This is from today's Fresno Bee. Note that our governor is having it
both ways: He's for the trains, but against financing for the $10
Billion bond issue until all the dollars, including $30 Billion
private dollars, are in place. Even he is saying "more than $40
Billion."

Martin
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GOV. ARNOLD SCHWARZENEGGER: State must build high-speed rail

By Gov. Arnold Schwarzenegger
05/04/07 04:48:53

As the recent Bay Area freeway collapse illustrated -- and as a
recent Bee editorial correctly pointed out -- Californians need and
deserve a diverse array of transportation options. I absolutely
believe high-speed rail should be one of those alternatives.

A network of high-speed rail lines connecting cities throughout
California would be a tremendous benefit to our state.

Not only would its construction bring economic development and the
creation of hundreds of thousands of new jobs, but once completed, we
would also see improvements to our air quality, reductions in
greenhouse gas emissions, congestion relief on our highways and
greater mobility for people living in the Valley and other areas of
our state currently underserved by other forms of transportation.

Yet it's been more than 10 years, and the state has already spent
more than $40 million in initial planning for the rail line. But
there is still no comprehensive and credible plan for financing the
system so we can get construction under way.

The High-Speed Rail Authority, the commission in charge of developing
a plan for high speed rail in California, estimates the cost of
building the system to be more than $40 billion.

Yet so far, the only financing party identified with specificity is
the state, which the Authority proposes float a $9.95 billion bond.
The remaining 75% of the project cost, or more than $30 billion, has
yet to be identified with any specificity or confidence.

Before asking taxpayers to approve spending nearly $10 billion plus
interest, it is reasonable to expect the authority and its advisers
to identify with confidence where we will find the remaining $30
billion.
A perfect example of what I'm talking about is my $5.9 billion water
infrastructure package. By using a public-private partnership
approach, we've identified a plan that lays out exactly how we are
going to pay for every piece of the proposal, from the reservoirs to
the groundwater storage to fixing the Delta to our conservation
efforts.

For the reservoir portion, the estimated building cost is $4 billion.
We've proposed $2 billion in general obligation bonds for the public
portion and $2 billion in lease revenue bonds to be paid for by the
water users themselves, i.e. water agencies, irrigation districts,
cities, etc. And to ensure that this funding materializes, we are
requiring that contracts be in place to pay for the lease revenue
bonds before public dollars are spent on the projects.
Identifying the exact funding sources for large transportation
projects is more problematic, which is why we need the authority to
come up with a well-thought out financing proposal before moving
forward.

I want to commend the authority for its great progress so far in
completing the necessary environmental studies and identifying future
rights-of-way that we would need to acquire.

Yet even the authority's executive director, Mehdi Morshed, says the
longer the state waits to build a high-speed rail network, the more
expensive it will get. I could not agree more.

That's why I have directed my recent appointees to work with the
authority and its financial advisers to develop a comprehensive plan
for financing the project in its entirety, so we can make high-speed
rail a reality in California once and for all.

Last year, my administration increased funds for the authority to
continue its work, and this year, my budget proposes additional
funding.

I am willing to explore multiple approaches in order to fund the
balance and execute this project -- whether through federal grants,
local participation, vendor support, co-development opportunities,
public-private partnerships or any other realistic financing plans in
which the authority expresses confidence.
I look forward to working with the authority and reviewing its
proposal as soon as possible.
But let me be clear: I strongly support high-speed rail for
California, and especially for the San Joaquin Valley. Increasing the
Valley's transportation options, especially after voters passed
Proposition 1B to repair Highway 99, would better serve the region's
growing population and enhance the Valley's critical importance to
our state's economy.

The promise of high-speed rail is incredible. Looking forward to the
kind of California we want to build 20 and 30 years from now, a
network of ultra-fast rail lines whisking people from one end of the
state to the other is a viable and important transportation
alternative and would be a great benefit to us all.

With a responsible plan in place, we can feel secure in delivering
high-speed rail and bringing greater opportunity -- and a brighter
future -- to all Californians.

Arnold Schwarzenegger is the governor of California.

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Martin Engel
1621 Stone Pine Lane
Menlo Park, CA 94025
650:323-1670
martinengel@earthlink.net
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