A lot of the hopes in the Administration for a solid demonstration project on the potential for high speed rail are pinned on California. The state has passed an initiative that will help fund the project through a bond sale, top officials are on board, and the project is further along than most of the others in the country. California got another chunk of money out of Florida’s give-back of HSR funds, and it was one of the few instances where the money went specifically to high speed rail rather than building infrastructure or capacity on existing rail lines. If the California HSR line is successful, the rest of the nation could go along with seeking one.

However, there are plenty of pitfalls ahead for the California project. Lots of community groups don’t want the rail lines going through their backyards. State lawmakers want to redirect the HSR money for commuter rail lines in their areas. And conservatives don’t want anyone getting the notion that government can provide tangible benefits to people, so they’ve been denigrating it from the beginning. They got another boost yesterday, with a very ideological report from the nominally nonpartisan Legislative Analyst’s Office. The report claimed mismanagement and suspect statistics from the HSR organization.

The Legislature faces “challenging choices” about whether even to proceed with the ambitious project, the nonpartisan state office said in its report.

Proceeding in the absence of a major overhaul of the project’s governance, route structure and finances would represent “a huge leap of faith given the threats to the success of the project,” the report also says.

…the report urges lawmakers to spend no more than $7 million on the project next year, saying, “The Legislature lacks the good information it needs to make critical multi-billion dollar decisions about the project that it will soon face.”

According to the report, issues that “threaten successful development of high speed rail” in California include: financial constraints, a high-risk plan and “lack of accountability.”

The project’s “optimistic” 2009 business plan counts on federal, state and private funding that may not materialize, the report says.

I’ll let Robert Cruickshank, who has been intently following the HSR situation in California for a while, respond to this.

The LAO makes some other recommendations too, of varying degrees of value, but the headline suggestion – that HSR be essentially put on ice – is a slap in the face to California voters, who support this project and expect it to be built as quickly as possible.

The LAO has attacked the HSR project before – and with similarly disappointing results. In January 2010 they leveled a flawed criticism of the HSR project. The May 2011 report, curiously timed to be released just as the State Senate is taking up a bill to blow up the California High Speed Rail Authority board and replace it with a bunch of people skeptical of the project’s value.

Go ahead and read his full denunciation of the LAO report. The LAO uses phony numbers, neglects the economic value of infrastructure spending and undermines the whole point of connecting the state through a rail network. Most important, the LAO doesn’t take into account the fact that $4 billion in already appropriated federal funding would be at risk if their recommendations to delay the project were followed. The federal Department of Transportation has shown no resistance to taking away HSR funds from states if they try to get appropriated for a different use. They specifically targeted the $4 billion for the construction of HSR lines in California. They won’t take kindly to a bait and switch, just like they didn’t when Rick Scott tried it in Florida and Scott Walker tried it in Wisconsin.

Ray LaHood should probably come out soon and remind California that they will lose their money, and $4 billion in economic activity, if they go the route of the LAO.

This is not an attempt to better manage the HSR project; it’s an attempt to kill it in California. And that would effectively weaken the future of high speed rail across the country, snuffing out the project with the greatest potential.