MONEY DOWN A RAIL HOLE

After the President’s State of the Union address, we now know how the U.S. will deal with an annual budget deficit of 1.5 trillion dollars. (That’s $1,500,000,000,000.) The answer is “green jobs” and high-speed rail.

California, with an unemployment rate of 12.5 % and a huge, chronic budget deficit, knows all about the benefits of green jobs and high-speed rail.

A bit more than two years ago, well-funded greenies and their government cohorts convinced gullible California voters to begin the process of building a high-speed rail system that’s ultimately supposed to travel from San Francisco to Los Angeles to San Diego (via the Inland Empire).

The price tag for the general obligation bonds approved in November of 2008 was 9.95 billion dollars—a figure doubtless chosen to keep the total discreetly under double-digits and to imply that government estimates on such projects can be calculated with precision.

It is instructive, however, to recall that when Medicare cost a mere three billion dollars in 1966, an inflation-adjusted estimate for the program in 1990 was twelve billion. The actual cost in that year was 107 billion. Multiplying official estimates by 8 or 9 is often a good way to approximate a program’s actual cost.

Case in point: North County’s cute Sprinter rail system from Escondido to Oceanside was estimated in 1990 to cost about $60 million. It ended up at 477 million. Following suite, the Rail Authority estimate for the state high-speed rail system increased from 33.6 to 42.6 billion in 2009 alone. If ditzy Californians insist on throwing more money down a rail hole, the final cost, according to economic journalist Robert Samuelson, “could easily approach 200 billion.”

The benefits of such projects, by contrast, regularly run well below estimates. Sprinter daily ridership, for example, was projected at 11,000 per day—increasing to 20,000 by 2020. In fact, ridership has yet to crack a 9,000 average, even for the best months.

Similarly, fare projections for a one-way high-speed rail trip from LA to the Bay Area have already increased from $55 during the Prop 1A campaign to $105. Topping all these disappointments, Samuelson has argued that the project’s crucial environmental benefits will be minimal to nonexistent.

In the meantime, the California High-Speed Rail Authority provides on its website a glowing image of 600,000 construction-related jobs that will eventually produce a cluster of gleaming trains traveling at speeds up to 220 mph past a bevy of active wind-turbines.

The highly optimistic Rail Authority completion date for the LA-to-the-Bay backbone of the system is 2020—yet another “shovel-ready” project. And voters should know exactly what those taxpayer-funded scoopers will be shoveling.