Fast track to a fiscal collision
What to do when taxes are high, your government is broke and industries are leaving to go elsewhere? In California, the answer is: Build a $68 billion “bullet train.”
Despite the Golden State’s dire financial problems, Gov. Jerry Brown has received authorization from his fellow Democrats in the state Legislature to get the project under way.
The bullet train would link San Francisco and Los Angeles, traveling at speeds of 220 mph. It is viewed by proponents as a needed transportation option and a jobs producer.
The bullet train may not be a bad idea. Similar high-speed rail systems are used in Europe and Japan.
But talk about bad timing. California faces a range of fiscal difficulties related to essential public services that appear increasingly difficult to solve. And over the last month, the California cities of Stockton, Mammoth Lakes and San Bernadino have filed for bankruptcy.
“We’re cutting the school year, releasing violent felons early, and the governor wants to increase taxes on every Californian while spending billions we don’t have on a project citizens don’t want,” Republican State Sen. Doug LaMalfa told Bloomberg News Service. “Voters simply aren’t buying the line that we need to cut education and public safety but have ample money for high-speed rail, and they’re right not to.”
Proponents point out that the rail proposal was approved in a 2008 referendum. Of course, that was before the full weight of the recession had been experienced. And recent polls show opposition to the project at 59 percent.
Meanwhile, voters will be asked to endorse a temporary increase in the sales tax, already the highest of any state in the nation, to 7.5 percent, and increase income taxes on those earning more than $250,000 a year.
If the tax referendum doesn’t pass, officials insist that the school year will be cut by three weeks statewide. Outside of the public realm that would qualify as extortion.
Gov. Brown said the rail plan will put his state “back to work and puts California out in front once again.”
Certainly, California appears ahead of the curve for self-inflicted fiscal problem.
It’s a train wreck.