California’s Next Train Wreck
Transportation Secretary Ray LaHood announced last week that he plans to divert to California some $300 million in high-speed rail funds that Florida rejected. Nice timing. California’s Legislative Analyst’s Office released a study last week warning the state legislature not to appropriate funds for the same project.
The state legislature’s fiscal watchdog says California’s high-speed rail authority, which is responsible for planning and overseeing the project, has grossly underestimated the cost. The authority projects that the 500-mile bullet train between Anaheim and San Francisco will cost $43 billion. The analysts start at $67 billion, which they say will go higher if there are construction overruns in metropolitan areas. When are there not such overruns?
Good luck finding that $67 billion. State taxpayers approved a $9 billion bond measure in November 2008 based on the authority’s assurance that the federal government and private investors would provide $30 billion in capital. The feds have only appropriated about $3.6 billion, and House Republicans aren’t about to subsidize any more. The authority also imagines that local agencies and businesses will chip in $15 billion, but the only people who want to invest in this California Dream are Democratic politicians.
Congress ought to tell Mr. LaHood to devote the $300 million to reducing the federal deficit. And California’s legislature had better pull the plug on the project before it blows up on taxpayers.