The controversy over the proposed construction of California's high-speed-rail system centers not on whether or how it can be built but on how much it will cost and how the state will pay for it. Good questions, considering that the last time California plunged into a momentous project with this little forethought, almost everything went wrong.
Critics say the state has no feasible plan to fund anything beyond a 29-mile initial segment of the train between Los Angeles and San Francisco, and they criticize cost estimates as way too low. Sacramento County Superior Court Judge Michael Kenny apparently agreed, ordering the rail agency on Nov. 25 to redo its 2011 funding plan before spending any state bond money.
It may seem shocking that California would begin the biggest public-works project in the state's history—the cost is estimated at between $60 billion and $150 billion—when it hasn't even funded the first $6 billion.
But California's practice of spending first and attempting to fund it later has led to unfunded liabilities and debts of nearly $355 billion, according to the Associated Press, and helped earn California the dubious distinction of being "the worst run state in America," according to a recent Wall Street Journal survey.
The state has been behaving this way for a long, long time. Dreamed up more than a century ago, another massive California public-works project—known as the Hetch Hetchy Water System—provides a distant but revealing mirror for California's present behavior. After federal approval in 1913, San Francisco invaded Yosemite National Park to build a dam and flood the Hetch Hetchy Valley, Yosemite Valley's lesser known but no less spectacular twin, to supply water and generate hydropower revenue for the city. The action resulted in staggering costs that San Franciscans are still paying for today.
The water project was the brainchild of San Francisco's mayor between 1897 and 1902, James D. Phelan, a self-styled visionary dedicated to transforming San Francisco into the greatest metropolis in the West. His "Greater San Francisco" would need a dependable municipally owned water supply. Phelan ignored the many feasible sources of water that city surveyors had located statewide. Instead, he discovered a spectacular, sheer-walled, waterfall-laced Sierra valley called Hetch Hetchy on the Tuolumne River. There he saw a perfect dam site and reservoir, an endless supply of pure water, and revenue-producing public-power potential.
Though the natural wonder was preserved in the newly created Yosemite National Park, Phelan and his successors waged an expensive 13-year battle against an equally determined opposition of park defenders led by writer-naturalist John Muir. A national controversy erupted. The matter finally landed in Congress. The 1913 Raker Act approved development of the valley.
San Francisco voters were told that the entire system would be financed by a $45 million bond, which they had authorized in 1910, and that they would have their water in five years. Aware that this cost estimate and timetable were terribly flawed, city engineer Michael Maurice (M.M.) O'Shaughnessy told supervisors to get the dam built first—then city residents would be locked into finishing the job, and the city could worry about aqueducts, infrastructure and inflation later.
Sound familiar?
O'Shaughnessy Dam was not completed until 1923. Construction costs totaled about $8 million. Hydropower facilities followed. Electric-transmission towers rose amid the pines. Costs for the aqueduct spiraled upward. The initial money, the $45 million, was soon gone.
New bonds were proposed, but San Francisco voters rebelled against "More Money" O'Shaughnessy, [Larry Aaroson]as M.M. was now dubbed. Finally, in 1928, with loans from financial institutions, wealthy individuals and construction lobbies—and with water-supply and infrastructure problems still looming—the city purchased the local water company for $41 million, far more than the private company had proposed many times since its first offer decades earlier.
Cities on the east side of San Francisco Bay opted out of the project in 1924 to develop their own water system from the Sierra. In June 1929, at a total cost of $39 million, East Bay residents began drinking pure mountain water. San Franciscans wouldn't taste a drop for five more years.
What finally brought it to them was an engineering marvel, a gravity-fed aqueduct bored through the coastal mountains and laid under the bay. On Oct. 18, 1934, more than two decades after the project was approved, Tuolumne water gushed into Crystal Springs Reservoir. San Franciscans had their water . . . and a bill of more than $100 million. Adjusted for inflation, that would be about $1.739 billion in today's dollars.
But all was not well. Undaunted, the city took on more debt to raise the dam another 86 feet to enhance power generation. Exhausted San Franciscans refused further funding. City officials found a way to finance power production but couldn't convince voters to pay to build the power lines to bring it to town. In violation of the Raker Act, which had specified the use of public power, city officials ended up transmitting electricity through the privately owned Pacific Gas and Electric. PCG +1.15%
To this day, the Hetch Hetchy System is a headache for the city. In 2002, after the system's maintenance had been largely neglected for six decades, San Franciscans were pressed by the city to authorize $3.6 billion in bonds for repairs and modernization. That debt rose quickly to $4.3 billion.
The environmental fight also goes on. In the 1980s, encouraged by federal studies, President Reagan's Interior Secretary, Donald Hodel, wrote: "Maybe, with imagination, good will, and perseverance, we will be able to reclaim the national park land under the water of Hetch Hetchy Reservoir." As if channeling James Phelan, then-San Francisco Mayor Dianne Feinstein objected, proclaiming Hetch Hetchy to be San Francisco's "birthright."
San Francisco leaders mock continuing efforts by national-park and conservation advocates to unhitch Hetch Hetchy from the system and restore it to Yosemite. In 2012, San Francisco Mayor Ed Lee called the idea "insane." But nationwide, support for such a move is slowly growing.
High-speed rail proponents ignore this history lesson, even as it is repeating itself before their eyes. Initial financing for the rail system is stalled. Future funding is uncertain. Environmental concerns persist. And yet—dismissive of serious geological, technological and revenue concerns, nonchalant about superior-court rulings, ignoring the state's multibillion-dollar debt and fueled by their own rhetoric—modern-day fans of this colossal public-works project proclaim that all will be well.
Even without the example of Hetch Hetchy, there is plenty already to make California voters wary of approving ruinous debt for a runaway high-speed-rail system that they may not live long enough to ride. [Nassau OTB Race Palace]
Mr. Cogan is an educator and spoken-word touring artist from Claremont, Calif.