California Governor Signs Bill for High-Speed Rail Funding Plan

Development of the California High-Speed Rail project with ongoing construction activities.

News Summary

California Governor Gavin Newsom has approved Assembly Bill 377, which mandates the California High-Speed Rail Authority to devise a funding plan for the Merced to Bakersfield segment. This plan must include updated cost estimates and risk assessments, crucial for the authority’s 2026 business plan. Despite ongoing challenges, including legal battles for federal funding, the Authority aims to start operations by 2030, with project costs ballooning to as much as $128 billion. Additionally, road closures are set near Fresno to accommodate utility works linked to the construction.

California Governor Gavin Newsom has signed Assembly Bill 377, which requires the California High-Speed Rail Authority to establish a comprehensive funding plan for the Merced to Bakersfield segment of the high-speed rail project. This newly mandated plan will need to include updated cost estimates, detailed risk assessments, and various options for service initiation, all of which are expected to be incorporated into the authority’s 2026 business plan.

Governor Newsom emphasized the significance of the high-speed rail project as a vital investment in California’s future. He advocates for enhanced infrastructure that aligns with the state’s goals for transportation and economic growth. This legislative move follows ongoing legal disputes, as the California High-Speed Rail Authority is currently involved in litigation against the Trump Administration in a bid to secure $4 billion in federal funding.

The High-Speed Rail Authority is optimistic about commencing train operations by 2030, although project delays have extended the initial timeline by nearly a decade. The estimated cost for completing the entire rail project has surged from an original projection of $33 billion to between $89 billion and $128 billion. Under Governor Newsom’s proposed budget, the rail initiative is set to receive $1 billion annually for the next 20 years to facilitate the completion of its first operational segment.

In the meantime, road closures have been implemented near the Fresno Chaffee Zoo to accommodate utility work related to the high-speed rail project. These closures on Olive Avenue are part of Construction Package 1, which covers the initial 32-mile segment between Madera County and Fresno County. Specifically, the closures running from West to Carruth avenues will take place from 9 a.m. to 4 p.m. until August 8, while additional closures between Golden State Boulevard and West Avenue will last until September 22, operating from 9 p.m. to 6 p.m.

The project faces several challenges, particularly following the Trump Administration’s announcement to withdraw $4 billion in grants. A federal report suggested that the High-Speed Rail Authority may struggle to complete the project, citing issues such as costly change orders, missed deadlines, and an inadequate plan to fill funding gaps. The projected funding shortfall for the high-speed rail initiative is now estimated at $14 billion due to concerns surrounding federal funding risks.

So far, more than 70% of the $13 billion expended on the high-speed rail project has been sourced from state funding, with the federal contribution totaling approximately $6.9 billion since 2009. The path to a completed rail system has been complicated by a combination of political disagreements and competing demands for cap-and-trade funding.

Governor Newsom’s budget proposal includes an initiative to pivot toward a cap-and-invest framework in hopes of expanding financial support for climate-related programs, including the high-speed rail project. This approach may help to ensure adequate resources are available to navigate the challenges ahead and maintain progress in achieving California’s ambitious transportation goals.