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Calif. Legislative Analyst says no to high-speed rail

Yet another analysis concludes it is unwise for taxpayers to pay for California’s multi-billion dollar high-speed rail project. Actually, unwise is a gross understatement.

“Highly speculative,” are the precise words of the state’s independent Legislative Analyst’s Office to describe the risk level of the proposed electrified train to run from San Francisco to Anaheim. The assessment follows the High Speed Rail Authority’s fourth revised business plan in four years, reducing costs from $98.5 billion to $68 billion. Voters in 2008 approved $9.9 billion in tax-backed bonds for the project, then estimated at $33 billion. Committees in the state Senate and Assembly Wednesday opened hearings on Gov. Jerry Brown’s request to spend $2.6 billion with $3.3 billion in federal funds for an initial 130-mile segment in the Central Valley.

Saying that voters no longer have confidence in the project, State Sen. Doug La Malfa, R- Willows urged lawmakers to approve his proposal to put a $68 billion high-speed rail plan back before California voters, during a hearing of the Senate Transportation and Housing committee at the Capitol in Sacramento,Calif. Tuesday, April 17, 2012. After more than an hour of testimony La Malfa was granted his request to postpone the committee’s vote on the bill. He did not say when he would seek a vote.

The LAO concluded the rail authority “has not provided sufficient detail and justification to the Legislature...” Spending a dime of public money without “sufficient detail and justification” is inexcusable, let alone $2.6 billion.

Even its scaled-down $68 billion price tag means the agency remains more than $55 billion short, and continues to rely on federal funds to pick up much of the slack, despite Congress’s hostility to the project. The LAO questioned using cap-and-trade revenue from auctions of credits to industrial greenhouse gas emitters “to backstop any shortfall in anticipated funding from the federal government.” That raises “serious legal concerns,” said the LAO because auction money is supposed to be used to reduce greenhouse gas emissions. The train’s latest revised plan with segments not traveling at high speed actually would increase emissions for many years.

We hope potential annual bond interest payments siphoning off as much as $700 million from the state’s general fund will give legislators pause. Meanwhile, we hope efforts to put the project back on the ballot are successful so voters can un-authorized bonds they foolishly approved by a narrow margin in 2008.

The Orange County Register

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