Jerry Brown Defends Use of Cap-and-Trade Funds for HSR

Mar 2nd, 2014 | Posted by

The Sacramento Bee ran into Jerry Brown as he filed papers for his fourth campaign for governor, and asked him about funds for the high speed rail project:

Right now my main focus is the litigation in the 3rd Court of Appeals, I’m hopeful we will get that resolved quickly. And yes, in addition to the bond issues, the sources of funding have been one of the greatest questions of the critics, and I think cap-and-trade is very appropriate, because high speed rail reduces greenhouse gases [Brown emphasized that point], there’s no question about that, it’s much cheaper than building more freeways, or attempting to build more runways. So from an environmental and fiscal point of view, or even from a convenience point of view, given the fact that we have a number of people who are aging, and I hope to be one of those people over the next 20 years, it’ll be a lot better to be sitting on a high speed passenger rail than sitting behind a wheel trying to weave your way down I-5 or 99.

So Brown isn’t backing down on his cap-and-trade plan for high speed rail, nor should he, since he’s absolutely right about its environmental and climate benefits. Those benefits include CO2 reductions, despite what the ignorant Legislative Analyst’s Office says:

Cap-and-trade revenue is intended to reduce greenhouse gas emissions. In a review of Brown’s proposal, the LAO said the first phase of the rail project will not be operational until after 2020, and “the construction of the project would actually generate GHG emissions of 30,000 metric tons over the next several years.”

Though acknowledging the California High-Speed Rail Authority’s plan to offset emissions by planting thousands of trees in the Central Valley, the LAO said the administration’s “emission estimates for construction do not include emissions associated with the production of construction materials, which suggests that the amount of emissions requiring mitigation could be much higher than currently planned.”

And yet the project will generate GHG reductions in the tens of millions of metric tons, far greater than any new emissions generated by construction. Those emissions can be offset easily and I support doing whatever it takes to offset them.

But the very idea that we shouldn’t build HSR and realize its massive carbon reduction benefits because it might generate some short-term CO2 emissions is completely absurd. It’s like telling a patient they should let a relatively minor cancer metastasize into a terminal illness because treating it might cause side effects. It’s like telling a student they shouldn’t go to college because it will cost money up front. It’s like saying we shouldn’t save the planet in the years to come because it might cause some inconveniences now.

Oh, wait, that last one isn’t just a simile, it’s an accurate description of the LAO’s head-in-the-sand attitude toward the state’s fiscal and environmental problems.

One wonders what the LAO has to say about the state legislature’s decision to spend cap-and-trade funds on drought relief. How much CO2 emissions will these steps cause? Is it right to use cap-and-trade revenues to fund climate change adaptation, rather than CO2 emission reduction? I’m not necessarily opposed to using a small amount of cap-and-trade funds to address water concerns, as the legislature has done here, but I wonder about the hypocrisy of those who criticized Brown for wanting to use the cap-and-trade funds for their original purpose – reducing CO2 emissions.

  1. joe
    Mar 2nd, 2014 at 17:34
    #1

    The LAO was stoned when they wrote this assessment.

    http://www.lao.ca.gov/reports/2014/budget/cap-and-trade/auction-revenue-expenditure-022414.aspx

    Some Activity May Have Happened on the Natural. The lack of an analysis evaluating the degree to which the proposals would result in GHG emission reductions is further complicated because it is unclear to what extent some proposed programs are subsidizing activities that would have happened on the natural (meaning without the support of cap–and–trade auction revenues). This is important because to the extent that GHG reductions would have happened even in the absence of additional funding, the state’s efforts do not actually yield additional net emission reductions. For example, it is unclear to what extent the incentives provided by ARB’s low–emission vehicle program can be credited with consumers’ decision to purchase one of these vehicles. This is because some consumers would have purchased more fuel–efficient vehicles on their own to save on fuel costs, even without a rebate. Likewise, SGC’s sustainable communities grant program would provide grant funding for projects such as bike lanes or sidewalks near transit stations that developers might have built anyway to meet local demand, even without the additional funding.

    Some Outcomes Would Depend on Changes in Behavior. In addition, the amount of GHG reductions for some proposed programs would depend on changes in behavior that are difficult to predict. For example, the administration assumes that the high–speed rail, SGC, and Caltrans proposals would result in some individuals shifting their mode of transportation, resulting in a net reduction in vehicle miles traveled in cars. While such changes might very well occur and could result in net GHG emission reductions, it would be difficult to predict with precision the likely marginal net GHG reduction due to these efforts. This uncertainty increases the risk that the administration’s plan would not achieve its maximum potential emission reductions.

    No mention of the ridership model’s forecasts when discussing HSR use – it’s as if there’s nothing out there.

  2. Derek
    Mar 2nd, 2014 at 20:46
    #2

    high speed rail reduces greenhouse gases

    Aggregate or per capita? As long as California’s population continues to increase, it seems unlikely that anything short of a moratorium on new road construction or a mass migration to electric vehicles will reduce California’s aggregate greenhouse gas emissions from residential transportation, but there’s no guarantee that HSR will result in either of these two situations.

  3. Emmanuel
    Mar 2nd, 2014 at 21:16
    #3

    Why are we still debating this? Yes you might be able to argue if HSR is actually reducing CO2 emissions since the original source of power always goes back to some fossil fuels. But, you might as well say that all energy goes back to solar power so that makes HSR a green project right?

    Okay, kidding aside. What else should we use the funds for anyway? Literally no other government project in the state of California is struggling so hard to find funds. IT makes me sick to my stomach how we are still debating funding while I am passing one wasteful, irrational highway expansion after another driving from SD to LA and back. How can anyone with a sane mind say that a 50 mile carpool lane is a better idea than a HSR segment the same length?

    We should get funds from every corner of the budget to make this thing happen. It’s long overdue and it’s only getting more expensive the longer we wait.

    adirondacker12800 Reply:

    California gets lots of it’s electricity from sources that don’t burn fossil fuels.

    http://energyalmanac.ca.gov/electricity/electricity_generation.html

  4. John Nachtigall
    Mar 2nd, 2014 at 22:33
    #4

    The root cause of the issue here is that CA seems (more than any other state) addicted to prescribed taxes and spending. You would think at some point the state would learn its lesson. Putting limits on revenue and spending sources leads to inflexibility and inefficiency.

    This started all the way back to prop 13 which has lead the state to a progressive tax scheme that is now magnifying every bump in the economy. But really that was just the first in a long trend of “locked in” spending and taxes. From education to disabilities to parks, the mandatory “percentage spend” or locked in funding sources has put the state into an artificial bind. Jerry has to “lend” and “borrow” from special accounts to keep funds in place. It is just ridiculous.

    I am obviously no fan of the democratic legislature, but it is their duty and responsibility to budget every year. Looking after both short and long term obligations and revenue sources. To further restrict that activity with specified revenue and spending just makes a tough job tougher. Revenue should go into a general fund and be budgeted as the legislature and Governor see fit.

    All that said, the law is on the books. It is a huge stretch of both the letter and intent of the cap and trade law to say that HSR qualifies. The intent was to fund projects that provide immediate reduction to greenhouse gases. The soonest that HSR will start to reduce CO2 (if ever) is 2030 and beyond. In the meantime it will most certainly increase the CO2 in the atmosphere as the system is getting built. It is obviously outside the intent of the law to provide funds to a project that MAY START to have a positive impact in 15-20 years and in the meantime make the situation worse. There are certainly many other projects that could be funded instead like alternative solar, hydro, nuclear, and/or wind electricity generation. Credits for electric cars. or even planting trees if you really think that is an offset.

    In short, while I personally think the legislature and Governor should be free to spend on programs as they see fit, they passed a law that puts them in a corner.

    As an aside, I am going to find it very interesting to see if Jerry can convince the legislature to provide the funding. He has changed from a 1 time 250M to 1/3 of the cap and trade funds every year. It is a real commitment of funds and if passed I could see it providing the dedicated revenue source that meets the letter of prop1a. Although I don’t believe cap and trade will raise all that much money that is for a different time. at least on paper it would be a dedicated funding source to sell bonds against and actually fund the IOS.

    adirondacker12800 Reply:

    I am obviously no fan of the democratic legislature

    hereditary legislatures are better? or perhaps an appointed one? Let all the rich straight white guys get together and pick a few among themselves to serve?

    John Nachtigall Reply:

    Yeah that didn’t read well did it. That should have been a capital “D”.

    Perhaps best rephrased as “I am no fan of the current CA legislature dominated by the Democratic Party”

    For the record I am a big plan of democracy.

    Ted Judah Reply:

    As unpalatable as tax and spend policies might seem, at least it is a real
    Istic approach. Reagan and other Republicans thought the solution was about running up huge deficits by spending while cutting taxes to spur growth. Notice how that turned out.

    John Nachtigall Reply:

    ok your the 2nd one. I even went back and re-read my post. It is NOT a diatribe on tax and spend. It is a position against targeted revenue and spending.

    I think “tax and spend” is a meaningless phrase. Every government conservative or liberal taxes and spends.

    adirondacker12800 Reply:

    Republicans borrow and spend.

    Ted Judah Reply:

    Targeted revenue and spending???

    You mean “budgeting”?

    BMF of San Diego Reply:

    By law, there needs to be a nexus between a particular tax and how the revenues from that tax are spent. That’s what I recall from school, but I finished that 20 years ago.

    Nathanael Reply:

    That is just weird. What California provision is that? It certainly isn’t true of federal or NY taxing or spending. (FWIW, the NY gas tax went into the general fund for nearly all of its history.)

    adirondacker12800 Reply:

    Your Freudian slip is showing again.
    One of the features of a liberal, with a lowercase L, democracy is that there is no plan. We make them up as we go along and adjust to changing reality.

    Nathanael Reply:

    Well, repeal prop 13 then. If repealing prop 13 is getting support from avowed Republicans like you, we should be able to get rid of it entirely. Would be a good start, right?

    Nathanael Reply:

    There are no projects which provide “immediate” reduction in greenhouse gases, except planting trees — or shutting down fossil-fuel-burning stuff, and shutting things down doesn’t actually cost money.

    Since all projects which cost money have some form of startup cost in carbon emissions, you’re left arguing about how quickly the payback will be achieved. If you’re worried that the HSR line’s payback is “too far away”, build it and open it faster.

  5. joe
    Mar 2nd, 2014 at 22:45
    #5

    The root cause of the issue here is that CA seems (more than any other state) addicted to prescribed taxes and spending.

    Then leave and go back home to CO and get a nice job. Or move to a low tax state and get a nice job there. Why stay

    We’ll continue to tax and spend and stay a global economic juggernaut. I like the policies and moved here – no problem paying for safer roads and state services. None whatsoever.

    MarkB Reply:

    John has a point: a ridiculously large percentage of the state budget is on autopilot year after year because of either federal mandates or earlier acts of the legislature (or initiatives) that mandated spending by either dollar or percentage, such as Prop 98. It makes it very difficult for the state to adapt to new spending needs when so little of the budget is available for change on a year-to-year basis.

    John Nachtigall Reply:

    Thanks for getting the point

    joe Reply:

    Look at the alternative.
    A budget that can shift expenses year to year.

    Schools are a large fraction of the state budget. Now staff them when you hire and fire annually with this dynamic budget. All organizations would spend more money and effort managing to a dynamic budget. Salaries would go up to compensate for the unstable work.

    John Nachtigall Reply:

    Of course it is work. But a “static” budget prevents flexability. Combined with the ultra-progressive tax system in CA that causes large fluxuations in tax recipts you end up with a situation where you have to cut some programs by 50% because some programs cant be cut at all.

    Hiring a few more bean counters is preferable to unstable funding in social programs dont you think?

    Ted Judah Reply:

    Prop 98 has nothing to do with “spending” but about the fear the Republicans had in the 1980s that Willie Brown would use Prop 13 to demand state control of schools and a different tax system to support them. (I.E. Prop 30…) So both sides brokered a truce which worked to the Democrats favor because tax revenue plummeted in the early 1990s .

    The GOP in CA just can’t figure out what do now that it got what it wished for. No spending means no constituencies and no voter mobilization. Other than tax credits or cuts, the CA GOP has no agenda.

    So be critical if you want, but realize there does not seem to be an alternative at the moment.

    Nathanael Reply:

    If I remember correctly, the initial start of the entire kerfuffle was the court ruling that school districts had to have equal funding — that the property tax system where rich districts had lots of money and poor districts had none was a violation of the state constitution. (That inequitable and disastrous system still exists in most of the rest of the US.)

    Everything from Prop 13 onward has been a reaction by people unwilling to comply with that ruling.

    John Nachtigall Reply:

    I think you missed my point joe. I said prescribed taxes and spending. I.e. The uses are locked in. I think the a Democrats in charge (actually whoever is in charge) should have more control over spending and taxes, not less. And I did not say they should lower taxes or change spending priorities.

    It was so obviously not a rant on “tax and spend”. I even mentioned how prop13 is a bad thing. Do you just disagree with whatever I write?

    joe Reply:

    Stable budgets on the receiving side allow for longer term planning, effort, training and retention of skilled workers.

    Voters want the stability and vote for dedicated funding.

    Dynamic spending is best in R&D – The OMB wants Federal R&D budgets to phase in and out over a 5 year time period. Funds transition to new efforts in the field as work progresses.

    John Nachtigall Reply:

    which is a fine theory, but in practice the tax recipts are not stable. In CA it is especially bad.

    http://www.ppic.org/content/pubs/jtf/JTF_BudgetJTF.pdf

    From the onset of the recession in December 2007 through the third quarter of 2009, real per capita revenues declined by more than 10% in California, compared to 4.4% in the nation as a whole.

    So by locking in spending and revenue you prevent the flexability required to manage the budget

    Ted Judah Reply:

    So you want a government that unlimited spending authority independent of elected officials???

    John Nachtigall Reply:

    By definition you could have a “government” with spending authority independent of elected officials in a democracy. The elected officials are the government.

    What I propose is that there is 1 general fund that all revenue goes in and spending comes out of. Simply put don’t restrict uses of funds and similarly don’t lock in spending.

    jonathan Reply:

    Ah, you want a Consolidated Fund….

    Ted Judah Reply:

    And how does it work at the federal and local level? The truth is there is more flexibility flexibility in State budgets than is to be believed. What there isn’t though, is a way to have that flexibility not correspond to political leverage.

    More Plato on your bedtime reading list, less Friedman.

    jonathan Reply:

    Go pee in a cave.

    Ted Judah Reply:

    Sorry, was that too condescending for you again?

    John Nachtigall Reply:

    there are 500+ special funds alone that dedicate revenue. Add in mandated spending percentages and the facts do not support your position that there is more flexibility than is to be believed, unless you think there is 0 in which case you are right, there is some.

    John Nachtigall Reply:

    and it works the same on a federal and local level also. The federal level is less about law mandated percentages and more just about politics (i.e. they wont defund SS) At a local level it gets locked in through pensions, again not through laws per se.

    Ted Judah Reply:

    The different funding sources exist because they are for programs and services for which the entire population does not use. The Legislature can always transfer money between funds absent a constitutional prohibition.

    Your continued problem is looking for a management grade solution to a dilemma that is inherently political in nature. Property tax used to fund all of California state and local budgets until the Depression. The income tax was introduced as a way to shift the burden from gross receipts to something more stable.

    Prop 13 was never about fiscal discipline. It was an attempt to stop the growth of black and Latino population by denying the counties the revenue needed to serve those populations. Whites already had Bradley Burns and the Lakewood Plan to sidestep the loss of racial covenants in housing and to permanently disenfranchise minorities. The cities all created their own police departments against revenue streams that stagnanted by the 80s…

    In sum, you keep looking in the wrong places.

    John Nachtigall Reply:

    There is not a single program at any level which is used by everyone. I have not used the services of the police force for 10+ years, but I am glad they are funded.

    The legislature can “borrow” funds but they are supposed to be paid back, unless they change the law. And if they change the law then why dedicate them in the 1st place.

    Income tax is inherently less stable than property tax. Land values change slowly over time and the assesments even more so especially when compared to incomes which can shift radically, especially now in the age of stock options. But that is fine, if you want a super progressive tax scheme that has ups and downs then fine, but dont pare it with manadatory spending levels that are unsustainable in the downturns.

    Prop 13 was simply people getting fed up with tax increases. It did nothing to black and latino growth rates. It was a combination of GOP people who hate every tax and older people scared that their fixed income would be eaten up by tax increases. Why does everyone have to go to a racial explanation when money is more obvious.

    adirondacker12800 Reply:

    There are other ways to make sure grandma’s property tax bill doesn’t go too high without giving Union Pacific and Walmart tax breaks in perpetuity.

    John Nachtigall Reply:

    i agree, prop 13 was a bad law and it gets worse with age. Which is the point I made originally if you read up the chain.

    synonymouse Reply:

    “There are other ways to make sure grandma’s property tax bill doesn’t go too high without giving Union Pacific and Walmart tax breaks in perpetuity.”

    No there aren’t. We live in a world of corruption. UP and Walmart always win; actually to be more correct Warren Buffett, Tim Cook and Bill Gates always win. With Prop 13 by accident Joe Paycheck got lucky. It was not meant to be that way. The slaves are supposed to pay all the taxes – the equus none.

    adirondacker12800 Reply:

    grandma isn’t getting thrown out of her house in the other 49 states. Grandma gets a low property tax bill but she gets a high sales tax bill. I suppose Grandma can use the Sears catalog instead.

    Derek Reply:

    I think the way to kill Prop 13 is to allow people to opt out of Prop 13’s protection against inflation in exchange for a lower tax rate today. More freedom is better than less freedom, right?

    John Nachtigall Reply:

    so Jerry has to do stuff like this

    http://www.sacbee.com/2012/08/03/4688237/california-reaches-deep-into-special.html

    because there are 500+ “special funds” that earmark revenue for specific purposes

    http://www.mercurynews.com/ci_21183013/while-california-struggles-pay-its-bills-states-special

    its just not a rational way to run a state and the recession showed what happens in a downturn

  6. Eric
    Mar 3rd, 2014 at 01:13
    #6

    “It just seems to me that a billionaire can come in and get whatever he wants and run roughshod over average millionaires like myself.” – Palo Alto NIMBYs
    https://twitter.com/tikhon/status/276567771318476801/photo/1

    John Nachtigall Reply:

    All problems are relative.

    Paul Dyson Reply:

    But not all relatives are problems.

  7. Keith Saggers
    Mar 3rd, 2014 at 13:52
    #7

    http://www.capitolcorridor.org/news/whats-new/capitol-corridors-yolo-causeway-west-crossover-project-now-complete/

    jimsf Reply:

    I did hear somewhere about increasing capitol corridor from 79 to 90 mph.

    Keith Saggers Reply:

    It must of been the Oakland to Niles section, sorry to hear about hassles at immigration.

  8. jonathan
    Mar 3rd, 2014 at 18:17
    #8

    OT, but just for John Nachtgall:

    http://www.salon.com/2014/03/03/gops_inane_war_on_science_plasma_physicist_congressman_takes_on_the_denialists/

    John Nachtigall Reply:

    Quote from article.

    You know, I find most members of Congress — like most citizens — actually value science, they understand that the payoff from science research is large, but, you know, they appreciate and enjoy the fruits of science but don’t really have a clue of how you sustain a productive science enterprise.

    John Nachtigall Reply:

    My turn. Regarding the kerfuffle about America in decline

    from the 4th richest man in the world and his most recent shareholder letter

    http://blogs.wsj.com/moneybeat/2014/03/01/quotes-quips-from-buffetts-2013-shareholder-letter/

    “Charlie and I have always considered a “bet” on ever-rising U.S. prosperity to be very close to a sure thing…Indeed, who has ever benefited during the past 237 years by betting against America? If you compare our country’s present condition to that existing in 1776, you have to rub your eyes in wonder. And the dynamism embedded in our market economy will continue to work its magic. America’s best days lie ahead.”

    The best investment I ever made was buying Berkshire Hathaway during teh 1st dot com boom when everyone said that Buffet had lost his touch and did not understand investing anymore.

    Alon Levy Reply:

    Past results do not guarantee future performance. Think about who in 1914 had benefited by betting against Britain.

    John Nachtigall Reply:

    Who? Not the Germans. By 1944 their entire country was destroyed and Britian was still standing.

    synonymouse Reply:

    Without the US Britain would have lost both wars.

    Perhaps had the Germans won WWI there may not have been a second war. Impossible to know.

    John Nachtigall Reply:

    good thing we were there. I guess Britian and the US made a smart choice not letting history (war of independance, war of 1812) stand in the way of a natural friendship and alliance. So many countries hold grudges for no reason. But that was a choice that Britian made, the right choice, they get credit for that. If you are not as strong as you once were, have strong and loyal friends.

    synonymouse Reply:

    The Great War was an utter disaster and so too the Treaty of Versailles that ended it. This year the centenary.

    Without the eastern front and subsequently the US involvement it would have been 1871 again. The Germans figured they should have won and that bitterness poisoned the waters.

    Alon Levy Reply:

    We’re not talking war, we’re talking investors. By the postwar era, Britain was impoverished, with a lot of austerity, relatively low growth, and decline in every city except London and Birmingham. And Birmingham only lasted until the 1970s. Britain’s 19th-century economy was based on massive colonization, and once it couldn’t afford to keep an empire, it needed a generation to retool itself around non-imperial production.

    EJ Reply:

    Britain’s economy was almost entirely on a war footing, whereas, by prior agreement, the US had an extensive focus on producing transport aircraft and other vehicles. This enabled the US to transition much more rapidly into producing civilian vehicles once the war ended.

    http://en.wikipedia.org/wiki/Brabazon_Committee

    Nathanael Reply:

    Indeed, past results do not guarantee future performance. Nobody made money by betting against the Chinese economy… until they did. Nobody made money by betting against the Imperial Russian economy…. until they did. Nobody made money betting against the German industrialists… until they did. Nobody made money betting against IBM… until they did.

    FWIW, you could have made a great deal of money by betting against the *Southern* US in the 1850-1870 period. Think about it.

    Nathanael Reply:

    “Charlie and I have always considered a “bet” on ever-rising U.S. prosperity to be very close to a sure thing…”

    Looking at this, Warren’s losing his marbles.

    We haven’t had rising US prosperity since 1980, and that’s a stone-cold economic fact provable by looking at real median incomes.

    You can still make a lot of cash in the stock market *if you understand this*. But apparently Buffett does *not* understand this.

    He’ll probably still make lots of money, because he’s heavily invested in a number of businesses which make money even when everyone is becoming impoverished (insurance particularly, but also railroads and utilities).

    But this line from Buffett is completely asinine nonsense. Disclaimer: I own a lot of Berkshire Hathaway stock.

  9. morris brown
    Mar 3rd, 2014 at 19:29
    #9

    With the now “forced” announcement by Democrat Calderon of his taking a “leave of absence” and the previous suspension of Democrat Senator Wright, there is no longer a Democrat super majority of 2/3 in the State Senate.

    Indeed a state budget can now be passed without a 2/3 majority, but no new taxes can be approved. Which leads to this question of use of Cap and Trade, which is being painted as a new tax, and right now without Republican support, will not be able to be approved for HSR financing, if the courts hold that indeed it is a tax.

    Also, strong opposition to any use of Cap and Trade for HSR even among Democrats, makes it look like Governor Brown is going to have to find another source of funding so long as Prop 1A funds are being withheld.

    BTW, the AG filed notice to appeal in the bond validation case. They really had to do this, or else lose this option, since the time limit for an appeal was running out.

    joe Reply:

    Ummmm.

    I’m not tracking the lawsuit(s) against Cap N Trade but there was some decision in Nov 2013 – maybe you were distracted by Judge Kenny.

    http://www.mofo.com/files/Uploads/Images/131115-Cap-and-Trade-Not-a-Tax.pdf

    Characterized as a “close question,” Judge Frawley ultimately rejected both of petitioners’ arguments, holding that the monies spent at the carbon auction are more akin to “traditional regulatory fees than taxes,” such as hunting licenses or mineral extraction permits. A two -thirds majority vote is not necessary to impose fees. The court also recognized that although AB 32 does not “explicitly recognize the sale of allowances,” it does provide CARB with wide discretion to “design” an ppropriate allowance distribution system.

    So we don’t need a super-majority for a budget and the cap and trade is a fee, so no super majority is needed there either.

    What next?

    joe Reply:

    Fox and Hounds
    http://www.foxandhoundsdaily.com/2014/02/calchamber-pursues-litigation-illegal-cap-trade-auction/

    But in the end the judge created a new category fees, which would seem to open the door to all types of new taxes disguised as fees.

    Cap and Trade is expected to bring in billions starting in 2015.

    Resident Reply:

    Are we talking to two different Joe’s here? Dumb and Dumber? The second article “joe” posts, says an appeal on this lawsuit was filed on 2/20/14, that’s only a week or two ago. So the question of Cap and Trade as an illegal tax or a fee is certainly not decided, and the second article also appears to say the judge was on shaky ground in the original ruling. Joe, what was your point in the second posting – to give the counterpoint of the argument you make with the first article you posted? If so, thanks for the balanced reporting.

    joe Reply:

    The question was decided. Cap and trade is allowed and plans are underway to spend the money.
    Morris’ plan to stop HSR didn’t acknowledge the State already one.

    The second posting did not contradict the first. You just liked the spin in the second.

    Resident Reply:

    By your logic the State lost their validation lawsuit and CHSRA lost TOS lawsuit – that’s been decided. Period.

    Correct?

    joe Reply:

    Yes. I don’t pretend otherwise.

    The State has to win on appeal. They were successful in fast tracking the appeal.

    Resident Reply:

    Yes, it was decided – and now its in appeal process. So its decided? Or still in an appeal state? So, its closed now or still open?

    joe Reply:

    Well, I answered you.

    This comment by Morris is more interesting

    Indeed a state budget can now be passed without a 2/3 majority, but no new taxes can be approved. Which leads to this question of use of Cap and Trade, which is being painted as a new tax, and right now without Republican support, will not be able to be approved for HSR financing, if the courts hold that indeed it is a tax.

    This summer, the budget will be passed and cap and trade is expected to be part of the HSR funding.
    The Nov ’13 ruling may be taken on appeal but it isn’t going to be decided in time to stop the budget this summer.

    John Nachtigall Reply:

    I don’t think Jerry has the majority of the votes. HSR got the bonds appropriated with 0 votes to spare and that was before the loss in court and the publicizing of the time problems.

    Now Jerry wants 1/3 of a honey pot that the “green” lobby feels is theirs and HSR is “stealing” because they did not help get it passed. He is also not going to pull any GOZp help for obvious reasons.

    I don’t think he has the votes

    joe Reply:

    He had the votes when we needed Prop30 passed, didn’t have a budget surplus or several billion in cap and trade.

    Publicized problems and fabricated a false choice between funding schools and rail.

    John Nachtigall Reply:

    I think you are underestimating the anger of the green lobby here. They pushed hard to get cap and trade passed, they dont want to give up 1/3 of the money until 2030+ to HSR.

    I dont underestimate Jerry, he is an accomplished politician and I would even say statesman with a lot of tricks, owed many favors, and plenty of charisma, but HSR is a hard sell at the moment and the democrats are not easy to herd. It was one thing to authorize the bonds which were already dedicated to HSR and voted by the people giving them political cover. Its another to dedicate a funding source long term that other people had counted on.

    This is going to be harder for him than you think, and he does not have a lot of time to accomplish it.

    PS. Jerry created a false choice between passing a tax of funding schools to get prop 30 passed so I dont think you can complain too much

    Nathanael Reply:

    The 2/3 rule on “taxes” needs to be repealed, long ago, and it’s unfortunate that the California Legislature hasn’t seen fit to do that yet.

    It’s an unconstitutionally enacted wholesale revision to the state Constitution.

  10. morris brown
    Mar 4th, 2014 at 10:39
    #10

    Judge Kenny rules (3-4-2014) that Plaintiffs in the Tos et. al. lawsuit be allowed to continue to trial in the Tos et al. lawsuit.

    The second part of this lawsuit, the 526a (Declaratory Relief section) will indeed go to trial. The AG representing the Authority had sought to prevent this from taking place, but this ruling denies that objection.

    You can view the ruling at:

    http://www.scribd.com/doc/210573315/California-High-Speed-Rail-Judge-rules-case-can-proceed

    Another setback for the Authority. Armchair lawyers who abound here with comments like incompetence on the part of plaintiff’s attorneys, should take notice.

    John Nachtigall Reply:

    Alan and joe will be so dissapointed that their interpretation of the law was not agreed to by an actualy judge with an actual law degree and years of legal experience.

    jonathan Reply:

    No, they’ll just pooh-pooh it.

    Joe Reply:

    Morris,

    The judge still denied amending the lawsuit to include the Leglislature. Plaintiffs realized their mistake too late for them to correct and litigate what they intended. The appropriation is still legal. Kenny could not invalidate the leglature’s action since plaintiffs forgot to include them in the lawsuit.

    You can troll over a different hearing but their incompetence stands. The State appeal that the remedy is a useless action is contingent on this mistake.

    morris brown Reply:

    @Joe

    Your comments above have no substance; I won’t bother to comment on them as I have done so in the past.

    Joe Reply:

    So what?

    I corrected you twice on the State budget, 1) a super majority is not needed to pass a budget so losing the super majority did not put HSR at risk and 2) the lawsuit against cap and trade was settled in favor of the State in Nov. The loss of the super majority will not impact funding with cap and trade or taxes.

    The Plaintiffs attempted to amend the lawsuit to include the State Legislature and invalidate the Appropriation. They failed. The amendment was too late. The Appropriation is still legal. The key objective was to invalidate the Appropriation and it failed on this technicality.

    John Nachtigall Reply:

    they cant spend the bond money…that is the bottom line. Unless they win the appeal they cant spend the money, so who cares if it is appropriated.

    Nathanael Reply:

    That’s a very odd interpretation of the law. Under principles of government budgeting which date back to before the 1600s, appropriations from the treasury can be spent, period. Is the problem that these are appropriations from a fund which hasn’t been filled yet, due to the lack of bond issuance?

  11. synonymouse
    Mar 4th, 2014 at 11:21
    #11

    This constitutes a milestone. Prop 1a and the PB-CHSRA scheme are going to be examined, provisos and all.

    Probably there will be an overall winner, which is important. This is a definitive development.

    My guess is back to the ballot, maybe even prompted by the Legislature.

    John Nachtigall Reply:

    see mouse…you keep thinking the courts are beholden to the authority but they have shown their independance. keep the faith

    synonymouse Reply:

    SMART(?) dooodlebugs, Muni Stubway, DogLeg DeTour, CBOSS, ad nauseam – hard to keep the faith.

    And am I the only one in the world to sense the CIA’s hands in the Ukrainian anti-Russian “revolution”? I am pretty sure the Chinese have learned a thing or two from this destabilization op and will up their military spending even more. I would.

    EJ Reply:

    Admit it, it’s you who’s been buying up all the tinfoil.

    adirondacker12800 Reply:

    Most people aren’t paranoid conspiracy theorists so they aren’t going to see the hand of the CIA in it. Most people don’t even know were Ukraine is much less care about what is or isn’t going on there.

    John Nachtigall Reply:

    I would be disappointed if the CIA did not have some involvement in every situation. That is why we pay the CIA, they are specifically there to look out for US interests and tip the balance in our favor. That is the job description. If they are not doing that they are not doing the job.

    adirondacker12800 Reply:

    Watching things isn’t what he had in mind.

    John Nachtigall Reply:

    Neither did I

    adirondacker12800 Reply:

    Doing more than watching things has worked out so very very well in the past.

    John Nachtigall Reply:

    It’s selection bias. When it works well you never know, when it fails it’s “bay of pigs”. You really think the CIA fails every time?

    adirondacker12800 Reply:

    yes like all the terrorism that has been stopped by making 90 year olds take off their tennis shoes and have their walkers examined. What’s happened that we never heard about? Surely people who have the prescience to see things like the vast left wing conspiracy can see the hand of the CIA in something the rest of us mere mortals can’t. And use that as examples. Point us at one.

    Nathanael Reply:

    The CIA has failed every single time.

    Even its successes were failures — look at the overthrow of Mossadegh in Iran, a “success” which has been a dramatic failure for US interests for over 60 years.

    Even its *intelligence gathering* arm is useless — failed to notice the fall of the Soviet Union, and the President had to get his information from CNN.

    The problem is that the CIA has a bad attitude, and has ever since Dulles. They need to be liquidated and replaced with a real intelligence agency which understands what American interests actually *are*.

    jonathan Reply:

    Do tell that to Mr. Mossadegh.

  12. morris brown
    Mar 4th, 2014 at 11:43
    #12

    Stuart Flashman, the attorney for the Plaintiff’s in the Tos et. al. lawsuit has just issued this statement, regarding the ruling that Judge Kenny has just issued (3-4-2014)

    “We are very gratified by Judge Kenny’s ruling denying the High-Speed Rail Authority’s motion. The Authority was, in essence, trying to shut the case down. Our position is simply that If the Authority want to use the bond funds, it has to build what it promised the voters. Our complaint says that the Authority’s project doesn’t meet requirements for the high-speed rail system that were set when California’s voters approved Proposition 1A. Judge Kenny’s ruling means we get our day in court to prove our case. If we’re successful, it will mean the Authority can’t use the bond funds to build its noncompliant project.”

  13. morris brown
    Mar 4th, 2014 at 12:08
    #13


    Fresno Bee:

    Judge: Kings County high-speed rail lawsuit can move forward

    Link:

    http://www.fresnobee.com/2014/03/04/3802992/judge-kings-county-high-speed.html#storylink=cpy

    Thomas Reply:

    If the petitioners win the appeal on the first part of the case, would that override whatever ruling comes from this second part, since they argue that it is the state legislature that authorizes whether bond funds can be used and not the courts?

    synonymouse Reply:

    Why divide the litigation into two parts in that instance?

    Thomas Reply:

    Yes, that is true. However if the appeals court agrees with the petitioners, wouldn’t that take any power away from the courts on whether Prop 1A funds can be used?

    jonathan Reply:

    No… because the litigation over whether CHSRA’s design meets the requirements of Prop 1A — the clause for which Alan and Joe show failure of reading comprehension — is a separate issue.

    Personally I don’t think the Authority can win their appeal. Judge Kenny ruled that the Authority hsa to go back and produce another plan which *does* meet the requirements of both Prop 1A, and the Authority’s own definition of a “usable segment”

    Gee, talk about “incompetent” and “Laurel and Hardy”. Of course, if you’re Joe, the Authority can “fix that with a word processor”.

    Nathanael Reply:

    Be careful what you wish for.

    If the voter-approved high-speed rail project is sabotaged on technicalities by a bunch of NIMBYs, you can expect a major push to get rid of all the government-hamstringing crap which has accumulated in California, from Prop 13 onwards.

    People may even decide that it’s time to get rid of the initiative and referendum system.

    synonymouse Reply:

    They already did get rid of the initiative and referendum system. Now it is simply a charade for legitimizing patronage machine decrees.

    California pollyanna airheads are easily and quickly propagandized – they can be manipulated into approving anything the machine wants.

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