Support independent, student-run journalism.

Your support helps give staff members from all backgrounds the opportunity to conduct meaningful reporting on important issues at Stanford. All contributions are tax-deductible.

Stanford experts wary of rail project

Stanford experts remain wary of the latest revision of the California High-Speed Rail project’s business plan and disagree over California State Legislative Analyst (LAO) Mac Taylor’s recommendations to withhold state funding to the project.

According to a press release on the high-speed rail project website, the new business plan, released last month, calls for a reduced budget cost of $68.4 billion from voter-approved state bonds, federal funding grants, local funding and public-private partnership. Taylor suggests withholding state funding of construction while allowing for minimal funding for more planning

Gregory Rosston, senior research scholar at the Stanford Institute for Economic Policy Research (SIEPR), said that even with the latest revision to the business plan, the state budget is still not in the right shape to undertake such an expensive project.

“We’ve had serious issues with the state budget for a long time, and we have a big state debt, so my concern is how this will impact the long-term health of the state,” Rosston said.

According to Rosston, there are other major concerns within the state budget that are not being addressed in any business plans and require more immediate attention. He cited liabilities for retired state employees, pensions and healthcare benefits.

Alain Enthoven, professor emeritus of public and private management, who has closely followed the project since its inception, suggested ending the project altogether and focusing attention on education reform.

“We are drastically, dangerously cutting back on education, which is so important for our future and for the future of our children and our young people,” Enthoven said.

Rosston, unlike Enthoven, agrees with a recent recommendation by California State Legislative Analyst (LAO) Mac Taylor, which would not fund construction, but a minimal amount for planning efforts.

“I think planning is really important to try to understand what is the magnitude of the issue because it’s quite possible that you could have projects that are very worthwhile in the long term,” Rosston said.

He added that if the train could be built at a low cost to the state, then it could relieve the problem of traffic congestion and potentially provide the increase in jobs and businesses that the project now promises.

“The nirvana scenario would be you could invest in this and not only not cost very much money, but it would increase the attractiveness of the state of California because there’s less congestion and because people like living there more, and it becomes more attractive for businesses,” he said.

Rosston, however, questioned the main argument of the project’s advocates, which he said is to “have faith” that the promised benefits will come. He said that supporters have yet to provide an accurate estimate of the total cost and projected revenue, which is why the project has not received full approval.

“Any construction project, if you even ask anyone who has ever tried to construct a single family home, the estimates are not very good — and those are things that get done every day,” Rosston said. “Whereas building a high-speed rail system, those don’t get done very often.”

“You might be able to look at Spain, France or China and see what did it cost them,” he added. “Those cost estimates are going to be somewhat applicable to California, but they’re going to be very different.”

For Enthoven, the lack of grounded estimates causes him to be dubious of the project as a whole.

“There’s a lot in their so-called plans that I think are dishonest misrepresentations of likely facts, so all together I think the best thing would be to kill it,” Enthoven said.

According to Enthoven, the projected 100,000 construction jobs and long-term employment opportunities are not convincing arguments. He said to provide such an effect, there would need to be too great of an increase in taxes.

“I don’t know when the breaking point will come, but already taxes in California are discouraging a lot of business from coming here,” Enthoven said. “There are plenty of worthy good things we could spend money on now that would put those people back to work.”

Both Enthoven and Rosston agreed that the greatest risk behind the project is that the increase in taxes proposed by Gov. Jerry Brown, a vocal advocate of the project, will discourage businesses from coming to California, which in turn will further hurt the state budget.

Both experts also said that that the project is currently being led more by political concerns than by economic strategies. They added that the project is diverting attention from more pressing concerns, including education.

“I think Jerry Brown seems to be kind of a visionary who wants to leave a great legacy as his father did,” Enthoven said. “Well, his father left a great legacy with the University of California, and Brown ought to know that the thing to do is to beef up the University of California.”

While you're here...

We're a student-run organization committed to providing hands-on experience in journalism, digital media and business for the next generation of reporters. Your support makes a difference in helping give staff members from all backgrounds the opportunity to develop important professional skills and conduct meaningful reporting. All contributions are tax-deductible.