Future of key California high-speed rail line solidified with $4.2B

Dive Brief:

  • An unprecedented budget surplus allowed the California legislature to come to an agreement Thursday night to fund construction of the first phase of the state’s embattled $113 billion, 520-mile-long high-speed rail project, which is designed to one day connect San Francisco and Los Angeles. 
  • Lawmakers voted to release a critical $4.2 billion in bond funds to finish building the 171-mile Central Valley line, and also authorized $3.65 billion for other transit efforts across the state for fiscal year 2022-2023. The Central Valley extension — which will link Bakersfield and Merced — is now slated to run trains by 2030.
  • The Central Valley extension is currently under construction, and bridges other lines on both ends. However, even with the last of the bond money released and revenue from California’s cap-and-trade program, the $23.8 billion line will likely require even more funding to get it finished.

Dive Insight:

State leaders had debated for more than a year how to spend the final portion of $9.9 billion in bond funds for high-speed rail that voters had approved in 2008. Gov. Gavin Newsom wanted to move ahead with the Central Valley extension, while other Democratic leaders wanted to reroute the money to other transit projects closer to their constituents in urban centers. 

With costs ballooning, frustrated Democratic leaders did not release the bond funds as planned last year. This year, the surplus allowed them to fund both.

The project’s price tag has risen from $45 billion to more than $113 billion, forcing it to be pared down. California High-Speed Rail Authority CEO Brian Kelly said in June that inflation could push that estimate to $120 billion, according to the Mercury News. Massive cost overruns are unfortunately common on American rail projects

California residents were originally promised a trip from Los Angeles to San Francisco in less than three hours as well as connections to Sacramento and San Diego, but the latter two stops were officially cut amid cost overruns. There’s no funding yet for further connections between Bakersfield and Los Angeles or San Jose and Merced. Even the “high-speed” aspect of the train has become a source of debate

To investigate some of these problems, the new funding establishes an inspector general to audit the authority. The governor will appoint the inspector for a four-year term from a list of candidates selected by a legislative committee. 

The legislature’s agreement also released $3.65 billion in this year’s budget for other transit projects throughout the state. Nearly $1.3 billion of that amount comes from the Infrastructure Investment and Jobs Act. Some potential contenders for the funds include Caltrain’s delayed electrification project and a BART extension to downtown San Jose.

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