"All Of A Sudden We’re Popular"
Last week the Fresno Bee had a good overview of the funding issues our high speed rail project still faces. The article includes some good details that we haven’t discussed before:
Three days after the election, the authority published an update of its 8-year-old business plan. It estimated construction costs at $23.5 billion in 2008 dollars, plus $3.2 billion to $4 billion for trains and about $6.1 billion for design work, rights of way and other expenses.
Besides the $9 billion authorized by Proposition 1A and the hoped-for $12 billion to $16 billion in federal funds, the authority also is counting on $6.5 billion to $7.5 billion from pension funds and other investors, plus $2 billion to $3 billion from local governments along the route.
If it all comes together, the plan says, the authority will be ready for final design and construction in 2012, a little more than three years from now. But that’s a big if.
This is the first mention of pension funds, but they are an intriguing and I would argue sensible source of money for the project. The stock market crash has hurt some of the larger public funds, like Cal-PERS, and it makes sense that they’d want a more stable long-term investment. It’s worth keeping in mind that it’s not anticipated that pension funds would make up even half of the $7 billion or so from private investors, and that the California High Speed Rail Authority has letters of interest from over 40 large investors.
As the US looks to recover from what is already the longest recession in over 25 years sustainable infrastructure projects will be a major part of future growth. It makes sense to use HSR as a 21st century version of the Depression-era projects that did so much to put California back to work. Private investors will find security in our project that has been lacking elsewhere in the economic landscape.
And of course economic stimulus is a major reason why we can expect to see some considerable coin coming out of Congress for HSR in the next year. As the Fresno Bee points out, though, we’re not the only ones in line:
An Amtrak reauthorization bill that President George W. Bush signed in October puts the state in competition with 10 other potential high-speed rail corridors for a pool of money currently limited to a modest $1.5 billion. The Washington-to-Boston corridor — home to Amtrak’s Acela, a sort-of-high-speed train that tops out at 150 mph — is at the front of the line.
California is fighting for second place with nine others, including virtually all of the nation’s population centers from Florida to the Pacific Northwest.
That $1.5 billion is the first drips from the faucet – John Kerry is proposing a much larger package for the 2009 session. Still, the Northeast Corridor has powerful allies. There are at least sixteen Senators representing the eight NEC states from Massachusetts to Maryland (damn seventeenth century borders!) as compared to just two from California.
However, California is in a VERY strong political position with San Francisco’s Nancy Pelosi as Speaker of the House and Dianne Feinstein and Barbara Boxer wielding significant power in the US Senate. Jim Costa, a member of the House of Representatives from Fresno and the author of the 1998 bill creating the High Speed Rail Authority while a state legislator, is confident that we’ll get federal money:
Rep. Jim Costa, D-Fresno, a current San Joaquin Valley congressman and longtime high-speed rail advocate, predicts that any federal help will come in several chunks.
Besides the Amtrak bill, Costa said, funds could come from other legislation on surface transportation and climate change as well as an economic stimulus bill intended to relieve the recent credit crunch and recession.
Lynn Schenk, a CHSRA board member, was also quoted as saying that our possession of state matching funds will put us in a very good position when lobbying Congress – outside the NEC no other state has matching funds for an HSR project (though some states, like Washington, have funds to upgrade existing tracks to reach higher speeds).
The upshot is that California has an opportunity to get HSR funded in 2009. I would prefer that the federal funds come all at once, but Costa is probably right that chunks are more likely. I just hope that doesn’t mean we get hung out to dry if control of the federal government shifts in 2012 or later. My own view is that a maximalist strategy is best – we should lobby Congress to contribute the entire federal match at once, and be willing to accept a smaller amount if necessary.
The article also discussed where the first section of HSR track will go:
At some future date, [the Authority] will begin construction on the first section of track, extending about 160 miles from Merced to Bakersfield.
The longest, flattest stretch of the proposed route, that segment is intended for use in testing trains at their maximum speed so that their use can be approved by federal regulators.
Along with expected upgrades to the urban Bay Area and SoCal portions of the route, this suggests that the final pieces are also going to be the most difficult – Pacheco Pass and the Tehachapis. The tunneling work alone will take years, but once completed it should mean that the entire first phase will be open. 2018 is still the ballpark date for SF-LA-Anaheim, and as Kopp pointed out in the article, the sooner we get moving the better.
We won the battle in California for high speed rail this year. Now we must prepare to do battle in the Congress. Our high speed rail project is exactly what this country needs in a recession like this. Let’s make sure California gets the federal support we deserve.