Back in 2016, a group of plaintiffs sued California over a high-speed rail bond measure. The plaintiffs included a Central Valley county, a Bay Area municipality, and several nonprofit transportation groups. They also included a retired judge and former California lawmaker, Hon. Quentin Kopp. He actually wrote the statute that created the state’s high-speed rail authority. He had also chaired its board of directors, and helped write the bond measure’s language.
The suit challenged California’s compliance with promises made in a $10 billion voter-approved bond measure. The state’s voters had narrowly approved the measure, designated as Proposition 1A, eight years earlier It was supposed to jump-start construction of a statewide high-speed passenger train system. Its signature segment was to be non-stop service between San Francisco and L.A. in little more than 2 1/2 hours. The bond measure stated that segment would be up and running by 2020.
In 2022, six years later, the legal battle came to an end. The California Supreme Court rejected review of the published decision from the Third District Court of Appeal. That decision, John Tos et al. v. State of California et al. (2021) 72 Cal.App.5th 184, upheld the trial court’s rejection of the legal challenge. The court of appeal held that bond measures for large projects – like building the high-speed rail system – didn’t need to fulfill promises made to voters. All that was needed was for the bond funds to be used for the measure’s general purpose. Here, that purpose was providing funding to plan and start constructing a high-speed rail system. Nothing else mattered. It didn’t matter how clear and specific the promises had been. According to the court, politicians could later unilaterally rewrite or ignore promises in the measure.
Short Term Benefit
In the short term, the court’s decision gave the high-speed rail authority a green light to continue forward. Bond funds would help construct bits and pieces of rail. Those might perhaps eventually become part of a high-speed rail system. That was contrary to the clear dictate of the bond measure. Prop. 1A stated that construction needed to build full “usable segments.” Each usable segment (defined in the bond measure) had to have at least two stations, plus connecting track and accessories. The bond measure also required the Authority to show, before starting construction, that it had enough money to complete the segment. The segment also needed to be, when complete, “suitable and ready for high-speed train operation.”
Instead, in 2015 the Authority finally began construction of a Central Valley segment. The segment was intended to run some 116 miles between the towns of Madera and Shafter. However, seven years later, the Authority has yet to lay a single mile of track! Nor does it have the funds needed to provide electrification, signal controls, or even stations. Of course, all these would be needed to actually run a high-speed train. The Authority also frittered bond funds away on other widely-separated small projects. Those included electrification of Caltrain, a Bay Area conventional rail commuter line. They also included eliminating some widely separated rail grade crossings on commuter lines. With luck (and much more money!), those lines might eventually become part of the high-speed rail route.
Looking Further Ahead
At this point, the Legislature has approved using all the remaining bond funds for such small and incomplete projects. It’s unclear when or where funds might be found to complete the Madera to Shafter segment. Completing a segment between the two real termini of a Central Valley segment – Merced and Bakersfield – won’t happen until some time after 2030, if ever. That segment would cost roughly $40 billion. The Authority now can count on about half that amount. That includes not only bond funds, but federal grants. In addition, it includes several billion dollars from the state’s greenhouse gas reduction “cap and trade” auction revenue.
It is generally acknowledged that build-out of a high-speed rail line between L.A. and San Francisco would cost well over $100 billion (and climbing!). Funding to complete that construction is no more than a pipe-dream. Further, constructing tunnel segments through the fault-riddled Tehachapi and San Gabriel Mountain ranges would be very expensive and technically challenging. In short, as a recent commentary put it, California’s high-speed rail system may end up being the largest (and most expensive) amusement park ride ever built.
Long Term Threat
What about the long term? Looking beyond how the Prop. 1A bond funds will be used, the court of appeal’s decision is likely to cause major damage. The decision will further erode the trust California voters place in promises made in bond measures. California, and even individual cities or counties, often place large bond measures on the ballot. While taxes, under Proposition 13, require a 2/3 majority vote to pass, state bond measures only require a majority vote. Nevertheless, getting approval for bond measures, especially large ones, is challenging. The authors often make promises about what a measure will do. They hope these promises with convince voters to vote yes. For example, the Legislature is looking at a $35 billion bond measure to build more affordable housing in the state. There may well also be measures to promote renewable energy and address housing for the homeless.
Such measures also usually have their critics and detractors. The decision in Tos v. State of California will give those detractors a powerful weapon. One can easily imagine the political ads: “Pay no attention to what you’ve been promised! Politicians will squander the bond funds wastefully. All those promises aren’t worth the paper they’re printed on!” Further, the Tos decision never defines what constitutes a “large” project. Is $5 billion enough? What about $2 billion? Could a $500 million bond qualify as “large” for a local project? In short, the Tos decision is likely to make approval of future bond measures far more difficult.
Conclusion
In the end, California’s politicians may rue the day they decided to ignore their promises to voters in Prop. 1A. Trust is hard to establish, but easy to destroy.