Economic Downturn Affects California High Speed Rail Project
by Andrew Posner, Providence, Rhode Island 
on 01.12.09
Image: Calhighspeedrail.org
Another Negative Impact of the Economic Downturn
The global economic downturn has already contributed to a major deficit at the New York MTA, lowered the value of recycled materials, and of course hurt individuals and businesses around the world. Another victim, it seems, is now the California High Speed Rail Initiative, which Californians approved on November 4th. The ballot measure approved investing "nearly $10 billion in a statewide high-speed rail system," but unfortunately "the agency charged with getting it built is running out of money." Read on to find out why.
The agency, known as the California High Speed Rail Authority, had a budget for this fiscal year for $29 million, some of which was to come "from the sales of high-speed rail bonds authorized by voters in November. But because of the state budget crisis, the credit crisis and the poor market for bonds, the state treasurer has not sold any of the rail bonds." As a result, the Authority has had to "[halt]payments on engineering and design contracts in progress and are holding off on awarding new contracts."
Fortunately, the future of the project still looks good, as "the governor's early state budget proposal for the 2009-10 fiscal year includes $123.8 million for high-speed rail, just a half million dollars short of the agency's request." Nevertheless, keeping the high-speed rail line on track (no pun intended) will be difficult, as the Authority will most likely be forced to take a loan from California's Pooled Money Investment Board just to be able to pay existing bills.
Still, Californians seem very committed to having the proposed 800 mile high-speed rail line, which will run the length of the state, completed on time. It would be the first true high speed rail system in the US, and could serve as a model for green job creation from infrastructure projects, something the incoming administration is talking a lot about.
Via: SFGate.com
More on High Speed Rail
High Speed Rail from San Francisco to LA Will Make An Even Greener California
Spain's New High Speed Rail Service Challenges the Airlines
High-Speed Passenger Rail Comes to the Americas
5 High Speed Trains that are Changing the Face of Rail
Election Day a Boon For Mass-Transit
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It's good that there is broad public support for this and that it passed a ballot initiative. The trouble with these mega projects in places like Canada, where ballot initiatives don't exist, is that some governing party comes out with a big splashy announcement (sometimes announcing the same deal or funding three or four times over several years), then the funding is quietly cut back during hard economic times, or when governments go into deficit, or when the ruling party changes after an election.
The real solution is to properly price both energy and land - including the public land used by roads - to factor in all external costs. If we did that, air and car travel, with their high CO2 emissions and with cars' high land use, would cost far more than trains, and we'd have millions of people shuttling across the continent on moderate and high speed trains.