Trump Wants California’s High-Speed Rail Money

Federal Railroad Administration threatens to pull back $3.5B awarded to California High-Speed Rail

High-speed rail under construction in CA's Central Valley. Photo via CAHSRA
High-speed rail under construction in CA's Central Valley. Photo via CAHSRA

The Trump Administration is trying to cut off funds for California High-Speed Rail.

Yesterday, in a letter to the California HSR Authority and Governor Gavin Newsom, the Federal Railroad Administration asserted that CAHSRA “failed to make reasonable progress,” so the feds are planning to pull back $929 million allocated to the project. Per a press announcement, the FRA is also “actively exploring every legal option” to yank an additional $2.5 billion in federal funds “previously granted for this now-defunct project.”

California’s State Senator for San Francisco, Scott Wiener was quick to reply when the news broke:

This move to yank federal funding is highly political. California is suing the feds over various administration actions, from the border wall to the Census. The feds may be looking for ways to retaliate.

Federal, state, and county funding agencies typically bend over backwards to allow infrastructure projects to adjust timelines, scopes, designs, etc., due to various unanticipated circumstances. Projects that fail to make reasonable progress are routinely granted extensions. The federal government basically never exercises the same sort of scrutiny toward highway expansion projects, which regularly fail to meet their scope, timeline, and/or budget – as well as failing to deliver projected traffic congestion or pollution reductions promised under the archaic Level of Service traffic analysis.

CA HSR, like pretty much all mega-projects, is well over budget. Though the reports of its death have been greatly exaggerated.

In 2008, California voters approved an initial $10 billion for a high-speed rail network then expected to cost around $40 billion. At that time, it was anticipated that state monies would likely be supplemented by private and federal funding. Private high-speed rail partners are common in Europe and Japan. Federal funding commonly comprises the vast majority of U.S. transportation network investments, including providing 90 percent of the budget for the nation’s early highway network.

Under the Obama administration, the feds kicked in $3.5 billion for California’s HSR. Private funding has yet to emerge. Governor Jerry Brown, a strong supporter of rail modernization, steered additional state funding to the project, including greenhouse gas reduction cap-and-trade funds. To date, state funding for the project totals about $13-14 billion.

While the route details were still being finalized, construction got underway in early 2015 in California’s Central Valley. There are 119 miles of CA High-Speed Rail currently under construction.

With property acquisition and construction underway, as well as some lawsuits, costs have risen. In 2018, the CAHSRA estimated it would cost $77 billion to extend HSR from L.A. to San Francisco.

Last week, Newsom delivered his first State of the State address. In it, he sought to distance himself from his predecessor, signaling that rail would be less of a priority. Newsom stated that “Right now, there simply isn’t a path to get [high-speed rail] from Sacramento to San Diego, let alone from San Francisco to L.A.” but then committed to finishing construction on the initial 150-mile segment from Merced to Bakersfield. Newsom also said that the state would finalize environmental clearance from S.F. to L.A., and would, as has been the case all along, continue to seek additional funds to complete the project.

The media then had a field day getting the story wrong, with various flavors of Newsom “abandons” “scraps” “slams brakes on” high-speed rail.

The stories were so wrong, that Newsom issued various reassurances the following day, including tweeting “We’re going to make high-speed rail a reality for California.”

In the speech, Newsom also said he was “not interested in sending $3.5 billion in federal funding that was allocated to this project back to Donald Trump.” The misleading headlines, plus his taunt, sparked a Twitter exchange. The president tweeted “California has been forced to cancel the massive bullet train project… They owe the Federal Government three and a half billion dollars. We want that money back now.” Newsom tweeted back “We’re building high-speed rail, connecting the Central Valley and beyond. This is CA’s money, allocated by Congress for this project. We’re not giving it back.”

Whether or not the feds can take back any of the money previously allocated Congress is at best unclear. Ethan Elkind, director of the Climate Program at UC Berkeley Law School, states that there is no precedent for the feds revoking transportation dollars at this scale.

California has to March 5 to challenge the FRA’s decision.

Elkind suggests that the dispute could go to some sort of administrative resolution process, then to the courts. He states that, though the project is behind on its anticipated schedule, it is premature to conclude that CAHSRA has definitely failed a 2022 deadline as the FRA letter asserts.

Though the matter may end up in court, the conflict and its resolution are fundamentally political. Political and legal wrangling can delay projects and increase costs. Karen Frick, Co-Director of the University of California Transportation Center at the University of California in Berkeley, likens it to the delays and cost overruns that resulted from arguing over the design for the Oakland Bay Bridge Eastern span project. That highway project was delayed some two years and ultimately came in 26-times over budget. When it comes to mega-projects, she told Streetsblog, “We don’t talk about the extra time, the transaction costs–time is money as the adage goes.”

29 thoughts on Trump Wants California’s High-Speed Rail Money

  1. The stories about Newsom and HSR demise were not “wrong”. Newsom said what he said, and it got reported. He then scrambled to walk-it-back. Waffle-gov & weathervane politics.

  2. Agree, many stories went off course. But even the straight up reporting containing not much more than Newsom quotes were also disparaged. Its Newsom, trying to play both sides of the coin.

  3. You’re saying 2022 is still too far away to judge whether the project is dead? That’s barely 3 years away.

  4. FRA is claiming that the segment under construction will not complete by the 2022 deadline. I don’t have much comparison, but most Caltrain grade separations take about 3 years. Given that Central Valley work is well on its way, I’m not sure it’s fair to say that it won’t complete by 2022.

    HSR is only building segments that it has money to finish, so claiming it’s behind schedule is admitting that project was underfunded.

  5. The only good that could plausibly come from this is Newsom creating a dedicated CHSRA funding source here in California, which can probably be done if the proposed Prop 13 reforms (end Prop 13 protections for commercial properties in exchange for homeowner tax portability) or another gas tax happen.

    Overall, Newsom is showing that Villar would have made the better Governor. It’s up to him to show he’s willing to 100% fund HSR while the Fed fight happens (if it even happens, since Pelosi is well positioned to stop it) since in the end we can always use a future court settlement for Phase 2 (San Diego service, a new Bencia RR bridge, etc) anyway.

  6. The California High-Speed Rail plan has not changed just the conservative spin on the plan. The past several business plans describe first building a segment in the California central valley capable of running trains and selling a concession to operate trains to a private company. The money from concessions will then be used to construct additional segments of rail. This is what Gov. Newsom means when he says there is not currently enough money. The scope has not changed and just shows the public’s lack of knowledge about the project.

  7. The California High-Speed Rail plan has not changed just the conservative media spin on the plan. The past several business plans describe first building a segment in the California central valley capable of running trains and selling a concession to operate trains to a private company. The money from concessions will then be used to construct additional segments of rail. This is what Gov. Newsom means when he says there is not currently enough money. The scope has not changed and just shows the public’s lack of knowledge about the project.

  8. while I think CA will eventually win the inevitable lawsuits, this is a freakin’ disaster of messaging on Newsom’s part. Very disappointed right now.

  9. it’s basically a disaster. Even though the content of what he said isn’t that interesting or that bad. We need a better funding source. And we definitely need federal dollars. But the way he said it… just set everything back another 5 – 10 years. I don’t know.

  10. I can only hope this backlash / Trump vindictiveness / stupidity pushes Newsom to decide he actually does support High Speed Rail

  11. If there’s no schedule to complete by 2022 due to funding, we can already judge it will never be done by 2022. It’s that simple.

  12. Yes because that’s not even set in stone anymore. EIR work on Pacheco is not complete either meanwhile Samtrans already did a preliminary Dumbarton study, so even if Newsom were to opt for an Altamont alignment he could probably pull it off with only a 6-12 month delay. The amendment in last year’s budget requring BART to study a Shin Park station and the Capitol Corridor’s move to the Coast Subdiv works well with such a move too.

    That said Palmdale is going to happen since Xpresswest is still alive (it was bought by Florida East Coast, aka Brightline which Sen. Scott is an investor in) which makes the plausibility of XPW being the lead there much higher since they’re approaching Caltrans with private money.

  13. Maybe we shouldn’t be siding with Newsom for expressing the possibility of not completing the SF to LA high speed rail?

  14. and “Palmdale on the LV line” doesn’t mean that much time lost for supercommuters to points northwest

  15. tbf they had to do the CV first, or else all the money would’ve been sunk in metro SF and LA, and then the local supers would’ve just blocked the connector

    for instance, LA Union Station’s run-through loop is being built with HSR money, but they keep trying to take the HSR platforms away

  16. Can you point to the words (or gestures or something) Newsom used to “express the possibility” then? Newsom said he’s finishing the first phase and seeking money for the rest

  17. The entire section of the speech devoted to high-speed rail. The part about “train to nowhere” sounds like he was considering not building high speed all the way from SF to AL, since SF/AL are definitely both somewhere:

    “Next, let’s level about High-Speed Rail. I have nothing but respect for Governor Brown’s and Governor Schwarzenegger’s ambitious vision. I share it. And there’s no doubt that our state’s economy and quality of life depend on improving transportation.

    But let’s be real. The project, as currently planned, would cost too much and take too long. There’s been too little oversight and not enough transparency.

    Right now, there simply isn’t a path to get from Sacramento to San Diego, let alone from San Francisco to LA. I wish there were.

    However, we do have the capacity to complete a high-speed rail link between Merced and Bakersfield.

    I know that some critics will say this is a “train to nowhere.” But that’s wrong and offensive. The people of the Central Valley endure the worst air pollution in America as well as some of the longest commutes. And they have suffered too many years of neglect from policymakers here in Sacramento. They deserve better.

    High-Speed Rail is much more than a train project. It’s about economic transformation and unlocking the enormous potential of the Valley.

    We can align our economic and workforce development strategies, anchored by High-Speed Rail, and pair them with tools like opportunity zones, to form the backbone of a reinvigorated Central Valley economy.

    Merced, Fresno, Bakersfield, and communities in between are more dynamic than many realize.

    The Valley may be known around the world for agriculture, but there is another story ready to be told. A story of a region hungry for investment, a workforce eager for more training and good jobs, Californians who deserve a fair share of our state’s prosperity.

    Look, we will continue our regional projects north and south. We’ll finish Phase 1 environmental work. We’ll connect the revitalized Central Valley to other parts of the state, and continue to push for more federal funding and private dollars. But let’s just get something done.

    For those who want to walk away from this whole endeavor, I offer you this:

    Abandoning high-speed rail entirely means we will have wasted billions of dollars with nothing but broken promises and lawsuits to show for it.

    And by the way, I am not interested in sending $3.5 billion in federal funding that was allocated to this project back to Donald Trump.

    Nor am I interested in repeating the same old mistakes.

    Today I am ordering new transparency measures.

    We’re going to hold contractors and consultants accountable to explain how taxpayer dollars are spent – including change orders, cost overruns, even travel expenses. It’s going online, for everybody to see.

    You’re also going to see some governance changes, starting with my pick for the next chair of the High-Speed Rail Authority, Lenny Mendonca, my Economic Development Director. Because, at the end of the day, transportation and economic development must go hand in hand.”

  18. Ah – so where he said “train to nowhere” is “wrong and offensive” – you took that as him “expressing” he’s not building SF to LA.

  19. No.
    When he says critics will say this is a “train to nowhere,” then talks about how the Central Valley is a valuable place, it seems like he is implying that he plans to build only in the Central Valley.

  20. I mean, as you can see from my other posts, I don’t take his words as positive for HSR… but your interpretation also seems off. And remember, that was just a speech. No laws have changed.

  21. I’m well aware of all this. Maybe it will play out according to plan. Seems like a gamble. If they had built LA to SD first, or LA to Bakersfield (which isn’t THAT useful but still gets the hardest part done)… we’d have something

  22. Despite the momentum of activity surrounding the CA High Speed Rail Project, I really don’t understand the logic of trying to replicate on the ground what air travel does very easily, safely, economically and efficiently…w/o draining needed tax dollars for priority social programs – health, education and welfare.

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