California: Nah, we don’t need more federal cash for our rail project — yet

posted at 4:31 pm on January 23, 2013 by Erika Johnsen

Because “financial feasibility” apparently ain’t no thing in the Golden State, California is getting ready to break ground on their much-vaunted, “historic,” “multi-generational” high-speed rail project, which is awesome — because out of the current (notice the added emphasis) price tag of $68 billion, they’re only short $60 billion with few concrete plans on how to obtain that money other than eventual federal assistance. …The long-term fiscal planning and pragmatic restraint are practically overwhelming me:

California’s landmark high-speed rail line won’t require cash from Congress for at least two years. But at some point, it will.

That’s the message the California High-Speed Rail Authority’s leadership team is sending to Washington about the massive $68 billion project set to break ground this year. …

The $6 billion, 130-mile initial segment in the Central Valley will begin construction this summer, a huge milestone in a decades-long effort to bring the fast trains enjoyed all over the world to the United States. It is an effort with strong backing from the Obama administration to the tune of $3.3 billion, and from California taxpayers, who are pitching in $2.7 billion after a dramatic vote in the state Legislature last summer cemented the project’s future. …

Among the big questions that will hang over Richard, Morales and the entire project for years: Where is the other $60 billion going to come from?

The answer is “we don’t know,” Richard said, emphasizing that step-by-step funding is the only viable path to such a large number. And California is taking precautions to make sure that even the Central Valley segment will be useful immediately for the Amtrak system in the state, an effort to avoid the “train to nowhere” moniker still popular among opponents.

Yes, because as we all know, the entire Amtrak system is holding up just swimmingly. It may very well be one thing to not know where “every penny” of a long-term infrastructure project is going to come from; but it is another matter entirely to have little idea of where you’re going to get $60 billion for a showy, ill-advised project in a state already beleaguered with debt. Perhaps this generally blithe attitude is why California’s outlook for fiscal sustainability isn’t looking too good, whatever Gov. Jerry Brown might say:

California had been floating in debt. Then Brown persuaded voters in November to increase sales and income taxes. Now he releases a budget that, as Brown said at a news conference last week, advances a progressive agenda but does so based on available dollars.

Is California on to something? Is Brown’s formula — a combination of government idealism, tax increases and tough- minded budget choices — the answer for the nation, as well?

As tempting as it might be to buy this story line, the answer is no. In reality, the Brown approach is the latest in a series of “kick the can down the road” budgets that ignore the buildup of debts. It rewards public-employee unions with pay and benefit increases — while shielding them from desperately needed pension reforms — and ignores deep problems within the state’s economy.

And why California just keeps on dropping ranks in terms of business-friendliness:

From small businessmen in San Diego to vintners in Napa Valley, top-earning Californians reeling from a new state income tax are preparing to pack up and bail out. …

“If you have excessive regulations and excessive tax, that’s just not where you want to be,” said Peter Farrell, president of ResMed a medical-device maker in San Diego that employs 600 workers and is considering moving its offices out of state. “California is unfriendly. It’s become an unfriendly business environment.” …

Another San Diego-based company, Fallbrook Technologies, a maker of variable speed transmissions, recently announced it is leaving for Texas.

Nevada tax accountant George Ashley said he’s received more than 100 inquiries from higher-earning Californians about the possible tax advantages and feasibility of relocating to a state with lower taxes.


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Of course we don’t… It’s NEVER going to be built, a pure Ponzi scheme.

SWalker on January 23, 2013 at 4:33 PM

Rails to Nowhere.

Electrongod on January 23, 2013 at 4:34 PM

I left 7 years ago, took two of my business with me, and never looked back…the only reason to stay in California is if you are a service business that serves the local population…any national company that stays, I question their fiscal intelligence.
I am not sure I would want to, or could afford to, do business with someone not smart enough to recognize how much money they are throwing away…and if I am doing business with them, that’s my money they are throwing away.

right2bright on January 23, 2013 at 4:36 PM

I must confess not to knowing much about these rail boondoggles. Is it earthquake safe? Can they save money by buying those two engines WI was stuck with?

Bmore on January 23, 2013 at 4:40 PM

Make work project. Bet the workers are going to be in unions.

rbj on January 23, 2013 at 4:40 PM

Just returned home from Californis. It’s starting to look like a 3rd world crap hole.

FORWARD!

jawkneemusic on January 23, 2013 at 4:44 PM

It connects to nothing cities…amazing they are even considering this…Madera (central valley, pop 65,000) to Bakersfield (don’t visit in August)…

right2bright on January 23, 2013 at 4:45 PM

right2bright on January 23, 2013 at 4:36 PM

I moved there in 2001. Stayed for 6 years. 6 of the most unproductive years of my life but I met my wife there so it wasn’t a compete waste. We moved out of there 4 years ago. Would like to return someday but it likely won’t happen given the insane leadership, fiscal situation, crap economy, living costs and anti-2nd Amendment culture.

jawkneemusic on January 23, 2013 at 4:49 PM

I had to raise children so I left California. That place is insane.

GardenGnome on January 23, 2013 at 4:50 PM

So, they’ve figured out where 8.8% of the total amount is going to come from with no plans where to get the other 91.2%. So they are basically applying CRA housing loan rules. I can see how this will work, look at how well the CRA debacle worked out.

AZfederalist on January 23, 2013 at 4:51 PM

What about the Delta Smelt?

Ditkaca on January 23, 2013 at 5:01 PM

Here is an exact example of this kind of madness: I decide to build an addition to my house. The estimate is $90,000. I have $7,900 between loans from my folks and my savings.

I have NO IDEA if or how I can possibly get the rest.

I then sign the deal with the contractor to get started!

This is how utterly disconnected Big Government is from economic reality that we all as citizens have to live by.

What world do they live in?

A world of complete fantasy.

A world sprinkled with Rainbow Sugar Magic Unicorn Fairy Dust.

Opposite Day on January 23, 2013 at 5:03 PM

Keep watching Cal-ee-four-knee-ah

We’re not too far behind.

ICanSeeNovFromMyHouse on January 23, 2013 at 5:04 PM

patronage crony boondoggle of the fking millennium.

tom daschle concerned on January 23, 2013 at 5:09 PM

Just returned home from Californis. It’s starting to look like a 3rd world crap hole.

There are some communities in California already like a 3rd world environment. What the Left hopes the entire USA will someday be like.

hawkeye54 on January 23, 2013 at 5:09 PM

It’s all an excuse to use eminent domain to gobble up Central Valley fertile farmland.

Maybe they will start collective farms if the train doesn’t get built! That’s always worked before.

Or maybe all our homeless will live in the empty trains.

PattyJ on January 23, 2013 at 5:09 PM

Opposite Day on January 23, 2013 at 5:03 PM

Sorry to correct you but the scenario is more like….

I decide to build an addition to my home. The estimate is $90,000. The house is currently worth $500k but I owe $700k on it. The $90k addition will add $15k value. My house payments are $3800 per month but I only make $2500 per month. My parents can kick in $400 per month but only if one of them stops eating.

I then sign the deal with the contractor to get started.

Ditkaca on January 23, 2013 at 5:10 PM

It connects to nothing cities…amazing they are even considering this…Madera (central valley, pop 65,000) to Bakersfield (don’t visit in August)…

right2bright on January 23, 2013 at 4:45 PM

FIFY

Absolute madness.

Lou Budvis on January 23, 2013 at 5:14 PM

Reminds me of the Cincinnati Subway. Started in the 1920s, paid off in the 60s, and never finished.

http://www.forgottenoh.com/subway.html

AcidReflux on January 23, 2013 at 5:16 PM

You’ll never get Californians out of their cars.

When this is all said and done, the stations will be as crowded as the streets of Pyongyang.

SPCOlympics on January 23, 2013 at 5:21 PM

Make work project. Bet the workers are going to be in unions.

rbj on January 23, 2013 at 4:40 PM

There’s some of that.

It’s all an excuse to use eminent domain to gobble up Central Valley fertile farmland.

Maybe they will start collective farms if the train doesn’t get built! That’s always worked before.

Or maybe all our homeless will live in the empty trains.

PattyJ on January 23, 2013 at 5:09 PM

This is closer to the mark.

Also, there’s a huge kickback/quid-pro-quo arrangement between the politicians and the big contractors – Siemens, etc.

peski on January 23, 2013 at 5:30 PM

100 years from now, kids in the CA valley will kicking around the tumble weeds and mud cakes and run into these old, rusty rails sticking up out of the ground. One kid will ask another, “what’s that?” and the second kid will just shrug his shoulders and say, “I dunno, but let’s throw rocks at it….” Dinner that night will consist of wild-eyed tales of how a once prosperous, fertile and bountiful Central Valley produced food for the entire world. The dad’s face will grow grim as he starts to talk about the beginning of when it all came to end at the hands of mad men…..

….then a band of leather-clad brigands will break in, kill the father, take away the women and children and ransack the home. They’ll wake up to Malia Obama standing above them looking like Tina Turner and yelling, “Welcome to Thunderdome!!!”

powerpickle on January 23, 2013 at 5:44 PM

Maybe the trains will have this much ridership.
The white population will be outnumbered by hispanics this year.
http://ctewary.blogspot.com/2010/01/crowded-train-in-india-can-you-imagine.html

docflash on January 23, 2013 at 5:47 PM

Among the big questions that will hang over Richard, Morales and the entire project for years: Where is the other $60 billion going to come from?

In the past, Moonbeam has stated that ‘foreign investors are lining up’! Of course NO ONE else has SEEN any of these foreign investors.

I think Moonbeam just didn’t HEAR correctly. I think what he heard was ‘Foreign TRAIN MANUFACTURERS are lining up to SELL us their bullet trains.’

GarandFan on January 23, 2013 at 6:24 PM

Of course we don’t… It’s NEVER going to be built, a pure Ponzi scheme.

SWalker on January 23, 2013 at 4:33 PM

Just a matter of how much is wasted in the process, isn’t it?

Count to 10 on January 23, 2013 at 6:50 PM

This conservative actually thinks HSR would work in California. I think each end of the line will be jammed with supercommuters going from dirt-cheap Central Valley and Mojave desert housing into Silicon Valley and LA.

The problem is that incompetent California leaders are going to do those parts last, and oh-so-green-and-progressive destination communities like Palo Alto are doing everything they can to hamstring operations on their part of the route.

There is also ample reason to doubt that the ruling Democrat political class can pull it off in a timely and cost-effective manner. That’s largely due to all the costly and time-consuming environmental regulation and litigation they’ve enabled. Conservatives can file EIS lawsuits too.

kd6rxl on January 23, 2013 at 6:58 PM

It’ll be cool looking down on a train going 200 miles per hour while you’re flying over in a plane going 350 miles per hour.

Worth every 6.8 trillion pennies.

MichaelGabriel on January 23, 2013 at 7:03 PM

**sigh**

Tim_CA on January 23, 2013 at 7:08 PM

Among the big questions that will hang over Richard, Morales and the entire project for years: Where is the other $60 billion going to come from?

Have Obama make 6 10-Billion Dollar Platnium coins and problem solved. :)

itsspideyman on January 23, 2013 at 7:21 PM

*math*

KOOLAID2 on January 23, 2013 at 7:46 PM

It’ll be cool looking down on a train going 200 miles per hour while you’re flying over in a plane going 350 650 miles per hour.

Worth every 6.8 trillion pennies.

MichaelGabriel on January 23, 2013 at 7:03 PM

FIFY, just a minor correction to show the real difference.

NapaConservative on January 23, 2013 at 8:53 PM