There’s an odd article in today’s Fresno Bee by Tim Sheehan, who usually has written good and insightful articles on the California HSR project. The article,
“What California has to show on high-speed rail — pages of reports and a chorus of concerns”, is not biased against the project, and the reporting is sound. But it does show a typical problem with American journalism these days – an obsession with “spending” that tends to obscure the true story, that makes government spending seem bad or problematic.

The basic argument of the article is that over 15 years, the California High Speed Rail Authority has spent a lot of money, produced a lot of reports, and hired a lot of consultants. Those are facts, but the article’s tone does seem to imply that those are also problems.

California is about to build the largest public-works project in the state’s history: a system of high-speed, electric passenger trains. And even before a spade of dirt is turned, perhaps late next year, the state will have spent about $630 million.

What does California have to show for it?

Thousands of pages of strategies, studies and plans – and a chorus of concern over the California High-Speed Rail Authority’s budget management and its ability to monitor an army of consultants.

Over the past two years, state oversight agencies repeatedly have cited problems – contract payments made without verifying that work was actually performed, payments for services or equipment not covered in consulting contracts, and a lack of policies and procedures to review invoices and payments.

With spending set to leap from millions of dollars per year in planning to billions per year once construction begins, those worries are now magnified.

One might argue that it’s very, very good that the project has done all that work – it shows this is not a rushed, fly-by-night, unstudied proposal. A lot of work and research has gone into this all-important project. True, it would be nice if it didn’t take two or three decades to bring it to fruition (more if you go back to Jerry Brown’s initial HSR proposal in the early 1980s), but it at least shows careful consideration.

The use of consultants is a major topic of discussion of the article, but Sheehan at least includes some common sense defenses of their use:

Experts say it’s not unusual for states to rely on highly paid consultants for specialized expertise on major engineering projects.

“Would California be able to hire hundreds of employees who are experts in high-speed rail?” said Christopher Barkan, director of the Rail Transportation and Engineering Center at the University of Illinois at Urbana-Champaign. “And if it did, where on Earth would it find them?”

And the CHSRA’s Jeff Barker is quoted as pointing out that hiring consultants means the state doesn’t have to hire permanent staff even if they’re only needed for a few years’ worth of work.

The bigger picture here is only hinted at in the article, however – that the CHSRA has been consistently underfunded by the Legislature, making it difficult for them to staff up to properly oversee the project. Sheehan does make some mention of it:

The California High-Speed Rail Authority was created by the state Legislature in 1996 to develop a high-speed train system. In its first decade, only twice did the agency’s annual budget exceed $4 million a year – enough to employ a handful of staff, cover administrative expenses, and hire consultants to do the heavy lifting.

That included a preliminary business plan at a tab of about $5.4 million between 1997 and 2000, and a statewide environmental assessment that totaled more than $17 million between 2000 and 2006.

Intensified planning over the past several years has ramped up the authority’s spending dramatically. As construction approaches, the agency’s budget rocketed from less than $5.2 million in 2005-06 to more than $220 million in the 2010-11 budget year that ended June 30.

The word choices here reflect the typical journalistic attitude toward government spending that we’ve seen since at least the 1970s – that it’s at best a necessary evil, and when it goes up somehow that’s bad. At this time, in the depths of a Depression, government spending is inherently good, and the more of it the better. Unfortunately, 30 years of “omg spending is bad!!!” ideology dies hard, and its persistence is a primary reason why we are in a prolonged Depression rather than climbing out of a short but sharp recession.

The increase in CHSRA spending reflects the fact that the project went from something on the drawing board to something voters approved in 2008. The new spending is there to ensure the project gets built as intended. But because the Legislature and Governor Arnold Schwarzenegger kept cutting CHSRA budgets – at one point in 2007 Schwarzenegger proposed cutting the CHSRA budget to just $1 million, which would have been barely enough to keep the lights on.

In recent months, the Authority has begun staffing up. If you go to the CHSRA website right now you can see job announcements for a Chief Financial Officer, a Central Valley Regional Director, and a Chief Program Manager. The most recent Peer Review Report commended the Authority for their work in staffing up. But the Legislature is still threatening to slash CHSRA funding, especially Senators Alan Lowenthal and Joe Simitian who are trying to use the funding as a stick to force the CHSRA to adopt the changes they prefer, even though such changes are not in the best interests of HSR.

The other problem with Sheehan’s article is the lack of historical perspective. There are other major infrastructure projects in California that had a long gestation period. The idea of bridging the San Francisco Bay had been around since at least the 1870s. The concept of a cross-state aqueduct had been around since that time, and in 1919 a detailed report was made for a canal from the Delta to LA via the Tehachapis – which was eventually approved by the Legislature 40 years later.

As to costs, we’ve seen increases on those too. The Golden Gate Bridge was approved by voters in November 1930 at a projected cost of $27 million. The final cost was about $35 million. In 1962, BART was projected to cost $996 million but the final cost was $1.6 billion, which included the significant inflation of the 1960s and 1970s.

Would anyone suggest that the Bay Area would have been better off without the bridges and BART?

Then there’s the Interstate Highway System:

The initial cost estimate for the system was $25 billion over 12 years; it ended up costing $114 billion (adjusted for inflation, $425 billion in 2006 dollars) and took 35 years.

California and the country need to get over their fear of spending. The bigger issue is whether the infrastructure in question is needed for economic growth, environmental sustainability, and energy independence in the 21st century. HSR meets each standard. The cost of doing nothing remains much higher than the cost of construction. It would be nice if we had a media that began looking at government spending in those terms, rather than defaulting to an “omg spending!” frame.