By Cyrus Gutnick
Politics & Culture Editor
November’s ballot gives California residents the choice to reduce emissions and travel more quickly between the major metropolitan centers, in only a matter of hours — and $40 billion. Proposition 1A will ask voters to approve the state’s issuance of $9.95 billion of general obligation bonds to begin funding a $40 billion, 800-mile high-speed train that would run between San Francisco and Los Angeles. It is estimated that the train system would be completed by 2030, with a commute time of around two hours and 40 minutes.
“If this [proposition] passes in November, it will be the beginning of a long-term investment,” said Dan Xie, UC Santa Cruz campus organizer for the California Public Interest Research Group (CALPIRG).
This is a long-term investment, with a plan to raise only half of the money. Along with the $9 billion in bonds from the state, is a promise of matching funds from the federal government to begin construction. This creates almost $20 billion combined, with the potential to be used almost immediately.
“A typical bond, if it passes, is sold to the public, to investors, [and] not just to California, but all over the world,” said Daniel Friedman, professor and undergraduate programs director of economics at UCSC. “They buy these pieces of paper, and the money becomes available within a matter of weeks.”
Xie said that some private entities, such as Southwest Airlines, have shown interest in investing in the project, and she feels more will sign on once the proposition is passed.
She also reassured citizens that they would not see an increase in their taxes, because they are voting to approve a bond. However, even though taxpayers may not see an increase in taxes, there will be money not spent elsewhere as Californians pay the installments on the bond’s interest.
“When an investor buys this piece of paper, we promise the issue of the bond; promise some payment to this investor, or whomever they might sell the bond to later,” Friedman said. “This might mean payments twice a year, called coupon payments, through the life of the bond. These payments will be made by the State Department treasury. The taxpayers are borrowing the money.”
Forty billion dollars is a daunting amount, especially in the throes of fiscal woe in a failing economy, but the alternatives are expected to be even more costly as California’s population continues to grow.
“If we don’t build the high-speed rail, it will cost more to build or expand the existing highways and airports,” said Naomi Isis-Brown, high-speed rail coordinator for UCSC campus CALPIRG.
CALPIRG’s website predicts that by 2030 — the projected completion date of the high-speed rail — total highway expansion in California will cost $66 billion, and total airport expansion, including runway expansion, terminal construction, etc., will cost $16 billion, totaling $82 billion.
The local Democratic party in Santa Cruz offered little insight into the proposed project.
“The Democratic party has made an endorsement of the proposition and we [Santa Cruz supporters] will work with them through November with great enthusiasm,” said Delilah Valadep, campaign coordinator for the United Democratic Campaign.
Despite the enormous cost to create the next generational public transit line in a time of fiscal tightness, optimism for the proposition is in the air.
Isis-Brown sees this proposition as a beneficial, long-term investment.
“[Prop 1a] would be the first step of making high speed rail a reality.”