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Study: California's High-Speed Rail System Will Cost Tens of Billions More Than Estimated, Adding to State Deficit
Report details why high-speed rail won't meet ridership predictions, deliver on promised travel times, or meet emission reduction targets
Staring at a $15 billion deficit, Gov. Arnold Schwarzenegger says he'll veto the state budget because "nothing is more important than getting our fiscal house in order." In November, voters will get their own say on budget matters: Will they let the state borrow nearly $10 billion to start a high-speed rail system that will likely add billions more to the state deficit in the years to come?
The high-speed rail system will cost tens of billions more than advertised and ridership numbers will be much lower than predicted, according to a due diligence report on the California High-Speed Rail Authority's plans.
"The current high-speed rail plan is a fairy tale," said Adrian Moore, Ph.D., vice president of research at Reason Foundation and the study's project director. "The proposal suggests these high-speed trains will be the fastest ever; the most-ridden ever; the cheapest ever; and will convince millions of Californians they no longer need to drive or fly. Offering up a best-case scenario is one thing, but actually depending on all of these miracles to happen simultaneously is irresponsible public policy."
Proposition 1A would authorize $9.95 billion in bonds for a high-speed passenger train, but taxpayers should beware that this is just a fraction of the system's total price. The Rail Authority claims the first two phases of the system will cost $45 billion. But even that understates the total price. With the high costs of building in California and the history of cost overruns on rail projects, the final price tag for the complete high-speed rail system will actually be $65 to $81 billion, according to the due diligence report. And while the Rail Authority forecasts between 65 and 96 million intercity riders by 2030, the due diligence report finds these projections are dramatically inflated. After compiling numerous ridership studies previously conducted for California rail systems, the study demonstrates the state can expect 23 million to 31 million riders a year in 2030.
» Full Study: The California High Speed Rail Proposal: A Due Diligence Report (.pdf)
» Policy Summary (.pdf)
» Brief: High-Speed Rail Plan Is A Financial Boondoggle (.pdf)
» Brief: Marginal Impact on Greenhouse Gas Emissions (.pdf)
» Brief: Exaggerating Rails Effects on California Transportation (.pdf)
» Findings at Glance
» Press Release
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