Behind the bad news about the escalating costs of California’s proposed high-speed rail system is a familiar question: Will state taxpayers get stuck with the bill?
But there’s another reason to question the project: It could leave the state’s working poor and most transit-dependent residents with fewer travel options than they now have, while the affluent travel on a gold-plated, luxury high-speed rail system.
That has happened before. It must not happen again.
The cost increases are mind-blowing: The price tag for the first leg – San Francisco to Anaheim – ballooned from $34 billion to $43 billion when inflation-adjusted.
Reflecting the added cost, the California High-Speed Rail Authority has suggested that fares could be double what the voters were told when they authorized $9.95 billion in bond money to get the proposed 800-mile transit system going.
At the original estimate of $54, a high-speed rail ticket was almost as cheap as taking a Greyhound bus – an affordable ride for just about anybody. But under the new fare estimates, a family of four catching a train in Los Angeles for a trip to San Francisco would have to pay $464, rather than the original $216.
That would effectively make a high-speed rail ticket beyond the reach of the state’s lowest-income groups. And the fare could keep rising as costs increase, knocking more residents off the train.
Remember the project to reroute Interstate 93 under the city of Boston, known as the “Big Dig”? When the tunnel and related transit projects were first proposed in 1985, officials put the cost at $2.8 billion. When completed in 2007, the bill was $22 billion. Massachusetts’ residents paid 75 percent of the cost.
The Big Dig did something else: It devoured dollars that would have funded other state projects, including those serving ordinary transit riders.
In theory, California should avoid a Big Dig fiasco because of financing safeguards in the bond proposition. But theory and practice split fast when a project is half-finished, political reputations are at stake, payrolls need to be met and money is running out. The rail authority has secured only $11.25 billion of the $43 billion it needs, and its business plan depends on Washington pumping in another $17 billion to $19 billion.
What if the federal money doesn’t materialize? Transit agencies in California are already headed for fiscal disaster. Sacramento’s Regional Transit agency recently announced that a $25 million shortfall will force it to lay off as many as 300 workers and cut bus service. The Los Angeles County Metropolitan Transportation Agency projects a $251.3 million deficit at the end of the 2011 fiscal year. And San Francisco, the state’s poster child for public transit, expects a $12.1 million deficit.
The service cuts to come will fall heaviest on immigrant workers – maids, nannies, restaurant employees – who rely on transit to get to work. If high-speed rail gobbles up a growing share of the state’s transportation general fund because of cost increases, it could leave little for transit investment within cities, which would hit low-income groups even harder.
Overspending on rail systems that ferry mostly affluent riders at the expense of transit services for low-income groups has landed regional transit agencies in hot water before. Just last month, the Federal Transit Administration withdrew $70 million in stimulus money from BART’s Oakland Airport Connector project in the Bay Area because the project failed to benefit low-income communities. Civil rights organizations have become adept at showing how these expensive rail systems reduce bus service for the poor.
California is in danger of making the same mistake with high-speed rail on a much more expensive scale. Here are four ways to ensure that the project is socially just.
• Run high-speed rail like the airlines. The National Airspace System is mostly funded through ticket fares and fuel taxes, and so should high-speed rail. If high-speed rail is going to be a service for primarily affluent people, then they can and should pay their full freight. If private investors demand revenue guarantees, Washington, not California, should provide them.
• No more general obligation bonds. The rail authority has more than enough money to pay for staffing and startup costs. If it needs to raise additional money, it should only be allowed to issue bonds whose principal and interest would be paid through fare revenues.
• Sales taxes should not be used to finance high-speed rail – ever. The sales tax is regressive. Using it to pay for high-fare high-speed rail would amount to a transfer of wealth from low-income families to the more affluent.
• Allow taxpayers a return on their investment. Rail officials want to promote high-density development around stations, a development that would help boost surrounding property values. The rail authority should be authorized to negotiate with host cities and developers to secure a share of the added revenues from higher real estate values.
Adoption of these ideas would help ensure that the state’s support for everyday transit does not disappear in the stampede to build high-speed rail.