7061 East Pleasant Valley Road, Independence, Ohio 44131 • (216) 241-2630 / Fax: (216) 241-6516

News and Issues
User Info

California's high-speed rail dream may face defeat

(Bloomberg News circulated the following story by Adam Satariano on October 30.)

LOS ANGELES — A 12-year push to link San Francisco and Los Angeles with a high-speed train may fall victim to voters' economic concerns in the cash-strapped state and the deadliest U.S. passenger rail accident in 15 years.

When backers last year chose to ask voters to approve an initiative authorizing the state to borrow $10 billion to build a statewide system that reduces rail travel time from Los Angeles to San Francisco to 2 hours, 38 minutes, the promise to cut congestion and help the environment made it seem like a winner among voters.

Then a budget fight left the state without a spending plan for the first 11 weeks of the fiscal year, a record for lawmakers in the state capital of Sacramento. Turmoil in the credit markets compounded California's economic woes, with Governor Arnold Schwarzenegger saying this week that education spending may need to be cut by up to $4 billion.

``When the economy is not well, it's a little harder to talk about the project,'' said Mehdi Morshed, executive director of the California High-Speed Rail Authority, the state agency created in 1996 to plan the rail line. Private polling suggests ``diminishing support'' for the measure as the economy has worsened, he said.

The Nov. 4 vote has been years in the making. Plans to put the measure on the ballot in 2004 were scrapped by lawmakers over concerns it would impair state finances. In 2006, it was put aside because it would have competed with another public works measure.

Costliest Bond Measure

The $10 billion high-speed train project is the most expensive bond measure on any state ballot this year. Supported by Schwarzenegger, an advocate for reducing greenhouse-gas emissions, it would let people travel in less than three hours the 432 miles between San Francisco and Los Angeles for an estimated $55.

In addition, the rail would reach Sacramento, San Jose, Fresno, Burbank, Ontario and San Diego.

Joseph Vranich, former chief executive of the High Speed Rail Association, a Washington-based trade group promoting their use, has come out against the California proposal because he said the plan is poorly crafted and underestimates costs. He questioned whether voters have the appetite for taking on new debt.

``Even if I could come up with a new plan that's much better than this one, I still wouldn't want it on the ballot at this time,'' said Vranich, who has testified before Congress about high- speed rail.

Untimely Rail Accident

An accident hasn't helped. On Sept. 12, a Los Angeles collision between a passenger and freight train killed 25 people, the most fatalities in a U.S. passenger rail accident in 15 years.

Morshed said the high-speed train is designed to avoid those types of collisions because the rail line would be separated from other traffic and automated controls will be used to avoid human error.

If approved, the bond money would pay for half the estimated construction costs for the rail line, while additional cash from the federal government and private investors would cover the rest. Rail officials would be required to get private matching funds before the public bond money could be spent.

Morshed said pension funds such as the California Public Employees' Retirement System, the biggest public pension fund in the U.S., will be targeted as investors in the project.

The fund last year created a new inflation-linked asset class where it set aside 5 percent of its holdings for investments in infrastructure such as roads, bridges and power plants.

But strain in the financial markets now makes this ``not an ideal environment'' to ask voters to approve $10 billion in new debt, said Sean Randolph, president of the Bay Area Council's Economic Institute, a supporter of the project.

Democratic Support

The rail initiative, Proposition 1A, does enjoy the support of the state Democratic Party, who officials say account for 43.9 percent of the state's registered voters, supporters note.

And the economic concerns may be outweighed by the long-term potential for the project, Randolph said. Supporters say the project will create about 160,000 new construction-related jobs and 450,000 permanent jobs.

Because of reduced traffic, the rail would cut carbon-dioxide emissions in California by 12 billion pounds annually by 2020, supporters said.

``This is a project that will carry us for decades,'' Randolph said. ``Hopefully voters will see it that way.''

Friday, October 31, 2008

Like us on Facebook at

Sign up for BLET News Flash Alerts

© 1997-2022 Brotherhood of Locomotive Engineers and Trainmen


Decertification Helpline
(216) 694-0240

National Negotiations

ND Officers Election Rules

Sign up for BLET
News Flash Alerts


CSX reports higher revenue, earnings in Q4 2021
CSX announces Q4 2021 results
AAR reports rail traffic for week ending Jan. 15, 2022
What’s behind LA’s shocking rail heists? Supply chain crunch, limited security, idle trains
UP calls for strong deterrence vs. train robbers
California governor unveils effort to help fight plundering of LA rail cargo
UP CEO signals interest in autonomous intermodal cars
UP says staff crunch from COVID-19 may hurt Q1 2022 volumes
RRB Q&A: Annuitants may need to increase tax withholding at age 62
COVID-19 vaccine mandates and Unemployment and Sickness Benefits under the Railroad Unemployment Insurance Act (RUIA)
Get the latest labor news from the Teamsters

More Headlines