California’s Bullet Train to Fiscal Oblivion

Californias Bullet Train
Dignitaries and VIP's line up to sign a portion of the rail at the California High Speed Rail Authority ground breaking event, Tuesday, Jan. 6, 2015 in Fresno, Calif. The $68 billion project faces challenges from Republicans in Congress eager to reduce government spending and Central Valley farmers suing to block the train from crossing their fields. The train would whisk travelers at 200 mph between Los Angeles and San Francisco in less than three hours. (AP Photo/Gary Kazanjian)

This post was originally published on Investor's Business Daily.

California’s bullet train project, also known as Jerry Brown’s Folly, has turned into a fiscal nightmare for the Golden State. Not only are the cost estimates soaring, but the time table has once more been shifted back. Based on current estimates, it may turn out to be the biggest fraud in the history of public works.

XWhen you lie about money in the private sector, it’s called fraud; when you lie about money in the public sector, it’s called politics or “public policy.” California’s bullet train is a perfect example of this.

Early on, planners warned that the cost would be more than $100 billion. But Jerry Brown, California’s governor, didn’t like that estimate. So, like Canute commanding the tide to recede, he sought new estimates. He sold those lower estimates to a gullible, and frankly foolish, public.

The original promise, made in a proposition voted on in 2008, called for the entire “high-speed” rail system to be built at a cost of just $37 billion and to be finished by 2020.  It would carry 120,000 riders a day at a cost of $55 a ticket — far less than it costs on average to fly. And it would zip riders to their destinations in just a few hours. Nice.

But none of those things are even remotely true.

Just last week, the state’s rail authority announced that the system will now cost $77.3 billion, 20% more than the $64 billion estimated a mere two years ago. And, oh yes, instead of being done in 2029, it will be done in 2033. But they also admitted that costs might soar to $98 billion. If you’re in a betting pool, take the over on that one.

And the ticket costs they now estimate will be $93 a pop, not $55. Big difference.

As Breitbart News notes, “only 6,132 passengers a day take the 1 hour, 39 minute flight (from Los Angeles to San Francisco) and there are lots of plan-ahead fares as low as $25.” The idea that the “high-speed” trains, which by the way will never achieve true bullet-train speeds of over 100 miles per hour, will carry 120,000 passengers a day is a total fantasy with no basis — none — in any statistical reality.

In short, there is already a low-cost, high-speed transport system between Los Angeles and San Francisco. It’s called “jet planes.” They are a 20th century technology, not a 19th century technology, as trains are.

By the way, this isn’t the first time the costs have been ratcheted up, nor will it be the last.

Just last month, the bureaucracy in charge of the rail project announced it would cost $10.8 billion for the firs 119 miles of rail (the route will ultimately cover over 500 miles). That might not sound so bad, but the initial estimate was $6 billion, so that’s a more than 70% increase. And this stretch is over flat land in what is by far the easiest part of the route to build, California’s agriculturally rich Central Valley.

But the state doesn’t have either an actual route, local community support or environmental clearance for the rest of the rail’s trip to Los Angeles, making it prohibitively expensive to build. Already, local communities in the southern part of the state are organizing to oppose having this white-elephant on wheels ripping through their communities.

So state bureaucrats, to avoid the political fallout, have begun talking about grandiose mega-construction plans, such as burrowing tunnels through two high mountain ranges surrounding L.A. This is more insanity.

Aside from the cost, that area is riddled with seismically active fault lines, which will make any attempt at building a lengthy tunnel dangerous at best. The San Andreas Fault  — due, seismologists say, for an 8.0 or even higher quake — is right in the area they would have to tunnel.

Here’s the bad part: Everyone involved in the project knew from the very first the cost would be astronomical, but ignored it. This was to be Gov. Brown’s lasting political monument, apparently working off some kind of psychic competition with his father, the late former Gov. Pat Brown, who built much of the state’s water infrastructure and its freeways.

Jerry’s dad built things that Californians actually needed. An old-style Democrat, he was keen on people getting ahead and, to coin a phrase, making California great. Jerry Brown, his son, is more into leaving a lasting legacy of futility that all Californians will  pay for. It’s a fraud, from start to finish. And, in a perverse way, this misbegotten rail system will actually serve as Brown’s legacy — one of waste, ego-driven public policy, and refusal to recognize basic fiscal realities.

If Brown has his way, this train-to-nowhere will lead to massive tax hikes and bitter voter anger at the people who built it. It might even bankrupt the state, which is already technically insolvent due to its outlandishly enormous pension obligations and plans for a “single-payer” health care program that dwarfs the rail project in size.

As it is now, the state comes up about $40 billion short in what it needs to fund the rail project, and that’s a very optimistic estimate.

But don’t worry: The Democrats in this one-party state will find a scapegoat, as they always have, when the bills come due. They’ll blame the Republicans.

This post was originally published on Investor's Business Daily.