Posts Tagged ‘California.high.speed.rail’

What’s $62 Billion Among Friends?

Sunday, January 27th, 2013

I used to live in California’s central valley. It’s prime agricultural land, with citrus, almonds, pistachios, stone fruits, grapes, and practically anything else that you can eat. The cities there aren’t big (Fresno is the largest), and poverty and unemployment are rampant.

The central valley is also where California will begin construction of a high speed rail network. The idea is to build the first stage from Madera (population 61,416) to Bakersfield (population 347,483). It will pass through my old hometown of Visalia (population 124,442) and Fresno (population 509,039). To date, California has raised $6 billion of the current cost estimate of $68 billion.

Most rapid transit needs subsidies; clearly, a rail line from Madera to Bakersfield is going to be a money-loser. Meanwhile, California has been raising taxes, driving businesses out of the Bronze Golden State. The state has yet to purchase any property that will be needed for the route (though approval was granted earlier this month to begin that process). Given that the land is of good use for agriculture, expect court battles to develop over what a fair price is.

Meanwhile, where is the other $62 billion going to come from? Given the recent uproar in Congress with the fiscal cliff and the upcoming uproar over the debt ceiling, I doubt any proposals for high speed rail will make it through. There’s also the basic problem that you can fly from Los Angeles to San Francisco in an hour; high speed rail will take just as long (or longer)…so there is no speed advantage. At least it’s no longer my state tax dollars going for this project.

Contact
Archives
Business Blogs
Note: All Content is Copyright © 2014, 2013, 2012, 2011, 2010, 2009, 2008, 2007, 2006, and 2005 by Clayton Financial and Tax.
Subscribe