Good news — well, if you’re betting on California to default on its debts sooner rather than later. The bankruptcy express is laying down some high speed rail in California and getting ready to start moving down the tracks!
The state Senate voted by a bare majority today to fund initial construction of California’s $68 billion high-speed rail project.
….The bill approved by the Senate authorizes $5.8 billion to start construction in the Central Valley, including $2.6 billion in rail bond funds and $3.2 billion from the federal government. Lawmakers tied that funding to nearly $2 billion to improve regional rail systems and connect them to high-speed rail. That regional money was considered necessary to lobby hesitant senators about the project’s potential significance to their districts.
In what SHOULD BE a related story,
Even as California faces a $15.7 billion deficit that has grown almost 70 percent since January, the state spells opportunity for municipal-bond investors.
…The budget strain, due in part to Governor Jerry Brown’s overestimate of tax revenue, may cost California an opportunity for a higher credit grade from Standard & Poor’s. S&P, which raised its outlook to positive in February, rates California A-, six grades below AAA and lower than any state.
…Brown, 74, announced May 14 that the deficit had grown from $9.3 billion in his January budget plan. The governor was counting on a gain in revenue that didn’t materialize, partly as a cooling economy depressed tax intake. Collections in April for the most-populous state were $2 billion below estimates.
….Investors see California as having a lower risk of default than some countries in Western Europe, including Belgium and Italy.
So, California has a 15 billion dollar deficit and roughly 500 billion dollars in debt. Now they’re going to add a 68 billion dollar (so far) Choo-Choo to Nowhere on top of that. Maybe they can write, “Lower risk of default than Belgium and Italy” on the side of the train, even though that’s a bit like saying you’re a little less likely to be found dead of a drug overdose than Charlie Sheen.