California to Sell Debt in March for Train Trump Blasts as Waste

(Bloomberg) -- California plans to sell general-obligation bonds in March for its high-speed rail project even as the Trump administration seeks to claw back federal funds promised for the line.

As part of the state’s scheduled sale of $800 million of taxable debt the week of March 25, some of the proceeds are expected to finance the bullet train, Deputy Treasurer Tim Schaefer said in an interview Wednesday. The amount set aside for high-speed rail is still being determined, he said.

California is moving forward with its controversial train even as the Trump administration said Tuesday that it will cancel more than $900 million in federal grants earmarked for it following Governor Gavin Newsom’s plans to focus on a single segment in the state’s Central Valley. In addition, the U.S. Transportation Department said that it was exploring legal options to recoup $2.5 billion in federal funds already granted to the project.

Initially conceived as connecting San Francisco and Los Angeles with a high-speed train that would slash travel times and transform the state’s economy, the project has been beset by cost overruns and delays. Its estimated price has ballooned to $77 billion.

Schaefer declined to comment on the Trump administration’s moves.

The state has sold $3.3 billion of the $9.95 billion of debt that voters authorized in 2008 for the project, said H.D. Palmer, a spokesman for Newsom’s finance department.

To contact the reporter on this story: Romy Varghese in San Francisco at rvarghese8@bloomberg.net

To contact the editors responsible for this story: James Crombie at jcrombie8@bloomberg.net, Michael B. Marois, Kara Wetzel

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