Trump administration pulls $1B from California rail project

By The Canadian Press
May 16, 2019 - 2:15pm

SACRAMENTO, Calif. — The Trump administration cancelled nearly $1 billion Thursday in federal money for California's high-speed rail project, further throwing into question the future of the ambitious plan to connect Los Angeles and San Francisco.

California Gov. Gavin Newsom immediately pledged to take the administration to court.

"The Trump Administration's action is illegal and a direct assault on California," he said in an emailed statement. "This is California's money, appropriated by Congress, and we will vigorously defend it in court."

The Federal Railroad Administration's official word it was cancelling the money came several months after President Donald Trump and Newsom sniped at each other over the project. The FRA said in a statement that it's still exploring whether it can force California to return $2.5 billion the state has already spent.

Trump made the rail line an issue when he seized on Newsom's remarks in February that the project as planned would cost too much and take too long.

Newsom has shifted the project's immediate focus to a 171-mile line in the state's Central Valley, but he said he's still committed to building the full line.

Still, federal officials said California has repeatedly failed to make "reasonable progress" and abandoned the original vision.

Voters initially approved about $10 billion in bond funds for the project in 2008. It faced repeated cost overruns and delays since then. It's now projected to cost more than $77 billion and be finished by 2033.

While the $929 million is a critical piece of the project's funding plan, state rail officials were not expecting to access the money until 2021, according to a recently released project update. If a court battle over the money drags on, that could put the state in position to win the money back or get more from the federal government if Democrats win the White House and control of Congress in 2020.

Still, the move to withdraw the money is a problem for the project, which is chronically underfunded.

The $3.5 billion the state has been awarded in federal money is dedicated to pay for an initial segment of track under construction in the Central Valley and to complete environmental reviews on the entire 520-mile line.

The $1 billion the administration has withdrawn is about one-twelfth of the money the state is counting on to pay for the initial line.

Officials highlighted the possibility of losing the money in a new business plan released in early May. They said losing the money would force the state to re-evaluate whether it can provide early train service in the Central Valley and require rail officials to look for funding elsewhere.

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This story has been corrected to say the federal government may still try to take back an additional $2.5 billion, not that it will try to take back the money.

Kathleen Ronayne, The Associated Press

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