5 Reasons the CA HSR Project Shouldn’t Get More Money

Joseph Vranich, Wendell Cox and Adrian Moore
July 2, 2012

Despite California’s budget deficit rising to $16 billion recently, Gov. Jerry Brown is asking state legislators for $6 billion in bonds to launch construction on the proposed high-speed rail system. Voters approved a $9.95 billion bond package for the “bullet train” in 2008, but just about everything about the rail system has changed since then.

The California High-Speed Rail Authority (HSRA) issued a revised business plan in April that calls for a 130-mile segment running from Bakersfield to Madera in the state’s Central Valley. If the Central Valley leg is built, the plan says the system would eventually share tracks with commuter trains in the Bay Area and Los Angeles, in what it is calling a “blended” approach. Not exactly the bullet train from San Diego to Los Angeles to the Bay Area and Sacramento that voters were sold back in 2008.

The last thing California should do right now is add billions more in bond debt. Beyond the most obvious – the state simply cannot afford it – there are at least five major reasons California shouldn’t move forward on this rail project.

1. Broken Proposition 1A Promises: The Costs Look Nothing Like What Voters Approved

The text of Proposition 1A asking California voters to approve $9.95 billion in bonds for the project in 2008 said: “The total cost to develop and construct the entire high-speed train system would be about $45 billion.”

Now the High-Speed Rail Authority says the price tag for a scaled down system will be $68.4 billion. Last year, the HSRA actually estimated the costs would be over $98 billion but to lower the sticker shock by $30 billion they’ve shifted to a “blended” plan that uses slower, existing rail tracks instead of building the exclusive tracks capable of handling high-speed trains that they originally planned on.

The official proponent’s argument in the Proposition 1A ballot pamphlet also promised voters that ticket prices would be “about $50 a person.” Now, they are saying tickets would cost an average of $81 each way, with “express” tickets for the fastest trips costing $123 one-way.

The costs have changed so much from what voters were promised that funding should be halted until the HSRA fulfills its 2008 promises to voters, or until voters get to approve the changes. Several groups, including popular KFI radio talk show hosts John and Ken in Los Angeles, are starting to get the signatures needed to put a re-vote of the high-speed rail initiative on the ballot.

2. There’s Still No Legitimate Funding Plan 

The California High-Speed Rail Authority says it will need $53 to $62 billion to build the Phase 1 Blended System, which would run from Los Angeles to San Francisco. Sacramento and San Diego appear to have been dropped from the plan. The state currently has the $9.95 billion in taxpayer-backed bonds originally approved by Proposition 1A plus an additional $3.5 billion in federal grants. But where is the remaining $40-$50 billion going to come from?

In April, the nonpartisan Legislative Analyst’s Office wrote, “We find that HSRA has not provided sufficient detail and justification to the Legislature regarding its plan to build a high–speed train system. 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.”

If the state starts building a high-speed train system somewhere between Bakersfield and Fresno it will run out of money well before the system is finished. That’s okay with many train advocates, who figure once construction begins the government will be forced to find the rest of the money to avoid having a partially built $10 billion train to nowhere sitting in the Central Valley. But the legislature can’t afford to be so fiscally reckless. It needs to demand a detailed plan showing how the full rail system will be funded before approving the bond money to start construction.

3. The Train Trip That Keeps Getting Longer

When voters approved the bonds in 2008 they were promised a train trip from Los Angeles to San Francisco in 2 hours and 40 minutes or less. The new business plan is surprisingly silent on travel times but an HSRA document circulated to the board of directors says the fastest “express” trip will take three hours.

Even that time is highly unlikely because it depends on trains operating at a peak speed of 220 mph, faster than any train in the world, and an average speed of 198 mph. Such average speeds are going to be next to impossible to reach because trains won’t always be running on dedicated tracks designed for high speeds and, as the plan admits, they would be forced to slow down to 100-150 mph in Los Angeles and the Bay Area for safety reasons. Hence, it’s likely that non-stop express trains will take three hours and forty minutes.

Travelers will also find that most of the trains will make local stops and be slower than that. The business plan doesn’t provide times but it’s likely that San Francisco-Los Angeles travel times would be between four and six hours, depending upon the number of stops made.

4. Shrinking Ridership Numbers

The estimated costs have gone way up since 2008 but the HSRA keeps lowering the number of people it claims will ride the trains.

As the Legislative Analyst’s report notes, “Specifically, the HSRA estimates that the projected ridership would be about 30 percent lower than estimated in the November 2011 draft business plan.” For example, the earlier plan projected between 29.6 million and 43.9 million one–way trips per year in 2040 while the latest plan assumes between 20.1 million and 32.6 million one–way trips per year.”

The Institute of Transportation Studies at the University of California at Berkeley says the HSRA ridership estimates are way off the mark. “We found that the model that the rail authority relied upon to create average ridership projections was flawed at key decision-making junctures,” said study principal investigator Samer Madanat, director of ITS Berkeley and UC Berkeley professor of civil and environmental engineering. “This means that the forecast of ridership is unlikely to be very close to the ridership that would actually materialize if the system were built.”

The current plan claims people will choose the trains over driving. It makes this assertion by arbitrarily doubling the real costs of driving from Northern to Southern California. But the new rail plan’s reliance on blended tracks would mean slower travel speeds. Add in the time it will take getting to and from train stations and to final destinations, and it’s clear that the trains would not offer a significant time or cost savings for people driving.

Similarly, even factoring in airport security hassles and the time it takes to get to and from airports, air travel will continue to offer most travelers a faster trip from LA to San Francisco – and there won’t be a major cost difference. The rail system would find it difficult to attract large numbers of people who would normally fly between Northern and Southern California.

5. The Train Won’t Reduce Greenhouse Gases

Proponents often say the high-speed rail system is needed to reduce the state’s greenhouse gas emissions. The United Nations has estimated that effective greenhouse gas reduction efforts should cost $20 to $50 per ton. The California high-speed rail system’s emission reductions would come at a monstrous cost of $1,800 a ton.

Just as troubling, research at UC Berkeley concluded that if rail ridership met HSRA’s mid-level estimates, it would take 70 years for the rail system just to negate the emissions created by its own construction. If rail suffers lower ridership the system would “never” negate its construction emissions.

California is drowning in debt and deficits. State leaders like Gov. Brown are calling for major tax increases. The California High-Speed Rail Authority keeps raising costs, lowering rider estimates and lengthening travel times. Its current business plan reneges on promises made to voters in Proposition 1A. It would be a major mistake for California legislators to borrow billions of dollars to start building a train system that is far inferior and far more expensive than the one voters were promised when they approved Proposition 1A in November 2008.

Adrian T. Moore is vice president of research at Reason Foundation. Wendell Cox is the principal of Wendell Cox Consultancy/Demographia. Joseph Vranich is an Irvine, Calif.-based business consultant. They are co-authors of “California High-Speed Rail Proposal: A Due Diligence Report.”