Why California Budget May Slam High Speed Rail

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(San Francisco––Casey Miner, KALW News) It’s only been a few days since Jerry Brown retook the California Governor’s office, but all signs suggest that he’s planning to put the state on a serious fiscal diet. Rumored to be among the casualties are local redevelopment agencies -- groups that undertake projects like revitalizing downtowns and building affordable housing. California’s perennial budget deficit is projected to be more than $25 billion this year, and slashing redevelopment could cut a quarter of that.

The Governor’s office isn’t commenting on specifics right now, so we’ll have to wait to know for sure. But losing redevelopment has big implications for the state as a whole – and perhaps for its biggest infrastructure project, high-speed rail.

The San Francisco Planning + Urban Research Association (SPUR) just released a report arguing that for high-speed rail to reach its full potential, it will have to be accompanied by good planning and smart growth around stations. One of their recommendations is that cities be allowed to use a tool called tax-increment financing – essentially, a bond paid back by increased property tax revenues – to support transit-oriented development around high-speed rail stations. Egon Terplan, SPUR’s regional planning director, said while axing redevelopment agencies wouldn’t eliminate that possibility, it might make it a lot harder – especially in cities like Fresno and Bakersfield where future high-speed rail stations are in redevelopment zones. “Taking away their ability to get funding takes away their ability to implement projects,” he said.

Regardless of what happens to the redevelopment agencies, said Terplan, high-speed rail needs a way to fund itself over the long term – and that might include certain financing tools that redevelopment agencies currently use. “Redevelopment has been a model,” he said. “We now need a model that aligns itself with the goals of high-speed rail.”

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