Navigating a New State-Federal Relationship

Dec 6th, 2016 | Posted by

California is on an epic collision course with soon-to-be-president Donald Trump. Governor Jerry Brown, incoming AG Xavier Becerra, and the legislative leadership are determined to defend California’s people and values against the new regime in DC.

It remains to be seen what this means exactly for California’s high speed rail project. Federal funding now seems unlikely until at least the 2020s. At this point there is no basis for continuing to delay the inevitable – California needs to plan for HSR to be funded and built without any more federal financial contributions. Eventually we will see Trump and his party ejected from power, but that could take four to eight years. It’s time for California to focus on resilience and survival, and building HSR all by itself is part of that.

Before the CA-US conflict begins in earnest (a political conflict, to be clear), the federal government did offer something very helpful last week. The Federal Railroad Administration finally announced new regulations allowing operators to use trains designed to European safety standards:

The FRA expects the new rules will enable railroads to use trains that are safer, more energy efficient, and cheaper to operate. The rules will allow American passenger train operators to purchase rolling stock designed to European safety standards (but not Japanese standards), without going through an expensive waiver process….

It’s unknown why the new regulations spurned Japanese models, but Alon Levy, who blogs about transit issues at Pedestrian Observations, speculates that it’s because Japanese safety standards focus more on crash avoidance than “survivability” compared to European standards.

It remains to be see what this means for California HSR, but Siemens and Alstom clearly now have an advantage over Japan, at least in terms of trainsets.

November Cap-and-Trade Auction Goes Very Well

Nov 27th, 2016 | Posted by

Last week brought more silver linings to California amidst the gathering storm clouds of the Trumpocalypse, as demand rebounded for cap-and-trade permits:

Demand for California pollution permits rebounded in the latest carbon auction after plummeting earlier this year, state officials said Tuesday.

Still, the permits did not sell out, heightening uncertainty about the program’s future.

About 88 percent of the available credits were purchased at the quarterly auction held last week by California and its trading partner, Quebec, Canada. That’s an improvement from the 35 percent sold in August and 10 percent in May.

I don’t think that an 88% sell rate compared to 35% in August and 10% in may qualifies as “heightening uncertainty” – it’s quite the opposite. There’s still a legal case to deal with, but as Democrats now have 2/3 majorities in Sacramento, a governor absolutely determined to leave strong climate change policy as his legacy of 16 years in office, and a state ready to fight against Trump and the Republicans with everything it’s got, I’m bullish on the future of AB 32 and cap-and-trade.

Clearly, permit buyers are bullish too. And this bodes very well for the ability of California to fund high speed rail.

I’m Thankful for California Voters

Nov 25th, 2016 | Posted by

The votes are in – most of them, anyway – and Californians have delivered some big, if indirect, victories for high speed rail. Let’s review:

Prop 53 goes down to defeat. Prop 53 fell behind on election night, but it took two weeks of counting until defeat became official. The numbers as of November 25 are 49.1% yes, 50.9% no. This ensures that future high speed rail bonds will not be subject to constant public votes, which would make it harder to successfully sell those bonds. It’s a big defeat for HSR deniers, and a big win for Governor Jerry Brown.

Democrats retake a 2/3 supermajority in Sacramento. Democrats won back several Assembly seats they had lost in 2014, ensuring they picked up a 2/3 supermajority in the lower chamber. It took a bit longer for the Senate supermajority to be declared, but earlier this week Joshua Newman passed Ling Ling Chang and has secured the 27th Senate seat for Democrats. This doesn’t guarantee smooth sailing for Democrats, especially as the Assembly mod caucus remains intact. But it sure helps, and makes a renewal and extension of cap-and-trade a lot easier.

Local rail measures pass. HSR needs local rail connections to thrive, and voters north and south approved measures to address both. In LA, 70% of voters approved the massive Measure M package, which will help bring rail to many more corners of LA County – with the HSR station at LA Union Station at the hub of the system. Bay Area voters approved Measure RR to invest in much-needed BART maintenance, and Santa Clara County voters approved Measure B, ensuring BART will reach downtown San José and Santa Clara.

That’s the very good news. Unfortunately there’s bad news as well, and it starts as the top, as everyone knows.

Rail projects face a Trumpocalypse. Sure, Trump talks about infrastructure spending, but the combination of a Republican Congress and a lunatic right-wing president does not bode well for any federal money for rail, including high speed rail. You can pretty much kiss federal matching funds for urban rail goodbye. It’s possible that a deal can be reached to set up an infrastructure bank but I would not be surprised if Congressional Republicans refuse to allow it to loan to California HSR. Worse, the US Department of Transportation and the Federal Railroad Administration and the Surface Transportation Board will come under the control of right-wing ideologues, causing new headaches for California HSR. While one might try to find some comfort in positive things Trump has said about HSR, the fact is that this administration’s domestic policy is largely being run by Mike Pence, with a heavy assist from Reince Priebus (and thus Paul Ryan). So those key federal agencies are going to fall into very anti-HSR hands.

Anti-HSR Congressional Republicans survive. It’s not over yet, but Darrell Issa is hanging on by a hair in his race against Doug Applegate. Jeff Denham and David Valadao won more easily over their opponents. It would have been nice to see them lose their seats, removing big obstacles to HSR and putting Democrats closer to a renewed House majority.

The lessons of the 2016 election are clear, and they’re not new. It’s the same lesson as every election since 2010: California is on its own, and should start acting like it. HSR will have to funded solely from state and private sources.

In fact, everything that makes up a modern 21st century civilization in California, from public schools to health care to infrastructure, is going to have to happen on the state level now. Judging by this powerful anti-Trump statement from California’s legislative leaders, the state’s government is up to the task.

So who wants to talk about the 2018 governor’s race?

Thursday Open Thread

Nov 17th, 2016 | Posted by

Apologies for the long gap in posts. I’m not stunned into silence by Trump’s victory – I’ve been waiting for more CA election results so as to post a review of what happened and what it means for HSR. But with 3.4 million ballots left to count, such finality may be a few weeks away. So let’s keep the discussions going here, and I’ll post something tomorrow with a preliminary look at CA results.