When the federal Federal Railroad Administration formally announced it was rescinding nearly $1 billion in funding for the state’s absurd high-speed rail system, it cast further doubt on the future of the project. In a 25-page letter, the administration correctly asserted the state had neither the plans nor the capability to build the system that was originally approved by voters in 2008 with $9 billion worth of bonds for what was advertised as a $36 billion system.
The funding for so-called “shovel-ready projects” was included in the Obama Administration’s 2009 stimulus bill that was, in fact, largely a bailout for public employee unions. With Democrats in control in Washington D.C. and Gov. Jerry Brown continuing to push for the project, Obama administration officials conveniently kept changing the rules to keep the money flowing for the project.
The few Republican members of Congress from the San Joaquin Valley have not been fans of the project and have let the president know that.
The feds also indicated that they may go after the $2.5 billion that California already has received and spent. As California state Auditor Elaine Howle (a non-partisan office) already had pointed that possibility out when she released a scathing report on the high-speed rail agency and its foibles.
The feds decision almost certainly will wind up in court as another one of the never-ending actions state Attorney General Xavier Becerra has filed against Trump administration policies and executive orders. Gov. Gavin Newsom declared that the money belongs to California.
Not so fast, Mr. Governor. California officials signed a contract with the feds that contained deadlines and deliverables that have not been met. Railroad bridges are under construction in the Fresno area and not much more.
The original promise in the bonds—travel between San Francisco and Los Angeles in under four hours at reasonable fares with no public subsidy—has been abandoned. When Newsom took control, he modified the project so it would run from Bakersfield to Merced and then potentially make a connection with ACE to connect to the Bay Area. That should be subject to a taxpayers’ law suit because it clearly violates the original bond measure.
Newsom took that step because private investment has not been forthcoming. Gov. Brown pressured the Legislature into putting 25 percent of the revenue from the cap-and-trade emission sales into the railroad. It’s a questionable—to put it mildly—use of that money.
Newsom also was looking at a system pegged at $77 billion (cut down from the $98 billion estimates for the original system reached) with huge cost overruns already showing on the first phase that was the most straight-forward to engineer and build.
It’s time for the governor to take the next step and formally kill the project. The state’s taxpayers will thank him for it.