Does the Legislative Analyst Have Any Credibility Left?
The concept of a Legislative Analyst Office is a good one. The state legislature ought to have a neutral, independent, non-partisan research bureau that is devoted to giving legislators facts and insight as they make important decisions.
But that concept falls apart if the LAO provides bad analysis, and especially if it abandons its neutrality and instead tries to make policy. Nobody elected Mac Taylor to govern the State of California, but as Legislative Analyst he has increasingly pushed the LAO to intervene in policy debates that he and the office simply have no place sticking their nose.
Worse, they tend to do it without the benefit of accurate information. That’s especially been their problem when looking at the high speed rail project. Rather than respecting the will of the voters of California, the LAO has waged a consistent effort to attack the project since early 2009, when they first argued for gutting the project. And their attacks are based on flawed evidence. With each baseless attack, they have jeopardized the reputation of the LAO and undermined their ability to give neutral, informed analysis to the elected lawmakers of California.
Earlier this year the LAO wanted to give HSR the Scott Walker treatment, arguing that California should sacrifice jobs and $4 billion in federal stimulus and kill the HSR project. As this blog explained back in May, their analysis was deeply flawed, written largely by an unqualified analyst who had no experience in the topic area.
That unprecedented report generated a strong backlash from legislators, mayors, government watchdogs, and newspapers around the state. The federal government slapped down several of the LAO’s uninformed claims, and Assemblymember Cathleen Galgiani asked a series of questions of the LAO regarding the assembly of that flawed report. I don’t know if the LAO ever did answer these questions, but clearly the May 2011 report did major damage to the LAO’s credibility.
Sadly, the LAO has chosen to double down on their flawed and unprecedented attack on a project approved by the voters of California. You can read their most recent report here. Its tone and word choice are clearly those of project opponents who grudgingly have to admit the project made great strides forward with the 2012 Business Plan, but who keep trying to find reasons to oppose the project. And once again all they do is make themselves look foolish in the process, further undermining the credibility of what once was, and should still be, one of the state government’s most useful agencies.
They include the completely misleading claim that just because massively unpopular House Republicans voted to kill HSR funding for a year, that we can therefore predict the feds will never again fund HSR:
Availability of Funding to Complete a Usable Segment Highly Uncertain. The possible future sources of funding necessary to complete Phase 1 that are identified in the draft business plan are highly speculative. In addition, Congress has approved no funding for high-speed rail projects for the next year. As a result, it is highly uncertain if funding to complete the high-speed rail system will ever materialize.
That last line is just not true. At all. It ignores the fact that President Barack Obama still strongly supports high speed rail funding. So too does Nancy Pelosi, who would return as Speaker if, as polls show, Democrats retake the House. Then again, the LAO is notoriously ignorant of federal issues, as their slapdown by the federal government earlier this year made clear.
The report is also an attempt to fight back against the 2012 Business Plan’s most successful claims:
Alternative Cost Estimate Overstated. The draft business plan compares the estimated $99 billion to $118 billion cost of constructing high-speed rail with an estimated $170 billion cost of adding equivalent capacity to airports and highways. This comparison is very problematic because $170 billion is not what the state would otherwise spend to address the growth in inter-city transportation demand. The HSRA estimates that the high-speed train system would have the capacity to carry 116 million passengers per year but their highest forecasted ridership is significantly less than that amount—44 million rides per year (roughly 40 percent less than capacity).
Huh? They simply claim it won’t cost $170 billion to build alternatives, but don’t provide a shred of evidence to back up that claim. They talk about CHSRA ridership forecasts, but that has nothing to do with the $170 billion alternative cost.
We know, for example, that it will cost $25 billion to widen Highway 99 in the Central Valley – and that’s a 2006 estimate. It’s entirely possible that estimate will have risen by the same amount as the HSR estimate has risen. Extrapolate that cost out through the rest of the state, especially the densely built Bay Area and Southern California, and $170 billion to expand both freeways and airports suddenly seems plausible.
And of course, nowhere in the report – nowhere at all – does the LAO discuss the rising cost of oil.
They also argue from a perspective of false choice and artificial scarcity:
High-Speed Rail’s Priority Over Other Transportation Investments Unproven. As the state’s population increases, demand for both interregional travel and urban travel will grow. It will be necessary to continue to maintain existing infrastructure, fund urban transit options, and use tools to increase the capacity of existing roadways to accommodate these increased travel demands. In light of this, the Legislature should consider where to invest limited state resources.
This is misleading at best. It’s not an either/or decision. California needs to invest in both intercity travel AND urban travel. In fact, they complement each other. And since California remains a rich state, there’s plenty of money available to do both. The LAO ought to be advising the legislature as to what its funding options are and what the possible impact might be, rather than saying “sorry, you are poor and have to pick between priorities.”
In fact, LAO staff went even further down the path of false choice and artificial scarcity in their testimony today:
“You may also have to look at making other cuts to social services programs or education,” and not funding other transportation projects, report co-author Farra Bracht told the Assembly Committee on Transportation.
Let’s be clear: this is bullshit. To the LAO, all HSR brings is debt. They have never once acknowledged the financial benefits to the state of tens of thousands of new jobs. A 2010 US Conference of Mayors report suggested HSR would bring a $10 billion annual green dividend to Los Angeles alone. Statewide, the boost would be even greater.
Not only does the LAO ignore the dividends entirely, they claim negatives might wipe out the benefits – but they don’t come up with anything close to $10 billion in annual green dividends:
Economic Impact Analysis Is Imbalanced. Our preliminary review of the economic analysis in the draft business plan is that it may be incomplete and imbalanced, and therefore portrays the project more favorably than may be warranted. For example, the plan does not estimate economic loses from negative impacts to business from right-of-way acquisition and rail construction activities or from increases in urban traffic congestion around train stations.
Those impacts will be minimal at best. They might hit the tens of millions. They won’t come anywhere close to the tens of billions. Once again it’s clear the LAO is biased against this project.
And of course, the legislature also has many other options open to it to raise revenue to fund social services and education. The notion that HSR would force those things to be cut is a lie, especially since the state is not on the hook for the $98 billion cost.
The LAO is acting as a nakedly political body here, abandoning its role as a neutral and informed analyst to instead try and kill a project it dislikes. By not accurately or honestly assessing the project and its environment, the LAO has not only produced a report that can safely be ignored, they have further damaged their already shaky credibility as an institution. It may be time for major staffing changes at the LAO in order to bring much-needed reforms to that important agency.