Two Very Different Op-Eds

This week the debate over high speed rail - which, bizarrely, we're still having even after California voters approved Prop 1A a year ago - returns to the opinion pages of two of California's most prominent newspapers. Two op-eds examine the project and reach very different conclusions about the project's value to the state. First up is Daniel Curtin, president of the California Conference of Carpenters, writing in the San Francisco Chronicle:

California voters know we must change to meet the environmental challenges we face. They realize that every passenger who travels these sleek trains will reduce greenhouse-gas emissions that auto or air travel would have spewed into the atmosphere. They know that 800 miles of high-speed rail will reduce congestion between urban centers and encourage low-polluting urban in-fill development....

On high-speed rail, California leads the nation and San Francisco leads the state. An intermodal transit station, the Transbay Transit Center, is ready to break ground. Some 8,000 construction jobs will be directly created by the project and tens of thousands of jobs will be generated from the economic activity, according to plan documents. In a state with more than 12 percent unemployment and a city with just more than 10 percent of its workforce out of work, this will provide a desperately needed economic stimulus...

Just as the New Deal-inspired Oakland-San Francisco Bay Bridge served as an economic bridge from the Great Depression to a prosperous future, so will the Transbay Transit Center and high-speed rail be our generation's transportation corridor from economic adversity to a greener, more prosperous future.

There are two ways one can read this op-ed, and they are not mutually exclusive. The first is as a call to support the economic stimulus value of high speed rail. In this deep recession, where California's unemployment rate is higher than it's been for 60 years, we can use any job we can get. Especially 8,000 construction jobs on just the TBT alone.

And that takes us to the second reading of the op-ed, which is as an argument for the Transbay Terminal project as being a fundamental piece of the high speed rail project. Quentin Kopp is still pushing alternatives to the current location of the TBT train box, and we keep hearing rumors that Kopp doesn't want the TBT to happen at all (rumors which he has denied to me). As the decision on HSR stimulus funds nears, it makes sense for TBT supporters to push out op-eds like this extolling the virtues of the project, including the badly needed jobs it would create.

Not everyone things jobs are important in a state experiencing at least a 12.2% unemployment rate. Dan Walters, who writes on state politics at the Sacramento Bee, writes today that we should "take bullet train claims with a grain of salt". As you'll see, it's Walters' column that requires the salt:

Ironically – or perhaps prophetically – the California High Speed Rail Authority's Web site bolsters the economic viability of a proposed statewide bullet train system by quoting an official of Lehman Brothers....

If nothing else, the fact that the rail authority is still quoting defunct and disgraced Lehman Brothers about financing the bullet train should make us skeptical that the system will materialize during the lifetime of any Californian now breathing, or that it would generate all the economic and social wonderfulness its advocates are claiming.

This is a ridiculous and misleading line of attack. If Lehman Brothers had collapsed because of its work supporting high speed rail, then Walters might have a point. But it didn't. As Andrew Ross Sorkin at the New York Times explained yesterday, Lehman's collapse was due to a CEO, Dick Fuld, who wasn't skilled at negotiating these kind of deals, and due to the Bush Administration's willingness to let Lehman fail.

None of that undermines the work Lehman staff did on high speed rail. Specifically, Lehman told the CHSRA that the project could "leverage significant private participation." There is every reason to believe this is still the case. Global money still seeks a safe return on investment, and as the CHSRA found in 2008 when they solicited statements of interest, at least 40 companies showed their desire to participate in the project.

The case for private investment remains solid. Every HSR route around the world has generated an operating profit. As oil prices rise, ridership will as well, as SNCF argued last month. Obviously the exact amount of money CHSRA can expect from the private sector will depend on credit and economic conditions, but it is still reasonable and plausible to expect that some investment will materialize.

Walters doesn't stop there:

Such skepticism is especially warranted now that Gov. Arnold Schwarzenegger and other promoters, having persuaded voters to pass a $9.95 billion bond issue that California can ill afford, are asking the Obama administration for half of the federal money set aside for high-speed rail – nearly $5 billion.

Even if the feds come through with that kind of dough, which is highly unlikely, it would be less than half of the federal funds that California needs. It would also fall well short of the $40 billion or more it would take to link San Diego, Los Angeles, San Francisco, Sacramento and points in between with 200-mph trains.

This is just plain wrong. The White House has repeatedly said California will receive a large share of the HSR stimulus funds. It is entirely possible we will indeed receive nearly $5 billion from the feds. Even $3 billion would be a substantial sum.

Does it fall well short of the $40 billion total to build both phase 1 and 2 of the project? (Note how Walters throws in the Sacramento and SD extensions, which will not be built until about 2030, to make HSR seem more costly.) Yes. And that's why President Obama and the Congress are looking at long-term funding of HSR. Right now there is the battle over the $4 billion in HSR funding for 2010 going on in the US Senate. The stalled Transportation Bill is likely to include a permanent HSR funding solution once it is finally passed and signed. Walters doesn't give the reader any of this information, which makes it obvious that CA is quite likely to get the federal money it needs to build the project.

Schwarzenegger et al. are asserting that private investors would put up about half of the total cost. They also contend that the system could operate at a profit without subsidies, based on rosy ridership assumptions.

Well, if that's what Arnold is claiming, Arnold is indeed wrong. I've never heard CHSRA suggest private investors would contribute more than 25% of the cost.

As to operating at a profit, here again Walters is simply wrong. The Acela generates operating surpluses, as do all other HSR projects around the world. And of course, neither California's freeways nor its airports operate at a profit without subsidies (and in fact, freeways aren't expected to operate at a profit, period).

Then there are the assumed economic benefits that would accrue. Building the system obviously would create some direct design and construction jobs and at least some ongoing jobs for operation. But the rail authority has bootstrapped that direct benefit into upward of a half-million additional jobs that would be created, it's said, simply by the economic activity generated by having a new transportation system in place.

The "economic activity" claim is a projection subject to quite a lot of change up or down in the future, but it IS based on legitimate studies. Further, it is based on the proven concept that mass transit creates a Green Dividend - economic activity generated through the reallocation of money previously spent on oil. It may not be as high as 450,000. But at this rate, in a state facing high unemployment for many years to come, even something that falls 50% of that goal is still well worth building.

Grandiosely, authority board member Rod Diridon Sr. of San Jose contends that the project "will generate 600,000 construction-related jobs … and another 450,000 transportation-related permanent jobs, providing a long-term stimulus to the California economy."

The claim appears to be way overblown. But even if true, it would represent a tiny portion of California's economy decades hence. There are about 18 million Californians in the work force now. In 2030, when the bullet train is projected to become operational, 450,000 permanent jobs would represent less than 2 percent of needed employment – if, indeed, they ever appear.

Walters doesn't give any evidence or explanation as to why the claim is "way overblown" - meaning Walters' own statement is baseless. But even if he were right, does he really believe California can afford to pass on even 2% of needed employment? Walters is writing as if it were 1998, when the economy was booming and jobs were plentiful. Here in 2009, it's clear that we are not in a position to turn down jobs like this, especially when the estimates run into the hundreds of thousands for both short-term and long-term employment.

Ultimately Dan Walters shows himself to once again be a leading apostle of the notion that the California of the 20th century, dependent on sprawl and oil, is somehow still a viable basis for economic prosperity here in the 21st century. To believe that, you have to believe that the current recession either isn't happening, or is an acceptable cost of doing business. Most Californians don't see it that way. That's why they approved the high speed rail project, and that's why it's going to get built.

California's going to get those jobs, whether Dan Walters wants them or not.

Thanksgiving Open Thread

According to the San Francisco Chronicle holiday travel was unusually light at SFO yesterday - the economic crisis keeping more folks at home? Perhaps people chose to drive to their in-state destinations but as anyone who has tried Interstate 5 around a holiday knows, the two lanes get backed up very fast. It once took me 10 hours to make it back to Berkeley from Santa Ana the day after Christmas on I-5 - nearly twice the usual travel time.

Obviously you know where I'm going with this. Ten years from now travelers won't have to choose between expensive airfares, costly and time-consuming car trips, or staying home for the holidays. High speed rail will provide a fast and affordable way to visit your family or friends. I can only imagine the TV reports from November 2018 - busy scenes at the Transbay Terminal, Diridon Station, LA Union Station.

Ten years from now high speed rail will become part of the fabric of everyday life in California. We'll wonder - rightly - how we ever got along without it.

And what am I thankful for? The 6,512,189 Californians who voted to make HSR a reality by passing Proposition 1A earlier this month.

Enjoy your Thanksgiving, everyone.

2008 Business Plan Published

As promised the California High Speed Rail Authority has published the 2008 Business Plan. Remember, this would have been ready in time for the election had Republicans like Roy Ashburn not blocked passage of the state budget for three months.

The plan itself is primarily an update of construction costs and ridership estimates. The overall cost of SF-Anaheim is pegged at $33 billion, of which $12 billion to $16 billion will come from the federal government. It's worth noting not all of that is going to be in the form of cash, but much will be in the form of low interest bonds that the feds will float - Obama has for example proposed a National Infrastructure Reinvestment Bank that could help provide construction cost support to high speed rail here.

The plan also anticipates that the ridership and operating surpluses are at their best when HSR fares are 50% of airfares on the LA-SF route. Some HSR deniers might scoff at the likelihood of that happening given possible cost increases - but consider that airfares will be rising over the next ten years, likely at a much faster rate than HSR fares will climb due to inflation. The airline crisis hasn't gone away.

The updated business plan also notes that if there are problems in getting funding to build the entire system, the urban segments can likely pay for themselves. Of course I have often railed against the possibility of turning HSR into a glorified commuter rail, and strongly believe that the first items that ought to be constructed are the tracks through the mountains - Pacheco Pass and the Tehachapis - which are the current choke points for intrastate passenger rail. In any event this is one of the issues we will need to monitor very closely over the coming months and years.

Of course, the HSR deniers are still out in force, getting their misleading quotes into the newspapers. Today's SF Chronicle article on the business plan is a good example, giving leading HSR denier Jon Coupal, of the Howard Jarvis Association, the chance to spew his truthiness:

Critics said they were disappointed by the plan released Friday, saying it lacked the necessary detail.

"We waited three months for this?" said Jon Coupal, spokesman for the Howard Jarvis Taxpayers Association, which opposed Prop. 1A. "I will say it's very pretty and has nice photographs. But as a business plan to present to venture capitalists to convince them to invest, it falls far short."

This from the guy whose organization's business plan involves bankrupting our state? I find it amazing that anyone in the media sees him as a credible source when it comes to government spending and balancing out the numbers.

Let's also be clear - the HSR deniers will claim that everything "lacks the necessary detail" up to the day the first passengers board the trains. If Coupal wants to see informed discussion about the details instead of misinformation intended to kill the project he would do well to click on our comments, where the details are given very intense discussion.

The business plan update provides the necessary information for our state to move forward on the project voters endorsed on Tuesday. At this point HSR deniers are trying to undermine the project - if they want to be useful, then join us in the comments and show how we can improve it. We all want the best possible HSR system for our state. It's time for Californians to come together and make it happen.

Finally, Some Real Experts

Michael Cabanatuan's article on Prop 1A in today's San Francisco Chronicle is one of the best articles I've seen from the media on high speed rail - partly because he doesn't just play the "he said, she said" game where someone from the oil company funded Reason Foundation spouts off a bunch of numbers and then someone from the authority responds. Cabanatuan, almost alone among California journalists, actually interviewed longtime HSR experts - people who have spent their careers in the field and who know what they're talking about:

California's system would be the first in the United States. But high-speed rail has been running in Europe and Asia for three to four decades.

"It's a proven business model in many parts of the world. Most of the high-speed rail in Europe is 25 years old," said Roelof Van Ark, senior vice president for North America for Alstom, a French firm that develops and builds high-speed rail trains and systems.

Japanese companies and Alstom are both interested in possibly investing in the California system, [Noriyuki] Shikata [of the Japanese Ministry of Foreign Affairs] and Van Ark said. And both are convinced that high-speed rail can fly in California - if voters approve it at the polls.

"The world is booming in high-speed rail," Van Ark said, citing new lines around the world and expanding networks in Europe and Asia. "The model has proven to be successful. It's only a matter of time before it comes to North America. But you've got to start somewhere."

Alstom understands how high speed rail works, and would not be interested in a California high speed rail project if they did not believe it to be financially and practically viable. They also know that California has optimal conditions for high speed rail to be as successful here as in Japan and Europe:

Van Ark and Shikata agree, saying a line connecting the heavily populated Bay Area and Southern California, and running through the flat, more sparsely developed San Joaquin Valley, is ideal.

"That stretch between San Francisco and Los Angeles is such an optimum stretch," said Van Ark. "You want a long stretch where you can actually use the maximum speed of the train."

Cabanatuan's article also points out the importance of having high density around the HSR stations. The Reason Foundation is again quoted as saying California doesn't have the population density period to support HSR but we have disproved that argument before, showing that California and Spain are very similar on that point. Van Ark pointed out that HSR actually spurs urban density as the land around a station becomes more valuable.

The Central Valley will be key to this, as cities along the line will have to shift their land use policies to favor infill density development. It's always been my argument that this is going to happen anyway given the factors that make sprawl less economically viable or practical. SB 375, recently signed by Arnold Schwarzenegger, provides a powerful weapon to make that happen, tying land use law to global warming reduction targets and favoring urban density.

In any event, it's refreshing to see a California journalist write an HSR article that actually informs the reader and provides a thoughtful discussion of the issue, rather than acting as a proxy for the Reason Foundation's anti-transit diatribes. Kudos to Michael Cabanatuan for this article.

Drowning In a Sea of Truthiness

The Reason Foundation is in full-scale attack mode on Prop 1A this week, flooding the state's newspapers with anti-HSR op-eds that stretch the bounds of truth and credibility. I guess that's easy to do when you're flush with oil money. As we've explained before, the Reason Foundation's HSR study is a tour de force in truthiness with statements that bear little connection to reality. Unfortunately, California's media outlets tend to listen to these guys, even when their claims have been so thoroughly discredited.

This week the Reason Foundation folks have been joined by another group of longtime HSR deniers - Richard Tolmach and his "California Rail Foundation." The CRF is a fancy name for Tolmach and two friends, who comprise the entirety of the organization. It has no website, no phone number, no members, no email list. It's basically Tolmach's effort to look like something other than a gadfly. Tolmach got an op-ed published in the San Francisco Chronicle, and the Reason Foundation has shown up in the LA Business Journal and the San Diego Union Tribune. Their message is starting to resonate, so it's worth spending some time deconstructing their nonsense.

Tolmach's article is full of misstatements and outright lies. For example:

In this year of global market meltdowns, voters should be cautious about a financially-leveraged proposal like Prop. 1A. The numbers don't add up and the High-speed Rail Authority refuses to explain how the system it proposes can be financed.

Not so. The CHSRA has explained how it would be financed. $10 billion comes from Prop 1A. $10-$15 billion comes from the federal government which has already signaled its intent to help fund it - something none of these op-eds acknowledge. The rest comes from the private sector which has shown strong interest.

What if neither materializes? Then we don't spend any money. Prop 1A mandates that no money can be spent unless matching funds are secured. What if the credit crunch means nobody buys our bonds? Then we wait until the market opens up, or we do nothing. In each case, California loses nothing.

How can taxpayers trust the rail authority with $20 billion, given this record?

Who says we have to trust them? Prop 1A contains numerous safeguards, including Legislative appropriation of funds. Tolmach conveniently omits that fact.

They go on to make the usual claims about ridership using the same truthiness that we debunked last month. Tolmach mentions TGV Southeast. "mike" had a good response to that:

The TGV Paris Southeast (PSE) line gets 45k passengers per route-km (20 million pax / 448 route-km) while the THSR gets 101k passengers per route-km (34 million pax / 335 route-km). CA HSR is forecasting a high of 80k passengers per route-km in 2030, or around 56k passengers per route-km at today's populations. This is slightly above TGV PSE but well below THSR. It does not seem unreasonable since the LA Metro Area is larger than Paris Metro Area or the Taipei Metro Area.

Not satisfied, Tolmach continues his column, throwing outright lies at the reader:

High-speed trains may never run, as the revenue bond is only a small fraction of the total amount required. The rail authority's idea is apparently to start a very big hole in the ground, then come back and ask for $30 billion to $70 billion more from taxpayers. Federal funding, following the Wall Street bailout, is as unlikely as private investment.

Let's say that again - those statements are lies. Prop 1A contains very strict language preventing the CHSRA from spending money before matching funds are obtained. The recent Amtrak bill contains some HSR funding and Senators John Kerry (D-MA) and Johnny Isakson (R-GA) intend to propose a massive HSR spending bill. Barack Obama, who looks increasingly likely to win the November election, is a strong supporter of high speed rail and has spoken of his desire to fund infrastructure projects like HSR as part of an economic stimulus package and green jobs program.

Tolmach's lies are matched by the absurdity of Reason Foundation Senior Fellow George Passantino, whose column in today's San Diego U-T is a blatant attempt to mislead readers. Have a look at his description of the HSR route:

For San Diego taxpayers, the high-speed rail system, on November's ballot as Proposition 1A, is an especially bad deal. Want to get out of traffic and commute via a quick bullet train ride from San Diego to Irvine? Sorry, the train does not go there. Well, at least you can go from San Diego to Anaheim. Actually, that route isn't offered either. How about a direct trip from San Diego to Los Angeles? Yes, you can make that trip, but you'll head to Escondido, out to Riverside, and then onto the Ontario Airport, before heading back west toward Los Angeles.

Passantino is being dishonest - San Diego is part of Phase II. And more astoundingly, he seems to not grasp the concept of "high speed" - meaning that even going from SD to LA or OC via Riverside is going to be faster than driving or taking the Pacific Surfliner.

The rest of his column contains the same misleading statements Tolmach's op-ed included. So it goes with the Reason Foundation, which has decided that truth be damned, a sustainable, prosperous high speed rail future has to be stopped at all costs.

Considering how much money the Reason Foundation has it seems clear that, in fact, a No on 1A organization HAS indeed materialized, and is overwhelming us in spending. It's time we fought back. Write letters to the editors of these papers explaining why the op-ed authors are not to be believed. Help distribute Yes on 1A signs, stickers and info cards. Donate. But most importantly, explain to everyone you know that these op-eds are nonsense.

SF Chronicle Endorses Prop 1A

This one isn't really a surprise, since they've been supporters of high speed rail for many years now, but today the San Francisco Chronicle endorsed a Yes vote on Prop 1A:

The passage of Prop. 1A would generate an estimated 160,000 construction-related jobs at a time when the state could use an economic stimulus. But its even greater long-term value to the state will be the economic and environmental benefits of connecting urban centers with growing inland cities that don't have major airports - and providing an alternative to the cattle-call flights between the Bay Area and Southern California.

They're absolutely right - and even understating the case. The long-term value isn't just in providing alternatives to cattle-call flights, nice though that will be. The long-term value comes in providing an alternative to oil, period. Our state's dependence on oil is causing financial and economic havoc. Those who make baseless criticisms of Prop 1A's financing are ignoring the far more risky and damaging impacts of "staying the course" and doing nothing in the face of a climate and energy crisis that is strangling our economy.

The editors had a good response to those fiscal critics:

Opponents have seized on the understandable anxiety about a venture of this magnitude and have questioned everything from its cost projections to ridership estimates to its environmental benefits. In a meeting with our editorial board this week, they suggested the money would be better spent on relieving gridlock on regional roadways.

However, the fiscal safeguards on Prop. 1A were toughened substantially with the Legislature's recent passage of AB3034. It limited the amount of money that could be spent on administration or other items unrelated to construction. Also, construction could not begin on any segment of the project until it was certified that the funding for it had been secured. State funding would account for about half of the project; the balance would come from the federal government and private sources.

HSR deniers want Californians to believe that if this passes that we're going to be DOOMED, doomed I tell ya, especially in our state budget. But the Chronicle points out this is nonsense. If the feds and private enterprise come through as they have consistently indicated they will then we build it and everyone's happy. If they don't come through, we don't build it, no money spent, no harm done.

They close well:

Prop. 1A presents an ambitious vision that is well tailored to the state's transportation and environmental needs. We recommend its passage.

We strongly agree.

Of course, to give the "other side" a chance to get their message across, the Chronicle published an op-ed by longtime HSR denier Richard Tolmach. That deserves its own takedown which will be provided tomorrow morning Wednesday evening (sorry guys, busy day).