Bankrupt California OK's BILLIONS For High-Speed Rail Line.

California OKs funding for high-speed rail line

By JUDY LIN

The move marked a major political victory for Democratic Gov. Jerry Brown and the Obama administration. Both have promoted bullet trains as job generators and clean transportation alternatives.

"No economy can grow faster than its transportation network allows," U.S. Transportation Secretary Ray LaHood said in a statement applauding the legislative vote. "With highways between California cities congested and airspace at a premium, Californians desperately need an alternative."

The bill authorizes the state to begin selling $4.5 billion in voter-approved bonds that includes $2.6 billion to build an initial 130-mile stretch of the high-speed rail line in the Central Valley. That will allow the state to collect another $3.2 billion in federal funding that could have been rescinded if lawmakers failed to act Friday.

Brown pushed for the massive infrastructure project to accommodate expected growth in the nation's most populous state, which now has 37 million people. He said the project is sorely needed to create jobs in a region with higher-than-average unemployment.

Members of the state Senate voted 21-16 along party lines after intense lobbying by Brown, Democratic leaders and labor groups. The bill, which passed the state Assembly on Thursday, now heads to Brown for his signature.

"The Legislature took bold action today that gets Californians back to work and puts California out in front once again," Brown said in a statement. The governor celebrated with Senate President Pro Tem Darrell Steinberg of Sacramento, a fellow Democrat, in the lawmaker's office right after the vote.

The first segment of the line will run from Madera to Bakersfield. The final cost of the completed project from Los Angeles to San Francisco would be $68 billion.

Republicans blasted the Senate decision, citing the state's ongoing budget problems.

"It's unfortunate that the majority would rather spend billions of dollars that we don't have for a train to nowhere than keep schools open and harmless from budget cuts," Sen. Tom Harman, R-Huntington Beach, said in a statement.

Sen. Ted Gaines, R-Granite Bay, said the project would push California over a fiscal cliff.

"It will require endless subsidies and will blast a massive hole into our budget," Gaines said in a statement.

The Bay Area Council, a group of business leaders from the San Francisco Bay and Silicon Valley areas, cheered the vote. The council backed the 2008 statewide bond measure regarding the rail line and had been working to sway legislators in support of the project in recent weeks.

"This is a courageous step forward for California's future," said its president and CEO, Jim Wunderman.

In recent days, Democratic leaders included more funding to improve existing rail systems in an effort to entice support for the bullet train.

The bill now allocates a total of $1.9 billion in bonds for regional rail improvements in Northern and Southern California. The upgrades include electrifying Caltrain, a San Jose-San Francisco commuter line, and improving Metrolink commuter lines in Southern California.

Dan Richard, chairman of the California High-Speed Rail Authority, which is managing the project, said California would have lost billions of dollars in federal aid if the Senate fails to pass the bill before adjourning Friday for a monthlong recess. California entered a contract that called for the federal government to provide money for building the Central Valley segment if the state also put up its share, he said.

"Not only will California be the first state in the nation to build a high-speed rail system to connect our urban centers, we will also modernize and improve rail systems at the local and regional level," Richard said.

California was able to secure more federal aid than expected after Florida, Ohio and Wisconsin turned down money.

Steinberg, the Senate leader, said the vote signaled the "biggest, boldest public works project in decades in California." He likened it to the state water project that was first undertaken by Brown's father, Gov. Pat Brown, in the late 1950s. The massive network of dams, reservoirs and canals is still used today.

The bill approved Friday authorizes the state to sell a portion of a $10 billion high-speed rail bond that voters approved in 2008 under Proposition 1A. The bond passed with 53 percent support, but a recent Field Poll showed support for Brown's November proposal to temporarily raise state sales and income taxes could slip considerably if lawmakers approved funding for high-speed rail.

Before Friday's vote, at least half a dozen Democrats in the 40-member Senate remained opposed, skeptical or uncommitted. Some were concerned about how the vote would impact their political futures, while others were wary about financing and management of the massive project.

One dissenter, Sen. Joe Simitian, D-Palo Alto, said public support had waned for the project, and there were too many questions about financing to complete it.

"Is there additional commitment of federal funds? There is not. Is there additional commitment of private funding? There is not. Is there a dedicated funding source that we can look to in the coming years? There is not," Simitian said.