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Taxpayers now supporting more than half of LA-Vegas high speed rail cost

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(The Center Square) – ​​The Los Angeles-Las Vegas private rail project has earned the ability to issue another $2.5 billion in tax-free public activity bonds, the federal government announced this week.

The approval brings the project’s total government-supported funding to approximately $6.5 billion, or more than half the project’s estimated cost.

The 218-mile Brightline project is projected to cost $12 billion, take 11.1 million passengers on one-way trips each year, and be completed by the 2028 Los Angeles Olympics. Brightline built and operates the only privately-owned, privately-operated intercity passenger railroad in the U.S., connecting Miami to Orlando.

The U.S. Department of Transportation is authorized by Congress to help building projects issue $30 billion of private activity bonds each year. DOT private activity bonds, such as those to be issued by Brightline, earn tax-free interest and tend to receive lower interest rates due to the association with the government’s credibility.

“Today, the Biden-Harris administration takes the next step to fulfill the promise of high-speed rail in the American West, with $2.5 billion in private activity bond authority to lay tracks, create jobs, and connect American cities,” Transportation Secretary Pete Buttigieg said in a public statement. “President Biden’s historic infrastructure package gives us the opportunity to build safe, green, and accessible rail systems that will deliver benefits to the American people for generations to come.”

In 2020, DOT approved $1 billion in PABs for the LA-Vegas rail line, with its most recent announcement bringing total PABs for the project to $3.5 billion. In addition to the PABs, DOT issued $3 billion in grant funding for the project in December 2023, which means the federal government is supporting more than half the project’s expected cost.

According to the DOT, the LA-Vegas rail line will create 35,000 jobs, bringing significant economic growth to the region.