California bill would block bonds for high-speed rail

Reuters News
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Posted: Jan 10, 2012 8:08 PM
California bill would block bonds for high-speed rail

SAN FRANCISCO (Reuters) - A group of Republican lawmakers in California touted a bill on Tuesday that would prevent the sale of state bonds to help finance a planned statewide high-speed rail system.

Republican Assemblywoman Diane Harkey's bill would effectively kill state debt financing for the planned system, which is raising concerns in California's Democrat-led legislature over its mounting costs.

Voters approved nearly $10 billion in general obligation bonds in 2008 to get the project started with the assumption that billions more dollars from Washington and private investors would help complete it.

The project's estimated cost has been escalating and now nears $100 billion, raising concerns among California lawmakers from both parties.

Lawmakers must decide in coming months whether to approve a tranche of the voter-approved bonds for the project to secure more than $3 billion in federal dollars for the planned first leg, which the California High-Speed Rail Authority aims to start in September in the state's Central Valley.

An independent peer review group examining the rail system's planning urged top lawmakers last week to not approve the bonds.

Governor Jerry Brown, a Democrat, supports moving forward with the rail system.

(Reporting by Jim Christie; editing by Andre Grenon)