Has Bullet Train Been Hoisted on Its Own Petard?
Steven Greenhut
by

Sacramento

California officials are notorious for ladling on one environmental regulation after another, forcing developers to spend years or even decades producing waist-deep environmental-impact reports and dealing with endless regulatory hassles and litigation. The main tool environmentalists use to stop growth is the 1970s-era California Environmental Quality Act (CEQA). It’s the equivalent of placing a “sue me” sign on every job site.

CEQA (pronounced “see-Kwa”) is so prone to abuse that virtually everyone in the Capitol, Republican, and Democrat, agrees it needs to be revamped. A reason the law never actually gets reformed is the political power of the environmental groups and unions who use it to their own advantage. It’s the perfect tool for opponents of growth, while unions can threaten suit to hold projects hostage until they get the wage rates they demand.

CEQA also remains uncorrected because of a disturbing double standard. Whenever there’s a big publicly funded project backed by prominent lawmakers, the first thing backers do is to exempt it from the act’s requirements. Why reform a poorly functioning law when it can be used to stop projects you don’t like, but never inhibits the ones you do like?

For instance, my office building is near the new Golden 1 Center in downtown Sacramento — the taxpayer-subsidized, solar-powered home court for the NBA’s Sacramento Kings. The facility was built so rapidly one would think we were living in Texas. Former Senate President Pro Tempore Darrell Steinberg, now Democratic mayor of his hometown of Sacramento, was able to ram through an exemption that put the arena project on a fast track.

That’s life in California’s one-party state, but the California Supreme Court recently has thrown this sordid arrangement into question. There’s no project that Gov. Jerry Brown seems to care about more than the $64-billion-plus high-speed rail system that is designed to link Los Angeles to San Francisco. It’s an amazing boondoggle in the making, the largest state-created infrastructure project ever built in the United States.

That $64 billion number is no doubt a down payment, given the degree to which such infrastructure projects always bust the budget. Voters approved $9.95 billion in starter funds by passing a 2008 statewide ballot initiative, but there’s not enough money identified to pay for the full project. The feds aren’t going to bite, certainly not with a Republican president and Congress. Funds from the state’s cap-and-trade system alone won’t get it built. Moreover, California already has a well-functioning, quick and low-cost method to get people from the Bay Area to Los Angeles. One can fly from SFO to LAX in an hour and 20 minutes on Southwest Airlines.

It also turns out the “ironclad” promises the bullet train’s backers made to voters in Proposition 1A weren’t so ironclad, after all, causing one of its most prominent advocates to turn against it. The rail system probably won’t meet the promised arrival times of two hours and 40 minutes, given that the latest plan routes the train along much-slower commuter tracks in major urbanized areas. It won’t be able to lure private investment. The ticket-price estimates are too low, and there’s little chance the bullet train can operate without ongoing subsidies. The lower courts held up bond spending because of the system’s funding plan, but higher courts declared that the project could proceed anyway.

Like CEQA, rules are made for the peons. I’ve argued that the bullet train’s greenlight sets a precedent for all initiatives. Just because advocates promise something doesn’t mean the courts will ever force them to live up to those promises. Nevertheless, the authority is busy spending money and using the power of eminent domain to condemn properties around Fresno. The line will now go from the Central Valley to the Bay Area until the authority figures out how to get over the imposing mountain passes that will take it south into the Los Angeles basin.

But then in late July, the California Supreme Court did something quite astounding. In a 6-1 ruling, it decided that this state infrastructure project must live under state environmental law. Imagine that. As the Los Angeles Times reported, “In 2014, the state asked the federal Surface Transportation Board, which regulates railroads, to exempt the project from any legal injunctions that could stop construction.” State officials even argued that “the project was exempt from state law,” which triggered a separate lawsuit in the federal courts.

The case was filed by two environmental groups against the North Coast Railroad Authority and a private rail company that does work for the authority. The appeals court had determined that “CEQA is preempted by federal law when the project to be approved involves railroad operations,” but the California Supreme Court disagreed.

The opinion, written by Chief Justice Tani Cantil-Sakauye, found that the relevant federal legislation “preempts state regulation of rail transportation” but not in this case. “This is both because we presume Congress does not intend to disrupt state self-governance without clear language to that effect, and because the (the federal law) leaves a relevant zone of freedom of action for owners that the state, as owner, can elect to act in through CEQA.”

Before the ruling, the Associated Press wrote the decision “could help speed up construction” of the bullet train. It quoted a legal filing from farm bureaus in Madera and Merced counties that put the relevance of the case in perspective: “If the court finds the federal pre-emption of CEQA applies broadly to railroads in California… the authority will be able to evade the environmental and political accountability that California’s Legislature (and the voters) intended.”

Frankly, that’s how it usually works. The state does as it chooses, but all the restrictions, rules and accountability are imposed mainly on private companies. I don’t usually side with environmental groups trying to stop development, but this decision is wonderfully satisfying. Perhaps the governor’s pet project will have to endure the same excruciating litigation and delays that other less-prominent projects have to endure.

This isn’t the end of the matter, of course. As the Times explained, the state’s high court tends to embrace the idea that state laws take precedence in state projects, but federal courts usually take the opposite position. This case could still be appealed to the U.S. Supreme Court. But in the meantime, California rail officials will have to abide by the state’s own laws. Maybe it will convince legislators and the governor to finally get serious about wide-ranging CEQA reform.

Steven Greenhut
Steven Greenhut
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Steven Greenhut is a senior fellow and Western region director for the R Street Institute. Write to him at sgreenhut@rstreet.org.
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