California’s High-Speed Rail Authority continues to forge ahead with the project to build the $68 billion train system, despite a court decision saying the HSRA cannot use Proposition 1A funds that were approved by the legislature.
To address this and many other controiversial decisions by the HSRA, Assemblyman Jim Patterson, R-Fresno, has introduced AB 1501 to protect California taxpayers from a risky financial obligation by the HSRA.
“By continuing to spend federal money, the HSRA is leaving taxpayers holding a bag full of matching state bond funds that a judge has said can’t be spent,” Patterson said in an interview. “We are essentially overdrawing our bank account by spending these federal funds. We simply don’t have the matching funds required by the federal government to go forward with this project.”
Patterson said if the rail authority is “out-of-control” and needs legislative oversight. “It’s the Legislature’s responsibility,” he added.
If the HSRA was allowed to continued spending, it would leave taxpayers on the hook to not only match billions of dollars in matching federal funds, the federal government could make California repay those funds.
Proposition 1A, passed in 2008, required the High Speed Rail Authority from spending any federal funds unless matching state funds are immediately available.
August 16, 2013, Superior Court Judge Michael Kenny ruled that the High Speed Rail Authority had not yet met the legal requirements to spend Proposition 1A bond funds for high-speed rail construction.
In its October 11, 2013 response, the High Speed Rail Authority did not dispute this finding but argued that, even if it cannot access or spend Proposition 1A bond funds, it can proceed with construction using federal funds.
In a show of unrestrained hubris and contempt, the HSRA argued that other sources of state funds, including the state’s General Fund, could be used to match the federal funds.
According to Patterson, this course of action would enable the High Speed Rail Authority to obligate the state to provide more than $3 billion in state resources toward high-speed rail construction that may otherwise be designated for purposes such as education, health care, or public safety, without any prior review or approval by the Legislature.
In November 2013, a Sacramento Superior Court judge said the HSRA could not use Proposition 1A funds that were approved by the legislature in 2012. The judge denied a request by the HSRA to validate the sale of $9.9 billion in Proposition 1A bonds, determining there was no evidence that it is “necessary or desirable” to issue the bonds now.
Prop. 1A authorized the state to issue $9.95 billion in general obligation bonds and expend the funds for the construction of a 520-mile high-speed rail system between San Francisco and Los Angeles/Anaheim.
Voters were assured the only cost to the state’s General Fund would be to pay bond principal and interest.
Patterson’s AB 1501 would reaffirm the actual intent of the Legislature by prohibiting the High-Speed Rail Authority from spending federal funds, unless state funds are immediately available for the purpose of providing matching state funds – and not by using the General Fund.