Although voters were told that the $9.95 billion would be taxpayers’ only burden for the system, hopes for enormous federal or private investment have faded. Therefore, the latest version would build the line to San Jose by using the project’s 25 percent share of proceeds from the auction of greenhouse gas emission permits, known as cap-and-trade, to secure a loan from somebody.
California consumers thus would be tapped, through their utility bills, gasoline purchases, etc., to pay for the bullet train, an indirect form of taxation. And to make the projected loan work, the business plan says, cap-and-trade would have to be extended from the current 2030 to 2050 and the state would also have to give the lenders some guarantees for backup payments.
It should also be noted that while cap-and-trade auction proceeds are supposed to be used for projects that reduce greenhouse gas emissions, the bullet train, by official estimate, would reduce automotive travel by just 1 percent, even if fully built out.