One of the more typical and predictable journalistic responses to the new HSR cost estimates is from the San Jose Mercury News:

Those hoping to ride the state’s high-speed train next decade will have to dig much deeper into their wallets than officials originally thought, a harsh reality that will chase away millions of passengers, according to an updated business plan released Monday.

Of course, as we pointed out, the estimated higher fares are entirely optional. The CHSRA could still have train fares at 50% of airfares if they wanted to. But since they believe they need more private funding, that means a need for more fare revenues, even at the expense of ridership, and so they’re contemplating setting fares at 83% of airfare. As I explained yesterday, I think that’s the wrong choice – but it is a choice.

And there’s a crucial underlying factor that explains this choice. From the same Mercury News article:

Authority Deputy Director Jeff Barker said while the numbers have changed, the “spirit of what the people voted for” with Proposition 1A remains the same.

“What they voted for was to put $9 billion toward construction of a high-speed rail system,” Barker said. “That’s still what we have today. We’re not asking the voters for additional money.” [Emphasis mine.]

Barker is reflecting the political assumption that there’s no way at all that any more money can be generated to pay for the project from public sources, and that private sources are the only way to make up the difference, and that we have to sacrifice ridership in order to pay those private investors.

I think we can all agree that for the time being, it’s probably accurate that California can’t pony up any more funds for HSR, not until we’ve resolved the budget crisis. But several years down the line, the state may be in a much better position to help support the project, and could well afford to kick in a few extra billion. And of course, the federal government should be able to kick in much more than just $2.5 billion a year nationwide, or the paltry but welcome $8 billion in one-time HSR stimulus funds.

However, when transit planners assume public resources are scarce, they tend to make bad decisions as a result. Sometimes the decision is to hide the true cost until well into construction, then say “surprise!” and force a politically difficult bailout – the Big Dig model. Or they feel forced to build an inferior system in order to make the money go farther, which is one charge that’s often leveled at BART.

Another option is to go to voters with a financial ask that is too low, and then try and finance the difference, jeopardizing the project as a whole. That’s a model I have some familiarity with, having watched it happen in Seattle earlier this decade with the rise and fall of the monorail project.

The Seattle Monorail Project was a genius of an idea. Generated from the people, against the wishes of the political establishment, it was an early form of 21st century transit activism that argued the best way to build mass transit affordably in a dense, geographically constrained city like Seattle was to, in the words of its backers, “rise above it all” with a monorail.

Although monorails have been the object of scorn and derision since most people know them either from Disneyland or The Simpsons, this project was more credible in its ridership numbers and technology. In 1997 and in 2000, Seattle voters approved two different initiatives to create and fund a monorail proposal, and in 2002 city voters were asked to approve a Motor Vehicle Excise Tax (MVET) to fund construction of a “Green Line” from Ballard to downtown Seattle to West Seattle, a corridor currently lacking mass transit, at a cost of about $2 billion. The tax narrowly passed with a 1% margin of victory. Construction was to begin in 2005, and an opening date of 2007 was projected.

However, the monorail project had set the MVET too low. Worried that a higher tax would fail at the ballot box, they proposed a 1.4% MVET, instead of something closer to 2% as had been recommended. The result was that as tax receipts began coming in during 2003 and 2004, revenues were about 2/3rds below projections. The project had a genuine funding shortfall, and no real answer how to close it.

Meanwhile, opposition to the project had grown, from a few folks who claimed that an Interstate 5 corridor should be used to downtown developers who were flipping out that trains might pass by the 4th story windows of their tenants. Since the city’s political establishment had never bought into the monorail concept, they didn’t feel moved to defend it, and Seattle Mayor Greg Nickels even convinced the council to deny the use of city streets for the monorail project. And the project opponents began making noise about a vote to repeal the MVET that had been so narrowly approved in 2002.

Afraid that they couldn’t get voters to agree to close the funding gap, the monorail board sought a number of solutions. They pushed back completion to 2009, and explored opening a shorter “starter line” with the promised full route to open some time after that. They also explored a bond financing model that would have saddled the agency with $9 billion in interest, 450% of the construction cost. Hostile media outlets like the Seattle Times breathlessly reported on the financing plan as a sign that the monorail had become a “boondoggle” that should be killed.

Cornered and friendless, the monorail board felt compelled to go back to voters in the November 2005 election – but NOT with a plan to raise more revenues. Instead they proposed to shorten the line and add the complete route at a later date. In an election where the monorail was outgunned on the campaign trail by an avalanche of developer money, 65% of voters rejected the plan. And even though they were still collected MVET revenue and had even bought property along the ROW, the Seattle Monorail Project chose to fold. They fired their staff, sold the property, terminated the MVET, and officially went out of business in early 2008.

I voted for both the 2002 and the 2005 monorail initiatives, but wasn’t surprised the 2005 initiative failed. The monorail board had made some poor decisions, from making an ask that was too low in 2002 to undermining their project’s credibility in 2004 and 2005 with more and more complex and costly plans to deal with the funding crisis. The board’s leadership was notoriously aloof, and their inability to effectively communicate with the public didn’t help matters. The lack of meaningful support from city, county, and state government didn’t help either. As an independent authority, the monorail board wound up lacking the political buy-in it desperately needed, especially in 2005 when it began circling the drain.

Ironically enough, the need to build mass transit on the Ballard-West Seattle corridor remained obvious to everyone, and Mike McGinn made a promise to build light rail on that route a cornerstone of his winning campaign for mayor last month. It will probably cost more than $2 billion to build that project, and since light rail would be on the streets, it would provide slower travel times than the monorail would have.

In other words, despite the monorail project’s flaws, Seattle will have to build high capacity passenger rail on that corridor eventually. And the city is going to spend more money to do it than they would have on the monorail. (Of course, had the Forward Thrust plan been approved in 1970, the city would have had a modern heavy rail system for only $500 million.)

There are any number of similarities between the Seattle monorail project and California high speed rail, from the issues finding complete funding to the lack of solid political support in the state legislature.

But there are also important differences. Unlike monorail, high speed rail is a flagship project of the current presidential administration, and more and more members of Congress and other stakeholders understand that HSR is a necessary part of our nation’s future. Whereas monorail was an untested technology never built on the scale Seattle was proposing, HSR is an off-the-shelf technology with plenty of global expertise on how to build this the right way, on time and on budget.

Still, it’s clear that California HSR needs to avoid some of the core mistakes made by the Seattle monorail. The #1 mistake to avoid is panicking and making stupid choices when you’re concerned about funding. Maybe the Seattle monorail would have died anyway if they had asked for an increase in the MVET, but we know that their attempts to survive without such an increase killed the project anyway.

California HSR should not be afraid to return to voters with a clear and honest ask for more funds when the time comes. Such an outcome is preferable to cutting back on system features, stations, or segments. It’s preferable to setting fares so high that ridership fails to materialize, setting in motion a series of other difficult problems. It’s preferable to bringing in too much private investment that would force setting those fares too high.

Of course, some of this discussion is theoretical. There is a level of private investment that is acceptable (probably around 20%) and it’s entirely possible that the CHSRA can build a good system without ever having to ask California voters for another dime. The Authority has been honest in its cost projections, even when duplicity might have caused them fewer political problems. That’s a very good sign for the project’s future, including its financial future.

The best solution to this is to have a robust federal funding source for HSR, so that California neither has to seek private funding nor has to ask voters to plunk down even more money. All of us should begin organizing to achieve the goal of stable, sustainable, long-term federal funding for HSR. But we should at least keep in mind the possibility that at some future date, we might have to indeed ask California voters for more money to complete the system.

We should not be afraid of that prospect, and neither should the CHSRA. Instead we should all strive for openness and accuracy in cost projections and discussions, to build a sense among voters that the project is well managed. Those are good goals in and of themselves, but they are also necessary pieces in the event that we need to put a proposition on the 2016 ballot to generate the funds to finish up the system properly.