Trump administration pulls nearly $1 billion in high-speed rail funding

The Federal Railroad Administration (FRA), an agency within the U.S. Department of Transportation, will cancel over $900 million in planned funding for the bullet train project, it informed the California High-Speed Rail Authority (CHSRA) Thursday.

The administration even warned that it may want billions in past grants returned.

In a letter to CHSRA CEO Brian Kelly dated May 16, FRA Administrator Robert Batory said “FRA has, effective today, terminated” the funding agreement, and that “FRA will also deobligate [sic] the $928,620,000 in funding” previously secured.

FRA telegraphed the move in February, warning Kelly in another letter that it would likely soon make good on its promise to yank funding.

Batory claims that the state has shown “repeated failure to submit critical required deliverables and [...] to make sufficient progress to complete the project,” nullifying original bargain.

Among his reasons for stopping the checks, Batory cites Gov. Gavin Newsom’s ambiguous comments about high-speed rail in his February State of the State speech:

California has scaled back its vision, all but abandoning any foreseeable plan to construct the statewide HSR System.

During his February 12, 2019, State-of-the-State address, California Governor Gavin Newsom announced a renewed focus on completing the Merced to Bakersfield portion of the HSR system, but also stated that there “simply isn’t a path” to get “from San Francisco to L.A.”

[...] That is far less than the HSR System that California proposed to build when it sought Federal funding. It is now clear that California has no foreseeable plans, nor the capability, to pursue that statewide HSR System as originally proposed

The governor’s remarks led many listeners at the time to believe he was cancelling plans for high-speed rail outside of the Central Valley.

However, the governor’s spokesperson later insisted that “the state will continue undertaking the broader project” and that Newsom still intended to fulfill the planned Bay Area-to-SoCal route.

Batory’s letter also notes, “Over the next decade, the state’s sole focus will be on the construction of, and operation over, HSR infrastructure between the Central Valley cities of Merced and Bakersfield.”

That’s more or less true; according to the most recent High Speed Rail Authority’s 2019 Project Update Report, released earlier this month, the Central Valley line will not be up and running until 2028.

However, the report still includes longer term plans for the SF-to-LA route beyond 2028, as well as the proposed (but not yet initiated) longer route from Sacramento to San Diego.

A statement on the FRA site says that the administration might even try to pursue a refund of $2.5 billion worth of federal spending already committed to high-speed rail, warning that “FRA continues to consider all options.”

In response, Gov. Newsom accused the feds of using high-speed rail as a way of pursuing a political vendetta against the state.

“Just as we have seen from the Trump Administration’s attacks on our clean air standards, our immigrant communities and in countless other areas, the Trump Administration is trying to exact political retribution,” said the governor in a statement Thursday.

In March, CHSRA CEO Kelly attempted to dissuade Batory from attempting to derail the funding, arguing in a letter of his own that walking away from construction in progress would be self-defeating:

It is hard to imagine how your agency—or the taxpayers—might benefit from partially constructed assets sitting stranded in the Central Valley of California. It is equally difficult to imagine the policy benefit of sending home the more than 2,600 craft workers, men and women who have been dispatched to work on the 119-mile segment now under construction in the Central Valley, one of the nation’s most economically distressed regions. [...] This infrastructure legacy would forever be a travesty.

In the latest estimate, the SF-to-LA high-speed rail connection is expected to cost roughly $79.1 billion.

According to CAHSR’s May update, authority has “secured approximately one third of the total funding needed for the current estimated cost of the statewide system”—but that figure includes federal funding.