Two weeks ago, President Donald Trump made what might be considered his first real move to screw over California, by delaying a $637 million grant, long thought to have been a lock, to pay for electrifying a Bay Area train route. That's bad news for Caltrain, which will have to stick to diesel gas for the time being. But it's also bad news for California Gov. Jerry Brown's pet project, the bullet train, which plans to share that section of track. The delay has been interpreted, by some, to be an act of political retribution, to get back at California for, oh, take your pick — not voting for Trump, for having so many “sanctuary cities,” for declaring itself the vanguard of the resistance, and so on.
Lisa Marie Alley, a spokeswoman for the California High Speed Rail Authority, downplayed the significance of the grant delay.
“I would not characterize it as a big blow whatsoever,” she said. “It’s something that is not good. The bigger question is, to the Republican administration, why would you hurt something that is creating jobs, creating a system that’s better for the environment and providing a valuable service for the Bay Area?”
The worrying thing for supporters of the bullet train, which aims to connect San Francisco and Los Angeles by the year 2029 for the not-so-small price of $68 billion (and that estimate is probably low), is if the Trump administration is willing to delay a fairly uncontroversial grant, can the nation's largest infrastructure project currently under construction expect any help at all from the federal government?
“The federal role in high-speed rail has pretty much run its course,” says William Grindley, a former World Bank executive and vocal opponent of the project. “Even the Obama administration washed its hands of it last year.”
Alley insists the project can survive without any more federal money.
“We do not account for or expect any future federal funding,” Alley says. “If federal funding becomes available, would we want it? Absolutely.”
When high-speed rail was first pitched to California voters in 2008, via Proposition 1A — which gave the project its initial $9 billion in bond money — the idea was that the total cost would be split three ways, equally among the state, the federal government and private investors. So far the federal government has ponied up around $3 billion, and that well appears to have run dry. Alley says the High-Speed Rail Authority “envisioned” having one third of its cost covered by the feds, “but we’re not anticipating it at this time.”
Private investment hasn't exactly been forthcoming, either. Only a small fraction of the world's high-speed rail projects turn out to be profitable, according to Grindley, and private investors appear skeptical that California's could end up being one of them. Alley says the rail authority hopes that once the first section of the rail is opened, it will begin to attract investors. That section will connect San Jose with the town of Wasco, population 25,000.
Which means that California is pretty much on its own as far as figuring out how to pay for its new train. One source of revenue was supposed to come from California's cap-and-trade program, which requires companies to buy permits, at auction, to release greenhouse gases into the environment. A quarter of that money is earmarked for the bullet train. The first two auctions earned close to a billion dollars each — a decent windfall — but the most recent two were duds, yielding the high-speed rail only a few million dollars. The program is also the subject of a lawsuit, which argues that the program is a de facto tax, and therefore should have needed a two-thirds vote to pass.
The state Legislature may try to work some funding for the bullet train into its next transportation bill, which may include a gas tax hike in order to fund some much-needed road maintenance. A carbon tax is also a possibility.
Is the bullet train dead? Not yet. It's unwell. It's limping along, looking more and more expensive to Californians every day. And it's very much an open question what happens once the project's biggest champion, Jerry Brown, leaves office in 2019.
“They’re in trouble,” says Elizabeth Alexis, co-founder of Californians Advocating Responsible Rail Design. “They’ve been in trouble for years, and they just keep going. They stay alive another day. When it's the governor's top priority, it's easy to stay alive. … The next governor, this may not be their No. 1 project.”