Governor's Budget Proposal Throws a Life Preserver to the High-Speed Rail Project


On the heels of Sacramento County Superior Court Judge Michael Kenney’s decision halting an $8 billion bond sale for the construction of the California high-speed rail (“HSR”) project, Governor Jerry Brown has submitted a budget proposal to reapportion money from California’s surplus fund to the HSR project. 

Notably, the surplus fund includes $850 million generated by AB 32’s cap-and-trade auctions, paid by industries participating in California’s new market on greenhouse gas emissions, which allows businesses to exceed the cap on carbon dioxide.  Governor Brown has proposed using $300 million of the $850 million for the construction and integration of the HSR project, and has defended the re-allotment as helping to curb greenhouse gas emissions by allowing people to rely less on their cars and supporting the growing economy. 

The viability of the HSR project has recently come under attack after Judge Kenney’s recent decision.  This recent development has now raised questions about whether the Governor’s reallotment can legally be spent on the HSR, and furthermore, if this money will be sufficient to meet the Authority’s earlier estimate of $68 billion to complete the HSR project.  The proposed budget must still be approved by the Legislature on or before June 15 and, given the outspoken opposition to the Governor’s plan, this is a hurdle that many anticipate will be difficult to overcome.  The new budget is slated to go into effect on July 1.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Stoel Rives LLP | Attorney Advertising

Written by:


Stoel Rives LLP on:

Popular Topics
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:

Sign up to create your digest using LinkedIn*

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.

Already signed up? Log in here

*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.