California ran out of other people’s money to build its high-speed rail line?

“California Scraps Plan to Build High-Speed Railroad Between Los Angeles and San Francisco” (TIME):

California Governor Gavin Newsom is abandoning plans to build a high-speed railroad between Los Angeles and San Francisco, saying the ambitious project that was approved by voters and championed by his predecessor is too costly.

Instead, the state will finish roughly 120 miles of track already under construction in the Central Valley, a mostly rural agricultural region that runs down the spine of the state, Newsom said.

California was one of the first U.S. states to champion a government-owned high-speed rail system like those that are ubiquitous in parts of Europe and Asia. Former Governor Jerry Brown defended the project as part of the state’s nation-leading effort against climate change, an issue that Newsom has made a centerpiece of his administration.

The Central Valley segment was expected to cost $10.6 billion, according to the latest business plan. [That’s about $66 million per mile in what would seem like some of the world’s simplest terrain.]

Newsom said workers will continue building a stretch of the line between Merced and Bakersfield.

What could have changed? The project has grown a bit in price, but not dramatically more than anything else government does. I wonder if the difference is the new tax law. With direct federal cash plus California state taxes being deductible, taxpayers in Indiana, Ohio, New York, et al. were previously going to pay for 75 percent of this fun project? Now that non-Californians would be stuck with only 50 percent of the bill, it isn’t fun to do anymore? So it would be fair to say that California ran out of other people’s money?

[Regarding the new mini-line: Google Maps shows that it is practical to drive between Merced and Bakersfield in roughly 2.5 hours. Why spend $10.6 billion on a short train line in a thinly populated area and then $1 billion/year (?) to run it? The answer can’t be energy efficiency, I don’t think, because even when tracks already exist an ordinary inter-city bus uses less energy per passenger than today’s trains. If Californians wanted to save energy, wouldn’t they just run more buses on their existing roads?]


8 thoughts on “California ran out of other people’s money to build its high-speed rail line?

    • Even if this were true in the aggregate, how does it change the analysis of an individual project? The high-speed train was partly directly funded by federal $$, to which Indiana taxpayers contribute. California collects extra taxes every year for the fancy train, no? When they were deductible against federal, that meant taxpayers in other parts of the country had to pay more (either actual tax today or more tax tomorrow for debt service and repayment (do we ever repay anything?)).

      (Separately, I don’t think it is true that California is a donor to the larger cause. So much federal spending on, e.g., health care, ends up back in the pockets of the richest states where pharma and medical device companies live. The spending is recorded as happening in Kentucky, but the money lands in San Diego or San Francisco. When a welfare family in the Midwest buys an iPhone with their cash earnings (because they don’t have to pay for rent, health care, or food), that money ends up in Apple’s pocket, though the spending was recorded as having happened in the Midwest.)

    • And we are still left with the question of why California is suddenly abandoning this project. The cost has not gone up all that much.

  1. Slightly O/T but useful for the high speed rail reference: What about the Hyperloop? Remember the good old days in August 2013 when Elon Musk’s vacuum tube train was only supposed to cost around $6 billion, do SanFran – LA in 1/2 hour at ~750 MPH perched atop concrete pylons and literally decimate the exorbitant costs of California’s high speed rail plans? I sure do. I wondered how they were going to get that train up to 750 miles per hour and back down in an evacuated tube for 30 minutes across the elevation changes and not make the passengers think they were gonna die for their $20 quick trip.

    “Mr. Musk took swipes at the California High Speed Rail that is being built and headed by the California High-Speed Rail Authority. This train, while real, is not expected to be completed until 2029 and will cost an estimated $68.4 billion to build.”

    One of the funniest lines in that piece comes from Richard White (Professor of History, Stanford) who looked at Musk’s plans and quipped:

    ” ‘How’s he going to build this thing for $6 billion? You can’t even build the Bay Bridge for that much money.’ The still-unfinished renovations of the Bay Bridge connecting San Francisco and Oakland are expected to cost $6.3 billion.”

    If you believed it, Musk had a bridge to sell you! Ho, ho.

    Inre: Elevation changes. This is a bike tour, but it gives some interesting numbers: “Cyclists contemplating doing the SF to LA bike tour should be comfortable with riding hilly terrain.”

    I guess we shouldn’t feel too bad, though. Allegedly they’re still going to build the first operational 10km segment of hyperloop in Dubai at an estimated cost of USD $20-40 million per kilometer So the upper cost estimate (recoup time: 8-15 years!) per mile is now almost as high as building the Central Valley segment of California high speed rail and calling it quits!

  2. The problem is not construction costs but purchasing right of ways from existing landowners. I doubt California is just going to “seize”the land. The only reason nice freeways exist in the DFW area is that the land was set aside decades ago and purchased from farmers when the price was low. Every large state and the federal government is broke. Until the population starts growing again with able-bodies workers paying taxes most states are just going to choke to death on their interest and pension obligations. Debts that should have not been accumulated and promises that should have not been made. But it’s easier for a politician to promise a teacher or policeman a full pension 20 years from now, than pay them what they deserve today.

  3. “…why is California is suddenly abandoning this project?…”

    Because the oil companies and the rubber companies finally killed it. Ever since it’s inception, there has been a never ending stream of negative press. Since it started construction, you couldn’t open a newspaper, magazine, Facebook, twitter, etc.. without seeing posting after posting panning it. “too much money”…”the train to nowhere”…no one will ride it”…on and on and on.

    In this country, the last thing the oil companies and rubber companies, and the airlines want is an efficient rail system. Goodyear and Standard oil had a major hand in wiping Los Angeles’ Red Car rail system off the map. They even made sure to tear up the tracks.

    Environmental rules, land acquisition nightmares, poor planning, route changes, etc…every imaginable option was deployed to stop this thing in it’s tracks (pun intended).

Comments are closed.