1. California High-Speed Rail
Future Funding of the California High Speed Rail in the Current Financial, Economic, and Political Environment

2. Introduction
The “greatest infrastructure project, not only in the history of California, but the nation”
~ Governor Jerry Brown
Purpose:
Support the 6th largest economy in the world
Bring economic growth
Provide affordable housing and greater mobility
Highlights:
800 miles of track
24 proposed stations
Construction dates:
Proposed budget: $64 billion

3. Initial Construction Section
Length: 130-mile long stretch connecting Madera to Bakersfield
Initial costs: $6 billion
Construction time: 4 years ( )
New construction period: 11 years ( )
New estimates for costs: $16 billion

4. Phase 1 Initial Operating Section(IOS) North – Madera to San Francisco
IOS South – Bakersfield to San Fernando Valley
Expected costs: $42 billion
Initial construction time: 6 years ( )
Delay in construction time due to ICS delay:

5. Phase 2 Phase 2 North – Merced to Sacramento
Phase 2 South – Los Angeles to San Diego
Expected costs: $16 billion
Expected construction time: 10 years ( )
Change due to ICS:

6. Special Projects Central Valley Wye Connects ICS, Phase 1, and Phase 2
Towards Merced
Central Valley Wye
Located in Chowchilla
Connects ICS, Phase 1, and Phase 2
Funded within the total $64 billion-dollar budget
Towards Gilroy
Towards Fresno

7. Additional Improvements
Tasked with creating one cohesive rail unit throughout California
Allow for easy transfers between HSR, regional, and city wide forms of transportation
Stations, platforms, train, etc.
Costs included in the original planning budget of $64 billion.

8. Cap-and-Trade Funding Total Funding as of Dec. 2017 for ICS
Initial Funding
Federal Funding
Funding for the ICS
American Recovery and Reinvestment Act - $2.5 billion
High-Speed Intercity Passenger Rail Program Federal Grant - $930 million
State Funding
Proposition 1A (the CA High- Speed Rail Act of 2008)
$9.95 billion in bonds
$3.2 billion flagged for the ICS
Cap-and-Trade Funding
Cap-and-trade fund allocation
25% of the annual action proceeds directed towards the project
$1.6 billion for the ICS (through 12/2017)
Total Funding as of Dec for ICS
$8.23 billion
Beyond the $6 billion originally planned for the project
Not enough accounting for the ICS increases

9. Time & Costs
Last number in April 2017

10. Cost projections for Phase 1
Original Time Frame – 2015 to 2021
Original cost – $42 billion
Cost projections for Phase 1
*change in years of construction based on 7-year delay from ICS
**inflation rate of 2.5% found based on expected inflation rate from

11. Cost projections for Phase 2
Original Time Frame – 2019 to 2029
Original cost – $16 billion
Cost projections for Phase 2
*change in years of construction based on 7 year delay from ICS
**inflation rate of 2.5% found based on expected inflation rate from

12. Funding Model Centralized funding model
Funds from various sources gathered at state level
Allocated as part of Governor’s budget
Distributed according to CA High-Speed Rail Authority’s priorities
Distributed and reviewed monthly
Looking forward
Continuing with centralized funding model
Focusing on federal grants and cap-and-trade funding
*gathered from Micah Flores, Information Officer I, at CA High-Speed Rail Authority headquarters in Sacramento, CA

13. Federal and State Funding
Federal Funding
State Funding
Past funding
$650 million set aside under Obama Administration for
In February 2017, President Trump, at the urging of CA GOP, blocked the pegged money
After 4-months of negotiation, money was reallocated to CA HSR
To be distributed over a 5-year period
Uncertainty and added risk
Proposition 1A
$9.95 billion in bonds received
$9.5 billion in interest payments
$1 received; $1.95 paid in principle and interest
Nearly 2-to-1 ratio
Costly means of funding
Currently on a 30-year payback period
$19.45 billion to payback

14. Voter Sentiment
Stratified Sampling of major newspaper in 7 heavily impacted regions in California
Media reports show
View points of citizens
View points being presented to, and projected on citizens

15. Voter Sentiment

16. Uncertainty of Cap-and-Trade Funding
To extend the cap-and-trade structure by 10-years, Governor Brown allowed Republican party to put forth a constitutional amendment gaining further control of funds
Scenario planning for effect of loss of cap-and-trade funding

17. –Jim Steer UK high-speed rail research group
Private Investment
CA HSR Authority hopes this capital infrastructure project brings private investments
Largely depending on operational sections of the CA HSR leading to revenues
Foreign Investment
Exploring since early planning phases
Gained “ideas” but not funds
Regaining investment dependable on revenues from operation
“operating profits are unlikely to be enough to repay massive construction costs”
–Jim Steer UK high-speed rail research group

18. Conclusion
Estimated costs range from $84 billion to $329 billion for conservative to radical scenarios
Collected approximately $8.23 billion for the ICS
Expected funding between $20 and $28 billion dollars
Deficit between $55 billion and $292 billion dollars
Federal grants and cap-and-trade funding are least expensive
Uncertainty in obtaining both
Bonds are effective way of gaining large sums of money
Very costly to the state and general support of the project is decreasing
Private investment are needed
Depends heavily on the completion of the project and revenues

19. Thank You