Could it be that the federal government is more protective of the interests of California taxpayers than the state’s own politicians and bureaucrats? Two stories from last week certainly support the theory.
First, recall that the U.S. Department of Transportation had already announced in June that it was pulling the plug on any further federal funding for California’s controversial high-speed rail project. Transportation Secretary Sean Duffy was blunt in his assessment that, “we don’t want to invest in boondoggles.” The decision to cut off funding was set forth in a 315-page report to the High Speed Rail Authority confirming that the “boondoggle” label is accurate.
A few weeks after the announcement, California High-Speed Rail Authority sued the federal government in the U.S. District Court as an “arbitrary and capricious abuse of authority.” Then last week the state moved for a preliminary injunction to prevent the U.S. Department of Transportation and Federal Railroad Administration from reallocating the funds to other transportation projects.
California Attorney General Rob Bonta justified the move saying that, “If (the) defendants transfer the funds to other recipients before the Authority’s challenge to the grant terminations can be decided, the case will be moot, irreparably harming the Authority and dealing a severe blow to a historic public works project that promises to transform the Central Valley and the state’s transportation network.” The motion will be heard in November.
Taxpayers should applaud the cutoff of additional federal funds as a first step in a 10-step process of forcing state officials to recognize that the project should be terminated in its entirety. That would save California taxpayers $1 billion per year for 20 years, the amount that the latest state budget allocated to the project from the Greenhouse Gas Reduction Fund. That’s the fund in the state treasury that’s filled up with the extra charges you pay for gasoline, electricity and anything in the state that uses energy, such as trucking food to supermarkets.
State leaders know that an appropriation of “only” $1 billion per year is barely enough to keep the High Speed Authority on life support. The “funding gap” to finish even part of the project is many billions more, and no one has any idea where to find that money.
As this column has argued ad nauseum over the last 15 years, the continuation of funding from any source is a waste of taxpayer funds. If the federal shutoff of the money spigot results in a rethinking of HSR’s viability, that would be a good thing.
The second example of the federal government protecting the interests of taxpayers is the announcement last week by U.S. Justice Department of charges against two real estate executives for defrauding California’s Homekey program. According to the Acting U.S. Attorney, Bill Essayli, the two misappropriated millions of dollars intended for homeless housing.
One defendant allegedly used fake bank statements to flip a Cheviot Hills property for a $16-million profit using state and city funds. The other defendant, unrelated to the former, allegedly spent over $2 million in grant money on luxury retailers, transferring funds from his developer to personal accounts.
No one familiar with homeless programs in Los Angeles believes for a moment that these two cases are isolated incidents. An audit of the Los Angeles Homeless Services Authority last November revealed that lax accounting procedures resulted in the failure to reclaim millions of dollars in cash advances to contractors.
While audits and other actions by state officials are important to protect the interests of taxpayers, rarely do misdeeds or incompetence result in any consequences. The actions of the federal government in response to both the High Speed Rail project and the criminal complaints against fraudsters prove that actions speak louder than words.
Jon Coupal is president of the Howard Jarvis Taxpayers Association.