Tag Archive for www.CaliforniaHighSpeedRailScam.com

California High-Speed Rail’s Approval Rating Should Be 30% – My Article in www.FlashReport.org

In an April 12, 2013 post in www.FlashReport.org, I ask this question:

Why does a significant minority of Californians STILL support California High-Speed Rail after all of its financial and management fiascoes?

I conclude that some Californians are unaware of what’s happening with this project. I encourage readers to provide the uninformed citizen with ten reasons not to support it. See the reasons at California High-Speed Rail’s Approval Rating Should Be 30%.

For more detailed information about California High-Speed Rail, see www.CaliforniaHighSpeedRailScam.com and follow @CaHSR_scam on Twitter.

Reality of Crushing Public Debt from Bond Sales Eclipses the Fantasy Vision of California High-Speed Rail

Originally presented to Californians as a $45 billion statewide high-speed rail system to transport people between major metropolitan areas, the “Safe, Reliable California High-Speed Passenger Train for the 21st Century” has been distorted by the state’s leftist ideologues and corporate and union special interests into the California High Speed Rail Scam.

My article California High-Speed Rail: One-Way Ticket to Debt in www.FlashReport.org on March 25, 2013 described my experience speaking at the March 18, 2013 meetings of the California High-Speed Rail Authority and the California High-Speed Passenger Train Finance Committee. I asked pivotal questions about how the State of California planned to sell the $9.95 billion in bonds authorized by 52.7% of California voters through Proposition 1A in the November 2008 election.

My questions were reported throughout the state in a March 18, 2013 Associated Press article Board Seeks $8.6 Billion in California High-Speed Rail Bonds:

Several speakers challenged the timing of the authorization during the board’s public comment period, asking why the board was acting on the bulk of the bonds approved by voters now when it could be years before the money is needed. Kevin Dayton, a public policy consultant from Roseville, questioned whether the board was rushing to beat the outcome of the lawsuits attempting to block the railroad.

“That’s the obvious question that comes up,” Dayton said. “I think it’s reasonable to assume they’re very worried about it.”

TV viewers also saw (and read) my comments in Nannette Miranda’s story Board Seeks $8.6 Billion in California High-Speed Rail Bonds for various local news programs of ABC affiliates throughout the state:

“What’s your current estimate of the total amount of debt that will be assessed including the interest on this?” high speed rail opponent Kevin Dayton asked the board.

During media interviews after the board meeting, California High-Speed Rail Authority chairman Dan Richard claimed the cost of interest payments for the entire project could eventually reach $700 million per year. He also claimed that interest on the first $2.61 billion in bond sales authorized by Senate Bill 1029 (2012) would cost $175 million per year over 30 years.

As stated in this article California Bullet Train Clears One Obstacle; Land, Legalities Remain, “It all depends on Wall Street, but for estimation purposes, the state is using a 6.5 percent interest rate for 35 years.” This was the rate cited by Chairman Richard during the media interviews. According to California Municipal Bond Advisor, yields for State of California 30-year general obligation bonds were 4.80% on September 20, 2012 and 5.03% on October 19, 2012.

My Questions Reveal One Surprise: Truckers Will Pay for the Bond Interest

California High-Speed Rail Authority chairman Dan Richard responded to my comments by declaring that my questions should be addressed to the California State Treasurer, Bill Lockyer. But later in the meeting, he said that the state would pay interest on the bonds NOT from the general fund, but from vehicle weight fees paid by truckers.

Fox News 11 in Los Angeles reported on this revelation with its March 28 story Money Shell Game? Potholes or High Speed Rail. I was interviewed for the story, and an excerpt from the interview appears in the segment. I am also quoted in the associated article:

Those are fees paid when trucks are too heavy. And that money is supposed to go to highway construction projects. This is typical of the entire way the rail authority operates. Things change. You don’t know what’s going on, there’s very little transparency and openness. Essentially, all they’re doing is taking the money, transferring it into another fund and pretending the general fund is not paying for it. In reality, California taxpayers are still paying the interest.

Assembly Bill 105 (2011) authorized vehicle weight fees to pay interest on bonds for transportation projects. The March 13, 2013 California Legislative Analyst’s Office Overview of Transportation Funding explains how vehicle weight fees will pay interest in 2013-14 on transportation-related bonds:

In addition to ongoing revenues from fuel taxes, the state has issued general obligation bonds in order to pay for transportation projects. The largest such bond measure was Proposition 1B (2006), which authorized the state to sell $20 billion in bonds to finance transportation projects. The Governor’s budget estimates that the debt-service costs on Proposition 1B and other outstanding transportation bonds will be about $1.1 billion in 2013-14.

Vehicle weight fees are used to pay the debt-service cost on transportation bonds rather than the General Fund. For 2013-14, the Governor’s budget uses all $946 million in weight fees to benefit the General Fund. Of this amount, $907 million is to pay debt service and $39 million is loaned to the General Fund and set aside for future debt service.

In addition, the Governor’s budget proposes to use miscellaneous revenues in the SHA to pay transportation debt service on an ongoing basis.

I asked this question in a tweet during the California High-Speed Rail Authority meeting on March 18 after the Authority chairman talked about paying interest from vehicle weight fees:

Does California Trucking Association @Caltrux know truck weight fees to pay interest Prop 1A bond sales for high-speed rail? $10 billion.

This response came on March 28 after the Fox News 11 story aired:

@DaytonPubPolicy we are well aware that the weight fees we pay to maintain roads now go to non-road projects. Trucks pay their share.

(They certainly do, and more – trucks are a favorite target of the Left in California.)

What Were the 2008 Cost Estimates for Interest Paid on the Bonds?

The official legislative analysis of Proposition 1A provided voters with an estimated cost of selling bonds with a 30-year maturity:

If the bonds are sold at an average interest rate of 5 percent, and assuming a repayment period of 30 years, the General Fund cost would be about $19.4 billion to pay off both principal ($9.95 billion) and interest ($9.5 billion). The average repayment for principal and interest would be about $647 million per year.

A July 7, 2008 Senate Appropriations Committee analysis estimated the cost of selling bonds with a 40-year maturity:

AB 3034 would extend the maximum allowable bond maturity term from 30 years to 40 years. Assuming the same interest and inflation rates, this bill could result in an increase in total General Fund costs of $3.78 billion if the term of the bonds is extended to 40 years (to a total cost of $23.2 billion). Annual debt service payments would be $580 million for 40 years.

According to Section 5.02(b)(vii) of the resolutions passed on March 18, the Treasurer is now authorized to borrow the $8.6 billion by selling bonds with a maturity period of 35 years

So does the Governor’s proposed 2013-14 budget adequately account for interest to be paid after the state borrows money for California High-Speed Rail through bond sales? It depends on how the California State Treasurer intends to structure and market them.

New Website www.CaliforniaHighSpeedRailScam.com Brings Experienced, Pugnacious, Relentless Opposition to the Effort to Terminate California High-Speed Rail

Here is a press release from the California-based Coalition for Fair Employment in Construction about a new web site:

www.CaliforniaHighSpeedRailScam.com

 


BREAKING NEWS! CFEC UNVEILS NEW WEBSITE EXPOSING HIGH SPEED RAIL SCAM!

Coalition for Fair Employment in Construction Banner 2013

PRESS RELEASE
January 31, 2013
Contact: Eric Christen
(858) 431-6337

 

New Website www.CaliforniaHighSpeedRailScam.com Brings Experienced, Pugnacious, Relentless Opposition to the Effort to Terminate California High-Speed Rail 

Union-Only Project Labor Agreement Provokes Professional Response to Train Debacle  

CA – The Coalition for Fair Employment in Construction today announces the launch of its comprehensively-researched opposition website www.CaliforniaHighSpeedRailScam.com, with the tag line “The Debacle to End All Debacles.” This website helps build the case to terminate what would be the most expensive construction project in human history.

“There are several grassroots organizations in California valiantly challenging the High-Speed Rail Authority’s taxpayer-funded public relations machine from various angles,” said Eric Christen, executive director of the Coalition for Fair Employment in Construction (CFEC). “We are now bringing their work together in one place, while adding our own expert perspective on construction and labor relations.”

The Coalition for Fair Employment in Construction has 14 years of high-profile experience pugnaciously and relentlessly fighting construction schemes in California that entangle wasteful government projects with labor union entitlements known as Project Labor Agreements (PLAs). Among its victories is the derailment of a proposed Project Labor Agreement backed by former Governor Gray Davis for the construction of the new University of California campus in Merced.

The Request for Proposals for the Madera to Fresno first segment of the Initial Operating Section includes two provisions (Sections 7.11.3 and 10.1)  giving construction trade unions a monopoly on the project by requiring all construction companies to sign a Project Labor Agreement.

A  Project Labor Agreement (disguised under the deceptive name “Community Benefits Agreement”) negotiated with officials of the State Building and Construction Trades Council was also included in the bid specifications, to ensure that the five prequalified design-build consortiums fully understood the directive to give unions a monopoly on construction.

The website so far includes the following sections:

1. Your One-Stop Source for Information about the California High-Speed Rail Debacle – Yes, Your Doubts Are Justified

2. Top-40 Donors to Campaign to Convince California Voters to Borrow $10 Billion to Start Building High-Speed Rail

3. How Much Will This California High-Speed Rail Cost? Making Up Numbers

4. Losing Bidders for High-Speed Rail Design-Build Contract Will Get Up to $2 Million from Taxpayers For Their Trouble

5. Construction Trade Unions Get Costly Monopoly on High-Speed Rail Construction with Project Labor Agreement (“Community Benefits Agreement”)

6. Timeline of the California High-Speed Rail: This Train Has Hurtled Down the Track for 20 Years

7. The #11 Campaign Contributor to Proposition 1A in 2008: A Mysterious Organization Called “Californians For A Safe & Reliable High Speed Rail”

8. Fighting Back Against the California High-Speed Rail Authority’s Taxpayer-Funded Public Relations Machine

9. Why Lowest Responsible Bidders Don’t Necessarily Win Rail Construction Contracts: Explaining Design-Build Procurement and Best Value Criteria In California Law

10. Art Inspired by the High-Speed Rail (parody art sponsored by Activist Artists 4 California)

“I’m meeting constantly with Californians who express utter disbelief that this California High-Speed Rail debacle is still chugging along toward its inevitably catastrophic conclusion,” said Christen. “This project stinks of failure, waste, and lack of accountability. The typical Californian is intrigued by the idea of high-speed rail but alarmed and disgusted by its disorganized implementation.”

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