On the heels of several critical reports from the Legislative Analysis Office, the State Auditor, and the University of California, Berkeley, detailing the inadequate planning, weak oversight, and lax contract management, the State Legislature put significant strings on the funding given to the High Speed Rail Authority (Authority) in this year’s budget. Specifically, the Legislature insisted that the Authority address some of the criticisms before receiving the second half of their funding. However, in a surprise move, the Governor cut those strings as he line item vetoed the budget.
In the Legislature’s budget, the Authority had to submit a report by February 1, 2011 which includes:
- A legal analysis of the revenue guarantee the Authority would like to offer the private firm that eventually operates the project – a guarantee, which if backed by state funding, would seem to violate the law
- A summary of contract expenditures for community outreach, which would likely show their outreach budget spent more on promoting the project instead of reaching to communities
- A financial plan with alternative funding scenarios since the likelihood of getting the large sum of federal and private funding the Authority is banking on seems remote
- A copy of the strategic plan
- A report on the performance of the Program Management Contractor
- A report on how the Authority has addressed the other recommendations of the Bureau of State Audits.
With his veto pen, the Governor removed these important reporting criteria, which means the Authority does not have to address any of the shortcomings. Another glaring deficiency of the Authority’s work is their ridership analysis. UC Berkeley looked at their ridership modeling and found it deeply flawed. Ridership – how many passengers they think will ride the train – determines the system’s financial stability and informs where routes should be placed to serve the most people. Ridership is the foundation of the Authority’s analysis and it is a critical component to get right. The Legislature recognized this and insisted that the Authority review its modeling and submits a report detailing how they are addressing Berkeley findings. The Governor deleted this provision too.
The Governor’s actions mean the Authority has a full year of funding with no strings attached. After the abundant criticisms that have come forward over the past 12 months, this is disappointing. It is the role of the Legislature to ensure taxpayers dollars are spent wisely and projects, particularly of this magnitude, are closely watched. The Legislature took this role very seriously in crafting the Authority’s budget. The Governor instead gave them a free pass.