Like the rest of the people in the Valley who try to stay informed, we've followed the high speed rail story from the beginning. Oujr sense of smell is probably a bit better developed than many due to our familiarity with the UC Merced project and the Great Real Estate Boom and Bust in the north San Joaquin Valley, which left its three county seats vying for top ranking in the national foreclosure sweepstakes. But there was always something stinky about the HSRR deal in our view because it was the same developers and the public officials that sold their public responsibility making all the noise, although the South African CEO of the operation until recently was a curiously fascist twist. He worked well with the former chairman of the board, an ex-state legislator, now a lobbyist busy fighting a bill to clean up water pollution in Southern California. Their staff, at least the people we met who were "handling" the Valley were primitive throwbacks to a time when the Railroad owned California and there was no such thing as public meeting and records law.
For the last 30 years, we've been in the habit, when in real doubt and confusion about an issue in the state, to at least check in with the non-partisan Legislative Analyst's Office to see their view of it. The LAO position is by no means always successful in the Legislature. A great example is UC Merced, about which the LAO took a dim view from the beginning, at some cost to themselves. But regarding the issues we've consulted them on, they have always looked at them from the point of view of the most broadly public interest. So, we are grateful again for the guidance of the LAO on the issue of high speed rail. It was flim-flam from the beginning and it remains such.
And Dan Walters has a good nose for a boondoggle, too.
Badlands Journal editorial board
Analyst: California high-speed rail plan still vague
The Associated Press
SACRAMENTO -- The legislative analyst's office said Tuesday that the latest plan to build a $68.4 billion high-speed rail system linking Northern and Southern California still relies on highly speculative financing, and it urged the state Legislature to reject funding until more details are ironed out.
The California High-Speed Rail Authority "has not provided sufficient detail and justification to the Legislature regarding its plan to build a high-speed rail system," the LAO said. "Important details regarding the very recent, significant changes in the scope and delivery of the project have not been sorted out."
The latest business plan, released earlier this month, trimmed last year's cost estimate of $98 billion but leaves it well above the $45 billion estimate given to voters in 2008 when they approved selling nearly $10 billion in bonds. The latest proposal for a 520-mile system linking San Francisco to Burbank pegs completion in 2028 and relies extensively on commuter rail lines to cut costs.
The report notes that the new plan still anticipates getting at least $42 billion in federal funding, which it calls "highly speculative."
So far, California has been promised $3.3 billion in federal funds to start construction in the Central Valley, but the project also needs financing from the voter-approved bonds.
The LAO recommended that lawmakers reject Gov. Jerry Brown's request to start selling $2.6 billion in bonds to start construction until the rail authority gives more details about its plan, but it suggested lawmakers continue funding for the rail authority in case the state wants to pursue the project later.
Opinion - National voices
Dan Walters: Bullet train still lacks valid data
The Maloof family, which owns the Sacramento Kings, is being excoriated by fans and local politicians for pulling out of a tentative deal to build a new basketball arena.
It's at least possible, however, that the Maloofs are doing Sacramento a favor by killing a project that could have been a financial albatross for taxpayers in the long run.
Christopher Thornberg, a well-known economist hired by the Maloofs to evaluate the complex deal, concluded that the ticket sales and other underlying revenue assumptions of the deal were unrealistically optimistic and in the end, it didn't pencil out.
"The current plan assumes that ticket revenues generated at the new arena will triple in four years from their current level," Thornberg wrote in a subsequent Sacramento Bee op-ed piece. "This is twice the rate of growth that was seen in ticket sales in the middle of last decade when the massive real estate bubble was in full swing and overheating all aspects of the local economy."
There is an unfortunate tendency of those who promote grandiose public projects to understate costs and overstate economic benefits.
And that brings us to what would be the largest state public works project in American history, the much- vaunted bullet train system to link the northern and southern halves of the state.
Its costs have see-sawed and its underlying ridership and revenue assumptions are, to put it charitably, suspect.
The latest plan to be released by the California High-Speed Rail Authority assumes that nearly two- thirds of the $68.4 billion construction cost will be covered by federal grants, even though Congress isn't allocating any money for bullet trains these days.
Just about every independent entity that has reviewed the ever-shifting bullet train plan has raised questions about its underlying assumptions. The Legislature's budget analyst, Mac Taylor, has been especially critical, and on Tuesday, his office issued a sharp critique of the CHSRA's latest version, which was unveiled a couple of weeks ago.
"We find that (C)HSRA has not provided sufficient detail and justification to the Legislature regarding its plan to build a high-speed train system," the report said. "Specifically, funding for the project remains highly speculative and important details have not been sorted out. We recommend the Legislature not approve the governor's various budget proposals to provide additional funding for the project."
The new analysis bolsters the reservations that many in the Legislature already harbor, although they are under tremendous political pressure from bullet train advocates, including Gov. Jerry Brown and construction unions, to allocate money for construction.
The need for a bullet train is questionable at best. But if it's to be built, it should pencil out, not be an act of political hubris.
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