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Can high speed rail swerve past fiscal cliff?

10:52 PM, Dec 11, 2012   |    comments
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The future of high speed rail in California, as it now stands, depends on the federal government. And depending on your perspective, the ambitious first-of-its-kind transportation project needs either just a little nudge from Washington in the short run... or a great big push before it's all over.

Either way, it's far from a done deal. And the current fiscal cliff debate dominating the nations capital may not help.

"Maybe it is the time we cut our losses," Rep. Kevin McCarthy, R-Bakersfield, told a House committee last week about the train project slated to run through his hometown. "Maybe we say 'No, we're not going to fund anymore,' and the savings should go to pay down our deficit."

McCarthy is, of course, no ordinary member of Congress. As the majority whip of the U.S. House of Representatives, the third-highest ranking member of the body's GOP leadership, he has a big microphone. And for the better part of a year, Whip McCarthy has been snapping at his home state's $68.5 billion bullet train proposal.

At the December 6 hearing of the House Committee on Transportation and Infrastructure, he suggested that the current battle between Congress and President Barack Obama over long-term federal spending priorities only reinforces the folly of California's quest.

"If we build it, I don't know that they'll come," he told the House Committee on Transportation and Infrastructure, invoking the memorable Hollywood line. "And that's not how we play with taxpayer dollars."

The "they" that he referred to was passengers for the San Francisco to Los Angeles train, scheduled for completion in 2028. And McCarthy found some support for his concerns in a new analysis by the Government Accountability Office (GAO). The GAO report essentially says the California High Speed Rail Authority's math seems to pencil out on construction costs, but not so much on predictions of ridership and revenue estimates.

"The financial viability of California's high-speed rail project depends on generating sufficient ridership to cover its operating expenses," notes the GAO report. "The operating costs were not as detailed as the capital costs, as over half of the operating costs are captured in a single category called 'Train Operations and Maintenance'."

Rep. Jeff Denham, R-Modesto, called the ridership numbers "fluctuating" at the hearing, going to so far as to say that "they get made up all the time."

State train officials don't dispute that their business plan is a work in progress - it's been rejiggered and downsized noticeably in just the last 12 months and due to be revised again in 2014 - but they also argue, as does Gov. Jerry Brown, that the project needs to be evaluated on more than just dollars and cents.

"It's not just a transportation project, it really is about investing in California's future," says Jeff Morales, who became CEO of the rail authority in May.

Morales says the agency is working with international partners to tailor its models on ridership and construction to California's own needs. And he argues the results of the recent election, where local communities across the state supported dozens of transportation and infrastructure projects, is proof that the public sees the value of long-term investments.

"California, on a daily basis, is becoming more transit friendly and more transit dependent," said Morales in an interview on Tuesday.

The current challenges are, of course, more tangible: negotiating on land needs in the Central Valley, selecting the right design/build team, and ensuring there's enough public support before breaking ground next summer on the first 130-miles stretch between Chowchilla and Bakersfield.

Morales takes issue with the GAO's assertion that recent history - no federal funding the last two fiscal years - is a sign that the project faces long odds. After all, more than 90 percent of the federal dollars on which the business plan depends on have yet to be approved. And 61 percent of the entire project's funding is slated to come from the feds.

"We don't need all the federal money at one time," he says. "We need it in pieces."

The rail authority's business plan doesn't even expect any additional federal dollars until 2016, and staff say even then it's only $2.2 billion of the remaining federal share. But what the agency does need, says its CEO, is a reliable partner in Washington, D.C.

"What we really need," says Morales, "is a commitment on long-term funding, which would then allow us to go out and finance the project and build it incrementally."

But even supporters of high speed rail on Capitol Hill may be getting restless.

At the Dec. 6 hearing, Del. Eleanor Holmes Norton, D-D.C., sparred with the President's top transportation chief when it comes to the survival of high speed rail after the fiscal cliff crisis ends.

"In not going over [the fiscal cliff]," said Norton, "there will be very significant reductions in every kind of program."

Holmes also raised a different concern that could be on the horizon for California's high speed rail supporters: competition. She pointed out that in a limited federal fiscal future, President Obama... or Congress... may need to ultimately rank the currently favored projects - including efforts in Florida, the Midwest, and the northeastern Atlantic Seaboard corridor, along with California - as to who gets first dibs on a shrinking pot of federal cash.

"If you continue to flake this money out," she warned Transportation Secretary Ray LaHood in describing the limited federal cash as so much snowflakes, "at the end there will be huge criticism of the [Obama] administration for having nothing to show for its funds."

News10/KXTV

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