California funds high-speed rail

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phfresno's picture
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California funds high-speed rail

A big day for a sustainable transportation system that has been controversial for the last four years since California voters passed a $10 billion bond in 2008 to start construction. I've been an advocate since the passage of the proposition. I see HSR as a great oppurtunity to build a sustainable rail network that can be powered by renewable energy and lead to a more resilient and prosperous California. Here is the article

High-Speed Rail Squeaks Through State Senate

by David Siders

By a bare majority, the state Senate voted Friday to approve initial construction on California's $68 billion high-speed rail project, ending months of intense lobbying and uncertainty in the Legislature.

The approval was a major legislative victory for Gov. Jerry Brown, who lobbied lawmakers before the vote and celebrated with Democratic legislative leaders off the Senate floor immediately after.

The outcome was uncertain as recently as hours before the vote. With all 15 Republican senators opposing the measure and several Democratic lawmakers wavering, the California High-Speed Rail Authority and Senate President Pro Tem Darrell Steinberg scrambled to muster at least 21 of 25 Democratic votes.

Twenty-one Democratic senators voted "yes."

"This is one of the hardest votes that I've ever worked on," Steinberg said. "I think what we did today is going to be seen over many years, and many decades, as a turning point in California, a time when we decided to say 'yes' to hope, 'yes' to progress, 'yes' to the future."

Steinberg, D-Sacramento, said the Democratic governor "talked to a couple members" ahead of the vote, while Sen. Mark Leno, D-San Francisco, reminded colleagues that the project not only had Brown's attention, but also that of President Barack Obama and House Democratic leader Nancy Pelosi.

Steinberg said he knew just before the floor vote that four Democratic senators would oppose the bill.

"There was no room to spare," he said. "Had to get everybody else."

The bill, approved the previous day by the state Assembly, authorizes $5.8 billion to start construction in the Central Valley, including $2.6 billion in rail bond funds and $3.2 billion from the federal government.

Lawmakers tied that money to nearly $2 billion in funding to improve regional rail systems and connect them to high-speed rail. That regional focus was considered necessary to lobby hesitant senators about the project's potential significance to their districts.

"Members, this is a big vote," Steinberg said as he opened floor debate on the bill. "In the era ofterm limits, how many chances do we have to vote for something this important and long-lasting?"

Democratic senators said the project would create thousands of jobs and make necessary improvements to the state's transportation infrastructure. Republicans said it is too expensive and relies on uncertain future funding.

They criticized starting construction in the sparsely populated Central Valley.

Among Republicans in opposition was Sen. Tony Strickland of Moorpark, who criticized a willingness by the Legislature to reduce spending elsewhere while finding money for high-speed rail.

"I think this is a colossal fiscal train wreck for California," he said.

Sen. Joe Simitian, of Palo Alto, was one of the four Democrats to break ranks with his colleagues. Simitian said he supports the vision of high-speed rail, but not the current plan. He said there are "billions of reasons" to oppose it.

"We're not being asked to vote on a vision today," Simitian. "We're being asked to vote on a plan."

The other Democratic senators opposing the measure were Mark DeSaulnier of Concord, Alan Lowenthal of Long Beach, and Fran Pavley of Agoura Hills.

Brown was governor three decades ago, when the state first contemplated high-speed rail, and has championed it again in his third term. His support came despite the fact that public opinion of the project has soured since voters approved it in 2008.

"In 2008, California voters decided to create jobs and modernize our state's rail transportation system with a major investment in high-speed rail and key local projects in Northern and Southern California," Brown said in a prepared statement. "The Legislature took bold action today that gets Californians back to work and puts California out in front once again."

Sen. Doug LaMalfa, R-Richvale, called unsuccessfully for the Legislature to put the project to another public vote. Following the floor session, he walked over to Steinberg and said, "Congrats, sir."

The vote could become problematic for Brown politically. Opponents of Brown's November ballot initiative to raise taxes already are planning to use the project as an example of spending they say is wasteful. A recent Field Poll suggests the message may resonate, and some Democrats said they feared its effect.

The rail authority had planned to start construction in the Central Valley by fall in order to meet a 2017 deadline for spending federal stimulus money. It is now likely to start building late this year or in early 2013.

The project still faces significant challenges, including ongoing litigation and fervent opposition from farmers in the Central Valley.

Last month, Brown proposed legislation designed to insulate the project from environmental lawsuits. Environmentalists protested, and Brown put the measure off. He suggested that the proposal to limit circumstances in which a court could block construction of the project could move forward later.

Dan Richard, chairman of the rail authority board, said Thursday that legislative leaders made it clear they didn't like the idea of relaxing environmental review.

"Look, this is 21st century California, and we're trying to build something big," Richard said. "There's obviously going to be litigation, there'll be challenges. That's the nature of the society that we live in, and we'll deal with those as they come up."

dshields's picture
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The State Is Broke

California is broke. They will have to borrow or be given (which means someone else will have to borrow it) all the money to build this. At one point they were looking at building one of these in NJ but it was canceled. Turns out that in order to make it self sustaining we would have had to charge so much for tickets that only rich people would have been able to use it. Since we dd not have the money to build it and it would have required government subsidies forever to keep it running - it was canceled. Hopefully you have a better experience.

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Ken C
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Spending more money

Yes we are spending more money THAT WE DONT HAVE.

Calif. is far past broke already so where will the money come from? Higher taxes- good luck with that.

I cease to be amazed that Calif. can continue these kinds of projects in spite of the reality of having overspent for decades. Reality cannot be overcome by politics.

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Ignoring the fact that we are broke.

I could almost see this as a stimulous project with decent multipliers for employment, if we were going to build the trains and the rails in America. I imagine we will just buy the parts from China, so most of the money will stimulate the Chinese economy.  I also note that you hail from Fresno. Pork projects are ok as long as they benifit my area.

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I don't see how you could be a member of Peak Prosperity since November of 2011 and not realize that this rail system is economic insanity. California doesn't have the money to build this thing and neither does the federal government so where does the money come from? China. Who benefits from the building of the rail line by manufacturing the components? China again. It's no wonder this country and several states are bankrupt.

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If we don't start building

If we don't start building electrified rail in this country it won't really matter how much debt we have because we won't be moving anywhere. I think Peak Prosperity is great, but it isn't all just people that want to see the governement just sit by and do nothing. We need the governement to invest in rail right now. It's vital for our transportation system. We should have started in the 70's after the first oil shocks, be glad we are starting now. Yeah, we could settle for a system that doesn't go high-speed, isn't electrified, and will be subsidies forever. HSR is proven around the world and will be particularly useful in a liquid fuels crisis. Sorry to say this, but those who think the governement shouldn't be using the remaining fossil fuel we have left to built that post-fossil fuel economy aren't seeing the real challenges we have. Money is a human construct; oil, coal, gas, are not. So we better prepare for those things not being around and build something that can run without them. Today we have no such system, but high-speed rail is infrastucture that will last. 

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Well said jonesb.mta

"I don't see how you could be a member of Peak Prosperity since November of 2011 and not realize that this rail system is economic insanity. California doesn't have the money to build this thing and neither does the federal government so where does the money come from? China. Who benefits from the building of the rail line by manufacturing the components? China again. It's no wonder this country and several states are bankrupt."

I agree. Keep in mind we are the Federal Govt. and why should citizens of other states subsidize California's insanity? The money would likely come from Social Security btw the SS Fund is the largest holder of US Debt. no wonder the Fed. wants to bankrupt it ...

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So you think electrfied rail

So you think electrfied rail is a bad idea? Just more roads and runways? Or should we just not do anything?  Let our transportation system crumble while we fund enormous entitlement programs for baby boomers. I'm not for that at all. If we are to cut, we cut the big four: Military, Social Security, Medicare, Medicaid. We don't stop investing in infrastructure. 

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Electrified Rail

I agree that we should have been investing in electrified rail, just not a bankrupt state borrowing money to build it. If you were bankrupt but just hadn't filed yet, would it make sense for you to borrow money to buy a hybrid vehicle? Actually I don't think anybody would lend us money if we were in the same financial condition as California but I have no doubt China will be glad to own $50,000,000,000 more of California. More than likely you're selling your state down the river for something that is probably overhyped and won't pay for itself.

dshields wrote:

At one point they were looking at building one of these in NJ but it was canceled. Turns out that in order to make it self sustaining we would have had to charge so much for tickets that only rich people would have been able to use it. Since we dd not have the money to build it and it would have required government subsidies forever to keep it running - it was canceled.

I wasn't a great fan of Jimmy Carter but he did try to get this country to invest in things like electrified rail and no one would listen to him.

UselessEater's picture
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Yes I think it's a bad idea

Our Interstate Highway's are already funded through our gas taxes and America is whether you like it or not built accordingly.  If you find a way to fund your electrified rail on your own that's one thing but if you think people in Wisconsin for example should fund your electrified rail in Ca. that's quite another. As for Social Security it's only an "entitlement program" if you are using that term as in people are ENTITLED to get back the money they were forced to put in. Social Security is a SELF FUNDED program is not going broke contrary to what people claim and it is completely seperate from Medicare and Medicaid so let's not confuse the issue.

Honestly I believe Social Security was unconstitutional to begin with but that train has already left the station.  To do anything but pay back the money that was TAKEN would be outright theft. It is a debt just like any other in fact it is one owed to our OWN citizens and if you don't like the borrowing you shouldn't be proposing more for electrified rail because where do you think that money will come from?  As I told you Social Security holds more debt then China!

I have no problems cutting programs let's start with real Welfare programs that redistribute wealth from one to another. Foreign Aid tops my list. Since you don't mind cutting Medicare and Medicaid let's cut food stamps too! Hell yea let's cut the Military by bringing home our troops, closing foreign bases and letting the other countries take care of themselves. We shouldn't be the World's policemen and we should keep our nose out of other people's conflicts (most recent Libya comes to mind) and what the hell are we still doing in Afghanistan!

BTW I have news for you just because someone retires doesn't mean they stop paying taxes. As I see it you don't mind cutting programs for the elderly across America kind of amusing to me the whining about Medicare for baby boomer's but yet you think those same people even the one's who don't live in CA. should fund your electrified rail when they were the very people who funded the infrastructure to begin with. Just wanted to point that out I have no problems cutting Medicare. As for Medicaid different program that's for the poor sure let's cut it and stop obamacare too while we're at it that just redistributes our money to big pharma and the health insurance industry. 

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If you understand peak oil

If you understand peak oil and the energy predicament we are about to enter into, we should be funding electricfied rail significantly more than we do now. It'll mean we need to raise the gas tax and put a price on carbon (oh noes! new taxes!). But there is no political will to do that, even though CO2 emissions are CLEARLY accelerating the pace of climate change. Sorry, but I'm acctually not against raising taxes on certain things that need to be raised. I think it's intellectually weak to think that taxes only need to be cut and never raised. If that's what we do then we will see the collapse of the entire system in our lifetimes. The math on that is clear. Peak Oil and resource depletion also has huge implications about our future military spending because most Americans will likely demand the politicians of the future to fight far-flung wars to get ahold of as much natural resources as we can, instead of building more resilient systems back home that don't use as much resources. Another predicament. It's all how you look at the world I suppose. I think high-speed rail gives my generation hope that we can built and NOT destroy to thrive this century. Others don't see it that way.

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'bout that hope thing...

Hey ph, I certainly can understand that younger generations need and want to experience a hopeful future.  But I agree with the previous respondants for the most part.  It's a gov't project- 8 billion today will be 24 billion by the time it is fully operational (2029!? yeah sure....).  $5.8 (let's call it 10) billion for 130 miles of track?  My old-school calculator wont do those #s but my semi-functioning noggin says about $43 million per MILE?  High speed rail is not new tech- it's been around for decades.  Why so much?  Who owns the proposed land?  Follow the money.  I can't believe the future for Ca. or any of us will be rosy and prosperous in the way that will benefit from a HS rail system.  Who are these folks that need to go from, let's say Fresno, to, say, LA or SF in such a big hurry?  And if this travel is necessary, what are they doing living in Fresno?  Will this system carry freight?  Can't they just put the tracks down the middle of I-5?   I enjoy riding BART when in the Bay Area, is it self-funding or subsidized, after 40 years?  Wanting to create a sustainable and prosperous future is what we're all about here, but I believe this project is not really thinking outside the box.  Can half the Senate really be that wrong ( of COURSE they can, but....)?  Gotta be a better way.  Jerry Brown must be gettin' senile...Aloha, Steve. 

I'm gonna read Frank Norris's "The Octopus" one of these days....

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My Multiple Cents On The Senselessness Of It All

As a resident of California, I think I have some points I would like to make:

If You Build It, They Will Come?
We don't already fully utilize the transportation options (rail, bus, and plane) that we already have. So why build and subsidize something like this? Amtrak currently takes some 9 to 11 hours from San Francisco to Los Angeles, and costs anywhere from $60 to $110, using a combination of train and bus. Shuttle bus service from San Francisco to Los Angeles costs around $45 and takes about 6.5 to 7.5 hours. I might see a real need if these buses and trains were packed and more route were being added all the time by Amtrak, airlines, and shuttle bus companies - but they're not.

And sorry, Fresno and Bakersfield are not tourist destinations. Been there. An OC/LA to Las Vegas line makes far more sense. People already take many hours on that route and the road is PACKED. It's shorter, passes through deserts and less private property, and you can bet a lot of Las Vegas special interests would help pay for this to boost their casinos, resorts, and even real estate prices (imagine if you had a Las Vegas condo that you could go by rail to in 2 hours).

Speed/Time Comparison
A Southwest flight from San Francisco to Los Angeles or Orange County (John Wayne Int'l) takes about an hour to an hour-and-a-half and costs about $100. Let's say you're at the airport an hour early for check-in and the TSA security lines, but by the time you arrive you can wait 30 minutes for baggage claim. So maybe 2.5 hours maximum time.

Well, a "bullet train" service would take at least 3 hours for actual travel time between SF and LA - assuming no stops in Fresno or Bakersfield or whatever. More time if there are such stops. Let's say, 4 hours.

And it would only take a few terrorist incidents or scares (maybe someone driving a heavy truck onto a rail, because, y'know, there are hundreds of miles of vulnerable points) to force a slow-down in speed or someone pulling a gun or a knife on board a train (as has happened on Los Angeles buses), for the TSA to start installing security scanners, initiating humiliating security theatre, and charging a security fee and graffiti-and-vandalism cleanup fee (because we're not like Japan) - to increase the total cost and time to, let's say, 5.5 hours. And then what? Might as well take a bus or a plane...

Cost Considerations
No, it never costs what they say it costs. For one, there will be costly lawsuits from individual property owners, and even exercising eminent domain will be difficult because those fighting will demand environmental impact studies, consultants will have to be hired, law firms engaged, etc. Appeals will be filed.

This will significantly delay construction and stretch out spending. California is currently at an "A-" credit rating, and may fall further. That would increase interest costs.

But let's say we wanted this project to be able to "pay for itself" after it was all completed. Let's say it would pay for itself once partial service started running in 2022. Even if the costs are miraculously kept somehow to $69 billion, the total payback over 30 years considering the time value of money (let's say it's around 4.4%, since that is how much 30-year California general obligation bonds are currently paying, (who knows if it will be worse by 2022 due to our continuing budget problems?) would be in the neighborhood of $124 billion.

Logistical Nightmare
To justify that kind of return on investment (at 4.4% over 30 years), the high speed rail system would need to generate profits above expenses of over $4.1 billion per year from 2022 to 2052. Assuming a generous net profit of $10 per passenger (baked into the ticket price, over and above operating and loan repayment expenses), there would need to the equivalent of 413 million passenger trips annually. Generate more profit, you can get fewer passenger trips, the ticket prices have to increase. And we already know they can't really go above $50 to $60 to be worth it compared to a shuttle bus.

That is just impossible. Even if California's population were to grow to an average of 60 million during that 2022 to 2052 time frame, each resident in California would need to take an average of over 7 trips annually. Since no one would need that many trips, if even half of California made that trip, that would be 14 trips annually. Let's say (again, generously) that tickets were as low as $30 ($10 profit, and cheap operating costs despite unionization and generous pension benefits of the work force - or privatization and generous million-dollar compensation of the executive staff in their big corporate headquarters). Can half of California's 60 million residents afford to spend $210/year on trips between San Francisco and Los Angeles? (Nevermind that the world current busiest high speed rail system, the Shinkansen in Japan carried only 151 million passenger trips in 2008. Or that the California High-Speed Train Project estimates between 88 – 117 million passengers annually by 2030 for the entire 800-mile high-speed train network connecting Sacramento, the San Francisco Bay Area, Central Valley, Los Angeles, Orange County, the Inland Empire, and San Diego. Sounds to me like there are a lot of stops there...) And if we don't have 413 million passenger trips, then net profit to consider the investment to be worth it will have to be much, much higher.

Unkempt, Grimy Travel
If it does pan out, it'll be an alternative form of travel. It wouldn't really be that nice, though. The gangsters and taggers will ruin it and make it look grungy. The cheaper the transportation it will be, the more disgusting the accomodations will be, because of the class of people traveling, and because of the lack of funds to keep up with cleaning and maintenance.

One Pyrrhic Victory
There is ONE thing Californians might ironically find good about it. The Federal government would be expected to kick in $41.9 billion - maybe more, if the funding requirements go over budget. As they always do. California's powerful Congressional delegation can do it. After all, if you look at charts of benefits, California consistently gets back less in Federal monies than it pays, even as the "red" states consistently get back more. Sorry, but it's very true! So it might be nice for California to see the Federal money in-flows be greater than out-flows for a while...

Even if it will cost a lot, however, it's nothing like the ridiculous costs of "nation-toppling" and "nation-rebuilding" in Iraq and Afghanistan. If the costs of the Vietnam War are any guide, the peak in Iraq and Afghan Wars spending will be about 2 to 3 decades from now. The $2 trillion spent so far on the wars thus far will be nothing compared to what will be spent, then. (And by the way, who amongst you were for those wars back in 2001 and 2003?)

Oh yeah... What will happen to Amtrak and it's Coast Starlight and other train schedules and budget and loan repayments? What about Southwest and other airlines and airports' current flight schedules, revenue projections, and infrastructure loan repayment schedules - that all depend on certain levels of generally increasing passenger traffic? Hmm....

Give me a thumbs up if you like what I'm saying.


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No mention of Peak Oil or related problems we face

An ok analysis of the project itself, but I disagree with many of your points on the need for the project. First, you didn't mention in 12+ paragraphs anything about the problems we face in oil depletion and our car-dependent society. If these current systems run into the slightest problem (and I'll say the problems they will face are at a scale we've never seen before) we are going to have a lot of people demanding train service that is quick, efficient, and gets them from Northern California to Southern California in a reasonable time. The airline industry will likely not exist in 20 years, so any point you made about airlines being fine and that we don't need a viable alternative is simply wrong. High-speed rail is run on electrical power, so the potential to be carbon-neutral is a technical reality (not saying it will be for sure, but it can happen). This also leads to the general environmental/climate change issues we have with our current transportation systems that are almost entirely based on carbon-emitting finite resources. We won't have enough resources to replace all of the internal combustion engine cars with electric cars. It won't happen. A lot of your post is trying to maintain our current thinking of transportation and how we can keep it going. What I'm saying is we need to radically shift our priorities away from automobile and air travel and onto electrified rail. If it's high-speed that’s the best (and most efficient) way of moving people we've ever invented over long distances (nothing compares with a bicycle for a short trip). Yes I do agree, knowing what I know about the exponetional money system, that this system will cost more than the $68 billion they say it will costs. I'd say we'd be lucky to get this system under $100 billion, and I think that will be reasonable, given how bad gasoline prices will be and the fact that the airline industry may actually not be around by the time HSR is finished in CA (or only for the most elite in our society, but the middle class won't be flying very much. Too expensive).

PS: Many people besides you think building a high-speed train to Vegas is a good idea. And it may be, but I think Vegas will simply not exist once the exponetional money system ends. Its in the middle of a desert and you can't grow anything out there. I wouldn't invest in building a train to a possible ghost town 30 years from now. But I could be wrong about that, we'll see.

badScooter's picture
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outright theft

It already is/was "outright theft".  I didn't steal a damned thing, though, but yet I get to fund it with rapidly diminishing resources.  The government stole it.  The people elected the government that stole it.  I wasn't born just yet.

Umm.  A Reuters article telling me how the ship isn't sinking doesn't hold much water with me either.  It's broke.  Gov't sold itself some funny instruments to stuff in the trust fund so the money could be  In my view, SS was, is, and will always continue to be a tax.  Guess we could always ask John Roberts for his opinion on that...


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In the end...

...any rail system will have to compete with highways and air transport to be cost effective.  Back in a different era I saw a cost breakdown of what our highway system was costing us including subsidies that we paid through tax dollars and other hidden costs.  It was a huge proportion of our cost of living.  And, that was in the days of $.35 gas.  I'm sure that number would be much higher today as we have many more roads, many more cars and trucks and gas is typically $3-$4.

I would like to see an honest breakdown of those costs compared to the costs of rail, both high speed and conventional, and how those costs are likely to change as peak oil becomes more of a factor.  Unfortunately, the politics of such calculations runs head on into our 'love affair with the automobile.'  We still have to contend with our burning desire to be able to transport mostly one person at a time in a two ton vehicle that is oil intensive to build and maintain over roads that are oil intensive to build and maintain any time and any where we want to go.

Let me be the first to tell you, that lifestyle and era are going to be interesting footnotes to history in the not too distant future.  The question is how do we get from here to there in the least painful way possible?  Rail transport is one of the obvious answers.

Whether the specific HSR that is the topic of this thread makes sense or not, the kind of cost analysis involved in answering that question should be going on in every corner of the country.  We will break our oil addiction and we have to figure out how best to do that.

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I'd like to know why this is so expensive to build and what the heck is behind the length of time to build it? We have all this technology and machinery that the pioneers didn't have in the 1800's when they laid out thousands of miles of track, and here were are, talking about building a 130 mile rail line in billions of dollars and in what, 20 years? Amazing.

FWIW - I take the train to work everyday. I fully support rail/electrified rail if you will. But does it need to be very high speed rail? Maybe start small and electrify the tracks. Trains in my neck of the woods go 100+mph. Do they really need to go 200mph in Calfiornia?

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CA High Speed Rail - wrong approach

One of the biggest issues I see with the Central Valley high speed rail project is that it will cost billions and yet server very few people in it's first phase.  If the first phase is seen as a complete bust, there is a good chance it will be defunded for following phases.  If the first phase is intended to give them an area to work the bugs out while building the rest, they need to state that.  If they do not, expectations will be that they are building a sustainable system and that first phase will not be sustainable on its own.

For phase 1, if they get an average of 10,000 passengers a  year that want to go from one spot in the middle of nowhere to another spot 130 miles deeper into nowhere, for 10 years, that 5.8 billion comes out to $58,000 per ticket subsidized by the taxpayers.  I wonder if they could even get that many people to use it.

I'm a strong believer in building a strong rail network that can take people where they need to go, but this seems like a bad way to start that.  Worse, if it fails, it will be the argument used to kill other rail projects in the US.  If rail is going to make a comeback in the US, it needs to happen in a state that knows how to manage money, not CA.


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Central Valley is just the beginning phase

Why they are starting in the Central Valley is for a couple reasons: First, it's where the trains will actually go over 200 mph. Building this first segment will 'lock-in' high-speed service down the road, which is the entire reason why they are building this system, its to connect Northern and Southern regions of the state together, not just fund local service that doesn't connect. Second, building in the flat Central Valley will get the construction teams use to building high-speed rail infrastructure so that they are more prepare for the more complicated portions that will be built later (specifically the mountain passes into LA and the Bay Area). It makes more sense to build in the Central Valley first than it does to build HSR track in the regions that already have good rail service. High-speed rail is to connect the regions, not to be duplicative service where there are already tracks. The current plan is the right plan, and this is coming from someone who has been on the ground here in California for 3 years working with those who are making decisions about this project. It's the right step forward.

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High Speed Rail

I agree and would add that moving people on this rail system will mean personal expenses for autos (tires, fuel, insurance, loans, maintenance, roads, garages, emissions, the list goes on) can be eliminated or reduced.  The money spent on personal autos can be better spent on rail tickets.

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