Trump administration sees ‘no viable path’ forward to finish high-speed rail project, moves to pull federal funding

The Trump administration found “no viable path” forward to complete California’s high-speed rail project following a nearly four-month investigation that jeopardizes $4 billion in federal funding.

In a 310-page compliance review released Wednesday, the Department of Transportation cited budget shortfalls, missed deadlines and a misleading projected ridership to connect San Francisco to Los Angeles via fast rail. The review targets federal grants for construction in the Central Valley. Those funds could be pulled within the next 37 days following the high-speed rail authority’s response.

“CHSRA relied on the false hope of an unending spigot of Federal taxpayer dollars,” the Federal Railroad Administration’s acting administrator Drew Feeley wrote. “In essence, CHSRA has conned the taxpayer out of its $4 billion investment, with no viable plan to deliver even that partial segment on time.”

The high-speed rail authority disagreed with the findings, which it called “misguided” and an inaccurate reflection of the project.

“The Authority will fully address and correct the record in our formal response,” a spokesperson said. “We remain firmly committed to completing the nation’s first true high-speed rail system connecting the major population centers in the state.”

Authority leaders previously sounded the alarm over the potential loss in federal funding while voting on new contracts to move forward on construction and design in the Central Valley. CEO Ian Choudri has also said that public-private partnerships will be key to the project’s future — an idea that has also been raised by a state-appointed advisory committee. And the latest state budget proposal extends at least $1 billion per year in funding toward the project for the next 20 years.

Roughly $14 billion has been spent on the project. The bulk of that funding — 82% — has been supplied by the state and 18% has been granted by the federal government. The Trump administration is not currently seeking repayment of past federal funds, according to the review.

Lou Thompson, who sat on the authority’s peer review group for 15 years before retiring last year, said that the project has long faced issues over budget and timeline that he and others have publicly addressed under multiple administrations.

“It’s obvious that there are serious problems with the project — that has been clear,” he said.

The project has faced massive challenges since its inception. The budget is roughly $100 billion more than the authority’s original $33-billion estimate in 2008, with tens of billions of dollars yet to be identified. The train was initially proposed with a 2020 completion date, but construction has been limited to a 171-mile stretch in the Central Valley. And although the entire line between San Francisco and Los Angeles was environmentally cleared for construction last year, no portion has been completed.

Many of the problems stem from the highly criticized decision to route the rail through the east side of the San Joaquin Valley, instead of taking a more direct and cheaper course through the west side along Interstate 5. Earlier this year, Gov. Gavin Newsom said past decisions couldn’t be undone, and stressed the need to move forward instead. He and other transit leaders also tied the project’s future to the privately owned Brightline West high-speed rail project, which would connect from Las Vegas to Southern California.

Department of Transportation Secretary Sean Duffy launched the review in February days after Republican lawmakers urged President Trump to investigate California’s project.

“We can’t just say we’re going to give money and then not hold states accountable to how they spend that money — how they spend it per the agreements that they made with the federal government,” Duffy said. “If California wants to continue to invest, that’s fine, but we in the Trump administration are going to take a look at whether this project is worthy of a continual investment.”

Last month, Trump said that the federal government will not pay for the project.

Transit advocates protested Duffy’s announcement, and Rep. Laura Friedman (D-Glendale), who sits on the House Committee on Transportation and Infrastructure, raised concerns over whether a possible withdrawal of federal dollars on this mega project could signal similar action for other transit projects awaiting commitments from the Trump administration.

State Sen. Tony Strickland (R-Huntington Beach), who vice chairs the Senate Transportation Committee, supported the Trump administration’s findings and called the project a failure.

“We should pull the plug on this and realize that we’ve already wasted billions of dollars,” Strickland said. He pointed to other transit projects, including Metro’s Olympics plans, as “more worthy for California citizens” when it comes to investments and said that the jobs high-speed rail has created could shift to other projects.

A recent poll commissioned by Politico and UC Berkeley found that 67% of a sampling of more than 1,000 registered voters supported the project, which has created more than 15,000 jobs in the Central Valley and has been considered integral to the revitalization of some business districts there.

“California voters are tired of traffic jams and airport delays,” said Andy Kunz, president and chief executive of the U.S. High Speed Rail Assn. “Support for the California High Speed Rail project is growing as the state’s transportation system continues to grind to a halt.”

Rick Harnish, the executive director for the High Speed Rail Alliance, called the review “angering” and said it would only create further roadblocks for the project he believes is critical for the state.

“This isn’t just about the Bay Area to L.A. Basin. This is about transportation for the whole state, and it would be the catalyst for making truly financially viable communities, for making families — giving them more economic opportunity. It would just be huge.”

Democratic lawmakers have also generally supported the project.

“This announcement is a rejection of the future. California has been a leader in realizing the vision of high-speed rail to meet the needs of working families with respect for consumers, labor and the environment,” U.S. Rep. Nancy Pelosi (D-San Francisco) said in a statement.

“It is unfortunate that the Secretary has misrepresented the facts and lacks understanding of how California High-Speed Rail promotes commerce, improves quality of life for Californians and creates good-paying jobs — while also lowering the cost of housing by shortening the distance to commute from home to work.”