High Speed Rail

Feds Cut Off Funding for California Bullet Train, Threaten Potential Clawback of $2.5 Billion

Without a realistic avenue to complete the project, why would they keep helping pay?


Train construction
Gary Reyes/TNS/Newscom

Now that California Gov. Gavin Newsom has acknowledged the truth—that the state's proposed high-speed train plan doesn't have a realistic future beyond the first stage—the feds (and a gloating President Donald Trump) are swooping in to try to get their money back.

Yesterday the Federal Railroad Administration (FRA) sent a letter to the California High-Speed Rail Authority (CHSRA) informing the state agency that the FRA plans to cancel more than $900 million in federal funds set aside to assist in the construction of the Central Valley portion of the route.

This is only part of the $2.5 billion the state has already received from the feds in order to launch the $77 billion-plus boondoggle. The three-page letter sent by the FRA documents that California has not met the terms of the agreement for the grants. California has not contributed adequate state funds, and is now demonstrating that it's not going to complete the project on time. The letter notes that more than 40 status reports submitted to the FRA thus far were either late or lacked necessary details, making it difficult for the FRA to fulfill its oversight role.

Furthermore, the letter notes Newsom's recent state of the state address, during which he announced that he was scaling back the scope of the bullet train. The initial plan called for building a bullet train that traveled between San Francisco and Los Angeles (through the Central Valley) in less than three hours. But funding became a problem, and Newsom acknowledged that it was unlikely to ever be finished, as it's already years behind schedule and billions over budget. Instead, he declared that they'd build the first Central Valley link and then research and work out other ways to connect that portion of the train heading north and south.

The FRA is extending an opportunity for CHSRA to make a case that it's appropriately advancing the project and meeting its goals, and that Newsom's announcement isn't a fundamental change in what the FRA agreed to support. But it also warns that the FRA may terminate the cooperation agreement entirely and attempt to claw back the money it has already sent.

If the FRA goes that route, it could jeopardize finishing even the first leg, unless California makes up the difference. Newsom has responded that this move is political payback for Trump's regular tangles with California; in particular, the Golden State joining others in challenging Trump's "national emergency" to get the border wall funded. From the Los Angeles Times:

"It's no coincidence that the Administration's threat comes 24 hours after California led 16 states in challenging the President's farcical 'national emergency,'" Newsom said in a statement, referring to Trump's emergency declaration to secure funding for his wall on the Mexican border. "The President even tied the two issues together in a tweet this morning. This is clear political retribution by President Trump, and we won't sit idly by. This is California's money, and we are going to fight for it."

Despite the fact that Trump had previously declared support for high-speed rail (because countries like China have it), he mocked the California bullet train on Twitter and pointed out he's asking for far less for his border wall. This morning he declared he wants the money back:

He's not wrong at all. Not only is the project not what was presented to the FRA, it's not what was presented to the voters when they first approved the project back in 2008.

California will now have a half-built train in a non-urban part of the state that is already served by passenger rail. Over at the Reason Foundation (the non-profit that publishes this blog), Baruch Feigenbaum and Marc Joffe note the absurdity of what we're left with:

The operating segment that Gov. Newsom says is going to continue would connect Bakersfield, Hanford, Fresno, Madera and Merced — covering a total distance of about 165 miles in the Central Valley. Realistically, no fiscally prudent government entity or private developer would plan a high-speed rail line to serve such a short, low-density, low-population corridor.

The region is already served by Amtrak's San Joaquins train, which has seven daily departures. The existing Amtrak service is relatively slow, at just over three hours, so a new train could provide faster connections between these cities. But the benefits will be limited. Although high-speed rail has a theoretical maximum speed of 220 miles per hour, average speeds are much slower given time spent in stations, accelerating and decelerating. End to end travel time for Central Valley High-Speed Rail could be in the range of 90 minutes.

Cities at the northern end of the operating segment have relatively low populations, so the most common trip along the route will be between Fresno and Bakersfield, covering a distance of about 110 miles. The current two-hour trip between these cities would likely be reduced to about one hour.