California'S High-Speed Rail
Mr. Speaker, our subject here tonight is about California's high-speed rail project, a project that was voted in in 2008 by the voters of California with approximately $9 billion worth of bonds to help fund what would be a project that…
Mr. Speaker, our subject here tonight is about California's high-speed rail project, a project that was voted in in 2008 by the voters of California with approximately $9 billion worth of bonds to help fund what would be a project that would seek outside private investment as well, a project that would link San Francisco to Los Angeles with possible additional spurs to Sacramento and San Diego. It has run into large funding problems and such. So the subject of our time tonight is that we see that there are huge problems with the funding and where will the funding come from.
I have my colleagues here from California, as well, who would like to speak on this subject. First of all, I would like to yield to my good friend and colleague from the north San Joaquin Valley, Congressman Jeff Denham, who has been a leader on this issue here in Congress as well as chairs the Subcommittee on Transportation and Infrastructure, which deals directly with rail and this issue. So, Congressman Denham, I would love to hear from you tonight.
Thank you, Congressman Denham.
Indeed, the more time that goes by on this issue, the more problems and flaws are exposed in this. This is a measure that passed in 2008, was put in front of the voters, known as ``Prop 1(a)'' at the time that passed by a 52-48 margin. I think the voters were sold something completely different than what we are actually seeing as Californians in the project.
Congressman Denham mentioned that the price has ballooned from approximately what people saw on the ballot, $33 billion for that initial San Francisco to L.A. segment; and just 1 year later, it was revised up after the voters had voted on it to $42 billion. And then we saw that the Sacramento segments, the San Diego segments were dropped off as even options.
Interestingly, we have all been in the State legislature--Congressman Denham and myself and another gentleman who will be speaking here in a moment--and we saw these numbers go past us at a time. And at a hearing that was held in the California State Senate in November of 2011, it was finally exposed that their numbers were way off, and they admitted that the project that voters expected would be right near $100 billion to do the San Francisco to Los Angeles segment if it was going to be truly a high-speed rail from port to port. And also during that time, in order to build up and say what an economic boom it would be, they were advertising that 1 million jobs would be created by this.
We pinned them down in that Senate hearing that it wasn't really 1 million jobs. It was a term called 1 million job years, which really translates out to perhaps 20,000 jobs of building the entire system. So we have seen a lot of very creative--I would say phony--numbers on costs, on benefits, and even some of the very highly optimistic ridership numbers as well.
So, Congressman Denham, what does that mean in your district here as far as what you really think the jobs would translate out to? And then what are some of the impacts on the property involved, as well?
Indeed, I attempted that in 2012 with legislation at the time called SB 95 in California to place that back in front of the voters, give people the option, now that they have more information, to say do they really want to go through with this with California's other issues. You mentioned, Mr. Denham, the challenges we have had with water supply. Even our Governor is saying that this is a huge priority and a huge problem for California to face in 2014, and yet we have a very difficult time allocating a few billion dollars to enhance our water storage in California and instead are faced with this.
What would that mean for jobs in the valley if we are able to turn the water, turn the tap back on to agriculture at a fraction of the price of high-speed rail?
I yield to my friend.
Indeed, when we look at the project in totality here, what ended up being $100 billion to be legal under Proposition 1A, to have a true high-speed rail--which is required--to go from San Francisco to L.A. at a high speed, 2 hours and 40 minutes, a $100 billion project was revised now down to a $68 billion project, which does not include high-speed all the way to San Francisco in the north. It would stop at the San Jose area, and then you are required to use local transportation, local light rail, what have you, to get all the way up to San Francisco. And at the southern end, you have, in L.A. County, it doesn't go to downtown Los Angeles under the new plan. It would stop somewhere in the north, remote north L.A. County portion. So it isn't truly high-speed rail anymore.
As you mentioned, too, Mr. Denham, on that, if they take the Palmdale route, they probably can't even sustain those speeds. So it is illegal on that count that it probably can't make a 2-hour-and-40-minute ride. And with that, you have three different segments. So if you have to buy three different tickets, I don't know how the customers are being suited by three different stops like that, as well.
We were told back in the day that the price of a ticket would somehow be tied to 85 percent of what an airline ticket was to go from north to south or south to north; and a real estimate, if this were self- sustaining, it would be somewhere maybe triple of that.
So the impacts of that, again, California agriculturally with water supply is struggling this year. So for a fraction of the amount of money it would take to bolster California's storage, we are going to spend perhaps what would have been $100 billion--in the revised number, $68 billion--to do an illegal Prop 1A version from south San Jose to north Los Angeles. That is a $55 billion gap on the entire project right there.
We can only point to $13 billion worth of funding, the 9.9 from the bond. Bonds have consequences. They have to be paid back by an already financially strapped State. As well, the 3.5 billion or so that is promised from the Federal Government under the 2009 stimulus has strings, too. It has an expiration period.
Please embellish on that a little bit, Mr. Denham, because we know there are some very important deadlines coming on that as well, if we can.
California just passed a recent tax known as Prop 30 last year, 2012, that was going to pay for a whole lot of things, go for a lot of different measures with perhaps schools and other infrastructure. We had talked about cap-and-trade. You can even point to truck fees, that they are all now trying to be shifted towards high- speed rail instead of other priorities. I wonder if that is what the voters' intentions were on Prop 30 or on their truck fees or weight fees, et cetera.
So I think there has been a lot of deception around this, again, on cost and on ridership. As I mentioned a minute ago, if it has been revised down to a $68 billion plan, we can only point to, for sure, approximately $13 billion from Fed stimulus and the State bond. Where does the other $55 billion go to build what is really an illegal plan? Where is it going to come from?
Mr. Denham, you mentioned we haven't seen the private-sector money from anywhere, yet you can point to, recently, a proposal came out for an east coast plan to build a maglev, magnetic levitation train, that would link east coast urban centers, and there are already interested investors from Japan on that with much more modern technology. You can say that rail isn't new technology because it is wheels still running on a steel rail. And in California, which is supposed to lead the way in technology and innovation, we are really not leading on this at all.
So what do you see as far as the problems with that bigger funding gap? And then, bringing that back, what is that going to do for our economy?
Indeed, when the stimulus money first started coming available, there were other States that applied for high-speed rail money, such as Florida, Ohio, and Wisconsin. I believe that after they looked at their numbers, ran the figures on projects that were eligible for that stimulus money, they turned that money back and went back into this pool. Of course, California said it wants it; but interestingly, it would have been a much smaller portion had California been sharing with those other States what Federal money would have come to the State. So the other ones said, We have looked at the numbers, and we are turning that money back in.
I think we ought to apply some of the same logic as the other States looked at when they had Federal money available, eligible funds, that they indeed turned back.
So I really appreciate your leadership on this, Congressman Denham, and we will be doing a lot more to make sure this is held accountable to the public here. I look forward to your hearing tomorrow on this matter.
We are also joined by a colleague from the lower San Joaquin Valley area of the State for whom this issue is very important, very key to his district as well, on the impact of the
rail route as well as the economy, as well as what it means for the taxpayers of the State and the entire country. Indeed, this has an effect on national taxpayers and the budget as well. So people in other 49 States are looking at what is going on here and saying, Why is our Federal money going into something that can't possibly work out?
And so I know we are all willing to help people in other States with sensible infrastructure projects. That is the way it works in this country with our interstate system that President Eisenhower had the vision for back in the day. And yes, there might have been naysayers there, but you could actually point to positive results in something that works long term and other infrastructure projects that were invested in, but this one here, the numbers just don't run.
So my colleague, David Valadao from the valley, has got very great concerns and has been very strong in leading in his area too, as well, on what are the impacts going to be, what are the costs.
I would like to yield to Congressman David Valadao.
One question: a commission, a board in California, recently moved to the three-person board to authorize the rail authority to start condemning property under eminent domain. Of course, there is going to be a lot of resistance. Kings County is a hot bed of resistance to this project. The eminent domain procedures are not easy or cheap to get through a court process. They are already moved to condemn two pieces of property, I believe, in Fresno County, and I believe there are at least 380 that may have to go through this process. How do your constituents feel about the forced taking of land and an alignment that doesn't make a lot of sense and some of the infrastructure that might be lost in these communities?
Indeed. Let me ask you, too: How easy is to relocate a rendering plant? A rendering plant, that is a facility that processes dead agricultural animals, which happens, and so they need to be taken to be processed, and one of those is right in your district, I understand.
Is the high-speed rail authority guaranteeing to help or see through as part of the environmental documents to help make sure this is replaced or other infrastructure is replaced? There are dairies in line. Again, in California, securing a permit for a new dairy has become nearly an impossibility, as my colleague in the dairy industry would probably report. So there are a lot of people weighing in on that. Relocating the dairy, these are facilities and lands that have been for generations of families that have been there. Is anything being taken into account on the authority helping with these processes as part of the impact they are having?
Indeed. We are both from long time farming families. I think when you are a farmer, or any business that is multi- generational, but especially on the land, you develop a bond. You develop a love of the land that you don't really put a price on. I think most farmers will farm until they can't farm any more, either due to age or regulations taking it away from them, or whatever. So how do you put a price on my family, raising the fifth generation, and you and your neighbors, you have multi-generations as well. How do you put a market price on your legacy? Someone is coming in from Sacramento or Washington saying we think it is worth that. It may be worth infinitely more to you and your family and the generations behind you. How do you quantify that?
Certainly. Eminent domain is something that governments should use very reluctantly, very rarely, and only when there is no other option available. My farm has been affected by that as well with the large towers, the power lines that move basically from hydroelectric projects in the northeast part of the State down to the San Francisco Bay area. It is something that affects our fields, but it is part of the greater good. Our tractors have to drive around those now and figure out how to still keep straight lines going through towers running at an angle, and you have ag aircraft that have to tangle with avoiding wires and flying over the towers at 200 feet and trying to drop seed or fertilizer, things like that. So we get some pretty strange streaks in our fields because of that infrastructure, but it is important. We want the folks in the Bay area to have that.
Eminent domain isn't always very fair. What I am seeing here is the promises, if there are any promises made by the high-speed rail authority, to truly keep people whole on this and give them options, and as you mentioned, the alignment changes frequently. We are not even sure if they have a full 520-mile alignment decided yet. They could have gone for a more low-impact route, perhaps putting it down the middle of Interstate 5 or adjacent to it, using parts of 99, perhaps.
Certainly you can make an argument that the first places you should look are the urban areas where you can have the potential ridership. Here on the east coast, you have a lot of ridership between Washington, D.C., on up all the way to Boston. I don't know about the financial viability of that, but at least you can make a case there. Here, as was reported just a couple of years ago, they wanted to start in the Valley because, as was quoted, they had the least amount of resistance to building the rail starting in the rural Valley as opposed to what it was going to take to run through the South Bay area, places like Palo Alto and others, that some people are feverishly opposed to what that would do and what that infrastructure tends to bring to high- value communities like that as well.
But, again, the promise lies in the Central Valley for us in what we do well already. My portion in northern Sacramento Valley, San Joaquin Valley, these are strong agricultural areas.
I am wondering--and maybe you can touch on this as well--we have had different ideas for water projects that for a fraction of the money we are talking about with the high-speed rail system, how far could we go to do one or two water storage projects and what would that mean for especially communities like you have down there that have seen a huge economic impact with the cutoff of water due to the delta smelt and those other problems? What would that mean in real jobs for the people that have the skills and education level that likely aren't going to be working on a high-speed rail project, but have a strong background in agriculture? What do you see that doing to help your area?
I think everybody in California in the midst of this drought probably find agreement with that. Our own Governor was underlying that in a speech the other day, and yet still so wedded to this high-speed rail project, which the funding for is highly questionable. Indeed, a judge handed down a decision the other day ordering California not to spend any of the State bond money because it wouldn't be legal to do so under the lack of a plan they have.
We both served in the State legislature. And is California's financial situation such that it can get out there on its own somehow with new funding? If the Federal money falls short or no private investment comes out, where will it come from?
What doesn't get talked about much are different impacts like the high-speed rail. In order to sustain a high-speed, you have got to build a very long elliptical form in order to make turns with a train going 220 miles per hour. It is kind of like the angled towers running at angled lines on my property that we farm. It doesn't fit in real well with a grid that is set up on straight lines and squares like that.
So when an elliptical-shaped rail comes through your community through agricultural zones, as well as high-speed rail having to cut off all the crossings, can you build enough overpasses to not stop the flow of traffic, whether that is cars or trucks or even a farmer on a tractor who now may have to drive his tractor instead of just across 6 miles down the road and back up to get around. I mean, there are a lot of impacts that are really not meeting the eye here when you line them out.
Well, indeed, it does appear that they are hell-bent on
spending that approximately $3.5 billion that has Federal deadlines on it in order to get the project started; and then at that point, well, we are invested in the project, we can't stop now, even though the judge ruled it is illegal to spend the State dollars because it is not fulfilling the plan. So, indeed, big impact on the Valley and on taxpayers.
Mr. Valadao, I really appreciate your time and your leadership on this here tonight. Let's keep putting the message out that there are better ways. Most anything might be better than investing in this at this point. So I thank you for your help here tonight.
So, indeed, the investors that were supposed to come in, private investment for what had been billed to voters as a $33 billion project, up to $45 billion if you built the San Diego and Sacramento link, they have not materialized. When you see that the price for a time went up to $98.5 billion--hence California's Senate bill 985--it scared everybody away from this.
You see, in a Baltimore to Washington proposal to do a maglev project here locally that has outside investors that want to come in on that, nobody is touching California's high-speed rail.
So in the absence of this outside investment, California has moved in many different ways to try and find other pots of money. The Governor plans on diverting truck weight fees that are collected from commercial truckers away from repairing California's aging roads.
Just try and drive in the right-hand lane of any freeway--I get to enjoy Interstate 5 a lot--and see what the condition of that road is. Some areas have been repaired. Caltrans had a pretty good year last year. Other areas it is still pretty rough. Interstate 80, near Sacramento, they are doing repairs now; but the potholes on that were pretty bad.
Yet we are seeing the effort by the State to shift funding away from repairing roads that everybody uses versus a project that maybe few can afford to actually use. My colleagues from the Valley here would probably tell you that there is not going to be a whole lot of people that jump on high-speed rail to ride from Bakersfield to Fresno because it doesn't make any sense for them.
The promise of a low-cost ticket being 85 percent initially of an airline ticket from L.A. to San Francisco or vice versa, how can that be met without having the tickets subsidized at these costs? $85 we were told, $90. It was revised later maybe $120 when we had a hearing about it. Try $300 if it is not going to be underwritten by the taxpayers for ridership on this.
How many people are going to spend $300 on that trip? Other than those that might do it for the novelty of the train ride from north to south or south to north. We saw pie-in-the-sky numbers on what the amount of ridership would be, numbers that at one time were greater than the entirety of Amtrak across the 48 continental States. They have had to revise them down to some other vague number.
So there is not a lot of trust in anything being put forward by the California High-Speed Rail Authority on costs, on ridership, on impact, promises made or not made to those that are impacted in the line of many different proposals of where the route is. Yet they are still trying to move forward and start condemning people's property, at who- knows-what price of reimbursement, in order to spend as quickly as they can this $3 billion-plus of Federal stimulus money put in place almost 5 years ago.
It is really looking more like a fraudulent enterprise from what the voters saw in 2008 to now. Indeed, polling out there shows that now that people have heard about this the last couple of years and what it really means and the other choices they have to make on schools, on water, on their actual highways, that they have a whole lot of different opinion on it. A lot of editorial pages around the State are saying at the very least if you are not going to stop it, you should put it back on the ballot.
I attempted that in 2012. The mood wasn't there in the State legislature to do that. My former colleague there that I served with, Assemblyman Jeff Gorell from the Santa Barbara area, he is putting forward legislation to put it back on the ballot and re-vote the rail. So I hope that catches fire and that the legislature will look at this project and decide maybe that would be worth a vote of the people of California to decide if this is still a priority at these prices.
So Assemblyman Gorell has got a pretty big task to put that in front of the legislature and achieve the votes. But interestingly--still talking State politics here--but in the State Senate, to put forward the first segment of funding in late 2012, it received the bare majority of votes to fund that. In our California State Senate, there are 40 Members. They have got a vote of 21-19. All the Republicans voted ``no'' and four of the Democrats, who up to that point had been pretty favorable on high-speed rail. It barely got out of the State Senate floor.
I think that is saying a lot, that the opinions have changed, certainly amongst the voters. Now we just have to put the State legislature in a figurative headlock and get them to think about it and do that.
So I hope Assemblyman Gorell is successful in this measure because it would be proper to put this back in front of the voters and ask them again: would you rather have this or water projects, highway projects, school projects, any number of things that could be done to help move California forward instead of this boondoggle that has no way of paying for itself or sustaining itself?
We see, again, with the court handing down a ruling, that the plan is diverted so far from what was initially voted on and approved by the voters that it is now illegal. Why should State government be doing things that are illegal? Because they are right now in such a hurry to get the money spent, the Federal money. If the Federal money was to stop, the State money also has to. They both have to have a match with each other; but if there is not the match happening, then there are giant legal problems.
Congressman Denham mentioned a while ago: What is the payback procedure if Federal money is misspent, improperly spent? Because California had the capacity to do that if it doesn't meet its timelines, it doesn't meet the goals, it doesn't meet the tenets laid out in proposition 1(a). It would be in a true high-speed rail system all the way from San Francisco to Los Angeles, which so far that plan is not. You have to ride three different train types to accomplish that under this current plan.
Now we know the folks in the Bay Area and parts of Los Angeles are interested in seeing some of their tracks electrified as beneficiaries of some of the money that will be coming from this. I get that, I understand that. That probably would be a benefit for them, some upgrades in their local infrastructure. I don't know why you could not support that separately from this. If it helps to get Caltrain in the Bay Area electrified, then that should be a separate question, a separate set of funding, because right now this is illegal.
The people in the Bay Area do not want to be part of an illegal project, likely, and maybe perhaps lose that funding they are depending on to electrify and upgrade their system. I don't think so. That is a lot of money when it gets around to doing that above what is going on in the valley, with the condemnation of the land, and building in an area where they said would have the least amount of resistance for the project, let alone the Bay Area and perhaps parts of north L.A. County.
So it is very problematic. It is really time, as I proposed back in my senate days, to slow down the project and really get some real numbers. That was my first bill in the State Senate, SB 22. It was a no spending, no doing anything, until we have fully vetted and thought out a plan.
Honestly, this reminds me of ObamaCare. I have been calling this around my neighbors ObamaCare, Jr., because it is so poorly thought out; and the plan for funding it looks largely the same, pie in the sky. Investors won't touch it. Federal Government, are they going to come in and bridge the gap of the other $55 billion that is missing, if we believe a $68 billion plan, or on up to the approximately 100, let alone the inflation things that might drive a real project all the way to $150 billion? All for what?
What could really be seen as an outdated technology and something that a lot of people can't afford to assess, nor even make sense for them to use in short segments within the valley. Yes, it may make sense possibly if you had a fast train that could go all the way from San Francisco to L.A. and complete that.
One of the things brought up is that in order for the project to be technically legal, they would only have to send one train per day in each direction at full, nonstop length. They would have other trains perhaps that are making all these stops, stopping at every little burg along the way. That is not high-speed rail. That is glorified Amtrak, glorified local commuters. That is not the intent of voters or anybody on this measure, or for that funding which is scarce money these days in California. The huge problems we have in trying to get a budget done and move eventually towards the balance in our Federal budget, it isn't a priority that we should be doing.
So, Mr. Speaker, I just want to note that again Congressman Denham will be having a hearing tomorrow in his Transportation and Infrastructure subcommittee on rail that will be at 10 a.m. in Washington time, developing more on this situation. So I would invite you to participate, or watch that, and expose what really needs to happen with Federal funding as well as maybe perhaps the people in California have an opportunity to weigh in on Assemblyman Gorell's proposal to have this back on the ballot and maybe perhaps shift our scarce funds to other things.
With that, Mr. Speaker, I thank you for the time here tonight, and I yield back the balance of my time.