California High-Speed Rail - Funding

Funding

On November 4, 2008, California voters approved Proposition 1A, a measure to construct the initial segment of the network. The measure provides $9 billion for the construction of the core segment between San Francisco and Los Angeles/Anaheim, and an additional $950 million for improvements on local railroad systems, which will serve as feeder systems to the planned high-speed rail system.

Financing plans to complete the initial segment require as-yet-unsecured support from federal and local governments, as well as significant investment from the private sector. In a plan developed by the CHSRA in conjunction with Goldman Sachs, the federal commitment was expected to be $12 to $16 billion, while private investors would invest up to $7.5 billion, leaving an additional $10 billion to come from local governments. Construction costs are projected to be approximately $98.5 billion (year of expenditure). The CHSRA projects the initial operating segment to produce a budget surplus which will be used to finance extensions to Sacramento and San Diego.

On October 2, 2009, then-Governor Arnold Schwarzenegger unveiled California's official application for ARRA high-speed rail stimulus funding. The total amount of the application was $4.7 billion, representing more than half of the $8 billion set aside for high-speed rail. The application included:

• $2 billion for high-speed train facilities at Los Angeles Union Station, Norwalk Station and the Anaheim Regional Transportation Intermodal Center; right-of-way acquisition, grade separations, utility relocation, environmental mitigation, earthwork, tunneling and track work between Los Angeles and Anaheim.
• $1.28 billion for station improvements, grade separations, electrification and other work between San Jose and San Francisco;
• $819.5 million for right-of-way acquisition, grade separations, utility relocation, environmental mitigation, earthwork and track between Bakersfield and Fresno;
• $466 million for similar work between Fresno and Merced

On January 28, 2010, the White House announced that California would receive $2.35 billion of its request, of which $2.25 billion was allocated specifically for California High Speed Rail, while the rest was designated for conventional rail improvements.

On October 28, 2010, the federal government awarded the CHSRA a further $900 million for passenger rail improvements, including $715 million specifically for the high speed rail project, but with the requirement that it be used for the Central Valley segments from Merced to Fresno, or Fresno-to-Bakersfield. While the CHSRA recognizes the federal government's desire for the initial segment to be built in the Central Valley, the CHSRA states that it will evaluate the starting segment according to its own criteria. This announcement brings the federal government's funding commitment to high-speed rail projects in California to $4.3 billion.

On December 10, 2010, the Department of Transportation reallocated $1.2 billion in federal high speed rail funding from states that had rejected the stimulus funds, including Wisconsin and Ohio. Nearly half of this funding, $624 million, was redirected to the CHSRA for use on the initial Central Valley leg of the project.

On May 9, 2011, the Department of Transportation reallocated $2 billion in federal high speed rail funding from Florida, which had rejected the funding. The DOT awarded $300 million to the CHSRA for a 20-mile extension along the Central Valley Corridor. The work funded in this round will extend the track and civil work from Fresno to the Chowchilla Wye, which will provide a connection to San Jose to the West and Merced to the North. The California High Speed Rail Authority issued a draft Business Plan on November 1, 2011, for public review and comment. The Business Plan will shape the financial and operational implementation of the HSR project, and must be adopted and submitted to the Legislature by January 1, 2012 and every two years thereafter.