Monday, January 23, 2012

High-speed rail: A poison pill in Governor Brown's tax plan

Howard Jarvis and Jerry Brown in 1979

Governor Brown will be asking the state's voters to raise taxes on themselves to support, among other things, the high-speed rail project that recent polls show they now oppose (here and here). In fact almost two-thirds of the state's voters want another chance to vote on high-speed rail so that they can reject it.

The budget cuts are deep and painful:

In terms of sheer dollars, the steepest cuts affect the most vulnerable in the state, including a $1.7 billion cut to Medi-Cal, the state’s health insurance program for poor families and disabled people; a $1.5 billion reduction in its welfare-to-work program; and $750 million cut from the agency that provides services to those with developmental disabilities. The state’s higher education system---including the highly regarded University of California---would lose $1.4 billion.

People are apparently willing to pay higher taxes for schools---and maybe for programs for the poor and the disabled---but public opposition to high-speed rail could doom Governor Brown's proposed tax hikes in November.



At 5:55 PM, Blogger Mario said...

And what proof do you have that any of this money will be used on HSR in any significant amount?

HSR will not need nor ask money from taxpayers until the federal and bond funding is exhausted. That's when you'll see it come up, but right now you're just making stuff up.

At 6:31 PM, Blogger Rob Anderson said...

But interest will have to paid on the $2.7 billion in bonds---if the state legislature approves their release, which isn't a sure thing, since even some Democrats are starting to question the HSR project.

If the state released all at once the entire $9.5 billion in bonds authorized by Prop. 1A in 2008, the annual interest payment would be $460 million. Interest on $2.7 billion in bonds would be roughly 1/4 of that, which would be around $115 million a year, money that could be put to better use elsewhere, like help for the poor, the disabled, the schools, etc., which is where the state is cutting now.


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