Funding plan called 'highly speculative'
SACRAMENTO (AP) — The state Legislative Analyst’s Office said Tuesday that the latest plan to build a $68.4 billion high-speed rail system linking Northern and Southern California still relies on highly speculative financing, and it urged the state Legislature to reject funding until more details are ironed out.
The California High-Speed Rail Authority “has not provided sufficient detail and justification to the Legislature regarding its plan to build a high-speed rail system,” the LAO said. “Important details regarding the very recent, significant changes in the scope and delivery of the project have not been sorted out.”
The latest business plan, released earlier this month, trimmed the cost from an estimated $98 billion last year, but leaves it well above the $45 billion estimate given to voters in 2008 when they approved selling nearly $10 billion in bonds. The 520-mile San Francisco-to-Burbank system would be completed in 2028, relying on existing connector rail lines.
The report notes that the new plan still relies on at least $42 billion in federal funding. So far, California has been promised $3.3 billion in federal funds to start construction in the Central Valley, but the project also needs financing from the voter-approved bonds.
The LAO recommended that lawmakers reject Gov. Jerry Brown’s request to start selling $2.6 billion in bonds to start construction until the rail authority gives more details about the latest plan, but it suggested lawmakers continue funding for the rail authority so the project could be pursued later.
Brown, a Democrat, has been a staunch proponent of high-speed rail. His office had no immediate comment Tuesday.
The LAO also questioned the rail authority’s plan to rely on funds from California’s new cap-and-trade program if federal funding does not materialize. The program is part of the state’s landmark global warming law, which aims to cut greenhouse gas emissions to 1990 levels by 2020, but the first segment of the rail system would not be finished until 2021, the LAO noted.
Earlier Tuesday, the Senate transportation committee postponed a vote on a proposal to put the high-speed rail plan back before California voters.
SB985 by Sen. Doug La Malfa, R-Willows, said voters no longer have confidence in the project, and would likely reject it if given another opportunity. California has also faced years of successive budget cuts amid the recession.