California High-Speed Rail Authority CEO Brian Kelly worked over the summer to reassure anxious state lawmakers that a new management team could revive the troubled bullet-train project. He also proceeded to push out key officials overseeing contract and property decisions.

Yet the changes haven’t stopped a new wave of bad news in September for the project, which was once envisioned as a statewide network of high-speed rail but has been downsized to a 119-mile link between Bakersfield and Merced expected to cost in the range of $20 billion. 

A Los Angeles Times report outlined the huge problems still facing the rail authority’s land-acquisition efforts after seven years in the Central Valley. Not only does the agency need to buy about 300 more properties to be able to build the train, the Times reported that consultants believe at least an additional 488 parcels will need to be bought to deal with complex issues related to easements on sites with infrastructure owned by Pacific Gas & Electric and other utilities as well as AT&T, railroads and irrigation districts.

This adds new doubts about the rail authority’s projection it could finish construction of the Central Valley route by 2026.

One project manager, after warning of severe delays, told the Times that “I am going to ride this train, but I am afraid it is going to be my ashes in an urn. I told my kids to take my ashes on the bullet train.”

The Times also noted that the rail authority had been forced to buy larger lots than it needed to accommodate the rail route to such an extent that it now owns hundreds of properties – including “toxic waste sites, vacant lots and rental homes” – that it must manage. The list includes at least 466 acres of cultivated agriculture fields.

San Jose area critics push for costly elevated lanes

There was also bad news for the project from Northern California. At a rail authority board meeting held in San Jose, trustees voted unanimously to approve a route connecting the San Joaquin Valley with San Jose after the Central Valley initial segment is built. Yet testimony at the hearing showed the intensity of opposition to building any new rail route that didn’t minimize disruptions to the neighborhoods and communities it traveled through.

According to a Fresno Bee report, speakers complained to the rail board that early promises that elevated rail lines would be built had given way to plans for regular, surface rail lines. But since elevated rail costs two to four times more per mile, choosing it would make project costs explode – and Gov. Gavin Newsom has already said there’s not nearly enough funding likely to be available to complete the $78 billion statewide project advocated by his predecessor, Jerry Brown.

That argument didn’t move San Jose resident Danny Garza. According to the Bee, he said that not building elevated tracks in his neighborhood was “a bait-and-switch” given past guarantees of minimal impacts. “Please don’t use our neighborhood to balance your budget,” he told the board.

San Jose Mayor Sam Liccardo told trustees that his city could drop its support for the project if the rail authority didn’t use “best practices”  to “provide our community with the safety it deserves.”

The section of the proposed route in the San Joaquin Valley also drew complaints, according to the Bee. Rick Ortega, general manager of the Grassland Water and Resource Conservation Districts, said the staff report “contains no design detail on how the authority intends to mitigate impacts through the ecological area.” The Grassland Environmental Area is a 160,000-acre site mostly in Merced County that the U.S. Fish & Wildlife Service has repeatedly said must be preserved because of the crucial ecological importance of its wetlands.

Ortega also said elevated tracks were necessary – or that the rail authority should change its planned route.

Board members said the staff would consider the complaints, but offered no promises about the nature of possible mitigation efforts, according to the Bee.

Three months after canceling a $929 million federal grant to the troubled California bullet train project, the Trump administration has unexpectedly given its go-ahead to the state to approve environmental documents that are needed to complete planning for the long-delayed project.

In May, after the funding was canceled, the relationship between the federal and state government seemed so bumpy that bullet train officials worried that Washington would try to sabotage the project by delaying approval of necessary paperwork. Instead, on Monday, the Federal Railroad Administration fulfilled a long-standing state request and moved environmental reviews of pending plans for the project’s full Los Angeles to San Francisco route from the federal to the state level. According to the Los Angeles Times, previously the agency had only approved segments from Bakersfield to Fresno and from Fresno to Merced.

“This action is an important milestone for the high-speed program,” said Brian Kelly, chief executive of the California High-Speed Rail Authority. “We’ve lost valuable time waiting with the FRA’s disengagement, so I am very thankful for this action and I am hopeful this step is the beginning of a more collaborative and cooperative relationship prospectively.”

But while state officials were relieved by the federal decision, funding obstacles still remain. The state only has about one-quarter of the $80 billion-plus it would take to link Los Angeles and San Francisco – and that’s for a plan that doesn’t use high-speed rail for segments from San Francisco to San Jose or from Los Angeles to its northern exurbs. This downscaling has led some longtime backers of the project, such as former state Sen. Quentin Kopp, to renounce it as a betrayal of promises made to state voters in 2008 when they approved $9.95 billion in bond seed money for what was then envisioned as a $43 billion statewide train system.

The lack of funding was behind Gov. Gavin Newsom’s February decision to pull back from predecessor Jerry Brown’s commitment to building a statewide system. Instead, Newsom said all $20.5 billion in available funding should be used to build a high-speed route between Bakersfield and Merced in the Central Valley. 

Speaker wants changes to Newsom’s focus on Central Valley

But it now appears that even that scaled-back plan will face opposition from some key Democrats in the Legislature. On Thuesday, the Times reported that Democratic Assembly members from the Los Angeles and Bay areas – including Speaker Anthony Rendon – have for weeks discussed shifting the state’s rail focus. They hope to take up to $6 billion that Newsom wants to use in the Central Valley to improve rail service from Pasadena to Anaheim and commuter rail in and out of San Francisco. They believe a shorter, scaled-down version of the Central Valley route is viable with funding in the $14 billion range.

“I like the concept,” Rendon told the Times. “Any project that doesn’t have a significant amount of service to the largest areas in the state doesn’t make much sense.”

The prospect of taking state bullet train money for the Los Angeles area was first raised publicly in April by several members of board of the Los Angeles County Metropolitan Transportation Authority.

Any reduction in the scope of the Central Valley route proposed by Newsom is likely to face bitter opposition from the area’s politicians, who see the bullet train as crucial to improving the economy in one of the state’s poorest regions. They were enthusiastic about Newsom’s comments during last year’s campaign that a bullet train would be ideal to connect Silicon Valley workers with relatively inexpensive housing in the Central Valley.

The Republican candidates – Assemblyman Travis Allen of Huntington Beach and Rancho Santa Fe businessman John Cox – reflect the GOP consensus that the project is a boondoggle that’s unlikely to ever be completed. But the major Democratic hopefuls – Lt. Gov. Gavin Newsom, former Los Angeles Mayor Antonio Villaraigosa, state Treasurer John Chiang and former Superintendent of Public Instruction Delaine Eastin – have all indicated they would continue with rail project, albeit with little of the enthusiasm shown by present Gov. Jerry Brown.

While the new business plan was depicted by the California High-Speed Rail Authority’s new CEO, Brian Kelly, as a constructive step toward salvaging the project, the plan’s key details were daunting:

The estimated cost of the project, which has yo-yoed from $34 billion to $98 billion to $64 billion, changed once again. The business plan abandoned the previous $64 billion estimate for an estimate of $77 billion – accompanied by a warning that the cost could go as high as $98 billion.

Even at the lower price tag, the state didn’t have adequate funds to complete a first $20 billion-plus bullet-train segment linking populated areas. The present plan for a Central Valley route has an eastern terminus in a remote agricultural field north of Shafter. That’s because the $9.95 billion in bond seed money that state voters provided in 2008 has only been buttressed to a relatively slight degree by additional public dollars from cap-and-trade pollution permits.

The business plan cites the possibility of additional federal funds beyond the $3.3 billion allocated by Washington early in the Obama administration. It doesn’t note, however, that domestic discretionary spending has plunged in recent years amid congressional concern about the national debt blowing past $20 trillion.

The business plan also promotes the possibility of outside investors. It doesn’t mention that such investors have passed on the project for years because state law bars the California High-Speed Rail Authority from offering them a revenue or ridership guarantee.

From 5 years behind schedule to 10 years behind

The initial operation of a bullet-train link serving California residents went from five years behind schedule, in the estimate of the Los Angeles Times, to 10 years behind schedule. The business plan said the project would begin operations no sooner than 2029.

The potential immense cost overrun of the bullet train segment in the mountains north of Los Angeles was fully acknowledged for the first time. A 2015 Times story laid out the “monumental” challenge.

Democratic candidates to succeed Brown have chosen to focus on housing, single-payer health care, immigration and criticism of President Donald Trump in most early forums and campaign appearances. But front-runners Newsom and Villaraigosa in particular seem likely to be pressed on how they can square their claims to be experienced, tough-minded managers with support for a project which seems less likely to be completed with every passing year.

Proposition 70 on the June primary ballot also will keep the bullet train on the campaign’s front burner, to some extent. It was placed on the ballot as part of a 2017 deal cut by the governor to extend the state’s cap-and-trade program until 2030. If Proposition 70 passed, it would require a one-off vote in 2024 in which cap-and-trade proceeds could only be used for specific needs with two-thirds support of each house of the Legislature. Republicans may be able to use these votes to shut off the last ongoing source of new revenue for the high-speed rail project.

Reason’s 22^nd Annual Highway Report ranked California 42nd. While this is still in the lowest category, the ranking has steadily improved over the years, moving up from a low of 46th. Because of data-collection delays, the rankings only go through 2013.

The study measures a number of important factors: Road conditions on freeways and primary commercial highways, the state of each state’s bridges, fatality rates and various costs per mile – administrative, maintenance, capital costs and expenditures.

California has done particularly poorly on the spending side of the equation. It ranked 44th in total disbursements per mile; 43rd in maintenance disbursements per mile; 40th in capital and bridge disbursements per mile; and 47th in administrative disbursements. That reinforces a California state auditor study from last summer showing that Caltrans may have as many as 3,500 unnecessary job positions.

The state’s overall per-mile capital and bridges cost totaled nearly $170,000 – far costlier than highest-ranked South Carolina, at nearly $21,000, or middle-ranked Utah, at nearly $78,000. But California wasn’t nearly the worst. Worst-ranked New Jersey spends $839,000 per mile; Florida spends more than $380,000; and Illinois spends nearly $202,000. On administrative costs, California spends more than $47,000 per mile, compared to $1,107 per mile in top-ranked Kentucky and $3,762 in 10th ranked Texas.

On the bad side, California had one of the highest proportions of rural interstate mileage in poor condition, at 6.52 percent. Its urban interstate mileage in poor condition was even worse, at 13.32 percent, which isn’t a surprise to anyone who regularly navigates the Los Angeles, San Diego or Bay Area highway systems. The survey only looks at state-owned highway systems, not at the myriad local and regional systems that are in various conditions.

“The good news is that California reported the lowest percentage of deficient bridges of any state in the nation,” according to Reason Vice President Adrian Moore, writing in the Orange County Register. California also ranked 10th in highway fatalities with a rate of 0.9 per 100 million vehicle miles. The best performance was in Massachusetts, with 0.58 fatalities per 100 million miles and the worst was Montana, with 1.9 fatalities per 100 million miles. Those rates, however, have been dropping nationwide.

One of the survey’s authors, Reason Senior Fellow David T. Hartgen, told me Caltrans didn’t do anything dramatic between 2012 and 2013 to explain the rating improvement – but it did improve a significant number of bridges and roadways.

“A widening performance gap seems to be emerging between most states that are making progress and a few states that are finding it difficult to improve,” according to the report’s authors. “There is also increasing evidence that higher-level road systems (Interstates, other freeways and principal arterials) are in better shape than lower-level road systems, particularly local roads.”

The good news: California is among those states that are improving. The bad news: It has an extremely long way to go to reduce congestion and bring state and local roads up to snuff. On a controversial note, California’s recently released transportation plan seems to downplay the importance of expanding the state’s highway and road infrastructure.

The “California Transportation Plan 2040” focuses more on battling climate change than on expanding the state’s already clogged network of highways. “By 2040, California will have completed an integrated rail system linking every major region in the state, with seamless one-ticket transfers to local transit,” wrote Transportation Secretary Brian Kelly.

“Responding to the desires of millennials and aging baby boomers alike, we will further invest in complete, safe pedestrian and bicycle networks,” Kelly added. He also promised a new approach toward lowering maintenance costs on roads and bridges. But the state’s blueprint relies heavily on alternative transportation sources, rather than on freeways and road construction, given the “transportation system must do its part to reduce these threats (climate change) to our environment and health.”

Other reports paint a mostly gloomy picture of California’s transportation situation. Last year, the Senate Transportation and Infrastructure Development Committee – during a special session designed to come up with additional funding for transportation programs – reported that “54 of California’s 58 counties have an average pavement rating of ‘poor’ or ‘at risk,’ with much of this deterioration occurring over the past six years.”

Reason found California to top the national charts on bridge condition, but the state Senate pointed to 3,000 “structurally deficient bridges.” The committee pointed to an expected doubling of freight moved on California’s freeways (from 2002 to 2035), to suggest that the state’s infrastructure will face an accelerated level of deterioration.

The session failed to come up with a long-term funding solution, but that will no doubt be a top item for the Legislature next year.

Steven Greenhut is Western region director for the R Street Institute. He is based in Sacramento. Write to him at sgreenhut@rstreet.org.