Newsom, California legislators reach $4.2B deal to continue high-speed rail construction
A budget deal forged over the weekend between Gov. Gavin Newsom and legislative leaders includes an agreement to release $4.2 billion in high-speed rail bond money to continue construction in the central San Joaquin Valley.
A year ago, the California Legislature sent Newsom a budget package that withheld the last chunk of money from Proposition 1A, the $9.9 billion bond measure approved by voters in 2008.
Subsequent negotiations last fall failed to yield any movement, causing concern among officials at the California High-Speed Rail Authority that the ongoing construction of 119 miles of the future bullet-train route in Madera, Fresno, Kings, Tulare and Kern counties could be stalled or forced to slow down.
Newsom signed a 2022-23 budget on Monday that had already been passed by the Legislature. The deal announced Sunday reflects additional bills to implement the broader budget framework, including additional spending.
A summary of the budget supplement released this week by Assembly Speaker Antony Rendon, D-Lakewood, and state Senate President pro tempore Toni Atkins, D-San Diego, indicates that the Proposition 1A funds are included among about $47 billion for infrastucture throughout California.
In addition to a multi-year program of transportation spending amounting to $14.8 billion for transit, freight, active transportation and other needs, the budget package “establishes an independent Office of Inspector General for the high-speed rail project and appropriates the remaining $4.2 billion of Proposition 1A high-speed rail funds with legislative direction to priorities construction of a Merced-Bakersfield segment.”
The rail authority has applied to the U.S. Department of Transportation for about $1.2 billion from the federal Bipartisan Infrastructure Law passed by Congress and signed by President Joe Biden last year to help round out work on a trio of construction sections now under way: from north of Madera to the south edge of Fresno; from south of Fresno to the Tulare-Kern county line; and from the Tulare-Kern line to near Shafter in Kern County.
The cost of those three construction contracts is estimated at about $13.9 billion. Another contract, at a cost yet to be determined, will cover the cost of installing tracks, safety systems and electric power systems along the 119-mile stretch of the route. But it will take more to create what would be an interim operating segment between downtown Merced and Bakersfield – about 171 miles.
But the lack of certainty since last summer and fall over the availability of the Proposition 1A funds forced the rail authority to postpone plans to seek bids for tracks and systems until at least later this year.
“The 119-mile segment in the Valley now under construction is not an ideal operating segment,” the rail authority noted in its 2022 business plan submitted to legislators in May. “Extending past the orchards and into the cities of the Central Valley — Merced, Fresno and Bakersfield — where connections will be made to current and future operators, makes the most sense.”
The state has spent about $9.3 billion for project development and construction since the mid-2000s, most of that coming since construction on the initial segments began in the central San Joaquin Valley in 2014. In its 2022 business plan submitted to the state Legislature last month, the agency projected the capital costs to complete its interim operating section between Merced and Bakersfield at about $19.7 billion.
An operational segment to run trains on Merced-Bakersfield tracks, with intermediate stations in Madera, Fresno and Hanford, would form the backbone of the system for future work extending the rail lines east to the San Francisco Bay Area and south through Palmdale and into Los Angeles and Anaheim.
Money will include increased oversight
The cost for the entire statewide system from San Francisco to Los Angeles/Anaheim – if and when future money becomes available – ranges from a low of $72.3 billion to a high of $105 billion. The wide range reflects the uncertainty over how much it will cost, among other things, to bore tunnels through the Diablo Range over Pacheco Pass between Chowchilla and Gilroy, or through the Tehachapi and San Gabriel mountain ranges to reach Los Angeles.
The inclusion of an inspector general to keep an eye on the project is one of the conditions for the bond funds, and other conditions “will be set by the Inspector General, once that person has been identified,” said Kaitlin Talbot, a spokesperson for Rendon. “Following years of cost increases and delays, the Assembly believes that increased oversight and project management will benefit the high-speed rail project.”
Both the state Senate and Assembly were scheduled to hold floor sessions Wednesday evening and Thursday at which votes may be held on the framework agreement between Newsom and the Senate and Assembly leadership.
Federal contributions to California’s ambitious bullet-train program have always been an important component of the state’s anticipated revenues for development and construction. In 2008, when California voters were asked to approve a $10 billion high-speed rail bond measure, officials “assumed federal dollars would cover from one-third to one-half of the cost of building high-speed rail.”
But after the Obama administration provided California with about $3.5 billion in economic stimulus and rail improvement grants in 2009 and 2010, few additional federal funds have been forthcoming as Republicans in the U.S. House of Representatives railed against providing any more money for the project.
This story was originally published June 29, 2022 at 4:05 PM.
