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John and Ken

Long-term money a big boost for high-speed rail

 
Posted June 17th, 2014 @ 3:28pm

Gov. Jerry Brown scored a big win for California's $68 billion high-speed rail project by persuading fellow Democrats to dedicate a steady future funding source for it in the state budget.

The $108 billion, 2014-15 general fund budget approved Sunday includes $250 million this year from the state's cap-and-trade greenhouse gas emissions fund. More important to rail supporters is the promise of 25 percent of all future cap-and-trade revenue each year, an amount that could total $3 billion to $5 billion a year in coming years.

The money is a fraction of the state's overall spending plan. But to high-speed rail officials and the governor, it signals the state's investment in the beleaguered project, which has been saddled by delays and court challenges that have left it with little operating cash and uncertain political support.

Rail officials believe the ongoing revenue will be enough to leverage bond borrowing and start work on new parts of the project, such as a segment connecting northern Los Angeles County to Burbank. Building that section of the rail line could help generate goodwill from the politically critical Los Angeles area and blunt criticism over the decision to start construction in the less-populated
Central Valley.

The renewed attention to high-speed rail funding also is a reminder of the most pressing problem it faces: Where will the rest of the money come from?

A Sacramento County Superior Court ruling last year, which is on appeal, has essentially blocked the state from selling $8.6 billion in voter-approved bonds that are supposed to be the primary source of construction funds for the first 130-mile segment from Merced to Bakersfield.

The state also owes the federal government a $180 million matching payment due July 1 as part of the $3.5 billion in federal grants awarded to California.

Rep. Kevin McCarthy, a Bakersfield Republican who is on the verge of becoming House majority leader, vowed in a statement to "do whatever I can to ensure that not one dollar of federal funds is directed to this project," as long as he is in Congress.

Read more at KFI News

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