Robert has written abundantly about the recent HSR controversy. And while there are still some serious issues to be dealt with before construction, HSR is still a good idea. Sure the HSR Authority could have done a better job at the initial planning and outreach. Former chairman Quentin Kopp, also known as "San Francisco's Favorite Crank," and his shall we say less than convivial tactics didn't really suit the situation all that well. Fortunately for HSR, Kopp is now removed from the situation and doing what he does best, acting cranky from the sidelines.
That all being said there is still much to like in the in the new HSR plan, and really it lies at the heart of the New California Dream. From a letter from Jim Earp, Chair of 2008's Prop 1A and also the executive director of California Alliance for Jobs:
As we all have witnessed, the debate over the details of the business plan has been spirited. There have been questions about cost, funding, whether starting construction in the Central Valley makes sense and whether the High Speed Rail Authority is being responsive to local concerns.
But there is a more fundamental issue that must be addressed first: Does California really need high-speed rail?
As the one who oversaw the high-speed rail bond measure campaign in 2008, I firmly believe that high-speed rail isn't a luxury, but a necessity for California. It isn't a pipe dream that should be shelved until such time in the distant future when California hopefully finds itself with loads of discretionary cash. Plain and simple, high-speed rail is the most cost effective, environmentally responsible way to help transport the additional 20 million people that will be living in California three decades from now.
You can find the full letter here or over the flip. But to me, the main issue is how we are going to move Californians north and south for the next century. We can either continue to rely on the highway system, and just hope that oil doesn't run out, and that we don't need to be concerned about greenhouse emissions or actually look at reality. There will be a lot more people in California over the next few decades.
We'll hit 50 million at some point in the next few decades and moving those people around is not cost-free even if we don't build HSR. Highways are far from free, and our airport system cannot really sustain substantially higher traffic. We'll have to invest in our infrastructure in one of two-ways, either try to prop up the old way of doing things, highways and such, or think big. As Governor Brown said:
While the nation is in a "period of massive retrenchment," Brown told The Fresno Bee's editorial board, "I would like to be part of the group that gets America to think big again."
*** **** ***
"The numbers look big," Brown said, but he added that the investment is small when compared to the state's economic productivity over the life of the system. That, he suggested, is why the state needs to "look to the future instead of the past."
Gov. Brown recently appointed Michael Rossi, his so-called "Jobs Czar" to the Authority, and is paying attention to the program. It is time to think Eisenhower-ian in California once again. We can afford to build big projects, the alternative is that we just coast off what we built in the last century. That is really as far away from the American ideal that I grew up with as is really possible.
From a couple of the stars of Mad Men comes this Mad Fast Trains short clip. While our two senators are generally supportive of HSR, it certainly doesn't hurt to let them know that you support it as well. And forward Mad Fast Trains to your friends...
With his State of the Union address, President Obama delivered an important message that Congress and the American people need to hear: our nation's leaders must pass legislation that creates American jobs now.
America, our shining city on a hill, has been blessed with great fortune in our proud past, but as the President noted, every generation faces new challenges and new opportunities. We must be bold and forward looking, never forgetting that America's prosperity has always relied on hard work, solid education, and well-maintained infrastructure. We're a nation that has always thrived when we've built things - the light bulb, the automobile, the Internet, and the GPS. We need to build things again. We need to Make It In America
Today is going to be an excellent day for California High Speed Rail and our state's economic future. California has been awarded $2.35 billion in federal passenger rail stimulus funds. $2.25 billion of that goes directly to high speed rail, the other $100 million goes to other passenger rail projects.
• $2.25 billion for high speed rail funding in the SF-SJ, Merced-Fresno-Bakersfield, and LA-Anaheim corridors, as well as for Phase I planning. There is some debate about whether these are specifically programmed to each corridor, or whether Governor Arnold Schwarzenegger and/or the CHSRA will determine the final allocations.
• $99.4 million for upgrades and track work designed to produce faster speeds on other passenger rail routes, including the Pacific Surfliners, San Joaquins, and Capitol Corridor.
There is no specific detail about whether the Transbay Terminal got funded or not, which has been part of an ongoing battle between the California High Speed Rail Authority and San Francisco. That might be part of the "to be determined" portion of how the money is to be allocated, if the reports are true that the FRA is leaving that decision up to the state.
Still, this is a major victory for the California high speed rail project. $2.25 billion, with $100 million for other passenger rail, is an unprecedented level of federal investment in California rail.
It's also a repudiation of the "go slow" argument on the Peninsula. Mayors Rich Cline of Menlo Park and Pat Burt of Palo Alto have openly derided the value of the stimulus and suggested the state not pursue the stimulus funds, even as unemployed workers explained the desperate need for new jobs. President Obama has rejected this insane approach, and said that instead of going slow, we need to go much faster - at high speed.
Just as the November 2008 approval of Prop 1A by California voters signaled that high speed rail really was going to happen, the infusion of a significant amount of federal money is further proof that despite all the deniers and critics, HSR remains not just popular, but a major element of this country's economic recovery plans.
It's also a reminder that, as many of the experienced land use planners and infrastructure builders explained at last week's State Senate hearing in Palo Alto, we're currently at the most difficult part: hashing out the details of where exactly the trains go, and how exactly the tracks will be built. Once dirt is turned and steel put in the ground, all this difficulty will begin to fade.
We still have some way to go on this. And if indeed the Governor gets to decide how the $2.25 billion for HSR is allocated, some of the corridor battles are still yet to be fought. But it gives us another chance to advocate for getting this money out the door as fast as possible to ensure that we start putting people back to work, weaning California off of oil, addressing global warming, and building a 21st century transportation system.
Today I'm going to be in Sacramento for the California Labor Federation's Economic Recovery Summit. The agenda includes discussions about creating jobs that can provide lasting economic recovery, ensuring a broadly shared prosperity that won't be dependent on a massive wave of debt as were the last three economic booms. It also includes a discussion of "rebuilding California's crumbling infrastructure."
Those are familiar stats to blog readers. But it's worth exploring in some depth just how high speed rail can contribute to lasting prosperity in California beyond the obvious benefit of over a hundred thousand construction jobs.
First, the big picture. California is suffering from an economic crisis right now partly because of overdependence on oil-based forms of transportation. When gas prices broke $3 per gallon in 2006, the housing market peaked as buyers were no longer able to service debts. That bubble would have eventually burst, but it burst at a specific time and for a specific reason, that being the ripple effect of high oil prices throughout the economy. When oil prices spiked again in 2008, it helped push the nation into a severe recession.
As we know, oil prices are projected to keep rising in coming years. The only reason they've stayed below $100/bbl is the recession, and even then the prices at California pumps have hovered around $3 all year.
There can be no lasting economic recovery without bringing down transportation and energy costs. High speed rail is a key part of that. By providing both regional and intercity transportation, it helps stave off the impact of the oil-driven airline crisis, enabling business travel to continue in the state at stable prices. By helping produce electrification on the Caltrain corridor, and potentially on some of the SoCal railroad corridors, HSR will help daily commuters enjoy stable costs as well.
Those savings have been described as a green dividend. Sustainable and green transportation policies have saved residents of Portland, Oregon $2.6 billion. The ripple effect throughout the local economy has made Portland one of America's leading cities, and provides a model that California would do well to emulate.
We've talked often at this blog about how high speed rail can play the same role as Depression era projects like Shasta Dam and the Golden Gate Bridge in driving economic recovery. The construction generates badly needed short-term employment, and the system operations generates long-term savings and economic activity, just as the Golden Gate and Bay Bridges do after 70+ years.
There's another interesting aspect of HSR and economic recovery, which we touched on in yesterday's post, and that is the construction of the trainsets themselves.
For 6 years earlier this decade, 2001 to 2007, I lived in Seattle, Washington. One of the dominant players in Washington's economy since World War II has been Boeing. The state's economy has often risen and fallen with the cycle of aircraft production, but that production was a central part of growing the state's middle class.
There's no reason why California cannot play a similar role for the rest of the nation, and maybe even a global market, with high speed train construction. Already Siemens and Alstom have set up plants in California. Since we are further ahead than any other state in HSR plans, it's likely that by the time other states start their own HSR construction efforts, California will already be producing trainsets. Those other projects could conceivably look to California to produce the trainsets they will use on their own systems, and provide an ongoing market for high speed rail production based in California.
Of course, it's not a given that it would turn out that way. Talgo is planning to open a factory in Wisconsin. The Detroit area is full of cheap land and skilled assembly line workers needing jobs. And you can bet other state HSR projects will try and woo the trainmakers to their states.
But if California starts making trainsets first, we'll still have an advantage. It would likely be cheaper to buy trains made in pre-existing California factories, with an existing workforce, than to buy trains made in a new factor with a new workforce - the latter has higher start-up costs to recoup than the former. And other states would still be able to meet Buy American rules by ordering California-made trainsets.
Other states are beginning to blaze this trail. In 2007, Oregon Iron Works established a subsidiary called United Streetcar to produce streetcars for Portland at its Clackamas factory. Their success has already led to orders from Tucson, and other cities planning streetcar lines are considering ordering from United Streetcar. Colorado Railcar would likely have been in a similar position in the DMU market were it not for its financial collapse last year.
California used to be a major producer of industrial products - steel at the Kaiser mill in Fontana, automobiles in Van Nuys and Fremont (among other places), even tires in Salinas. Those industries produced broadly shared economic prosperity, at least until the great wave of deindustrialization and offshoring hit after 1975.
Today we can restore some of that prosperity by building more environmentally sustainable, clean, green industrial products like HSR trainsets. California can and should take the lead in producing them - and the only way we will do it is by seeing through to completion the high speed rail project voters approved in November 2008.
During this whole budget crisis, a lot of friends have told me that Calitics is a big downer. So, in an effort to highlight some of the good stuff going around California, I've decided to introduce something I hope to do regularly with this Dept. of Good News. If you have some good news that will fit this space, shoot me an email.
First, the Long Beach Port has installed the worlds' first shore-side power system for oil tankers that will drastically decrease pollution in the area. It will allow tankers in one of the busiest ports on the West Coast to connect to the power grid rather than sit in the port idling, burning dirty fuel.
At a ceremony formally unveiling the port's dockside power system, port Executive Director Dick Steinke described it as "another giant step" toward cleaning up the air. The project cost $23.7 million and took three years to complete, port officials said. The port contributed about $17.5 million to the project and BP paid the rest.
Roger Brown, regional vice president of BP, said the emissions reductions amounted to 50% even when factoring in pollution created by power plants in generating the electricity. (LAT 6/4/09)
Speaking of reducing emissions, you know what else would do that? Why, high speed rail, of course. After passing our high speed rail bond package (2008's Prop 1A), we are now sitting pretty for the federal government's $8 B of stimulus money tagged for high speed rail.
"The reason why California is looked at so closely -- it's been a priority of your governor, it's been a priority of your Legislature, they've talked about it, a lot of planning has been done," Biden said in a conference call with reporters.
The vice president said the administration wants "to get shovel-ready projects out the door as quickly as we can. . . . So California is in the game." (LAT 6/4/09)
HSR has been in the works for a loooong time, and had we just put this on the ballot 6 years ago or whenever it was originally scheduled we would now be in full construction mode. Despite that, after all the land is purchased and a bit more planning is done, we should be digging for what could be our next great infrastructure project sooner rather than later.
At the California Democratic Convention a couple weeks ago, Gavin Newsom met with a couple dozen bloggers to talk about his campaign for governor. I was excited going into this meeting, especially since I knew exactly what question I was going to ask. It was the same question that AC Transit Director Joel Young asked at a Newsom town hall in March: what are you going to do about the fact that the state has entirely stripped funding from local transit agencies? You might remember that Newsom basically dodged the question and launched into a speech about how great high speed rail is. So this time, I was determined to get a better answer.
And surprisingly, I was somewhat impressed with his answer. He explained that coming from a city and county, he understands the needs of public transit agencies. While stimulus funds are available for capital projects, none are available to run buses, which is problematic. (Of course, this isn’t entirely true - some funds are being used for operating expenses - but it was nice to hear that he understands the need for operations funding.)
Newsom then said that California is a prosperous state and that it’s all about priorities. Except somehow he managed to skirt by without saying what his priorities are! His comments suggested that he would prioritize public transit, but he never actually committed to this. This was a theme throughout the blogger meeting - Newsom displayed a firm understanding of the issues at hand but managed to not make many specific policy promises.
My favorite line from Newsom about transit issues came not in response to my question but in an answer to Calitics’ David Dayen’s question about prison issues. Newsom said (among other things), “Building prisons is like building highways; within a few years, they’re 90% filled up.” Yes, a major candidate for governor understands that building highways is fruitless because they only generate demand and never fulfill it. Of course, he didn’t promise that he would place a moratorium on new highway construction or do anything else to stop highway expansion.
I left feeling pretty good about Newsom’s answer. Though he didn’t make specific policy promises (except on high speed rail), he at least didn’t entirely dodge my question.
But I became a bit less impressed yesterday, after reading Lieutenant Governor John Garamendi’s post on Calitics about High Occupancy Toll (HOT) lanes and Bus Rapid Transit (BRT). Up until a few weeks ago, Garamendi was running for governor, and if he had stayed in the race, he would have blown Newsom out of the water on transit issues:
It's an important announcement and contains some long-awaited policy changes that will help make HSR a reality across the nation. It's not yet clear how this will impact the California HSR project, but the way the funding allocation categories are set up appears to be quite favorable to us here in California.
First, I want to quote from both President Obama and VP Biden - these guys get it when it comes to HSR. It is a sea change from the last 25 years of refusal to speak openly and honestly about our nation's transportation needs.
"My high-speed rail proposal will lead to innovations that change the way we travel in America. We must start developing clean, energy-efficient transportation that will define our regions for centuries to come," said President Obama. "A major new high-speed rail line will generate many thousands of construction jobs over several years, as well as permanent jobs for rail employees and increased economic activity in the destinations these trains serve. High-speed rail is long-overdue, and this plan lets American travelers know that they are not doomed to a future of long lines at the airports or jammed cars on the highways."
He nailed it. This quote has it all - energy independence, job creation and long-term economic growth, and relieving congested airports and freeways.
That case is made strongly and powerfully in the HSR strategic plan document (PDF, 3MB). It is one of the best arguments for HSR that I've ever seen. This administration is serious about HSR. The plan includes a good overview of the history of rail funding in America, explaining that we have spent over $1 trillion on roads and airports in the last 50 years but have starved rail - even though, as the report makes clear, high speed rail is one of the best methods to move people over distances from 100 to 600 miles.
The report also recognizes the need to update the FRA's regulations to make HSR more of a possibility in this country - current regulations require trains to be unusually heavy, which makes it difficult to import existing "off the shelf" train technology or to achieve high speeds in an energy efficient way.
The heart of the plan is a three-pronged approach to funding HSR using the following "tracks" - shovel-ready projects (including engineering and EIR prep); "corridor programs" to support HSR corridors where planning and engineering work has already been done but that aren't yet shovel-ready; and "projects" to help new HSR planning efforts get off the ground. The CA HSR plan potentially qualifies for funding under all three categories, since our project has some shovel-ready elements to it, as well as corridor design work to complete.
California has to compete with some other states, of course, including the Pacific Northwest, Illinois, Ohio, New York, Pennsylvania, and perhaps even Florida and Texas. The California High Speed Rail Authority had been hopeful that we could get as much as $4 billion out of the $8 billion HSR stimulus money. That's going to be a challenge, but the plan hasn't been set up to make that impossible.
So overall I think this is a huge boost for HSR, even though it does leave some things unclear as to how exactly our own project will fare. And it all depends on Congress's commitment to funding HSR in future years, especially in the next transportation bill, where the highway lobby will fight to prevent their money from going to HSR.
Over the flip, I take issue with Matthew Yglesias on this announcement.
I'm tired of even thinking about the lunatic political leaders in this state, so I'm going to take a short break and focus on the innovators, those who have the ability to drag us out of recession and toward a new economic future.
For starters, Tesla Motors, which last year was thought to be in a fair bit of trouble, has come out of that and has begun to receive orders for their new $50,000 sedan model.
San Carlos, California-based Tesla Motors said it has received 711 reservations for its new Model S, an all-electric family sedan that carries up to seven people and can travel up to 300 miles per charge.
Tesla said reservations - which include a refundable $5,000 fee - started coming in after the car was formally unveiled on March 26. Mass production of the Model S is expected to begin in late 2011.
The company said the Model S will go from zero to 60 miles per hour in 5.6 seconds, with an electronically limited top speed of 130 mph. Three battery pack choices will offer a range of 160, 230 or 300 miles per charge. The company has not released pricing options on the higher-mileage battery packs.
The anticipated base price of the Model S is $49,900, after a federal tax credit of $7,500.
One high-profile buyer is Governor Schwarzenegger himself, who will turn in the Tesla roadster he had previously purchased in exchange for the sedan. The goal of Tesla is to bring a model into the $35,000 and under market, essentially on par with a Lexus, within the next couple years, and with the federal tax credits and complete lack of gas costs, that would be an attractive option for a pretty broad section of the upper and upper-middle class. Tesla reminds me of the Wild West early days of the auto industry, when lots of small manufacturers competed for business and the competition drove innovation.
The American Recovery and Reinvestment Act approved by Congress in February contains $8 billion to be doled out to states for development of high-speed rail service and passenger rail service among cities.
California wants half.
"As of now, we have close to $4 billion worth of things we can show can be done within the time limit" of the act, said Mehdi Morshed, executive director of the California High-Speed Rail Authority, the agency charged with building a speedy rail line connecting Northern and Southern California through the Central Valley.
Morshed and other California boosters are trying to make the case with federal transportation officials that when it comes to high-speed rail in the United States, the Golden State is king.
"All factors considered, we are at the top," Morshed said. "We are the only ones with a real high-speed rail project. Everyone else is just improving their current (conventional) rail service."
While the $10 billion in bonds authorized by last November's Prop. 1A (the good one) have yet to be sold on the open market, federal stimulus dollars would really help get HSR off the ground. And such an investment would get some of the preliminary work out of the way and spur private investment, which would be looking toward a shorter lead time for their payoff. Our friends at the CA HSR blog, including some guy named Robert, have more. You can quibble with the strength of the SacBee article, but you cannot deny that the President has made high speed rail a priority and California's entity is clearly the furthest along, suggesting that we will be in line for a good portion of those stimulus dollars.
Despite political dysfunction, innovators will allow California to move to a new economy based on clean energy and efficiency. Hopefully the political leaders will follow, having failed to lead.
Last night, I went to Gavin Newsom’s town hall at the Rotunda in downtown Oakland. Overall, I wasn’t surprised by the event. He touched on many subjects - health care, education, improving the environment - and his overriding theme for the evening was that while many candidates talk about these issues, he has shown real progress on them. He did fail to mention though that many of the projects he took credit for last night (like universal health care) actually originated in the Board of Supervisors. But that’s pretty typical - he’s a politician and of course is going to take credit for everything he possibly can.
I really appreciated the fact that he took almost an hour of unfiltered questions from the audience. And I could not have been much more pleased when our new AC Transit Director, Joel Young, asked the first question. Joel explained that the state had defunded public transit and asked if Newsom, as governor, would restore public transit funding.
Newsom responded that public transit is so important for the environment and briefly answered, “Yes,” that he would restore the funding. But then instead of explaining why or how, he jumped into a long-winded speech about high speed rail. He started off by saying that he wanted to tell us about a project that he knew not all of us supported because it barely passed. This is a strange thing to say because 63% of Alameda County voters voted in favor of Prop 1A.
He then explained how high speed rail was going to change the state, creating jobs and changing how we thought about and used transportation. He talked about his vision for the “Grand Central Station of the West,” which is what some are calling the Transbay Terminal. Energetically, he explained how this would greatly improve the Bay Area region, making it easy to get from downtown to downtown (Oakland to SF).
And that was it. That was his answer to an AC Transit Director.
There's a very pernicious habit in California of turning away from budget issues once a crisis is averted, in a show of relief that we will at least get a small reprieve from having to deal with the contentious battles for a period of time. This false sense of security is bad enough in regular years, when the budget is cobbled together through borrowing against the future and no long-term solutions are implemented. In this dynamic economic crisis, when rosy outlooks can darken in a matter of days, it's downright foolhardy.
Greg Lucas at California's Capitol has been one of the louder voices in insisting that the budget crisis is not at all over. According to Controller John Chiang, revenue in February was $900 million dollars below estimates. Now, if you extrapolate that out, we'll be in a $10-$12 billion dollar budget hole by the end of the year just if things remain at the same level. This is of course unlikely, as the February national job numbers showed. So much of the tax increases passed in the February 19 budget solution are tied to employment - an increase in the income tax, and sales tax increases that of course rely on residents having purchasing power. In addition, these lean economic times will push more people into needing state services, like unemployment and Medi-Cal. Then there are the counter-cyclical increases and cuts that are working against what the economic recovery is attempting at the federal level.
In addition, many of the spending and taxation decisions made in the recent budget cancel out some of the benefits to California of the American Recovery and Reinvestment Act.
The federal package provides an estimated $13.1 billion in refundable income tax credits for middle to low-income Californians at the same time the state budget includes $12.2 billion in tax increases, only some of which are deductible. And only half of taxpayers deduct.
The federal bill includes a one-time $250 payment to the state's aged, blind and disabled poor at the same time the state is reducing the maximum grant for an individual by $37 a month, $444 annually.
"California is roughly an eighth of the nation. The impact of this is sufficiently large that it could affect the prospects of recovery for the nation as a whole," said Jean Ross, director of the California Budget Project, who has been examining how the state's budget interacts with the federal stimulus package.
The biggest short-term issue is cash. Lucas did an interview with John Chiang where he admitted that we will still need to borrow against the anticipation of future revenue as early as April, to the probable tune of $1.5 billion. Because the budget deal was completed too late to include changes to the income tax code, those revenues will not come in until the following tax year. The sales tax will go up April 1, but that will not be enough to cover expenses.
CC: Is February a big month for obligations?
JC: No. April is the real difficult month. If we don't get that RAN, we're $636 million in the red. But then the bigger issue is July. When we walk into the next fiscal year we will need a massive cash infusion.
CC: How come?
JC: We always borrow at the beginning of the year, 25 out of the last 26 anyway and then in April we make up the difference. But this year we walk in with weakness into the next fiscal year. There are less tools in the tool kit. We'll need a massive RAN or RAW (Revenue Anticipation Warrant).
Remember these last budgets borrow $16.5 billion from (state) special funds to backfill the general fund. So if we have any emergency in the state requiring aid from one of those special fund departments, the state is in trouble. Over 1,100 special funds in the state and we borrowed from over 650 of them. Part of this last budget solution gives us the ability to borrow another $2 billion more. The governor's budget has us borrowing $11 billion from special funds over the next 18 months.
So we're going to have to do some outside borrowing for the next fiscal year. Period.
And of course, there's very little anticipation of the worsening economic picture in the budget, meaning that we'll be in unquestionably worse shape by summer. And the cash crisis, forcing short-term borrowing, really impacts selected projects that go out into the bond market, for example infrastructure like the high speed rail project, which will basically have to shut down if there isn't a quick infusion of cash. Keep in mind that California has the worst bond rating in the country and the credit markets are still not that friendly to the state.
Another pressing matter is the determination of how much money from the federal stimulus will be available to the state to fill budget holes. There is a "trigger" in the state budget that would actually reduce some cuts - most of them the worst of the worst, particularly in health care for the needy - as well as reverse increases to the income tax, if at least $10 billion dollars in federal money hits the state budget. It's not just that money comes in, it's that it has to go toward general fund relief in order to contribute to the trigger. And Mike Genest, the Governor's finance director, has a preliminary estimate up showing that the state will come up short. This is insanity. As the California Budget Project noted on a conference call today, there will be many billions above the trigger number available to the state, the legislature need only craft the receipt of that money in such a way to hit the trigger. Otherwise, they are raising taxes and cutting services, and needlessly so. One such bill would change Medi-Cal eligibility requirements to free up as much as $11.23 billion over 27 months. That should happen ASAP. Democrats are trying to write this as a special session bill and ensure that it requires only a majority vote.
The main point here is that we remain in crisis mode with the state budget, and will continue for years upon years until we stop putting off the fundamental, structural solutions the way we constantly do. For example, the prison system remained virtually untouched during the budget crisis, despite being both crippling to the bottom line and unconstitutional in its overcrowding and inability to provide health care. We desperately need structural changes with how the state budgets, and those will only be accomplished by demolishing the conservative veto over the process and repealing the 2/3 rule.
UPDATE: Here's a link to the CBP study of the American Recovery and Reinvestment Act, identifying as much as $50 billion dollars available to the state in funding. Surely the legislature can figure out how to capture 20% of that and set off the budget trigger.
In Indiana Jones and the Last Crusade the hero must choose from a collection of drinking vessels to determine which is Holy Grail and which leads to certain death. When the Nazi-collaborating villainess picks the wrong cup the knight says "she chose...poorly."
Unfortunately the Palo Alto City Council has chosen poorly as well, preferring to fuel a broad-based attack on the high speed rail project to a more reasonable set of suggestions about how to effectively build HSR in Palo Alto. They adopted the anti-HSR recommendations that this blog implored them to reject, turning an understandable debate over the visual and physical impact of a structure to a more fundamental attack on the concept of high speed rail itself. Palo Alto could have limited itself to asking for a tunnel. Instead they want to buck the will of the voters - including their own residents - and insist that the HSR project be imperiled because of a small handful of NIMBYs and HSR deniers.
The council responded [to NIMBY protests] by unanimously approving a formal letter to the high-speed rail authority calling for it to study the possibility of building a rail tunnel under the city. Despite Diridon's comments, the letter will also call for the rail authority to reopen the possibility of running the trains through the East Bay or along the Highway 101 or Interstate 280 corridors rather than along the Caltrain tracks. Another suggestion is to stop them in San Jose, forcing riders to transfer to Caltrain to get to San Francisco.
"That's not the end of the line," Council Member Larry Klein said of the authority's 2008 decision on how to route the trains. "Laws do get changed. That's what our legislature is for, that's what the initiative process is for, and that's what the courts are for, in some cases."
Larry Klein is basically trying to force adoption of the previously-rejected Altamont Pass routing, and cut out of the HSR project entirely the city of San José, the third largest city in California and the largest city in the San Francisco Bay Area. Failing that he wants to destroy the entire system by forcing it to terminate at San José Diridon and forcing intercity passengers to transfer to a commuter rail service to finish the journey to SF - something most passengers WILL NOT DO. This would weaken the system by reducing ridership below the number necessary for the system to be financially viable.
Klein seems willing to ignore the democratically expressed will of the people and risk the entire HSR project, which he presumably supported when Palo Alto's City Council endorsed Prop 1A last year, because of a few ignorant people. As we have explained at the HSR blog they believe, in spite of the available evidence, that the tracks will form an unsightly "Berlin Wall" that will make their communities look ugly.
Because of that, they're willing to destroy the entire project. Consider that for a second, and then read more over the flip:
Darrell Issa has had an interesting position in the 111th Congress as one of the chief yarn-spinners on the Republican side. I guess it's because he's immune to any charge of hypocrisy. First he demanded White House compliance with necessary Presidential Records Act laws regarding email, after playing down the Bush Administration's major failings in this regard. Yesterday, he appeared on MSNBC with David Shuster to parrot the latest RNC talking point, that the stimulus earmarked construction of an LA-to-Las Vegas high speed rail train. Now, I'm not sure what's so horrible about this - LA to Vegas is a busy corridor, especially on the weekends, and the route essentially goes through desert so construction will be disruptive to almost no communities. But the fact is that it's completely untrue - LA to Vegas is not on the current DOT high speed rail lists and no money expressly goes toward construction of that corridor. A fact that David Shuster inconveniently pointed out. I particularly enjoy the smile after he knows he's been caught.
This zombie lie isn't going away, but at least some reporters aren't taking the bait.
One of my lingering concerns about the Obama Administration has been that they might be tempted to claim victory with the $8 billion in HSR funding added to the stimulus and not follow up on that money, which as we know merely pays for some initial costs. But Secretary of Transportation Ray LaHood made clear last week that in fact, the $8 billion in HSR stimulus really is intended as a signal to America that Obama is truly serious about building HSR:
LaHood said that for Obama building high-speed rail networks is, "if not his No. 1 priority, certainly at the top of his list. What the president is saying with the $8 billion is this is the start to help begin high-speed rail projects." He added that the administration "is committed to finding the dollars to not only get them started but to finishing them in at least five parts of the country," although he declined to elaborate on where these projects might ultimately be built.
And don't worry about the right-wing freakout over the Vegas HSR project - California is in better position than any other HSR project in America to use that stimulus funding. We can begin construction in late 2010 or early 2011; no other project is anywhere close to that point.
This couldn't be better news for us in California, where we have long known that at least $15 billion in federal aid, spread out over 10 years, will be needed to build the SF-LA line. Unfortunately the news is tempered by the fact that the Obama Administration's support for HSR did not extend to mass transit as a whole. Here in California the state has decided to zero out the State Transit Assistance account, costing local agencies over $500 million in funding. The federal stimulus isn't nearly enough to make up the difference. And as the San Jose Mercury News reports, that's setting up a situation where HSR may be pit against local transit agencies:
The MTC meeting Wednesday in Oakland could turn contentious, as the current plan calls for allocating $75 million to help build the Transbay Terminal in San Francisco, which would serve as the final stopping point for a high-speed rail line and Caltrain (UPDATE: the MTC now plans to seek train box funds from the $8 billion HSR stimulus, not the general transit stimulus funds - see Transbay Blog for more info) and $70 million to build a BART spur to Oakland International Airport. Those two projects alone would take 43 percent of the $340 million headed to the area in stimulus funds for local transit.
Some want money for those new two projects scrapped or reduced - and redirected to cover the cost of paying for day-to-day transit needs.
But MTC officials counter that building the Transbay Terminal now will save millions of dollars in later costs, and combined with the $8 billion in stimulus funds set aside for high-speed rail could accelerate that program.
I support using that money for the Transbay Terminal, although I'm less certain about whether BART to OAK is all that necessary; the AirBART buses work pretty well (I used them on numerous occasions when I was an undergrad at UC Berkeley, although that was 10 years ago).
But I really hate it when HSR pitted against other forms of transit. I have said it before and I will say it again - HSR and other mass transit need each other to be successful. It should not and must not be an either/or choice. I don't blame the MTC for being stuck in this position - that blame lies in Sacramento and Washington DC. But we transit advocates need to not fall out along modal lines.
I'd like to propose a solution, one that I don't even know is possible under state law but makes a ton of sense to me. The nine-county SF Bay Area region should implement its own gas tax, which will solely be used to fund public transit. I haven't penciled out the numbers so I don't know exactly what the tax amount should be, but it should be indexed to the price of gas, and not a fixed cent number.
This money would initially be used to backfill the loss of STA funds, and allow the federal stimulus money to go to new transit infrastructure such as Transbay Terminal or BART to OAK. Ultimately the STA funds must be restored by a statewide gas tax increase, but it is much more politically possible to implement a gas tax in the Bay Area first than to try and get the Central Valley and the Southern California exurbs to buy into this (they can be brought on board later, once the 2/3 rule is eliminated).
It's very difficult for folks living in the nine counties to evade the tax, with the possible exception of Gilroy residents who might drive to Hollister to fill up. Most folks will simply pay the increase rather than drive far out of their way to get a cheaper gallon of gas.
I'm not sure if this option has been explored by the MTC and the member counties, but it ought to be. It's a sensible solution that would not only help spare transit agencies from "Armageddon" but would itself be a long overdue policy shift that would give a real boost to transit efforts in the SF Bay Area.
Everybody at the post-Christmas sales today? Yeah, you and nobody else. Here are a few links to give to you and yours.
• This is really a terrible tragedy in Covina, where a man dressed in a Santa outfit opened fire on a Christmas party at his ex-wife's family's house, eventually pouring lighter fluid on it and burning it down. Nine bodies have so far been recovered at the site, and the assailant, who had $17,000 and a plane ticket to Canada on him, instead drove to his brother's house in Sylmar and took his own life. Stunning and horrible.
• On a markedly more hopeful note, here's an LA Daily News story (which made the front page) about state Obama 2.0 organizers who joined together to engage in community service projects throughout the past week. If nothing else, Obama has inspired a generation of activists who will pay deeper attention to their local communities, and I think it's just the beginning. A national Day of service is planned for January 19, the day before the inauguration.
• Another in a series of less-than-meets-the-eye reports about the California housing market shows home sales way up but the median price way down. Close to half of the sales were on foreclosed properties, accounting for the price decrease. This also makes it extremely difficult to sell a non-distressed home, because the competition on price is so great.
• The latest apportionment study by Election Data Services projects that California may not lose a Congressional seat as previously feared. The state has seen an increase in growth relative to the other states lately. I would add that growth by region is probably different than projected models, given the shock to the housing markets. Most of the areas growing the fastest in the state, like the Central Valley and the Inland Empire, are among the worst housing spots in the nation, and their populations relative to the coasts may suffer as a result.
• High-speed rail officials are optimistic about their chances to secure federal funding to finish the projected cost of voter-approved Prop. 1A.
The Field Poll finally got around to polling Prop 1A and the results are about what I'd expected after six weeks of the Reason Foundation and the Howard Jarvis Association flooding the state's media with lies. We have a 47-42 lead with 11% undecided. The common rule of thumb in California politics is that a proposition under 50% before election day is in serious trouble, but I'm not convinced that conventional wisdom will hold true this year. There are a number of propositions - such as 4 and 8 - that are also very closely split, and voters are showing a better understanding of the issues, with a reduced inclination to vote no as a knee-jerk reaction.
Still, the poll shows that we have a LOT of work to do between now and Tuesday. Especially when you look at the crosstabs.
Prop 1A will be decided on election day. Those who have already voted oppose it 39-51. That is very close to the number of McCain voters opposing Prop 1A, 35-56. Here in California absentee voters have traditionally leaned Republican and conservative. Those groups oppose Prop 1A - Republicans by a margin of 35-58 and conservatives by a margin of 30-64. Voters over age 65, those most likely to cast an absentee ballot, oppose it 38-53.
However, if California gets an Obama surge on election day, the outcome may be much different (preferences are listed in order of yes, no, and undecided):
Democrats: 53-30-17
Independents: 54-40-6
Moderates: 49-40-11
Liberals: 61-25-14
Obama: 56-33-11
Age 18-34: 50-38-12
If young voters in particular hit the polls in large numbers than we can win this on election day.
The latest canard that high speed rail opponents are trying to use to defeat Prop 1A is that the Authority failed to deliver a legislatively-mandated, updated business plan. Dan Walters made this the centerpiece of his HSR denial column today.
On the surface it sounds bad. But as the facts demonstrate this is a case where Republicans - and Democratic Senator Alan Lowenthal, who oughta know better - have set up high speed rail and Prop 1A to fail.
On August 26th AB 3034, after a weeks-long delay, was finally signed by Arnold Schwarzenegger. That bill directed the California High Speed Rail Authority to create a new business plan...by September 1. Giving the Authority merely five days to come up with the new plan.
Why the delay? The bill was passed out of the Assembly on May 29. From there it languished in the State Senate. Alan Lowenthal put out a nonsense study trying to cast doubt on the plan, but it was Sen. Roy Ashburn who played the central role in delaying AB 3034 into early August. By the time the Senate passed AB 3034, however, Arnold Schwarzenegger had started in on his temper tantrum, refusing to sign any new bills until we got a new budget. Arnold relented on AB 3034 - but had the bill bent sent to Arnold sooner, it would not have been subject to Arnold's tantrum, and there would have been time to produce it.
But it gets worse. As you know, the state budget delay this year was the worst on record - three months long. The state Constitution mandates that a budget be approved by June 15 and implemented on July 1 - the beginning of the new fiscal year.
The Authority's staff consists of 6.5 employees. Not a huge amount of staff to put together a business plan, actually, especially when you give them five days and then withhold a budget from them.
HSR deniers have now tried to use the delayed business plan to claim that Prop 1A and HSR are flawed. Today the State Senate held a hearing about the business plan, likely designed and timed to hurt Prop 1A's chances. You can see the complete video here and the YouTube of the key exchange above. At the hearing Quentin Kopp explained that the plan will be ready around November 8, after proper work goes into its production and review by Goldman Sachs.
Roy Ashburn tried to attack Kopp over the delay, asking "You and your Authority are in violation of California law as we sit here today. If you were in my chair, what would you say?"
Kopp's reply:
If I were sitting in your chair I would use temperate language. Did you ever read the state Constitution? Did you ever read Article 4, Section 12? Do you know what it says? It says...the Legislature shall pass the budget bill by midnight on June 15 of each year. You're in violation of the law. Consider the outcome should a taxpayer bring a suit to recover the money that you eventually drew between June 15 and September 23 of this year. Consider the fact that people don't work without being paid. Consider the fact that my executive director hasn't been paid since January of this year. Consider the fact that when you finally appropriated the money the contractors who expect to be paid can finally begin work on the business plan. I'll tell you why people should believe me. Because I have an impeccable reputation for honesty, integrity, and independence.
Ashburn could not reply to that point. He avoided it and tried to repeat his same points. But the smackdown was delivered, and Ashburn is exposed as a fraud. The state legislature, led by Republicans like Ashburn who held this state hostage for three months, refusing to do their Constitutional duty to pass a budget because they were demanding unspecified cuts, have absolutely NO place to be criticizing ANYONE else in the state government for not following the law. Ashburn is full of it and kudos to Kopp for calling him out on it.
Kopp drank Roy Ashburn's milkshake. I think we're done with this whole "business plan" nonsense, aren't we?
Not content with denying to Californians the numerous tangible benefits of high speed rail, Prop 1A opponents have retreated into a revival of Herbert Hoover's economic policy in order to try and defeat the most important project Californians have considered in nearly 50 years. Their argument is that in an economic crisis, we should turn to austerity instead of following the tried and true path of deficit spending on infrastructure that provides short-term job relief and long-term economic value.
Today we have numerous articles and media outlets starting to push back against the New Hoovers. From newspaper editorial pages to leading economists there is a growing consensus that we must use deficit spending - in our case, bonds - to spur economic growth through infrastructure projects.
Conservative Financial Times columnist Samuel Brittan said the fears that short-term stimulus spending by governments will raise deficits miss the point. Even the $700 billion Wall Street rescue plan approved by the U.S. government - part of a more than $2 trillion international bailout of banks by governments around the world - does not change the equation.
"Maxims about debt that might be prudent for families can be the height of folly for government," he wrote.
British economist John Maynard Keynes is credited with the basic insight, arguing that the Great Depression was prolonged because Western governments insisted on balancing budgets, raising taxes and cutting spending at a time when private economic activity had ground to a halt.
Maya MacGuineas, president of the Committee for a Responsible Federal Budget, a nonpartisan research group, said both candidates must put together a credible long-term plan to deal with the exploding deficit, but that the government should be priming the pump in the short term.
And to provide that help, we're going to have to put some prejudices aside. It's politically fashionable to rant against government spending and demand fiscal responsibility. But right now, increased government spending is just what the doctor ordered, and concerns about the budget deficit should be put on hold....
All signs point to an economic slump that will be nasty, brutish - and long....
And this is also a good time to engage in some serious infrastructure spending, which the country badly needs in any case. The usual argument against public works as economic stimulus is that they take too long: by the time you get around to repairing that bridge and upgrading that rail line, the slump is over and the stimulus isn't needed. Well, that argument has no force now, since the chances that this slump will be over anytime soon are virtually nil. So let's get those projects rolling.
The growing unanimity of opinion on the need for deficit spending for infrastructure projects is striking. Krugman, MacGuineas and Brittan join leading economic figures like Nouriel Roubini and Lawrence Summers in calling for bold action to mitigate the deepening economic crisis.
Or, why the Sac Bee and Modesto Bee are wrong to oppose Prop 1A.
California is staring into the abyss. 30 years of conservative economic policy, including tax cuts, have brought the national and the state economy to the worst economic crisis we have faced since 1933. The state budget is in perennial deficit - caused by those same conservative policies. Since Prop 13 in 1978 the state's revenue levels have been set artificially and deliberately too low to maintain our core services. The purpose was to force crises like this and tell Californians "either we raise your taxes or we destroy government."
The budget deficit is a difficult problem. But it can be closed fairly easily by returning to the income tax levels on the wealthy that Ronald Reagan supported, that were in place from 1991 to 1998. It is a question of political will - our budget deficit is not a force of nature but a deliberate creation of man. What we make, we can unmake.
More importantly, how exactly are we going to close that budget deficit, provide short-term relief and long-term economic growth without infrastructure projects? Many economists argue that government spending on infrastructure must be part of not just an economic stimulus right now but also of any financial rescue plan. These economists understand what we at this blog have understood - that we need stimulus to revive our economy.
Banks aren't lending just because of the bad assets on their books - they're not lending because the economy is sliding into recession. To stop that we need government spending on new stimulus. That was conventional wisdom during the Depression and it eventually brought us out of the depths - while also setting up the prosperity of the postwar era.
Unfortunately California newspaper editorial boards remain trapped in the failed conventional wisdom that brought us to this point of crisis. Instead of returning to tried-and-true economic principles of infrastructure stimulus, they argue we should sacrifice the future to the failure of the present. That because we are in crisis now, we cannot act to rescue ourselves from that crisis, and cannot act to provide a more stable future.
Such is the position of the Modesto Bee in its editorial against Prop 1A and of the Sac Bee. They both claim it is "too costly for the state." In doing so they merely demonstrate their lack of knowledge about high speed rail and their unwillingness to act to reverse the slide into severe recession.
The passage of Prop. 1A would generate an estimated 160,000 construction-related jobs at a time when the state could use an economic stimulus. But its even greater long-term value to the state will be the economic and environmental benefits of connecting urban centers with growing inland cities that don't have major airports - and providing an alternative to the cattle-call flights between the Bay Area and Southern California.
They're absolutely right - and even understating the case. The long-term value isn't just in providing alternatives to cattle-call flights, nice though that will be. The long-term value comes in providing an alternative to oil, period. Our state's dependence on oil is causing financial and economic havoc. Those who make baseless criticisms of Prop 1A's financing are ignoring the far more risky and damaging impacts of "staying the course" and doing nothing in the face of a climate and energy crisis that is strangling our economy.
The editors had a good response to those fiscal critics:
Opponents have seized on the understandable anxiety about a venture of this magnitude and have questioned everything from its cost projections to ridership estimates to its environmental benefits. In a meeting with our editorial board this week, they suggested the money would be better spent on relieving gridlock on regional roadways.
However, the fiscal safeguards on Prop. 1A were toughened substantially with the Legislature's recent passage of AB3034. It limited the amount of money that could be spent on administration or other items unrelated to construction. Also, construction could not begin on any segment of the project until it was certified that the funding for it had been secured. State funding would account for about half of the project; the balance would come from the federal government and private sources.
HSR deniers want Californians to believe that if this passes that we're going to be DOOMED, doomed I tell ya, especially in our state budget. But the Chronicle points out this is nonsense. If the feds and private enterprise come through as they have consistently indicated they will then we build it and everyone's happy. If they don't come through, we don't build it, no money spent, no harm done.
They close well:
Prop. 1A presents an ambitious vision that is well tailored to the state's transportation and environmental needs. We recommend its passage.
