High Speed Rail Will Save You Money and Create Jobs

But the Howard Jarvis Taxpayers Association would prefer you not know that.

In what is becoming an unfortunate trend, California journalists are turning their articles over to the right-wing anti-tax brigade, allowing them to spout nonsense but rarely providing important alternative information. In today's LA Daily News is an article titled California tax bites get hard to digest (get it? hard to digest? you slay me, Daily News) that makes the following flawed claims:

Stung by one of the highest state tax rates in the nation, Californians soon could be paying even more if officials and voters approve an array of new bond measures and taxes now under consideration.

Already on the November ballot are nearly $17 billion in statewide bonds, ranging from $9.95 billion for a high-speed passenger train system linking Southern California to the Bay Area, to $5 billion that would give motorists cash rebates for buying fuel-efficient vehicles.

Two problems here: first, Californians do NOT pay one of the highest state tax rates in the nation. According to the California Budget Project we rank 13th in state taxes and 18th in state plus local taxes. That hardly qualifies as "one of the highest state tax rates in the nation" but the claim goes uncorrected.

The second problem is the implicit equation of a bond measure with a tax increase. Rod Diridon is famous for saying "this project won't raise your taxes" and while it's not what I would say, neither is he technically wrong - there is no tax increase written into Prop 1(A). Depending on how the state resolves the current budget crisis it is possible that there will be extra money to pay the annual debt service - and the state Legislative Analyst has said we can afford that debt. It's possible that Prop 1(A) might lead to higher taxes, but it's not certain, and depends on a whole host of factors. Those who claim it WILL raise taxes are assuming certainty where none exists.

The Howard Jarvis Association, which alongside the Peninsula NIMBYs are likely to be the main source of opposition to Prop 1(A) this fall, goes on to argue these tax and bond measures will be the death of us all:

"What's happening is the taxpayers are under assault like we've never seen before," said Jon Coupal, president of the Howard Jarvis Taxpayers Association. "We have not seen an assault on taxpayers of this magnitude since the tax revolt leading up to Proposition 13 three decades ago.

"Our elected leadership, at both the state and local levels, is pushing California into the 'coveted' position of the highest-tax state in America. If that happens, it will be economic suicide for the Golden State."

Seeing as we're currently at 18th in state and local taxes, it would require one hell of a tax increase to put us up to #1. But what's more important is their delusional argument that taxes will cripple California.

That's only true if you assume that the taxes vanish into a black hole, never to emerge in any form again. But with the HSR bonds, as with other mass transit proposals like SMART or the LA Metro sales tax, that's just not so. High speed rail will produce immediate and long-term economic benefits while saving Californians money.

The California High Speed Rail Authority has estimated that the cost of expanding freeways and airports to meet the demand HSR would serve is between $80 and $150 billion - from twice to four times the cost of HSR. HSR is therefore a savings over those alternatives.

Of course, California taxpayers will save money once the system is open through cheaper fares than what airlines and gas stations can offer. As we've pointed out before, the long-term gas price trend remains upward, and by 2018 it's likely that oil prices will be substantially higher than they are now. Even if Prop 1(A) were to be paid for by new taxes, it'd be around $525 per person *total* ($19 billion in bond principal plus interest, divided by 36 million Californians). If the bond life is 40 years, as AB 3034 directs, that comes out to $13 per year per Californian.

If a Californian travels between the northern and southern halves of their state at least once a year using HSR they're likely to save more than $13 a year, and likely to save much more than $525 over the life of the bonds.

Finally, HSR will create jobs. The current estimate is 160,000 construction jobs and 450,000 permanent new jobs will be created by the project. As Atrios, a longtime fan of our project that he calls "SUPERTRAIN", noted today that's a badly needed economic stimulus in a country that has lost 800,000 construction jobs. California now has the fourth highest unemployment rate in the nation at 7.3%, behind Michigan, Rhode Island, and Mississippi. 160,000 new construction jobs would be an ENORMOUS boost to this state at a time when we desperately need new employment.

What prosperity California still has today is the product of past public spending - the bay bridges, the freeways, the aqueducts, the universities. All of those were paid for by taxes, and Californians reaped the rewards. But those investments need to be renewed, in a way that suits the new conditions of the 21st century, specifically energy, environment, and climate. High speed rail accomplishes all those wonderful things.

The Howard Jarvis Association would prefer California voters know none of this. In their mind all taxes are bad, as is the government spending the taxes support. In a state with a decaying infrastructure and a sky-high unemployment rate, partly due to the Association's successful 30-year war on government, you wonder why anybody would listen to them.

Retraining America

Via the passenger rail blog I discovered a fantastic documentary titled Retraining America (scroll to the bottom of the page; film is a 34 min Quicktime file) made by students at Guilford College in North Carolina. It's a good overview of the state of passenger rail in America, including the history of rail in the 20th century, the rise of freeways, and the starvation diet trains have faced.

Matt Melzer, of NARP and a frequent contributor to this site, is featured and as usual he makes some solid arguments about trains in America. He makes the point that America has been "socially engineered" to the point that cars are the only viable form of transportation for most people, leaving them without the freedom to choose another way to travel. Of course, this also leaves them vulnerable to crippling increases in the price of gas, which in turn damages the economy, as we're witnessing right now.

The problem we face today is that a transportation system that worked for a while, from around 1960 to 2000, is no longer working. The end of cheap oil and the massive congestion of airports and freeways both indicate the desperate need to give Americans more choices and to guarantee prosperity through a revival of rail. Freeways in particular were the product of a massive federal subsidization effort; roads don't pay for themselves and never have.

What the HSR deniers are asking California to do is shackle itself to this failing model. They believe, against all available evidence, that the post-1960 model of freeways and flights is still sufficient for our travel and economic needs. The increasing rail ridership belies their arguments, as does the move of California industries like Salinas Valley agriculture to revive rail freight.

Partly for those reasons, alongside the environmental and climate benefits of HSR, I argue that high speed rail is the most important project California has considered in the last 50 years. Just as the bay bridges and the State Water Project were necessary for a prosperous 20th century California, so too is HSR necessary for a prosperous 21st century California.

PS: I have added a link at the right to the ActBlue page for the official Prop 1 campaign. Help make high speed rail a reality in California by kicking in a few bucks to the campaign.

HSR Grabs 30% of Market in Six Months

Spain's AVE high speed train service was finally completed between Madrid and Barcelona earlier this year, with the first passengers riding in February. Since then the line has taken 30% of the travel market between Madrid and Barcelona, which was one of the world's busiest air corridors. That's a stunning level of ridership that is surely going to grow as more Spaniards become used to the service.

The Madrid-Barcelona line shares many similarities to the California high speed rail project. It connects the two major metro areas of the polity (sorry, Sevilla) in 2 hours 40 minutes - and even though a flight between the two is about an hour, Spanish travelers are flocking to HSR. Like California, the Madrid-Barcelona line serves a few intermediate-size cities - Zaragoza, Lleida, and Tarragona are sort of like San José, Fresno, and Bakersfield (though not necessarily in that order, and surely not culturally). As Matt Melzer explained last month, Spain's population densities are much like those here in California and a third of the ridership on the AVE trains was "induced demand" - new travelers brought out by the promise of fast and comfortable rail travel.

Lest we think that Europeans are somehow different than Americans in their travel habits, the Acela has over 40% of the market on the Northeast Corridor between Washington DC and Boston, despite the fact that the Acela isn't true high speed rail. Here on California's intercity trains ridership is booming, straining the existing capacity of Amtrak California. Standing room only is now common on many Capitol Corridor and Pacific Surfliner trains, and LA Metro Rail continues to set new ridership records.

As gas prices will continue to rise well into the future, causing airlines to cut back on flights and charge higher fares for those that remain, demand for high speed trains will only continue to rise. If ridership is already this high on Spain's and America's high speed trains, imagine how it will look here in California in ten years' time.

If Californians want a fast and affordable way to get around their state in the years to come, they need to vote for Prop 1.

Does Ashburn Deserve Cheers or Jeers?

AB 3034 finally passed the Assembly today on a 54-15 vote. The bill is NOT going to be sent to Arnold Schwarzenegger immediately, though, in hopes that a budget deal will be reached by Saturday.

AB 3034 would have been sent to the governor sooner had Senate Republicans not blocked its passage for several weeks, and Bakersfield Republican Roy Ashburn was the central figure in the delay. This blog was extremely critical of Ashburn for these delays. But were we wrong to do so?

Lois Henry is a columnist for the Bakersfield Californian and an ardent HSR supporter. In her column today she suggests Ashburn's actions were actually GOOD for HSR:

Here I was all set to blast State Sen. Roy Ashburn, R-Bakersfield, for letting politics get in the way of progress, when common sense and fiscal responsibility got smack in my way.

His, not mine....

Being the jaded gal I am, I chalked up his apparent Luddite ways to his plans to run for the Board of Equalization when he’s termed out in 2010. No one has a prayer of winning that office with out the blessing of the Howard Jarvis Taxpayers Association and I’d just seen an editorial in the Orange County Register by the Jarvis group repeating Ashburn’s points nearly word for word.

Ah HA! I thought. This is just Ashburn feathering his future nest by dumping on the constituents in his current nest. The first phase of the 800-mile train corridor, after all, would be built from Bakersfield to Merced, giving us access to clean rapid transit before the rest of the state.

What the heck was Ashburn thinking?

Actually, he was thinking about making sure this project comes to fruition responsibly by not getting caught up in the emotion and instead sticking to facts.

I think Henry's first instincts were right - Ashburn was posturing for the Howard Jarvis Association in what will likely be a spirited contest for the Board of Equalization seat. But Henry thinks Ashburn was actually trying to do HSR a favor. Problem is, a close examination of her defense of Ashburn reveals some holes in the case:

Facts such as the High Speed Rail Authority’s business plan was last updated in 2000 and they didn’t plan to do a new one until October, meaning anyone voting absentee might not have a chance to dig into the particulars until after their ballot was cast. Under the fix Ashburn advocated, the business plan must be updated by Sept. 1.

But if Ashburn was genuinely interested in an updated business plan, why did he wait until July to demand one? He had plenty of time to call for it - AB 3034 was introduced way back in February. He had plenty of time to make his wishes known. Further, his delay meant that the production of a new business plan was also delayed. If he really wanted to give voters the opportunity to "dig into the particulars" shouldn't he have ensured that the bill got passed quickly, so that the Authority could produce the most complete and accurate document possible? Ashburn's delay has jeopardized even the Sept. 1 deadline, since AB 3034 still isn't signed by the governor.

Henry goes on:

And facts such as, under the existing proposition, the authority could stick its hand in the cookie jar and spend that $10 billion willy nilly with little or no oversight. Under Ashburn’s amendments, the authority must request money through the budget process, which means a lot more public scrutiny.

I did not realize that was part of AB 3034 - and I am not pleased. Far from a positive move, this could be an *extremely* bad change. Requesting money through an annual budget process is guaranteed to drive up the cost of the project and delay construction. Instead of the Authority releasing funds as contractors need it, to suit a proper and efficient construction schedule, they have to wait on a state budget process that is ALWAYS late. It also makes it difficult for the project managers to plan construction since they can't count on the money always being there. Worse, this makes it possible for politicians to stick their own hands in the cookie jar and mess with the way money is spent, causing inefficiencies and politically-motivated bad spending choices.

If Ashburn merely wanted to give, say, an independent commission the ability to disburse the money that'd have been one thing. But what makes him think politicians who haven't solved the state's budget crisis for 30 years are going to be effective stewards of HSR bond money?

It's difficult for me to see Ashburn's move here as beneficial for or in the best interests of the HSR project. Few things are more likely to cause delays and cost overruns than an annual budget appropriation.

Henry explains that she isn't convinced by some of Ashburn's other arguments:

I’d vote for the proposition either way. California must solve our ever worsening air and traffic conditions. But I’m glad Ashburn is asking some tough questions and keeping an eye on the bottom line.

I do disagree with Ashburn’s take that the authority has only a vague idea of how the train would operate, its ridership numbers, proposed fares, alignment and technology.

Almost all of that has been ironed out in painstaking detail, according to documents on the authority’s Web site and according to Mehdi Morshed, executive director of the authority.

That should be a clue that Ashburn really doesn't have the project's best interests in mind. Looking at this in whole - raising objections at the 11th hour, demanding a new business plan and then blocking the bill that would provide it, turning a smooth project funding process into something chaotic and dependent on a broken state budget process, and then demonstrating a lack of knowledge about the HSR operating details - all suggests that Ashburn actually was trying to block HSR, and that the amended AB 3034 isn't as great for the project as Henry believes.

We'll see what happens with AB 3034. Either way we, like Lois Henry, will be voting for Prop 1(A). But the issues she raises suggest some of the battles we will have to face after we win that vote. If you thought this blog was going away on November 5th...heh. Not gonna happen. We'll still have plenty of work to do.