DALLAS - The California High-Speed Rail Authority officially began work on the state's $68 billion high speed passenger rail project funded with $10 billion of voter-approved state bonds as officials signed segments of steel rail at a ceremonial groundbreaking.
Gov. Jerry Brown and others speaking at the official groundbreaking in Fresno on Tuesday praised the project for its economic benefits and how it will bring southern and northern California together.
"We've got a lot to be proud of today," Brown said.
"It is going to be easier for people to live in the middle of the state and do business elsewhere," said Fresno mayor Ashley Swearengin.
Several of the project's legal hurdles have been overcome in recent months, notably a ruling by the California Supreme Court that the authority could go ahead with the sale of $9.9 billion of Proposition 1A bonds approved by voters in 2008. The federal Surface Transportation Board said in December, that it, not the state, had the final say in the environmental reviews for the rail project.
The state HSRA still faces seven environmental lawsuits seeking to halt construction on the rail line, and how to pay for the project remains uncertain.
At best, the state has identified $26 billion of funding, including the Prop. 1A bonds and $3.2 billion of federal grants from the 2009 federal stimulus package.
The 2014 Legislature dedicated to the bullet train 25% of the revenue from the state's cap-and-trade greenhouse gas fees. Annual revenues are expected to begin at $250 million and eventually ramp up to $1 billion.
The rail authority expects up to a third of the construction costs will come from private investors once the initial segments of the system begin generating revenue.
Brown said he had doubts about the funding for rail project when he was elected governor in 2010, and credited his wife with changing his opinion of the project's value.
"I wasn't sure where the hell we were going to get the rest of the money," he said. "Don't worry about it. We're going to get it."
The price tag on the bullet train project is a small fraction of California's gross domestic product of more than $2 trillion a year, Brown said.
"It's not that expensive. We can afford it," he said. "In fact, we cannot afford to not do it as we look at building a future that really works."
Rep. Jeff Denham, R-Calif., who last year filed legislation in Congress seeking to halt any further federal funding for the project, said proposed train system will never produce a positive return.
"The California High Speed Rail Authority is trying to spend money it doesn't have on the false assumption that more federal funds are coming," Denham said. "No taxpayer should have to spend any further money on skyrocketing expenses they never supported."
The rail authority won't be able to expend its $3.2 billion in stimulus funding before it expires in two years, he said.
"There is simply no way the authority will meet the 2017 deadline to spend the stimulus funding," Denham said. "It's hard to celebrate breaking ground on what is likely to become abandoned pieces of track that never connect to a useable segment."
Plans for the project funded in part with the $9.9 billion of Prop. 1A state bonds call for a 520-mile route stretching from San Francisco to Los Angeles by 2029 with trains running at speeds of more than 200 miles per hour.
The system will be extended later to Sacramento and San Diego, with up to 24 stations along the 800-mile route.
