California is in dire need of federal funds to keep its high-speed rail dream alive. But a Midwestern senator is standing athwart the “gravy train” yelling stop.
Iowa Republican Sen. Joni Ernst recently introduced the Put the Brakes on Boondoggles Act, a to-the-point bill to withhold federal aid from transit construction debacles. If enacted, the legislation would block the secretary of Transportation from funding transit or rail lines if “the overall cost projection to complete the project exceeds the original cost projection by at least” $1 billion, and “the operational and administrative costs of the service provided by the project are projected to exceed the revenues generated from ridership annually over the next decade.”
California’s high-speed rail, which so far is more blank than bullet, neatly fits the description – almost as if it were the primary target. It is $95 billion over budget, having been approved in 2008 at a cost of $33 billion by voters and now projected to cost $127.9 billion based on the latest estimates. Ernst hopes to “put an end to these shady accounting practices by forcing truth in pricing.”
“The projects are sold to the public with the promise of ‘free’ federal money, but once ground is broken, the costs magically multiply,” she said. “Going a billion dollars over budget is not a rounding error, after all, and being off by $100 billion is a train wreck.”
The train, if it’s ever built, is also bound to spend more on operations and administration than it earns in revenue from riders. The most recent forecasts expect ridership to be about 40% lower than the previously predicted 18.4 million passengers a year.
Analysts Joe Vranich and Wendell Cox warned a decade ago that ridership estimates were grossly inflated. While the California High Speed Rail Authority assumed the train would serve 21.1 million riders a year by 2035, a more realistic number would be in the 4.8 million to 6.9 million range, meaning it’s likely the “system will require operating subsidies to cover its day-to-day financial losses.”
In 2010, the Obama administration poured $3.5 billion into what it called a “shovel ready” project. The Trump White House cut the funding by $929 million. But the Biden administration not only restored the funds, it added an additional $25 million.
Ernst also has in her sights the 1.3-mile Caltrain extension, which currently ends at San Francisco’s Fourth and King streets. She says at a cost of $5.15 billion per mile, it’s “on track to be one of the costliest transit projects in the world.” Just as the cost of the high-speed rail has increased over time, so has the Caltrain extension. The initial estimate in 2016 of $3.9 billion has soared to $6.7 billion.
All of which is meaningless to rigid-thinking transit planners, who, The Mercury News reports, will not be held back. Not only have “they have set an ambitious 2032 completion date,” they've directed more than “$1.7 million toward lobbying the state and federal government for funds, and rebranded the extension with a new name: ‘The Portal.’”
Another California transportation project that made Ernst’s April 2023 Squeal Award, awarded monthly to wasteful pork projects, is the BART Silicon Valley extension into San Jose and Santa Clara. This 6.5 mile addition will cost more than $1 billion a mile. Like the other projects, its cost has increased from a not-so-modest $4.7 billion to a hefty $9.3 billion, with Washington funding about half of it. It is, likewise, far behind schedule. Service was to begin in 2026, but, according to Ernst, it’s running a decade late.
Officials have made it clear that without federal taxpayers’ dollars, the bullet train cannot be completed. When voters approved the high-speed rail in the 2008 ballot measure, the expectation was the project would be completed with $9.95 billion in general obligation bonds. The remainder, about $23 billion, was to be obtained from “major capital contributions from multiple sources, including the state of California, the federal government, local and regional governments and private sector investors,” according to the High-Speed Rail Authority’s 2008 Business Plan.
So far, though, there’s been zero private funding, and California is in effect broke since the budget is now in deficit, leaving the bulk of the financing to Washington. And Ernst aims to pull the emergency brake on that.
Kerry Jackson is a fellow with the Center for California Reform at the Pacific Research Institute.