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California seeks big chunk of high-speed rail funds

(Reuters circulated the following story by Lisa Lambert on September 16, 2009.)

WASHINGTON, D.C. — California is pushing plans for a high-speed rail line and is banking on receiving nearly half of the federal stimulus money set aside to bring fast train travel to the United States.

On September 23 the financially troubled state will finalize a list of projects it wants the federal government to fund from a pool of $8 billion dedicated to high-speed rail in the American Recovery and Reinvestment Act. It will likely hear by October 2 how much it will receive, Cathleen Cagliani, a state assembly member, said on Wednesday.

The state will request between $4 billion and $5 billion, or at least half of the money available for all states, and California voters have approved selling bonds to fund the rest of the cost.

"California is the only state in the nation that has passed a bond measure that guarantees public funding," Cagliani told reporters after visiting with federal regulators and legislators.

"We have a public commitment of $9.5 billion," she said, referring to financing for a stretch of rail line that will eventually carry passengers up and down most of the West Coast. "That guarantees to the private sector that if they put money into California, that the project will be successful and it will be profitable."

California can sell the debt starting in January.

California is also the only state that has a plan approved by the Federal Railroad Administration over a year ago "that can guarantee we can reach speeds of 220 miles per hour," Cagliani added.

The state has memoranda of understanding with Spain, France, Japan and Germany to build trains and establish the infrastructure for a profitable rail line, she said.

The financially strapped state will need any extra funds available from the federal government. The speaker of the State Assembly, Democrat Karen Bass, led a group of California legislators to meet with agencies and members of the U.S. Congress this week.

While they discussed federal grants and programs the state has not yet tapped -- including an emergency unemployment trust fund -- they also pressed for a second stimulus plan, seeing a sequel to the $787 billion package as the state's greatest chance of recovery.

"One of the things that is of great concern to us is that over the last year and a half we've had to make devastating cuts in every single area," Bass said. "But we have every reason to anticipate another deficit next year."

She does not hold high hopes and noted California has received $13 billion of the $23 billion set aside for it in the current stimulus plan.

"It's hard to say 'Give us a second stimulus' when we've only received half of the first one," she said.

On Wednesday, the UCLA Anderson Forecast group said the most populous U.S. state will not return to normal economic growth until 2011. For a related story please see.

Friday, September 18, 2009

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