California’s high-speed rail project may run out of money in 2015 due to a lack of state funding. If the necessary funding dries up, the $3.3 billion allocated from Obama’s federal stimulus program could be rescinded.
According to Jeremy Fraysse, an analyst with the California Legislative Analyst’s Office, unless the California High-Speed Rail Authority can navigate around legal and funding obstacles, “there would be a question of whether the federal government would allow the expenditure of federal dollars on the project.” Right now, the federal government is the only source of funding for the so called “Bullet Train,” and if the state cannot demonstrate that it has the ability to provide funding on its own, the feds can pull the plug on the whole project.
At the heart of the issue is the failure on the part of the authority to identify where it will get $31 billion for the initial construction of tracks through the Central Valley between Madera and Fresno. So far, they have raised only $6 billion in state and federal money, which leaves them more than $20 billion short of the amount needed to begin laying down the first track. Until the authority can make up for the shortfall, a Sacramento Superior Court Judge blocked access to voter-approved bonds.
The authority is relying partly on procuring funds from the state’s cap-and-trade program, but that allocation relies on legislative approval that is far from certain. “You couldn’t get a business loan for a small business based on what we’re assuming here,” said state Sen. Mark DeSaulnier, a Democrat from Concord who chairs the Senate Committee on Transportation and Housing. “The question is,” DeSaulnier asked rail authority CEO Jeff Morales, “Where is the other money going to come from?”