Los Angeles (CNN) — California is poised to become home to the nation’s first truly high-speed rail system with Gov. Jerry Brown’s signing Wednesday of a law authorizing the first leg of construction for a line that will eventually connect Los Angeles and San Francisco.
California will issue $2.6 billion in bonds, with the federal government providing an additional $3.2 billion, to build the initial segment of the high-speed rail between Merced and the San Fernando Valley on the north side of Los Angeles, officials said.
The high-speed rail project was part of a transportation bill signed by Brown that calls for general improvements to the state’s rail system involving a total of $4.7 billion in state funding matched with $7.9 billion in federal and local funds, officials said.
“This legislation will help put thousands of people in California back to work,” Brown said at Union Station in downtown Los Angeles, according to a news release. “By improving regional transportation systems, we are investing in the future of our state and making California a better place to live and work.”
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Think again, CT.
California has been subsidizing the rest of the nation since 1985, providing a net subsidy of more than $47 billion in 2005, according to taxfoundation.org (study done in 2007 using 2005 data):
http://taxfoundation.org/article/federal-taxes-paid-vs-federal-spending-received-state-1981-2005
Your editorial headline is not factual.
Are you going to re-run those reports in a few years after California restructures?
The headline is quite factual. It clearly says they’re borrowing money for this project by backstopping it with federal loans mixed with some of their own “savings”.
Sorry. I seem to have overestimated you. I didn’t think you would see the need to add a headline comment to note something so routine as the fact that the state will issue bonds for a large capital project.
Even states in a healthy financial position will almost always use bonds to fund such a project, to assure bidders that the funding is in place and to smooth out the cash flow.
In the very unlikely event that California defaults on these bonds, they indeed would be using “other’s dime”, otherwise, the California taxpayers will pay for all of it through their state and federal tax payments.