The California High Speed Rail project has had no shortage of political and financial challenges. Faced with a ballooning budget, tepid political support in Washington and heated NIMBYism along the planned route through the Bay Area peninsula, the project has appeared closer to a pipe-dream than reality.
When the House Appropriations Committee released its Transportation, Housing and Urban Development budget proposal for fiscal year 2012 last Thursday, however, California High Speed Rail may have been dealt a lethal blow. In the proposal, the Committee strips $7 billion from the President’s budget request of $8 billion for inter-city passenger and high speed rail service – leaving just $1 billion for Amtrak and other rail funding.
With it’s sheer size and considerable budget (the last estimate puts it in the ballpark of $60 billion, although the California High Speed Rail Authority is expected to release a revised estimate in October 2011) high speed rail has become a high-stakes project for President Obama and California Governor Jerry Brown (D). Both claim that high speed rail will boost the U.S. economy, spur construction jobs (particularly important in California, where the statewide unemployment is the third highest in the nation at 12%) and relieve traffic at congested U.S. airports for medium-haul trips through highly populated, urbanized areas such as the one between San Francisco and Los Angeles or the Northeast Corridor between Washington, D.C. and Boston. In his State of the Union address in January 2011, Obama boldly set a goal to make high speed rail accessible to 80% of America by the year 2025 – a goal that seems wildly optimistic even among the program’s supporters.
Republicans have been less supportive of high speed rail, primarily due to the high cost factor. The governors of Iowa, Florida, and Wisconsin – all Republicans – rejected high speed rail stimulus funding with considerable fanfare earlier this year, citing their concerns about cost overruns. These high speed rail grants, created by the American Recovery and Reinvestment Act, provided $8 billion to create the foundation for a nationwide high speed rail system.
Although House Transportation and Infrastructure Committee Chairman John Mica (R-FL) has supported high speed rail in the past, it is unlikely he will attempt to salvage funding from the Appropriations Committee’s 2012 budget draft. It appears that the President has also backed off from his support for high speed rail, at least for now. During his landmark jobs speech last week, which included a proposal for a $10 billion infrastructure bank, the President was mum on any plan for continuing high speed rail – an ominous omission from an infrastructure proposal to which high speed rail should have belonged.
As the Los Angeles Times recently pointed out, the California high speed rail project is dependent upon a firm federal investment. Without consistent federal support, the project costs would fall squarely on the state, which would be unlikely to meet the project’s budget obligations through the bond market or private financing. The political winds have shifted in D.C., and it doesn’t bode well for high speed rail supporters.