Putting the Price of California HSR in Perspective

Between now and 2033, the rail project would cost between $65 and $75 billion (in 2010 dollars). Over the same period, Caltrans, California’s Department of Transportation, can be expected to spend at least $286 billion (also in 2010 dollars), mostly on roads projects, assuming that its current annual budget of about $13 billion (including federal and state outlays) stays intact. In truth, considering that there is considerable support for increasing infrastructure spending in general, that figure is likely to go up considerably.

Compare those figures to the state’s GDP, which is estimated at about $1.9 trillion a year. Over the course of twenty-two years, the state will produce $42 trillion in output (again, in 2010 dollars) — assuming no growth in the economy, despite the fact that California’s population is expected to grow by seven to seventeen million people by 2040.

This very conservative estimate, then, suggests that a high-cost rail project would not only represent only 0.18% of a heavily depressed state economy over 22 years, but also that it would only account for 21% of the broader state transportation budget, which would remain mostly focused on highway construction and maintenance, as in the status quo. On average, the U.S. invested between 2.5 and 3% of its GDP on publicly sponsored infrastructure between the 1950s and 1990s. The full cost of the California project thus comes to appear far less dramatic.