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California Politics: The $4-billion bullet train impasse

California's bullet train project has been beset by construction challenges and criticism.
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It has been more than 13 years since California voters, spurred to action by a Republican governor and a coalition of local governments and environmental advocates, gave the green light to borrow some $10 billion in seed money for the nation’s first high-speed railway.

But the project, beset by construction challenges and criticism from communities and politicians alike, has yet to spend all of that voter-approved cash — in part, because Gov. Gavin Newsom still doesn’t have the approval of the Legislature. And should the standoff continue much longer, it could have serious impacts on the project and its public standing.

For the record:

4:49 p.m. Jan. 24, 2022An earlier version of this article incorrectly described the payments made by some companies as a result of their greenhouse gas emissions.

Perhaps the most interesting part of the battle is that it’s being waged by a few Democrats who say they support the historic project’s goals — though not necessarily its blueprint.

In search of the ‘path’

Not that Newsom hasn’t wrestled with his own mixed emotions about California’s high-speed rail dreams. The governor got everyone’s attention in 2019, when during his first State of the State address he said there “simply isn’t a path” for the train’s ambitious north-to-south goals, offering what sounded like a critique of the project as it stood under former Gov. Jerry Brown.

Later that year, Assembly Speaker Anthony Rendon (D-Lakewood) and several other Democrats stepped forward to say they wanted more of a focus on Southern California, long after the state’s high-speed rail leaders had decided to home in on a 119-mile Central Valley segment between Merced and Bakersfield as the first to someday become operational.

“Any project that doesn’t have a significant amount of service to the largest areas in the state doesn’t make much sense,” Rendon told The Times that summer.

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The project has continued to move forward in the intervening years, in part due to almost $2.5 billion collected from California’s cap-and-trade program, in which some companies make cash payments to cover their greenhouse gas emissions.

That’s about 26% of all to-date spending on the project, according to a detailed assessment prepared last month by the California High-Speed Rail Authority. Roughly an equal amount has come from federal dollars earmarked in 2009 by the Obama administration. The other largest pot of cash — about $4.6 billion — has come from the sale of bonds authorized under Proposition 1A in 2008.

Not that this is anywhere enough to build out the entire San Francisco-to-Los Angeles project, which the rail authority says could total close to $100 billion, nor was it supposed to be. The effort has always assumed private funds will be needed to finish the job.

But the Proposition 1A cash is a key component, agency officials say, because the rules on how it’s spent are more strict than those for the cap-and-trade dollars. Spend too much of the flexible cap-and-trade cash now, they argue, and you’re left with funds that might not be allowed for those future needs.

The $4.2-billion standoff

And so the $4.2-billion question in Sacramento right now is this: What’s the holdup? Even with a variety of problems that have been reported with the project through the years, there’s still been almost $9 billion in total spending.

Last spring, Newsom’s state budget proposed a far-reaching transportation package that included items such as projects related to the 2028 L.A. Olympics and funds for regional rail and transit needs. And yes, legislative approval of the final $4.2 billion in Proposition 1A bonds.

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Several of the proposals were included in the final spending plan though the budget noted the deal still required “subsequent legislative action.” On the other hand, Newsom’s bullet train request was nowhere to be found.

The governor’s administration and lawmakers never settled any of it. The Legislature adjourned in September without action and three weeks into the new year, that’s where things remain. Newsom’s new state budget, unveiled two weeks ago, again asks for action on high-speed rail bonds.

“The conversation is a leftover conversation from last year and the sooner it can be resolved, the better,” said Brian Kelly, the CEO of the California High-Speed Rail Authority.

It appears the impasse remains largely rooted in the Assembly, where Rendon and the chair of the Assembly Transportation Committee, Assemblymember Laura Friedman (D-Glendale), have continued to push for funding that serves more urban areas — and not on a project that, in the near future, will be focused on the Central Valley.

“The fact that the state currently has high revenues does not relieve us of the responsibility to target those revenues — both to the people who need it most, and to the places where it will do the most good,” Rendon said in an emailed statement. “I look forward to more discussions on how we can answer California’s long-distance rail transportation need — including [high-speed rail] — in the way that answers both those demands.”

The L.A. Democrat was far more blunt in a Bay Area television interview last September, calling it “pure fantasy” that the Central Valley component of the rail system would have any value to Californians on its own, without the state’s urban areas.

“I’m worried that we’re dead in the water. I’m also worried that we have what would be a laughingstock for California,” Rendon said in the interview.

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Friedman, whose staff did not respond to a request for comment, has fought on social media with train supporters who accuse her of seeking to block the project.

“Once again, refusing to write the high-speed rail authority a blank check, without fulfilling our oversight mandate, is not ‘blocking’ them,” she posted on Twitter in mid-November.

But similar concerns have not been expressed by Democrats in the state Senate, so this is really a standoff between Newsom and Assembly Democrats — one that has caught other transportation projects in the crossfire and, pardon the pun, seems stuck in its tracks.

Harris brings wildfire prevention help

The governor will be in San Bernardino on Friday to welcome Vice President Kamala Harris back to her home state, a visit in which she’s bringing along some cash to help cover wildfire costs.

Harris will announce $600 million in federal disaster funds for cleanup and repairs in the wake of last year’s devastating wildfires. The money is part of a $5-billion package of wildfire response efforts contained in the federal infrastructure law signed by President Biden in November.

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California politics lightning round

— Child-care providers serving California’s low-income families are scrambling to purchase rapid COVID-19 tests while banking on the state to boost their supply.

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— State Sen. Bob Hertzberg, termed out of his legislative post, will run for the Los Angeles County Board of Supervisors in what’s looking like a very crowded race.

— In the latest battle between California and scammers out to defraud its benefits system, the state has frozen 345,000 disability insurance claims that it suspects were fraudulently filed.

— California could send $500 a month with no strings attached to college students from low-income families as part of the Legislature’s latest approach to a guaranteed basic income plan.

— Newsom refused last week to parole Sirhan Sirhan, the man convicted of gunning down Robert F. Kennedy in Los Angeles in 1968.

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