SACRAMENTO — A state appellate court ruling has given new momentum to Gov. Jerry Brown’s $68 billion high-speed rail project by providing the state with a substantial funding source and lifting one cloud over a plan that has been widely criticized for its cost, route, construction plans and environmental reviews.
The 3rd District Court of Appeal on Thursday overturned two lower court rulings that had prevented the sale of $8.6 billion in voter-approved bonds and created uncertainty about financing of the project to link Northern and Southern California with high-speed trains.
The Sacramento County Superior Court judge had also ordered bullet train officials to write a new funding plan specifying how the state would pay for $26 billion in work it has not yet found financing to cover.
The appeals court ruling is “probably the most important news that’s been received in the last several years,” said Rod Diridon of the Mineta Transportation Institute at San Jose State University and a former member of California’s High-Speed Rail Authority board. “What it does is signal to the rest of the world that the California high-speed rail project is legally sound and is going ahead.”
The ruling came on the heels of a budget deal Brown brokered for long-term funding. It gives the project $250 million this year from the state’s greenhouse gas emissions fund and a quarter of the fund’s revenues in the future, which could eventually be billions of dollars a year.
Last year’s lower court rulings stalled momentum and tied up future financing, forcing the state to rely on $3.3 billion in federal matching funds. The plaintiffs, Kings County and landowners in the Central Valley, argued that the current bullet train plans deviate substantially from what voters were told the project would be in 2008 when they approved selling nearly $10 billion in bonds for it.
Rail Authority Chief Executive Jeff Morales called the appellate court ruling a turning point.
Opponents “have been for months now creating a narrative that we would never be able to get to the bonds, that we could never comply with the law,” Morales said. “That continued drumbeat from opponents impacted public opinion.”
He said the ruling, which is not final for 30 days, provides needed legal clarity.
Demolition work and construction testing has already begun around Fresno, one of the first hubs on a 28-mile stretch in the Central Valley.
Other impediments remain, however, including ongoing uncertainty about funding; a land acquisition process that is behind schedule; and another lawsuit by the same plaintiffs arguing that compromises made to cut the price to $68 billion mean the bullet train won’t be able to travel between Los Angeles and San Francisco in 2 hours and 40 minutes, as promised.
Morales said land and right of way discussions were slowed by the public perception that the project could be halted at any time.
Republicans who control the House have also vowed to block any further funding for California’s rail project.
The latest ruling “does nothing to change the $55 billion funding gap the California High-Speed Rail Authority faces, nor does it eliminate the glaring differences that remain between what voters approved in Prop. 1A and the authority’s current plan,” U.S. Rep. Jeff Denham, R-Turlock, said in a statement.
The judges acknowledged legitimate legal concerns “as to whether the high-speed rail project the California High-Speed Rail Authority seeks to build is the project approved by the voters.” But they said plans are still in flux and noted that on other public works projects the California Supreme Court “has allowed substantial deviation between the preliminary plans submitted to the voters and the eventual final project,” which casts doubt on the chances of success for a possible appeal.
The state must still draft a new funding plan before actually spending any of the bond money. Department of Finance spokesman H.D. Palmer said the bond money is not needed yet anyway, and the state will first tap other funds for construction.
The decision is a serious blow to the landowners and other Central Valley opponents who have spent years challenging various parts of the high-speed rail plan. Kings County Counsel Colleen Carlson called it disappointing.
“Everyone I talk to, that seems to be the first word that falls off their lips,” Carlson said. “There’s always a ‘but’ in this and the ‘but’ is that so much has been accomplished. I mean, we’ve required accountability from the rail authority, made it get itself up and operate.”