GAO Report Validates HSR Ridership and Revenue Projections
In an attempt to undermine the California high speed rail project Congressional Republicans, led by the Central Valley’s Kevin McCarthy and Jeff Denham, sought a review of the project by the federal General Accounting Office. Their hope was that the GAO would find all kinds of major problems with the project that they could use to continue their attack on the project.
Well, that’s not what the GAO found. Instead the GAO concluded that the ridership and revenue estimates were “reasonable” and that the California High Speed Rail Authority followed all laws and best practices in designing and planning the project. Here’s how the Authority described the GAO findings:
The GAO audit found that the Authority:
• Followed all applicable guidance from the Federal Railroad Administration (FRA), which administers the Authority’s federal grants.
• Ridership and revenue forecasts are reasonable.
• Substantially met best practices for developing accurate cost estimates and the report highlights the Authority’s efforts to produce cost estimates that correctly reflect the program’s scope.
The funding plan recognizes the uncertainty of the current funding environment and is building the project in usable phases and has identified an alternative funding source.
• Did a comprehensive job in identifying key economic impacts that could result from the high-speed rail project demonstrating the strong economic case for the project. This includes its ability to create jobs in the short-term and its potential to change the state’s economic landscape in the long-term through improved connections between its metropolitan areas.
• The GAO report contains no formal recommendations for the Authority.
The report itself does make some suggestions for improving the ridership and revenue projections, including a new travel survey for the 2014 Business Plan (I believe the travel survey currently being used dates to 2005). And they did have some words about the project’s cost estimates:
The Authority substantially met the criteria for the accurate characteristic by, for example, the cost estimate’s reflecting the current scope of the project. However, the Authority partially met the criteria for the other three characteristics since the operating costs were not sufficiently detailed (comprehensive), the development of some cost elements were not sufficiently explained (well documented), and because no systematic assessment of risk was performed (credible). The Federal Railroad Administration (FRA) issued limited guidance for preparing cost estimates, and this guidance did not reflect best practices in the Cost Guide. The Authority plans to improve its cost estimates.
That particular finding wasn’t any kind of slam against the project or the Authority, and because the Authority plans to make improvements, the GAO did not conclude that there were problems with the project or its oversight.
But that didn’t stop Congressional Republicans from taking a report that found the California HSR project to be sound and somehow spinning it as validating their own criticisms:
“Obtaining sustained congressional and public support for appropriating additional funds is one of the biggest challenges to completing this project,” the Government Accountability Office auditors noted in the new report.
Underscoring the political challenge, House Majority Whip Kevin McCarthy said the GAO study only stiffened his resolve to oppose the project.
“The authority’s plan is irresponsible and reckless, and that is why I am developing legislation to stop more hard-earned taxpayer dollars from being wasted on California high-speed rail,” McCarthy said in a statement….
“At a time when we’re overburdened by state and federal debt and already struggling to find ways to pay for existing programs, we should not be throwing federal dollars at a project that has spun so drastically out of control since it was first voted for by Californians,” Denham said in a statement Friday.
This is nonsense – it’s circular logic. Republicans like McCarthy and Denham have spent the last two years working to kill federal funding for high speed rail. The GAO notices that effort and points out, correctly, that such efforts put HSR funding at risk. Then those same Republicans point to the GAO report and say “See! There’s a risk this project won’t get enough funding. So let’s not fund it!” even though they themselves created the funding problem in the first place.
The GAO report doesn’t tell us anything we did not already know. HSR systems around the world and in the United States routinely generate high levels of ridership and revenue. And we also knew that long-term HSR funding was at risk due to Republican opposition. The GAO has described reality accurately (the California Legislative Analyst’s Office could learn from that) and while Republicans may not like it, the result is a report that even Ralph Vartabedian had to acknowledge was good for the project.