Jeff Denham Denies HSR Funding – Then Complains About Lack of Funding
Congressman Jeff Denham was for high speed rail before he was against it. Since taking office in Congress in 2011 he has done everything he can to stop high speed rail, including helping block any new federal funding for it. Denham’s game is to undermine HSR from Congress, then blame the Authority for having financial problems. It’s like taking food away from someone and then criticizing them for starving.
Denham is at it again, with a new op-ed in the Sacramento Bee criticizing the project for lacking funding. Let’s deconstruct this:
The authority is more than $20 billion short of completing the initial operating segment, and $55 billion short to build from San Francisco to Los Angeles.
Cost estimates have doubled, then tripled, and now settled at $68 billion for completion. That $68 billion doesn’t include segments to Sacramento or San Diego, which were promised to voters when they approved Proposition 1A in 2008. It will cost billions more to connect these two major cities and enable their residents to use the rail line.
Denham doesn’t mention the cap-and-trade funds as a source of revenue here, which drops the unfunded part of the initial operating segment by at least half, if not more. Sacramento and San Diego are non sequiturs here, as they are Phase II of the project — those cities were never promised to be connected from day one.
Denham then goes on to take a shot at the right-of-way purchase process:
Most of the spending so far has been on designing, building and consulting fees instead of land. The authority’s unwillingness to offer fair prices to farmers whose families have owned their property for generations has impeded the process.
Instead, the authority has resorted to using eminent domain to steal land it needs, which could take years. Breaking ground without acquiring the necessary land is likely to leave our Central Valley dotted with empty construction sites that have torn through farms, forced residents to move and cost us all billions.
Everyone thinks their land is worth more than it actually is. The Authority is legally bound to offer a fair market value price. Eminent domain is no more “stealing land” than is me going to the store, taking something off the shelf, and paying for it at the checkstand. It’s a constitutionally protected process.
Of course, land acquisition would proceed more quickly if the Authority hadn’t had to slow the process owing to uncertainty over funding. Which Denham could easily resolve. Similarly, it’s hypocritical to slam the Authority for not having all its money accounted for and then slam them for not offering top dollar for properties – something they can’t do if they’re not swimming in money.
On Sept. 30, 2017, the stimulus money will go away, regardless of whether the authority intends to spend it or not. To meet the deadline, the authority, which has spent $500 million in the past six years, would have to spend $2.7 billion in the next two years – 16 times its current rate of spending.
At the same time, the authority would have to come up with an additional $2.7 billion in state matching dollars. This seems impossible. The stipulations of the stimulus funding are written into federal law and cannot be renegotiated by the Federal Railroad Administration and the California High-Speed Rail Authority.
The thing that Denham leaves out about that $2.7 billion figure is that the spending will come in the form of actual steel-in-the-ground construction. The Authority has already approved two construction contracts that add up to about $2.7 billion. One is just getting started and the other will be under way shortly. And once construction gets going, that money will be flying out the door – spending on construction happens much faster than spending on studies and consultants. So yeah, spending 16 times its current rate is not only possible but certain.
I don’t understand the source of Denham’s second point here, that the state doesn’t have extra money to give. My understanding is that there’s more than enough left in Prop 1A bond funds to meet that goal. If not, there’s hundreds of millions of dollars coming from cap-and-trade this year alone. Denham’s claims here don’t stack up.
Republicans in Congress will not, under any circumstance, provide more funding for this failed project. We are six years into the authority’s efforts to harangue, cajole, extort, bribe or otherwise bamboozle California and the private sector for additional financing.
This is just ideological commentary designed to appease the far right. However, it’s nice that Denham is being honest here: even if the Authority addressed every single one of his complaints in this op-ed, it would never be enough, the Republicans will never give another dime to HSR no matter what.
The best the authority could do was to convince Brown to commit $250 million a year via the controversial cap-and-trade scheme on carbon emitters – a drop in the bucket that will be paid for by our state’s highway users. No private financing has emerged, irrespective of the authority’s comments that financiers are coming out of the woodwork.
Cap-and-trade is only controversial on the right. It is popular with the state as a whole, whose voters approved it when oil companies tried to repeal it in 2010. And the state’s highway users are, it turns out, not actually paying for this at all. Gas prices have fallen by an average of 20 cents per gallon since the beginning of the month, wiping out the temporary increase of about 3 cents a gallon that occurred when cap-and-trade was extended to gasoline on January 1. I’m guessing Denham has not even seen a gas station in California in weeks.
Despite breaking ground recently, the authority’s gamble has failed. The authority wagered that if only it could get a shovel in the ground, the inertia behind the project would be too great to turn back. And yet the opposite has occurred. Public opposition is at an all time high, no doubt due to the private citizens who are having their land removed from their possession by a state government blinded by a pipe dream and the allure of “free” federal tax dollars.
Denham is simply wrong to say “public opposition is at an all time high” – the most recent poll on HSR, PPIC’s March 2014 poll, found that 53% supported HSR – that’s greater than the 52% who voted for Prop 1A in 2008. The Republican candidate for governor, who made opposition to HSR a centerpiece of his campaign, lost to the HSR Governor by 20 points. All the evidence is crystal clear: Californians support high speed rail and want this project to be built. Maybe that’s why Denham’s party lost seats in the California Congressional delegation in 2014.
This isn’t a conversation about whether or not opponents of the project support the concept of high-speed rail. Personally, I would love to see high-speed rail in this country, where and when it makes sense.
And yet he has opposed the only HSR project currently under way.
This is a conversation about priorities. Here are a few things you could pay for with $100 billion, the total cost of building to Sacramento and San Diego:
▪ 10 years of the state’s entire infrastructure budget, including all the money spent maintaining or constructing highways, bridges and roads.
▪ 800 million-plus plane tickets from LAX to SFO.
▪ 34 years of free tuition for every UC student.
If anyone seriously proposed spending $100 billion on any of that, Denham would be first in line to oppose it. Republicans believe that this $100 billion should not be spent on anything at all – except maybe more tax cuts for the rich.
The only sensible thing to do is to take the project, and its new estimates and costs, back to the voters to seek their approval. The authority must be honest with us about the challenges ahead, and what the true costs and deliverables of the project will be. The high-speed rail proposal no longer resembles what California voters were promised in shovel-ready jobs, ridership numbers, speeds or costs, and cap-and-trade funding is uncertain at best.
So why have all the past efforts to put this back on the ballot fizzled? I’m willing to go back to the ballot, with an ask for more HSR money. I am confident it would pass. I am also confident that a revote of the project as a whole would pass. Denham knows that, and therefore knows no such revote will be offered since his side would lose.
The United States has led the world in rail infrastructure for generations. Now we have an opportunity to move into the 21st century with safe and efficient high-speed rail systems. California’s high-speed rail, with no viable funding plan, little support from the voters and a “don’t worry about it” attitude toward the future, is no way to set an example.
Years from now – but hopefully just a few years – people will look back at the Republican Congress and its absolute refusal to spend any new money on modern infrastructure and see it as an example of something that must never be repeated in this country again.