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California gives green light to high-speed rail plan

SACRAMENTO, California (Reuters) – California lawmakers gave a nod of approval to a high-speed rail plan on Friday in a make-or-break vote for $8 billion in funding to start construction on a 130-mile section of track through the state’s central agricultural heartland.

The 21-16 vote in the state Senate was a substantial win for Democratic Governor Jerry Brown, who says a bullet train network will boost job creation and provide an alternative to car and plane travel in the country’s most populous state.

Unions also lobbied hard for the network, the most ambitious public works project to date in California. Republicans opposed it, saying the $68 billion project would be a massive financial burden that could jeopardize state spending on basic services such as education and health care.

“The Legislature took bold action today that gets Californians back to work and puts California out in front once again,” Governor Jerry Brown said in a statement after the vote, which passed with the minimum number of required ‘yes’ votes.

Outside the Senate chamber, union representatives counted votes closely and cheered when it became clear the bill would be approved.

The state and federal financing approved by the legislature includes the issuance of $2.6 billion in state bonds, which would in turn unlock $3.2 billion in federal funds for construction of track in the Central Valley.

The bill, which had passed the Democratic-controlled Assembly by a 51-27 vote on Thursday, would also spend over $2 billion in federal, state and local funds on rail projects in urban areas to prepare to link them to a statewide system.

The bullet train network, expected to take decades to complete, would eventually connect Sacramento and San Francisco to Los Angeles, with stops along the way.

“Literally, this project means tens of thousands of jobs,” said Mark Kyle, director of government affairs for the Operating Engineers Local Union No. 3, which was among the bill’s supporters. California has a 10.8 percent unemployment rate.

Kyle, whose group represents operators of large construction equipment, added he was confident the High Speed Rail Authority would attract private money to help build the entirety of its planned system.

UNCERTAIN FUNDING

Critics worry that funding for the project will eventually run dry before the rail network can be completed, leaving California with a “train to nowhere” in its agrarian midsection for which it spent billions of public dollars.

The U.S. government has insisted that construction on the bullet train line start in the state’s Central Valley, home to farms and ranches.

That insistence irked both lawmakers from urban centers in coastal northern and southern California, as well as farmers who described the project as an “imminent threat” to some of the most agriculturally productive land in the United States.

But with federal funds involved, the state has had to make concessions in some aspects of the project, whose cost estimates have ballooned to $68 billion from $45 billion previously.

The Legislative Analyst’s Office, an independent budget watchdog agency, said the source of funding for the project beyond Friday’s initial round was “highly uncertain.”

State Senator Joe Simitian, a Democrat who voted against the plan, told Reuters he was concerned about the system’s costs growing beyond current projections, that too few riders will use the train, and that private-sector funds and more money from the government might never materialize.

“There are billions of reasons why none of us should go along with the program,” Simitian said during the three-hour debate over the bill. “This is the wrong plan in the wrong place at the wrong time.”

Voter sentiment on the high-speed rail line has soured since a 2008 statewide vote in which Californians approved nearly $10 billion in state debt to help finance the plan. A June USC Dornsife/Los Angeles Times poll found a majority of voters would oppose the project if given another chance to vote on it.

The California high-speed rail project is the centerpiece of President Barack Obama’s priority to upgrade the nation’s transportation infrastructure, a goal he highlighted in this year’s state of the union address.

The United States has fallen sharply in the World Economic Forum’s ranking of national infrastructure systems in recent years. In its 2007-2008 report, U.S. infrastructure ranked sixth in the world but fell to 16th in the 2011-2012 report.

Other bullet train projects have fared poorly. Last year, Florida Governor Rick Scott rejected $2.4 billion in federal funds to build a high-speed line between Tampa and Orlando, saying it would put the state on the hook for billions of dollars it did not have.

Ohio and Wisconsin also rejected federal funds for high speed rail projects.

(Reporting by Mary Slosson; Additional reporting by Jim Christie; Editing by Cynthia Johnston and Lisa Shumaker)

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