The Federal Transit Administration’s decision to halt the funding ($647 million) for the electrification of the Caltrain — a key part of extending California’s high speed rail to the Bay area — didn’t stop the rail authority. Even though the FTA stated they needed “additional time to complete review of this significant commitment to Federal resources,” the state didn’t feel the same way.


Caltrain officials needed the funding by March 1st. Now, they will face delays and be forced to pay costly penalties, which could threaten the viability of the project. In a letter to the board that runs Caltrain, the FTA said it would make a final decision after President Trump releases his budget for the 2018 fiscal year, which starts on Oct. 1.


On Friday, the Finance Department approved the California High Speed Rail Authority’s request ask the State Treasurer’s Office to issue $2.6 billion of the nearly $10 billion in funds authorized by voters in 2008.


Despite the lack of major ongoing revenue sources for the project, the state doesn’t seem concerned. The most recent proceeds from the state’s cap-and-trade auctions fell far below projections again. Only 16.5% of the emission allowance were sold, netting just $2 million for the high-speed rail out of the possible $12 million. Just a small fraction of the pollution credits up for sale have been sold in the last year, threatening the nearly hundreds of thousands of dollars that the state is relying on until 2050.


“The Legislative Analyst’s Office noted in 2012, when the cap-and-trade program first got up and running, the use of such proceeds was ‘very speculative,’ and cautioned that using them to fund the high speed rail might be illegal, since they were supposed to be used to mitigate greenhouse gas emissions,” as quoted in the OC Register. “But the high speed rail system will actually increase the GHG emissions for at least several decades due to construction and operation effects.”


The state is required to match about $3.5 billion in federal grants. It is possible that the FTA will withhold more funding if the state is unable to match their legal obligations.


We will continue to follow this project as plans evolve, and will continue to represent property and business owners affected by the project. If you think your property or business may be taken for the high-speed rail project, you can learn more about your options by giving us a call at (866) EM-DOMAIN.