In 2008, the voters of California approved a $9.95 billion ballot measure known as Proposition 1A to help finance the construction of high-speed rail between Sacramento and San Diego. Voters were sold a $33 billion project that would receive equal parts financing from the state, federal government and private investors with a guarantee to taxpayers that it would be fiscally responsible and not need an ongoing subsidy.
Since then the project has skyrocketed in cost, ballooning to $98 billion for the full 600 miles – later sliced to $68 billion by eliminating segments from San Francisco to Sacramento, and Los Angeles to San Diego – while the federal government has committed just south of $3.5 billion. Even the Democratic chair of the California Senate Transportation Committee admits the true costs of high-speed rail could really be $350 billion, and recently our Democratic Lt. Gov. Gavin Newsom said he would rather allocate high-speed rail dollars to “other, more pressing infrastructure needs.”
Five years after the passage of Proposition 1A, Superior Court Judge Michael Kenny – appointed by Gov. Gray Davis – issued a ruling invalidating the California High-Speed Rail Authority’s business plan and denying the issuance of billions in state bonds to help finance the project. The court concluded “that the funding plan did not comply with statutory requirements” of Proposition 1A.
Kenny’s ruling is rooted in the fact that the authority has identified only $12 billion of the $32 billion in financing needed for the construction of the initial operating segment from Merced to the San Fernando Valley, and not a single penny of the amount needed to connect San Francisco and Los Angeles. All in all, the authority is more than $50 billion short of the funds needed to construct a high-speed rail line.
To make matters worse, the authority must match every dollar that has already been spent by federal taxpayers. The first of these payments – $180 million – was originally required to be received by April 1. Last week the Federal Railroad Administration announced that the deadline has been postponed to July 1. A second payment of $800 million is due the following year. If the authority fails to come up with this money, the federal government can withhold other sources of funds from California to make up the difference. Those funds could include transportation, public safety or even education funding. Point being that the fiscal irresponsibility of this project is now endangering federal grant dollars that are meant to protect and educate our children.
Of course, none of this has slowed the Brown administration’s willful disregard for the realities facing the project. Gov. Jerry Brown has offered to spend $250 million in cap-and-trade dollars to help the authority make its initial payment. Despite the declaration by California’s Legislative Analyst’s Office that such a proposal would be an illegal use of cap-and-trade funds, the money is nowhere near the $20 billion needed to satisfy Kenny’s ruling.
No matter; Brown recently stated the federal government will deliver that $20 billion in 2015. Yet President Barack Obama just signed a bipartisan funding plan that delivers zero additional federal dollars to the troubled project for the fourth straight year.
Before a congressional hearing in January, High-Speed Rail Authority Chairman Dan Richard stated that the authority “intend(s) to comply with Judge Kenny’s orders.” This, of course, was immediately followed by a plea from the Brown administration to the state Supreme Court to dismiss Kenny’s order. The Supreme Court declined Brown’s request, and we are still no closer to hearing from the authority or the governor on how they will comply with Proposition 1A.
In a letter to the Federal Railroad Administration, Brown assured the railroad administration that the authority is an agent of the state, and therefore the “authority’s legal commitments will continue to be commitments of the state of California.” Since Brown is keen on obligating California taxpayers, we have to wonder – what is he doing to ensure the rail project complies with Proposition 1A?
It is evident that California taxpayers can no longer rely on Sacramento or Washington to faithfully execute this project. That is why we have introduced legislation at the state level, Senate Bill 901, to put high-speed rail back on the ballot and at the federal level, H.R. 3893, to prevent further endangerment of taxpayer funds.
The law is clear that moving forward without securing state funding will put future federal funding at risk, including transportation, public safety and education dollars. It’s time that Brown put the brakes on this poorly executed project.
U.S. Rep. Jeff Denham, R-Turlock, represents the 10th Congressional District. State Sen. Andy Vidak, R-Hanford, represents the 16th Senate District.