The governor, high-speed rail, and reality

Portrait by Don Bachardy

In Response to Criticism, the Governor Reinvents Reality

by Community Coalition on High-Speed Rail

When the High-Speed Rail Authority issued its revised Business Plan in November 2011, it admitted that the first phase of the proposed system would cost about $100 billion. That was just the low estimate. The high end estimate was $117 billion.

Initially, the revised Business Plan was praised for being more "realistic" than the earlier versions, which had "low balled" the price tag. Praise for these "realistic" new numbers, however, soon gave way to criticism, based on the fiscal implications of this enormous cost (coupled with the fact that no funding source has been identified). 

Criticism of the revised Business Plan began further to undermine public support for the high-speed rail project. Reliable polling shows that a majority of the public no longer believes that we should build this costly train.

After the release of the draft Business Plan, the Legislative Analyst's office gave the plan a critical review. This was followed by an analysis by the Authority's own Peer Review Group, which was extremely critical of the Authority's proposed funding plan. 

The most recent independent opinion came from the State Auditor. The Auditor's hard-hitting report echoed concerns about the cost and the financial viability of the project, calling it "increasingly risky." Click the highlighted links to get to the actual documents.

Members of the Legislature who had formerly supported the project were heard to say in public that these financial problems were significant, and that the Legislature might not release bond funds for what increasingly looks like a "no train to nowhere" endeavor. 

The Legislature, in other words, began to take seriously the fiscal realities that CC-HSR has featured on its website for over a year (thanks to the incredibly good work of business and financial experts Alain Enthoven, William Warren, William Grindley and their colleagues).

To many observers, it looked like the project was (finally) getting the kind of hard-headed scrutiny that the project absolutely deserves!

Enter Governor Brown! Click this link to hear his reaction.

In response to well-founded criticism coming from the state's own transportation and financial experts, the Governor has stated (apparently based on some private source of information unknown to anyone else) that the $100 billion price tag is "way off." It's "not going to be $100 billion," says Governor Brown; it will be "a lot cheaper." 

The horrendous $100 billion to $117 billion cost, heralded by the Governor three months ago as "realistic," and based on an actual financial analysis by transportation planners and fiscal experts, is now magically made to disappear. How did this happen? Why, the Governor said so, that's how!

Plus, the Governor has now conjured up a new source of funding for future additions to the high-speed rail project, so called "cap and trade" fees, which are intended to deal with global warming impacts. These "cap and trade" monies don't actually exist at present, and they may never exist, and they may or may not ever be made legally available for high-speed train purposes. That didn't stop the Governor. If reality is an impediment to what you want to do, the Governor solves the problem by declaring reality to be something else.

CC-HSR hopes that members of the Legislature are going to pay attention to bona fide experts, like the State Auditor. When the State Auditor says that the financing plan for the proposed high-speed train project is "increasingly risky," everyone including the Governor needs to pay attention. No one who cares about the future of California should think that we can reinvent reality by whim or that "wishing makes it so."

The latest report from CCHSR: "California High-Speed Rail Authority's Draft Business Plan: Still Not Investment Grade," January 27, 2012