Controversy over the construction of high speed rail in California provides a glaring example of the rigidity inherent in using infrastructure projects as economic stimulus. A state study suggests that the Central Valley is not the most efficient location to begin the project’s construction, and that construction should begin in a population center such as Los Angeles or San Francisco. However, US Department of Transportation officials said funding would be revoked with a major change to existing plans because construction must begin by 2012. The LA Times reports:
Until those issues could be addressed, analysts called on the rail authority to push back its federally required construction deadline and consider relocating the initial segment to a major urban area where there was more potential for trains to run sooner.
Analysts further recommended that the Legislature not spend any more money on the project if the federal government did not allow the changes in the route and construction schedule.
Because the federal funding for the project comes from the American Recovery and Reinvestment Act, the project must be comply with the federal timeframe. However, for the long-run benefit of California residents, the flexibility to adjust plans as the market is reassessed makes more sense than adhering to the stimulus schedule.
Furthermore, many politicians and academics have questioned whether or not the train will be a long-run drain for California taxpayers. The federal funding is contingent upon $9 billion in state bonds to fund construction of the rail line, but will allegedly be operated at a profit by a private company once construction is complete. In fact, Proposition 1A that voters passed to fund the project forbids subsidies to the train operator. The rarity of profitable high-speed rail systems and the US track record of rail subsidies call into question the feasibility of operating profitably. Will the rails that cost billions to construct sit empty, or will voters pass a new proposition for funding?
Alan Enthoven of Stanford University co-authored a study suggesting that the existing analysis from the California High-Speed Rail Authority likely underestimates the cost of running the line and overestimates the number of riders who will use it. If Enthoven’s estimates are more accurate than those of the HSRA, the high speed rail project could end up being not only a train to nowhere, but one that requires a steady stream of taxpayer subsidies.