Three years after California voters approved a $9.95 billion bond to build the nation's first high-speed-rail system, a debate over its funding has turned into a legislative game of chicken, with billions of dollars on the line.
The California High-Speed Rail Authority, which is charged with building the new system, has asked the state Legislature to release $2.7 billion to pay for the first stretch of the rail line -- a 130-mile segment in the Central Valley.
But Republicans in the state Legislature introduced a bill this week to halt state funding for the controversial project, which has seen its estimated price tag swell from less than $40 billion in 2008 to $98.5 billion in the latest business plan. And while Democrats have been less fixed in their stance, they too have expressed hesitation about releasing billions of dollars in state funds. State Sen. Joe Simitian, D-Palo Alto, told the Weekly this week that he is not ready to support releasing bond funds for the project and is calling for the rail authority to slow down and give the project some more thought.
The rail authority has maintained it needs state funds to match the $3.5 billion it has received for the project in federal grants and has argued that the Legislature's failure to release the bond funds immediately would jeopardize the federal contribution. When a peer-review committee recommended earlier this month that legislators withhold state funds until the rail authority addresses what the committee considered flaws in its business plan, the authority issued a 10-page response to legislators blasting the group's conclusion.
"Any delay in proceeding with the Initial Construction Segment (the Central Valley section) at this time will result in the loss of the existing $3.5 billion in federal funding for a California high-speed rail system," Thomas Umberg, chair of the rail authority's board of directors, wrote in the letter.
The peer-review committee, Umberg wrote, "fails to assess the risks of not proceeding with the program at this juncture," including loss of federal funding, potential elimination of state funds and the impact of losing $950 million to connect regional rail systems with high-speed rail (funds that voters approved as part of the $9.95 billion bond).
"These risks are present and real and represent lost opportunity of enormous cost and lasting consequence," Umberg wrote.
But Assemblywoman Diane Harkey, R-Dana Point, doesn't believe Umberg. This week, she introduced a bill to halt state funding for high-speed rail. Harkey pointed to recent critical audits of high-speed rail from the Legislative Analyst's Office and the rail authority's peer-review group as evidence that the project is heading in the wrong direction and should be stopped. She also cited a recent Field Poll survey that showed more than half of state voters supporting a fresh vote on the San Francisco-to-Los Angeles rail line.
"This one project has the potential to double our state's debt and become a huge future drain on our state's budget, while our existing rail and roadway infrastructure is in dire need of repair," Harkey said in a statement. "California does not need a shiny new heavily subsidized toy with no confirmed ridership, when we have real shovel-ready infrastructure jobs in every community awaiting funding."
Simitian, who chairs a budget committee that focuses on the rail project, said he prefers a third option -- taking a year to rethink the project and address the myriad issues brought up in recent critical audits. These include uncertainty over future funding, planning for the next construction phase and whether the rail authority is complying with Proposition 1A, which requires that the first segment constructed be a "usable segment."
"I'm convinced that at this point, we're effectively presented with two choices -- neither one of which is particularly appealing from my perspective," Simitian told the Weekly. "On the one hand, we have a proposal to spend $6.2 billion on a project in Central Valley that I'm not yet ready to support. On the other hand, absent that, we're told that you'd be putting an end to the debate about high-speed rail and that's the end of that.
"I think that's a bad set of choices."
Simitian said he is working with his staff and with state analysts and attorneys to determine what exactly the state would get for the $6.2 billion, to ascertain that the project as described in the business plan complies with Proposition 1A, and to determine how flexible the federal-grant deadlines are. Until these questions are answered, Simitian said, he's not ready to support the rail authority's request.
"Sometimes, you have to go slow to go fast," Simitian said. "To date, I have not made a believer of the High Speed Rail Authority on that principle. They lurch from ad hoc decision to ad hoc decision.
"That's no way to make a $6.2 billion decision, let alone a $100 billion decision."