California has about $13 billion on hand to begin the first phase of the project. The rail authority and its boosters claim that the federal government and private investors will supply the remaining $85 billion...Wall Street isn’t enamored with the project, and private investment funds have shown zero interest in partnering with California unless they receive revenue or ridership guarantees. But guaranteeing a certain return on investment would amount to promising subsidies if the rail authority’s immense ridership forecasts don’t pan out—taxpayers would be making up the difference. And Proposition 1A—the 2008 state ballot measure providing $9.95 billion in bond money for the project—explicitly bans taxpayer-funded operating subsidies.
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