By Paolo von Schirach
December 30, 2011
WASHINGTON – TIME magazine recently reported that California Governor Jerry Brown, with difficulty, is trying to bring down the retirement costs of state employees. If the package he proposed were implemented, the state would save about $ 900 million a year. And this is good, if you are bent on reducing public expenditures in a perennially broke state.
California high speed rail?
But frugality is not across the board. The proposed California high speed rail network now is estimated to cost $ 98. 5 billion, (a century of pensions savings). And the cost projections keep going up. The current estimate is double the previous one. All this money for a project with extremely shaky economic fundamentals.
High speed rail needs high traffic to recover large upfront costs
High speed rail makes sense when it links major, (and not too distant), population centers, so that projected high traffic volumes justify the significant upfront cost. Otherwise it is is pie in the sky. Stuff that makes you proud, nice to look at, but a money sinkhole.
Even with some federal funds, this California rail project is an unsustainable financial disaster. Once he is done with state pensions, Governor Brown may want to revisit and help bury this zany idea.