Even California's Analysts Are Confused About Bullet Train Fate

(Bloomberg) -- Even California’s studiously deliberate bureaucrats are confused by what Governor Gavin Newsom intends to do with the state’s high-speed rail project.

Two weeks ago, the Democrat shocked people around the state and country by appearing to walk away from an ambitious $77 billion bullet train that has been in the works for more than a decade. He said in a speech that there "simply isn’t a path" for the original plan linking Los Angeles and San Francisco and that he wants to focus on finishing one segment running only through California’s less-densely populated agricultural heart. But Newsom, who took office in January, also said he would continue preliminary work on the entire system and seek more federal and private funding.

Reaction was swift, and Newsom and his chief of staff, Ann O’Leary, took to Twitter to stress he wasn’t abandoning high-speed rail, as his comments were initially interpreted. Still, he gave an opening to the administration of President Donald Trump, which last week said it would seek to cancel and claw back federal funds from the project. Republicans in the statehouse and Congress had long opposed it and tried to choke off funding before.

Staffers at the nonpartisan Legislative Analyst’s Office, which undertakes methodical examinations of dense topics such as education-funding formulas, wrote in a report Tuesday that the specifics of Newsom’s plans are "uncertain." That includes aspects from whether portions of the system would be canceled entirely to details of the line he wants to complete.

"Most notably, it is not clear whether the segment would carry high‑speed trains or whether it would instead host express service for the existing San Joaquin passenger rail line," the analysts wrote.

There’s some urgency to addressing the confusion. If the railroad is being scaled down, the state should decide soon and avoid piling on more expenses. But if the legislature wants to press ahead, it should solve the funding deficit for the project to succeed, the LAO said in the report. After 2030, the committed financing for the system is short by at least $54.9 billion, an amount that would grow by $900 million if federal grants are lost.

"There is significant risk that the state would have to cover the large majority of any funding gap -- likely from the general fund," the report said.

The analysts noted that Newsom’s administration said more details may come next month in a project update. The governor’s press office didn’t immediately respond to a request for comment on the report.

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