At a Glance
- California drops lawsuit after $4B federal cut.
- Authority pivots to private and cap-and-trade funding.
- Project remains >$100B, with $1B annual cap-and-trade support through 2045.
- Why it matters: State moves away from unreliable federal partnership, seeking new financing for a costly high-speed rail that could reshape California’s transportation.
In a decisive move, California has abandoned a lawsuit against the Trump administration that cut $4 billion from its high-speed rail budget, and the High-Speed Rail Authority is turning to private investors and cap-and-trade dollars to keep the project on track.
Lawsuit and Funding Cut
The U.S. Transportation Department slashed the $4 billion earmarked for the San Francisco-to-Los Angeles bullet train in July, citing the Authority’s lack of a viable plan for the Central Valley segment. The Authority filed a lawsuit, and Gov. Gavin Newsom described the decision as a “political stunt to punish California.” President Trump and Transportation Secretary Sean Duffy have called the rail a “train to nowhere.”
- $4 billion federal cut
- Authority sued
- Gov. Newsom labels it a political stunt
- Trump & Duffy criticize project
Authority’s New Funding Strategy
The Authority said it would focus on other funding sources, noting the project’s cost exceeds $100 billion. It secured $1 billion annually from the state’s cap-and-trade program through 2045, and is now courting private investors. A spokesperson said moving forward without federal involvement allows the Authority to adopt proven global best practices.
| Source | Amount | Status |
|---|---|---|
| Federal (cut) | $4 billion | Withdrawn |
| Cap-and-trade | $1 billion/year | Ongoing |
| Project cost | >$100 billion | Total |
Quotes
Gov. Gavin Newsom
> “a political stunt to punish California.”
President Trump
> “The Railroad we were promised still does not exist, and never will.”
> “This project was Severely Overpriced, Overregulated, and NEVER DELIVERED.”
Authority spokesperson
> “This action reflects the State’s assessment that the federal government is not a reliable, constructive, or trustworthy partner in advancing high-speed rail in California.”
> “Moving forward without the Trump administration’s involvement allows the Authority to pursue proven global best practices used successfully by modern high-speed rail systems around the world.”
Key Takeaways
- California drops lawsuit after federal cut.
- Authority relies on cap-and-trade and private investors.
- Project still >$100 billion, with ongoing debates on federal partnership.
By shifting its funding strategy, California aims to keep the high-speed rail on track, even as it distances itself from a federal administration that has repeatedly questioned the project’s viability.
