Even if Congress were to move ahead with President Joe Biden’s $2.3 trillion American Jobs Plan as-is, the California high-speed rail project stands to receive little additional federal support. And absent the large federal bailout state leaders have been hoping for, the rail project still lacks the funding needed to build and run bullet trains from San Francisco to Los Angeles and Anaheim. It’s time for the state to produce the money or downsize its high-speed rail project.
President Biden’s $2.3 trillion plan is a massive amount of spending, but it is modestly sized relative to even more enormously costly infrastructure proposals from other Democrats. Part of the huge price tag comes from the inclusion of many elements not normally regarded as infrastructure, such as home care. Only $621 billion of Biden’s plan is earmarked for transportation, with most of that portion devoted to roads, bridges, electric cars, trucks, and buses.
The entire intercity rail component of Biden’s package totals $80 billion. If that amount was fully devoted to California, and if the state managed to stick to its latest budget for the rail system, it would be enough to finish the San Francisco to Anaheim phase of the project. But the White House fact sheet includes numerous other rail priorities.
For example, Amtrak’s Northeast Corridor, connecting Boston, New York, and Washington, DC, requires numerous repairs and upgrades to ensure reliability and reduce travel times. The biggest issue involves repairing a century-old Hudson River tunnel and increasing the number of trains that can traverse this crossing. This requirement is part of Amtrak’s Gateway Program, which is estimated to cost up to $29 billion alone.
Amtrak also has ambitious plans for new services, including connections between Los Angeles and Phoenix. Getting rapidly-growing cities like Phoenix and Nashville onto Amtrak’s national intercity rail grid may seem more compelling to federal appropriators than California’s high-speed rail line, much of which parallels existing Amtrak service in the Central Valley.
Amtrak’s proposed 2035 route map also includes a Texas high-speed rail project connecting Dallas and Houston. Although this project faces substantial local opposition and suffers from a paucity of transit connections at either end, it is a less costly choice for proponents who are just hoping to successfully build any high-speed rail line in the United States. Given the shorter distance between endpoints and the lack of mountain ranges along the route, Houston-to-Dallas is easier and cheaper to build than Southern California to the Bay Area.
With a laundry list of competing rail projects, it may be tough for California to get more than a few billion dollars for its costly high-speed rail plan. But state leaders are hoping members of the House will earmark more funds for it by pushing Massachusetts Rep. Seth Moulton’s $205 billion national high-speed rail bill or Fresno Rep. Jim Costa’s $32 billion measure focused on the California project.
But, as massive as the Biden plan’s price tag is, increasing it further may be complicated. Biden has positioned the plan as being fully paid for by a corporate tax hike. And the money available from a corporate tax increase may drop, with Sen. Joe Manchin, D-West Virginia, being among those saying he’ll only raise the corporate tax to 25% rather than Biden’s recommended 28%.
Facing a budgetary hangover from the $5 trillion in stimulus and relief spending of the past year, along with rising interest rates, and the additional annual spending bills waiting in the wings, one can hold out some sliver of hope that centrist Democrats and some Republicans may try to at least pretend to care about the national debt and federal deficits once again.Given all this, the best option for California may be to finish the initial segment, connect that to the Amtrak San Joaquins’ line and rely on an upgraded Altamont Corridor Express to provide a connection between the Central Valley and Silicon Valley.
California high-speed rail advocates need to face the reality that their vision lacks the necessary funding to pay for its ever-rising costs. It is time for the California High-Speed Rail Authority, state legislature, and the governor to find an exit ramp for this project.
Marc Joffe is a senior policy analyst at Reason Foundation.
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California should be looking for an exit strategy on high-speed rail project - LA Daily News
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