Rail court decision could run over future bonds

Rail court decision could run over future bonds

train wreckIs there a cow catcher on the front of the California high-speed rail project? One that pushes away future bond measures on everything from water to parks?

That’s the unasked question as voters head to the polls next Tuesday to decide the fate of Proposition 1, the $7.1 billion state water bond.

Earlier this month, the California Supreme Court green-lighted the state’s high-speed rail project. Although questions remain about the project’s long-term legal viability, as CalWatchdog.com reported.

But the ruling also cast a pall over other bond measures because it’s not clear how literally the exact wording of such measures must be interpreted. In a September argument to the court to stop the project, the Howard Jarvis Taxpayers Association argued, according to its website, “The current plan for high-speed rail is nearly twice as expensive as promised and the projected travel times and fairs have nearly doubled.”

In the wake of the court decision, the Jarvis President Jon Coupal brought up an new concern. He wrote on Oct. 26 that the court ruling “raises the specter that, no matter what a bond proposal promises about what will be built with the bond proceeds, those promises are meaningless. In other words, when California voters are asked to approve a bond, are they just approving debt for any purpose at all? This is the very definition of a blank check.”

As a result, he said, “the opponents of any bond proposal, at either the state or local level, need only point to High-Speed Rail to remind voters that promises in a voter approved bond proposal are meaningless and unenforceable.”

With just days to go before the election, Prop. 1 has mustered broad but probably shallow support for its massive expenditures. Although water policy has emerged as one area where legislators were able to find bipartisan ground this year, serious questions remain as to what voters will be approving with a Yes vote. And by some measures, those questions cannot even be answered until after the fact.

Spreading concern

Analysts and media reports have sounded alarms over Prop. 1’s deep ambiguity. The terms delimiting the high-speed rail project were clear and concise — although, as noted above, that didn’t matter much for the implementation.

But the language describing the scope and purpose of the water bond doesn’t even try to be precise, and is vague and uncertain from the get-go.

As the San Francisco Chronicle reported, opponents of the measure charge the bond’s language has been left vague “by design.”

The Chronicle agreed, concluding the “potential effects and implementation” of the big measure “are still hazy.”

Too late?

However, complex legal arguments are hard to press on voters, especially this lately in the election season.

Prop. 1’s bipartisan support also has muted opposition. Brown’s own re-election campaign largely has consisted of TV ads of him touting Prop. 1 and its companion, Proposition 2, the Rainy Day Budget Stabilization Act. It’s a calculated plan to emphasize his “good government” intentions, while ignoring his Republican opponent, Neel Kashkari.

The latest PPIC poll, taken a week ago, showed Prop. 1 spouting a high lead, 56 percent to 32 percent. It showed the proposition tied among Republicans, 43-43. But it enjoyed hefty support among Democrats, 68-20, and Independents, 56-23.

According to Ballotpedia, the Yes on Prop. 1 campaign has raised $13 million and spent almost all of it. The No on Prop. 1 campaign has raised only $89,100.

Future bonds

Where the Supreme Court decision on high-speed rail could come into effect is with future bond campaigns. Bonds usually pass. But in recent years two bonds have failed:

Indeed, even Prop. 1A, the 2008 rail bond, passed with just 52.7 percent of the vote, 47.3 percent against. It’s unlikely it could pass today.

Prop. 1, after all, started out as a $11 billion water bond that twice was postponed by the Legislature, in 2010 and 2012, due to fears voters would drown it.

And all that happened before the Supreme Court certified that bond language is meaningless.

 

 

7 comments

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  1. LetitCollapse
    LetitCollapse 29 October, 2014, 19:16

    “But the ruling also cast a pall over other bond measures because it’s not clear how literally the exact wording of such measures must be interpreted.”

    Ah come on. You guys have been around long enough to know that the important rulings will always be interpreted in favor of the ruling class – just like ObolaCare was. Just like the Patriot Act was. Just like NSA domestic spying was. The ruling class ALWAYS gets what it wants. And it will be the same with the crazy train. Your masters will win again!
    Anybody with 2 brain cells understands that the crazy train would be a massive failure. Like the Edsel. You would have to pay at least $250 for a round trip fare from LA to SF that would take at least 5 hours one-way with transfers and stops. By comparison, you could buy a round trip airfare for $140 that would get you to SF in less than an hour. You’d have to be a complete imbecile to pay over $100 more for a trip that would last you 4 hours longer unless you’ve got time and money to burn!!! HAH! Nobody’s going to ride on the crazy train!!! You’d have to be nuts!!! 😀

    Reply this comment
  2. LetitCollapse
    LetitCollapse 29 October, 2014, 22:04

    Well, I see the Feds claimed that they’ve stopped QE yet have committed to keeping interest rates low (as if they have a choice)! hah. If the rates normalized to 6% the interest on the fed debt would be nearly a trillion dollars and it would consume more than a third of the nation’s operating budget!! hah. That alone would blow up the economy. Don’t believe a thing they tell you. They are still backdooring the banks with bailouts in some form or fashion. Otherwise the interest rates would have to rise. Or they are going to implement another program to replace QE and just call it something else. This is simply math, friends. They have painted us into a corner with no way out and all of us are going to get screwed royally. Once the bond markets get a whiff of this hang onto your hats. It’s going to be one wild ride. Store water and food. And if you don’t own protection – buy some! We can’t give you a date. Only God knows that. But it’s coming. And very likely in your lifetime. 😉

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  3. Ulysses Uhaul
    Ulysses Uhaul 30 October, 2014, 09:29

    Yawn……stretch…..Gulp…gulp….scratch…..nite!

    Reply this comment
  4. Richard Rider
    Richard Rider 30 October, 2014, 09:47

    If we had the same 2/3 majority requirement for state bonds (such as this bond) that we have for most city and county bonds, it would likely not pass. Sadly, it takes only 50% voter approval to pass a state bond.

    Moreover, there’s no tax increase directly tied to state bonds — it seems like something for nothing to many voters. Such bonds are paid for out of the state general fund.

    Given any slide in our booming stock market (and the resulting diminished capital gains tax collected), such growing bond obligations will only increase the pressure for further “necessary” tax increases.

    Reply this comment
  5. LetitCollapse
    LetitCollapse 31 October, 2014, 11:52

    I heard some goofball on the radio this morning who is supposed to be an expert on trains. Naturally, he has a background in the industry and is a big supporter of the crazy train. I wanted to toss the radio out the window when he claimed that the LA to SF run will only take 2 hours 40 minutes. If you do the math, that is ONLY possible if the train traveled at 220 MPH without any slowdowns or stops along the way. The interviewer on the radio didn’t even bring it up!!! heh. Typical media. Oh, and he said a ticket will be the same price or cheaper than a airfare from LA to SF. LIAR! How are they going to spend over $70B on a stupid train and price the tickets @ $140 RT from LA to SF??? IMPOSSIBLE!!! These people are LYING TO YOU before and while the train is built. And after it’s finished YOU ARE GOING TO SEE THE REALITY OF THE SITUATION!!! NONE OF THE PROMISES WILL BE KEPT!!! You folks are being PLAYED by these scoundrels!!! Your infrastructure is literally falling apart. Water mains are breaking. Buildings that wouldn’t sustain a 6.5 quake are claimed to be safe. Potholes everywhere!!! AND THEY WANT TO SPEND $70B of YOUR money on the equivlent of an Edsel!!! And no matter how much you protest the ruling class represented by the high courts always get what they want!!! 🙁

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    • Richard Rider
      Richard Rider 31 October, 2014, 12:12

      Letit — This bozo claims that he is a “rail expert” and makes such a dumbass “2 hour 40 minute” statement? You’d THINK the other side would at least TRY to field someone credible.

      This person is definitely NOT credible — at least in a debate format. I salivate thinking about going head-to-head with such dishonesty in a live format.

      And the pricing is just as ludicrous. Not only that, the HSR Authority has since issued more realistic (and STILL grossly underpriced) ticket prices (I think it was $125 each way). This “expert” was using information out of the original dishonest ballot measure! Where do they FIND such people?

      Reply this comment
      • LetitCollapse
        LetitCollapse 31 October, 2014, 18:56

        Correct, Richard. You know it only costs $140 for a RT airfare from LA to SF, right? An hour flight. The crazy train will still take at least 5 hours one-way with stops and slowdowns. @ 220mph it might take 2 hours and 40 minutes at that speed straightaway with no slowdowns or stops along the way, which of course is LUDICROUS! Amtrack takes about 13 hours! HAH! A crazy train will cost AT LEAST $250 RT from LA to SF. The interviewer was not a stupid person. He knows it’s BS too, but let the so-called train expert have his way with the audience. It was a sales pitch, and a deceitful one at that! We need to repair our infrastucture that is falling apart. Not pay $70B or more for a stupid choo-choo.

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