CA High Court Puts High-|Speed Rail Back on Track

SAN FRANCISCO (CN) - Opponents of the now-$68 billion California high-speed rail project have been dealt another setback, after the state's high court declined to review a lawsuit that had challenged the project's funding model.

Voters approved Proposition 1A in 2008, an ambitious bond-measure project to build a first-in-the-nation bullet train network linking Los Angeles and San Francisco with trains that can reach 220 mph. If finished, the 800-mile system would connect 24 cities throughout the Golden State.

But the California High-Speed Rail Authority, known as CHSRA, sold the project to voters with a $42.6 billion price tag, a figure that has since increased to $68 billion and may go to $100 billion or higher once completed. And so far, not a single foot of track has been laid.

In 2013, state Attorney General Kamala Harris sued to validate nearly $9 billion in bonds that would fund the project and shield it against further litigation. Harris claimed the rail authority had complied with all aspects of Prop. 1A and were ready to start raising funds.

But Sacramento County Superior Court Judge Michael Kenny found late last year that the high-speed rail project's finance committee failed to provide any evidence that "supports a determination that it was necessary or desirable to authorize the issuance of more that $8 billion in bonds under Prop. 1A," a requirement under state law.

Kenny also held that the proposition's language gave the finance committee free rein to deny the high-speed rail authority's request to sell bonds, making the committee the "ultimate keeper of the checkbook."

This past July, however, the a three-judge panel of Third Appellate District in Sacramento found that Kenny had overstepped his authority by ordering CHSRA to rework a $25 billion shortfall before it could sell bonds to fund the beleaguered project.

The appeals court added that Kenny applied "highly unusual scrutiny" to the finance committee's decision to greenlight the bond sales, and that his "keeper of the checkbook" theory "thwarts progress building a high-speed rail system in California and jeopardizes the financing of public infrastructure throughout the state."

On Wednesday, the Supreme Court declined to review the appellate decision without comment.

"This decision reaffirms that the authority can continue building a modern high-speed rail system that connects the state, creates jobs and complies with the law," CHSRA board chairman Dan Richard said in a statement. "We will continue to move forward aggressively to deliver the nation's first high-speed rail system."

But the project faces numerous legal challenges, including environmental actions and questions of whether trains will achieve the speed necessary to run between LA and San Francisco in under three hours as mandated by Prop. 1A.

Meanwhile, crews began demolition and utilities work for the project this summer in the Central Valley.

High-speed rail officials estimate a 2029 completion date for the Los Angeles-to-San Francisco segment.

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