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The authority overseeing efforts to build a high-speed rail system in California approved its revised business plan on Thursday, sending the ambitious project to an uncertain fate in the Legislature.
The California High-Speed Rail Authority voted 6-0, with two members absent, to approve its latest plan. Two hours of public comment preceded the vote, most of it favorable toward the bullet train.
"We're 30 years behind the rest of the world. It's time for us to move ahead in our country," rail board member Bob Balgenorth said.
Union members touted the project as a way to create much-needed jobs in a state that has battled double-digit unemployment for years. Critics targeted the project's $68.4 billion cost. That amount is $23 billion more than the amount sold to voters when they authorized the project in 2008.
Project opponent Frank Oliveira said the cost and other provisions of the authority's updated business plan ran counter to the voter-approved initiative. When $9 billion in bonds were approved, voters were told the total project would cost $45 billion and connect all the state's major cities with trains running at speeds of 220 mph.
Last fall, the authority issued a draft plan saying the rail line would cost $98 billion, prompting Gov. Jerry Brown to demand a major rework.
To reduce costs, the authority proposes a high-speed line through California's Central Valley then connecting it to existing urban rail lines in the Los Angeles and San Francisco areas. The initial high-speed section would run between Merced and the San Fernando Valley and be completed by 2022.
"Do the project right, comply with the law, or reconfigure the plan," said Oliveira, who is with the group Citizens for California High-Speed Accountability.
Sacramento, the state capital, and San Diego, a major tourist destination, will not be directly connected to the high-speed rail line as envisioned in the project's initial phase. Even a bullet train connection to Anaheim, home of Disneyland, was removed to save money, although board members on Thursday said they hoped to find a way to salvage that connection.
The Legislature has until Aug. 31 to authorize the bond sale that would get the project started. Brown, a Democrat, has championed the project, making it likely that the Democratically controlled Legislature will authorize the first wave of bond sales so construction can start by early next year.
Only a simple majority vote is needed.
The leader of the state Senate, President Pro Tem Darrell Steinberg, issued a statement praising the rail line as the state's biggest public works project in decades but said lawmakers "will exhaustively ask all of the important questions."
Yet nearly all Republicans and even some Democrats have expressed skepticism about the project's scope and affordability, so approval is far from certain.
Republican lawmakers acknowledged there was little they could do to stop the project if a majority of Democrats favor it, so they are pinning their hopes on a referendum planned for the November ballot.
"It has been an idea that gets worse the more information we get about it," Jim Nielsen, the Republican vice chairman of the Assembly Budget Committee, said in an interview Thursday.
Only about $13 billion has been identified for the project so far -- the $9 billion in voter-authorized bonds and about $3.5 billion promised from the federal government. That leaves about $55 billion to be funded with uncertain sources of money.
The latest business plan says private investors, more money from the federal government and industrial fees from California's cap-and-trade program to reduce greenhouse gas emissions are expected to fill much of the gap.
Although the project is more expensive than voters initially authorized, rail board Chairman Dan Richard said it's not clear that taxpayers will be on the hook for the additional costs.
Earlier this week, a House oversight committee sent a letter to the rail authority notifying it of an inquiry into whether the state was spending the federal money appropriately. Richard said the scrutiny is expected for such a project, which would be the nation's first true high-speed rail system.
He compared the fight over the bullet train to construction of the Bay Area Rapid Transit system in the San Francisco region.
"This project will have a similar impact and people will look back and say, `Thank God they did it,'" Richard said before the board's vote.
Dreier reported from Sacramento.
This article first appeared on www.businessweek.com
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