Last month, the Legislative Analyst's Office released a devastating report on California's massive high speed rail project, essentially calling for the project to be scrapped. Tim Cavanaugh wrote up this analysis at Reason, and called high speed rail "dead" at the time. Sadly, like most truly bad ideas, high speed rail isn't as dead as it appears.
Senate approved SB 517, which would put HRSA under the authority of the Business, Transportation, and Housing Agency and give the Govenor and Legislature substantially more control over its board membership. And just yesterday, the Assembly passed AB 145, which would create a new agency, the Department of High Speed Rail Trains, within Business, Transportation, and Housing. These two bills, presumably, lay the groundwork for taking away HRSA's authority. Given the Authority's history of wasting vast amounts of money with little to show for it, this isn't in itself a bad thing; as of 2010, HRSA had spent $250 million since 1996 without producing an inch of track. But for us it's a worrying sign that Sacramento's bureaucrats haven't given up on this spectacularly wasteful boondoggle, and that they're ignoring the LAO's other concerns in their eagerness to claim billions in federal funds toward the project. According to Senate President Pro Tem Darrell Steinberg, the goal is to "mend the project, not end it."
Even if the Legislature succeeds in wresting control of high speed rail away from HRSA, there's still the question of what to do with appropriations requests for Authority funds that are still floating around. The LAO recommended slashing Jerry Brown's request of $185 million down to $7 million, which is a bureaucracy's way of saying that HRSA can't possibly do a damn bit of good with the money and should be kept from wasting it wherever possible. Yet unless the Business, Transportation, and Housing Agency is really ready to go, cutting off funds to the project at this point will only make it harder for California to begin work on it by the September 2012 deadline. The second big problem is that all the arguments for the line insist that it can generate profits that cover the costs of construction; aside from the fact that this generally isn't true elsewhere in the world, the business case for the California project suffers when you remember that it's being built in the middle of nowhere. The first phase of the line, the projected cost of which has already ballooned by 57% since planning started, will run between the towns of Borden ("near Fresno") and Corcoran ("north of Bakersfield"). The choice to start in an isolated stretch of the Central Valley was made to evade federal environmental-clearance requirements that would've led to a missed deadline and the loss of federal funds. But, clearly, it's not going to help taxpayers to have empty trains running in the middle of nowhere.