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Did $98.5 billion high-speed rail project just hit a wall in California?

An independent review panel says the plan for a high-speed rail corridor linking northern and southern California poses 'an immense financial risk' to the state and should not move forward.

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The governor’s spokesman, Gil Duran, was dismissive of the panel’s recommendation. “The peer review report will be evaluated by the Legislature,” he said in a statement Tuesday, “but it does not appear to add any arguments that are new or compelling enough to suggest a change in course.”

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But that thinking will now run into opposition in the Legislature.

“It’s never a good idea to start a project, especially of this magnitude, with this many uncertainties reaffirmed by the review panel,” said Republican Assemblyman Jim Nielsen, in a statement. “California clearly cannot afford this project. This report should be the nail in the coffin for the High Speed Rail in California.”

Some seasoned observers agree the handwriting is on the wall.

“The panel is like a Gamblers Anonymous sponsor keeping a habitual bettor from blowing the rent at the racetrack. In a narrow sense, the lesson is that California policymakers should immediately scuttle this insane project,” says Jack Pitney, professor of government at Claremont McKenna College, in an email.

“In a broader sense, the lesson is that policymakers have to be more realistic about the long-term costs of public works projects. They can no longer count on future generations to pay for their mistakes. The future has already arrived. The baby boomers have started to enter retirement and the problems of Social Security and public sector pensions are already casting a shadow over budgets at all levels.”

National analysts see the report as a hurdle, as well.

“The review panel’s report creates a big impediment for Governor Brown as he tries to secure bonding for his very expensive bullet train initiative,” says Steven Schier, a political scientist at Carleton College in Northfield, Minn. “The state's large budget problems, coupled with this report, slow momentum for the project. The governor now has his work cut out for himself with this one.”

But some independent analysts counter that the review panel’s report might amount to the kind of scrutiny that no important public project could survive, and that the bullet train project carries important symbolism.

“If the transcontinental railroad or interstate highway system had been subject to this level of scrutiny, they never would have been built,” says Robert Stern, former president of the Center for Governmental Studies. “A high-speed train system built in California shows that the Golden State is once again leading the nation in new technology and innovation.”

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