Gov. Gavin Newsom came close this month to abandoning the state’s misbegotten bullet train project that’s already cost many billions of dollars and demonstrates no signs of becoming viable.
“Let’s be real,” Newsom told legislators in his first State of the State address. “The project as currently planned would cost too much and take too long. There’s been too little oversight and not enough transparency. Right now, there simply isn’t a path to get from Sacramento to San Diego, let alone from San Francisco to L.A.”
The bold – and logical – move would have been to finish what’s under construction in the San Joaquin Valley, fold it into existing Amtrak service and then cancel everything else before it gobbles up even more money. But Newsom couldn’t bring himself to entirely pull the plug on this hot mess.
Voters were sold a bill of goods by former Gov. Arnold Schwarzenegger and the Legislature in a 2008 ballot measure that authorized $9.95 billion in bonds, pegged the cost of the project at $33 billion and promised that it would operate with no subsidies while whisking passengers from San Francisco to Los Angeles in 160 minutes.
State Unable to Attract Investors Without Promising Subsidies
Under successor Jerry Brown, the projected cost more than doubled, the state has been unable to attract investors without promising subsidies, changes in the project, such as merging it with regional commuter rail, make the 2:40 travel time impossible, and public sentiment has turned against it.
State Auditor Elaine Howle told the Legislature in December that the High-Speed Rail Authority’s “flawed decision making regarding the start of high-speed rail system construction in the Central Valley and its ongoing poor contract management for a wide range of high-value contracts have contributed to billions of dollars in cost overruns for completing the system.”
The Obama administration awarded California a $3.5 billion grant in 2010 for the valley segment.
The grant required completion by 2017. The deadline was later extended to 2022 but Howle says the latter date won’t be met “unless…construction progresses twice as fast as it has to date,” adding, “Missing the deadline could expose the state to the risk of having to pay back as much as $3.5 billion in federal funds.”
After Newsom’s address, President Donald Trump declared on Twitter: “California has been forced to cancel the massive bullet train project after having spent and wasted many billions of dollars. They owe the Federal Government three and a half billion dollars. We want that money back now. Whole project is a ‘green’ disaster!”
It’s Time to Derail the Train to Nowhere
Newsom, of course, rejected the idea, telling legislators, “I’m not interested in sending $3.5 billion in federal funding that was allocated to this project back to Donald Trump.”
However, if a Republican still occupies the White House in 2022 and the San Joaquin portion is still incomplete, as Howle suggests, the state could, indeed, be on the legal hook to repay the grant.
The bullet train also receives 25 percent of proceeds from auctions of greenhouse gas emission allowances on the assumption – fanciful at best – that it would make a major contribution to curbing carbon emissions by diverting travelers from cars and airlines.
However, the High-Speed Rail Authority’s own projection is that when fully built out, including extensions to Sacramento and San Diego, the bullet train would reduce auto travel, now nearly a billion miles a day, by scarcely one percent. That doesn’t come close to justifying 25 percent of cap-and-trade funds, which would be much better spent elsewhere.
It’s time to derail the train to nowhere.
CALmatters is a public interest journalism venture committed to explaining how California’s state Capitol works and why it matters. For more stories by Dan Walters, go to calmatters.org/commentary.