California HSR, spoiled brat politics, and bad hardball

Attention Conservation Notice: HSR supporters have undermined their own vision through their cynical lack of faith in voters and democratic process. Yeah, democracy is tedious. And you don’t get what you want when you want it. That’s the price.

For those of you who have been watching the California HSR saga, the Superior Court Judge Michael Kenny issued his second ruling in the Kings County Lawsuit filed earlier this year. To recap, the lawsuit alleged multiple things (and since I’m not a lawyer, I will probably mess this up, but here goes)

1. The state does not have a finance plan that satisfies Prop 1a passed in 2008, which the first link of statewide HSR system (520 km if I remember right), and that link would operate without taxpayer subsidy. (Whose idea was it to put THAT in the initiative? Yes, HSR systems make money around the world; but they usually do so after government eats most of the early capital cost risks and babies the systems along in their early years. Is that really so wrong, when you think about it? Isn’t one of the roles of government to absorb risk?)

2. The “blended system” plan that came about after the CHSRA was forced to admit the real costs of the proposed high speed rail system isn’t what Prop 1a promised voters. (The cost estimates went from $32 billion at the time of the vote, which was laughable, to $43 billion, and then, after much dusting up with People Who Can Do Math the far-more-accurate $83 to $117 billion, which caused an outcry, which caused them to rescope the project to the blended system, resulting about $76 billion. This rescoping is going to bite them, too. Yeah, I know, but keep up, would you?)

3. And therefore, the state is not allowed to spend out of the $9 billion of bonds that Prop 1a authorized, which also means they can’t spend from the federal pots of money they obtained either.

Sigh. That’s only on Part 1. Part 2 of the lawsuit will be argued in 2014, when they take on whether the blended system on the table captures what voters were promised. As it stands now, plenty of people are annoyed; what they voted for was a high speed rail system. They didn’t vote for a proposition that builds HSR in the central valley and then improves Caltrain and Amtrack in the big urban markets. The revised cost estimates made some folks furious; the revised construction plan annoys plenty of others who note that the resulting system is not likely to be particularly high speed. (It would be higher speed than now. Does that help?)

So the Judge heard arguments in June and issued his first ruling in favor of King’s County and Fukuda in November, but he gave the Attorney General time to make arguments for why the state should be allowed to spend out those resources. Again, I’m not a lawyer, but my sense would have been that this precise moment, having lost, would have been a good time to grovel and scramble to find a potential source of funding to fix the gap. Instead, the Attorney General tried to argue that the court does not have the authority to make a decision, aka as “you’re not the boss of me,” and that the right to determine whether funds may be spent resides with the legislature.

Last week, the judge issued his final decision, and it’s not good for HSR: the state can’t spend 1a money, and they can’t enjoin Federal money. Since they’ve already spent about $1 billion, Californians are on the hook for that anyway.

Reporting on Kenny’s ruling has been, generally, petulant, like Kenny is a mean meany mean pants who is capriciously throwing up obstacles to a great vision.

Only he’s not. The judge is enforcing the terms of the ballot box initiatives supporters wrote and voted for.

From the beginning, the supporters of the project have overemphasized what damage criticism might do–note their continued flouncing around about the Hyperloop, which is the least of their problems at this point–and underemphasized the possibility that, in managing and using criticisms that arise, voters might still be brought around to understanding–and perhaps event wanting–public infrastructure of this scale and scope. Instead, they pursued assumed the worst of voters–that voters are spoiled brats incapable of signing on to a vision unless it was tarted up with unrealistic promises about how the projects work. I have said it a million times on this blog: I think voters would have been open to persuasion, even if it took longer than supporters wanted. Instead of trusting the democratic process, project supporters did everything they could to subvert it. In politics, William Galston once noted, one does occasionally have the obligation to play hardball. But here? Now, the procedural tide has turned on them, and they will have no choice but to go back to the very voters they have trusted so little–and whose faith in the project they have done much to undermine.

1 Comment

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One response to “California HSR, spoiled brat politics, and bad hardball

  1. Here are a few clarifications of the rulings: They don’t themselves block issuance of bonds or prevent the use of federal funds. However, the state Treasurer has said he won’t issue bonds unless they are verified by a court (which removes litigation risk). So the validation process would have to start all over again, this time generating actual evidence that issuing bonds would be in the State’s interest.

    The feds are having to reconsider whether they want to keep federal construction funds flowing to CA, if the state is unable to repay its matching half of the costs. If the feds pull the plug, it is GAME OVER.

    Most importantly, the Authority is unable to spend HSR bond funds on construction. It will first need to identify funding adequate to build a self-sustaining (i.e., no operating subsidy) HSR passenger operation. The Merced-LA Basin segment selected by the Authority will cost at least another $26 billion, so it seems unlikely that the current project can ever be built.

    As one of the litigants, we have contended that the project has been dead ever since the Authority decided to proceed without an experienced HSR operator as partner. (Let’s not forget that the Authority flatly rejected the French HSR operator SNCF’s offer to build SF-LA.) Not only is private capital desperately needed, but only a profit-focused entity can sidestep the political entreaties that snared the Authority in an economically infeasible route.

    All the papers filed in the various legal cases are posted on our website. Access them, the SNCF story, and an amazingly frank editorial via our blog at transdef.org.

    As a reminder, we are HSR advocates that oppose this project because we don’t want the money wasted, and the reputation of HSR in CA destroyed, perhaps forever. Because the project is vastly more expensive than needed, and the route can’t make money because it’s too slow (and also because of the legal roadblocks we have placed), we are convinced it will never result in a statewide HSR system.