Gov. Gavin Newsom and California legislative leaders on Thursday announced a deal to fund the state’s beleaguered bullet train project with $1 billion annually over the next 20 years.
The funds, should the full Legislature sign off on them, would be enough to complete the initial 171-mile stretch underway in the Central Valley but not enough to build out to population centers in the north and south — let alone complete the entire San Francisco to Los Angeles rail line.
Even so, California High Speed Rail Authority CEO Ian Choudri called it “a historic commitment” of “the largest guaranteed infusion of funding for California’s high-speed rail program to date.”
“This funding agreement resolves all identified funding gaps for the Early Operating Segment in the Central Valley and opens the door for meaningful public-private engagement with the program,” Choudri said in a statement. “We must also work toward securing the long-term funding — beyond today’s commitment — that can bring high-speed rail to California’s population centers, where ridership and revenue growth will in turn support future expansions.”
The rail authority plans to borrow against the future funding guarantee to finance the rest of construction on the route between Merced and Bakersfield, which is set to be completed by 2033. Since 2019, the rail authority has been focused on building out that stretch alone, which is now estimated to cost a total of $37 billion. That’s higher than the $33 billion price tag for the completed San Francisco-Los Angeles line that voters signed off on when they approved the initial $9 billion bond in 2008.
The Legislature and Newsom directed the rail authority to focus on the Central Valley as the initial operating segment in 2019 as the costs and timelines swelled for the full project between San Francisco and Los Angeles. Now it’s unclear when — or if — the entire line will be built.
Since he took the helm of the rail authority last year, Choudri has pushed to build beyond the Central Valley as quickly as possible, extending the line to population centers Gilroy, in Northern California, and Palmdale in Southern California, which connect via local rail to San Francisco and Los Angeles.
Operating in the Central Valley alone, the rail line is not expected to be profitable, according to a report released last month by the rail authority. Building to Gilroy and Palmdale at the same time as the Central Valley segment could generate enough profits to pay back the private investors that Choudri is targeting. But completing the longer route would require more funds than the $1 billion committed, as well as the Legislature’s approval to modify the scope of the initial operating segment.
Already, getting just $1 billion a year for high speed rail was a delicate matter in a contentious deal to extend the state’s cap-and-trade program, in which companies bid over credits that allow them to emit greenhouse gases. The program’s revenues — which have hovered around $4 billion annually in recent years — go to support public transit, wildfire prevention, and housing, in addition to the high speed rail.
Newsom had been pressing lawmakers to expand the program through 2045. After weeks of secret negotiations, he reached a deal with lawmakers, announced early Wednesday morning. Still, it’s not a done deal until lawmakers vote on the reauthorization plan this coming Saturday.
Republicans have criticized the project as a boondoggle whose funding could better be spent elsewhere. Rep. Kevin Kiley, a Rocklin Republican, touted Congress’ cutting of its federal funding in July.
“The High-Speed Rail Authority is now claiming it’s made ‘substantial progress to deliver high-speed rail in California,’” Kiley said in a July social media post. “In fact, there has not been an inch of track laid in 17 years.”
High-speed rail proponents like Sen. Dave Cortese, a San Jose Democrat, are encouraging fellow lawmakers to sign off on the plan.
“For too long, critics have tried to write the obituary for High-Speed Rail,” Cortese said in a statement. “But we’ve kept pushing, and now we have a long-term commitment that will create jobs, cut pollution, and revitalize communities up and down the state. The Legislature must act quickly to pass this plan and keep California on track to deliver America’s first true high-speed rail.”
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