The Seattle monorail project, which ran from 1997 to 2008, offers important lessons for California's current bullet train struggles. Despite initial support, the project faced significant obstacles and financial challenges, ultimately leading to its cancellation.
1. Economic Principles: Two key economic concepts relevant to large projects are:
• Sunk Costs: Money already spent should not influence the decision to continue a project if it faces ongoing issues.
• TANSTAAFL (There Ain’t No Such Thing as a Free Lunch): Every project has hidden costs that someone will eventually pay.
2. California Bullet Train Issues: The California bullet train project, launched by voters in 2008, is facing serious challenges, including:
• Over $14 billion spent on the initial 171-mile segment.
• A projected funding gap of $7 billion to complete the segment.
• Investigations and potential cuts in federal funding.
3. Seattle's Project Overview: The Seattle monorail project was planned to be a 54-mile system extending from the original 1962 monorail. However, it encountered financial issues:
• Initial support waned as costs rose and funding projections fell short.
• Voter enthusiasm was not sustained leading to a series of initiatives to find additional funding or halt the project.
4. Multiple Ballot Measures: From 1997 to 2005, several ballot measures were held concerning the monorail project:
• The project was initially approved in 1997 and had a second referendum in 2000.
• By 2004, a recall initiative aimed to stop the monorail, which failed.
• Ultimately, after a series of failed ballots and budget struggles, voters rejected the project in 2005.
5. Financial Management Issues: Key financial decisions led to the project's downfall:
• Revenue from vehicle excise taxes was significantly below projections.
• Bond ratings for the project dropped to "junk" status, triggering a loss of municipal support.
6. Conclusion of the Monorail Project: By January 2008, the Seattle Monorail Authority was dissolved after attempting to liquidate its assets. The experience highlighted the challenges of ambitious urban transit projects and the need for careful financial planning.
The Seattle monorail project's failure points to significant lessons for California's bullet train initiative. It shows the importance of realistic funding, public support, and addressing financial shortfalls to avoid costly mistakes in large transportation projects.
https://mises.org/mises-wire/seattles-other-monorail-some-lessons-california
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