Prop 1A explicitly prohibits any public operating subsidy for high speed rail

The following article is from a Flash Report link to an Op-Ed written by Chris Reed exposing Curt Pringle’s spin on the high speed rail subsidy. I recall contacting Chris when he “was the opinion-page columns editor and wrote the featured weekly Unspin column for The Orange County Register.” He is now an editorial writer for the Union-Tribune.

Here is his report as published in yesterday’s edition of Sign on San Diego.

As Prop 1A did not provide for any public subsidy for this massive project the CHSRA is looking for a back door way to entice venture capital investment by consideration of a “ridership guarantee.” Nice try Curt.

The SF Gate and Sign on San Diego links are provided for verification.
Deceptive op-ed from chair of bullet-train board

Chris Reed

Friday, April 2, 2010

Anaheim Mayor Curt Pringle completely ignores the biggest and possibly insurmountable problem with the bullet-train proposal in his S.F. Chronicle piece today.

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2010/04/02/ED0R1COIGP.DTL
Here’s his some of his hooey:

So today, we are having a statewide discussion with those cities and communities. It is a critical part of building this system, which the voters said they want and which the president and Congress stand firmly behind. For some, this discussion means a focus on the risks of building, mostly from people in one of two camps: First, those who think it will cost too much, and second, those who are concerned about impacts on people and communities near the rail lines.

No, Mr. Mayor, these aren’t the two main elements of the “discussion” now going on. Instead, the “discussion” is focusing on the fact the California High-Speed Rail Authority has an illegal business plan that would require future taxpayer subsidies.

Yo, Curt! Can’t you ever address that forthrightly? Please?

What Curt leaves out, from a previous screed on this topic:

On Jan. 11, the Legislative Analyst’s Office issued a terse eight-page report on the latest business plan for the California High-Speed Rail Authority. … Besides depicting the business plan as vague and insubstantive, the LAO analysis noted its funding plan “appears to violate” Proposition 1A language that “explicitly prohibits any public operating subsidy.” That’s because authority officials concluded they couldn’t attract the necessary tens of billions of dollars in private funding without offering investors a minimum revenue guarantee. To attract investors, the plan also presumed that government agencies would cover the vast cost of insurance for rail operations…

This is not a minor problem. This is an immense and fundamental problem. No subsidies, no investors. No investors, no high-speed rail.

After Pringle downplayed this problem in an e-mail to me, I went directly to Legislative Analyst Mac Taylor, who said the revenue guarantee “did seem to be in direct violation” of the no-subsidy promise. Taylor was also highly skeptical of the idea that a ridership guarantee could be substituted for a revenue guarantee.

Why isn’t Pringle writing about this? Why is this huge PR apparatus gearing up to present the bullet train system as an inevitably when the LAO has issued such a basic warning about the illegality of its funding blueprint?

I’ve got a bad feelling about high-speed rail. I think it’s going to be the California version of the D.C. debate over health care. They’re going to force it down our throats — even if it is brazenly illegal.

Find this article at:
http://www.signonsandiego.com/weblogs/americas-finest/2010/apr/02/deceptive-op-ed-chair-bullet-train-board

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