Economy

Challenging the California High Speed Rail Leadership and Project Direction

Written by Michael Palomba

California’s “high speed rail,” or HSP for short, has been in the works for decades. The California High-Speed Rail Authority was established in 1996. Proposition 1A, also known as the Safe, Reliable High-Speed Passenger Train Bond Act for the 21st Century, was passed in 2008.

However, with over two decades spent on this project, there is virtually nothing to show for it. It was only a few months ago that Governor Gavin Newsom announced plans to scrap the high-speed rail line from San Francisco to Los Angeles. He claimed it would take too long and cost too much.

This prompted a quick response from President Trump. The federal government contributed billions to the project, and Trump said that California would have to pay that back since their project failed. 

So what is the status of the project, which has consumed over $5 billion? 

Currently, CEO Brian Kelly and Board Chairman Lenny Mendonca are pushing a “spend all existing funds in the Central Valley agenda.” Governor Newsom, at least currently, does endorse the present plans.

Despite this, HSR Board Director Danny Curtin and other Democrats support diverting around $5 billion away from the present plans to other projects in both Northern and Southern California. 

Kelly’s responded, “The idea to divert money from what we’re doing now and spend it on regional services, to me, is not consistent with the mission of high-speed rail. That’s my opinion.”

The goal of Prop 1A, which laid the groundwork for the rail, specified that the HSP would be able to transport passengers from Los Angeles to San Francisco in two hours and 40 minutes, or less. The current plans of spending all existing funds in the Central Valley will not accomplish that goal, at least for the foreseeable future. According to the State Auditor, the project is $50 billion short of being able to meet that goal.

What would be accomplished by the current plans would be starting operations on the segment from Merced to Bakersfield. However, there would be an operating subsidy required, a blatant violation of Prop 1A, which requires there be no operating subsidy.

For reference, the MTS system currently has an operating subsidy. This means the price of the ticket does not cover the cost of the ride, so the additional cost is covered by the state.

Currently, the Federal Transportation Inspector General is conducting an audit of the authority which is scheduled to be released this winter. 

As of now, the exact fate of the rail is unknown. There will be a vote sometime next year to decide what happens with unallocated $4 billion that remains for the project. 

But one thing we know for sure: nobody will be taking the high speed anytime soon, if ever at all.