California Officials Dread Rail Project Trial

The $68 billion high-speed boondoggle may not comply with its legal promise.

SACRAMENTO — Those readers who are familiar with Judge Gideon Tucker's words that "No man's life, liberty, or property are safe while the legislature is in session," might chuckle that two good-news-for-taxpayers stories came out of Sacramento last week. They came, coincidentally, as legislators had left town to enjoy their spring break.

The first came from the Brown administration, which announced its support for a revised rainy-day fund ballot measure that would set aside surpluses in boom years and use them to soften the blow during downturns. If the Brown plan is approved, the state will have new sources of cash that can be used to pay down debts and liabilities.

The second came from a California appeals court. It rejected a motion by the California High Speed Rail Authority to overturn a decision that slows its $68-billion rail plan. The ruling has set the stage for something state officials have long been dreading: a trial about whether the current rail project complies with the legal promises in the initiative that created it.

The two issues are related in a broad sense. The governor is looking for funds that could, in part, make a dent in the state's long-term liabilities, but he has championed this new rail idea that will ramp up debt spending. Perhaps the courts will save the governor from himself.

Experts at a state Senate hearing late last month argued that the current rail price tag is far below its likely cost – not surprising, given the cost overruns that are typical on virtually every major infrastructure project built anywhere. Critics wonder whether a new round of debt spending is wise before the state has gotten its last rounds under control.

In 2008, voters gave the OK for the state to spend nearly $10 billion in bonds to finance the initial construction of a rail system that promised to take riders from Los Angeles to San Francisco in 2 hours and 40 minutes. But they approved a carefully drafted initiative that included a host of taxpayer protections, which are now the subject of the litigation. Even the father of the rail project, former state Sen. Quentin Kopp, has argued to the court that the current plan doesn't resemble the one voters approved.

Previously, Sacramento Superior Court Judge Michael Kenny barred the state from spending the $10 billion until it provided a financial plan (rather than "theoretical possibilities") that properly identified income streams for the rail plan's initial segment. Last week, the court rejected the authority's attempt to toss out a portion of the decision dealing with other promises made in 1A.

"Despite the fundamental promise of Proposition 1A to provide a genuine high speed rail system for this state, the authority completely changed that goal by adopting a blended system," argues the lawsuit by Kings County and two county residents. The "blended" approach would mean that trains would, in some places, share routes with slower commuter trains – making it highly unlikely that the trains could comply with the promised trip times.

The initiative also assured voters that the system would not need an operating subsidy. The lawsuit (and most observers) contends that it will need such subsidies and argues that the authority's "wildly exaggerated figures on costs, ridership, train speed … demonstrate a credibility problem that taints the entire project." It will be useful to examine the project's credibility in court.

So far, the courts are siding with the rail line's Kings County critics. Its legislative supporters have discussed plans to use the fees generated from the state's cap-and-trade system to provide a dedicated funding stream for the rail line and other "green" projects.

In her legal brief, Attorney General Kamala Harris argued, "The trial court lost sight of the purpose of the Bond Act, which is to build a high-speed-rail system that will foster the future prosperity of the State. The Bond Act must be reasonably interpreted to achieve that purpose." She said the court has imposed a "straitjacket."

But is the specific, legal language in a voter-approved initiative a binding law or a mere suggestion? If the courts agree with Harris, then the legislature and state agencies will have much more latitude to use taxpayer funds in a way that even Tucker might not have envisioned.

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  • anon||

    But is the specific, legal language in a voter-approved initiative a binding law or a mere suggestion?

    From whom do California judges receive their paycheck?

    I know, I know, your first inclination is to say "the taxpayer." But really, it's "The People's Republic of California," which will dictate the ruling.

  • Dances-with-Trolls||

    A CA spokesman went on to say that "Those who have been railing against this project have stationed themselves on the wrong side of history. This will be a wonderful engine for progress for those wishing to conduct business in our state, and concerns about our ability to track the relevant costs are overblown."

  • Tonio||

    Railing...engine. Har, har.

  • Brian D||

    Railing ... engine ... stationed ... conduct ... track...

    Clever.

  • Scarecrow Repair||

    ... wrong side ...

  • Terc||

    to... our... the...

  • Notorious G.K.C.||

    "A California appeals court rejected a motion by the California High Speed Rail Authority to overturn a decision that slows its $68-billion rail plan."

    Couldn't you rephrase that to make it clearer? "Thanks to a California appeals court decision, a $68 million rail project will be slowed. The delay was ordered by a lower court, and the appeals court upheld that decision. The California High Speed Rail Authority unsuccessfully tried to persuade the appeals court to speed up the project."

  • C. S. P. Schofield||

    When the citizens use a ballot initiative to tell the politicians what to do, it's a suggestion. When the politicians tell the people what to do, it's a law.

    Guillotine bait.

  • C. S. P. Schofield||

    When the citizens use a ballot initiative to tell the politicians what to do, it's a suggestion. When the politicians tell the people what to do, it's a law.

    Guillotine bait.

  • C. S. P. Schofield||

    Oh, jeeze. Sorry about the duplication.

  • Tonio||

    It's the guillotine for you, then, Shoe.

  • Sevo||

    ..."If the Brown plan is approved, the state will have new sources of cash that can be used to pay down debts and liabilities."...

    Any military history will tell you that the issue is not what you think the enemy might do; it is what the enemy is capable of.
    That money will never be used to pay down the debt; they are perfectly capable of finding new places to spend it.

  • R C Dean||

    I recall that Dallas issued a huge pile of bonds awhile back for one purpose (Trinity River park), and then decided to use the money for something else entirely (bridges and highways that run through and over the "park"). Not only did they use the money for something different, they used the money to destroy what it was supposed to be spent on.

    AND NOTHING ELSE HAPPENED.

  • anon||

    Sounds just about like every other government project throughout history.

  • Sevo||

    ..."Its legislative supporters have discussed plans to use the fees generated from the state's cap-and-trade system to provide a dedicated funding stream"...

    Why, those unicorn rides will pay for all sorts of goodies!

  • ||

    Unicorn rides? Is that similar to a donkey show?

  • Sevo||

    It's what the CA donkey show fancies itself.

  • Michael Price||

    A little but it's way more obscene.

  • jester||

    But how else will we get from Bakersfield to Modesto? Didn't Hobo Joe's close down years ago?

  • Marty Feldman's Eyes||

    The Bond Act must be reasonably interpreted to achieve that purpose." She said the court has imposed a "straitjacket."

    Thing is, it would never have passed without that "straitjacket" that was explicitly written into the proposition.

  • Sevo||

    "Thing is, it would never have passed without that "straitjacket" that was explicitly written into the proposition."

    Same with the operating subsidies.
    But now, when it gets press, the comments tend toward the 'well, gas gets subsidies, too!' bullshit.

  • AD-RtR/OS!||

    If AG Harris is correct, we might as well forego the ordeal of Initiative and Referendum, and just ask for a show of hands.

  • buybuydandavis||

    "The $68 billion high-speed boondoggle may not comply with its legal promise."

    Rules aren't for our rulers, you silly goose.

  • Sevo||

    And even the backers now admit to somewhere close to $100Bn. I think there are some precedents:
    "The bridge's estimated cost now is nearly five times the $1.3 billion projected in 1996."
    Read more here: http://www.sacbee.com/2013/09/.....rylink=cpy

    Well, not quite:
    "When all is said and done, the new Bay Bridge will wind up costing tax- and toll-payers more than $12 billion—a figure that leaves even the officials in charge “staggered.” - See more at: http://sfpublicpress.org/news/.....hs5wu.dpuf

    So I'd say we can take the $100Bn with a bit of salt.

  • Waffen Hans||

    Why do liberals have just a hard-on for light rail, trains and trolley cars? And they have a nerve to say libertarians and some conservatives live in the past? Wait, what?

  • Waffen Hans||

    Damn it! I meant to type Why do liberals have such a hard-on...

  • Barry Williams||

    We just finished a $100 bus-on-rails system here in Atlanta. The thing is all of 2.7 miles long. It will never operate at a profit because the fare is below the cost to build the thing much less operate it.

    The project was touted as a way to revitalize the downtown area. However, many businesses suffered and tanked because the construction was so disruptive.

    The system runs from Centennial Olympic Park to the Martin Luther King Memorial. Now we know the real reason it was built.

    Truly . . . A streetcar named desire.

  • Barry Williams||

    Grrrrr . . . $100 MILLION.

    Why the heck doesn't reason give a 5 minute edit window?!

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