Size and Scope of Mass Transportation Development

Last: One Transportation Solution Fits All

To put the long term spending plan of the Los Angeles County Metropolitan Transit Authority (LACMTA or MTA) in perspective; $300 billion represents over 40-times the annual budget of the nearly bankrupt City of Los Angeles, or 67% (2/3) of the 53-year budget of the National Aeronautics and Space Administration. While NASA funded the entire US space program from 1958-2010 for $453 billion, the LACMTA plans to spend $300 billion in just 35 years (2005-2040), with debt service, maintenance and operating costs continuing indefinitely. It took NASA forty-four years, until 2001, to spend $300 billion on the space program and all of its historic accomplishments, while the LACMTA’s accelerated spending plan, supplemented by $30-40 billion of LA County Measure R ½ cent sales tax revenue, offers limited and uncertain system performance, at unsustainable costs to the taxpayers and economy of Southern California.

In a further comparison, China has announced plans to build a 16,000-mile high-speed rail network by 2020 at a cost of $300 billion; and is preparing bids and proposals to build high-speed trains in several US cities. The fully operational Chinese system is already in service on 4,000 miles of high-speed domestic routes, traveling at speeds between 150 and 220 miles per hour, as China has clearly demonstrated their ability to produce the most advanced trains in the world.

Promotion and planning of the California high-speed train system has leveraged its initial $10 billion voter-approved funding into a proposed 800-mile network of tracks conveying imported trains between San Francisco, Sacramento, Los Angeles and San Diego, without producing credible cost projections or evidence that the system would be self-supporting once completed. As the California High-Speed Rail Authority continues to make costly design concessions, including the grade separation of all street and highway crossings, and tunneling under controversial route locations, the $43 billion first phase could be undone by a failure to complete all segments of the inter-city track network, or secure funding sufficient to complete the entire system. To date, only $10 billion have been secured for development of the high-speed rail system, by means of a rare, and unlikely to be repeated, state- wide California voter initiative that deepened the state’s long-term bond indebtedness. The prospect of securing five to ten times the initial funding for the system’s completion appears remote, and should prompt a serious and timely reassessment of the project’s viability. Furthermore, a 2010 UC Berkeley critique of the ridership projection methodology for the California High-Speed Rail Authority, submitted to the US Senate Transportation and Housing Committee, found that critical annual ridership forecasts overestimated use of the planned 800 mile high-speed system by as much as 100%, or double the Authority’s basic fare revenue projection. Basing the decision or justification to complete, or start development of the multi-billion dollar project on such grossly inaccurate projections would inevitably doom the system, since the voter initiative that created the California High-Speed Rail Authority explicitly prohibits taxpayer subsidy of the project or service.

Offers of federal support for high-speed rail development have been rejected by several states due, at least partially, to federal requirements that the funds be spent exclusively on HSR, but not on any cost overruns, and that they be paid back. California politicians’ and special interests’ clamoring for billions of federal dollars in subsidies as if they were grants, irresponsibly fails to advise taxpayers and tax-dependent government entities of the increased liabilities that accepting the federal high-speed rail funds would entail. In view of the fact that no public transportation system or project in the state produces self-sustaining revenue, let alone profits, it must be assumed that the additional costs of debt service associated with proposed federal loans would be paid by means of new taxes, surcharges or revenue diverted from other budgets, without the vote of any legislative body.

Funding regimes and schemes such as these increasingly reflect the financial conditions of mass transportation development programs, systems operation and long-term indebtedness of transportation authorities and local governments nation wide. Over-extended and convoluted transportation funding schemes are exhibiting financial bubble characteristics that have disrupted entire sectors of the US economy.

Next: Importing Transportation Solutions

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