The Rutland Group

California high-speed rail chief: Projects often lack sure funding

After the state’s fiscal analyst criticized California high-speed rail for facing “highly speculative” financial prospects, California High-Speed Rail Authority Chairman Dan Richard defended the $68 billion program this morning by suggesting major transportation projects often lack funding certainty.

Richard urged Assembly members to approve $2.6 billion in state bond funds along with $3.3 billion in federal money to start construction in the Central Valley by the end of the year. He testified in the first of a double-header of legislative budget hearings slated for today.

The project chief, who once served as a Bay Area Rapid Transit board member, said BART and other transportation programs commonly pursued construction without knowing where every dollar would come from.

“I spent 12 years on the BART board in the transit world, we never knew where all of the money was coming from,” he said. “Our colleagues in Southern California just adopted a $540 billion regional transportation plan for the Southland, for the next 20 years, same time period we’re talking about here. They don’t know where all of the money is coming from.”

“It is just part and parcel of the transportation world that people don’t know these things now,” he added. “The key then is, as you build, knowing you don’t know what you’ll be able to build next, can you build something of value?”

Richard said that even if the project ended due to funding problems after the initial phase, the state would benefit by creating a new Central Valley line from Madera to Bakersfield and improving connections and operations in existing Bay Area and Southern California transit systems.

Richard’s appearance was preceded by another critical review by the nonpartisan Legislative Analyst’s Office, which recommended Tuesday that lawmakers reject Gov. Jerry Brown’s request for $5.9 billion in state and federal bond funds.

The Analyst’s Office assailed contentions by the authority and Brown that if federal funding falls through, the high-speed rail project could rely on billions of dollars from a new charge on businesses for greenhouse gas emissions. The emissions program stems from a 2006 law signed by Gov. Arnold Schwarzenegger to reduce greenhouse gases 25 percent by 2020 by imposing new carbon costs and using those funds on mitigation.

The LAO said that the state would face significant legal risks if it were to use such funds for high-speed rail. It noted that the initial high-speed operation would not begin until 2021, a year after the emissions deadline set in the 2006 law. The office also believes that high-speed rail will result in more greenhouse gas emissions than it will reduce for the first three decades. And it said the state could more cheaply reduce carbon emissions in other ways.

Richard disputed those findings, saying that Brown administration lawyers believe the state is on firm ground in using greenhouse gas money for high-speed rail. He also said early investments in regional rail, such as transitioning Caltrain on the peninsula from diesel-electric locomotives to full electric service, would reduce greenhouse gas emissions before 2020.