By WAYNE LUSVARDI
By Wayne Lusvardi | CalWatchdog
SACRAMENTO — Gov. Jerry Brown just proposed a new idea for financing California’s $100 billion high-speed rail project: Use the fees from the state’s Cap and Trade emission taxation program to fund it.
This new hybrid between Cap and Trade and High-Speed Rail is likely to be dubbed “Cap ‘N Train.”
What this new proposal would do is transfer billions of dollars in higher costs for everything in California that has to be manufactured or trucked anywhere, thus creating air emissions. In turn, these higher costs will be transferred to an unproductive train project that will take riders away from commercial airlines serving the Bay Area and Los Angeles.
High-Speed Rail is Redevelopment in Another Guise
Brown has recently gotten some respect from political conservatives and school-funding advocates for shutting down redevelopment agencies because they rob schools of property taxes. But it is apparently OK to create yet another redevelopment project because it won’t drain the state budget needed for public schools. What Jerry Brown’s right hand takes away, his left hand re-creates in another form. This proves the principle of California bureaucracy: “Problems can’t be solved — just shifted around.”
Brown is reportedly trying to sell his High-Speed Rail project to the skeptical Legislature. Earlier this month, Brown floated an idea to use $1 billion in Cap and Trade taxes to plug his state budget deficit. But $1 billion yearly at today’s bond interest rates would only finance about $20 billion of the estimated $100 billion needed for the High-Speed Rail project. Rider fees on the new train would not come anywhere near paying for the system.
Brown said that if the Legislature didn’t approve his proposal there “always would be the ballot initiative” route to financing the High-Speed Rail. Brown was apparently referring to Proposition 71, which financed $3 billion in redundant stem-cell research. The cost to pay back those bonds, with interest, is $6 billion.