Political Doubt Clouds High-Speed Rail Progress in California

An artist’s rendering of a bullet train gliding through a California city. (Credit: California High-Speed Rail Authority)

SACRAMENTO, Calif. (CN) – President Donald Trump’s nascent administration has sent mixed signals when it comes to California’s polarizing project to build the United States’ first high-speed rail system.

While California’s Republican congressional delegation may view Trump’s stint in the Oval Office as a unique opportunity to withdraw funding and federal support from a project they have long maligned as a vast boondoggle, recent comments from the president and his professed commitment to infrastructure have supporters of California high-speed rail wondering whether he represents an enemy or ally.

“It’s too early to know what the Trump administration will do,” said Lisa Marie Alley, a spokeswoman for the California High-Speed Rail Authority. “But the fact that he recently spoke about high-speed rail in a positive light is a good sign.”

When Trump met with executives from assorted American airline companies, he lamented the lack of high-speed rail in the United State.

“You go to China, you go to Japan, they have fast trains all over the place,” Trump reportedly said during the meeting. “I don’t want to compete with your business, but we don’t have one fast train.”

It’s a complaint Trump reiterated on the campaign trail, using America’s lack of high-speed rail as an example of failed policies.

The president also promised a huge infrastructure package in his first speech on Election Night, prompting some bullet-train supporters to hold out hope Trump would prove of valuable assistance.

That hope dissipated significantly after Transportation Secretary Elaine Chao, a Trump appointee, withheld a $647 million grant from Caltrain that was going to be used to electrify part of its track between San Jose and San Francisco.

The withdrawal, which Caltrain officials acknowledged in a Feb. 17 statement “jeopardized the viability of the project,” occurred after California’s 14-member GOP congressional delegation sent a letter to Chao maligning the high-speed rail project and asking to pause the disbursement of the federal grant.

Caltrain is distinct from the California High-Speed Rail Authority, and was slated to share the electrified track once high-speed rail was ready to concentrate on the San Jose-San Francisco segment. Now with the deferment of the grant, the future of that project – which figured to assist both agencies – is shrouded in doubt.

Despite these setbacks, the rail authority has already spent $3 billion on the project and construction on some of the fundamental aspects of the projects, like bridges and culverts, is already underway.

“We’re moving on down the track on this project,” Alley said. “We’re building a transportation for the future that will transform this entire state.”

The rail authority further said it does not need federal funds to bring high-speed rail to fruition.

Instead, the rail authority plans on gathering funds from the bonds approved in 2008 – when California voters approved the project – and funds diverted from the state’s cap-and-trade program.

The cap-and-trade auctions have not been as lucrative for state coffers as some had initially hoped, but the state will allocate $1.2 billion from the proceeds of last year’s auction to the rail authority.

Michael Cohen, director of California’s Department of Finance, recently announced the sale of bonds authorized by Proposition 1A – which set the project in motion – and transfer about $2.6 billion to the rail authority.

Still, questions abound about whether it’s sufficient.

Given that voters approved approximately $10 billion in general-obligation bonds in 2008 and recent cost estimates for the project hover around $64 billion, many are wondering if the state is capable of footing the bill for the project without federal assistance.

California got an initial boost of about $3 billion from the American Recovery and Reinvestment Act, the stimulus bill former President Barack Obama signed into law in 2009. The rail authority has spent about 87 percent of that amount to date.

The rail authority’s business plan also calls for a reliance on private investment, although critics claim investors will get cold feet without federal support.

Those claims are not an “accurate portrayal” according to Alley, who said the rail authority continues to garner feedback from the industry about investments. The investment potential runs the gamut from providing money for construction projects, to potential concessionaires and railway operators.

But the rail authority isn’t there yet.

“We’ll explore those opportunities as the years progress,” Alley said.

Instead, the agency is attempting to head off attacks from a GOP-dominated Congress that appears hostile to its mission.

One of its most formidable opponents is House Majority Leader Kevin McCarthy, one of the most powerful lawmakers operating in Washington.

McCarthy represents Bakersfield and its outlying communities in California’s more conservative Central Valley, and he has consistently vilified the Golden State’s most expensive infrastructure project.

Apart from being one of the signatories on the letter to Secretary Chao, he has used his pulpit to call for the immediate cessation of work on the project.

“The train was sold on rosy predictions not grounded in reality, has disrupted the lives and communities of Californians, and remains a money-pit publicity project that we cannot afford,” McCarthy said in January, just days before Trump’s inauguration.

The rail authority pushed back, noting it had just held a small business forum in Bakersfield and that several local contractors were excited about the prospect of jobs.

“I think we have to point the finger back at the congressman and ask what he is going to tell his constituents that are working or have the potential to work on this project,” Alley said.

The rail authority anticipates the project will create 20,000 construction jobs annually over the first five years of the program – all centered in the Central Valley, where the Great Recession hit particularly hard and where the recovery has not come along at the pace witnessed by some of California’s coastal communities.

“It still has the highest unemployment in California,” Alley said.

Alley also notes high-speed rail and rail transportation is not without support from California Congressional delegation.

Rep. Anna Eshoo decried the Trump administration’s decision to defer the $647 million grant, saying the government allowed “partisan politics” to interfere with a “shovel-ready” project that had less to do with high-speed rail than modernizing an aging transportation network in an area that desperately needs transportation solutions.

“This project has met every requirement of the Department of Transportation including planning, environmental approval, broad community support and strong local funding – including citizens taxing themselves,” Eshoo said. “The only requirement it didn’t meet was a political one.”

The rail authority says it is less focused on federal wrangling over its future and instead directing attention to the momentum created by state funding and the progress on construction currently occurring in the Central Valley.

Plans call for the completion of the entire San Francisco-to-Los Angeles segment by 2029. But with strident opponents in Congress, significant hurdles remain.

Clouding the prognosis further is the presence of Trump, who on the one hand has spoken extensively and made large promises regarding investment into American infrastructure, particularly in terms of transportation.

On the other hand, Trump has labeled California “out of control” in terms of its spending, and has the fiscal hawks in his own party to appease.

Trump’s relation to high-speed rail, like many of the new president’s positions, remains murky, meaning the future viability of the expensive transportation project still hangs in the balance.