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Saturday, July 7, 2012

Train wrecks California budget?

From the Sacramento Bee
By a bare majority, the state Senate voted Friday to approve initial construction on California's $68 billion high-speed rail project, ending months of intense lobbying and uncertainty in the Legislature.
The bill, approved the previous day by the state Assembly, authorizes $5.8 billion to start construction in the Central Valley, including $2.6 billion in rail bond funds and $3.2 billion from the federal government.

Lawmakers tied that money to nearly $2 billion in funding to improve regional rail systems and connect them to high-speed rail. That regional focus was considered necessary to lobby hesitant senators about the project's potential significance to their districts.

The vote could become problematic for Brown politically. Opponents of Brown's November ballot initiative to raise taxes already are planning to use the project as an example of spending they say is wasteful. A recent Field Poll suggests the message may resonate, and some Democrats said they feared its effect.
From the New York Times
Opposition cut across party lines. Speaker after speaker noted there was no source of revenue for the train line beyond the initial $8 billion, and that it was being built in rural California, far from where the bulk of the state’s population lived. Several noted the incongruity of embarking on such a major project weeks after passing a budget that included deep cuts in spending on schools and other programs.

“This is a colossal fiscal train wreck for California,” said Senator Tony Strickland, a Republican. “Members, this bill is spending money we simply don’t have here in California.”

From Bloomberg News
If Brown signs the funding bill, the state can start construction on the first 130-mile stretch down California’s Central Valley. The initial route, connecting some of the least- populated parts of the state, has fed opposition to the effort.

The tracks are to run from Merced, about 120 miles south of Sacramento, the capital, to the San Fernando Valley, north of Los Angeles, the state’s biggest city. To connect to that population center with San Francisco, the bill authorizes $2 billion of bond funds to upgrade existing commuter and freight lines to handle high-speed traffic.

California is already the most indebted U.S. state, with $73.2 billion of general-obligation bonds outstanding and the authority to sell another $33.1 billion.
From the San Francisco Chronicle
Sen. Joe Simitian, D-Palo Alto, spoke for 15 minutes about the project's strengths and weaknesses before ultimately saying he could not support the details being weighed Friday.

"I think high-speed rail makes sense in California ... but we're not being asked to vote on a vision today, we're being asked to vote on a particular plan," he said, critiquing the cost and placement of the initial stretch of track in the Central Valley and noting that the $3.3 billion in federal funds is about 5 percent of the project's total cost.

"We will be expected to put up 20 times that amount over the course of how many years. ... Regrettably, the only conclusion I can come to today is that this is the wrong plan in the wrong place in the wrong time," Simitian added.

But it was the location, demanded by the federal government, of the first phase of construction that proved the most controversial. Critics have derided it as a "train to nowhere," and many farmers in the Central Valley are angry about plans to seize some farmland and homes to make way for the bullet train.

"We are getting an upgraded Amtrak line in the Central Valley for $6 billion," said Simitian. "And oh, by the way, it's in a low ridership area ... a million potential riders as opposed to 28 million in the north and southern ends of the state."
Cartoon by Monte Wolverton, L.A. Daily News