Brown Backs California High Speed Rail

California Governor Jerry Brown said last Wednesday that the future of the state rests on the spending of billions to link cities with bullet trains and boost water supply. The speech comes even though the largest state in the US by population is faced with a $9.2 billion deficit. California is in a mending period after years of monetary distress, and it needs the projects to continue growing. Brown says that people who believe the state is in decline will naturally shy away from such an undertaking as the high speed rail plan, and he understands that feeling. However, he doesn’t share those feelings, as he knows the state and the spirit of the people living there.

Brown slammed everyone who would retreat from money-making public works projects, like the estimated $98.5 billion high speed train network. Additionally, the Legislative Analysts’s Office has estimated that water improvements could cost more than $12 billion. Brown’s plan reduces welfare and health care schemes, and temporary tax hikes will help pay the state’s debt and improve its credit rating.

According to market figures from CMA, which is based in London, the cost of insuring $10 million worth of California bonds against default for ten years dropped this week from an annual $302,190 to an annual $208,500. Bloomberg figures show that the state debt yields about 98 basis points more than top-rated municipal debt.

Brown’s State of the State speech was focused on addressing the proposals for high speed trains, which travel as fast as 220mph. The plans have been largely controversial in recent months, particularly when the cost significantly rose to nearly $100 billion. An independent review panel raised questions about the financial feasibility earlier this month and recommended lawmakers to postpone it. Brown says that the Panama Canal was thought to be impractical for years, while Benjamin Disraeli saying that the Suez Canal was impossible to carry out. Critics were wrong about the projects then, he added, and they are wrong about the high-speed rail line now.

Democratic California Senator Ted W. Lieu has described the train as “a symbol of what California can do”. However, he says that Brown is a dreamer, as high-speed rail is very suggestive and something that the governor would like to add to his legacy.

The speech also focused on the restoration of the Sacramento-San Joaquin River Delta, which provides most of the state’s drinking water. Brown has asked lawmakers to finish the Bay Delta project, which is due to protect endangered species to the southeast of San Francisco, as well as deliver a new canal system for water provided to Southern California. The California governor says that this is a huge project that will ensure water for 25 million residents, millions of farmland acres and 100,000 acres of new habitat for wildlife.