High-speed rail system could drive Valley's economic engine

The San Joaquin Valley may have more at stake than the rest of California when voters decide Nov. 4 whether to build a statewide high-speed rail system.

Major Valley cities from Modesto to Bakersfield were bypassed a generation ago when the state built its main north-south highway, Interstate 5. But the rail system would have stations in most of those cities.

Construction on the system also would begin in the Valley with a segment of about 160 miles from Merced to Bakersfield. It would be used for testing the 220 mph trains and getting them certified for their first use in the United States.

An Oct. 1 consultant’s report for the California High Speed Rail Authority predicted that the trains could help lift the Valley from its long economic malaise and produce billions of dollars worth of new business. A July poll suggested that voters are ready to endorse high-speed rail by a margin comfortably larger than the required majority.

But Proposition 1A provides only $9 billion for a system estimated to cost $33 billion for the first phase alone, which will run from San Francisco to Southern California. It also includes $950 million for local transit connections to the high-speed tracks.

The rest, the authority says, is expected to come from the federal government and private investors such as pension funds. None of that money is nailed down yet.

A small but vocal group of critics, led by the Howard Jarvis Taxpayers Association, is skeptical that the additional money ever will be found. The opponents also claim that the project is certain to suffer from cost overruns, is unlikely to carry as many riders as the authority projects, and may not even collect enough fares to cover its operating expenses.

Only one political committee has filed campaign finance reports to date on Prop. 1A, and it supports passage. On Monday, Californians for High Speed Trains reported having raised $549,234 — a small sum for a statewide campaign. Of that, $200,000 came from the California Alliance for Jobs, a coalition of heavy construction contractors and unions. Much of the rest was from engineering and high-tech companies.

Current plans call for the high-speed system — modeled after those already operating in Europe, Japan and China — to start carrying passengers a decade from now.

Its first line would run from Anaheim and Los Angeles to San Francisco via Palmdale, Bakersfield, Fresno, Merced and San Jose. That puts the Valley at the heart of the system. And unlike Interstate 5, the high-speed tracks would run directly through the region’s cities, instead of dozens of miles west of them.

Shawn Kantor, a UC Merced economist who was paid by the authority to assess the system’s likely effects on the Central Valley, describes a future in which goods and people can move easily and cheaply from here to the bigger cities.

“Transportation costs are very high in the Central Valley,” he said. “If you start breaking that barrier down, it will help us.” But opponents focus on construction costs, which they say are likely to rise, and on the authority’s plans for future phases to the rest of the state’s major cities, including Sacramento and San Diego, which they think are unrealistic.

“If the governor put me in charge of that agency tomorrow, I would say start over,” said Joseph Vranich, who co-authored a critique of the authority’s plan for the Jarvis association, the libertarian Reason Foundation and Citizens Against Government Waste.Also opposing Prop. 1A is the California Chamber of Commerce.

But many local chambers — including in San Francisco, Los Angeles and Fresno — support it. Environmental groups are generally in support or neutral.

An investment or a waste?

High-speed rail advocates base their support on the idea that California needs a third method of intercity transportation.

Building enough new freeway lanes and airport runways to accommodate the state’s travel needs in coming decades could cost $82 billion, the authority calculates. In contrast, it says, a high-speed rail system serving all of the state’s major cities would cost around half as much.

For that money, the state would get a fleet of sleek bullet-nosed electric trains that would run with steel wheels on steel rails at maximum speeds of 220 mph. Although speeds would be only half that over mountain grades and in congested big cities, the authority still says a nonstop trip from Union Station in Los Angeles to the Transbay Transit Center in San Francisco would take only two hours and 38 minutes. From Fresno to the San Francisco airport would be less than an hour. To Union Station, one hour and 24 minutes.

The Reason Foundation report argued that the authority is projecting higher ridership for California’s high-speed rail system than for similar systems in countries, like those in Europe, that are better suited for rail travel because of denser populations and more expensive gasoline and other driving-related costs.

Jarvis association President Jon Coupal says that spending billions on high-speed rail could also jeopardize the state’s ability to borrow money for other needed projects, such as new dams.

“The stark reality is that these projects are going to be competing for scarce bond dollars,” he said.

Although the bond measure does not raise taxes itself, the state Legislative Analyst’s Office estimates that California would spend $647 million annually for 30 years to pay off the resulting debt.

Opponents also question whether fares could possibly be as low as the authority predicts — Fresno to San Francisco for $32 one-way, or Fresno to Los Angeles for $38 at 2005 prices — and still cover the system’s operating costs, which the LAO estimated at more than $1 billion per year.

The authority and other rail supporters have taken the attitude that they don’t want to dignify the Reason report with a rebuttal.

“A total response by the campaign hasn’t been prepared because the effect of it usually is to confer prominence,” said the authority’s chairman, Quentin L. Kopp, a San Mateo County Superior Court judge and former state senator.

Still, many critical details of the system’s financing have not yet been worked out. The $9 billion from Prop. 1A may cover only a quarter of the cost. The authority predicts that the federal government will chip in at least that much more.

Looking down the track Valley congressman Jim Costa, D-Fresno, shepherded an earlier incarnation of the high-speed rail ballot measure when he was in the state Legislature. He said he believes there is strong support in Washington for infrastructure projects that could boost the sour national economy. And when such projects are selected, he said, “states that have funding in place will be at the front of the line, clearly.” For whatever additional money is needed, the authority is recruiting private investors, mainly pension funds sitting on large amounts of cash that won’t be needed to pay benefits until their members retire.

“They’re looking for someplace to park their money and have a good prospect of having a profit 10 or 15 years from now when they need it,” said Mehdi Morshed, the authority’s executive director.

With $33 billion needed for the first phase and only $9 billion provided by Prop. 1A, if approved, another $24 billion will be needed even with no inflation. At least another $10 billion would be needed for a second phase extending the system to Sacramento, to San Diego via Riverside and Escondido, to Oakland from San Jose, and possibly through the Altamont pass west of Tracy. The authority predicts that profits from first-phase operations would help build the later phases.

In any event, the very first part of the system to be built under the authority’s current plan would be the Merced-to-Bakersfield test track. Until the rest of the first phase is finished, the test track would be used mostly for putting trains through a three-year series of performance checks required to get federal approval for their use in this country.

The Merced-to-Bakersfield segment qualifies for testing use because of its length, flatness and relative lack of urbanization, which would permit trains to be tested at their top speeds. Morshed said there will be no high-speed passenger service on that segment until the entire first phase is ready.

But he said the tracks could be made available to Amtrak in the meantime.

Of course, neither the test track nor any other part of the system is likely to be built unless a majority of California voters say yes to Prop. 1A on Nov. 4.

If they don’t? Morshed said the authority has enough state funding to remain in business through the end of the current fiscal year next June 30.After that, high-speed rail may just be consigned to a list of big ideas that went nowhere fast.