High Speed Railroaders, Governor Brown and democrats in the State Legislature, possess an insatiable appetite for taxpayer money. California has the highest sales tax and the highest gasoline tax in the nation [Note 1] [Note 2]. Our maximum state income tax rate of 10.3% is second only to Hawaii’s 11% [Note 3] and yet the railroaders propose sales and income tax increases they hope voters will approve this coming November [Note 4]. The railroaders’ problem is not lack of revenue. Theirs is a spending problem. To say railroaders spend money like a drunken sailor is an insult to drunken sailors around the world. A drunken sailor is somewhat restrained because he is spending his own money. Railroaders seek to spend from your wallet and operate under no restraints as evidenced by their recent authorization of $4.8 billion in rail bonds which will result in a California taxpayer cost of nearly $400 million per year for the next 30 years.
It has often been said, “Fool me once…shame on you. Fool me twice….shame on me.” California voters have been fooled and shamed for years. Voters must remember the lessons learned from the railroaders’ recent decision to fund high speed rail and vote NO on the railroaders’ proposed tax increases in November.
Lesson #1 Railroaders just want access to your money.
California voters were duped in 2008 into approving $9.95 billion in rail bonds by railroaders (legislators and Attorney General Jerry Brown) who promised them a statewide system of high speed rail by 2020 connecting Los Angeles, San Francisco, Sacramento and San Diego projected to cost $45 billion; mostly funded with federal and private dollars. From the allotted $9.95 billion, a mere .95 billion was to be used to improve and connect regional and commuter lines with the new high speed rail system [Note 5].
Four years later the state legislature approved using all $.95 billion of the interconnectivity bonds and an additional $1 billion of the high speed rail bonds to improve regional commuter trains with no concrete plans to ever connect them with a high speed rail system. Worse yet, they approved spending $2.6 billion in high speed rail bonds and $3.3 billion in federal funds to trample across farmland in the Central Valley building “high speed rail” that will only connect with Amtrak service [Note 6]. Coupled with the $.6 billion in rail bonds used or recently committed for environmental and preliminary engineering work, the state has now spent or authorized bond issues totaling $5.2 billion of the voter approved $9.95 billion. The list of projects funded with this money includes improvements to conventional rail service up and down the state [Note 7], [Note 8], but fails to provide for even one mile of high speed train service or the purchase of a single high speed train.
Lesson #2 Railroaders’ promises mean nothing.
Most railroaders are lawyers. Voters must read the fine print on future tax increase initiatives crafted by railroaders. The railroaders made promises in the text of Proposition 1A, the Safe, Reliable High-Speed Passenger Train Bond Act, designed to make you, the taxpayer, feel your money would be spent on usable high speed rail or not spent at all. The railroaders were not to even ask the legislature for high-speed rail funds without first developing a funding plan [Note 9] for a “usable segment” of high speed rail. A list of criteria for this funding plan included one stating that “the usable segment thereof would be suitable and ready for high-speed train operation” [Note 10]. Any rational person would envision from this requirement of the funding plan that when the funds were spent there would be great fanfare and celebration with the opening of the first usable segment of high speed rail. The rational person would have been wrong.
The railroaders’ lawyer, Legislative Counsel Diane Boyer-Vine, when asked to look into the legality of the proposed funding plan, had this to say about what constitutes a “usable segment”.
“It could be argued that “usable segment” means that the segment is to be used by high-speed trains immediately upon its completion. However, the word “usable” is not specifically defined” [Note 11] .
Ms. Boyer-Vine then goes on to make her argument for a definition of “usable” and concludes:
“Therefore, we do not think “usable” in the context of “usable segment” necessarily means “usable by high-speed trains” [Note 12] .
The ability to tie the 130 miles of track slated to trample over business and prime Central Valley farmland into existing BNSF freight tracks making it capable of serving Amtrak renders it “usable” enough for Ms. Boyer-Vine.
Ms. Boyer-Vine was not concerned that the track would not be electrified, would not have positive train control, and no high-speed trains would operate on it. She simply concluded that no one could expect electrification and positive train control “since it could be many years before these features could be put to use, including them immediately could lead to degradation of the electric catenary lines and related facilities and result in a waste of government funds. Therefore, we do not think that the “suitable and ready” provisions require these features to be included in the proposed construction of the initial 130 mile segment.” [Note 13]
Degradation of the track itself while serving freight and/or Amtrak trains for decades while waiting for high speed trains was of no concern to Ms. Boyer-Vine.
More importantly, she made the statement that the State Legislature could do pretty much whatever it wanted to do regarding issuance of rail bonds because while the text of Proposition 1A made many promises designed to safeguard the taxpayer’s money, it failed to include the words “or else you cannot approve the issuance of the rail bonds.” [Note 14]
Lesson # 3 Federal grant money is also your money.
California is home to approximately one in eight Americans. Of the nearly $4 billion in federal grant money assigned to the high-speed rail project, $500 million will become debt shouldered by Californians. The other $3.5 billion will be borne by fellow Americans. Nearly all of it will be borrowed from the Chinese.
Looking towards the November election
Now consider Proposition 30, the Schools and Local Public Safety Protection Act of 2012, to be voted on in November. It raises sales and income tax rates that are already the highest in the nation. The railroaders say these tax increases are necessary or the state will face draconian cuts to state services, primarily education. The railroaders say Proposition 30 revenue will go to fund education in California. However, Proposition 30 is written in a way that allows the railroaders (legislature and Governor Brown) to take away existing educational dollars and use them in any way that meets the needs of their political backers (think public sector union pension bailout) and replace it with money generated by Proposition 30 tax increases. [Note 15] [Note 16] [Note 17] In short, no additional educational dollars are assured. The railroaders are trying to deceive you again. Voters need to remember lessons one and two stated earlier.
Railroaders just want access to your money.
Railroaders’ promises mean nothing.
Vote NO on all initiatives that give railroaders access to your money….either through direct taxes or bonds. Tell them enough is enough. Live within your means. Existing revenue should be sufficient. Higher taxes will result in more waste, drive more businesses out of California, and result in more lost jobs.
Factual statements made in this article are footnoted below and can be accessed by clicking on the link embedded in the article.
Note 1: Table of Sales Tax Rates for the 50 states
California is highest at 7.25%
Note 2: Table of Gasoline Tax Rates for the 50 states
California is highest at 41.2 cents/gal
Note 3: Table of Tax Rates for 50 states and
California is second highest at 10.3% (Hawaii is 1st at 11%)
Note 4: Link to Proposition 30
Note 5: Supplemental Voter Guide for November 2008 General Election
Note 6: Text of Budget Amendment funding high speed rail
Note 7: Bay Area Commuter Rail Improvements
Note 8: Southern California Commuter Rail Improvements
Note 9: Text of Proposition 1A found in Assembly Bill 30304, section 2704.08(c)(1)
Note 10: Text of Proposition 1A found in Assembly Bill 30304, section 2704.08(c)(2)(H)
Note 11: Legislative Counsel’s Opinion, page 12, paragraph 2
Note 12: Legislative Counsel’s Opinion, page 12, middle of paragraph 3
Note 13: Legislative Counsel’s Opinion, bottom of page 15
Note 14: Legislative Counsel’s Opinion, page 13
Note 15: Opinion Article by Jon Coupal, OC Register, July 24, Title: Paying lip service to education
Note 16: LAO on Proposition 30 Impacts to Education
Note 17: Full Text of Proposition 30