End game on bullet train: No $, no project — and no prospects for $

End game on bullet train: No $, no project — and no prospects for $

train_wreck_num_2-203x300Sacramento Superior Court Judge Michael Kenny’s issued a double-whammy ruling Monday. He barred the use of bond funds for the state bullet-train project until it had adequate funding and complete environmental reviews for its first 300-mile segment. He also blocked the already-authorized sale of $8.6 billion in rail bonds until they had proper vetting by a state committee that is supposed to assess whether issuance of the bonds was “reasonable and necessary,” not the incredibly cursory review that they got.

The first ruling was predictable, unless you were one of those who wondered whether Kenny “had the [deleted]” to make the logical follow-through on his Aug. 16 ruling that the project’s business plan was illegal. The second ruling was a jaw-dropper, in that the government “bond validation” process is usually so pro forma. Sharp insider types I heard from Monday said they literally could not remember any government bond anywhere in the U.S. being thwarted this way.

But even though the Associated Press account of Kenny’s decisions made it seem possible that the project could be back on track with “months,” it’s just not so.

The completion of environmental reviews is hugely daunting. As pointed out by Michael J. Brady, the attorney for Kings County and other plaintiffs, “It’s taken [the state five years to get environmental clearance for] 28 miles, so how long will it take them to do 300 miles?”

Unfortunately, there could be shenanigans that cleared the way for the approvals, such as state and federal exemptions.

The money can’t be funny: $25 billion shortfall not finessable

But the funding shortfall can’t be finessed. The state began with a $9.95 billion in bond seed money from 2008’s Proposition 1A. Then it got $3.4 billion in federal funds from the Obama administration. Since then, it’s either spent or committed to spend about $7 billion of those funds. The $6 billion or so left is $25 billion short of what the state estimates the first segment will cost to build.

Judge Kenny ruled Aug. 16 that state law required the state to have solid financing in place before construction could begin. He reaffirmed that view Monday. And in between, in a peculiar state filing, Attorney General Kamala Harris didn’t disagree, offering a “remedies” brief that offered no remedies for the project’s financial deficiencies.

So as a practical matter, we have a project that doesn’t have a legal funding plan, and it’s not just a rogue judge who thinks so, it’s the state’s top law-enforcement official — someone who backs the bullet train and has for years.

patty.murrayBut can it have a legal funding plan?

Theoretically, sure. But realistically, I don’t see how, and I don’t just say that as a project hater. Consider the possibilities:

— The congressional spigot has been turned off. In the sequester era, domestic discretionary funding is squeezed to the max. And another point that is rarely made is that it’s not just House Republicans who want federal funds for California’s bullet train eliminated. It’s also Senate Budget Chairwoman Patty Murray, D-Wash., who has fought to end this Golden State pork for years.

— The state doesn’t have the money for the project. Cheerful Mac Taylor may choose to simply ignore the state’s pension and retiree health-care obligations in evaluating the state’s finances, but not everyone is that obtuse.

— Private investors aren’t forthcoming. As the very first business plan for the project noted, they expected the state government to share their investment risk. But that’s not legal under Prop. 1A, because it amounts to a guarantee of a subsidy if revenue falls short.

So who could come to rescue? Maybe the real Big Red

So how could the initial operating segment be built? I don’t see anything that’s got even a 0.5 percent chance — except for The Beijing Scenario.

Three years ago, Gov. Arnold Schwarzenegger acted as if it were a realistic possibility that China might want to help pay for California’s bullet-train project, and this Bloomberg News article went along with his premise. In discussions with a New York Times reporter, Chinese authorities seemed to encourage Arnold.

It never came to pass. But the buzz as to why Beijing might want to play sugar daddy to a cute U.S. chick was entertaining and faintly plausible.

red-chinaHaving the United States’ economic archenemy help build a huge, futuristic project in the richest, most populous and most famous U.S. state could be a gigantic image and public-relations windfall for China. It could make China look potent and high-tech and the U.S. impotent and pathetic.

But it didn’t happen in 2010 and I struggle to see any way it could happen now. For all the obvious reasons: $25 billion is a huge gift for anyone, even an economic superpower; it wouldn’t play well domestically in China, where a rising middle class would prefer the money be spent to reduce pollution and gridlock; it could backfire on PR grounds if critics portrayed it as a wealthy nation being played for a fool by an even-wealthier nation.

But there’s also this: After all the insanity of the past five years from the California High-Speed Rail Authority — the lies, the deceit, the self-delusion, the braying and bluster of authority board chair Dan Richard — who on Earth would want to be the authority’s partner?

Beijing is not dumb. Or at least not dumb enough to want to subsidize a project as ridiculously flawed as the California bullet train.

So join me in a toast to the demise of the dreaded state high-speed rail system. Yum. That Vanilla Coke Zero really hits the spot.

I’ll always remember where I was on Nov. 25, 2013, when I first heard that the bullet train died.

21 comments

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  1. Dennis
    Dennis 26 November, 2013, 09:27

    The very BEST news I have heard about the high rail project………..EVER!!

    Reply this comment
  2. Rex the Wonderdog!
    Rex the Wonderdog! 26 November, 2013, 10:15

    Put a fork in this scam, it is done, over. Kaput.

    I still cannot believe a state judge, well known yes men to state government, pulled the plug.

    An amazing turn of events.

    Reply this comment
  3. traintonowere
    traintonowere 26 November, 2013, 10:17

    The truth is it will be coming back, don’t celebrate now and squeeze your horn because this a forced down your throat agenda and it will be ongoing. They will find more funding to do this and this ain’t over with yet ! remeber you got unions involved, city’s involved and it is firstly about the money .What they can get from it when built and afterwords .Do you honestly believe they are doing solely because the citizens really need it, please quit smoking that northern california bud and put the pipe down . Amtrack has a miserable record and the only way it is affordable to the average citizen is due to of federal subsidies, without that , the common person couldn’t afford it .but remember that money comes from some were so we are paying for that too, nothing is free !

    Reply this comment
  4. Dyspeptic
    Dyspeptic 26 November, 2013, 10:34

    Well, it’s a small victory but worth celebrating anyway. I do like how the Prog-bots who run the asylum these days have been hoisted by their own petard. Draconian EIR requirements, a litigious society and a judge appointed by Gray Davis (aka Governor Gumby) have put the kibosh on the Browndoggle. I can finally say it, thank you Gumby!

    Reply this comment
  5. LetitCollapse
    LetitCollapse 26 November, 2013, 12:42

    Never ever underestimate the state kleptocracy. This is only a minor and inconvenient obstacle in the road. There are way too many powerful government thugs (state and federal), union parasites and crony capitalists involved in this giant taxpayer heist for it not to come back to haunt you. These people stop at nothing. You think one judge will end this? Come on. There’s way too much money on the table here. You know how it works. If one judge strikes 3 others step in to overrule him. Some backdoor method will be used to resuscitate this monster. You wait and see.

    Reply this comment
  6. Billybs
    Billybs 26 November, 2013, 13:49

    The Jerry Brown Hi Speed Prison Transport System(HSPTS) will one day will be up and running for the future 21 million state inmate population.

    Reply this comment
  7. The Ted Steele Conceptual Abstraction Unit
    The Ted Steele Conceptual Abstraction Unit 26 November, 2013, 14:41

    Good News Everybody!

    Yaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaa

    Reply this comment
    • Dyspeptic
      Dyspeptic 27 November, 2013, 15:38

      Theodore, I am shocked at your lack of support for this necessary and visionary infrastructure project. This will create jobs for thousands of overpaid, shovel leaning, politically connected union slugs. It will stimulate local economies throughout Crazyfornia’s inner wastelands. It will draw awe struck tourists by the millions. It will make our precious environment cleaner. And finally, it will provide a more efficient means of whisking dissidents and undesirables to their future hellish quarters in the Progressive gulag.

      What’s not to like?

      Reply this comment
  8. Rex the Wonderdog!
    Rex the Wonderdog! 26 November, 2013, 15:32

    There is no saving this turkey. It is over. It was supported by both liberal and conservatives, which is why it passed in 200 (2008??). Now neither liberal nor conservative voters want this boondoggle.

    The only ones who support it are the small minority of people who will get work out of it, like 1/100,000 of the states population.

    Reply this comment
  9. Rex the Wonderdog!
    Rex the Wonderdog! 26 November, 2013, 15:33

    Teddy is probably home crying on his Mom’s shoulder in his Batman jammies over this news…… 🙂

    Reply this comment
  10. Rex the Wonderdog!
    Rex the Wonderdog! 26 November, 2013, 19:24

    This ruling could finally send Teddy Steals over the edge.

    Poor Teddy is so close to toppling over I am hoping and praying he can handle the meltdown he is probably going through right now.

    We love you Teddy 🙂

    Reply this comment
  11. Hondo
    Hondo 26 November, 2013, 19:35

    This train to nowhere is done. There is no more money to beg, borrow or steal. They need 50 billion and have no where to get it. The US house and senate don’t want any part of this. Kalifornia hasn’t got 50 billion laying around. And the law says there MUST be private money and there isn’t any showing up. The whole deal, like Obamacare, was sold on a lie.
    The fat lady has just sung.
    Hondo……..

    Reply this comment
    • Ted Steele, CEO
      Ted Steele, CEO 28 November, 2013, 10:55

      Honda is right! We’re done! It’s over. The fluoridation of the water, the UN, the Voting Rights Act, our President born in Africa. Yikes, and now trouble with his website??? Just when you think you’ve seen it all.

      “The fat lady has sung”, wow, well said Honda!

      Reply this comment
  12. Queeg
    Queeg 26 November, 2013, 20:59

    Geesh. You mean no gourmet club cars to tourist bastions like Selma and Rosamond and Stockton?

    These primo destinations are Doomsday Prepper bug out havens….

    Reply this comment
    • The Ted Steele Conceptual Abstraction Unit
      The Ted Steele Conceptual Abstraction Unit 27 November, 2013, 14:15

      or Earlimart and Poso …….my word it does spin the doomers up though, no?

      Reply this comment
      • Dyspeptic
        Dyspeptic 27 November, 2013, 15:47

        I prefer Ludlow or Amboy. The sweltering heat, bone dry humidity and wondrous isolation keeps out panty wastes like you two.

        Have your giggles now girls, when the zombie apocalypse hits the fan you two will be snack time for walkers. You heard it here first.

        Reply this comment
  13. Queeg
    Queeg 27 November, 2013, 19:38

    Dys… Now that was a disturbing post. It shakes one to the core. Wash your little white coat…..it has been at least two weeks!

    Reply this comment

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