Transportation Secretary Ray LaHood. (Alex Brandon / Associated…)
The Obama administration threatened California on Thursday with rescinding $3.3 billion in federal grants to start construction of a bullet train if the Legislature does not act by June to appropriate the state's share of funding.
In a series of meetings with key lawmakers in Sacramento, Transportation Secretary Ray LaHood said that the recent proposal by state Senate leaders to delay a $2.7-billion decision on the high-speed rail project until August is not acceptable.
"We need the Legislature to make the strongest commitment possible," LaHood said in an interview. "The way to do that is to include the money for high-speed rail in the budget that is passed in June. August is too late for us."
Asked whether the administration might attempt to take back the funding, LaHood said, "Correct," adding that if the state does not move by June then he will begin discussing a response within the Obama administration and Congress.
"We may begin looking at other places in the country," LaHood said.
In what amounts to the highest profile political pressure that the Obama administration has applied on the state so far, LaHood met with Gov. Jerry Brown, Senate President Pro Tem Darrell Steinberg (D-Sacramento) and Speaker John Pérez (D-Los Angeles), among others.
"What I have been reading about is they are planning on holding hearings, that they are going to go throughout summer. That doesn't suit us," LaHood said at a news conference after the meetings.
Brown wants the state to start building a $6-billion segment of track as early as this year in the Central Valley, running from Bakersfield to Fresno. Eventually the complete $68-billion project would connect Los Angeles and Anaheim with San Francisco.
Whether the Transportation Department can legally rescind obligated grants is not clear. When Republican lawmakers in Congress said earlier this year that they were exploring such a move to stop the project, Democrats asserted that it was legally impossible to take back such funds. LaHood, however, said the money would need to be "re-obligated" later this year, suggesting otherwise. In addition, the Obama administration gave California additional funds for high-speed rail after other states backed out and returned grants.
The key senators who are influencing the Legislature's decision on the project did not appear to be ready to bow immediately to the outside political pressure.
State Sen. Alan Lowenthal (D-Long Beach), chairman of a select committee on high-speed rail, said he pushed back when pressured by LaHood for quick action.
"They are telling us what to do but they are offering us nothing," Lowenthal said. "There is not enough federal support."
Lowenthal said he wants to continue public hearings on the project and is not sure they can be completed before the new budget takes effect July 1.
"I have to go through a series of hearings. I don't want to be pushed," Lowenthal said. "I told him I have concerns. I needed a financial commitment on the part of the federal government."
State Sen. Joe Simitian (D-Palo Alto), who heads a budget subcommittee on transportation, said he remains convinced the Legislature should continue to hold hearings and make a decision in August. He said it is unlikely that he would support approving $2.7 billion in bond funding for the project in the budget scheduled for action by June 15.
"That's not the kind of thing you ought to do on a hurry-up basis," Simitian said. "I continue to believe that this is a decision that requires thoughtful deliberation."
LaHood said he was reassured by Pérez and Steinberg "that they are committed to high-speed rail and they are committed to making sure that California is able to provide the match that is needed."
Meanwhile, Republican lawmakers in Sacramento called LaHood's actions a "shakedown," even though LaHood is the lone Republican in the Obama Cabinet.
Sen. Doug La Malfa (R-Richvale), who has introduced legislation to allow voters to reconsider the bullet train project, said LaHood doesn't understand the state's problems.
"This state is facing a $14-billion deficit, our students have seen their tuition double, and he wants California to invest in a high-speed rail scheme that has a $61-billion shortfall without reviewing the plan's risks?" LaMalfa said. "Secretary LaHood's demand boils down to a belief thatWashington, D.C., knows best, a point of view I couldn't disagree with more strongly."
Vartabedian reported from Los Angeles; McGreevy reported from Sacramento.