Institutionalized graft in the Golden State

The Democrats in the California State Assembly really believe their constituents are fools, willing to ignore the institutionalized union graft that funds their re-election. How else to explain their party line vote to fund $8 billion for building high-speed rail, starting in the agriculturally rich Central Valley. Assemblyman Tim Donnelly, a Republican from San Bernardino called the vote, "a high speed train robbery."  The issue now goes to the State Senate for a close vote on Friday.

The Central Valley has an extremely low population density as compared to the metropolitan areas of Los Angeles and San Francisco, making it less than an ideal proving ground for testing the project's financial and engineering viability. Population density of the Central Valley is estimated at 155 persons per square mile. The population density of metro Los Angeles is estimated at 25,904 persons per square mile. Where would you choose to begin building a railroad, given these figures?

In testimony before Congress in January, Rick Geddes, the author of "The Road to Renewal: Private Investment in U.S. Transportation Infrastructure" said:

... that the Northeast [corridor] may be the only corridor in the United States that meets the necessary requirements to have self-sustaining high-speed rail, due to its population density, demonstrated demand, clear access to rights-of-way and strong local transit systems.

Scarce public dollars must be directed first to making much-needed improvements to high-speed rail in that corridor, that's likely to be where market returns are the highest."

Let's look at what the California's independent Legislative Analyst had to say about this boondoggle-in-a-box.

In April 2012, the HSRA [High-Speed Rail Authority] released its most recent business plan that estimates the cost of constructing the first phase of the high-speed train project at $68 billion. However, the HSRA only has secured about $9 billion in voter approved bond funds and $3.5 billion in federal funds. Thus, the availability of future funding to construct the system is highly uncertain.

We find that HSRA has not provided sufficient detail and justification to the Legislature regarding its plan to build a high-speed train system. Specifically, funding for the project remains highly speculative and important details have not been sorted out. We recommend the Legislature not approve the Governor's various budget proposals to provide additional funding for the project.

Why did the Democrats in the Assembly ignore this recommendation? Simply, because they receive hefty campaign contributions from the building trades and government employee unions that desperately want this project to move forward.

More from the Legislative Analyst:

Specifically, the funding approach outlined in the 2012 revised business plan is no more certain than what was proposed in previous plans. For example, the recent plan assumes nearly $42 billion, or 62 percent of the total expected cost, will be funded by the federal government. However, about $39 billion of this amount has not been secured from the federal government. Given the federal government's current financial situation and the current focus in Washington on reducing federal spending, it is uncertain if any further funding for the high-speed rail program will become available. In other words, it remains uncertain at this time whether or not the state will receive the necessary funds to complete the project. The absence of an identified funding source at the federal level makes the state's receipt of additional funding unlikely, particularly in the near term. In addition, it is unclear how much, if any, other non-state funds (such as local funds,and funds from operations and development, or private capital) have been secured. In total, only $11.5 billion (or about 17 percent) of the estimated funds needed to complete the project have been committed.

Why would any one start building a massive project with only 17% of the money in the bank? No contractor would start construction on an office building or residence without a guarantee of payment. The Democrats in the Assembly may think that the taxpayers are such suckers that we will silently accept the tax increases to help pay for this boondoggle.  They are actually quite wrong. Tens of thousand of productive taxpayers have voted with their feet and have left California for more tax-friendly states where their energy and innovation will be rewarded and not punished. Tens of thousands more will soon follow their example especially when they find out who has to eventually pay for this self-inflected financial quagmire.

Even the liberal LA Times adds to our disbelief on why high-speed rail continues to attract such passionate legislative support.

If California starts building a 130-mile segment of high-speed rail late this year as planned, it will enter into a risky race against a deadline set up under federal law.

The bullet train track through the Central Valley would cost $6 billion and have to be completed by September 2017, or else potentially lose some of its federal funding. It would mean spending as much as $3.5 million every calendar day, holidays and weekends included -- the fastest rate of transportation construction known in U.S. history, according to industry and academic experts.

What could go wrong? 

The burning desperation of the Democrats to fund high-speed rail starkly illustrates the institutionalized political corruption in Sacramento. The incestuous relationship between the unions and the Democrats has destroyed the future of California by saddling the taxpayers with over half a trillion dollars in unfunded union pension and retiree health benefit plans. Oh, California may still have great weather, Yosemite, Disneyland, and the coastal wineries. But the vast working middle class that paid their property taxes, renovated their homes, started and grew small manufacturing and high tech ventures, umpired Little League, and unselfishly gave back to the community is quietly evaporating. We are becoming a three-tier state with the ultra rich of Hollywood and Silicon Valley at the top of the pyramid. Next, we are seeing the emergence of a new lower pay, lower financial stratum (that still remembers better economic times) which now primarily serves and services the rich and their ever-changing appetites. Finally the Democrats have achieved their goal of a permanent underclass. This underclass consists of the urban uneducated added to the already teeming migrant and illegal immigrants communities. They have been conditioned to believe that they deserve a helping hand plus a generous handout for their reliable liberal votes.

The voters have only themselves to blame for opening their eyes so late, after the damage has been done.  California has elected and re-elected hyenas and vultures empowered to plunder a dysfunctional political system that is self perpetuating and rotten to its core.