Is the bullet train hungry for property taxes?

A wonderful children’s poem by Shel Silverstein is about Hungry Mungry, a sad soul with an unquenchable appetite. It starts like this: “Hungry Mungry sat at supper, Took his knife and spoon and fork, Ate a bowl of mushroom soup, ate a slice of roasted pork, Ate a dozen stewed tomatoes, twenty-seven deviled eggs, Fifteen shrimps, nine baked potatoes, Thirty-two fried chicken legs.” By the end of the story, Hungry Mungry had consumed the kitchen table, his house, the city of Chicago and, you guessed it, the entire universe. Hungry Mungry was never satisfied and was always looking for the next thing to eat.

The tale of Hungry Mungry makes us think of California’s High-Speed Rail Authority (CHSRA). It is constantly looking for new kinds of revenue to feed the controversial High-Speed Rail project.

Last year, this column reported on Senate Bill 545, which mandates “a study on economic opportunities along the corridor of the California high-speed rail project, as defined.” Further, the bill “would require an infrastructure district, as defined, that uses its revenue to finance the construction of the high-speed rail project to dedicate a majority of its revenue to infrastructure projects within the jurisdiction of the local agencies that establish the district.”

Forgive the legalese, but the above sentence “assumes a fact not in evidence,” given that there are no local infrastructure districts that currently spend funds on high-speed rail. Nonetheless, the language certainly appears to lay the groundwork for that use. Moreover, when anyone in government starts looking at “a variety of funding mechanisms,” there’s only one meaning: tax increases.

Senate Bill 545 passed in the Senate, its house of origin, but as a “two-year” bill, it has yet to move in the Assembly. Not waiting to see if SB 545 becomes law, the High-Speed Rail Authority, in the latest iteration of a “draft business plan,” expressly identifies this controversial proposal to capture local tax revenue.

As reported by the Fresno Bee last month, “the state agency in charge of the California project is seeking control over land-use and tax revenues within a half-mile of its future stations—a radius that in Fresno would include the entire core of downtown and Chinatown. The details of the idea have not been fleshed out, but the California High-Speed Rail Authority says it wants to capture the increase in property and sales tax revenues generated in an area by the arrival of a station. That would mean city and county budgets do not capture those extra property and sales tax dollars, which typically pay for police, fire and other essential public services. The rail authority says it needs these powers to ensure the necessary infrastructure—including streets, utilities and grade separations—are in place when its stations open. Otherwise, its investment could be put at risk, the agency says.”

Not surprisingly, the idea that local tax revenue would be diverted to a state transportation project—especially one as uncertain as High-Speed Rail—does not sit well with local government officials. The same Fresno Bee article quotes Jerry Dyer, the mayor of Fresno, as saying, “As much as I have been supportive of high-speed rail in the past, any attempt to take revenue from the City of Fresno and transfer it to HSR will be strongly opposed.”