After clearing a major legislative hurdle, California's proposed bullet train between Los Angeles and San Francisco still faces obstacles-including lawsuits and uncertainties over future funding-that could delay it for years.
Friday's narrow state Senate vote approving $4.7 billion in bonds for the train and related projects sends the funding bill to a likely signing by Gov. Jerry Brown, a proponent of high-speed rail. The vote helps ensure the state will get to keep $3.3 billion in federal matching money for its efforts to build the nation's first bullet train. Federal officials had warned the state it had to commit to the funds this year in order to use the money, which mostly came from President Obama's 2009 economic-stimulus package.
Finance experts said the state should have little trouble selling bonds for the issuance, because interest rates are so low on many alternative investments and the stock market has been mixed. The bonds approved by the legislature are part of nearly $10 billion in state bonds that California voters in 2008 earmarked for the train network.
"I would characterize the demand for bonds as insatiable," said Jim Sarni, managing principal of Payden & Rygel Investment Management, a money-management firm in Los Angeles.
But actual construction of the line -- which state officials have hoped would begin this year -- could be delayed in part by farmers who object to the California High-Speed Rail Authority's plan for the construction of the first phase of the 800-mile route through their fields in the state's Central Valley.