Once Again, Legislative Analyst Ignores Benefits of High Speed Rail

Mar 7th, 2012 | Posted by

This week the Legislative Analyst’s Office issued its fiscal analysis of a proposed ballot initiative to prevent further issuance of high speed rail bonds authorized by voters when they passed Prop 1A in 2008. They were asked to do the fiscal analysis of the potential impact of the initiative before it goes out for circulation, and what the LAO came up with was a flawed examination that focuses on costs but downplays and almost ignores the benefits.

Savings in Debt-Service Costs. This measure would prevent the sale of up to $9.4 billion in bond funds previously authorized by Proposition 1A. The actual reduction in bond sales would depend on such factors as: (1) how many bonds would have been sold absent this measure and (2) the amount of bonds sold prior to the passage of the measure. It may be, for example, that the state would otherwise be unable to sell all the state bonds due to an inability to raise the necessary matching funds. Moreover, it is possible that up to a few billion dollars of Proposition 1A bond funds could be sold prior to the passage of this measure in order to support high-speed and existing passenger rail projects currently under consideration. The cost to the state of repaying the principal and interest on the $9.4 billion in unsold bonds, assuming they would have been sold at an average interest rate of 6.5 percent and repaid over a period of 30 years, would be $709 million annually. Based on the above factors, however, the estimated annual debt-service savings could be far less.

But there are several flaws with this reasoning. All $9B in authorized bond funds won’t be sold at once, therefore in the initial years the repayment will be far smaller. By the time the state actually sells all $9B in bond funds, the state will be in much better financial situation, both generally and in terms of the budget. High speed rail can help with that, as we’ll explain in a moment.

The LAO’s assumption for $700 million a year is based on a high interest rate assumption of 6.5%. It is likely to be lower. California’s debt ratings were recently improved, and a state bond sale last week paid interest rates of between 1.28% and 4.13%. That’s an average of 2.7%, not 6.5%.

For each dollar in bonds borrowed, a matching non-state dollar is required to be procured by law per Prop 1A. This means that if we borrow the full $9B (which the $700M/yr payback rate is based on), a minimum of $9B in outside money must be injected into California’s economy.

To summarize: Unlike almost all other bonds, legally California is not allowed to suffer economically by borrowing for the HSR project due to requirements for outside matching funds in Prop 1A.

Of course, a proper study of HSR funding does not merely assess the costs. It also has to assess the benefits of such spending, including economic activity and tax revenues generated by the project. The LAO did look at these “other effects” but the examination was cursory:

Other Impacts. The state has received $3.5 billion in federal funds dedicated to high-speed rail that require matching state funds. To the extent that Proposition 1A bonds are not sold prior to the passage of this measure to satisfy this match requirement, the state would lose up to $3.3 billion of these federal funds. The state could also incur a loss of potential matching funds from state, federal, and local governments, or the private sector that would be required in order to spend any remaining bond funds. Unlike the federal funds that have already been committed, there are currently no funding commitments from these other entities. The loss of federal funds and potential other funds, in turn, would reduce somewhat the level of economic activity in the state over the next several years resulting in unknown reductions in state and local tax revenues. However, the loss of any state and local matching funds would not have a significant net fiscal impact on the economy to the extent that they were otherwise spent in the state for other purposes.

That last sentence is key. The $3.3 billion in federal funds – as well as tens of billions more in future federal and private funding that repealing Prop 1A would reject – aren’t coming to California in some other form. If the LAO thinks so, they are completely deluded. When Tea Party governors in Wisconsin, Ohio and Florida rejected federal stimulus funds, the Obama Administration made it clear those funds could not be used for any other purpose. They’re not coming back in another form.

The LAO analysis also skims right over the economic benefits of the project. It doesn’t look at projected numbers of jobs created, and only briefly mentions state and local tax revenues. Significantly, it does not mention gas prices at all, even though the green dividend is well known.

In short, the LAO obsesses over the costs and pretty much ignores the benefits. They’d make terrible investment advisers, yet they are the in-house analyst for the state legislature.

As to the initiative, so far there’s no financial backing to get it onto the ballot, so it doesn’t yet need to be taken as a threat to the project. But it should be taken seriously as a possible way to mobilize and legitimize anti-HSR sentiment and arguments. And pushing back against flawed fiscal analysis is always important too.

  1. Jonathan
    Mar 7th, 2012 at 21:04
    #1

    …. However, the loss of any state and local matching funds would not have a significant net fiscal impact on the economy to the extent that they were otherwise spent in the state for other purposes.

    The LAO is just plain lying. They have to be aware that the Federal funds are coming if and only if they’re spent on FRA-approved HSR. Which means spent in the Central Valley, per the proposal which was awarded the ARRA funding. That money is not coming back to California for “other purposes”, period. The LAO has to know that, in which case they know that “not have a net significant fiscal impact to the extent”… is actually zero extent, and thus *will* have a fiscal impact of removing a total of over $6bn (federal funds plus matching Prop 1A bond money).

    How they get from an undeniable $6+bn nett change to “no net fiscal effect”, is beyond me.

    Randy Reply:

    I just penciled out the 3.5 billion federal money to be over 60k job/years of construction jobs. Each paying about $8k of state and local taxes. So “not net fiscal effect” DIRECTLY equals over 500 million in state and local tax revenue. Not counting all those multiplier effects (which I believe are real but hard calculate.) — Of course we can keep being a donor state and the math works in reverse.

    VBobier Reply:

    Yeah a Donor to RED States, their RED for a reason, without some GREEN, they’d always be in the RED

    Nathanael Reply:

    I also cannot fathom how the LAO was allowed to get away with assuming a much higher interest rate than *the most recent interest rate on California government bonds*.

    That’s just a dishonest assumption, and someone should send the report right back with “Report is not based on facts, please issue new report”.

  2. Peter
    Mar 8th, 2012 at 04:02
    #2

    Robert, I think you’re misinterpreting this line:

    “However, the loss of any state and local matching funds would not have a significant net fiscal impact on the economy to the extent that they were otherwise spent in the state for other purposes.”

    The LAO isn’t saying that federal funds would be used elsewhere in the state, but is instead saying that state and local matching funds would be repurposed.

    BMF from San Diego Reply:

    To that…. “repurposing” could be discussed whereas those funds might go to other capital projects, or, to programs.

    I’d forward that programs, whether it is teacher salaries or for prison guards, would create or continue ongoing expenses and not provide a lasting benefit for Californians.

    On the other hand, a capital project like CHSRA would provide a 100 years of benefit.

    synonymouse Reply:

    100 years of requisite operating subsidies. See BART.

    adirondacker12800 Reply:

    It’s going to make money like HSR systems the world over.

    synonymouse Reply:

    California is not the world over, as Van Ark has had to learn the hard way.

    We provide the example to others of what not to do, the downside of having too much money along with stealth political corruption. BART made numerous eccentric errors just as the CHSRA is in the process of repeating. They provide a real world object lesson for others to avoid.

    wu ming Reply:

    there’s corruption and less-than-ideal planning in infrastructure construction all over the world, and yet even with taiwan’s absurdly corrupt, poorly designed system (to provide an egregious example), it still makes money and does not require operation subsidies.

    hell, if acela can run a surplus, CAHSR will.

    synonymouse Reply:

    When was the last time anyone anywhere went to Indian broad gauge? (outside of the subcontinent, of course)

    And the Muni Central Suxway – tunneling under 4 levels and risking hitting underground water when an easy mezzanine cut and cover crossing is one block away on a much wider street that accesses both Chinatown and the financial/retail district?

    Not to mention the grotesquerie at Tejon.

    ComradeFrana Reply:

    “even with taiwan’s absurdly corrupt, poorly designed system (to provide an egregious example)”

    Considering the fact that CAHSR is on it’s way to outdo it in almost every way possible, that’s not very reassuring. Because even with it’s poor planning, terrible financing scheme and ginormous amounts of concrete-pouring (less than 10% of route at grade) in earthquake-prone area it still cost about $16billion in 2010 dollars for a 345km route, i.e. approx. $46.3million per km and achieved yearly ridership of 41 million in 2011.

    Comparing that to CAHSR Phase 1 cost of 65.4 $billion for a 832km route, resulting in a whooping cost of 78.6 $million per km, and (2012 Draft Business plan best-case scenario) yearly ridership of 44 million in 2040 makes it look like positively sane.

    Alon Levy Reply:

    Poor design and corruption will boost construction costs, but they’re not going to make the system less operationally profitable.

    synonymouse Reply:

    Palmdale to LA operationally profitable? Preposterous – LA will demand the State pay for below market fares.

    Tehachapi to Mojave profitable? he he And there will be stations at each – a political requirement.

    Just admit it – it’s a big BART, a present to the consultant-contractor-labor complex. Unfortunately California is running out of enough taxpayers to bankroll it and all the other welfare programs.

    Richard Mlynarik Reply:

    Poor design and corruption will boost construction costs, but they’re not going to make the system less operationally profitable.

    Not so. Longer routes serving fewer markets (eg ignoring the entire SF East Bay) more slowly (eg inevitable, guaranteed speed restrictions on mainline routing through city cores), means less revenue and higher operating cost.

    (And yes, I freely acknowledge that Tejon vs Palmdale is losing some market, and Altamont vs Los Banos is more track in Phase 1 in isolation. Both are good economic/engineering real-world trade-offs, following analysis. Not so PBQD=CHSRA’s lose-lose synergies.)

    Appalling rail technical design (bespoke “standards”, glacial turnback times, Taj Mahal maintenance, huge fleet size) and appalling station access (barriers, inadequate platform access. queueing) mean lower door-to-door average speeds which mean less revenue.

    Appalling alignment design (large excess of structures) means higher infrastructure maintenance cost, which means less profitability.

    It’s a system: start out on the wrong foot and you’re saddled with higher costs forever. The gift that keeps on giving!

    Nathanael Reply:

    Richard, the technical design is fine in terms of operations. It’s overbuilt, but it’s NOT bespoke or incompatible.

    Structures don’t increase infrastructure maintenance significantly for the first 50 years, judging by, oh, every structure I’ve ever seen. (After that it starts going way up, of course, but that’s “shall we reconstruct this at grade level now?” time).

    Do you actually know anything about civil engineering at ALL?

    Routing decisions are speicfically designed to require a specific speed. It’s in the ballot language, even. So that accusation of yours is wrong too.

    Unfortunately, the piles of bullshit you write make people inclined to ignore the rare accurate critcisms you make.

    joe Reply:

    The LAO isn’t saying that federal funds would be used elsewhere in the state, but is instead saying that state and local matching funds would be repurposed.

    But this too is NOT correct. The benefit of the ARRA funding is it leverages state funding, anyone who has put together some project from multiple funding sources knows the leveraging is key to getting funding.

    Put another way, the matching funds are 2 for 1 spending where 1 state or local dollar gets another in matching funds.

    Remove the ARRA funds and you can lose the incentive to produce the matching funds.

    Eric Reply:

    Its also talking about State and Local funds, not the 3.3 billion in federal funds.

    joe Reply:

    “Remove the ARRA funds and you can lose the incentive to produce the [State and Local] matching funds.”

    J. Wong Reply:

    “is instead saying that state and local matching funds would be repurposed” except they won’t.

    HSR critics like to make the false equivalence between HSR funds and funds for other purposes as if they are completely interchangeable, but they are not. Not spending $3bn on HSR does not mean that $3bn is now available to education for example. The LAO is being disingenous in implying that the funds are interchangeable.

    Richard Mlynarik Reply:

    In other words: “Earmarks are evil, except when they’re my earmark”.

    J. Wong Reply:

    ???

    How does this relate to my post? Canceling HSR does not automatically mean the money is available for other purposes. The Legislature must still allocate those other funds, which admittedly might be easier to do without HSR in the budget, but there is no guarantee that they would or will. In fact, they’re still likely to say “we still can’t afford more education funding” and not allocate anything.

    Nathanael Reply:

    Richard, as usual you don’t know what the hell you’re talking about. What J. Wong is saying is “Government budgets are not a fixed yearly stipend — earmarks are earmarks and they’re essentially created and destroyed out of thin air”. Which is true, though some people seem to have trouble understanding it.

    wu ming Reply:

    no, it’s that earmarks aren’t fungible, and cannot be rededicated to other projects after canceling the original project they were allocated for.

    VBobier Reply:

    Problem is the ARRA money is not Earmarks, If not spent in CA for HSR, It will go back to DC & It will not be in existence anymore, House Repugs will see to that.

    Richard Mlynarik Reply:

    Oh you mean like how the Bay Area MTC couldn’t take away the voter-approved earmark for Dumbarton Rail and give it to BART? Except … its inexplicably not yet indicted head Steve Heminger did so.

    Or how the Santa Clara VTA couldn’t take away all the other project funding in their voter-approved sales tax earmarks and give it to BART? Except … it did so.

    Were you born yesterday? Anything is possible if you’re politically juiced enough. It just takes a couple phone calls.

    synonymouse Reply:

    Thank you, Richard. One’s imagination can run wild about the politicking that is transpiring over hsr funding, planning, fixing, etc. as we type away. The naivete is getting to me. I keep thinking of MIchael Corleone telling Carlo not to insult his intelligence with farcical stories.

    joe Reply:

    Were you born yesterday? Anything is possible if you’re politically juiced enough. It just takes a couple phone calls.

    Yeah, like the hit on Breitbart.

    This is a correct statement:
    “Canceling HSR does not automatically mean the money is available for other purposes. ”

    This too:
    Problem is the ARRA money is not Earmarks, If not spent in CA for HSR, It will go back to DC & It will not be in existence anymore, House Repugs will see to that.

    An Earmark is legislated: ARRA to CAHSR is no earmark but the law included FAR competition clauses and those can’t be moved with a few phone calls. We got other state money for their fialure tospend on HSR.

    MTC voter approved funding was not an earmark: If Steve Heminger didn’t follow an earmark he’d be violating law and subject to arrest and criminal prosecution – you could probably issue a citizens arrest or hit him with a cream pie.

  3. joe
    Mar 8th, 2012 at 07:33
    #3

    http://www.mercurynews.com/travel/ci_20128857/faa-forecast-high-air-fares-most-this-decade

    WASHINGTON — Air fares are likely to stay high throughout this decade, as passenger travel grows but airline capacity shrinks, according to a government forecast issued today.

    In its annual economic analysis, the Federal Aviation Administration said travelers won’t get much relief until airlines start getting more competition, which is years off. The FAA predicted that more airline mergers and consolidation will shrink the number of cities served and the number of flights available in the nation’s air travel network.

    U.S. airline travel is expected to nearly double over the next 20 years, the FAA said, but in the near term, airline capacity will shrink.
    ..
    The growth in airline travel won’t be evenly distributed. The miles passengers fly on domestic flights are forecast to decrease slightly this year and then grow an average of 2.8 percent a year over the next two decades. But passenger miles on international flights are predicted to increase 2.2 percent this year and then grow an average of 4.4 percent a year.

    Move state air travel to HSR and use that capacity to service international flights.

    Tony d. Reply:

    Not looking good for San Jose International Airport in the future, regardless if full state HSR doesn’t come to fruition (see SFO).

    Eric Reply:

    Agreed. Let HSR compete with the airlines for short and medium trips.

    synonymouse Reply:

    Not competitive due to circuitous routes and high union labor costs.

    adirondacker12800 Reply:

    It’s not competitive if you live in the airport and your destination is a hotel at the other airport. Otherwise it is.

    jimsf Reply:

    right because airlines don’t have high union labor costs, or fuel costs, or equipment costs. And a 2:40 downtown to downtown rail trip is longer than a 3 hour airport to airport trip.
    and everyone seems to be ignoring something….
    aside from the fact that the benefits of hsr reach far beyond the sf0-lax travel market,

    even looking at just the sfo – lax market guess what….. very few people are actually trying to get from south city to el segundo. They probably aren’t even trying to get to downtown LA. The fact is that one can board hsr at either downtown SF or somewhere on the peninsula be delivered… not to El segundo, but actually be delivered much closer to their destination which most likely “somewhere in the greater la area that isn’t el segundo or downtown.

    The number of hsr station choices a south bound traveler has is much greater than the number of airport choices, and the time savings from being dropped off much closer to ones actual destination in the basin, more than cancels out the longer on-board time.

    Would you rather board a train after a meeting in downtown sf, at tbt, adn head home to “la” where you live, in say buena park, or west covina, or the san fernando valley or pasadena or fullerton, and take a single seat ride to a point much closer to your home, or would you rather make your 30 minutes south to sfo, then after tsa etc, fly into lax, then make your way somehow from lax to wherever it is you live which odds are are much closer to the nearest hsr station than the nearest airport.

    EVeryone is arguing everything but the single best thing about this system as designed.

    NO OTHER MODE will offer as many city pairs – or put as many peopl and places so close time wise to as many other people and places within the state, as quickly as hsr will. The airlines cant beat the choices and driving can’t beat the times and neither can beat the price or comfort. and that is the real brilliance of ca hsr. no amount of bickering about how its done wrong can change that fact.

    Matthew B Reply:

    Finally some sense on this board. It’s really not rocket science.

    joe Reply:

    City-Pairs and we have to push so that the HSR stations are transit hubs, not parking lots.

    But there is this nugget – airlines are merging to cut competition and drive up prices.

    In its annual economic analysis, the Federal Aviation Administration said travelers won’t get much relief until airlines start getting more competition, which is years off. The FAA predicted that more airline mergers and consolidation will shrink the number of cities served and the number of flights available in the nation’s air travel network.

    HSR is competition for airlines in the CA market.

    The GAO is asked to look at ridership and HSR ticket prices which are a proportion of airfare. The FAA says airfares will remain high due to consolidation.

    “slackfarmer” points to the FAA’s conservative estimate of oil making air-travel even ore expensive.

    Even playing by airline rules, HSR has clear economic advantages.

    jimsf Reply:

    Still, there needs to be ample parking at stations. The only station on the entire system than can get away with not providing parking will be transbay terminal. People in the bay area do not expect to find easy parking in downtown sf. They are well aware. Every other station though, even downtown fresno, san jose and union station, will need to offer plenty of parking so as not to put off those who are willing to use hsr, but not willing use transit to get to hsr. And there will be lot of “those people” In fact, probably the majority will not use transit. I don’t blame them. Its much nicer to drive, take a cab or have your friend drop you off. ( BART from SFO to SF being the exception as its quick easy single seat 30 minute ride from terminal to downtown with frequent departures.)

    Trying to force people onto transit will backfire. What is important is to have well designed access and drop off zones, taxi stands, etc and plenty of secure long term pakring.

    Alon Levy Reply:

    There needs to be some parking, but there also needs to be intense walkable development near the station. Something that looks like the renditions of Diridon Intergalactic is hostile to pedestrians and would only get used by people like me. Even the way the stations in New Haven and Providence look is not very good, though at least one can walk to them, if not too comfortably.

    For some Streetview images, consider the following:

    Good:
    Kokubunji (commuter rail station in suburban Tokyo, with 150,000 boardings per day)
    Tachikawa (ditto, but farther out of the city)

    Bad:
    New Haven
    Providence (this is the worse side of the station, but the better side, unfortunately not on Streetview, is still meh)

    Ugly:
    Hicksville

    jimsf Reply:

    Agreed that TOD etc, is a good thing. But its pretty much going to be up to the local yokels on a city by city basis when it comes to deciding what type of development happens. The authority has enough problems without trying to dictate ( and they can’t anyway) what type of development goes in around stations. We have to depend on the likes of the merced city council and the merced planing commision, or the same in fresno, etc. I don’t have any confidence in these local officials. What will likely happen is a big developer will come in, offer x y and z in incentives in return for permission to build their big plan, whatever it may be, and that will be that. The city that already has a comprehensive plan in place is SF.

    Id bet lunch that what we will see in Merced, Fresno, and Bakersfield will be less than ideal. You will have this

    Alon Levy Reply:

    This is better, but not really good. It’s like the better side of Providence Station – there’s more development and it seems a bit less sterile, but the road is too wide. The main problem is the big complex with the Shop Work Live sign isn’t really facing the street – it’s fenced away, with only one access point.

    Anyway, the main reason HSR should care about TOD quality is that people who live on top of the train station and don’t own a car are a captive market. If I live on top of Fresno Station and commute to Stanford twice a week, I’m going to use HSR to all other destinations, even ones where normally most people would drive, such as Bakersfield. This is doubly true if I can walk out of the destination station without getting hit by a car.

    Moreover, this development pattern would encourage further concentration of development near the train stations, giving people more reasons to take the train. Expect HSR to have a much higher market share for travel between downtown Fresno and downtown LA than between (say) Fresno’s eastern sprawl and Pasadena, which means it’s in HSR’s interest to maximize the intensity of development near the stations. If the train station area looks like it does now, there’s no benefit for locating downtown rather than skirting the built-up area to the west as Clem and Richard propose.

    StevieB Reply:

    Los Angeles Union Station hopefully will not build the 6,000 parking spaces requested by the CaHSRA. The Los Angeles County Metropolitan Transportation Authority wants less than 1,000 parking spaces with more passengers arriving at Union Station by bus, light rail, heavy rail and subway. This would also allow for more high-density development around the station.

    jimsf Reply:

    they may be able to get away with less at union station, but the surrounding stations – BUR FUL ANA etc will need plenty of parking.

    I notice from the 101 at LAUS there are separate busway lanes which exit. I would suggest a large garage with a direct freeway – to hsr parking offramp. That would take cars from the freeway right to parking with out dropping them into the grid.

    ps how fast is this train going (in mph please) any idea? just wondering.

    Alon Levy Reply:

    Don’t mention BUR. It offends me that LA isn’t doing anything to extend rail or even BRT there (Orange Line, hello?), and I don’t even live there.

    adirondacker12800 Reply:

    Burbank has rail, it’s called Metrolink. You might want to check this out, the author seems to have the idea that commuter style rail can be appropriate now and then
    http://pedestrianobservations.wordpress.com/2012/03/04/commuter-rail-stop-distribution/

    Alon Levy Reply:

    They can improve Metrolink all they want, but it still takes people only along the lines, whereas an Orange Line extension could connect to North Hollywood and Pasadena.

    adirondacker12800 Reply:

    What’s in Pasadena that makes someone from Burbank get the urge to go to Pasadena?
    A Rite Aid instead of Walgreens? They all want to go to the palatial CVS in North Hollywood? I know! they all want to go to the Olive Garden that has that something extra that the Olive Garden nearer to home doesn’t have. Or maybe soak in the ambiance at the McDonalds across the street from the station. Is the parking in North Hollywood so bad that the people who have the urge to go to Starbucks in North Hollywoed versus Starbucks in Burbank would want to take the train?

    James in PA Reply:

    The Rose Bowl. JPL. Something about a little old lady…

    Alon Levy Reply:

    I don’t know, what makes someone from the Upper West Side get the urge to go to the Upper East Side so bad that the crosstown buses are all filled?

    adirondacker12800 Reply:

    It’s too far to walk and since they don’t own cars the bus cheaper than a cab and almost as fast?

    Alon Levy Reply:

    Okay, so we’ve established the mode of choice for the trip is the bus. But why would someone want to go from the Upper West Side to Yorkville in the first place? The Duane Reades stock the same goods and open the same hours, etc.

    adirondacker12800 Reply:

    if they have a car parked in their driveway and the Duane Reade has ample free parking why would they take the bus? Even with the traffic on the Tranverses.

    Paulus Magnus Reply:

    There is nowhere to build those parking spaces anyhow. That being said, LA prolly needs to replace Union Station. It’s design is fine for the 20 daily trains, almost all long distance, that it was built for, but the pedestrian flow of 150+, mainly commuter, and then another fifty or so HSR is going to be absolutely horrible.

    jimsf Reply:

    Here’s a spot?

    Nathanael Reply:

    Pedestrian flow for LA Union is going to be OK even with a lot more trains. Train flow requires the run-through tracks, of course. New platforms will be needed (already planned) with level boarding (already planned) and canopies and benches on the platforms (easy enough).

    For pedestrian flow, if it really gets crowded inside the plenty-wide-enough corridor (very very unlikely), track access can be improved by adding an *overhead* passage to complement the underground one.

    The only real pedestrian flow issue is the expressway to the south of Union Station, restricting pedestrian access from the south to a single sidewalk across a single bridge. It may be possible to add additional pedestrian bridges for access; having one on the Patsouras (sp?) Transit Plaza side would already improve the situation.

    adirondacker12800 Reply:

    The secure long term parking doesn’t have to be at the station, it can be miles away just like it is at airports.

    Nathanael Reply:

    True, the airlines are not competitive with HSR due to the airlines’ circuitous routes and high union costs. But I suspect that’s not what you meant, syno…

    slackfarmer Reply:

    “The price of oil is expected to remain high, increasing to $110 a barrel by 2015 and $138 a barrel by 2032, the FAA noted.”

    The FAA is drastically underestimating the cost of oil in the future. Given a more realist increase, airline travel will be even more costly — and the need to switch short distance travel to trains even greater.

  4. jimsf
    Mar 8th, 2012 at 13:15
    #4

    Not will this system bring access to nearly unlimited numbers of high speed city pairs to residents, even more important, will be what it will do for California’s golden goose tourism industry. this system, combined with thruway bus connections, will bring the entire state to within less than half a days travel time to most of our tourist destinations. Most the international tourism are people who are already familiar with high speed rail. This will give visitors a ton of flexibility that they don’t have now because our state is so large. And the marketing possibilities are endless. Ca hsr will be THE preferred option for tourism in california hands down and all of our tourism based institutions and related business will be able to take advantage that.

    jimsf Reply:

    Take a look at the chart on page 12 of the value of the top ten 2010 california exports.

    and note:
    EXECUTIVE SUMMARY
    California is the number one travel destination in the United States. In 2010,
    approximately 200 million visitors generated $95.1 billion in spending on goods and
    services in the state. Visitor spending directly supported jobs for 873,000 Californians
    and resulted in $6.1 billion in direct state and local tax revenues (Source: Dean Runyan
    Associates)

    When people visit california, they generally do it the same way one of us would visit europe. Rarely one city, but usually one tries to get the most of the week or two. As everyone here knows, if you go to france now, you can, if you want, visit all the regions of france easily in a week, because each region is only an hour or two by tgv. In fact its possible now to use paris as a base and make day trips to the north east and west and south central. (one probably wouldn’t try to do paris to nice and back in a day perhaps) Point being, hsr will bring to california tourism, a spectacular marketing opportunity for both the tourism industry, and the hsr operator.

    Currently we sell a very popular california rail pass, specifically designed for tourists. Its a great product for a great price and I have booked thousand of folks around the state, carefully helping them build itineraries that get the most out of their time here. The only drawback.. the long travel times and the limited departure and connection options. HSR will solve that problem.
    In addition to being something familiar to our international tourists, will take to it like a duck to water, it will be a showcase for our domestic tourists, will stick their toes and and realize the water is indeed fine. Then they’ll go home and tell of their amazing high speed adventures out in wacky california.

    Being able to showcase our state to the world in this way is the single most exciting aspect of bring hsr to california.

    J. Wong Reply:

    Totally. Foreign tourists will start in either LA or SF and take HSR to the other with a stop in Fresno to visit Yosemite and maybe a stop in Gilroy for Monterrey.

    VBobier Reply:

    I mentioned that months ago & I agree, but some here poo pooed that, Foreign Tourists don’t generally have cars & will rent them for short distances, but not to drive 500-800 miles or so. So going to places like Yosemite or Sequoia National Park would be only a Bus ride away from HSR Train Stations like Fresno. And Tourists bring Money and they spend it, on food @ restaurants, Hotel lodging, Souvenir gifts for relatives back home, transportation, etc…

    jimsf Reply:

    thats correct. Whenever I suggest I rental car they decline saying they don’t want to drive. They also aren’t fond of flying. They even use the horrible 10 hour trip to vegas via train and 5 hour bus ride, even after I suggest airlines and prices. (btw the yosemite connection is via merced’s YARTS system not fresno)

    The high speed system will cut hours off of trips making it easier to both, put together a linear or circle trip, and to do day trips from a central home base – the higher speeds and frequencies making most of the state (except the far north) accessible by day trip.

    It not just that they will be able to spend money in more places, (the total spend will be the same budget for which they planned) but that the overall experience will be better with more and faster access, making california a more attractive choice on a planet with so many attractive choices.

    No one anywhere making the same tired argurments for and against, is taking any of this intangible into account.

    J. Wong Reply:

    I’d have to say @jimsf that you have a self-selecting clientele so you’re not likely to see those tourists that do choose to drive. I was renting a car at SFO for a trip to Santa Barbara and there were a fair number of foreign tourist renting cars to drive around California. That said, there’s nothing wrong with allowing people the choice, and with HSR perhaps some of those auto-renters would instead choose HSR along with those who choose public transit by default.

    jimsf Reply:

    thats true. and being in sf, meant a higher percentage of people were doing car free vacations than in other parts of the state. Still no doubt this will be fantastic for the trourism industry

    VBobier Reply:

    Yep, wouldn’t doubt that, Travel agents would be springing up like weeds almost.

    Peter Baldo Reply:

    One attraction of the classic trains – the Zephyr, Coast Starlight, etc – is that the trip is an experience in itself. Even the ride along the bay on the Capitols is pretty special. Will the view out the window of the high speed trains be anything to look forward to?

    I can imagine that one could design a great visual experience, with choice of routing, and judicious use of Stilt-A-Rail, much as they do with roads in the national parks.

    jimsf Reply:

    and those trains will still be there for those who want that trip.

    swing hanger Reply:

    Exactly. Cruise trains for the leisure travelers. HSR for everyone else, and if there is some decent scenery out your window, it’s a cherry on top. But most will be glued to their mobile devices, reading, snoring, or having a frosty one, I reckon.

    Nathanael Reply:

    In fact, I do love riding Amtrak, but it’s not exactly a scenic experience. Well, it is, if you like to see disused rust-belt decay. The Coast Starlight shows you giant, bright red industrial sewage ponds (I think that’s what they were); the Zephyr shows you the decaying industrial districts of old Midwestern towns; and as for my “home train”, the Lake Shore Limited, it gives you a beautiful view of Gary, Indiana. Ahem.

    Well, I actually like seeing this stuff and a lot of other people do too, or there wouldn’t be so much “Detroit ruin porn” out there on the Internet. But it is really not the scenery which is the key draw for Amtrak, even for the two-day train trips.

    It’s being able to walk around the train and stretch your legs; hang out at a table and play cards or do business; get something to eat whenever you want. Sitting in large, comfortable, huge-legroom seats. Having a large window to see natural light (regardless of the actual contents view, which is often better on airplanes). Very low chance of motion sickness.

    All of that will still be true on something like California HSR; it will still be a more “touristy” experience than your average plane flight.

    Richard Mlynarik Reply:

    One attraction of the classic trains – the Zephyr, Coast Starlight, etc – is that the trip is an experience in itself.

    Damn straight!

    Here’s what my (otherwise very train-friendly) partner said after our last Amtrak Cruise Experience: “I’m never taking Amtrak again, under any circumstance. Don’t ever even bring it up.”

    Joe Reply:

    “with you!”

    Nathanael Reply:

    You clearly don’t hate driving and flying as much as I do.

    I’ve had very pleasant experiences on a several-hour delayed Amtrak train running through a flood. Still got fed. Still could lie down flat and sleep (yeah, I had a room). So, you know — whatever! (When they bustituted the return trip I rented a car.)

    In contrast, being DELAYED FOR AN HOUR TRAPPED IN MY SEAT FLYING IN CIRCLES OVER YUMA was absolutely intolerable.

    Alon Levy Reply:

    For mass transportation, the scenery is a nice-to-have. People who use it regularly don’t care. People who live on the Hudson who commute on the Hudson Line don’t particularly care that they have the view of the river and the Palisades. I’m fairly certain that the same is true of people who shuttle back and forth between New York and most of Upstate. The river is stunning and when I took the train up to Dobbs Ferry I’d look at it, but I was never part of Metro-North’s core clientele. Now, the Adirondack probably has a high proportion of people who are on the train because it’s scenic, but that’s a train that comes once a day and is too slow for anything but scenic travel; it’s not what HSR should model itself after.

    And from what I hear from other commenters here (I want to name Swing Hanger and Andre Peretti but I may not remember right), the same is true on the TGV and Shinkansen. Regular Shinkansen travelers keep working in their seats, while tourists gaze at Mount Fuji. And regular TGV riders prefer the lower deck because they prefer not having people keep passing through to having a view.

    jimsf Reply:

    one exception is the people who commute from marin to sf. Crossing the gg bridge with that view or taking the ferry across past angel is. and alcatraz – a view that never gets old. After 47 years Im still in awe everytime I cross the bay bridge into sf..

    You still get a view on hsr. You just have to watch quickly!! Thats the one nice thing about aerials… better vie. ( not suggesting we build them for that reason though)

    Alon Levy Reply:

    But is HSR even going to have an interesting view? The current route is LA Basin, tunnels, Antelope Valley sprawl, tunnels, flat Central Valley, tunnels, Bay Area sprawl. The scenery is on Route 1.

    P.S. It’s not too relevant to California because the optimal transportation corridors are so far away from the scenic route, but in the Northeast, there is a legitimate tradeoff between scenery and efficiency. Basically, the Hudson Line with some curve modifications and tilting trains is good for 200 km/h. For anything more than that, trains need to run in a cutoff, and in Westchester, where the mountains are the most breathtaking, this means tunnels. That said, the main argument against is cost – the view is again just a bonus. (On the NEC, there’s zero chance trains could ever run at speed on the scenic coastal segment, and conversely a high-speed cutoff of that segment is dirt cheap.) At least a rail route through otherwise undeveloped terrain, such as the high-speed segments in Rhode Island, is next to tree cover, which means fall foliage in October.

    jimsf Reply:

    beauty is in the eye of the beholder don’t forget. On a clear day after a winter storm the view the high sierra fromthe valley is spectacular

    And the valley itself can be stunning

    Alon Levy Reply:

    Ignorant question: can you see the Sierra from where HSR would be, or only from further east?

    J. Wong Reply:

    The linked photo is of downtown Fresno with the Sierras in the background, so yes, you will be able to see them from HSR since it will be traveling through downtown Fresno.

    Nathanael Reply:

    Personally, I thought the brownness of Kansas was interesting, and the post-industrial moonscape of Gary, Indiana is awe-inspiring.

    I’ve never actually properly seen the Central Valley or the Antelope Valley — I am absolutely certain that there will be foreign tourists who will find them alien and interesting. My fiancee who grew up in Bakersfield will be bored stiff, but that’s how it works.

    synonymouse Reply:

    In urban areas you won’t be seeing anything but graffiti because the locals will insist on massive sound walls to mitigate the roar of 200mph.

    J. Wong Reply:

    It’s a lot quieter than a freeway mostly because it won’t be continuous the way vehicle traffic is. Duh!

    swing hanger Reply:

    You’re correct Alon. Most shinkansen riders are using the train to get from point A to point B- they rarely look out the window. Window seats are more valued for giving you one side to yourself rather than, say, a possibly smelly neighbor. I think seeing Mt. Fuji from the shinkansen was a promotional point when there were dining cars, which are long gone, alas. The JR group railways promote their local and secondary trunk line trains as scenic journeys, with appropriately large windows.

    datacruncher Reply:

    YARTS at Merced is the current situation. Fresno is working on service to both Yosemite and Sequoia and it likely will startup in the next few years.

    Nathanael Reply:

    Correct, J. Wong. And a Surfliner connection to San Diego.

    D. P. Lubic Reply:

    “Not [only] will this system bring access to nearly unlimited numbers of high speed city pairs to residents, even more important, will be what it will do for California’s golden goose tourism industry. This system, combined with thruway bus connections, will bring the entire state to within less than half a day’s travel time to most of our tourist destinations.”–Jim SF

    And that is the genius of this system, right there. Despite longer than desirable mileage, despite some other problems, despite the opposition, despite the cost, and even with some serious compromises, I suspect the performance of this railroad, if it even comes close to to what its enabling law demands of it, will be such an improvement over driving or an air-and-driving combination, that the ridership will shock about everybody, including its wildest proponents.

    Now, if only we can get PB out of the game, and build more at grade, we don’t need all those viaducts. . .

  5. jimsf
    Mar 9th, 2012 at 11:17
    #5

    An article in the merced sun star today on high speed rail. jobs, and development

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