The Trump administration and California Gov. Gavin Newsom are sparring over funding for California’s high-speed rail project, a bullet train originally designed to carry passengers from Los Angeles to San Francisco.
President Trump has attacked the “failed” project and said it has “no hope of completion” — comments that coincide with his administration’s efforts to rescind what amounts to $3.5 billion in federal grants for the California High-Speed Rail Authority.
“The failed Fast Train project in California, where the cost overruns are becoming world record setting, is hundreds of times more expensive than the desperately needed Wall!” Trump tweeted in February.
After Newsom indicated he wanted to downsize the project so it would instead span from Merced to Bakersfield, the Federal Railroad Administration announced in February it would cut $929 million that had been designated for the California High-Speed Rail Authority in 2020-2021 fiscal year funds.
Newsom’s comments “presented a new proposal that represents a significant retreat from the state’s initial vision and frustrates the purpose for which federal funding was awarded,” the FRA argued.
The Department of Transportation cautioned it was “actively exploring every legal option” to require California to surrender $2.5 billion in federal funds already used for the project — a move that came a day after California and 15 other states filed a lawsuit to block Trump’s national emergency declaration at the border.
Newsom clarified he remains committed to the entire project but the state only has the capacity to complete the line from Bakersfield to Merced at the moment. He characterized the FRA’s letter as “political retribution” against California for opposing Trump’s “farcical” national emergency, and he signaled he is poised to go head to head against the Trump administration on the matter.
“We won’t sit idly by,” Newsom tweeted. “This is California’s money, and we are going to fight for it.”
According to California High-Speed Rail Authority CEO Brian Kelly, the state is readying a “comprehensive response” to the FRA by March 5.
“We have received and are reviewing the Federal Railroad Administration (FRA) letter threatening federal funds dedicated to the high-speed rail project,” Kelly said in a statement to the Washington Examiner. “We remain committed to delivering high-speed rail and its many economic, environmental, and mobility benefits to Californians.”
Even if the federal money is withdrawn, all is not lost, according to Elizabeth Alexis, co-founder of Californians Advocating Responsible Rail Design.
“Losing the money is far from a fatal blow for the project,” Alexis told the Washington Examiner. “At this point, California should have enough money to construct a new Central Valley train line, if it decides to do so.”
“This has been a moving target for a number of years as available funding and project costs change,” she explained. “A little less money might just mean 10 less miles of track.”
According to Alexis, there is approximately $5 billion in unallocated bond funds that the California state legislature could designate for the project. She also noted that the project will receive a quarter of all state cap-and-trade revenues until 2030, which could generate between $8 billion to $10 billion in that span of time. A portion of that funding is already supporting cost overruns, she said.
But Alexis identified a “real concern” that the politicization of the funds has graver ramifications than the actual funding on the line.
“There are definitely some [state] lawmakers who have ideas about other ways to spend the cap-and-trade monies, and the loss of federal funds might be a convenient excuse to turn off the spigot,” she said. “On the other hand, there are others who will take Trump’s move as a challenge to find a way to get the project finished.”
“The future of the project is in the hands of the state legislature, who were hoping to avoid being in this position,” Alexis said.
California state Sen. Jim Beall, Democratic chairman of the Transportation and Housing Committee, called the Trump administration’s threats to withhold future funding an “unprecedented action” and a spokesman for Beall told the Washington Examiner he will hold an oversight hearing on March 26 to examine the project further.
“Let’s have a hearing to review the project, listen to the experts, and let’s do the best thing for the project,” Beall told the Sacramento Bee.
