Thought Piece

[There are many great sounding ideas and beautiful prototypes on which significant government money should never be spent. The California high speed train from Sacramento to San Diego is probably one of those. This futurist project never made any economic sense, because it could not support itself with user revenues, even in small subdivisions. If CA wants it build, they should spent their own tax revenues.  Steve]

California’s Big Dig

Elaine Chao can take the train to Fresno off federal life support.

Jan. 16, 2017 6:38 p.m. ET

Eaine Chao is rolling to confirmation as Transportation Secretary with little trouble. The same can’t be said of California’s beleaguered bullet train, and one of Ms. Chao’s first orders of business should be to cut the choo choo off federal life support.

Last week the Los Angeles Times reported that the first 118-mile segment in the state’s rural Central Valley could run 50% over budget, according to an internal Federal Railroad Administration (FRA) risk analysis that was labelled “confidential.” The FRA also warned that the California High-Speed Rail Authority would miss several deadlines.

The Obama Administration gave California $3.2 billion to build the 500-mile bullet train from San Francisco to Anaheim, which seven years later still isn’t shovel ready. The $10 billion in state bonds that voters approved in 2008 for the $64 billion (and counting) train have been tied up in litigation. Meanwhile, Democratic legislators have been loath to appropriate funds beyond a fraction of the revenues generated by California’s cap-and-trade program, which is also under legal challenge.

So the Obama Administration has repeatedly eased the spending and construction deadlines in federal grant agreements. Last year the White House provided a cash advance rather than require the railroad authority to match federal funds dollar for dollar.

Yet according to the FRA document, the rail authority still won’t meet its June deadline for spending stimulus funds. Merely 56% of the 1,606 parcels of land have been acquired for the first segment. Environmental reviews that were supposed to be done this year won’t be completed until 2020. The FRA estimates that the first segment won’t be completed until 2024—seven years behind schedule—and could cost $3 billion more than the $6.4 billion estimated.

All of this is ominous since the Central Valley segment was supposed to be relatively simple compared to building in urban areas and boring through the geologically complex Tehachapi mountains. That’s why the Obama Administration required that it be built first.

The Trump Administration can stop the federal cash advances, which are merely encouraging the rail authority to burn through funds to meet spending deadlines. This may also be contributing to cost overruns. Why should national taxpayers pay for a boondoggle that California’s liberal legislators won’t?

By | 2017-05-15T21:57:07+00:00 January 17th, 2017|Categories: Thought Piece|Tags: |0 Comments

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