California High-Speed Rail Authority CEO Brian Kelly worked over the summer to reassure anxious state lawmakers that a new management team could revive the troubled bullet-train project. He also proceeded to push out key officials overseeing contract and property decisions.

Yet the changes haven’t stopped a new wave of bad news in September for the project, which was once envisioned as a statewide network of high-speed rail but has been downsized to a 119-mile link between Bakersfield and Merced expected to cost in the range of $20 billion. 

A Los Angeles Times report outlined the huge problems still facing the rail authority’s land-acquisition efforts after seven years in the Central Valley. Not only does the agency need to buy about 300 more properties to be able to build the train, the Times reported that consultants believe at least an additional 488 parcels will need to be bought to deal with complex issues related to easements on sites with infrastructure owned by Pacific Gas & Electric and other utilities as well as AT&T, railroads and irrigation districts.

This adds new doubts about the rail authority’s projection it could finish construction of the Central Valley route by 2026.

One project manager, after warning of severe delays, told the Times that “I am going to ride this train, but I am afraid it is going to be my ashes in an urn. I told my kids to take my ashes on the bullet train.”

The Times also noted that the rail authority had been forced to buy larger lots than it needed to accommodate the rail route to such an extent that it now owns hundreds of properties – including “toxic waste sites, vacant lots and rental homes” – that it must manage. The list includes at least 466 acres of cultivated agriculture fields.

San Jose area critics push for costly elevated lanes

There was also bad news for the project from Northern California. At a rail authority board meeting held in San Jose, trustees voted unanimously to approve a route connecting the San Joaquin Valley with San Jose after the Central Valley initial segment is built. Yet testimony at the hearing showed the intensity of opposition to building any new rail route that didn’t minimize disruptions to the neighborhoods and communities it traveled through.

According to a Fresno Bee report, speakers complained to the rail board that early promises that elevated rail lines would be built had given way to plans for regular, surface rail lines. But since elevated rail costs two to four times more per mile, choosing it would make project costs explode – and Gov. Gavin Newsom has already said there’s not nearly enough funding likely to be available to complete the $78 billion statewide project advocated by his predecessor, Jerry Brown.

That argument didn’t move San Jose resident Danny Garza. According to the Bee, he said that not building elevated tracks in his neighborhood was “a bait-and-switch” given past guarantees of minimal impacts. “Please don’t use our neighborhood to balance your budget,” he told the board.

San Jose Mayor Sam Liccardo told trustees that his city could drop its support for the project if the rail authority didn’t use “best practices”  to “provide our community with the safety it deserves.”

The section of the proposed route in the San Joaquin Valley also drew complaints, according to the Bee. Rick Ortega, general manager of the Grassland Water and Resource Conservation Districts, said the staff report “contains no design detail on how the authority intends to mitigate impacts through the ecological area.” The Grassland Environmental Area is a 160,000-acre site mostly in Merced County that the U.S. Fish & Wildlife Service has repeatedly said must be preserved because of the crucial ecological importance of its wetlands.

Ortega also said elevated tracks were necessary – or that the rail authority should change its planned route.

Board members said the staff would consider the complaints, but offered no promises about the nature of possible mitigation efforts, according to the Bee.

The Republican candidates – Assemblyman Travis Allen of Huntington Beach and Rancho Santa Fe businessman John Cox – reflect the GOP consensus that the project is a boondoggle that’s unlikely to ever be completed. But the major Democratic hopefuls – Lt. Gov. Gavin Newsom, former Los Angeles Mayor Antonio Villaraigosa, state Treasurer John Chiang and former Superintendent of Public Instruction Delaine Eastin – have all indicated they would continue with rail project, albeit with little of the enthusiasm shown by present Gov. Jerry Brown.

While the new business plan was depicted by the California High-Speed Rail Authority’s new CEO, Brian Kelly, as a constructive step toward salvaging the project, the plan’s key details were daunting:

The estimated cost of the project, which has yo-yoed from $34 billion to $98 billion to $64 billion, changed once again. The business plan abandoned the previous $64 billion estimate for an estimate of $77 billion – accompanied by a warning that the cost could go as high as $98 billion.

Even at the lower price tag, the state didn’t have adequate funds to complete a first $20 billion-plus bullet-train segment linking populated areas. The present plan for a Central Valley route has an eastern terminus in a remote agricultural field north of Shafter. That’s because the $9.95 billion in bond seed money that state voters provided in 2008 has only been buttressed to a relatively slight degree by additional public dollars from cap-and-trade pollution permits.

The business plan cites the possibility of additional federal funds beyond the $3.3 billion allocated by Washington early in the Obama administration. It doesn’t note, however, that domestic discretionary spending has plunged in recent years amid congressional concern about the national debt blowing past $20 trillion.

The business plan also promotes the possibility of outside investors. It doesn’t mention that such investors have passed on the project for years because state law bars the California High-Speed Rail Authority from offering them a revenue or ridership guarantee.

From 5 years behind schedule to 10 years behind

The initial operation of a bullet-train link serving California residents went from five years behind schedule, in the estimate of the Los Angeles Times, to 10 years behind schedule. The business plan said the project would begin operations no sooner than 2029.

The potential immense cost overrun of the bullet train segment in the mountains north of Los Angeles was fully acknowledged for the first time. A 2015 Times story laid out the “monumental” challenge.

Democratic candidates to succeed Brown have chosen to focus on housing, single-payer health care, immigration and criticism of President Donald Trump in most early forums and campaign appearances. But front-runners Newsom and Villaraigosa in particular seem likely to be pressed on how they can square their claims to be experienced, tough-minded managers with support for a project which seems less likely to be completed with every passing year.

Proposition 70 on the June primary ballot also will keep the bullet train on the campaign’s front burner, to some extent. It was placed on the ballot as part of a 2017 deal cut by the governor to extend the state’s cap-and-trade program until 2030. If Proposition 70 passed, it would require a one-off vote in 2024 in which cap-and-trade proceeds could only be used for specific needs with two-thirds support of each house of the Legislature. Republicans may be able to use these votes to shut off the last ongoing source of new revenue for the high-speed rail project.

My focus in 2012 was on cap-and-trade fees. But my larger point was that the California Teachers Association and the California Federation of Teachers and their 500,000-plus members played the long game. They’re not just interested in protecting Prop. 98 and getting their minimum cut of state funding. They want significantly more.

This month, the Brown administration’s unveiling of a proposed bailout for the teachers’ pension system brought this bullet-train end game fight much closer. But it isn’t just likely to dry up funds for Jerry’s folly. It also is a harbinger of perpetual junkyard-dog budget fights in which the CTA and CFT — determined to grab every last dollar to maintain the status quo of teacher pay raises — fight constantly over funding with every competing lobby or interest group.

Why? Because the bailout is going to cost so much, and in the zero-sum game of state budgeting, the question is whether the cost is absorbed in the larger K-12 state budget — or out of the hides of other state programs.

If Brown’s plan is adopted in its present form, eventually there will $5 billion more a year in state spending to cover CalSTRS’ unfunded liabilities. 70 percent of that will come from districts (and thus indirectly from the state); 20 percent will come directly from the state; and 10 percent will come from teachers.

Will $4.5 billion come from education budget? Or other programs?

So that’s $4.5 billion a year — a little more than 4 percent of the next proposed state budget — that the Legislature and the governor are going to need to find to fund the CalSTRS bailout.

The CTA and the CFT didn’t achieve their dominance of Sacramento by playing nice. Covering the cost of the CalSTRS bailout going forward is going to be the Sacramento version of the federal budget sequester for non-education budget categories. Spending on just about everything but  K-12 is going to be curtailed.

Of course, we’ll also see redoubled efforts to raise taxes and make “temporary” hikes permanent. But the day in which the Maviglios of the world could pretend the pension crisis was exaggerated or no big deal will soon be history. Pretty soon the pain is going to be shared by all users of California government services and programs outside of K-12.

Once you understand that the single most powerful imperative in California politics is protecting an education jobs program in which most teachers get automatic annual raises just for showing up, Sacramento is pretty easy to understand.

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.

But 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.

Having 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.

“Just two years ago, the idea that California could be a global model for anything was laughable. When Brown took office, the state was staggered by double-digit unemployment, a $26 billion deficit and an accumulated ‘wall of debt’ topping $35 billion. California was a punch line for Republican politicos – a cautionary tale, they said, of the fate that awaits the nation should it embrace Left Coast-style economic, social and environmental liberalism. On the campaign trail in 2012, Mitt Romney joked that ‘America is going to become like Greece, or like Spain, or Italy, or like . . . California.’

“But in astonishingly short order, America’s shrewdest elder statesmen blazed a best-worst way out of California’s economic morass. With a stiff cocktail of budget cuts and hard-won new taxes, Brown has not only zeroed out the deficit, he’s also begun paying down the debt. ‘Jerry Brown’s leadership is a rebuttal to the failed policies of Republicans in Washington,’ says Neera Tanden, president of the Center for American Progress. ‘California is proving you can have sane tax systems, raise revenues, eliminate structural deficits and have economic growth.’

“Fed up with the state’s own obstructionist Republicans, California voters have even given Brown a Democratic supermajority in the state legislature. As a result, the Golden State is now reasserting itself as a proving ground for the kind of bold ideas that Republicans have roadblocked in Washington – including a cap-and-trade carbon market, high-speed rail and education-funding reform.”

Sigh. Did Jerry Brown write this himself?

Drum roll, please

The real Cali story is infinitely darker. It’s time for The Top 7 Things The National Media Always Ignore About Jerry Brown.

1. California has the worst poverty rate of any state. Worse than Mississippi. Worse than West Virginia. Worse than Nevada. So much for the narrative of Jerry Brown as Mr. Economic Growth.

2. California’s unemployment rate may be down from its past high, but that’s not because of any broad economic rebound at all, it’s because part-time jobs are growing and hundreds of thousands of residents have stopped looking for jobs. In the Labor Department’s U-6 category, measuring the percentage of adults who want full-time jobs but can’t find them, California has the second worst rate in the U.S. About 19 percent of these workers — nearly one in five — can’t find work.

3. The idea that the state’s finances are in good shape depends on really aggressive cherry-picking. Here’s what I wrote in June:

But what’s not yet appreciated is that the good news was generated by that rarest of Golden State phenomena: a well-crafted state initiative. Proposition 1A — the 2008 measure providing $9.95 billion in state bond funding for initial work on a much-costlier statewide bullet-train system — included several powerful protections for California taxpayers.

Two of those protections were cited by Superior Court Judge Michael Kenny in his decision. One held that construction could not begin on any segment until the state had reliably identified financing for the entire 300-mile initial operating segment, which is to link Merced and northern Los Angeles County. The second held that construction could not begin until all necessary environmental clearances had been obtained for the entire initial segment.

Judge Kenny’s failure to order a halt to work being done by the California High-Speed Rail Authority in preparing for construction of the first 30 miles of the rail line in Madera and Fresno counties appeared to offer hope to bullet-train supporters and authority officials. He will hold an as-yet-unscheduled hearing, likely to allow the state to respond to his ruling and to provide assurances that it will comply with financing and permitting requirements.

At least $18 billion short on initial segment

But it is difficult to see how the authority can offer such assurances — especially by documenting that it has the needed funds for the entire initial operating segment. The $13 billion-plus in total state and federal funds for the project are far short of the $31 billion the authority’s business plan says will be needed to build the 300-mile segment (see the plan here). Private financing is unavailable because of another powerful Proposition 1A protection: one barring subsidies to investors, even if they are disguised as revenue or ridership guarantees. No investor is eager to partner with the state of California on such a controversial and troubled project without such guarantees.

And so far state officials have only completed environmental reviews for the 27 miles the train is supposed to run between Madera and Fresno. Even if Attorney General Kamala Harris continues to weaken environmental regulations governing the project, it is difficult to imagine how the rail authority could quickly obtain clearance for more than 270 miles of the bullet-train route. The same delay-and-obstruct legal tricks that NIMBY groups and greenmailing unions and lawyers have used for years are available to bullet-train foes.

But as this legal battle plays out, there is another one on the horizon that looks at least as grim for bullet-train fans. It deals with what is perhaps Prop. 1A’s most important protection — one fought for by former state Sen. Quentin Kopp, the San Francisco politician who is considered the father of the California bullet-train project but who opposes the present state version.

That is the requirement that when complete, the bullet-train system will allow a passenger to go from downtown Los Angeles to downtown San Francisco in two hours and 40 minutes or less. While state newspapers’ coverage of high-speed rail is dramatically improved over what was seen in 2008, one obvious angle has been ignored. That angle: When Gov. Jerry Brown and rail authority board chairman Dan Richard shaved $30 billion off the previous $98 billion price tag for the project by embracing a “blended” system, they essentially gave up on meeting the two hour and 40 minute promise to voters.

“Blended” system incompatible with time guarantee

A “blended” system in which a high-speed bullet train links San Jose and Palmdale (about 410 miles), with regular rail bringing passengers from San Jose to downtown San Francisco (about 50 miles) and from Palmdale to downtown Los Angeles (about 60 miles), won’t come close to the 160-minute requirement. Even if the trains used on regular rail in the Bay Area and the L.A. area go 90 mph — which is unlikely — that would take up 73 minutes of the 160 minutes. That would mean that on the San Jose-Palmdale link, the train would have to cover 410 miles in 87 minutes — 283 mph.

That’s nearly 100 mph faster than the 187.5 mph (300 kilometers per hour) used to estimate travel time on Taiwan’s and Spain’s bullet train systems. No rail expert not in the employ of the state has ever said the 2 hours and 40 minute requirement can be met with the “blended” plan. A lawyer for Kings County, which was among the plaintiffs in the lawsuit that generated Friday’s ruling, said the likely travel time was double the promised number of minutes.

The governor and Richard apparently believed that they could get away with disregarding this key provision of a plainly written law, at least until enough of the bullet train were built that the “we’re-so-close-we-must-finish-it” argument would seem plausible.

But now that Judge Kenny has held that the law’s protections matter on other fronts, the fact that there is no way the project can meet its most fundamental guarantee — that it be a high-speed train linking San Francisco and Los Angeles — seems certain to catch his attention in the next phase of the trial. It will deal with the speed issue, among other matters.

And if Kenny rules as he did Friday — telling the state that it must comply with Prop. 1A — then the bullet-train boondoggle may be dead at last. The rail authority won’t be able to comply with the two hour and 40 minute requirement because it is very close to a physical impossibility — at least unless the governor goes back to the old $98 billion plan that he abandoned because of its enormous cost.

By Chris Reed

Jerry Brown’s speaking style — learned, florid, meandering — is so unusual that he’ll always be able to get away with his shtick that he’s not like other politicians. But his appalling push to gut open-government laws in California shows he’s just another primitive pol who reacts to negative coverage by seeking to punish the press.

The amount that his budget proposal would save by reducing state reimbursements for no-longer-mandatory local compliance with document requests is meager compared to the larger state budget. Meanwhile, the value of transparency in government is proven every day around the world. The cost of providing documents is small — and getting smaller — in comparison to the money saved by exposing government incompetence, malfeasance and corruption.

Governor has to know value of transparency

The governor has to know this. He’s no dummy. (Just ask him.)

So what could be motivating Brown’s attempt to gut transparency and stick his thumb in the eye of the media?

Let’s use Occam’s Razor and keep it simple. How about all the negative press the Brown administration has faced in the past two years?

Yes, the gov has gotten credit for trying to improve the state’s horrible budgeting practices and for pushing pension reform. But there have also been tons of stories, columns and editorials that he can’t care for.

The long list of stories Jerry wishes were ignored

For starters, there’s the bullet-train boondoggle. The beat reporters covering the California High-Speed Rail Authority have done a fabulous job in the past year of showing what a farce it is, making up for the horrible coverage seen in 2008, when voters were lied into giving the project $9.95 billion in state bond funds.

Then there’s the state’s never-ending computer fiascos. The state that’s home to Silicon Valley can’t bring its computer payroll system into the 1990s, much less the 21st century. There’s also the computer debacle with the DMV.

Then there’s the scandal with the state parks agency hiding millions of dollars from the Legislature and the public while seeking to close parks.

Then there’s the scandal with dozens of state executives getting paid millions of dollars in extra money in part-time jobs — really de facto overtime — with the state.

Then there’s the Bay Bridge scandal in which a multibillion-dollar state project is riddled with shoddy work and shoddier oversight.

Even ‘triumphs’ have prompted press skepticism

Even on issues where the governor has gotten good marks, he faces intense skepticism.

On the budget, Dan Walters has often pointed out the excesses of Brown’s claims to have shaped California up.

And on pension reform, the San Francisco Chronicle’s editorial page depicted Brown’s efforts as woefully inadequate.

So looking at this big picture, why wouldn’t Jerry Brown enjoy kneeing the media in the groin?

Like Michael Jackson, he’d have us believe he’s not like other guys.

Yes he is. Oh, yes he is.