High Speed Rail Ahead!

Katy Grimes: Despite dire warnings of increasing additional massive state debt, the Assembly just passed another High Speed Rail bill – this one establishes a brand new state agency called the Department of High Speed Rail Trains within the Business, Transportation and Housing Agency.

“The train has already left the station,” said Democratic Assemblywoman Cathleen Galgiani (Tracy), author of  AB 145. Galgiani insisted to colleagues that California high speed rail can be profitable, and said that France and China both have profitable train agencies.

However, only two systems in the world are even close to profit, even acknowledged by the New York Times which has reported, “By 2020, Spain plans to spend close to 100 billion euros on infrastructure and billions more on trains. That figure could give pause to places like, a potential high-speed corridor whose area and population are about four-fifths the size of Spain’s.

“High-speed rail is good for society and it’s good for the environment, but it’s not a profitable business,” said Mr. Barrón of the International Union of Railways. He reckons that only two routes in the world — between Tokyo and Osaka, and between Paris and Lyon, France — have broken even.”

But profit is in the eyes of the beholder. “If Europe holds lessons for the United States in high-speed rail, America holds the promise of lucrative contracts,” reported the Times. And lucrative contracts abound in California’s High Speed Rail Authority, starting with the big public relations contract held by Ogilvy, a leading public relations communications firm.

The High Speed Rail Authority promoted “lucrative” federal and state bond dollars to people and businesses seeking contracts and even work. The rail authority had a huge response to their request for letters of interest for contractors –  more than 1,100 responses came in.

Republican Assemblywoman Diane Harkey (Dana Point), has consistently challenged every high speed rail bill, as well as colleagues who support funding high speed rail, at a time in which the state debt is off the charts. And Harkey has warned that the rail debt created will more than double the state’s general obligation debt.

“Do not fool yourselves into thinking that the Federal government will give more than $3 billion, and another $5 to $6 billion will saddle you with more state debt,” said Harkey.

As Harkey spoke about the financial consequences, other Assembly members loudly chatted with each other, causing Harkey to remind them that while many of them will be termed out after this session, and may not have the political baggage associated with the debt, they were creating billions of dollars of state debt for their children.

But her words didn’t seem to matter. The bill passed 50-16.