At yesterday's CHSRA board meeting the effect of the state's budget crisis on HSR became clear - unless Republicans stop obstructing a budget solution, the Authority may have to suspend planning and design work, and terminate contracts with consultants and engineers whose accumulated expertise on our HSR project has become vital.
The California High Speed Rail Authority's budget for the current fiscal year, which ends in June, included $29 million from the sales of high-speed rail bonds authorized by voters in November. But because of the state budget crisis, the credit crisis and the poor market for bonds, the state treasurer has not sold any of the rail bonds.
That's left the rail authority without cash at a time when Californians are eager to see the 800-mile fast train system built. At an authority meeting Thursday, officials said they had halted payments on engineering and design contracts in progress and are holding off on awarding new contracts.
"Unfortunately, I have quite a backlog of bills that need to be paid, but no money to pay them," said Carrie Pourvahidi, deputy director for the authority.
The article is a bit misleading on this. The credit crisis and the poor market for bonds are part of the issue. But the state budget crisis is THE central issue. The crisis has led Treasurer Bill Lockyer to refuse to try and sell authorized bonds, and led the Pooled Money Investment Board to stop all infrastructure spending. To the extent that the market for California bonds isn't good because of the budget crisis, it's because the bond markets are concerned that the state may default on its debts.
And why is that a possibility? Because Republican politicians - from legislators to Arnold Schwarzenegger - continue to block a budget solution. I usually try to keep my more partisan comments to Calitics but we cannot escape the fact that it is Republican obstruction alone blocking a solution. Democrats have compromised far more than the media reports - agreeing to nearly $8 billion in spending cuts that have their labor allies VERY angry with them. Speaker Karen Bass agreed to most, but not all of Arnold's demands on cutting environmental and labor protections. But Arnold vetoed the Democrats' solution, and Republicans refuse to budge.
That won't stop HSR deniers from using this manufactured budget crisis to blame HSR. They've done it before - when the CHSRA wasn't funded as a result of the summer budget delay, pushing back the release of the 2008 Business Plan, HSR deniers said it was a sign the CHSRA was a flawed agency unfit to manage the project. It is likely we will see the HSR deniers use thus cash crunch story for the same purposes.
Arnold has proposed giving the CHSRA the funding they need:
On the other hand, the governor's early state budget proposal for the 2009-10 fiscal year includes $123.8 million for high-speed rail, just a half million dollars short of the agency's request.
But if he keeps blocking budget deals, this doesn't really matter. If consultants and engineers are let go, they may decide to take their expertise elsewhere in the country or in the world, and we will not easily replace them.
The big picture involves conservative anti-government ideologies. One reason the HSR deniers oppose the project is they refuse to accept that government can plan and implement this kind of project effectively, even though HSR has been successfully built by governments around the world. By starving government of revenue they are able to "prove" their case with a self-fulfilling prophecy. They opposed Prop 1A and HSR, so they starve the Authority of funds and then say "oh wow they can't manage money!"
California Republicans need to recall their Constitutional obligations to this state and provide it with a balanced budget that protects Constitutionally-guaranteed services - and respects the will of the millions of Californians who voted their endorsement of HSR by approving Prop 1A on November 4.