Jerry Brown’s two big legacy projects, a north-south bullet train and twin water tunnels beneath the Sacramento-San Joaquin Delta, are approaching points of no return.
They face legal, regulatory and financial hurdles that must be cleared for them to proceed. The next few months – a year at the most – may determine their fates.
Brown scored two recent wins for the $68 billion bullet train, for which preliminary work in the San Joaquin Valley has begun.
The Legislature appropriated $250 million from cap-and-trade fees on greenhouse gas emissions to relieve a cash crunch for the project, and a state appellate court set aside two lower court rulings that the project had not met its legal requirements.
The $250 million is the first installment on a guaranteed allotment of cap-and-trade funds for the project – money that Brown’s bullet train managers believe can be leveraged, possibly through federal loans, to form the backbone of a complete financial plan.
They may have bought some time to formulate that plan when the appellate court declared that the High-Speed Rail Authority needn’t yet fully comply with what it called a “straitjacket” of financial and environmental requirements in the 2008 bullet train bond issue approved by voters.
The appellate court, in two rulings now being appealed to the state Supreme Court, said that the challenge to a preliminary funding plan “was too late to have any practical effect, and it is too early to challenge a yet-to-be approved final funding plan,” and also upheld the validity of a bond sale.
In one appeal, attorneys for opponents counter that “The Court of Appeal’s decision essentially allowed the Authority and the Legislature to rewrite Prop. 1A contrary to the intent of the voters.”
Were the Supreme Court to overturn the Court of Appeal, it could at the very least delay construction by months or years, and could doom the project completely.
The legality of the cap-and-trade system itself is also being challenged. Were it blocked, the bullet train’s future would dim even more.
The twin tunnels, meanwhile, are at least indirectly intertwined with the fate of a $7.5 billion water bond issue on the November ballot. Brown and legislators contend that Proposition 1 is “tunnel-neutral” but opponents say otherwise.
A new poll, driven by drought worries, shows strong voter support for the bond, and whether there will be a well-financed campaign against it is uncertain. Rejection of the bond would certainly be a psychological, if not financial, blow.
The tunnels have other hurdles, as well, including a sharply worded warning from the federal Environmental Protection Agency that the project could damage Delta wildlife, and the lack of firm commitments from big water agencies south of the Delta for billions of dollars to bore the tunnels.