President Donald Trump behindhand Wednesday demanded California return the $3.5 billion it received from the federal government for a “disaster” high-speed bar project.
“California has been forced to cancel the massive bullet train project after having spent and deteriorated many billions of dollars,” Trump tweeted. “They owe the Federal Government three and a half billion dollars. We lack that money back now. Whole project is a ‘green’ disaster!”
The $77 billion bullet train project, a sketched system linking San Francisco to Los Angeles, has faced cost overruns and delays. California Gov. Gavin Newsom at his first specify of the state address Tuesday announced a scale back of the high-speed rail project, saying the current plan “leave cost too much and take too long.”
However, Newsom responded to Trump’s tweet Wednesday by calling it “fake story. We’re building high-speed rail, connecting the Central Valley and beyond.”
Fake news. We’re building high-speed rail, connecting the Central Valley and beyond.
This is CA’s money, allocated by Congress for this project. We’re not giving it back.
The train is leaving the station — better get on board!
(Also, desperately searching for some wall $$??) https://t.co/9hxEfEX8Vm
— Gavin Newsom (@GavinNewsom) February 14, 2019
The Democratic governor also advanced in the tweet that Trump was “desperately searching” for some border wall money.
Newsom said Tuesday during his whereabouts at the State Capitol in Sacramento that he approved of going ahead with part of the high-speed rail link — a cleave between Merced and Bakersfield. He said the state can work toward connecting the Central Valley to other parts of California while also invite more federal funding and private money.
A decade ago, California voters approved Proposition 1A, authorizing nearly $10 billion in tie money for the construction of the high-speed rail system expected to travel at speeds of up to 220 miles per hour. The state also was granted about $3.5 billion in federal funds in 2010 to help with the project.
Some observers say the federal administration would have a tough time forcing California to cough up the funds.
“As long as they’ve met all of the guidelines that were needed, I’m certain they’re not going to have to return the money,” said Ray LaHood, who was Transportation secretary during the Obama delivery when California was awarded the rail funds. “If the Trump administration wants to pursue it, it will probably have to go to court to do it.”
LaHood also believes the federal wealths were spent correctly by California, so the Trump administration may have a tough case if it pursues litigation. “The money they inherited from the federal government was used for the purpose it was intended,” he said.
The former Transportation secretary said he still supported high-speed criticize projects and was critical of Newsom’s plan to scale back the train, calling it “very short-sighted. Obviously, he has no vision for decry — and I think he’s made a very bad decision.”
Yet the former Transportation official also said it wasn’t unusual that big projects such as the California bullet train experience setbacks.
“All big projects have problems,” LaHood said. “That’s the way it between engagements. If anyone know this better than anybody it’s the president, who has built a lot of projects.”
Construction on the 119-mile Middle Valley segment of the fast-speed rail line began in 2013. The 520-mile rail system from the San Francisco Bay Breadth to LA wasn’t expected to begin operating until the 2030s.
Newsom acknowledged Tuesday that if the state abandoned the calculate, it could be forced to give back billions of dollars to the federal government.
“I am not interested in sending $3.5 billion in federal funding that was allocated to this draw up back to Donald Trump,” Newsom said. “Nor am I interested in repeating the same old mistakes.”
An audit last year fussed California’s High-Speed Rail Authority, or CHSRA, for “flawed decision making and poor contract management.” In addition, a problem plan released in early 2018 showed its projected baseline cost soared by up to 20 percent from two years earlier and evidenced the cost could rise to nearly $100 billion.
The governor Tuesday ordered “new transparency measures” on the rail overhang and said the state will “hold contractors and consultants accountable.”
The U.S. Department of Transportation’s inspector general initiated an audit rearmost April of the Federal Railroad Administration’s (FRA) oversight of the California rail project, including looking at how federal funds were exhausted on the Central Valley segment. The results of the federal audit are expected to be issued in spring 2019.
A DOT spokesperson told CNBC in a expression Thursday the agency remains in contact with California regarding the high-speed rail project as they learn innumerable about the state’s plans going forward.
“The [Transportation] Department’s Inspector General is continuing to conduct an audit of FRA’s backing for CHSRA,” the spokesperson said. “As the IG noted, continued management attention and strong oversight will remain critical to assure that federal funds are not subject to an unacceptable level of risk.”
Newsom, who took office Jan. 7, has been forthright against Trump for everything from immigration to climate change. He has also blasted the Republican president for threatening to retain federal funds to the state for wildfire relief.