Aug 3, 2014

Wall Street Journal: California Plans Bullet Train Without More U.S. Aid

State financing is important given Republican control of the U.S. House of Representatives. Majority Leader Kevin McCarthy (R-Calif.) has vowed to block any additional federal money for the project.

“It’s well within the capability of the state of California,” Mr. Brown said in an interview last week with The Wall Street Journal. “We would like more federal help. We get federal help for our roads and our bridges…but right now the Republicans, under Mr. McCarthy, have decided that it’s better to treat high-speed rail as a political football, than as a great civic opportunity.”

State financing was largely absent before Mr. Brown reached a deal with state legislators in June to fund the train using money from the state’s cap-and-trade program on carbon emissions.

The budget deal directs $250 million from a cap-and-trade fund for the first year, and a quarter of the revenue from that fund in following years.

An important appellate court decision last week also potentially frees up the sale of voter-approved state bonds for the train. Some initial demolition to clear the way for the line in the state’s Central Valley has begun.

The high-speed train’s cost is estimated at $68 billion, though the predicted price tag has fluctuated. The train is slated to run directly through Mr. McCarthy’s district.

The majority leader said in a statement Sunday that the program originally sold to California voters in 2008 is “a far cry” from the current one the governor is pushing, and he would continue to fight the program in Congress.

“I will do all that I can to ensure not one dollar of federal funding goes to boondoggles like California’s high-speed rail,” Mr. McCarthy said. “The government’s handling of hard earned taxpayer dollars must be based on merit and facts, not upon a desired legacy.”

Last week’s decision by the Third District Court of Appeal overturned a lower court ruling last November that had blocked California from selling $8.6 billion in state bonds for the project. In a separate ruling a week prior, the court also issued a ruling favorable to the state over the train’s route.

Stuart Flashman, an attorney representing a farmer, a landowner and Kings County, located in California’s Central Valley, against the state, had argued California had not abided by the terms of the 2008 voter initiative when it decided to sell bonds.

In an interview, Mr. Flashman said the decision by the appellate court wasn’t only a blow to those opposing the train, but also to California’s voter-initiative system.

“It’s a terrible decision,” Mr. Flashman said. “The message it sends is that you can’t trust anything on a ballot measure.”

Mr. Flashman would not say whether he would appeal to the state’s Supreme Court. A trial in a lower court is also expected in coming months over whether the train can deliver passengers between Los Angeles and San Francisco fast enough, and whether the train can operate without a subsidy. A trial date has not been set.