California judge cuts off state funding for high-speed train venture

A California judge has slammed the brakes on funding a pricey high-speed train project, in a move that could put the entire Los Angeles-to-San Francisco line in jeopardy.

The ruling Monday, by California Superior Court Judge Michael Kenny, was greeted as good news by critics of the ambitious but costly rail proposal.

Rep. Kevin McCarthy, R-Calif., the House majority whip, called the high-speed train an “unworkable boondoggle” and said Tuesday he’ll work with his colleagues in Congress to deny federal funding for it as well.

“The ruling marks yet another self-inflicted setback for the California High-Speed Rail Authority and a small victory for California taxpayers,” McCarthy told FoxNews.com. “The CHSRA has failed at every turn to detail a realistic plan that will fund this program. With no private funds, unreliable ridership numbers and the reliance on taxpayers to eventually bail the project out – it should not move forward.”

The ruling is the latest setback for champions of high-speed rail in California. It follows a recent decision by the federal government to suspend their review of a massive loan for a separate California-to-Vegas train.

Kenny, in his ruling Monday, rejected a request from the CHSRA to sell $9 billion of the $10 billion in bonds approved by voters in 2008.

Over the summer, Kenny ruled that the state had failed to comply with requirements of the voter-approved money that would pay for the project’s initial phase.

However, the measure also included provisions that basically said the state couldn’t start building if it had not secured all of the capital needed to create a fully operational and self-supporting first section of the line. California is about $25 billion short of what it needs to complete the first phase.

While Kenny’s decision doesn’t immediately halt the project, it does make going forward difficult. Kenny ruled state officials failed to comply with legal requirements but chose to proceed with plans anyway.

Dan Richard, head of the rail authority, said in a written statement he saw the ruling as a positive sign and the board is reviewing the decision “to chart our next steps” -- he said “it is important to stress that the court again declined the opposition’s request to stop the high-speed rail project from moving forward.”

Elizabeth Alexis, co-founder of a Bay Area group fighting the project, told the Los Angeles Times the rail authority has been “acting as if it is above the law.”

The CHSRA, which was already a year behind schedule, had hoped to break ground on the first 28 miles of a 130-mile stretch in the Central Valley by mid-2014.

State officials say they are weighing their options and looking for ways to keep the project going but admit Kenny’s ruling could complicate construction plans.

While the ruling limits California’s access to $9 billion, the state still could technically begin building by tapping into federal money; however, experts warn it would be a big financial risk for a state that has a history of making questionable money decisions.

Less than five years ago, the state’s coffers were so depleted that many of the public services that helped boost California into the ninth largest economy in the world were in jeopardy of shutting down.

Rod Diridon, a former rail agency board member and supporter of the high-speed train, discounted Monday’s ruling, telling the L.A. Times, “Our state is no longer used to mega projects. There are going to be a lot of impediments. So suck it up.”

Earlier this year, another proposed high-speed train connecting California to Las Vegas was disrupted after the Transportation Department halted the review of what would have been its largest taxpayer loan in history.

The project, which was a favorite of Senate Majority Leader Harry Reid of Nevada, came under intense Republican scrutiny, with lawmakers citing concern about “subsidizing” a costly and possibly risky project.