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California High-Speed Rail Op-Ed in the Orange County Register

Dec 14, 2012

Dear Friend,

Oftentimes, reality can mimic moments on the big screen. In one of my favorite movies "Field of Dreams," Iowa farmer Ray Kinsella is working in his fields one day when he hears a voice telling him, "If you build it, he will come." Ray immediately has a vision of a baseball field smack-dab in the middle of his cornfield. He doesn't quite understand what he saw, but is compelled to build a baseball diamond in the middle of his field, even at the risk of putting his farm in jeopardy of bankruptcy and his home in danger of foreclosure. All he knew was that he had been promised by a voice that "If you built it, he will come."

With respect to high-speed rail, I fear that Californians are now collectively playing the role of Kinsella, and Sacramento is the voice in the night telling us that "If we build it, they will come." But just because our state is home to Hollywood doesn't mean high-speed rail will get a Hollywood ending.

Over the past few years, primitive business plans have morphed into exaggerated business plans, and publicized funding estimates have ballooned by billions of dollars – in some cases by tens of billions of dollars. This is why, during my testimony before the House Committee on Transportation and Infrastructure regarding California high-speed rail, I expressed serious concerns about the California high-speed rail project's viability, cost and when, if ever, it will be completed, as well as the lack of private capital available or committed to the project. I also remain gravely concerned about the distinct possibility that taxpayers will be on the hook to subsidize operating costs when rosy ridership projections do not pan out.

To date, the California project has been the largest recipient of federal high-speed rail monies, monies that have been earmarked for an initial segment. The rest of the project (over 80 percent of the remaining estimated cost) remains unfunded, with no path toward committed and sustainable funds for the project. In its almost Pollyanna business plan, the California High Speed Rail Authority insists the funds are there: It relies on tens of billions of dollars in federal funding when Congress has already voted to stop new federal monies due to increased cost-cutting in this time of record-high deficits and debt. It also relies on non-existent private capital, which is how the project was sold to Californians back in 2008. The current lack of any private commitments should be a major red flag, not only to the Obama administration but to Sacramento, that there remains heavy concerns on the long-term viability of this project, both in construction costs and ongoing operating costs if the rail is ever constructed.

That leaves California taxpayers as the last best hope to fund this project. Not only does Sacramento run a structural deficit, our state controller recently announced that state revenue from taxpayers was below estimates for the month of November. Not by a few thousand dollars or even a million; by almost a full billion dollars!

After recently passing Proposition 30 making our state's top tax rates one of the highest in the nation, at what point does it make sense for Sacramento to take a look at both sides of the government ledger and reconsider the massive spending obligations Californians can no longer afford. If we move forward with this project, we will consign future Californians with more bonds to be paid back, at the expense of future opportunities to create jobs in our state and keep our state competitive.

With practically little prospect of additional federal funds and the California project relying on a tenfold increase in them, I believe it's time to cut our losses, scrap this project and put that money toward debt reduction. Californians are not Kevin Costner in "Field of Dreams," and throwing billions of taxpayer dollars from hardworking Californians at a project the Legislative Analyst's Office and a California High-Speed Rail Peer Review Group have expressed similar concerns about it is simply not a prudent investment of taxpayer dollars. If we build it, I fear that not only will a sustainable number of riders not come; but millions of future Californians will wonder how today's leaders could so badly mortgage our state's future.


Congressman Kevin McCarthy