Eleven months after leading a successful campaign against a ballot measure that would have repealed fuel tax hikes approved by the Legislature in 2017, Gov. Gavin Newsom is facing bipartisan criticism over his administration’s decision to cancel three road projects in the Central Valley and San Luis Obispo County.

Newsom has rejected the criticism that he had engaged in a “bait and switch” because he previously emphasized to voters in 2018 that at least 60 percent of the $5.2 billion generated annually by the 2017 tax hikes would go to roads and bridges, as specified in Senate Bill 1.

But his Sept. 20 executive order directed state transportation officials “to leverage the more than $5 billion in annual … spending for construction, operations and maintenance to help reverse the trend of increased fuel consumption and reduce greenhouse gas emissions” and to “reduce congestion through innovative strategies designed to encourage people to shift from cars to other modes of transportation.” 

Soon after, Caltrans – citing Newsom’s order – said the three road projects had been subject to “deletion” from a list of scheduled work at a savings of $32.5 million. It also said other road projects had been reduced in scope, creating a total savings of $61.3 million “to be held in reserve for priority rail projects and other priorities aligned with [the governor’s] executive order.”

Assemblyman Rendon says voters remembered ‘clear promises’

This led to criticism not only from Republican officials in the Central Valley and San Luis Obispo but from Assembly Speaker Anthony Rendon, D-Lakewood.

Gas taxes were raised “with some clear promises … that this money would be used … almost exclusively for roads and repairs,” he told the Los Angeles Times. “Now is not the time to go back on those promises.”

But Newsom said he would honor Senate Bill 1 exactly as it was written and said critics shouldn’t “conflate” his Sept. 20 executive order with the state’s “locked in” commitment to fix roads and bridges.

Nevertheless, Democrats in the Legislature have good reason to be wary about fallout from their support of the 2017 gas tax hike. One of their few setbacks in recent years as they have established lopsided majorities in the Assembly and Senate came in June 2018 when state Sen. Josh Newman, D-Fullerton, was recalled easily after a campaign that focused on his vote for the gas tax hike.

But the potency of the issue has been evident longer than that. In 2002, 69 percent of state voters backed Proposition 42, which made it more difficult for gas taxes to be shifted for use on general needs. In 2006, 77 percent of state voters supported Proposition 1A, which added even more restrictions.

Gas tax revenue diverted to general uses in 2010

Yet these measures were unable to block Gov. Arnold Schwarzenegger and the Legislature from raiding gas taxes again in 2010. Facing a huge budget deficit after the Great Recession had led to a nearly 20 percent drop in state revenue, the Republican governor and Democratic lawmakers and their lawyers came up with a plan to end state sales taxes on gasoline while sharply increasing excise taxes. Because the “gas tax swap” didn’t increase revenue, it was allowed to be enacted on a simple majority vote.

And since there were far fewer restrictions on gas excise taxes than gas sales taxes, lawmakers were able to take $1.8 billion in annual gas excise revenue for general uses.

Senate Bill 1 in 2017 eliminated the law setting up the tax swap.

Assemblyman Jim Frazier, D-Oakley, and Sen. Jim Beall, D-San Jose, propose a 17 cent per gallon tax increase to fund a $7.4 billion transportation program, with likely additional annual hikes after adoption because the rate is indexed to inflation. They also want to increase the tax on diesel fuels by 30 cents a gallon, with the same indexing provision, and to make it easier to get approvals for transportation infrastructure improvements.

Brown’s proposal — which went nowhere in a special session — was built on a 6 cent per gallon tax increase and other provisions that would have funded a $3.6 billion transportation plan.

Bitterness over 2010 gas tax swap hangs over debate

The huge problem facing any proposal to raise taxes of this sort is the need for two-thirds approval, which means Republican votes in both the Assembly and Senate are necessary. And Democrats lobbying for GOP support don’t just have to overcome traditional Republican opposition to higher taxes. There continues to be deep bitterness over the gas tax swap that GOP Gov. Arnold Schwarzenegger and Democratic lawmakers pulled off in 2010 to plug a $1.8 billion hole in the 2010-11 budget. Republicans aware of this history would struggle to believe that the tax hikes that Frazier and Beall seek for road repairs might not at some future date be used to pay for state salaries, pensions or other needs unrelated to potholes and aging bridges.

The background: Irate over previous diversions of gasoline sales taxes from road repairs to other uses, California voters twice this century passed ballot measures — Proposition 42 in 2002 and Proposition 1A in 2006 — that banned such use of gas sales tax revenue.

But gasoline excise taxes can be spent on general fund obligations. So in 2010, gas excise taxes were sharply raised and gas sales taxes sharply reduced. Because the move was revenue-neutral, Schwarzenegger and Democrats successfully argued that the maneuver only needed to pass on a simple majority vote — not the two-thirds vote needed for tax hikes.

As a result, each year, the state Board of Equalization announces whether it is raising or cutting state excise taxes on gasoline to honor the deal’s requirement that the 2010 gas tax swap be roughly revenue-neutral.

Recent coverage of the Frazier-Beall initiative has not detailed whether the 17 cent per gallon tax hike would be entirely in the gas sales tax or entirely in the gas excise tax or a combination of increases in each.  If it were in the gas sales tax, that would nominally mean the money could only be spent on road repairs and infrastructure improvement because of Propositions 42 and 1A. But another gas tax swap could enable the money to be diverted to the general fund by a simple majority of the Legislature in the future, at least if the governor was amenable.

Republican lawmakers are also likely to be wary of another part of the Democratic lawmakers’ proposal: a $165 yearly fee for owners of zero-emission vehicles to help pay for road improvements. While that’s higher than what most states with such fees charge, it’s only half of what the average U.S. car owner pays in gas taxes a year, according to data from 2013. 

The argument that zero-emission vehicles should pay more toward road maintenance is dismissed by greens who cite the environmental benefits of the vehicles. But as such vehicles become more common — and as states push gas taxes higher — owners of regular vehicles and free-market advocates are likely to cry foul.

Another California story —  politicians declaring the need for much more spending to repair infrastructure, starting with roads covered with potholes — is now akin to a weekly ritual. Gov. Jerry Brown, Assembly Speaker Toni Atkins, Los Angeles Mayor Eric Garcetti and San Diego Mayor Kevin Faulconer are among the many state politicians who have made this case.

But what’s not noted much is that the gas tax shuffle story is directly related to the infrastructure blues story. The reason the rates were adjusted in 2010 was to increase the amount of money raised by gas excise taxes, which can be used in the operating budget, and to reduce the amount of money raised by gas sales taxes. Because of Prop 42 and Prop 1A — two ballot measures that won easy victories from California voters in 2002 and 2006, respectively — gas sales taxes can only be used for road repairs, local transportation projects and a narrow range of needs.

The gas tax swap shifted $1.8 billion from infrastructure and transportation to the general fund. It passed the Legislature on March 4, 2010, on the strength of Democratic votes and with the support of Republican Gov. Arnold Schwarzenegger.

Five years later, Atkins is proposing a $52 a year road-user “fee” to raise $2 billion to pay for infrastructure. Her proposal has drawn a mixed to positive reaction from Democrats, some of whom have their own ideas about how to attack infrastructure needs.

But it has also won praise from those who say it’s about time the state government is taking the lead on infrastructure. The context that is rarely included, however, is that the $2 billion annual infrastructure shortfall was essentially created by the state government in 2010 — specifically, by Schwarzenegger and Democrats.

2010 was a brutal year on the budget front; the state’s spending plan for fiscal 2010-11 didn’t past until the 100th day of fiscal 2010-11. But the gas tax diversion would have been much more defensible if it had a sunset provision. Instead, the way the Legislature and Schwarzenegger handled the maneuver created a permanent new source of revenue for general government operations — despite the wishes of California voters who wanted the money spent on roads and transportation projects.

On Wednesday, the California Supreme Court declined to review of an appellate Court decision regarding the project. The case commonly is referred to as “Tos/Fukuda/Kings County” after the county and two residents who sued to stop the project.

This meant the July 31 ruling of the 3rd Appellate District Court stands; and the California High-Speed Rail Authority, which runs the project, has until the time they file their second funding plan to comply with the law.  They must finish all environmental work for a 300-mile segment and find the funds to finance the construction at that time.

As CalWatchdog.com wrote at the time, the appellate court:

“…overturned a decision last fall by Sacramento Superior Court Judge Michael Kenny.

“Kenny had ruled that the current funding plan, as approved by the California Legislature, did not follow the strictures of Proposition 1A, the 2008 initiative approving the bonds for the project.

“The appellate court instead agreed with California Attorney General Kamala Harris. Her office argued that the Legislature had the power to interpret the proper funding mechanisms for Prop. 1A, and the courts should let that process work itself out.”

The main result this week from the Supreme Court’s decision is that the project will continue condemning property under eminent domain and demolishing structures along the way of the train. It’s a definite moral victory for the California High-Speed Rail Authority, which runs the project – although not a complete victory.

Silence

However, the Supreme Court did not explain its silence regarding the project. By refusing to rule, the court did not say, “Good job, CHSRA. You are following the law.” There is no final stamp of approval.

The key now is the 3rd Appellate District Court’s earlier opinion, which read in part:

“[U]nder the Bond Act, bond funds cannot be committed and spent until the second and final funding plan is approved by the Authority and submitted to the Director of the Department of Finance and the Chairperson of the Joint Legislative Budget Committee, and an independent financial consultant prepares a report. …

“This latter report is particularly significant in that the independent consultant must certify that construction can be completed as proposed and is suitable for high-speed rail; the planned passenger train service will not require an operating subsidy; and upon completion, passenger service providers can begin using the tracks or stations.”

The “bond act” is Proposition 1A, which voters passed in 2008. It authorized $8.6 billion in bonds to fund the project.

On where the case stands after the Supreme Court decision, Mike Brady, lead counsel for Kings County and the two residents, said:

“The appellate court decision simply said that the trial court erred in rejecting the first funding plan which the appellate court said was meant to provide notice to the Legislature only, preliminary to a legislative appropriation. The appellate court said that the High-Speed Rail Authority could not use or spend Proposition 1A  bond funds until it had gone through the rigorous requirements/procedures of the second funding plan.”

“Without the ability to spend Proposition 1A bond funds, the HSRA is still hamstrung.  It is also important to remember that the appellate court itself said that the HSRA’s first funding plan was defective and deficient; those problems still exist and they will have to overcome them before the second plan can be approved.”

Most importantly, Brady said the CHSRA cannot access the Prop. 1A bond funds “until it goes through a rigorous procedure.” He promised of the court action, “We will be there to enforce those requirements.”

Nine legal actions

The case the Supreme Court just declined to hear is not the only one against the high-speed rail project.

According to the CHSRA’s Oct. 14 Monthly Meeting Agenda, nine legal actions are pending against the project, including a second part of the Tos/Fukuda/Kings County case (see list below).

Said Mike Brady, lead counsel for Tos/Fukuda/Kings County, “We will take the Authority to trial early 2015 on whether the high-speed rail system can meet the bond measure’s requirements” that voters approved. The requirements are that the train must run between Los Angeles and San Francisco in two hours and 40 minutes. “We think the evidence is very strong that it can’t.”

Litigation against the CHSRA, as listed in its Oct. 14 Monthly Meeting Agenda:

• John Tos; Aaron Fukuda and County of Kings v. California High Speed Rail Authority, Sacramento Superior Court Case No. 34-2011-00113919; (Court of Appeal, Third Appellate District, Case No. C075668)
• John Tos; Aaron Fukuda and County of  Kings v. California High Speed Rail Authority; (Sacramento Superior Court Case No. 34-2011-00113919)
• Town of Atherton v. California High-Speed Rail Authority; (Court of Appeal, Third Appellate District, Case No. C070877)
• CHSRA Validation Action; Sacramento Superior Court Case No. 34-2013-00140689; (Court of Appeal, Third Appellate District, Case No. C075668)
• Before the Surface Transportation Board; Finance Docket No. 35724 (SUB No. 1); CHSRA-Construction Exemption
• Coffee-Brimhall LLC v. California High-Speed Rail Authority; (Sacramento Superior Court Case No. 34-2014-80001859)
• County of Kings v. California High-Speed Rail Authority; (Sacramento Superior Court Case No. 34-2014-80001861)
• County of Kern v. California High-Speed Rail Authority; (Sacramento Superior Court Case No. 34-2014-80001863)
• First Free Baptist Church of Bakersfield v. California High-Speed Rail Authority; (Sacramento Superior Court Case No. 34-2014-80001864)
• Dignity Health v. California High-Speed Rail Authority; (Sacramento Superior Court Case No. 34-2014-80001865)
• City of Bakersfield v. California High-Speed Rail Authority; (Sacramento Superior Court Case No. 34-2014-80001866)
• City of Shafter v. California High-Speed Rail Authority; (Sacramento Superior Court Case No. 34-2014-80001908)
• TRANSPORTATION SOLUTIONS DEFENSE AND EDUCATION FUND v. California Air Resources Board and CHSRA as a real party in interest; (Fresno Superior Court Case No. 14CECG01788)

Kathy Hamilton is the Ralph Nader of high-speed rail, continually uncovering hidden aspects of the project and revealing them to the public.  She started writing in order to tell local communities how the project affects them and her reach grew statewide.  She has written more than 225 articles on high-speed rail and attended hundreds of state and local meetings. She is a board member of the Community Coalition on High-Speed Rail; has testified at government hearings; has provided public testimony and court declarations on public records act requests; has given public testimony; and has provided transcripts for the validation of court cases. 

In what probably is the last train stop of opposition to California’s high-speed rail project, today the California Supreme Court refused to hear a case that could have stopped it. The case, by Kings County and two local landowners whose property would be bulldozed for the project, objected that the Legislature had altered the project from the clear language of Proposition 1A in 2008, which authorized $8.6 billion in state bonds for the project.

According to California High-Speed Rail Authority Board Chairman Dan Richard, as reported in the Times, the decision:

“reaffirms that the Authority can continue building a modern high-speed rail system that connects the state, creates jobs and complies with the law. We will continue to move forward aggressively to deliver the nation’s first high-speed rail system.”

Actually, what it affirms is what I’ve said all along: The project exists to spend the $8.6 billion in bond money, plus $3.5 billion in federal moolah from President Obama’s 2009 economic stimulus program. Total: $12.1 billion: so much money the state’s political establishment — from the governor’s office to legislative leaders to the high court — was not going to let it remain unspent.

But that’s all that will be built. The project promised more federal and private support, but none will be forthcoming. No private investment firm would pour money into this tracked turkey. And the Republicans who control the U.S. House of Representatives — and who likely will control it at least until 2019 — won’t drop a penny on this track. A major opponent is House Majority Leader Kevin McCarthy, R-Bakersfield.

PLF summary

Here’s a good summary of the situation from attorney Harold Johnson of the Pacific Legal Foundation, which in the case filed a petition before the court against the project:

“This is a disappointing development for the interests of California taxpayers and for the cause of integrity and common sense in government. The appellate court said that the High Speed Rail project is still in ‘flux’ so it’s too soon to judge whether it conforms with what voters authorized when they passed Proposition 1A in 2008. But the appellate court also ordered that $8.6 billion in bonds for the project be approved by the judiciary, so the bonds can be sold. That’s a self-contradictory ruling, and it now stands, because the Supreme Court has declined to review it. This means that billions of dollars in bonds can be sold, even before we know what the money will be spent on, and even before we know if the final shape of the High Speed Rail project is true to the voters’ will and the state Constitution’s requirements. In other words, more than $8 billion can be borrowed on the taxpayers’ credit card, for what amounts to a pig in the poke. That’s bad public policy, and I believe it’s wrong as a matter of constitutional law.”

In a controversial decision late this July, the California Court of Appeal for the Third District brushed aside claims that ballot wording and voters’ intent carried legal weight that legislators’ plans did not. Now the Pacific Legal Foundation has joined the original Kings County plaintiffs in appealing that verdict, hoping to be heard by the California Supreme Court.

In the case summary posted on its website, PLF lawyers described two lines of argument they’ll make before the court, if the appeal is accepted. First, PLF alleged, state officials “attempted to evade meaningful oversight” of the high-speed rail project. The evidence before past courts, PLF claimed, has been “insufficient” to justify “even the most lenient judicial review of the High Speed Rail Finance Committee’s decision to authorize issuance of the bonds.”

Billions on the line

Those bonds are at the heart of the fight over the bullet train’s future. The plaintiffs arrayed against their authorization have maintained that at least $8.6 billion of bonds cannot be sold unless the terms set out in Prop. 1A have been fulfilled. Stu Flashman, the attorney representing plaintiffs from Kings County, said the ballot measure’s language was “clearly intended to protect the state from the financial risk” the train might create. According to plaintiffs, courts must recognize that voters approved Prop. 1A in accordance with the plain reading of its text, not because they supported the more vague or general goal of high-speed rail.

Previously, Sacramento County Superior Court Judge Michael Kenny had agreed, ruling against the bullet train in three ways across two separate decisions. He held that California’s preliminary funding plan fell short of Prop. 1A by fudging its funding sources. Furthermore, he held that California could not issue a so-called “blanket validation” for train bonds because it had not properly determined whether the issuance was currently “necessary and desirable.” Additionally, Kenny determined that the state could not start building out the train’s infrastructure without official clearance on potential environmental issues.

Pivoting off the first two elements of Kenny’s rulings, PLF has prepared arguments for the state Supreme Court that assert a “bait and switch” pulled on California taxpayers. The state, PLF alleged, has failed to show the courts “that the current, significantly modified project outline is consistent with the design that was presented to voters when they approved bonds for the High Speed Rail project” with an affirmative vote for Prop. 1A.

A reversal in the courts

But the appellate judges who recently reversed Judge Kenny disagreed. “Instead of deciding whether the state had, in fact, violated Proposition 1A as the project’s opponents claimed, the appellate judges ruled that the contentious funding plan was valid regardless because the state Legislature approved it,” the San Jose Mercury-News reported in August, as preliminary construction for the project got under way.

This line of legal reasoning threw plaintiffs a curveball. In addition to arguing to the California Supreme Court that Prop. 1A plainly imposes requirements the state failed to meet, they must also argue that the language of Prop. 1A must take legal precedence over Sacramento’s legislative stamp of approval.

That is why PLF has taken pains to claim state officials have tried to “evade meaningful oversight” of the train’s funding and construction. In an additional wrinkle, the actual access to the train’s funds raises a separate legal question that plaintiffs have threatened to bring before the higher court.

Michael Brady, attorney for Kings County farmer John Tos, told Bloomberg he could “challenge the legality” of trying to “access the monies in the bond fund.” Officials, he indicated, must apply for the funds through a section of the law that’s “actually much tougher” than other provisions when it comes to showing compliance with the state’s legal authorization.

The next action will be for the Supreme Court to take or deny the appeal.

On Thursday, Sacramento’s 3rd Appellate District Court ruled California’s high-speed rail project can move ahead. It overturned a decision last fall by Sacramento Superior Court Judge Michael Kenny.

Kenny had ruled that the current funding plan, as approved by the California Legislature, did not follow the strictures of Proposition 1A, the 2008 initiative approving the bonds for the project.

The appellate court instead agreed with California Attorney General Kamala Harris. Her office argued that the Legislature had the power to interpret the proper funding mechanisms for Prop. 1A, and the courts should let that process work itself out.

In the court’s language, “[A]bsence of a clear directive from the people to constrain the discretion of the Legislature, we will not circumscribe legislative action or intrude on the Legislature’s inherent right to appropriate the funding for high-speed rail. “

The final funding plan

Yet the project also was given a warning.

Basically, the Appellate Court said that the California High-Speed Rail Authority, which runs the project, has until they file for the second funding plan to get their act together.  There is no time requirement for when the second funding plan is due. But when they file, they must have finished all the environmental work and demonstrate they have the funding for the entire initial operating segment.

The court reasoned:

“[U]nder the Bond Act, bond funds cannot be committed and spent until the second and final funding plan is approved by the Authority and submitted to the Director of the Department of Finance and the Chairperson of the Joint Legislative Budget Committee, and an independent financial consultant prepares a report. …

“This latter report is particularly significant in that the independent consultant must certify that construction can be completed as proposed and is suitable for high-speed rail; the planned passenger train service will not require an operating subsidy; and upon completion, passenger service providers can begin using the tracks or stations. …

“The Authority has repeated frequently that it will have all the requisite environmental clearances before construction begins. CEQA [California Environmental Quality Act] certainly demands nothing less. The Tos real parties [Kings County and two local residents who brought the original lawsuit], in fact, concede that state and federal law require environmental clearance before starting construction. Because the Authority must comply with CEQA before the project proceeds, a writ of mandate is not necessary.”

It is the requirements of the second funding plan that give hope to the legal team that brought the case for Kings County and the the two local residents. Co-counsel Mike Brady said, “The Authority must show that the project will be successful financially.”

He added via an email message, “They have to make a stronger showing that they have enough money in the bank or firmly committed to be able to complete the useable segment that they picked, a segment costing in today’s dollars about $35 billion.”

Environmental

Brady also believes that, when the CHSRA wants to spend the Prop. 1A bond funds, “They will have to demonstrate they have obtained all the environmental clearances for the entire 300-mile usable segment that THEY picked.”

He said the appellate court indicated the litigants would have the opportunity to challenge the legality of the CHSRA’s spending when it actually tries to access the money in the bond fund.  “They have to apply for that money through a different section of the law, a section which is actually much tougher on the Authority with respect to what it has to prove,” he said.

However, Co-Counsel Stuart Flashman said, “The court has essentially allowed the Authority to ignore promises it, and the Legislature, made to California’s voters.  It bodes ill for voters’ willingness to trust such promises in the future.”

The legal team is considering an appeal. The basis would be larger than the high-speed rail project.   Brady said, “We are also evaluating the possibility of going to the state Supreme Court on issues such as respect for the protection of the voters in the initiative process when measures were specifically enacted for their protection and are then brushed aside, contrary to the intent of the initiative.”

Kathy Hamilton is the Ralph Nader of high-speed rail, continually uncovering hidden aspects of the project and revealing them to the public.  She started writing in order to tell local communities how the project affects them and her reach grew statewide.  She has written more than 225 articles on high-speed rail and attended hundreds of state and local meetings. She is a board member of the Community Coalition on High-Speed Rail; has testified at government hearings; has provided public testimony and court declarations on public records act requests; has given public testimony; and has provided transcripts for the validation of court cases. 

At a May hearing, judges signified their readiness to defer to the Legislature — at least so far — in determining whether state efforts were meeting the safeguards in Proposition 1A, the 2008 ballot measure providing $9.95 billion in bond seed money for the$68 billion project.

Below is the initial reaction of Michael Brady, one of the attorneys representing Kings County and other plaintiffs targeting the California High-Speed Rail Authority. In a nutshell, he says this isn’t a sweeping victory for the state — just a victory at a very early stage of years of court fights that is tempered by the appeals court’s acknowledgment of the project’s shortcomings:

1. We are disappointed in the decision in that we think it ignores  150 years of precedent which respects the intent and the protection of the voters who engage in the initiative process.  Proposition 1A had various safeguards and protections which do apply to this case, and we question whether the court has properly interpreted those protections; the court itself on several occasions even conceded that the initial funding plan was “deficient.”

2. However, the court was dealing with what is called the INITIAL funding plan procedures of Proposition 1A; it seems to be saying that those requirements were meant to provide notice to the legislature only and not to provide a measure of protection to the voters themselves (we disagree with that);

3. We still have (and the court so indicated) an opportunity to challenge the legality of the Authority’s actions when the Authority moves to the NEXT STEP and  actually tries to access the monies in the bond fund; they have to apply for that money through a different section of the law-a section which is actually much tougher on the Authority with respect to what it has to prove;

4. For example, when the Authority applies under the 2d/updated funding plan, they have to make a stronger showing that they have enough money in the bank or firmly committed  to be able to complete the usable segment that they picked-a segment costing, in today’s dollars, about $35 billion.  They only have $6 billion of that, or 20%; that will not suffice and they will not be allowed to access Proposition 1A for construction costs until they have the full $35 billion; that will be a heavy burden;

5. We also believe that the Authority when they apply for Proposition 1A bond funds will have o demonstrate that they have obtained all the environmental clearances for the entire 300 mile usable segment that THEY picked; they have at present nothing  beyond Bakersfield , nothing through the Tehachapi’s all the way to the Los Angeles Basin; those clearances  will take years to obtain and they have delayed doing this for years; these are both heavy burdens;

6. Finally, under the 2d/updated funding plan requirements they must show that the project will be successful financially and in other respects; actually the financial situation on funding, the increased costs, the lack of private investors, the likelihood  of government subsidies (forbidden by 1A) have all deteriorated in the last 2 years, making the prospects for success very remote; this project , state -wide, will cost well above $100 billion, and currently they have 6% of that available with no prospects for significant further financial help from the federal government or from private investors. Californians will bear this enormous cost by themselves and alone.  This was never intended and is a bleak prospect.

7. Therefore, we look forward to litigating these further issues where the burdens on the Authority to meet the requirements of 1A are even heavier;

8. We are also evaluating the possibility of going to the Supreme Court on issues such as respect for the protection of the voters in the initiative process when measures were specifically enacted for their protection and are then brushed aside, contrary to the intent of the initiative.

In 2008, California voters narrowly approved $9.95 billion in funds for a statewide high-speed rail network. When they voted for Proposition 1A, they didn’t think there was much doubt about what they were getting — a “safe, reliable, high-speed passenger train” was the mantra of Gov. Schwarzenegger and other project supporters.

Then there were the formal claims to voters in official election materials.

In the official summary, there was a reference to a train that would average 220 mph from San Francisco to Los Angeles. There was another reference in the official analysis, and another in the official rebuttal to the official argument against the project.

For good measure, the official argument for 1A stated that it would provide for “Travel from Los Angeles to San Francisco in about 2½ hours for about $50 a person.” And the official rebuttal of the argument against 1A said project critics were making things up, and the the measure would allow for “travel intercity downtown to downtown throughout California on High-Speed Trains faster than automobile or air—AT A CHEAPER COST!”

Doesn’t seem particularly ambiguous, does it?

Could go that fast vs. would go that fast

But that is just what the California High-Speed Rail Authority seems likely to argue at the upcoming court hearings over a lawsuit saying the project can’t conceivably meet the requirement that the train get from San Francisco to Los Angeles — some 520 miles — in two hours and 40 minutes, as specified in the text of the law.

I wrote about the coming bait-and-switch on the speed question this weekend for the U-T San Diego:

Since initial segments in the Bay Area/Silicon Valley and in Los Angeles County will not have trains going at high speed, this requirement seems impossible. It would require a train that averages about 270 mph for a twisty 400-mile stretch from Fresno to the San Fernando Valley.

So how will state officials respond? Apparently with semantic games — the assertion that the fine print of Proposition 1A only requires that the train system’s “design” could achieve a trip time of two hours and 40 minutes or less, not that it necessarily would do so on regular basis. …

[In] an email published by The Atlantic’s website last week, board Chairman Dan Richard wrote that the state is “maintaining fidelity to the bond act requirements” of a train “designed to get from Los Angeles to downtown San Francisco in less than two hours, 40 minutes.”

What’s particularly insulting here is that both in the email to The Atlantic and to comments to The Los Angeles Times last month, Richard asserted the rail authority would never “parse” Prop 1A to get out of honoring its plain intent.

I guess that depends on what Richard’s definition of “parse” is. The usual Clintonian definition of parsing is hunting for a way to get out of trouble or get out of an obligation by using narrow definitions of broad, pain language in a way that serve your interests.

That is exactly what the state government is doing here. As I wrote in the U-T …

… what the state government is now doing to keep the bullet train alive amounts to the biggest bait-and-switch ever pulled on the voters of California. Even by Sacramento’s low standards, it is a shabby dirty trick.

So how about we let others join in the fun? What do the mainstream media have to say about my key three points?

Their conventional wisdom is a lot closer to my deep skepticism than to Richard’s rosy scenarios, that’s for sure.

Point 1: There are not nearly adequate funds available to complete the $68 billion project in the way promised to voters in 2008 who approved Proposition 1A, giving the bullet train $9.95 billion in state bonds as seed money.

As Politico reported on Feb. 8, this is already a huge legal obstacle based on Prop. 1A’s language — not a distant headache on the horizon.

Judge Michael Kenny ruled that the state could not sell future bonds to finance the first leg of construction until they redid the business plan to specify sources of funding “that were more than merely theoretically possible.”

As for the $250 million in cap-and-trade funds Gov. Jerry Brown secured for the rail project this fiscal year, as Associated Press noted on Jan. 14 …

It also is just a tiny fraction of the overall price tag for high-speed rail, currently at $68 billion.

And as the L.A. Times reported on Feb. 28, this appropriation is deeply unpopular with environmentalists — and it offers …

… significant legal risks. The state law that set up the limits on greenhouse gases and the cap-and-trade system calls for investments that will reduce emissions by 2020 to the levels that existed in 1990, some experts say. The state’s nonpartisan Legislative Analyst’s Office, noting the bullet train would not be in operation until after 2020, has questioned the legality of using the cap-and-trade funding  for rail construction.

As for Dan Richard’s claim that significant private financing is just around the corner, I await Dan naming a single company that would have any interest in partnering with the state of California on a multibillion-dollar project without revenue or ridership guarantees, which are banned by Prop. 1A. Dan won’t be able to because there aren’t any.

As for the notion that the federal government might foot nearly the entire bill for one state’s extremely expensive project –as some CA bloggers hope  — I can’t cite an MSM piece saying that’s not true, because it’s not even something the MSM considers in the realm of human possibility.

And, no, it’s not just those evil House Republicans who oppose further federal funding than the $3.5 billion the project has gotten so far. Patty Murray, the Washington Democrat who is now chair of the Senate budget committee, came out as an opponent of federal funding for such projects in 2011.

Point 2: The legal challenges the project faces because of Prop. 1A restrictions are likely to be impossible to overcome.

Judge Michael Kenny didn’t just say that before construction began, the state has to have $31 billion in hand to build a “viable” first operating segment of 300 miles that could make money even if the full system was never completed. He said the state had to complete environmental reviews for all 300 miles. It’s not even one-tenth complete, with only 27 miles having clearances.

This is from the Hanford (CA) Sentinel’s reporting on Feb. 4:

Kenny also ruled that the Authority needed to complete environmental analyses for the segment before construction begins.

As for Richard’s confidence in the bullet train’s lawyers, as the Sentinel notes, the legal team instead looks more like the Keystone Kops:

Kings County opponents celebrated the [August 2013 and November 2013] rulings as at least partial vindication, but Authority officials said the project was proceeding on schedule and implied that the rulings were a minor inconvenience.

In the appeal [filed in January], the Authority argued just the opposite.

“The trial court’s approach to these issues cripples government’s ability to function. … Action by this court is urgently required to avoid compromising the Authority’s ability to build the system quickly and economically, as intended by the Legislature and the voters,” the appeal states.

And keep in mind that in Silicon Valley, rich cities have basically vowed to block related construction forever using NIMBY tactics. These tactics have a long history of winning in California — especially when you have very skilled attorneys with very deep-pocket clients.

Point 3: What the state proposes isn’t even high-speed rail.

Because of fears of just the sort of corner-cutting we’re now seeing, Prop. 1A required that the bullet train get from downtown Los Angeles to downtown San Francisco in no more than two hours and 40 minutes. But under the governor’s “blended” plan using regular rail from San Francisco to San Jose and from the northern edges of the L.A. exurb to downtown L.A., that means about 100 miles of the trip will be at conventional train speeds and 410 miles at bullet-train speeds.

If you make the generous concession that the conventional trains will go 100 miles at 100 mph, taking 60 minutes, and if you have transfer times of five minutes for each of the train switches, that means the bullet train will have to cover 410 miles in 90 minutes, going 273 mph, to comply with the 160-minute limit in state law.

I repeat, 273 mph. I repeat, 273 mph. I repeat, 273 mph.

That’s average speed, not top speed.

Nevertheless, Richard says that’s not going to be a problem. He says …

“… the independent Legislative Peer Review Group looked at the planning and concluded that at present, our design would allow for that trip to occur in 2 hours and 32 minutes.”

What does the MSM say? Even though I have never seen a piece that breaks down the math of the CHSRA’s claims as I did above, most journos are very skeptical, and so are many experts, as this L.A. Times piece from March 27 notes.

But there’s another wrinkle here. In his response to my original post, Richard seems to take the 160-minute provision of Prop. 1A seriously. But as the L.A. Times reported on June 9 of this year, the rail authority is trying to play semantic games to get out of the obligation — because it’s an obligation it can’t meet:

Dan Richard, chairman of the authority, said the state would deliver a system that meets all legal requirements of the ballot measure.

“We are not trying to parse words and hide behind legal technicalities,” he said.

But critics and opponents, including some key players from the project’s past, say the rail authority is trying to circumvent the basic intent of the protections because the existing plan for the Los Angeles-to-San Francisco line can’t meet them.

The unusual specificity of Proposition 1A has been cited by bullet train promoters and critics to bolster their positions. And both sides have put the language and procedures set out in an 8,000-word piece of legislation underlying the ballot measure under an interpretive microscope. One example: Does a requirement to “design” the train so it can travel from L.A. to San Francisco in two hours and 40 minutes mean the state has to provide such service?

“This bond issue was extraordinary,” said Quentin Kopp, a former state senator, state court judge and former chairman of the rail authority, when the restrictions were written. “I can’t recall any general obligation bond issue that incorporated legal provisions to the extent this one does.”

In Kopp’s view, the state legislation and subsequent ballot measure were a conscious effort by the Legislature to place binding safeguards on the biggest infrastructure project in California history.

Rep. Alan Lowenthal (D-Long Beach), a former state senator who wrote many of the restrictions, said: “We didn’t put them in as guidelines…. It was really clear what we wanted.”

In 2008, 160 minutes meant 160 minutes in California. In 2014? Well, that’s open to debate.

I look forward to Dan Richard’s response to my response to his response to my response to James Fallows. Will he argue again that I’m a “rabid” bullet-train hater? Or will he concede that “rabid” though I may be, I’ve got the MSM generally on my side?

If he says the MSM is with him, Dan should offers specifics, and not just boosterism from the edit page of the Fresno Bee.

We shall see.

In the mean time, I sure hope that Fallows talks to Ralph Vartabedian of the L.A. Times or Mike Rosenberg of the San Jose Mercury-News or to former Democratic state Sens. Quentin Kopp, Alan Lowenthal or Joe Simitian. When that happens, he will see that it’s not just blowhard libertarian bloggers who believe the bullet train is a debacle.

It’s lots of people — including many of the project’s original true believers.