Of hyperloops & self-dealing
A new feasibility study suggests that the development of a high-speed hyperloop transportation system linking Pittsburgh, Cleveland and Chicago would be an economic boon to communities along the route and to investors alike.
The $1.3 million study, running 157 pages, says the Great Lakes Hyperloop System – which would move passengers and freight through low-pressure tubes at more than 500 miles per hour – would cost about $40 billion to build.
But the Post-Gazette says backers project an operating profit of $30 billion during its first 25 years of operation.
Proponents insist the only public part of this deal would be to provide rights of ways for the route; private investment would pay the capital costs. (Though never mind that, according a newspaper report, they’re seeking a $5 million federal taxpayer grant for an environmental study.)
A representative of the firm that conducted the feasibility study claims the hyperloop would be “self-sustaining” and would “not require government subsidies.”
Do remember that.
For the Pittsburgh area, the study offers grand pronouncements of tens of billions of dollars in benefits, from higher property values over that same 25 years, to hundreds of thousands of new jobs; from hundreds of millions of dollars in new property and local taxes, to $1.5 billion in new income tax revenue.
The projected cost per mile? An astounding $49.2 million to $64.2 million.
Remember all this – and all these numbers – when the investor pool isn’t as deep as projected, the benefits (as determined through “multiplier effects”) are found to have been overstated (as they so often are with these projects) and backers seek heavy taxpayer subsidies to, drum roll, please, make them “whole.”
Of course, if that happens, it means the project is not “self-sustaining” and should not have been built in the first place.
Pardon the usually journalistically verboten and, in this case, inverted phraseology — but Christmas did not come early for departing Pittsburgh City Councilwoman Darlene Harris.
A council majority, seeing the attempted self-dealing for what it was, tabled legislation that would have killed a provision that would have eliminated what’s know as the “Social Security offset” for elected officials.
That provision was instituted when the city was in state-overseen financial recovery. It reduced pensions by half of whatever was to be received in Social Security benefits.
Not only was the legality of the move questioned, it would have, if later applied to all non-uniformed city employees, placed even more stress on a “moderately stressed” pension system that’s now only about 60 percent funded.
As eyebrow-arching as all that is, it didn’t faze Harris. While six City Council members, with almost no discussion, voted to kill the measure Wednesday last, Harris was one of two city councilors who voted against the motion to table her personal sweetener.
There’s a highly technical public policy term for this: Wow.
Colin McNickle is communications and marketing director for the Allegheny Institute for Public Policy (firstname.lastname@example.org).