Merced Sun-Star: “Get On With Rail”
In the wake of Thursday’s decision by the California High Speed Rail Authority board to start HSR construction on a route connecting Fresno to Hanford, the Merced Sun-Star today editorializes that the project still deserves support from the Merced community. They quoted Assemblymember Cathleen Galgiani, a leader on high speed rail here in California, who emphasized the jobs that the construction project will bring to the San Joaquin Valley:
Galgiani said she was generally pleased because the 83,000 jobs coming exceed the population of Merced. She urged anyone “who’s presently a member of one of the labor unions or in the construction field” to be prepared to get to work.
Commuting 50 to 60 miles daily from Merced to Fresno to a good-paying construction job isn’t a bad deal.
Galgiani’s point is particularly important, reminding people that this is intended as a stimulus, and will create jobs that Valley desperately needs. Once construction gets underway in 2012, it will provide a significant economic boost to Fresno, Hanford, as well as Merced. If further federal funds materialize, Bakersfield will join in the job-creation party.
The editorial also cited CHSRA board member Rod Diridon’s pledge to keep Merced involved in the HSR project:
Authority board member Ron Diridon of San Jose said he is going to pitch these ideas to “salve the wounds” for Merced and Bakersfield when the board meets in January:
Allocate $2 million for environmental studies in Merced and Bakersfield.
Affirm that Merced’s Castle site remains under consideration for the heavy maintenance facility.
Ensure that work on the “Chowchilla Y,” where the trains to the Bay Area would connect to the Valley, be another early investment after work begins on phase one.
These are good things to do for the project anyway. The environmental studies and solving the Chowchilla wye issue will ensure that Merced is positioned to get its connection quickly, even if the CHSRA board pursues CEO Roelof van Ark’s approach and focuses on building the SF-LA route first.
Most importantly, the editorial puts the issue in bigger perspective:
This may help us to get over our disappointment on the way this is starting out. The next decade will go by quickly, and before you know it, we’ll be flying up and down the tracks at 220 miles an hour.
Let’s hope so. There are financial challenges ahead, particularly as Congressional Republicans threaten to destroy the American economy as part of their bizarre, sociopathic vendetta against the 21st century. Even as the Central Valley is poised to get a huge economic boost, Valley Republicans are criticizing the project and calling it a “train to nowhere.” Suddenly, jobs aren’t important to these representatives, who are going to have to explain to voters in their districts – which will be rendered much less safe by the redistricting commission – why they shouldn’t have the jobs and other economic benefits that the HSR construction project will be delivering.
The Merced Sun-Star editorial takes exactly the right tone – recognizing that there are a lot of frustrations in Merced right now, but reminding readers of the big picture – HSR brings jobs and long-term growth to Merced, whether there’s a track going to the city center in 2012 or not.
Robert always tries his best to try make what is awful look acceptable. The old saying “putting lipstick on a pig” is perfectly appropriate here. The press has it right, this is “a train to nowhere”.
“Galgiani said she was generally pleased because the 83,000 jobs ….”.
Well I am continually amazed by the exaggerated estimates of revenues, ridership and in this case job creation.
From what I have read, most observers put job creation at about 10,000 per billion spent in funds. In this case that would translate to about 43,000 job,s not 83,000 jobs.
at:
http://www.whitehouse.gov/administration/eop/cea/Estimate-of-Job-Creation/
is a report from the Federal Government COUNCIL OF ECONOMIC ADVISERS, surely not going to short change job creation.
As I read this report, they say it costs $92,000 per job year in funding.
So at the projected $4.3 billion cost for this “sub-set” of a usable segment, approximately 50,000 job years would be created. The project is supposed to take 6 years, but even saying only 5 years, that works out to 10,000 jobs created for the five year period. 10,000 jobs, is not 83,000 jobs.
YesonHSR Reply:
December 4th, 2010 at 10:49 am
bored Brown?
Peter Reply:
December 4th, 2010 at 11:28 am
Because 43,000 jobs are insignificant, I guess?
And 83,000 was Galgiani’s number, not Robert’s.
Paulus Magnus Reply:
December 4th, 2010 at 11:37 am
The rate for federal funding of public transportation reflects a specific mix of capital investment and preventive maintenance funding as allowable by law. Under current federal law, an estimated 30,000 jobs are supported per billion dollars of spending.
morris brown Reply:
December 4th, 2010 at 12:45 pm
If your input here was indeed applicable, I am sure that the Authority would be claiming 129,000 jobs to be created no just 83,000. Is this jobs-years or job-days or just what?
BruceMcF Reply:
December 4th, 2010 at 12:58 pm
Job years. That is direct, indirect and induced, but its a national level figure ~ some of the indirect and induced employment will be located out of state.
StevieB Reply:
December 4th, 2010 at 1:12 pm
The central valley will be swimming in jobs. What a great economic stimulus for the area.
Elizabeth Reply:
December 4th, 2010 at 1:14 pm
Here is the CARRD work http://www.calhsr.com/funding/how-many-jobs-will-the-california-high-speed-rail-project-create/
In an unusual turn of events, we think Morris is being way too generous to the project.
BruceMcF Reply:
December 4th, 2010 at 1:39 pm
Yes, by assuming that the project provides no gross long term economic benefit, and adding Ricardian equivalence on top, one can assume away all jobs gains.
Brandon from San Diego Reply:
December 4th, 2010 at 4:15 pm
In fact, there will be zero jobs created by this project. Robots will relocate the utilites, move the earthworks and create foundations and lay the rail. Supplies will be delievered by robot trucks from Mexico. And, other robots will be making the ‘constructor’ and ‘logisitcs’ robots.
Victor Reply:
December 4th, 2010 at 5:19 pm
And Robot Terminators will keep people away from the rails, Soon they will go rogue… ;)
Robert Cruickshank Reply:
December 4th, 2010 at 2:00 pm
Heh, even by your extremely flawed and misleading “logic” the alternative, to do nothing, will destroy huge numbers of jobs by the loss of tax revenues and subsequent cuts that will result from economic crisis initiated by dependence on rising oil prices.
Of course, your approach is indeed flawed. You posit a false zero-sum game in the state budget. HSR bond repayments will not come at the expense of teachers or nurses. Jerry Brown appears set to propose some significant new revenues in 2011 – after showing Californians the consequences of not doing so. And you do not at all take into account the “green dividend” that HSR will produce.
This is a consistent flaw with your analysis – you implicitly assume oil prices will remain static over the coming years, when virtually every other credible analyst knows that these prices will rise, and will do so significantly.
peninsula Reply:
December 4th, 2010 at 5:38 pm
And by that you mean Jerrry Brown appears set to propose some significant new TAXES in 2011.
Which voters will not approve. As if voters have never been “shown the consequences of not doing so”.
Out of curiousity, how do the democrats, now in 100% control of the state budget, propose to ‘show voters the consequences’ of not agreeing to significant new taxes? With draconian funding cuts – decimation of public services? Schools? Knowing full well they are now holding 100% full political responsibility for the ‘consequences’ of that?
Robert Cruickshank Reply:
December 5th, 2010 at 12:16 am
Democrats are not in fact in “100% control of the state budget” since the 2/3 rule for taxes and fees is still in place.
Voters have shown they will support new taxes, but the specific problem is to show how this can be done during a recession. People are skittish about approving any new expenditure. That’s an incorrect position; they’ll save much more than they pay in new revenues, but it’s understandably difficult to convince people of that right now. Apparently Brown plans to try.
Nathanael Reply:
December 8th, 2010 at 9:15 am
I think Brown should also found a Bank of California along the lines of the Bank of North Dakota (look it up)… and perhaps the Bank of California should also issue banknotes. California has a lot of options although it’s still hamstrung by the 2/3 rule.
Dan S. Reply:
December 5th, 2010 at 6:09 pm
I support new taxes. Do you think you can have government services and not pay for them?? Do you think it’s morally just to fight wars in the middle east and send the bill to your children and your children’s children?
I would think that argument would resonate with Americans if it were made more frequently.
I would support a “war tax” today. I would support a “carbon tax” today. In fact I advocate it. We need it now.
Further, I support deficit spending during a recession to kick-start the economy. I think the government should put brakes on the economy during expansion and add fuel to the fire during contraction. I just don’t believe that the free market has any intrinsic fairness, benevolence, or stability at all, although it has proven to be the best economic system at creating wealth. Since the states can’t run a deficit, the feds need to run this particular show though.
Nathanael Reply:
December 8th, 2010 at 9:14 am
Actually, the free market has proven only to be the best system at creating what are known as “private goods”, which are one type of wealth. The best system for creating “public goods”, a much more important type of wealth (they include clean air and clean water and even *justice*), is not yet clear, though there is strong evidence that a democratic government implementing regulations and public works projects using taxation may be the best.
Eric M Reply:
December 4th, 2010 at 2:28 pm
So Elizabeth, if your organization is so “nuetral” and doesn’t have alterior motives, why don’t you allow comments on your website?
BruceMcF Reply:
December 5th, 2010 at 9:24 am
If I was putting up “analysis” like that nonsense on employment creation, I’d be tempted to ban comments too.
jimsf Reply:
December 4th, 2010 at 2:33 pm
Maybe the people are are opposed to hsr are people who never actually go anywhere so they aren’t aware of how bad things things are travel-wise, in california. Going anywhere in this state, be it across the street or 30 counties away has become a never ending exercise in frustration. People who try to go places realize that. Thats’ why in polls, transportation always ranks at the top for californians. To pretend like there is nothing wrong is to just say no for the sake of saying no.
Elizabeth Reply:
December 4th, 2010 at 2:44 pm
As I recall, we state that calculating long term economic benefits of the finished project requires a different and difficult analysis. This analysis is just about the jobs impact during construction.
We don’t have comments because constructive comments require some active monitoring which we are not prepared to commit to , we often go months without positing anything and we are willing to subject ourselves to the scrutiny of Robert’s blog. You may agree or disagree with what we say but I think it is fair to say we are willing to take all the criticism people want to pile on.
Elizabeth Reply:
December 4th, 2010 at 2:47 pm
Robert,
We have this fight repeatedly. The state budget, in the short term, is a zero sum game. It is different than the Federal budget which does not have balanced budget requirements.
Our point is (1) that this is a transportation and infrastructure program, not a short term stimulus program and (2) the decision to match funds was a really big strategic error on many levels.
Robert Cruickshank Reply:
December 4th, 2010 at 5:26 pm
It is absolutely not a zero-sum game. The state budget is based on the state’s GDP, which remains considerable. A political choice was made over 3 decades ago to make it difficult for the state’s majority to harness that GDP to fund public services and infrastructure, but that option is still very much on the table.
More importantly, those options will be harnessed sometime in the next 5 years to fund our public services. It is highly unlikely – and of course totally unnecessary – for HSR bond repayments to come from other state services.
HSR is both a transportation program AND a stimulus. Many of our bridges and dams were built during the Depression as both infrastructure and stimulus; those imperatives are quite compatible. I do agree that it would be better if the funding did not have to be matched.
I will note that, as of the writing of this comment, you haven’t responded to my other points, about the HSR “green dividend” and the economic/budgetary impact of the rising price of oil.
Eric M Reply:
December 4th, 2010 at 4:40 pm
But you will not openly take criticism if it is not allowed on your own site. Allowing it to be on another site, but keeping your site closed of comments just shows how biased you are. It speaks miles and makes any comments you make here have as much weight as a grain of salt.
Nadia Reply:
December 4th, 2010 at 5:21 pm
We are four unfunded volunteers, with day jobs – who also happen to be full time moms of very active elementary school aged kids. We’re putting in a lot of volunteer hours and monitoring open comments on a blog is a real pain – just ask Robert – it is why he switched to registered users.
As Elizabeth said, if you want to rebut what we write or criticize or complain – feel free – but it will have to be on this site (sorry Robert) but we just don’t have the bandwidth and that’s the honest truth.
You may have noticed our site isn’t exactly very well organized. We just don’t have the time to make the appropriate tweaks…
Robert Cruickshank Reply:
December 4th, 2010 at 6:04 pm
No need to apologize, I’m glad you guys are active here.
Robert Cruickshank Reply:
December 4th, 2010 at 5:31 pm
Moderating comments isn’t actually all that difficult or time-consuming – it just depends on the system you choose to use. WordPress makes this pretty simple, especially with the requirement that anyone who posts have a previously approved comment first.
That being said, everyone has a different attitude about how to manage comments on their sites, including not having any at all. I won’t criticize you guys for not having comments – as you say, you do frequently post and interact here, defending and articulating your ideas and claims. And those comments are always welcome, even when they are wrong. ;)
morris brown Reply:
December 4th, 2010 at 5:52 pm
This same heavy criticism was aimed at DERIALHSR when it was up and running.
Robert wasn’t nearly so understanding about our position of not allowing postings
there, so Nadia and company, feel blessed you are not quite in the “Deniers” camp that I, Martin,
and Mike find (and found) ourselves. Actually not a bad place to reside.
Peter Reply:
December 5th, 2010 at 10:38 pm
“Robert wasn’t nearly so understanding about our position of not allowing postings there”
Gee, I wonder why Robert and others weren’t understanding of a propaganda page.
Nadia Reply:
December 4th, 2010 at 6:03 pm
Thanks Robert – we’ll keep mooching off your site for comments. ;)
BruceMcF Reply:
December 5th, 2010 at 9:31 am
Your “analysis” is that the State of California will be paying this money. The money comes out of bonds. The bulk of the public finance impact is IN the long term.
So you are saying:
(1) this will have to be paid, long term
(2) we don’t have a clue what the long term impact will be
(3) lets therefore assume that the long term impact will be $0 net benefit
(4) therefore the cost is a pure diversion of a fixed pool of state financial resources
Except that you don’t explicitly say point (3), but rather leave it as a tacit assumption.
Indeed, you never even address the claims that its a cheaper means of providing the intercity transport capacity than roadworks and airport expansion, and also less exposed to risk of oil price shocks, since if either are true, it has a positive net benefit and building the system will result in a larger pool of funds available to the State of California than otherwise.
mike Reply:
December 4th, 2010 at 5:16 pm
Ah yes, the old “public spending can never create jobs because a dollar of additional public spending must be offset by a dollar less private spending” fallacy. And by extension no spending – public or private – can ever create jobs. Whenever you choose to spend a dollar on one thing, that means you must be spending a dollar less on something else. Sad to see that the sometimes-reasonable CARRD buys into the Treasury View and the Dark Ages of Macroeconomics, just like the Real Business Cycle nuts at Chicago and Minnesota.
Elizabeth Reply:
December 4th, 2010 at 5:47 pm
People, pls read what we write carefully. The only thing we are commenting on is the short term effect of the spending, which we have explained is offset by the cutting.
One would presume there would be long term benefit to GDP, but it is incredibly difficult to measure such a benefit for passenger rail. For anything that moves goods, it is easier to see but for passenger rail, you can see some shifts within regions but it has been very hard to see actual overall increases in GDP. I would expect to see some tourism benefit. The rest is a little harder to determine as the industry that loves high speed rail is services.
The ridership study looked at job creation. It showed some new jobs, but virtually all those jobs were the result of increased population. It didn’t really budge the unemployment rate.
As I said before, this type of analysis is challenging.
Dan Reply:
December 4th, 2010 at 6:00 pm
Although no one would argue the tourism benefit, I expect there are also algorithms to estimate the economic benefit from biz travel. Every time I read about airport expansions, they’re accompanied by statistics for “delta_local_GDP”-vs-”marginal_additional_flight”; it seems like much of the same methodology could be used to gauge the effect of HSR on GDP. Perhaps someone knowledgable could comment? Alon?
Robert Cruickshank Reply:
December 4th, 2010 at 6:03 pm
I very much agree that stimulus – no matter what form it takes – is offset by budget cuts. That being said, there is no inherent causal relationship between the stimulus and the cuts. Further, as I have said, the cuts are themselves a deliberate political choice, made by ruling out other alternatives which remain very much alive.
Given the depth of this Depression, any new jobs are welcome, particularly well-paying jobs that build long-term infrastructure and thus create new value. While it is worth discussing the details, there is no credible argument to be made whatsoever against creating these new jobs.
jimsf Reply:
December 4th, 2010 at 6:08 pm
You know, the premise to start with is wrong. The premise that the only reason we should ever do anything is if it somehow results in profit, or job creation. How bout we do it because it would be a nice thing to have. Remember that? Its ok to buy things like that for ourselves for no other reason than the fact that it makes our lives better. We are suppose to have high standard of living in america. If our spending priorities were put back in order, and certain people weren’t hoarding all the money, we would have the things we should have. Instead we have been slowly and insidiously convinced that we don’t want, need, deserve, nor can afford such “luxuries.” Its a lie.
Elizabeth Reply:
December 4th, 2010 at 6:17 pm
Jim,
Pls note. We are not saying do HSR or don’t do it. In fact, I’d like to find a way to get it done.
What we are saying is that if we are going to invest public dollars wisely, we should it with our eyes wide open and not use whatever the topic du jour is to promote our pet project.
jimsf Reply:
December 4th, 2010 at 6:22 pm
I’m just not buying it because I think the project is moving along as it should. I like the route. I like the plan. It will no doubt need and will get, some tweaking here and there along the way but if you support it, then support it. The correct attitude in getting something done is, “lets move forward, and solve problems along the way, be willing to compromise, and realize that it will not be perfect because no project can be all things to all people.”
What I see is stalling and trying to slow down the process under the guise of concern. I don’t buy it. I’ve seen the schtick manifest itself too many times over the decades. Same tired story. Sorry. I’ve just seen it too much of it.
jimsf Reply:
December 4th, 2010 at 6:32 pm
When someone supports something, they tend to show a positive enthusiasm for it rather than look for every opportunity to highlight anything that may or may not be wrong.
For instance, immediately responding that merced/wye is dead now. Well we don’t know that. Why jump on it so quickly. Or making a big ta’do about the incompatible office holders. Its a side show is all when we know that ultimately these things go on all the time and will work themselves out. Or the criticism of the construction start point, when the list of reasons were given and make sense.
What I’m waiting for is a “you know, its not our favorite outcome, but we realize things need to move forward so let keep moving in the knowledge that in the end we are still going to wind up with nice system, even if its not exactly as we want.”
D. P. Lubic Reply:
December 5th, 2010 at 12:46 am
I have to concur with Jim on the “we want this, let’s tweak it a bit” attitude. Like him, I’ve seen examples of real support, and I’ve seen excuses to kill something because someone either doesn’t like a project or is, for some reason, scared of it (often the two are the same). And if you’ve read my previous material, you’ll take note that I’ve lost out because of this repeatedly, including being insulted with the ridiculous charge that I was a Communist.
I’ll also concur with Robert about the oil situation. I’ve been watching this unfold for over 35 years now, and if we’d had just a little bit humility to say, “we need to look a little at the past to improve the future, we need to bring rail back” 35 years ago, we very likely could have avoided this whole oil-caused crash we’ve been through, or at least been in a position to weather it better. Instead, we blew chance after chance with excuses of “people will not ride trains,” “buses are good enough,” “there is plenty of oil if the environmentalists and liberals would get out of the way,” and “it costs to much, it needs a subsidy, let the free market decide,” all the while totally ignoring (or outright denying) that the market was rigged with all those auto subsidies, which I and others have repeatedly been documenting and pointing out.
As it is now, we have a horrible game of catch-up to play, compounded by the time wasted and by the general loss of jobs to outsourcing.
I’ve said this before, and I still think it bears repeating, I think we should at least temporarily retire Lee Greenwood’s “God Bless the USA” from the air; the song is false, hollow, today. I’m sick and tired of this “USA is No. 1″ talk, too. If we really were No. 1, there would be no need to boast about it, we would just be it, would just live it. You didn’t see that in the 1950s and 1960s, we just went and did things, even if it turns out that some course corrections would be needed.
In fact, this improper pride, and now fear, is keeping us on course to disaster.
Winston Churchill is famous for supposedly saying Americans would do the right thing after exhausting all the alternatives. The problem with that approach is that you can run out of time. I hope that isn’t our case, but I am deeply concerned we are mighty close to it.
BruceMcF Reply:
December 5th, 2010 at 12:44 pm
WHY would you like to find a way to get it done, if you assume that it will offer no benefits to the State of California over the long run?
Or, conversely, if you suppose that there are benefits, why assume the long term benefits to be zero?
mike Reply:
December 4th, 2010 at 11:07 pm
People, pls read what we write carefully. The only thing we are commenting on is the short term effect of the spending, which we have explained is offset by the cutting.
I take it back. The Real Business Cycle guys understand that tax-financed spending and debt-financed spending should seemingly have different effects on aggregate demand; they try to construct an argument to showing that this is untrue. The CARRD analysis fails to even recognize the difference between tax-financed spending and debt-financed spending.
BruceMcF Reply:
December 5th, 2010 at 9:34 am
Difficult to measure is no justification for using a gross benefit of $0 as your assumption.
Dan Reply:
December 4th, 2010 at 5:53 pm
jobs are created by expanding the economy. Those who believe the “fallacy” you argue against merely believe that jobs are created more efficiently in the private sector than via gov’t programs.
I expect a number of folks (like myself) believe that private-sector spending is much more efficient than public sector spending at creating jobs and yet still believe that government infrastructure spending (e.g. HSR) is a net-win for the economy & job creation.
mike Reply:
December 4th, 2010 at 11:12 pm
Those who believe the “fallacy” you argue against merely believe that jobs are created more efficiently in the private sector than via gov’t programs.
No, these people (the academics I’m referring to) actually believe that spending – private or public – has no impact on jobs. I kid you not. In their models, the economy is always at full employment. The loss of millions of jobs since 2008 merely represents a rational choice by individuals to stop working – they would prefer to stay at home and consume leisure at this time. The Great Depression? That was actually the Great Vacation. And, believe it or not, these models dominate the macroeconomic literature right now. Shocking, no?
BruceMcF Reply:
December 5th, 2010 at 9:36 am
The private sector can only be efficient at doing the things can be done effectively by the private sector. An efficiency in being able to do “A” is no use when what needs to be done is “B”.
And effective infrastructure investment is not a rival for private sector spending, but rather a complement: its improves the rate of return on possible private sector investment projects, and so it increases the range of things that the private sector can do.
Dan Reply:
December 5th, 2010 at 9:53 am
I agree completely.
John Burrows Reply:
December 4th, 2010 at 3:34 pm
So for this $4 plus billion capital spending project you would create the following mix of jobs:
Direct effect jobs (actual work on project)——————————————————–33,000
Indirect effect jobs (workers in industries supplying materials and equipment)———- 31,000
Induced effect jobs (respending of worker income on consumer goods and services—-31,000
Looks like almost all of the direct effect jobs would go to the San Joaquin Valley, and that indirect effect jobs and induced jobs would be more spread out with the great majority staying within California
It’s hard to come up with a breakdown of these 95,000 jobs by area. but I would guess at least 50% in the Valley, 90% in the state.
Not all of these jobs will last for the length of time that it takes to build the segment, but they are going to give a big economic boost to the San Joaquin Valley and a considerable boost to the whole state.
John Burrows Reply:
December 4th, 2010 at 3:54 pm
A correction in my last paragraph:
You might end up with about 50,000 jobs averaging 1 year in length in the San Joaquin Valley and another 30,000 to 40,000 throughout the state.
Robert Cruickshank Reply:
December 4th, 2010 at 1:54 pm
I’m happy that you have enough economic security to dismiss the tens of thousands of jobs this project will create. You’ve got yours, so who cares about the high unemployment in the Central Valley?
Further, a decontextualized average based on a wide range of different kinds of spending is not a convincing argument against Galgiani’s claim, which is based on actual project planning.
Elizabeth Reply:
December 4th, 2010 at 2:50 pm
Galgiani’s claim is based on the project spending x a simplistic multiplier that the Feds use.
I’m not dismissing the economic pain being suffered by the CV. Indeed, I think it is a problem that more aggressive efforts to help probably won’t be put in place because they are taken care of with the 80,000 jobs from this project.
BruceMcF Reply:
December 5th, 2010 at 9:40 am
Unlike CARRD’s argument, which is entirely founded on the assumptions of the argument, and which is immune to arriving at a different result in the face of different real world facts, the “simplistic” multiplier that you dismiss is grounds in observed facts.
And the suggestion that there are aggressive efforts to aid in the unemployment crisis in the CV which are going to be put on the back burner because of the construction jobs from building the first segment of the California HSR is quite simply absurd. Its even more obviously absurd than the empty rationalization to arrive at the desired conclusion that there is no jobs impact from public works spending, if the state government participates in the debt finance.
peninsula Reply:
December 4th, 2010 at 3:13 pm
A commenter on that article from within the construction industry also pointed out that the number of jobs at any one time is likely to be a few hundred or a few thousand at best. The huge quoted numbers of ‘jobs’ created is really temporary assignments that would be made available over the course of the entire project across many years.
I think it would be helpful to understand how they define jobs when they quote these numbers – are jobs equal to short term assignments, and can the same person hold more than one of these “jobs” over the course of a year (say 4 consecutive ‘jobs’ that last for 3 months each, like hauling concrete – an activity repeating over the distances covered, over course of time and space of the entire project?
If so, it certainly is massively misleading to the unemployed in the Central Valley to say 83,000 jobs are created – as if 83,000 people will have jobs. In that example, it would be about 20,000 people that would have been taken off the unemployment line, for a single year.
Yet, they get the ‘benefit’ of sharing the tax/budget burden created by the bond obligation for the State, forever. So when, for example, school district budgets are cut to squeeze in the extra billion(s) in debt service – which areas of the state suffer most from those cuts to public education (or the public safety net in general.)? (Hint, wealthier areas who turn to the parents in the district for massive fund raising when state budgets fall short. Its the poorer areas of the state that hurt from the same level of budget cuts.) Galgiani cares entirely about the short term effect, which she can put on her resume while she holds that office – she’ll be long gone from that post by the time the CV is looking around for who to blame.
Paulus Magnus Reply:
December 4th, 2010 at 5:15 pm
A few thousand jobs in a high unemployment area which will contribute further into employment creation by spending money (food, housing, entertainment, etc.). Nor will ten billion dollars in state bonds to pay for the CA HSR system (implicitly assuming that the system will not generate enough revenue to pay for them) raise the debt service burden by billions and squeeze out education spending.
jimsf Reply:
December 4th, 2010 at 5:41 pm
again with the typical game of threatening that- if we provide benefit X to the ordinary folks, it will be at the expense of one of their other benefits. Typical scare tactic. Typical BS from the right. You people keep it up and your gonna have angry villages with torches busting in to your gated communities.
n
BruceMcF Reply:
December 5th, 2010 at 9:43 am
“The huge quoted numbers of ‘jobs’ created is really temporary assignments that would be made available over the course of the entire project across many years.”
If they are the equivalent of 80,000 full time jobs for one year, and its spread over six years, then there has to be more than a few thousand at a time at some time.
If the argument is, “but some of them will take a year to show up”, the CV will still need the jobs a year from now.
Dan S. Reply:
December 5th, 2010 at 9:33 pm
Let’s look at CAARD’s report. First, read it for yourself, and see what you think of their conclusions.
http://www.calhsr.com/funding/how-many-jobs-will-the-california-high-speed-rail-project-create/
Reading their analysis, I see that they are trying to convince me that it is really super complicated to figure out the jobs impact, and that basically there will be no significant creation of jobs as a result of the project. I love the idea that spending 40 billion in the state might even lose jobs overall.
Even after reading the whole thing, their basic premise fails both my smell test and my full analysis of their arguments. Same with Morris’s strange results. Let’s take the CBO’s analysis of the stimulus bill. That included a lot of construction and infrastructure spending, didn’t it? About 700 billion spent, and 3 – 5 million jobs created or saved. That’s the analysis by the CBO, which is the non-partisan fiscal evaluation office of the federal government.
Okay, our 40 billion project is about 20 times smaller than the stimulus package. So my quick envelope-math tells me that 150,000 jobs would likely result from undertaking this project. I believe CBO jobs are jobs that would count against unemployment, so they are jobs that might be held by one person at any one moment of taking a snapshot of employment across the region.
Look, I’m not an economist, but I’ll take a moment to think about the numbers that “advocates” throw around. I encourage everyone to do so. For them to say that jobs could even be lost as a result seems incredibly misleading to me.
Dan S. Reply:
December 5th, 2010 at 9:40 pm
Shoot, not sure where I got 3 – 5 million jobs in my head for the stimulus bill. The CBO said 1.5 – 3.5 million jobs. So divide by 20 and you get 75,000 – 175,000 jobs for 40 billion in spending. Oh yah, plus you get a high-speed rail system.
I’m glad the Merced Sun has common sense not to get entangled in this inter valley turf war and maintains the high road that this is a statewide project and this is just the first section and that the decade will go by quickly and we will all be traveling on high-speed rail.. excellent thinking unlike the backward sensational soundbite media normally thrown out today.
Diridon is not surprisingly keen to build the wye to his home town of San Jose. Trouble is, that can’t happen until Pacheco is environmentally cleared, i.e. litigated, which will take a while yet.
Brandon from San Diego Reply:
December 4th, 2010 at 11:58 am
Speaking of which, the selected constructable segment is not environmentally cleared either, is it?
If that is correct, I suspect the CHSRA Board decision was essentially to pick the locally preferred alternative, or LPA, to take into Final Environmental Impact Review (FEIR/FEIS).
Peter Reply:
December 4th, 2010 at 12:14 pm
Actually, no. They didn’t even do that. They did not pick between the number of alternatives in Fresno, just that they were going to build through Fresno. I think the different alternatives in Fresno are similar enough that it doesn’t really matter at this point.
morris brown Reply:
December 4th, 2010 at 12:43 pm
If this “sub-set” has not been studied in the program level EIR, then they are going to lose in court just like they did on the Peninsula, when they had to rescind the certification of the program level EIR, mainly because they studied an alignment that the UPRR owned and would not allow them to use.
Presumably this would be brought up in when the certification of the project level EIR takes place, which is still in progress, as I understand it.
Peter Reply:
December 4th, 2010 at 3:11 pm
Morris, they can’t build anything until they have completed environmental review of both sections. Deciding where to start along the two corridors doesn’t require environmental clearance, as long as environmental review on both sections has been completed.
Jack In Fresno Reply:
December 4th, 2010 at 10:45 pm
They didn’t loose in court on the peninsula. No matter how many times you repeat it to your self. The lawsuits goal was to stop the project. The lawsuit failed.
BruceMcF Reply:
December 5th, 2010 at 12:48 pm
AFAIU, they have to get one of the two corridor EIR/EIS done by the deadline in order to take the USDoT money. Otherwise they have to hand it back to be spent on some other more shovel ready project.
BruceMcF Reply:
December 4th, 2010 at 1:03 pm
Its got at least two years to get sorted out, the kind of odds and ends funding that may or may not be available in the next two years seems like it would be more of a size for extending the preferred segment further toward Bakersfield.
Tony D. Reply:
December 4th, 2010 at 5:05 pm
“Trouble is..” There’s no “trouble” Clem with the wye or the route eventually coming through the Pacheco Pass; only in your world I guess. And why do you hate so much the fact that HSR will serve directly the nations 10th largest city and economic engine of Northern California? Oh well, it’s your problem, not ours.
Alon Levy Reply:
December 4th, 2010 at 11:27 pm
The economic engine of Northern California? You mean SF? It would get the same service under Altamont and Pacheco, thank you very much.
jimsf Reply:
December 5th, 2010 at 7:00 am
because who doesn’t love a pie chart
I can’t find county by county as to who is more valuable though.
BruceMcF Reply:
December 5th, 2010 at 1:21 pm
Beware reading the size of FIRE as an indication of its importance ~ that is begging the question on whether it is an engine of growth in the first place, or just a transmission. After all, we do not take the size of the tumor as an indication of how much it is contributing to the health of a patient.
Nathanael Reply:
December 8th, 2010 at 9:07 am
Yep. An overly large financial sector, more than 20% of the economy, is generally the sign of a very sick economy.
Elizabeth Reply:
December 5th, 2010 at 8:22 am
SF is not the economic engine of northern California. That would SV. Start in Palo Alto with HP and Facebook, hit Moutain View with Google and work your way down. Most of the businesses are in what is called the Golden Triangle – 237 / 880/ 101.
SF is more of the creative and tourist center and where everyone under 30 wants to live. The economic engine part is much farther south.
Interesting chart. A lot of it is just the business of serving those who live in a state. It tells you that what makes something thrive and not is what is happening on the margins.
adirondacker12800 Reply:
December 5th, 2010 at 8:49 am
The only reason Silicon Valley is there is because San Francisco is so close.
jimsf Reply:
December 5th, 2010 at 9:05 am
yep. and its basically a result of having a large pool of bored but educated free thinking hippies who had nothing better to do. One thing just led to another and bam there you have it. It also doesn’t hurt that that (well all) part of the bay area is stunningly beautiful and blessed with the best weather in the US year round. Throw in the available culture and and outdoor/active lifestyle, easy availability of the party substances and recreational activities of your choice and really, where else could it have happened but here.
jimsf Reply:
December 5th, 2010 at 9:31 am
its still a lovely place to live though….
jimsf Reply:
December 5th, 2010 at 8:49 am
I though maybe true, but I found the list and SF actually has the higher GDP. Now I can’t find the page.
jimsf Reply:
December 5th, 2010 at 9:00 am
Heres the list by region
and heres the US top 10 (scroll down)
The more industrial/transportation/banking focused parts of the bay still outweigh the info/tech sectors. Tech just gets all the attention. Why I’ll never know. So dull. But it does. Perhaps altamont/eastbay/oakland/sf should have been the hsr route after all? yikes. You didn’t hear that from me.
BruceMcF Reply:
December 5th, 2010 at 9:51 am
If they could have crossed the bay to Oakland, sure, that’s the other reasonable route in terms of total transport benefit. Indeed, if the HSR is running the next time the Bay is crossed, Sacramento / Oakland / SF / SJ / CV / LA / SD is your main route, and the Wye is for the supplementary Sac / CV / LA / Anaheim.
jimsf Reply:
December 5th, 2010 at 9:57 am
Besides, the older original industrial part of the bay is the peninsula. The bay areas industry grew south from san francisco down the el camino before the eastbay. So they are entitled to be first.
D. P. Lubic Reply:
December 5th, 2010 at 10:13 am
Nostalgia trip:
http://en.wikipedia.org/wiki/Oakland_Long_Wharf
http://www.snowcrest.net/marnells/oakpier.htm
And how many people here recall that the film version of “Pal Joey” opens with Frank Sinatra’s Joey arriving in Oakland and taking the ferry to San Francisco?
http://www.youtube.com/watch?v=-chWouJQflw
D. P. Lubic Reply:
December 5th, 2010 at 10:21 am
“Pal Joey” would be Rita Hayworth’s last film–and I would say she went out in style. . .
http://www.youtube.com/watch?v=Uz8qRsqoBLc&feature=related
And who wouldn’t fall in love with Kim Novak?
http://www.youtube.com/watch?v=dAZB20R_2nY&feature=fvw
Sigh–I live in the wrong time. . .
adirondacker12800 Reply:
December 5th, 2010 at 10:55 am
Bruce they can cross the bay but since they decided to wedge everything into a tiny little block where the streetcar terminal was in 1939, there won’t be any place to bring the trains to….
jimsf Reply:
December 5th, 2010 at 11:33 am
There are plenty of places to bring the trains too. stop it.
adirondacker12800 Reply:
December 5th, 2010 at 11:52 am
Where? Oakland doesn’t count.
BruceMcF Reply:
December 5th, 2010 at 12:50 pm
When the HSR is up and running, rather than being excuses for failure, difficulties like that will be problems to actually solve.
Drunk Engineer Reply:
December 5th, 2010 at 1:02 pm
Commute traffic along 680/580/880 from the East Bay into the Golden Triangle numbers in the 100′s of thousands. Commute traffic from Gilroy and Merced is tiny by comparison.
So if Silicon Valley is the State’s economic engine, then it is clear what route trains should be taking to reach it.
BruceMcF Reply:
December 5th, 2010 at 1:13 pm
Sure, what route commuter trains should take. I am shocked that the CHSRA does not have a “commuter overlay” proposal to address that very point.
Joey Reply:
December 5th, 2010 at 1:15 pm
However, you could save several billion on an additional regional HSR line, plus probably a few billion in Capitol Corridor upgrades, by routing all trains through Altamont.
Joey Reply:
December 5th, 2010 at 1:45 pm
Not to mention a couple of billion in Phase 2 as there would be less track to build in order to get to Sacramento.
Drunk Engineer Reply:
December 5th, 2010 at 3:49 pm
Bruce,
There is no commuter overlay proposal. Perhaps you are thinking of the ‘when pigs fly’ overlay?
Alon Levy Reply:
December 5th, 2010 at 2:13 pm
The biggest concentration of income is in downtown SF, not SV. Overall Santa Clara County is larger, but it also includes a lot of suburban territory; to be comparable with SF, you’d have to include Marin County and the northern parts of San Mateo County.
The notion that SF is mainly residential is completely false. On the contrary, it has about the same gross commuter income outflow and inflow as Santa Clara County, i.e. the total income of people working in each county living in other counties is the same, and so is the total income of people living in each county working in other counties.
The dems actually stood up and had the guts to vote against tax cuts for the wealthy today. Its about time they showed some back bone.
The pos resmuglicans continue to show their asses at every opportunity. These valley repubs against the project are just another example of telling working class and unemployed americans to drop dead.
slime.
Brandon from San Diego Reply:
December 4th, 2010 at 12:08 pm
I support user fees…. start with gasoline and transportation fuels. Or, look at vehicle mileage.
Just a thought…. If paid at the pump… first $1 paid is to a fee to support transportation maintenance, modernization and improvement.
Or, for gallons 0-3.0, something like flat $0.30 for maintenance; gallons 3.1-6.0, the same flat amount for modernization; and over 6.1 gallons the same flat amount for improvments. I don’t care about amounts and when the triggers would be, but it could be a model taken up by the Feds or state. Of course, by ‘transportation’ I mean all transportation… and not only roadways. In theory, the firs few gallons are for local travel… upon roadways already in existence. Ertc.
jimsf Reply:
December 4th, 2010 at 12:20 pm
of course you can’t do that in a recession because the people it hurts are the working poor and middle class who can’t afford to pay more because their wages have either remained flat for 30 years or gone down. How can you tell someone making 8 dollars an hour at walmart to pay an extra xx per week for gas when they can barely make rent as it is?
adirondacker12800 Reply:
December 4th, 2010 at 3:23 pm
Dya see the candidate for NY Governor from the “Rent is too damned high” party? You can look at as the rent being too high or as the wages being too low. There’s many ways to make the impact of higher gas taxes less painful to the low wage workers. How about the first $3000 a year aren’t subject to Social Security taxes? That way someone who drives far to get to their low wage job can spend it on gas taxes. Someone who walks to his or her low wage job gets a small raise…
jimsf Reply:
December 4th, 2010 at 3:48 pm
yeh that would work. except that people tend to not see it that way. They tend to look at the price tag in front of them. And yes the rent is too damned high. Especially in sf.
The bigger issue is where you put our priorities and who’s needs are being addressed. I think we all know whats really going on. take take take squeeze squeeze squeeze. everything they can out of the middle and the bottom, in order to overbloat the top, then pretend the top is put upon.
adirondacker12800 Reply:
December 5th, 2010 at 12:00 pm
The rent isn’t too high in San Francisco. … the pay is too low. That and people like you won’t let other people build higher buildings.
jimsf Reply:
December 5th, 2010 at 12:33 pm
Uh building taller buildings does not bring the rent down. Hello Manhattan anyone? Tallest buildings of any american city… highest rents.
Taller building contain very expensive condos and apartments. Never has a highrise been built that resulted in rents being lower.
Joey Reply:
December 5th, 2010 at 12:59 pm
It’s not about how tall the buildings are. It’s about supply and demand. San Francisco remains a desirable place to live, and there remains relatively little available real estate. This has changed somewhat since the recession started, but not enough to bring prices down significantly. The only way to really bring prices down would be lots of new development (of which new tall buildings would undoubtedly be a part). Manhattan has tall buildings but little-no new development, ergo demand remains high and supply doesn’t change, so prices stay up.
Alon Levy Reply:
December 4th, 2010 at 11:29 pm
Bob Reich has been pushing for a $10,000 exemption from the payroll tax; it’s never gone anywhere. Greg Mankiw is trying to resurrect the same idea: raise the gas tax substantially and institute other externality taxes, but give a payroll tax credit to offset it so that it will be revenue-neutral.
Robert Cruickshank Reply:
December 5th, 2010 at 12:20 am
The problem is that we don’t need revenue-neutral policy, we need revenue-positive policy. Government at all levels needs substantially more funding than it currently has.
The issue of gas tax impacts on lower-income communities is real. One solution is to phase in the increase over time, as well as giving the kind of exemptions Reich discusses.
Of course, it must also be kept in mind that gas prices will rise anyway, even if we never again touch the fuel tax, so we might as well get something for it instead of just seeing the money go toward oil company CEOs and their largest shareholders.
Alon Levy Reply:
December 5th, 2010 at 12:33 am
If you increase the gas tax immediately, then it will be revenue-positive in the short run, before people adjust by driving less and buying more fuel-efficient cars.
However, right now the last thing anyone needs is revenue-positive. The US federal government has a recession problem, not a debt problem. Mankiw is proposing phasing in the gas tax but cutting payroll taxes immediately, so that the program will be revenue-negative (i.e. net stimulus) in the short run, becoming slightly revenue-positive in the long run as gas taxes rise.
jimsf Reply:
December 5th, 2010 at 7:23 am
Or god forbid we take more of the zillionaires profits and a chunk of the defense budget, and pay for some stuff that regular working americans need. But then why would we do that huh.
BruceMcF Reply:
December 5th, 2010 at 1:18 pm
That would be second best to giving the private sector someplace to put the savings it is trying to generate by running at the deficit that is required in the wake of a major financial crisis. First best, of course, would be sensible economic policy, but the DeficitErrorists have a well funded propaganda machine, and second best would be to take it from areas that generate less stimulus, like high incomes and defense spending, and shift it to areas that generate more stimulus, like direct public works employment and infrastructure investment.
Alon Levy Reply:
December 5th, 2010 at 2:25 pm
…like unemployment benefits, aid to states, and other direct cash infusions going mainly to cash-strapped low-income people. Infrastructure doesn’t generate as much stimulus; its main benefit is that it (sometimes) generates less political controversy than giving money to poor people directly.
Nathanael Reply:
December 8th, 2010 at 9:02 am
Japan discovered that infrastructure *substitutes* for economic growth; if you have enough infrastructure, it’s just not as *unpleasant* to be poor and unemployed.
Of course you also have to have a minimum social safety net, which thanks to “the end of welfare as we know it” under Clinton we don’t.
Nathanael Reply:
December 8th, 2010 at 9:03 am
The near-trillion-dollar military budget really *does* need to be cut. The multiplier effect on military spending is terrible, possibly the only form of spending where the multiplier can be worse than for tax cuts. But worse than that, it’s actively *counterproductive* to our interests and has been most of my life…. Kosovo being the honorable exception.
D. P. Lubic Reply:
December 5th, 2010 at 1:08 am
Just a reminder: we really need a new revenue model for roads, too. If we have a bunch of cars that don’t burn gas, or burn very little, the current model of tying road revenue to fuel consumption breaks down. In fact, between cars becoming more efficient even with current technology and a gas tax that has been unadjusted for inflation, much less rising fuel prices, the current model is already broken, and has been for years.
The new revenue model must be divorced from fuel consumption; the best example I can think of would be converting all the limited access roads to toll roads, combined with a large vehicle registration tax to cover everything but the toll roads, and perhaps a direct subsidy of property taxes on local roads (and I don’t even like that last part). If we were to continue to tax gasoline, it should be strictly a general-revenue tax (remember all the indirect costs of our oil addiction, including oil wars), combined with a big cut in income taxes, if not their total elimination.
This is important, even if you hate rail travel.
Alon Levy Reply:
December 5th, 2010 at 1:33 am
The biggest costs of gas consumption are environmental damage and oil wars. Cutting cars’ fuel consumption solves these just as well as cutting the amount of driving, and the incentive structure should reflect that. In the unlikely situation of low-emission vehicles becoming much more common than they are, the smaller issue of funding roads could be handled with tolls then.
Nathanael Reply:
December 8th, 2010 at 9:00 am
We have to cut out the excess development of the road system. Road standards which demand overwide roads result in large, unnecessary increases in road costs. If we stopped widening roads, maintenance would cost significantly less.
Though asphalt simply doesn’t hold up well in snow and salt. To make the roads in the snow belt sustainable, we will need saner methods of road maintenance than dumping salt.
Nathanael Reply:
December 8th, 2010 at 9:05 am
Gas prices are going up no matter what. You can have all the revenue go to Big Oil and Saudi Arabia, or you can have some of it go to the US government.
High tarriffs on imported oil would do the right thing.
BruceMcF Reply:
December 5th, 2010 at 9:53 am
Or, since the biggest problem is imported crude oil, a 1% import tariff to fund oil-independent transport. All of a sudden all of the diesel 110mph route proposals will turn into electric 125mph route proposals, but if it goes into an infrastructure bank, the CA-HSR should be OK out of that.
Paulus Magnus Reply:
December 5th, 2010 at 9:57 am
Fun fact: We have tariffs ten times higher on wine than we do on oil.
BruceMcF Reply:
December 5th, 2010 at 12:54 pm
And crude oil is an “unscheduled” commodity in the WTO schedules ~ we are free to put any discriminatory tariff we wish on it.
After the Oil Lobby invested so heavily on “drill baby drill” and the fantasy that we can replace imports equal to about twice our production with a 5% increase in production at best (likely not even that) … widespread math illiteracy just is a gift that does not stop giving, isn’t it? … they have laid the groundwork for a tariff on imported crude oil that “encourages” domestic production (for those who living in the fantasy world where the 1980′s drill baby drill in response to the last oil price shock never happened, and that oil was never burned).
Alon Levy Reply:
December 5th, 2010 at 3:33 pm
1% import tariff = $2-2.5 billion per year.
I am quite skepictal on the redirecting commission as the proposition that passed last month made it a bipartisan commission instead of a non-partisan one. Republicans and Democrats will still take part in redistricting and I feel it is not better than the districts being redrawn by the State Legislature. I expect dealing and wheeling in the commision and the districts redrawn to please both parties. It is best redistricting is done by a non-partisan commission.
Off topic, but of interest to a steam fan like me, and it’s in your neighborhood–Flimore & Western Railroad recently test ran its steam locomotive No. 14, and hopes to have the engine running in time for Christmas. And she’s supposed to be green, too–her fuel is used vegetable oil!
http://www.fwry.com/The_FW_14_steam_engine/FW_14_steam_engine.html
http://www.fwry.com/
Supposedly this road has had a lot of movie work over the years; one writer said its right-of-way recalls southern California of years ago, thanks to running through great orange groves.
http://www.fwry.com/productions_home/pro_home_pg.html
Those stations are definitely ex-Southern Pacific.
A road 30 miles long? Wish I had a steam road like that around here.
Have fun.
D. P. Lubic Reply:
December 5th, 2010 at 5:12 am
The last section on the Wikipedia link looks interesting–a proposal to use part of the road for a commuter train.
http://en.wikipedia.org/wiki/Fillmore_and_Western_Railway
@Robert:
By now you must have a copy of the Peer Review committee report that was the subject of two media articles: (Will Kempton chief author)
Cox at: Bakersfield.com
http://www.bakersfield.com/news/local/x716461163/Peer-report-calls-for-thorough-reassessment-of-high-speed-rail-project
Dan Walters at the Sac Bee:
http://blogs.sacbee.com/capitolalertlatest/2010/12/new-study-sharply-criticizes-h.html
I’m sure all of your readers here are awaiting your evaluation.
D. P. Lubic Reply:
December 5th, 2010 at 9:10 am
Out of curiosity, Morris, what is your evaluation of the commentary by others and myself about the real cost of driving being hidden in a hundred different subsidies, and about how it has driven our oil dependence into a national security threat? And as a corollary to that, what would you recommend as an appropriate course of action?
Robert Cruickshank Reply:
December 5th, 2010 at 2:13 pm
I’ve skimmed it, but won’t have time to fully read it and post on it until tomorrow.
Dan S. Reply:
December 5th, 2010 at 6:45 pm
From Cox:
From the articles that Morris linked to, it seems like the primary issue they are raising is that federal money will be harder to secure if Republicans maintain power in Washington for the next 20 years. I agree, but this is not exactly information that is rocking my world…
morris brown Reply:
December 5th, 2010 at 7:24 pm
RE: The HSR peer review committee report:
You can now access an OCR’d version of the Kempton / Peer review committee report at:
http://www.scribd.com/doc/44712285/KEMPTON-11-18-2010
Special for Rafael and Jim SF: off topic, but good for a smile–a lament by someone about diesel locomotives in their state of development (i.e., new technology that is not completely debugged) during WW II, complete with comment about the conductor using up his shoe coupons walking the train.
http://www.sdrm.org/roster/diesel/facts_fables.html
Where that link comes from–you’ve got what look like some nice museums and heritage railroads out there.
http://www.sdrm.org/
The 2009 business plan (page 89—section cost updates) gives the total cost of the Merced to Bakersfield segment as $8.1 billion (vehicles not included). If you subtract electrification costs for this segment of $800 million (page 85, table 3), you end up with a total cost for Merced to Bakersfield of $7.3 billion for a segment that is 175 miles long and does not include vehicles or electrification.
The hybrid 65 mile long Borden to Corcoran segment without vehicles or electrification is going to cost $4.15 billion.
Subtracting $4.15 billion from $7.3 billion leaves $3.15 billion to build the rest of the Merced to Bakersfield segment. The hybrid section does include an extra station, but even allowing for this, it looks to me like the 2009 business plan cost estimates for Merced to Bakersfield are going to come up short.
Somebody please tell me I’m wrong.
BruceMcF Reply:
December 5th, 2010 at 1:08 pm
If they’ve added extra contingencies for it being the first project, and there are some extra costs to qualify for ARRA funding, then it ought to come up higher than the 2009 business plan estimate, unless the 2009 business plan was deliberately high-balled.
Elizabeth Reply:
December 5th, 2010 at 2:14 pm
They apparently don’t think it will cost extra. I think they maybe have an extra 5% contigency on structures but that is all.
Also, the $4.15 billion is only for 54 miles of high speed rail tracks. The extra 11 miles would not be high speed rail tracks.
Alon Levy Reply:
December 5th, 2010 at 3:30 pm
Correct me if I’m wrong, but isn’t the range of construction costs for truly greenfield low-speed track (i.e. not restoring a line on a preserved ROW) similar to that for high-speed track?
Elizabeth Reply:
December 5th, 2010 at 3:38 pm
It is not clear if they are in the $4.15 or in a reserve on top of that. Also, the low speed ones look like they would be built as an at grade connector. The plans show aerial high speed tracks as an alternative.
Elizabeth Reply:
December 5th, 2010 at 3:38 pm
So, no I don’t think they are the same in this case.
Elizabeth Reply:
December 5th, 2010 at 2:13 pm
They are way, way short. I’m working on a spreadsheet to show how short.
This is why they are not building to Merced.
John Burrows Reply:
December 6th, 2010 at 11:28 pm
I found an estimate of $1.43 billion for a 69.4 mile segment from Corcoran to Shafter, but I don’t know if it is still applicable.
If it is accurate, we would have about $5.6 billion estimated for the roughly 130 mile stretch from Borden to Shafter.
“as Congressional Republicans threaten to destroy the American economy as part of their bizarre, sociopathic vendetta against the 21st century”
Great description, mind if I use it?