Winner of California Governor's Race Can Boost or Kill High Speed Rail

Jeff Morales, Managing Principal at InfraStrategies discusses how the outcome of the midterm elections will affect California's high speed rail project. 

Excerpted from Trains Magazine

By Jody Meacham | October 31, 2018

In his eight years in Sacramento, Democratic Gov. Jerry Brown pushed California’s high speed rail project from idea to construction stage, fought off Republican attempts to kill it in the state Legislature, and found new money when funds were running low. When Brown leaves office Jan. 7, he will be replaced either by a governor who promised during this year’s campaign to scrap high speed rail or a candidate who’s been on both sides of the issue in the past and currently is a timid supporter. That question will be answered in Tuesday’s election, though it would be incorrect to characterize the vote as a referendum on the rail project. It didn’t come up this fall in the candidates’ only debate. But even if Democrat Gavin Newsom defeats Republican John Cox, as expected, and decides to go all-in on backing the railroad, the project still faces a steep grade of other changes moving forward. “They have a mountain of skepticism and literal mountains that they have to get through,” says Ashley Swearengin, a high speed rail supporter and former Republican mayor of Fresno, Calif. Jeff Morales, CEO of the project for five years — including the groundbreaking — until his resignation midway through 2017, says Brown “did not come into office just hell bent on putting his arms around it. … But he put his imprint on the program and reshaped it. And I would expect that Newsom will do the same.” Morales says Brown twice came to high speed rail’s rescue when he could easily have let it slip away to deal with more pressing problems.  The first time was in the summer 2012 when there was a key vote on the appropriation of money from Proposition 1A bonds, which voters passed in 2008 to fund the project. It could have endangered Brown’s efforts to put another measure on the ballot, called Proposition 30, to increase income taxes to balance the state budget.  The second time Brown saved high speed railroading was two years later when Brown agreed to commit 25 percent of the revenue from California’s cap-and-trade market, which works to lower greenhouse gas emissions by selling permits to release carbon dioxide into the air, to high speed rail on the grounds that increased use of electric trains would improve the environment. Besides the change in governor for the project to deal with, Dan Richard, 67, who has chaired the California High Speed Rail Authority board for the past six years, may be replaced if Newsom wins and installs his own appointees in the state bureaucracy.  And CEO Brian Kelly, former head of CalSTA, the state transportation agency, who’s been on the job only 11 months and spearheaded the railroad’s most recent two-year business plan, has an unknown future. He went on an extended medical leave in September and little has been announced about his problem or prognosis. “I'm not worried about the continued momentum because we're employing thousands of Californians today,” Richard says. “We've got strong support here in Silicon Valley and I think those things will carry us through the first construction segment connecting (Silicon) valley to (Central) valley.” That connection is now projected for 2029 under Kelly’s business plan. All the approximately 2,000 people working on high speed rail construction are in the Central Valley on a segment of the line that stretches from Merced through Fresno to near Bakersfield. A new station location and alignment into Bakersfield were approved earlier in October. That’s the heart of the project because there’s no way to run a train from the San Francisco Bay Area to Los Angeles in less than three hours without using the Central Valley’s 120-plus miles of flatness to build a 220-mph race track. Construction began there because the topography allows for the cheapest construction and the rural land is much cheaper to buy than in the megalopolises at either end. But the valley is also the heart of the project’s opposition — the rural “nowhere” critics have warned would be the only place any railroad would ever be built and where farmers and ranchers decried the loss of agricultural land. Ten months ago, the valley produced the project’s latest setback when the authority announced that the $7.8 billion construction price tag there had ballooned by more than a third. Jim Patterson, a leader of the Republican opposition to high speed rail in the California Assembly and a Fresno mayor before Swearengin, immediately called for a state audit. He got it when state Sen. Jim Beall, a Democrat from San Jose and chair of the state Senate’s transportation committee, joined him in the request. But the two legislators are on opposite sides of the project. Patterson declined an interview request through a representative but tells the Fresno Bee last month, “We are at a place where any objective individual who looks at the high speed rail business plan must conclude it is a going-out-of-business plan.” It’s not that easy, says Beall, noting that a $3.3-billion federal grant that funded construction from the groundbreaking in 2015 until September 2017 would have to be repaid if the project is shut down. Much of the cost increase was attributed to having to use a cumbersome and time-consuming land acquisition process that relied on the state’s general services department. Beall led the Democratic majorities in both state houses in passing a bill, which Brown signed this fall, giving the project the same authority as Caltrans, the state agency that builds highways, to negotiate and buy land directly from owners. “It's a streamlining of the process that should cut costs,” Beall says. Beall says that as long as Democrats maintain their majority status, high speed rail will survive in the legislature. Both he and Swearengin also said they have confidence in Newsom, should he be the next governor. Even though the Central Valley is Republican California, Newsom recently took rail opponents to task for using the “nowhere” term to describe it. “It’s insulting to suggest the Central Valley is nowhere.” But the candidate also said the current business plan’s strategy of just building from San Francisco to Fresno and on to Bakersfield may be all that’s realistic until a way of solving California’s most persistent railroad obstruction, the Tehachapi Mountains, is found. Such a railroad would put Fresno residents, by most measures among the poorest in the United States, within an hour’s commute of Silicon Valley, the nation’s economic powerhouse. Swearengin sees high speed rail as an element of a three-part infrastructure investment in the Central Valley, which also includes water and higher education expansion, as the region’s long-needed economic lifeline to pull it out of poverty. “High speed rail scratches a pretty significant itch,” she says. “It's difficult to overstate the importance of this sort of transportation link into the heart of the Central Valley.” But she warned that Fresno, which swallowed up 60,000 acres of farmland during the last 50 years, can’t sprawl further as San Jose’s suburb.  “That is not a recipe for success and for lifting the Valley's economy,” she says. “As boisterous as many of us are about the importance of the connection, we also are constantly reminding our colleagues and peers in the Bay Area that there's got to be an equal investment in business here along with housing development.” It’s been a long time since Americans last thought of building a passenger railroad as the kind of economic driver that they’ve long relied on government-funded freeways and airports for. “There are a few cases where the private sector is stepping in,” Morales says, citing Brightline in Florida and Texas’ mostly privately funded high speed rail plan. “The limitation on that is there are only a handful of circumstances where the conditions are ripe for the private sector to step in and take some of the risks that government typically and traditionally does. You'll get a few [private] one-offs, but you're not going to get a system or a network that really functions fully without some level of government engagement.”