California’s high speed train officials
certified an environmental impact report Thursday, allowing for
the start of land purchases along the first leg of their monstrous
mother of all boondoggles. The California High-Speed Rail Authority
(CHSRA) hopes to start construction on the 65-mile stretch from
Fresno to Merced by the end of the year, attempting to get building
before voters figure out
a way to slap the money out of their hands.

The certification moves the $68
billion project into the well-known phase of California development
where people with various agendas use any little issue with the
environmental impact report to sue, sue, sue. These people could be
property owners looking to block the project (or negotiate better
compensation), union groups looking to secure labor agreements,
environmental attorneys hoping to make a buck by challenging the
science, or any number of folks with complaints of varying
legitimacy.

The Los Angeles Times reports that farming interests in
Merced and Madera counties may be planning suits over perceived
defects with the environmental report and disruptions to their
agricultural pursuits. If they press their concerns in the courts,
they’ll join quite
a
crowd of litigants already fighting various decisions about the
train.

In other recent developments connected to the
still-not-quite-embattled-enough-to-kill-it-dead project:

More Games with Numbers. CHSRA has faced plenty
of criticism over inexplicable ridership projections that are
accepted by absolutely
nobody and
funding methods that are essentially illegal. Now critics are
focusing on its projected operational costs, which are absurdly low
and would only add up if California’s trains were the most
economically efficient in the world.

Authors of a new study say operation costs for the train will
actually be four times what CHSRA is projecting, necessitating
annual subsidies to continue operations. That would be a problem
because state law forbids subsidizing the train’s operations. The
Reason Foundation estimated in 2008
that the operations of the train would cost as much as $700 million
more per year than what CHSRA projected. This new study (readable
here at
Community Coalition on High Speed Rail) projects the train will
actually require as much as $2 billion in subsidies annually to
stay in operation. California Watch
spoke to Alan Bushnell, one of the report’s authors, who said,
“We showed that their (projected) operating costs and revenue costs
per mile were significantly lower than what anybody anywhere in the
world had ever been able to achieve.”

CHSRA board member Mike Rossi
responded by claiming the report used “wrong numbers” and
incorrect data from a Spanish foundation study of high speed rail
in Europe. But the report writers pointed out CHSRA used data from
the same Spanish study. Bushell and his co-authors used the study
specifically because it was footnoted in CHSRA’s business plan.

Could We Be Any More Out of Money?
The answer to that question is: yes. Also on Thursday, Gov. Jerry
Brown, faced with even more budget shortfalls, announced he will be
proposing “serious cuts” to the California budget in two weeks.

As Bloomberg Businessweek
reports, the state’s $9.2 billion deficit is not getting any
relief from this year’s revenues, which are already $3.1 billion
less than expected. State income tax revenue is $2 billion less
than predicted.

“I’m going to present a balanced budget proposal with serious
cuts,” he told a Bloomberg reporter at an event for low-cost pet
spay-and-neuter programs in Los Angeles. He declined to provide any
hints on his targets, saying much depended on the fate of his fall
ballot measure, which would increase state income and sales
taxes.

His reference to the tax measure is as good a hint as any. The
revenues from the tax increase are earmarked for public schools and
community colleges, so expect Brown to begin insisting he has no
choice but to cut from those areas. Don’t expect Brown to suddenly
gain a measure of sanity on the train.

Or maybe Mark Zuckerberg will rescue the Golden State’s bungling
leadership. Bloomberg
reports California is hungrily drooling at the income tax
revenue the state will bring in if Facebook insiders exercise their
options once the company goes public. The money could make up for
this year’s income tax shortfall.

A Private Investor! Er, Wait a Minute. A

big,
weird deal was made on Thursday out of a Madera businessman who
reportedly came forth at hearings in Fresno with a commitment to
add $1 billion to the project. The announcement seemed to be spun
as evidence that the private market is gaining faith in the
train.

In reality, Chowchilla
developer Ed McIntyre is offering to invest $1 billion in the
development of two sites as maintenance facilities. This is not
“investing” in the train project any more than a private developer
building a prison is “investing” in the justice system, nor any
other private business offering to sell his or her services to a
government agency. Once the trains are built and running, McIntyre
becomes part of the operating costs experts fear the CHSRA has
underestimated. He becomes one of the people the train will be
losing money hand over fist to.

Reason Foundation Senior Policy Analyst Adam Summers offers
more analysis of how the CHSRA’s business plan is taking
Californians for a ride.

More Reason on high speed rail.