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  • California's High-Speed Spending Spree

    The State of California keeps sinking into a deeper hole of debt, with reports showing that the state’s budget shortfall is projected to be $16 billion, up from $9.2 billion in January. But despite all the red ink, the state is still going ahead with a high-speed rail boondoggle that would cost billions.

    The LA Times reports:

    If California starts building a 130-mile segment of high-speed rail late this year as planned, it will enter into a risky race against a deadline set up under federal law.

    The bullet train track through the Central Valley would cost $6 billion and have to be completed by September 2017, or else potentially lose some of its federal funding. It would mean spending as much as $3.5 million every calendar day, holidays and weekends included — the fastest rate of transportation construction known in U.S. history, according to industry and academic experts.

    That $6 billion is for just part of the project, which has been estimated to cost as much as $98.5 billion. But note the perverse incentive to spend. California stands to receive as much as $4 billion in federal funds that have either been provided or set aside for the project. If they don’t complete it on time, the LA Times reports, that money disappears. Now the race is on to spend.

    But all the spending is happening in a state that is already far in the red — and whose leaders are turning toward tax hikes in order to dig themselves out. Gov. Jerry Brown (D) is proposing a 0.25 percent increase in sales tax and an income tax surcharge on wealthy Californians to prevent him from having to cut spending. But that just means more money will be available to spend on projects like California’s high-speed rail.

    When it comes to the bullet train, is it worth it? Critics have slammed the increasingly high projected costs and have questioned its usefulness (the LA Times reported that just one segment of the track, costing $4.15 billion, would essentially be a “train to nowhere.”) And generally, projects like these have long-term costs, a perpetual need for government subsidies, and wasted money from a lack of ridership.

    In April, a congressional committee headed by Rep. Darrell Issa (R-CA) launched an investigation into the project. Issa remarked:

    California high-speed rail was sold to voters as a grand vision for tomorrow but in practice appears to be no different than countless other pork-barrel projects — driven more by political interests and consultant spending than valid cost-benefit analysis. Before more taxpayer money is sent to the rail authority, questions must be answered about mismanagement, conflicts of interest, route selection, ridership and other risks.

    Taxpayers should take notice. Government likes to spend without limits, and even “free money” from Uncle Sam has costs. California is a prime example of what happens when that spending runs unchecked and elected officials refuse to just say “no.”

    Posted in Featured, Ongoing Priorities [slideshow_deploy]

    9 Responses to California's High-Speed Spending Spree

    1. ursine says:

      Californians need to wake up and shed off the failed policies of the socialist nanny state.
      Back in 2009 more than 100,000 IOU were mailed in lieu of real money to cover nearly half-billion in due payments.
      In 2010 unemployment reached 13.2%, total expenditures grew to $216 bil. Thousands of inmates were let go because prisons were overcrowded and state had no money to build new facilities.
      Between 2007 and 2011 more than 2,500 employers have left California. More than 100,000 jobs have been lost.
      If this trend continues even train to nowhere may find the riders.
      Big Brother government surely can tax, but it cannot feed. Never could, never will.

    2. Bobbie says:

      Deliberate and cruel intentions. Everybody became incompetent under Obama? Government WHO'S CONTROLS ARE BEYOND OURS taking as much of our money to cover their faults in all areas along with once outstanding business falling for government? Nobody held accountable for the lack of "oversight tax payers also pay for?" Extreme incompetence! All of a sudden out of the clear blue, everyone's bankrupt? Government wants more regulations when they can't even keep up or take responsibility with the ones in place?? What have you done to America? Get this man and all the fakes, OUT! America needs her jobs back that Mr. Obama sent out of the country! And any person of any media, government, public to suggest anything is too "complicated" are the only ones it's too complicated for!

      For any American to want the word "change" from a man in the highest position without the man in the highest position specifically saying what "change" he promotes, are the American dumb that can redeem themselves. "Change" is never for the better when it's the only focus and by government force! Free people who want "change" doesn't look to government authority. It comes from their own mind and ability. Don't "change" America who's "change" from authority is for government abuse put on those by government choosing.

      • allen says:

        You wanted change now you are getting it. Hollywood is still giving millions to Obie, I hope the Actors are satisfied, They will be the first on the train to ride the first whistle-stop. Then jet off to France.

        • Bobbie says:

          I'll give you a thumbs up but I certainly didn't ask or want or misunderstand the "change" Mr. Obama wasn't truthful on that many good people were fooled by.

    3. Stirling says:

      At some point I would wager even Holywood and Silocone Valley will feel the tax burden of their runaway spending debacle. When we hear Liberal bastions such as these threaten to leave the state then maybe their government will take notice.

      What will hasten their demise may just be a new president that will force states to stand on their own, without government bailouts.. As long as states think that the Feds will come in with help they will continue to run up excessive debts..

    4. Ryan says:

      First off California needs to cut the spending immediately. Raising taxes is NOT the answer. The answer is to cut spending. Here is some solutions, cut government workers pay by about 30% and CUT ALL WELFARE and instead of letting killers sit in jail and suck our tax money put a bullet through their head. If they have killed someone than let the death penalty be put in place. Also get Jerry Brown out of office and put a republican in office. Next how is it fair to tax the wealthy, just because they make more money doesn’t mean they should pay more than the rest of us. They work hard for their money unlike all of the welfare recipients. Last off cut California state income tax and cut California buissness tax that way more buissnesses and companies will move back into California.

    5. Lloyd Scallan says:

      When citizens of any state are brain dead enough to continues to reelect the likes of Pelosi, Boxer, and Brown, what can we expect? And just remember, those billions of dollars to be wasted is our money, not just the people of California. When California fails, we all are on the hook, so we all should have a say.

    6. Carol, AZ says:

      Lets rename this latest Green disaster and call it the " Ghost train to no where."
      Bo jingoes is obsessed with GREEN ENERGY.
      Every project attached to this topic proposed, has been a complete disaster.
      Solyndra, also earmarked to CA, costs, $535 M. to the tax payers, as an IOU, since we are a debtor nation. 1100, employees ended up jobless. The Oakland Bridge is being out-sourced to China.
      What hasn't been written about in detail, is the silence for the land grabbing needed , under Eminent Domain, for 103 miles of track.
      This knowledge IS the magic bullet that should rally CA citizens to stop this Green fantasy in its tracks.


    7. CforUS says:

      California spends as if there is no tomorrow. They are assuming the federal government will step in eventually to bail them out, mostly because it's "too big to fail". What will they do when they don't get the bail out? How will they stem the flow of money that is fleeing the state now that could potentially help bail them out? I was born and raised in California. I loved it because there isn't another state like it. I can't stand what they've (liberal/progressives) done to it now and couldn't possibly live there now.

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