SACRAMENTO, Calif. — The legislative analyst's office said Tuesday that the latest plan to build a $68.4 billion high-speed rail system linking Northern and Southern California still relies on highly speculative financing, and it urged the state Legislature to reject funding until more details are ironed out.
The California High-Speed Rail Authority "has not provided sufficient detail and justification to the Legislature regarding its plan to build a high-speed rail system," the LAO said. "Important details regarding the very recent, significant changes in the scope and delivery of the project have not been sorted out."
The latest business plan, released earlier this month, trimmed last year's cost estimate of $98 billion but leaves it well above the $45 billion estimate given to voters in 2008 when they approved selling nearly $10 billion in bonds. The latest proposal for a 520-mile system linking San Francisco-to-Burbank pegs completion in 2028 and relies extensively on commuter rail lines to cut costs.
The report notes that the new plan still anticipates getting at least $42 billion in federal funding, which it calls "highly speculative." So far, California has been promised $3.3 billion in federal funds to start construction in the Central Valley, but the project also needs financing from the voter-approved bonds.
The LAO recommended that lawmakers reject Gov. Jerry Brown's request to start selling $2.6 billion in bonds to start construction until the rail authority gives more details about its plan, but it suggested lawmakers continue funding for the rail authority in case the state wants to pursue the project later.
Dan Richard, chairman the High-Speed Rail Authority board and a Brown appointee, said he agreed with the LAO's recommendation to share more information with the Legislature.
"But other LAO recommendations overlook the significant environmental and economic benefits of reducing freeway pollution, improving transportation and creating jobs," he said in a prepared statement. "This project is important for California and it would be a mistake to delay this project and lose billions of dollars in critical federal funds."
The report said although planning for the project has been in the works for 15 years, "the proposed modifications, which substantially change how the project would proceed, were developed within the last couple of months," in response to heavy criticism of the plan released last year.
The LAO also questioned the rail authority's plan to rely on funds from California's new cap-and-trade program if federal funding does not materialize. The program, in which businesses can buy and trade carbon emission permits, is part of the state's landmark global warming law, which aims to cut greenhouse gas emissions to 1990 levels by 2020, but the first segment of the rail system would not be finished until 2021, the LAO noted.
The state Air Resources Board, which oversees the cap-and-trade system, believes high-speed rail "meets both the letter and spirit of California's pioneering global climate change laws," Chairwoman Mary Nichols said in a statement.
"Not only does it take millions of tons of greenhouse gases out of the air, it also goes to the heart of the law itself, transforming California's economy to clean energy and clean technology and breaking our century-long dependence on fossil fuels," Nichols said.
The LAO also recommended that the California Department of Transportation take oversight of the project.
Earlier Tuesday, the Senate transportation committee postponed a vote on a proposal to put the high-speed rail plan back before California voters.
SB985 by Sen. Doug La Malfa, R-Willows, said voters no longer have confidence in the project, and would likely reject it if given another opportunity. California has also faced years of successive budget cuts amid the recession.
"The voters have been deceived, they've been misled," La Malfa said.
The Democratically controlled committee appeared likely to reject La Malfa's ballot measure, so he asked for a delay in voting after more than an hour of testimony.