California has a tough choice to make: proceed with a high-speed rail project with no clear funding mechanism, or return $3.3 billion to the federal government.  In order to get billions at a time when the state needs it, California must spend billions when it doesn’t have it.

The California Authority for High Speed Rail estimated the price tag for a line that would eventually allow a passenger to board a train in San Diego and get off in San Francisco within four hours would be around $98.1 billion. That's more than double the $35.7 billion that appeared on the 2008 ballot when voters approved the project. 

Killing the project now might seem like a wise fiscal choice, but it would also gut one of the rare bright spots for job creation.  The project boasts thousands of temporary construction jobs and a shift in California’s transportation structure.  If completed, passengers could get from San Francisco to Los Angeles in less than three hours.

Symbolically, the choice represents which road California’s transportation infrastructure will travel. In a nation built around airplanes and automobiles, there is little precedent for new transportation technologies such as high-speed rail. 

Although billions in stimulus money is just 3.4 percent of the overall price, it provides a compelling incentive for California to not scrap the project.  Not only would California have to pay back the federal funds, it would also lose access to state-matching funds, totaling around $6 billion.  That means it would have to kiss goodbye much-welcomed construction jobs at a time when California’s unemployment is pushing 12 percent. 

The alternative is to proceed, committing California’s already strained budget to billions of dollars, with no defined funding mechanism, to solve a transportation problem of the future. 

But, with federal dollars dedicated to the plan, if California doesn’t break ground now, it may never get the momentum needed to lay some tracks.

“If they start construction, there is a higher likelihood that the project will continue,” said Martin Wachs, researcher in urban planning and transportation for the RAND Corporation.

The funds are enough to begin the first leg of the project, a 140-mile stretch from just north of Fresno to Bakersfield through the Central Valley.  The Central Valley is the most sparsely populated portion of the tracks, making it the least logistically complicated and cheapest portion to build.  It will also bring an estimated 100,000 construction jobs to the depressed region, according to the California High-Speed Rail Authority report.

“If we don’t have a project, we lose all of that opportunity for funding, and of course, the jobs that go along with that funding,” said Daniel Krause, executive director of Californians For High Speed Rail.  “So we actually think we can’t afford not to do this project.”

Krause said that once the Central Valley rail is built, it hopes to attract a large investment from a future operator. If it doesn’t, Californians are going to have to make some tough decisions with future projects, or scrap high-speed rail and eat any public funds already invested.  If the project isn’t completed, the Central Valley tracks would be handed over to Amtrak , which would shave 45 minutes of commute time through the middle of the state.  Though no company has expressed interest yet, Krause said the Central Valley rail might change that. 

“It’s the back-bone of the project,” said Rachel Wall, spokeswoman for the California High-Speed Rail Authority, the organization that published the Nov. 1 report that contained the new price tag. 

“Once we have this running and we can better understand the technology, it will be easier to get the other portions built.”

But the project may not get more funding, which is why some critics have dubbed the Central Valley rail as the train to nowhere.  That leaves some, such as GOP leader state Sen. Bob Dutton, thinking that this is money that could be better used elsewhere.

John Blank, deputy chief economist for Los Angeles Development Economic, thinks it is a mistake to use hypothetical projects as an excuse to not act. He said that America’s retroactive approach to infrastructure demands are hurting our economy’s ability to compete globally, and innovations demand forays into the unknown.

“You can’t have it both ways,” Blank said. “You can’t have a project that is innovative and state of the art that is built cheaply and quickly.”

Because high-speed rails are untested in America, Blank said that it is difficult to assess the value the project will create, so the estimated price tag may not mean much.  Projected population growth would require substantially more highway lane miles, airport gates and runways, which would likely be more expensive than high-speed rail. 

The ballooning projected cost is attributed to sections of the rail being more complicated than originally anticipated, extending the investment timetable and pushing the completion date to 2034, 14 year later than original estimates.  Factor in annual inflation at 3 percent, not accounted for in the original figure, the final price tag of almost $100 billion looked shocking in headlines on newspapers across the state, especially at a time when funding is being slashed in programs across the board.

 

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Reach contributor Sarah Golden here.