California’s proposed high-speed rail from San Francisco to Los Angeles is off the tracks of fiscal responsibility.
In another display of spending money we don’t have, the state’s governor, Jerry Brown, and our profligate legislature have approved legislation to proceed with a railroad we don’t need and can’t afford. But then, who’s counting.
Writing in the San Francisco Examiner, columnist Dan Walters recently noted the following obligations that are facing the state:
“Voters have approved nearly $130 billion in active general obligation bonds, of which $73 billion are still outstanding and $33 billion remain unissued…Even if no more are sold, it will cost the state nearly $135 billion to repay them over the next 30 years.”
In addition, other bond issues will cost another $20 billion.
Local redevelopment agencies “have run up more than $100 billion in debt that must be repaid, mostly from property taxes that otherwise would finance local services…And local governments and school districts may have many billions more nonredevelopment debt.”
“The state also owes the federal government $10 billion in loans to prop up the Unemployment Insurance Fund. But all of those pale next to the ‘unfunded liabilities’ of state and local pension funds and obligations for retiree health care.”
“Brown’s budget pegs California pension debt at $42.5 billion and retiree health care at $59.9 billion, but independent estimate of the pension gap have ranged as high as half-trillion dollars, depending on assumptions of future investment earnings.”
California’s “state and local governments may be $1 trillion in debt, equal to half of California annual economic output.”
So, in the face of the mountain of debt that California has already incurred, Gov. Jerry Brown and the state’s legislature have agreed to incur another $9 billion in debt to finance a railroad we don’t need. My question is how many passengers is this train likely to carry. That is, what kind of revenue do its proponents expect it to generate and how much will it cost to operate?
All too often in the la-la land of government, no one bothers to do the math.
“High-speed boondoggle” notes the following:
“Costs have increased from $33 billion to at least $68 billion.”
“The authority has a history of mismanagement and making misleading statements.”
“The authority has misled the public and elected officials about the number of jobs that would be created by the project…the number of jobs was not more than a million as previously claimed, but in the tens of thousands. It acknowledged its definition of jobs has been ‘imprecise and potentially confusing.’”
“Flawed ridership projections…projections used prior to the revised business plan were widely criticized by watchdog and non-partisan groups. For example, a UC Berkeley Institute of Transportation Studies report says the data used by the CHSRA was so ‘unreliable’ that it is impossible to predict whether the project will be successful or lead to ‘severe revenue shortfalls.”
“The revised business plan uses a number of scenarios, but is still being widely criticized by experts.”
With all the conflicting claims and counter-claims, it’s no wonder the public is confused.
My sense is that, as usual, most residents of California have little or no idea about the issues that are involved in making a final decision about this project. It’s primarily a matter of evaluating the facts and representations involved, but then, once again politics gets in the way.
In the final analysis, whose ox gets gored is what counts. And, my sense is that, as usual, it’s the public’s ox.
© 2012 Harris R. Sherline, All Rights Reserved