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How to Make a $35B Increase Look Like a $30B Decrease

Could we just please get back to a $33-billion plan that was on the ballot?

Apr 02, 2012


Families Protecting The Valley Newsletter

APRIL 2 2012


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How to Make a $35B Increase Look Like a $30B Decrease!

Hey! The cost of California's high-speed rail just went down by $30-billion. This is an Orwellian lesson in how to tell bad news. Could we just please get back to a $33-billion plan that was on the ballot? And, while we're at it could we also stick to the other parts of the ballot measure that were put in place to protect Californians from a massive boondoggle?


Gov. Jerry Brown to change high-speed rail plan, lower cost by $30 billion

David Siders

The Brown administration has lowered the projected cost to build California's high-speed rail line by $30 billion – to $68 billion – as it braces for crucial hearings in the Legislature, according to sources familiar with the plan.

The lower estimate is tied to a series of changes to the project, primarily by relying on existing rail lines in and around Los Angeles and the Bay Area.

The changes are expected to be announced Monday in Fresno, just five months after the California High-Speed Rail Authority estimated the project could cost $98.5 billion. The business plan underpinning that estimate was widely criticized as inadequate. The critics included lawmakers and the rail authority's own peer review group.

Elements of the revised plan were suggested by rail officials weeks ago, including the "blended approach," in which existing tracks in urban areas would be upgraded and eventually used by high-speed rail.

The plan now will rely on a high-speed line down the spine of the state – from Merced to the San Fernando Valley – with tie-ins to improved tracks in the Bay Area and Los Angeles.

The approach could result in the authority spending more than $1.5 billion to improve commuter rail service in and around Los Angeles and the Bay Area, pleasing lawmakers in those areas.

The new plan also will abandon the idea of the so-called "train to nowhere," the much criticized initiative to begin the project with a line from near Chowchilla to Corcoran, in Kings County, sources said.

The federal government, which is contributing about $3.3 billion to the project, conditioned funding on starting in the Central Valley.

Now construction is planned to begin in Merced and move south to Lancaster and the San Fernando Valley.

Gov. Jerry Brown is expected to ask the Legislature to appropriate $2.3 billion in rail bond funds within weeks. This week, he told reporters he spent "several hours" on the project changes.

"We are striving mightily to get a plan that can pass muster and work, and get the train built," Brown said.

The plan still is almost certain to rely, however, on as-yet-unapproved federal funding in future years, a chief complaint of the California High-Speed Rail Peer Review Group.

In a March 21 letter to legislative leaders, the group said it expected the plan "to be changed in significant ways" and would re-evaluate it when it is approved. The rail board is likely to approve the revisions on April 12.

Public opinion has turned against the project since voters approved $9 billion in high-speed rail bonds in 2008, and critics roared when the authority in November released its $98.5 billion cost estimate, far higher than its previous estimate of $43 billion.

Brown, a Democrat, embraced that business plan. In the wake of the criticism, however, he said the cost would be reduced.

Sen. Joe Simitian, D-Palo Alto, has previously said it would be difficult for the rail authority to produce any plan sufficient to be approved by the Legislature before June, the end of the fiscal year.

When it released its business plan in November, officials said the cost would still fall lower than the cost of airport and highways expansions to accommodate a growing population.


Call David Siders, Bee Capitol Bureau, (916) 321-1215. Follow him on Twitter @davidsiders. The Fresno Bee contributed to this report.

Orange County Register

High-speed rail may be only $59 billion short. Yeah, that’ll work

posted by Mark Landsbaum

Apparently desperate to get spending underway on the California High-Speed Rail project, Gov. Jerry Brown has dramatically cut how much it will cost. No longer will the train cost $89 billion more than state taxpayers have to pay for it. Now it’ll be only $59 billion short.

Yeah, that’s like saying you will drown in only 59 feet of water instead of the deep end – 89 feet.
The Sacramento Bee is reporting that the lower price has been arrived at, as if that should sell the idea. But remember when they pitched this boondoggle in the beginning in 2008? It was supposed to cost only $33 billion.

Even then, all Californians supposedly would pay was the cost of $9.95 billion in bonds that would siphon taxes from the general fund for decades. Yeah, the same general fund that’s $9 billion in the red – again.

So, why is it supposed to cost less? Because the latest revision of this scheme won’t exactly be high-speed rail all the way. Apparently it will zip through places like Modesto. But then slow once it reaches places like Los Angeles. That accomodation was to lure politicos in congested areas to support the plan, in return for “blending” the high-speed concept with their decidedly slower existing metropolitan rail systems.

If this sounds like a bribe, it should. It meets the definition: “money or favor given or promised in order to influence the judgment or conduct of a person in a position of trust”

Your “trusted” local politicians are being bribed with money from the high-speed rail system to jump aboard this bad idea. The payoff comes from “sharing” some of the high-speed rail’s booty to “improve” the local lines.

Everybody gets something. Certainly the crony capitalists who will belly up to the trough to get fat contracts from those billions. Remember, they will get paid whether the train ends up operational, or not.

And none of this affects a few realities: 1. It is unrealistic to think the train will operate in the black. 2. The initiative approved in 2008 requires it to operate without taxpayer subsidies. 3. Ridership studies that claim it can be profitable are wishful thinking at best. 4. Voters approved a high-speed rail, not a mostly high-speed rail.

And the harshest reality of all:

The boondoggle still would be $59 billion short of what they say (now) it will cost to build it.

Maybe they can borrow from some of the public retirement funds.

Brown wants the Legislature to approve selling $2.7 billion of those bonds soon. That would be ludicrous on its face, except for one thing. The Legislature is controlled by people like Brown, which is why the state budget is $9 billion in the red and public retirement funds already are under funded.

All aboard?

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