Heritage Foundation op-ed against California high speed rail

Impact of high speed rail service in Spain, California Watch graphic.

Three things that people often fail to properly distinguish in discussions of government spending:

(1) this year's budget, what it comprises, and how it's paid for;
(2) the difference between program (current) spending and investment in capital improvements (paid for now, but with multi-decade return on investment)
(3) the various funding sources (federal, state, etc.) and mandates for different programs.

I think it's fair to say that Emily Goff of the Heritage Foundation mis-represents all three, plus reasons for privatization of rail transit in Japan and the United Kingdom, in the Orange County Register op-ed "State can't afford 'free' rail money" to support an anti-rail argument.

The State of California is projected to have a $16 billion deficit this year (and she uses this number to imply that California is far more mismanaged than JPMorgan despite that firm's announcement of multi-billion dollar hedging losses, which is completely irrelevant to the article--I think Jamie Dimon would be in over his head managing a state government) which is the result of many reasons, some due to restrictions on the ability to tax, and others due, yes, to the disconnect between new economic realities and the conditions under which old program commitments and contracts were made--some things do need to change, to better fit reduced economic circumstances (a/k/a "you can't have your cake and eat it too" especially if you aren't willing to pay for the cake).

But the investment in high speed rail will have a multi-decade payback, and whether or not California makes this investment, it won't have any impact on the state's current account projected deficit for FY13--the high speed rail project will be funded in part by bond money and in part by federal funds.

Chris Nash, University of Leeds, on wider economic benefits of high-speed rail [PDF]

Gines de Rus, University of Las Palmas, on economic effects of high-speed rail [PDF]

Roger Vickerman, University of Kent, on research into economic benefits of high-speed rail/transportation investments [PDF]

Gines de Rus, University of Las Palmas, on benefit-cost analysis of high-speed rail [PDF]

Two other problems with the piece:
1.  Her statements about "privatization" of rail in Japan and the United Kingdom are misleading (but are deliberate, to make the point that "the government" shouldn't be making this kind of investment).

The main reason that rail is private in Japan is that it's profitable, although this in part has to do with how Japanese land use practices maintain dense centers and focus on maintaining investment in cities, and how the rail companies are able to monetize development opportunities in association with the rail system (like how rail transit systems were first created in the US in fact).  

None of this is mentioned in the piece.  Actually, this sets the stage for an interesting conservative argument in favor of privately run transit systems--by coordinating land use and transportation policy, promoting mixed use development, and eliminating subsidies of sprawl and the automobile, rail transit service could be successfully privatized (but still there would have to be government support for the infrastructure probably) because the ridership volumes would be significantly higher.

As long as the competition to transit is deeply subsidized, which it is, it's impossible for transit to function as a privately owned service or without subsidies of its own.

In the UK, rail was privatized for political and ideological reasons, not for business reasons, and for the most part, rail service has suffered for it.  Certainly, compared to continental Europe, for the most part, UK rail service does not measure up.  See this 2001 piece from the International Herald Tribune, "Why privatization of public utilities can be a disaster," which discusses the UK rail experience.

Transit doesn't have to be a government service inherently.  But as long as land use decisions are not made in an integrated fashion with transportation planning decisions and motor vehicle use is significantly subsidized in many ways (the cost of roads, the cost of gasoline, public and environmental health impacts, the cost of military forces stationed overseas, etc.), and the majority of the economic benefits of transit access are gained by other economic interests, privatization of transit doesn't work--it's why transit services had to be taken over by the government. 

2. The new trope going around in conservative circles, related to the general emphasis on "state's rights" and the sentiment that the federal government is incapable of doing anything right, is that transportation planning and infrastructure investment is "increasingly Washington-centered," that "bureaucrats make decisions about projects hundreds of miles away," and that states "know their transportation priorities much better than Washington."  These are all quotes from the Goff piece.

While there is some truth to the point that decisions can be disconnected, at another level the completely ignores the necessity of national planning for transportation.  This is from a past blog entry:

Speaking of exercise, my  thinking about transportation planning generally occurs at five scales:

1. International -- connections between countries.

2. National -- anchors of a national transportation system, current anchors are the Interstate Highway system, the freight railroad system, and airplane travel. We do not have a national passenger railroad network presently.

3. Regional --connections between states or two or more metropolitan areas in a state -- for the most part these don't exist for public transit, except for passenger rail service, but do routinely exist for freight railroad service, airplane travel, and the Interstate highway system, which in turn supports inter-city motor coach (bus) service.

Railroad passenger service with regional scale includes Amtrak's Northeast Corridor railroad passenger service, along with the Amtrak Cascades service from Portland Oregon to Seattle and Vancouver BC, and the Capitol Corridor in California.  Passenger service provided by local rail systems in the New York-Pennsylvania-New Jersey-Delaware region, Illinois-Indiana, serving Chicago, in Southern California, and between Maryland/West Virginia/DC are other examples.

4. Metropolitan -- transit systems like the WMATA subway and bus system in the Washington metropolitan area or the combined railroad, subway, bus, and waterborne transit services in the NYC or Boston metropolitan areas are examples of transit provided at the scale of a metropolitan area, with one major central city at the core.

5. Sub-metropolitan transit systems (in the DC region, locally provided services such as RideOn in Montgomery County Maryland or the Downtown Circulator in DC are examples of services within the subnetwork category of the Metropolitan Transit Network).
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At the state level, transportation budgeting tends to be dominated by road building interests and rural interests, so monies are spent on roads, not on making decisions focused on optimizing the use of the most efficient transportation modes.

And transportation planning is not solely a local responsibility although at the end of the day, infrastructure is built and maintained locally. 

Transportation infrastructure is a system that is designed to be integrated, to connect the entire country, to serve a variety of needs, especially freight transportation.

Even the vagaries of local politics and gerrymandering of political districts and sprawl and its negative impact on center cities, the local political environment is focused not on optimizing transportation efficiency, but on maintaining the automobile-focused status quo.

The Heritage Foundation knows this, which is why it uses the bogeyman of the "federal government" to pressure politicians to push the control of federal transportation monies to the state level.

Finally, the reality is that high-speed rail is a 21st century public investment in California's (and ideally the nation's) future, just as the creation of transcontinental railroad service in the 1860s united the country and laid the foundation for a century of incredible success--economic growth, the development of a mass internal US market, consolidation of the nation, tremendous wealth creation--high-speed rail can reset the mobility and economic paradigm for California for the next five decades, not unlike how high speed rail service is changing Spain.  See "Spain's high-speed rail system offers lessons for California" from the Fresno Bee/California Watch.  

It is tragic that such a strong ideological bent focused on negativizing federal, state, and local government activities is being justified to support a failure to invest in the future of the nation.

I don't understand why progressives have such a difficult time making counter arguments (except for the fact of misfeasance in so many instances, from the war in Iraq to government corruption, which I suppose can be hard to counter, especially when the conservatives are so quick to provide excuses for massive business failure, i.e., JPMorgan's failure in London or BP's oil spill in the Gulf of Mexico, etc.)