High-speed rail financial crisis could get worse under Trump
The future of California’s decades-long dream to one day connect Los Angeles and San Francisco via high-speed rail is again under threat as a Trump administration redux looms.
His selected Cabinet officials and a California congressman have vowed to pull federal funds from the ongoing rail project, which is budgeted at roughly $100 billion more than the $33-billion budget the authority estimated in 2008.
The potential loss of federal support would pose one more setback for the project, which has struggled to identify tens of billions of needed funds and has no clear timeline for completion.
Sen. Dave Cortese (D-San Jose), chair of the Senate Transportation Committee, said that a combination of cap-and-trade and private developer investments is key to sustaining the life of the project.
“If we can’t come up with a formula like that, that adds up and gets us close to a full substantial budget for the project … we will die under our own weight and never have an opportunity to blame the federal government for much of anything,” he said.
California’s high-speed rail is a decade off-schedule and is expected to cost $100 billion more than initially planned.
Cortese said that private sector investment will be studied further amid discussions over how long to keep California’s cap-and-trade program, which is set to run out in 2030 and has helped fund the project.
The project was recently targeted on X by Trump’s proposed Department of Government Efficiency, as its leaders Elon Musk and Vivek Ramaswamy look for areas to cut spending. The post highlighted the $6.8 billion the project has received in federal funding, and the authority’s request for an additional $8 billion. Musk said earlier this year that billions of dollars have been spent on high-speed rail “for practically nothing.”
And U.S. Rep. Kevin Kiley (R-Rocklin), who sits on the House Transportation and Infrastructure Committee, announced plans to introduce legislation that would cut federal dollars on the project.
“High-speed rail, in short, is a staggering waste of taxpayer dollars that fails to meet the transportation needs of either today or tomorrow,” Kiley said. “That federal support is keeping the project on life support.”
Trump, who earlier this year lamented that the U.S. doesn’t have high-speed rail, clawed back a $929-million Obama-era grant in 2019. The Biden administration restored that funding and last year promised nearly $3.1 billion more to California. The authority said that although those funds were authorized, they have not been spent yet. A Republican Congress under Trump could try to reverse course once again.
U.S. Sen. Alex Padilla, who helped secure federal funding last year, said in a statement that he is “prepared to use every available avenue to protect current funding and prevent clawbacks of federal high speed rail investments.”
Advocates have pointed to the state’s need for environmentally sustainable transportation options as a major reason to keep the project going.
“More than 25 countries — most of them smaller than California — have been operating clean, safe and fast high-speed rail systems for years. We should be leading, not following, the rest of the world,” said Andy Kunz, president and chief executive of the U.S. High Speed Rail Assn.
There has been progress. Construction on the rail project is underway in the Central Valley along a 119-mile stretch, with plans to extend into Merced and Bakersfield. The project, which has supported more than 14,000 jobs, has been central to local communities’ plans to reinvigorate and expand business districts. The authority said its first obligation is to make this portion of the line operational between 2030 and 2033.
When adjusted for inflation, the final segment, from Palmdale to Burbank, would cost nearly $29 billion, according to outgoing CEO Brian Kelly.
Earlier this year, the entire route from Los Angeles to San Francisco was environmentally cleared for construction after the board certified the final review of a crucial Palmdale-to-Burbank segment, which had faced pushback.
“More than $11 billion has been invested in the project, generating $18 billion in total economic benefit in disadvantaged Central Valley communities and statewide,” Annie Parker, the authority’s deputy director of communications, said in a statement. “The Authority remains committed and aggressive in moving this historic project forward while actively pursuing additional funding.”
Despite these steps, the project continues to face uncertainty. Ridership projections have dropped as interstate travel for business has decreased in the age of remote work. Some initial supporters of the project have lost interest. And a recurring grievance in board meetings is that there is far more money yet to be identified for the rail system than currently exists, even with help from the federal government.
Former CEO Brian Kelly, board members and advisors have repeatedly acknowledged a need for solutions.
The state-appointed high-speed rail peer review group that advises the authority has repeatedly cautioned officials to remedy the growing financial gap and consider a change of plans from the initial proposal in order to complete some aspect of the project.
“There are off-ramps here if somebody insists they be taken,” said Lou Thompson, the longtime chair of the peer group who recently retired.
The peer group has pointed out that not only has the project tripled in cost from what was originally proposed, it will take significantly more time to finish, won’t meet trip times and will carry fewer passengers, falling short of promises made to voters.
The group has recommended the authority examine its justification for continuing to fund the project and consider revisions to the scope.
Marc Joffe, a visiting fellow with the California Policy Center, said that one possibility would be to complete the initial 119-mile section of the track, from Madera to Shafter, then connect it with existing Amtrak service.
“Completing the line without connecting it strikes me as useless. How is anyone going to get to the train?” he said, adding that another option would be to use the 119-mile right of way “as a trail for hikers, bikers, and those using e-bikes and scooters.”
Joffe said that the project — whether it continues with its current plans or is revised in light of its funding insecurity — is not the same proposal that Californians voted on more than 15 years ago.
William Ibbs, a civil engineering expert and incoming chair of the peer group, said the potential funding cut will only add to the rail difficulty.
“I do expect that given the new administration and given our overall fiscal situation at the government level that there’s going to be some belt tightening and some redirection of funding and priorities,” Ibbs said. “They really didn’t have a steady stream of funding as it was. This is just going to make it even more challenging.”
Ethan Elkind, a rail expert and director of the climate program at UC Berkeley Law’s Center for Law, Energy and the Environment, said that the project’s success has significantly depended on the state.
“There’s a bias against funding rail at the federal level compared to highways. California is basically doing it itself,” Elkind said, adding that permitting for the project occurs at the state and local level, limiting federal interference on the project.
“It’s just about getting the dollars to finish it,” he said.
That lack of financial security has always been a problem, Thompson said — a sentiment that even authority leaders have agreed with.
“If you have a dream, first of all, make sure you’ve vetted it properly. … Be sure you’ve got the money before you get started. Because once you get started, if you don’t have the money, you’re in trouble immediately,” he said.
“And that’s exactly what happened.”
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