Sunday, December 21, 2008

The New Hoovers Are Still Trying to Kill HSR

NOTE: We've moved! Visit us at the California High Speed Rail Blog.

As we repeatedly explained at this blog during the campaign, the New Hoovers have it in for high speed rail. HSR is a necessary part of California's economic recovery, but Republican politicans - from Arnold Schwarzenegger to GOP legislators - are bent on using this economic crisis to achieve the dismantling of government that they could never get during normal times. They have used the 2/3rds rule and the governor's veto power to prevent a balanced budget from being enacted. As a result California has had to borrow money to pay for basic operations, but the strain of that borrowing has nearly exhausted our short-term borrowing capacity.

As a result of Arnold's most recent budget-blocking action the Pooled Money Investment Board had to cut off all funding for infrastructure projects - throwing a whopping 200,000 people out of work. As an AP article explains that action jeopardizes HSR planning efforts:

The state treasurer says the high-speed rail board won't be able to tap any of that money until lawmakers pass a balanced budget.

Without an agreement to close the budget gap, the treasurer won't be able to sell any bonds and won't allow the board to get a loan to tide it over until the bonds are sold. The state's loan fund, the Pooled Money Investment Account, is needed for other state operations, said Tom Dresslar, a spokesman for Treasurer Bill Lockyer....

Carrie Pourvahidi, one of the rail board's deputy directors, said the board is counting on getting $29.1 million from the Pooled Money Investment Account to pay for its operations in the first half of 2009.

Without that money it would have to shut down in late January or early February, she said.

[Mehdi] Morshed said he doubts any federal money could be allocated quickly enough to fill that void.

"If we can't pay our bills, we would just have to stop spending, which means we would have to tell our contractors to stop work. Then, hopefully, later on, when we have the money, we can pick it up," he said.

As you may remember we just went through this mess - during the summer Republicans blocked passage of a budget for three months, delaying the delivery of the updated Business Plan until just after the November election. When the state is out of money the CHSRA cannot continue its planning operations. This current delay - again caused by Republican intransigence - could cause consultants to leave the HSR project:

But if the state does not resolve its own fiscal problems in time to keep the board operating, even a short-term shutdown could prompt some of the engineers, planners and environmental consultants who have been working on the project to abandon it for more reliable clients, he said. That could cause delays.

"The federal government's going to pump billions into infrastructure nationwide," Morshed said.

"Then everybody's going to scramble for the people who are going to deliver those projects. Whoever has their hands on somebody, they are in better shape than the other person. If we lose some (consultants), we may lose them for good or a very long period of time."

Arnold Schwarzenegger needs to get his head out of his ass and sign the Democrats' budget plan. Otherwise California is going to suffer for quite a long time - the infrastructure projects Arnold championed in his Newsweek op-ed will be severely weakened and compromised by this ongoing crisis. Not to mention the effect of California being thrown into an outright economic depression which HSR is supposed to help alleviate.

Federal aid will still be necessary to complete the project and while that looks more promising, New Hoovers in Congress are beginning to stir in their own opposition to infrastructure stimulus spending:

House Minority Leader John Boehner of Ohio said he has "grave reservations about taking $1 trillion from struggling taxpayers and spending it on government programs." He suggested tax cuts as a better alternative to kick-start the economy.

As far as I can tell Republican politicians in Sacramento and Washington, D.C. are, instead of trying to help resolve one of the worst economic crises we've faced in 75 years and help build for our future, are using the crisis to settle old scores and trying to reverse what remains of the New Deal.

Canadian author Naomi Klein described this phenomenon as the shock doctrine. And it's now threatening to cripple the HSR project California voters approved last month. Things were bad in the 1930s, but at least our government wasn't being held hostage by a clique of ideologues determined to score points even at the expense of the economic security of millions of Californians, of the state's future prosperity.


Rafael said...

Now would be a good time for one of the private investors to step up and inject a moderate amount of money to ensure the HSR effort does not shut down. Several tens of millions will tide them over until the summer, by which time the state budget mess is either resolved or the good burghers will be march on Sacramento with torches and pitchforks.

With a large general infrastructure boom in the offing early next year, planners and contractors will go to where the money is. Once they're off the HSR project, it will be hard/expensive to replace them.

Brandon in California said...

I think some of those contractors will continue working on CHSR assuming their goodwill will be compensated later.

If/when the stimulus funds begin playing a role with projects... I suspect the state's problem will have been resolved. That's my hope, anyway.

If we're talkign about a mid-year budget change for the FY08-09 year, the problem should be resolved in short order.

If we're talking about next years budget, well, that is a much different story. The govenor is suppose to unveil that budget proposal in January. It's then vetted by the legislator and the govenor then produces a revision in May. That One is then supposedly required to be adopted by the end of June, but we know that old tired story.

bossyman15 said...

Let's all donate money to help CAHSRA!

Anonymous said...

"things were bad in the 1930s, but at least our government wasn't being held hostage by a clique of ideologues"


Anonymous said...

Maybe the Democrats should pass a balanced budget without tax increases. Instead they attempt to circumvent prop 13 with strange accounting tricks. They are just as much to blame for this budget crisis as the republicans.

Anonymous said...

First.. to go rafael's RAM hog posts ..altho wonderful!!!
then A simple broad range tax increase for more than comfortable citizens wiil not kill anyone...HSR planning is nothing 29 million..some people have homes worth that much here.

Robert Cruickshank said...

Anon @ 8:42, that's a good point about the Supreme Court. Even then they eventually reversed themselves in 1937 and upheld the core of the New Deal. And they were among the only parts of the US government blocking the New Deal - the White House and Congress both wanted to move ahead with recovery plans and weren't burdened by Hooverites.

Anon @ 9:48, you betray your ignorance of the budget. It is not possible to balance the state budget without tax increases - unless you want to close down one of our college systems (UC, CSU or community colleges), or close most prisons. You could stop all state health care spending and, leaving aside the massively destructive economic and public health impact of doing so, would still not close the deficit.

Democrats do have some blame to share here, yes - in that they spent 30 years dithering and disorganized while the state slowly crumbled. Republican budget solutions are Hooverite - they are not credible on their face and are designed to throw the state into Depression in order to settle old political scores and achieve ideological goals.

HSR is one of those goals - killing it, that is.

calwatch said...

Of course, part of this is exarcebated by partisanship (which Proposition 11 will start to alleviate, albeit four years down the line... which your organization opposed, Robert) and conservative talk radio, which basically scared Schwarzenegger into backing away from his original compromise of a 1.5% increase of state sales tax (although high, and somewhat regressive, was certainly a more sensible solution than the lack of a plan coming out of him now).

Anonymous said...

So basically, this is yet another great and much-needed reform of our infrastructure that is never going to happen. Oh well. When Europe or China becomes the center of the global economy and structures the global system in its image at our expense, we will at least know why--because we have forgotten how to build things. Yes, of course we still can put up structures and move materials, but the structure of our economy and our regulatory system makes it all but impossible for anything on the scale of a high-speed rail network ever to be built. The same goes for modernizing our power grid. The best we can hope for from an Obama administration is limited modernization of existing infrastructure, and even that may be too much to ask at this point.

Rafael said...

@ anon @ 12:55am -

perhaps you're being a little too pessimistic here. Every single country that has decided to build an HSR starter line has had to overcome fairly massive opposition to the idea. Only once trains start running do people begin to really understand the value of the investment.

California HSR will happen, but the state will have to sort out not just its immediate budget woes but the process as well. HSR is caught up in that maelstrom, but so is every other aspect of government.

Anonymous said...

"Maybe the Democrats should pass a balanced budget without tax increases."

Sure, but to do that they'd have to remove the three strikes law, decriminalize marijuana, and generally change the criminal law to remove all nonviolent offenders from prison. *THAT* is where the giant spending bloat in the California state budget is.

Unfortunately that's been suggested and the Republicans won't accept it. (Nor, to be fair, will many of the Democrats.) Your tax dollars are needed in order to keep locking more and more nonviolent people in cells, a very expensive and wasteful process.

Brandon in California said...

Fwiw, I just sent an email to my state representative to voice support for the democratic lead initiative to change the state fuel tax to a user fee, with the introductory rate at 39 cents per gallon. This is 13 cents more per gallon than what we currenlty pay.

Anonymous said...

No new taxes, if we keep this up, severe cuts will happen. We should help pay for stuff, the rich can also contribute too. If we all come together instead of placing walls up, objectives might be accomplished. Time to tear down the walls and come down with an agenda of what is agreed and disagreed upon.

High speed rail works if done in the right way. If the Authority executes the project in the correct way, there will be no problems. The politicians do not know much on the issue and need more convincing along with the public. Write into your local news editors! Give reasons to support the project! Use examples from around the world especially! Set an example! Not another failure!

Alisha said...

donation of money for HSR is a great idea.

Anonymous said...

Robert Cruickshank - Republicans "are not credible on their face and are designed to throw the state into Depression in order to settle old political scores and achieve ideological goals."

Wow, such a cynical comment. Where did this come from, MSNBC? And the Democratic party does not do this??

I think it is unfair to pass the blame on the GOP alone. I believe both parties are to blame for the mess we're in right now. If California truly wants to make HSR work, we do need a balanced budget before we start spending. And although I'm all for HSR, just like any family, we can't spend money we do not have. Hopefully (being optimistic), both Democrats and Republicans can work together and cut the wasteful spending in programs that do not work and spend on something desperately needed like HSR.