There is someone in Sacramento that has stood up and said, “the Emperor has no clothes.” Diane Harkey, Assemblywoman from Orange County, has put forward a courageous bill, AB 2121, which would pull the plug on funding the High Speed Rail Project.
Why would she propose such a bill? With a 30 years in banking and corporate finance, Harkey was attempting to find ways to save money for the state. “If we were a corporation, we’d be bankrupt.” She found a little known article in the state constitution. Article XVI says, “the legislature at any time after the approval of a general obligation bond act by the people, may reduce the amount of indebtedness authorized by the act to an amount not less than the amount contracted at the time of the reduction or to repeal the act if no debt is contracted.”
Harkey looked at the debt California owes: 73 billion in General Obligation (GO) debt and another 48 billion left to borrow. Dissatisfied with the numbers, she started to work on the problem of “too much accumulated debt and not enough revenue.”
Her original plan was to review some of the older uncommitted bonds on the books and she thought she’d shave off a little of this and a little of that, but then she came upon the High Speed Rail (HSR) bond. It was nearly fully outstanding with unspent bonds. Considering the financial condition it’s in, she wrote Assembly Bill 2121 to eliminate their funding. While HSR sounds like a good idea, “we have a chronic deficit that we’ll be looking at for at least the next 4-5 years of $20 billion.” She also cites our high unemployment which will result in lower revenue; the triple B rating adds cost to state borrowing. She also stated that, “we’ve borrowed from 719 internal accounts. There’s nowhere left to grab.”
“The people of California expect us to set some priorities – that’s what we’re elected for – and they’d agree that we probably have much more important immediate needs such as education, local transportation, water and public safety. Health and Human Services is being cut tremendously for the aged and disabled.” She was looking for “ways to save money, ways to reduce debt and ways to keep the state afloat.”
Since she wrote the bill, people have been coming to her in droves, thanking her. She has since discovered the Legislative Analyst’s Office findings that the 9 billion was a mere down payment of total cost which could be over 40 billion. And there are issues such as the questionable ridership, “sketchy financial proposals” and she believes that the project would have to be heavily subsidized. Harkey says while there may be benefits to high-speed rail, she believes it shouldn’t come at the expense of schools, local transportation, public safety, and health and human services.
Rod Diridon is quoted in a local paper as saying, “my guess is [the bill] wouldn’t go very far.” At the most recent Board meeting in March, the High Speed Rail Authority voted to officially oppose the bill. Jeff Barker, Deputy Director for CHSRA said, “It was just introduced, so we typically wouldn't comment on a bill that hasn't even been heard in a committee yet.” Diane Harkey admits, “it may meet with a lot of resistance, maybe the bill will die. I think it’s worthy bringing forward, I would like to hear how the committee members and supporters justify funding with public money a project that doesn’t have a work plan, a business plan that has tracking, funding, timelines, guidelines and doesn’t have any assurance of more federal stimulus dollars and one that the state may have to cover insurance for the rail operation.”
“We’re getting into something that we may not be able to afford for a very long time. We will be, in essence, pregnant with the bond and the funding and be stuck. We have to be very, very careful with what we do with the public money. We would not go to Wall Street with a private offering like this without all this backup data.”
The bill will be heard in Sacramento at the Assembly Transportation meeting, tentatively on April 19 at 1 PM. For more information go to:
http://arc.asm.ca.gov/member/73/?p=article&sid=217&id=222972
Comments
Take a look at Diane Harkey's investment record. She and her husband get rich on fees while they suffer a near 100% failure rate. They have some of the worst investment track records in the nation. They are being sued personally for fraud. Most of their clients are now broke.
Maybe an article should be written about her using the stuff you just said.
"In 2008, Amtrak's inspector general published an analysis of government subsidies to passenger rail in Europe and compared them to Amtrak's subsidies. One purpose of the review was to address the contention that passenger rail in other countries, especially HSR, operates...without subsidies. For 1995-2006, the study found that the governments of Germany, France, the United Kingdom, Spain, Denmark, and Austria spent "a combined total of $42 billion annually on their national passenger railroads."[9] The $42 billion that these six countries, which have a combined population of 269 million, spent on just passenger rail in 2006[10] is roughly proportionate to the $54.8 billion (most of which was funded by user fees) that the government of the United States (population of 309 million) spent on all forms of transportation, including highways, rail, aviation, water transport, and mass transit.[11]" - "America's Coming High-Speed Rail Financial Disaster" Ronald Utt, PhD, Reagan Advisor
Here in Orange County there is mounting support for AB2121. I heard from several local elected officials recently who are going to be pushing this as Resolutions for their own community Agendas, in support of Harkey. This is the best bet California has to unwind this boondoggle and free our future generations from paying for our inflated jobs program. I would encourage everyone to please contact Diane Harkey and show your support for AB 2121.
Cynthia Ward, Anaheim Colony Historic District
Keep dreaming people, maybe you could have a chance to kill HSR funding if it were a few years back. Now HSR is a monster and growing in the U.S and in California. Your fighting a lost war trying to kill this project. We need JOBS and this project delivers them so shut up already. We need to take our tax dollars that we send to Washington every year and pull them back for our benefit, to our state, not let them go to other states for their projects.
What? So she expects America to sit around and watch the rest of the world zip around on their fantastic infrastructure systems? I don't think so. The American population is expected to grow to nearly 400 million residents by the year 2030. Does this person really think that we can build more highways and airports to transport our entire population from city to city? Or does she just not realize that improving our highway and airport network is double the cost of bulding a brand-new High Speed Rail Network? We spend $18 billion on highways and $15 billion n the airlines every year in subsidies. I don't want to hear the subsidies argument because it is irrelavent considering HSR doesn't even operate on subsidies. HSR has to happen, we have no choice.
THIS ASSEMBLYWOMAN IS REDICULOUS!! California and America is so far behind on High Speed Rail infastructure already! This Bill is a rediculous waste of time! High Speed rail is coming to California. PERIOD!
"She has since discovered the Legislative Analyst's Office findings that the 9 billion was a mere down payment of total cost which could be over 40 billion". Wow!!! Where has she been the last year and a half. That report which she just discovered has been available at least since the Nov. 2008 election. If I were against California High Speed Rail I would be wondering if Diane Harkey were the right person to propose this bill.
I, for one, really appreciate you taking the time to talk to Harkey. On the surface, her bill could be easily dismissed - but you've made it clear that this isn't an anti-HSR bill, but really a budget minded bill.
I appreciate your perspective. Thanks for your efforts Ms. Hamilton. Keep up the good work.
It is no wonder that lady is from Southern California. She just doesn't knw what public transportation is (after all, the car industry had the light rails ripped out if the bleeding streets of LA), and probably has the big word "AMTRAK 2" flashing in her head right now. But you know what? It's time that we move on and push that high speed rail down your ignorant throats. I have taken AMTRAK's beautiful Coast Starlight from Oakland to LA (and a further ttrain to Tucson) and hundreds of miles on high speed trains back in Europe. That's the future, dinosaurs, don't even try to stop it. See you on the rails.
"That report which she just discovered has been available at least since the Nov. 2008 election."
That's one of the tried and true tactics of anti-rail folks. Play dumb and act like the rug was swept out from under you. Never mind that this thing has been in the works since, oh, 1996?
Another tactic is to claim that there is no "backup data." There have been tomes of studies that are all readily available online and some libraries (your mileage may vary). Go seek them out and read them if you want.
One thing you have to remember about Examiner.com is that it's not a real newspaper or anything. Anybody can write for this site and the standards aren't incredibly daunting to meet. "Journalists" are paid by page views. It's not that much different from blogging.
I'm kind of annoyed when I see them in Google News results, but I click on the stories so I guess I'm a hypocrite. I'm just a fan of really bad journalism I guess.
Seriously, how can Harkey claim to represent California when it is clear she doesn't pay any damn attention to anything? Everything she just 'discovered' is very old news. Too little, too late. HSR will be a success.
HSR seems like a perfect fit for stimulus money. Why does she want to curtail a project that will add jobs, help the environment and be a boon to tourism? Oh, that's right she is a Republican.
Are the supporters of High Speed Rail (HSR) serious that we should burden Californians with billions of dollars of additional debt? Do they think we should have HSR and no education? With limited stops (to make HSR), do they really think HSR is going to solve the traffic problems? What jobs are going to be created? How many and where? If you go look, you will find these questions are NOT answered by the work of the HSRC; and any reasoned consideration will lead you to the conclusion that Californians cannot afford this HSR at this time.
Boondoggle:
Pronunciation: \?bün-?dä-g?l, -?d?-\
Function: noun
Etymology: coined by Robert H. Link †1957 American scoutmaster
Date: 1929
1 : a braided cord worn by Boy Scouts as a neckerchief slide, hatband, or ornament
2 : a wasteful or impractical project or activity often involving graft (this one is disguised as a "jobs" program)
This High Speed thing is all about $$$$, not transportation. There is no way in hell the ridership numbers are ever going to work out no matter how fast the trains go! All the people involved will be long gone when everything hits the fan and the people will be holding the bag.
There should be a third party looking at the numbers and not just taking HSR consultants data. Hawaii has the same rail issue going on and the governor finally hired an outside firm to really look at he thing before the state is stuck with a five billion dollar bill! Kathy keep it up!
Good to see Diane Harkey having the courage to propose cutting the money for HSR. It is a project that would eventually cost $100 billion and run at a loss each year The jobs would mostly be short term and the ridership estimates and "business plan" are are farce. Then the price per ride just went up almost double to $105 from the early low-ball estimate provided for the fraudulent Prop. 1A campaign. Thanks, Quentin and Rod, I'd prefer not to put any more financial albatrosses around the neck of my son for decades for the sake of your precious legacies. Where's the money beyond the 9.95 billion and the 2.34 billion supposed to come from? Investors? Don't make me laugh. It would come from going back to taxpayers for more bond support or increased taxes, especially since no HSR in the world runs at a profit. They are all public money sinks. It's time to get California back on a firm financial footing, not put it deeper into debt with HSR, the rail version of the now defunct Concorde SST.
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