Senate Holds Fiery HSR Hearing

Senate Holds Fiery HSR

04/18/12 Filed in:

On April 18, Budget
Subcommittee #3 conducted a hearing on High-Speed
Rail. Chairman Joe Simitian asked many pointed
questions as to the viability of the proposed 130
mile Central Valley project. Compelling testimony
from the Legislative Analysts’ Office cast strong
doubts on assertions in the HSRA Business Plan that
the Authority would be able to access cap and trade
revenues as a backstop for 20+ billion in missing
funding for its Initial Operating Section (IOS).
Without a fully-funded IOS, opponents of the Central
Valley project assert that the Authority cannot
legally access Proposition 1A Bond funds. TRANSDEF
provided the following testimony:

Chairman and members,

We think the proposed project is the wrong plan in
the wrong place. I’m David Schonbrunn, President of
TRANSDEF. I want to thank you Mr. Chairman for asking
exactly the right questions and for your exceedingly
measured concluding comments.

I’m here to say that the Business Plan is not a
business plan–first, there is no business, and
second, there is no plan for the money needed to
build a system. As you have discerned, there’s
nothing else in the business plan that is real. What
it is is a sales job to induce you to release bond
funds to match ARRA funds. I’m glad to see you are a
tough customer.

We think the Authority got distracted by the
availability of ARRA funding, and totally lost sight
of the realities of building a statewide system. In
particular, the availability of public funds has
allowed them to avoid having to attract private
sector partners.

We believe that, had ARRA funds not come along, the
Authority would not be before you seeking funds for
this project. Instead, they would have been forced to
find a private sector partner at the project’s
beginning, which would have resulted in a project in
the I-5 corridor, at much lower cost and with no
public opposition. Even at this late date, this could
conceivably still be built with ARRA funds and a
little federal flexibility–if the Authority turned
on a dime from its current direction. Environmental
work could be very quick.

Additional funds could be used to upgrade the San
Joaquin service, and connect it via HSR to the Bay
Area and LA Basin. Using compatible equipment would
allow a one seat ride systemwide. The advantage of
such an approach would be the avoidance of massive
disruption to Central Valley cities and farms, and a
much faster LA-SF trip.

We urge the Committee to turn down the Governor’s
budget request, and create a state structure that
will get a public-private partnership going. We are
convinced that a political body like the Authority is
inherently incapable of creating a cost-effective
revenue-generating system.

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