State Waste: The Golden State's vaunted bullet train project, planned to connect San Francisco to Los Angeles, may be in its financial death throes. If so, it's probably the best fiscal news for the Golden State in years.
To say that Gov. Jerry Brown's pet project, the so-called high-speed train, is troubled would be an understatement. From the very beginning, it has been a testament to political hubris, fiscal irresponsibility, outright lies and abysmal planning.
The bullet train idea was floated on a blustery gust of political promises in 2008, when proponents put the high-speed rail to the state's voters in the form of a $10 billion bond issue to pay for its initial costs.
With hard-hit voters then suffering from the worst of the financial crisis, they fell for pledges of high-paying jobs and an ultrafast, low-cost train that would speed passengers from the San Francisco Bay Area to Los Angeles in a mere two hours and 40 minutes.
The proposal passed. But as the scale of deception behind the project has become known, it has been hit by a series of legal and environmental challenges. Even so, California has already committed to spending more than the $10 billion bond amount, and taxpayers are on the hook. It's a runaway train.
Worse, since the bond issue passed in 2008, cost estimates have only soared. Initially budgeted at $32 billion, the price tag is now put at twice that: $68 billion or more. Even the initial stretch of track, which lies on the flattest, easiest-to-build part of the entire total 700-mile route, has seen its cost soar 50%, from $6.4 billion to $10 billion.
Moreover, that initial part of the much bigger project was originally slated to be completed this year. But so far, not a mile has been laid. Nothing. According to a recent confidential report by the Federal Railroad Administration, the first part of the rail system is at least seven years behind schedule.
And the final stage may require the boring of 36 miles of tunnels through the earthquake-prone mountains that surround Los Angeles — a massively costly undertaking that will add billions more to the costs and delay even further its completion.
The official estimates call for 18 million to 31 million riders a year after the rail is finished. But just 11 million or so people now fly between the five airports in Los Angeles and Orange County to San Francisco each year, making the estimates highly dubious.
And estimates that travelers will pay just 20 cents a mile for the trip seem bizarre, given that even in the heavily trafficked eastern high speed Acela rail corridors, costs are above 50 cents a mile.
The red ink, in short, will flow. Even so, with the financing dicey and funding short, Gov. Brown and his pro-bullet train allies have resorted to trickery, dedicating a quarter of the revenues from the state's cap-and-trade program to continue financing the train.
Yet that financing is not forthcoming. As Dan Walters, the dean of California political commentators who writes for the Sacramento Bee, recently reported, "the financially challenged project ... just suffered two immense hits, either of which could be fatal."
The first was the recent auction of the CO2 emission rights for the state's cap-and-trade market. It yielded almost nothing, meaning the rail system will get almost nothing in continuing funding.
As if that wasn't bad enough, this came after the Trump administration put a hold on $647 million in provisional funding, as questions about the troubled project grew.
It didn't help that even some California Republican Congress members weren't backing the white-elephant train system, whose tens of billions of dollars in cost overruns and enormous annual operating costs have the potential to bankrupt the state — and leave U.S. taxpayers on the hook for billions of dollars to build what amounts to a mini-me, money-losing Amtrak system in California.
Brown is desperately trying to sell the train to the Trump Administration as a badly needed piece of "infrastructure" that should receive funding from President Trump's $1 trillion infrastructure proposal. Given the huge $187 billion estimated cost of repairing the rest of the state's shaky and decrepit infrastructure — including the massive Oroville dam, the highest in the U.S., which almost breached during the recent heavy rains — spending more money on Jerry's Folly would be irresponsible to the point of criminality.
Trump has pledged to drain the swamp in Washington. He can help drain California's red-ink swamp by putting an end to any federal involvement in Brown's Folly. In doing so, he would likely kill the Bullet Train and thereby restore a measure of sanity to California's budget — something recent California governors have either refused or been able to do.