California’s legislature is moving ahead with plans to provide $20 billion in additional funding for the state’s financially challenged high-speed rail system, which will help complete the initial Central Valley portion and start work connecting it to San Francisco and Los Angeles. The move comes as the state also sues the Trump administration for attempting to claw back $4 billion of federal funds.
State legislators are reauthorizing California’s Cap-and-Trade program, which requires the biggest industrial emitters of greenhouse gases to buy pollution credits, through 2045, with plans to direct $1 billion a year from that source to the rail project for the next two decades, a plan pushed by Governor Gavin Newsom. It’s the biggest funding commitment in the project’s history, which got underway after voters approved a $10 billion bond measure in 2008. Though the estimated cost to build the system has tripled since then to more than $100 billion and construction timetables have lengthened dramatically, work on the first 171-mile phase is extensive and has accelerated in the last few years.
“Today’s agreement has made a big, bold statement about California’s future—one that will create jobs, cut pollution and connect and transform communities across the state,” CEO Ian Choudri said in a statement. “This funding agreement resolves all identified funding gaps for the Early Operating Segment in the Central Valley and opens the door for meaningful public-private engagement with the program.”
Choudri, a veteran of global infrastructure projects who took over as the bullet train’s leader last year, released a new business plan last month that’s intended to accelerate construction and find new revenue sources from the authority’s vast landholdings to help hold down the total cost, including letting tech firms build data centers on its property, powering them with solar farms that will also propel its trains. Other ideas include selling rights to telecom companies to lay fiber optic cable along the train’s path and install cellular towers, advertising and station naming rights, electric vehicle charging services and promoting real-estate development projects on its route, especially in lower-priced Central Valley cities such as Fresno and Bakersfield.
Prior to the new funding plan, the project had secured about $27 billion, the bulk of it provided by state sources. That figure includes $4 billion that Transportation Secretary Sean Duffy rescinded in July. Duffy justified the move by pointing out that “not a single mile of track” had been laid in the many years since the project was approved, failing to mention the vast amount of bridges, tunnels, grade separations and other prep work done so far (that take much longer than laying steel rails) or the more than 15,000 workers it employs. California’s legal fight to get those funds back–which hadn’t been spent–will take months if not years to resolve.
Currently, the U.S. is a global laggard in high-speed rail, which is now commonplace across Europe, Japan, China, South Korea and dozens of other countries. Billionaire Wes Edens hopes to begin operating Brightline West, a private bullet train between Las Vegas and suburban Los Angeles, within a few years. That project also received $3 billion of federal funding from the Biden administration.
“We applaud Governor Newsom and legislative leaders for their commitment and determination to make high-speed rail a success,” Ray LaHood, former Secretary of Transportation and co-chair of U.S. High Speed Rail, said in an emailed statement. “The agreement represents the most important step forward to date for this transformational project.”
