LOS ANGELES — A California appeals court has agreed to fast track review of a lower court's decision that prevents the state from issuing $8.6 billion in bonds for its high speed rail project.
The Third District Court of Appeals late Friday granted the state's request for quick review of two rulings by Sacramento County Superior Court Judge Michael Kenny.
"It is definitely a positive for the state — that the appellate court is going to hear the case on an expedited basis," said H.D. Palmer, a Department of Finance spokesman.
Kenny had concluded that the California High-Speed Rail Authority's plans no longer comply with the promises made to voters when they approved $9.5 billion in bonds for the project in 2008. In the first ruling, Kenny concluded that the authority's finance committee didn't adequately disclose its reasons for authorizing the bonds. In a separate ruling, he found that the rail authority's financial plan did not comply with provisions of the voter-approved bullet train program.
The trial court's Nov. 25 decision barred the state from issuing $8.6 billion in bonds needed to help finance the high-speed rail line from San Francisco to Los Angeles, which is expected to cost $68 billion and achieve speeds of 220 miles-per-hour.
The trial court ruling and delay in state bond issuance for the project has jeopardized $3.9 billion in federal funding for the project.
U.S. Rep. Jeff Denham, a California Republican, introduced legislation Jan. 15 that would suspend payments on $3.9 billion in federal funding the state is receiving for the project.
Without the state bond sale, the federal government cannot be sure California will pay the $180 million in matching funds due April 1, Denham said at the time. His bill has the support of the California Republican delegation.
The bill is "about ensuring that federal dollars are being spent wisely and that the failure of the California High-Speed Rail Authority to secure adequate state and private money does not put federal funds at risk for other critical state needs, such as infrastructure, water and education, from the state of California," said Denham, who chairs the House Transportation and Infrastructure Subcommittee on Railroads, Pipelines, and Hazardous Materials.
Lieutenant Governor Gavin Newsom, a long-time supporter of high speed rail, is also beginning to question the viability of the project.
Newsom still supports high speed rail, "but this project in its current form gives him pause," said Andrea Koskey, the lieutenant governor's communications director.
Before the state commits to something that "draws down vital resources needed for job creation and investment in long-deferred infrastructure projects, particularly in light of the need to immediately address our water infrastructure, we have an obligation to the people of California to better explain how we can deliver on high speed rail without distracting from other, equally important and urgent priorities," Koskey said.
A spokesman for the governor's office declined to comment on the apparent loss of support from the lieutenant governor.
Opponents of the project have until March 17 to file a brief stating why the ruling should not be overturned. After that, the state has 15 days to respond.
"The burden will be on the opponents to show why the lower court ruling should not be reversed," Palmer said.
