High-speed rail builds out

As high-speed rail builds out Central Valley section, more money is needed elsewhere

By Anabel Sosa

For every step forward and track laid, California’s high-speed rail project seems to face continuous money hurdles and controversies, leading the public to question when the state — and arguably country’s — biggest infrastructure project will be built. Until then, only time will tell if it is really on a train to nowhere.

Railway officials and legislative analysts are aware that the project is going to take a lot more time and cost much more than originally planned if they want to keep up with deadlines.

They are strategizing ways to get more money and faster, so that incoming funds can arrive at the same time as expenses. This month, during an oversight hearing in the Assembly Transportation Committee, those financial risks were addressed, along with potential paths forward to complete the first installment of tracks in the Central Valley by the 2032 deadline.

These conversations are becoming even more dire as the project is now leaning on private investors since losing $4 billion in federal funding last year, a move done at the behest of the Trump administration. The president and Republicans have long used the railway as ammunition to criticize the Democratic Party’s ineptitude.

In order to secure investors, the railway also needs to jump over a legislative hurdle.

State Sen. Henry Stern, a Democrat from Los Angeles, is proposing revising Senate Bill 198, a 2022 law that prioritized funding to first go toward the construction of the Central Valley segment, which at the time was seen as a critical initial part of the railway.

That law did this by capping the amount of money the railway could invest outside of the Valley to $500 million until 2030, or if the Central Valley route gets fully funded first. But the railway and the lawmakers argue those limitations have prevented them from developing other areas of the project, like in Los Angeles, and from seeking private investors, which proponents say is critical to help move things expeditiously. This bill is making its way through the Legislature and comes as the railway is negotiating a private investor deal by this summer.

About 119 miles of railway are under construction between Merced and Bakersfield, the project’s first phase, which includes a 22-mile southern section that is already finished and ready for rail later this year. That will cost $17.8 billion, and the entire 171-mile Central Valley segment is reportedly going to cost $31 billion to finish, according to updated figures from the 2026 business plan. Railway officials said this month they were trying to figure out a $2 billion gap in funding based on last year’s funding figures.

This section of track is the first installation of the entire railway, which was envisioned to span a 494-mile stretch of tracks from San Francisco all the way to Los Angeles.

Earlier this month at the Assembly committee hearing, Ben Belnap, the inspector general of the railway, addressed a $2 billion funding gap for the Valley section alone, which is slated to run through Madera, Fresno, Tulare, Kings and Kern counties. He speculated in the meeting that with the high cost of construction, the railway finances were not moving at “at the pace” needed to finish on time. 

He said that the project depends on a $1 billion annual pool of money from California’s cap-and-invest program, but the money doesn’t always come in on time, which may require the rail authority to resort to relying on funding elsewhere, like private investors. The total estimated cost of the project is now $120 billion.

“That doesn’t mean that there are not future funds coming in,” he said in the meeting, according to Cap Radio. He clarified that the money would be coming into the accounts but “not at the pace we’d need to keep up with project expenditures.” 

Belnap went on to say that if the state does not resolve its financial structure, it could result in a delay in the construction schedule, and the rail authority would then be in a “weaker” position when it comes to negotiating with private investors.