California High Speed Rail Funding Politics
Founded in 1996, California High Speed Rail (HSR) Authority was a skeleton organization with less than 10 people for nearly a decade. It was a rookie organization taking on America’s largest infrastructure project: 500-mile Phase 1 from San Francisco to Los Angeles + Anaheim and Phase 2 extensions to Sacramento and San Diego for 800 total miles.
By 2002, that nascent organization publicized a $33 billion California HSR System Phase 1 Base Cost Estimate that did not account for ongoing inflation.
Based on his experience riding HSR in Europe, California Republican Governor Arnold Schwarzenegger (November 2003-January 2011) backed the California HSR Bond Measure citing its short potential Trip Times and additional benefits to society.
By 2008, America had yet to upgrade Amtrak Northeast Corridor HSR, so few people understood realistic costs to build a 186 mph (300 kmph) HSR system like the TGV in France.
Around the world, 186 mph Top Speed HSR for 135-145 mph Average Speed (depending on number of stops) yielding a 3 hour or less Express Trip Time , a 3 hour 15 minute or less Limited-Stop Trip Time, plus a 3-hour 30-minute or less All-Stop Trip Time typically attract high ridership and operating profit.
As refinement of the project’s progressed, California HSR Phase 1 slightly reduced 463-miles between Downtown San Francisco and Downtown Los Angeles, plus 33 additional miles south to Anaheim for a total of to 494-miles.
At 145 mph Average Speed, California HSR Phase 1 could produce a 3-hour 12-minute Express Trip Time between San Francisco and Los Angeles. A Limited Stop Trip Time would grow to 3-hours 28-minutes. An All-Stop Trip Time would be a less attractive 3-hours 49-minutes. Depending on number of over/underpasses and stops between Downtown Los Angeles and Anaheim, add 22-27 minutes for the entirety of 494-mile California HSR Phase 1.
Given CPI inflation from 2002 to 2008, Base Cost Estimate should have increased to $40 billion for a 186 mph Top Speed HSR system extending 500-miles in Phase 1. Inflation wasn’t the only thing misunderstood about the California HSR Base Cost Estimate.
In 2007, France opened a next-gen HSR route (“Next-gen LGV”) and announced plans to operate a next-gen TGV up to 224 mph (360 kmph) on it in the future. Such speed would generate substantial Trip Time Savings and extra roundtrips for higher ridership and operating profits.
Shortly afterwards, California HSR Authority upgraded its design to 220 mph (354 kmph) top speed with boosted ridership goals between Downtown San Francisco and Downtown Los Angeles via:
• 2 hours 40 minutes: Express Trip Time
• 2 hours 56 minutes: Limited-Stop Trip Time
• 3 hours 15 minutes: All-Stop Trip Time
The Highway and Airport lobbies directly or indirectly funded think tank reports to make $33 billion Base Cost Estimate stand out on the November 2008 HSR Bond Measure ballot without acknowledging inflation common to long construction-time infrastructure projects, including Highways and Airports. Call it the “Project Time-Inflation Cost Paradigm.”
Nor did California HSR Authority have sufficient resources to educate news media that 220 mph Top Speed requires straighter & flatter HSR route than 186 mph Top Speed. Consequently, France, Japan, and China judged that 220+ mph Top Speed is worth many billions for added benefits to society.
The Highway and Airport lobbies also backed many HSR-critics in print, online, and TV who cemented the $33 billion cost narrative without context for inflation and the 220 mph speed-upgrade. In my opinion, California HSR Phase 1 should have listed a $50 billion Base Cost Estimate on the November 2008 Ballot.
Another critical mistake in HSR Bond Measure was muddled wording implying that federal funding and private investors would cover most of the balance.
If California HSR Authority listed $50 billion as Phase 1 Base Cost Estimate on the 2008 ballot measure, the bond measure should have included wording similar to:
“Base Cost Estimate is co-dependent on federal grants for a 60% federal/40% state funding formula at project start, like most Highway and Major Airport projects in 2008. Around the world, private high-speed train operators and Transportation-Oriented Developers contribute funds later when they can forecast operating profits 3-5 years after investment. Once the Central Valley Spine from Gilroy to Palmdale approaches commercial operation in 2-3 years, California HSR Authority anticipates a private high-speed train operator and Transportation-Oriented Developers contributing significant funds for a rebalanced federal/state/private funding formula.”
For greater context about project benefits, California HSR Authority should have added words to this effect on the 2008 HSR Bond Measure:
“This bond funds 3-4 years of Early Works (Geo-Technical studies, Preliminary Engineering & Renderings, and to gather public input during federal & state-mandated Environmental Reviews. It also helps fund HSR connectivity to 3 Amtrak California lines, 4 Commuter Rail lines, and 4 Metro Rail systems. Similar to California’s 797-mile I-5 Freeway that opened segment-by-segment for early benefits but took 23 years to complete, 800-mile California HSR System will open segment-by-segment.”
Another rookie mistake was not repeatedly stating that large federal funding is needed for these early activities:
1. Begin purchasing Rights-Of-Way (ROW) property in the Gilroy-Palmdale corridor in 2011
2. Begin 3rd Party negotiations with Gilroy-Palmdale corridor ROW utility agencies by 2012
3. Lock in as much material & labor construction prices as possible in 2011-14
Despite rookie mistakes, HSR advocates remained optimistic because voters passed the $9.95 billion California HSR Bond Measure in November 2008 and the Obama Presidential Campaign promised to fund Interstate HSR projects.
All of that said, HSR critics would have still criticized the project for CPI Inflation driving a $50 billion Estimate Base Cost in 2008 to $75 billion by 2025. That’s okay. The rate of inflation would have been similar to other infrastructure projects over 17 years (2009-25).
California HSR Merited Larger Federal Funds
The HSR bond required California Transportation Commission (CTC) to allocate $500 million to staff-up California HSR Authority and develop programming guidelines for $950 million authorized for California HSR-connectivity projects that also qualify for federal grants. Only $8.5 billion of the HSR bond could directly apply to California HSR’s Central Valley Spine.
Capital improvements to Intercity Passenger Rail and Rapid Transit systems connected to HSR systems in Europe and Asia proved that they boost ridership for all Transportation modes. The first $760 million for California HSR-connectivity was to be dispersed per this CTC document.
Using an initial 60% Federal 40% State Funding Partnership formula, the $9.95 billion HSR State Bond Measure should have received a $15 billion federal funding match from 2009 economic recovery funding pool (ARRA) should have been allocated & authorized to California HSR & HSR-connectivity projects.
The CTC and California HSR Authority had more reasons to believe that a 60% federal/40% state funding formula would apply.
California was the largest tax-donor state, had the largest state population, and most Congressional Representatives. LA and San Francisco Bay Area are 2 of America’s 3 highest GDP-generating metro areas. They maintain one of the busiest flight corridors on Earth. White-knuckle drives through winding mountain passes in a 6.5-hour drive between LA and San Francisco would motivate millions of drivers to switch to a sub-3-hour train ride.
Assume that the 2009 President and Congress would authorize $15 billion contingent on the $9.95 billion California HSR bond measure passing. Mile-for-mile, a federal grant of that scale would actually be less than grants to many highway & bridge projects around the nation.
The California HSR Authority needed to secure the first $7 billion of $15 billion authorized federal funds in June 2009, contingent on a state match of $4.7 billion within 2 months. That would have forced CTC to complete programming guidelines and state legislature to allocate the first $4.7 billion from $9.95 billion HSR bond money in August 2009.
If California HSR Authority secured $11.7 billion in August 2009 for Early Works from Gilroy to Palmdale (~250 miles) spanning the Central Valley could have started in late 2009 and completed in 2014. Most nuisance lawsuits would have begun & finished earlier. The remaining $13.3 billion could have had Pacheco Pass-Palmdale segment under construction by 2015.
By 2017-18, the public would have demanded $50 billion more federal & state funding to complete Pacheco Pass-Gilroy-San Jose-San Francisco and Palmdale-Burbank Airport-LA Union Station-Anaheim segments that required tunnels, viaducts, over/underpasses, and new/upgraded stations.
Unfortunately, events did not unfold that way, in part, because America’s problem building great passenger train infrastructure started earlier and continues today.
Disappointing HSR Funding by Clinton and Bush II
In January 1993, President Clinton had Congressional backing to help the nation recover from an economic recession quicker. He could convince a majority of Congress and governors to combine for $20 billion of upgrades in the nation’s most important GDP-producing corridor: Boston-Providence-New Haven-NYC-Newark-Philadelphia-Wilmington-Baltimore-Washington.
That Northeast Corridor had 50-120 year old bridges, tunnels, viaducts, signaling and electric systems. Too many segments had only 2-3 tracks, when at least 4 tracks were needed to support hundreds of daily Amtrak high-speed, Amtrak regional, commuter & freight trains.
That 457-mile Northeast Corridor project would be highlighted by a new Amtrak Acela high-speed train capable of 165 mph. It had Environmental Clearance and existing ROW to start constructing several small projects, but needed large enough funding to start more Environmental Reviews for tunnels, bridges, over/underpasses, electrification, following by engineering and construction.
To form $20 billion investment, the federal government would need to grant $12 billion. States benefiting from project would have contributed $7 billion and freight rail companies benefiting from project would have contributed about $1 billion.
For reasons unclear, President Clinton only funded $4.3 billion/8 years, which in turn, attracted only $1.5 billion from states and perhaps $200 million from freight rail companies. That $5.8 billion total only produced high-speed trains on mediocre infrastructure.
As a result, poor infrastructure limited Acela high-speed train to 150 mph over 34 miles, 120-135 mph over 95 miles, and 30-110 mph over 326 miles. Acela’s Average speed was a disgraceful 83 mph when Northeast Corridor HSR operations began in December 2000.
Bush II grew up as an Oil Man. When he became President in January 2001, he only saw America’s transportation infrastructure through a lens that required us to burn more oil. He had no interest supporting electric transportation infrastructure using wind & solar energy. Bush II threatened to kill all Amtrak funding outside the Northeast Corridor.
Despite the Northeast Corridor’s mediocre infrastructure, Amtrak Acela and Amtrak Northeast Regional high-speed trains reached operating profit in 2006. Since Total Trip Time between Washington & NYC was shorter than flying, Acela and Northeast Regional captured more travelers than airlines did in the same corridor.
In 2006, the Northeast Corridor still needed $12 billion federal funding for “No-brainer” upgrade projects. Partner states and freight rail companies would have kicked in $8 billion. Projects in Washington-New Haven and Providence-Boston segments would have shrunk corridor Trip Times by nearly 1.5 hours.
If Bush II worked with a majority of Democrats & some Republicans over 2006-14, California HSR Authority and news media could have drawn upon that experience for sound project timelines and a realistic Project Time-Inflation Cost Paradigm.
Since President Bush II would not fund those No-brainer upgrades before the Great Recession, a future Congress, presidents, governors and state legislatures would absorb incredibly higher inflation cost upgrading the Northeast Corridor.
Obama’s Naive Gamble on HSR Funding
On January 21, 2009, Republican Congressman Ray LaHood was confirmed as President Obama’s Secretary of the U.S. Department of Transportation (USDOT). Having prior Transportation committee background, LaHood knew the national value of good Intercity Passenger Rail and Rapid Transit to improve economic productivity and reduce highway congestion.
On February 17, 2009, Obama signed the $787 billion American Recovery & Reinvestment Act (ARRA) with presidential discretion for swift disbursement to counter the Great Recession. Since a Democrat-majority Congress backed him, Obama also had political capital to eliminate a dozen wasteful Defense programs for larger ARRA grants to Intercity Passenger Rail and Rapid Transit projects when CPI Inflation was a combined 1.2% over 2009-10 during the Great Recession.
Considering the nearly $10 billion California HSR Bond, President Obama should have authorized $15 billion to Secretary LaHood for a 60% federal/40% state funding formula for California HSR & HSR-connectivity projects. Secretary LaHood could have granted the first $7 billion by June 2009, contingent on California legislature authorizing (releasing) a $4.7 billion match within 2 months.
Instead, Obama permitted Secretary LaHood to grant only $2.34 billion for California HSR & HSR-connectivity projects in January 2010. Another fault of Obama-LaHood’s Transportation Administration was placing over-stringent requirements on what California HSR Authority had to spend the money on. For example, $929 million of federal funding got held up twice by Trump because it has to be spent on tracks & signaling, not concrete infrastructure that precedes them.
In October 2010, the Republican-minority Congress publicly pledged to make him a 1-term President by not supporting his agenda. Yet Obama naively gambled that 2011 Congressional Republicans would agree to more infrastructure jobs in all states & districts to recover from the Great Recession faster.
Opposing parties typically reclaim the Congressional House-majority during mid-term elections. Obama and Congressional Democrats were not polling high enough to confident of maintaining a Congressional majority after the November 2010 Election.
Florida never committed state funds to its HSR project. The leading candidate for Florida governor in that election, a Republican, stated that he would reject Obama’s HSR grant to Florida. In contrast, the California governor had backing from a $9.95 billion HSR bond measure and lobbied for higher grants.
All those signs should have convinced Obama to grant a sum total of $15 billion to California HSR project by September 2010, with the only major stipulation being that its coupled with state funds in a a 60% federal/40% state funding formula.
In November 2010, Congressional Republications reclaimed the House-majority. Florida elected the anti-HSR Republican governor. True to his word, in February 2011 the new governor of Florida rejected its unspent HSR grant funds. Though Obama reallocated much Florida’s HSR grant to California by May 2011, California HSR’s federal grants only summed to $3.4 billion — a far cry from $15 billion needed.
Despite his many proposals to Congress for $54-60 billion/5 years of federal HSR grants over 2011-16, the Republican House-majority halt new funding for Obama’s agenda. The impact on all HSR projects in America was severe.
California HSR Authority had to focus on 119 Central Valley miles instead of 280 miles. Obama’s miscalculation that 2011 Republicans would support HSR projects added 6 years of delay to California HSR project.
Despite California HSR Authority challenges and “less-than” federal funding, second-time California Governor Jerry Brown (January 2011-January 2019) continued essential political support for California HSR project.
Trump 45’s Surprising HSR Antagonism
As Time magazine reported in March 2016, Presidential Candidate Trump said words akin to, “America should have high-speed trains too.” He added that he would invest in HSR infrastructure, without giving an estimate of federal investment.
Over 2017-20, however, Trump 45 reneged on that and many other campaign promises.
In early 2017, Trump’s Big Tech campaign donors in San Francisco-San Jose corridor pressed his Transportation of Secretary Elaine Chao, to co-fund that Caltrain Modernization. She finally convinced Trump 45 to grant $650 million towards the project. With the upgrade completed, that 51-mile, electrified San Francisco-San Jose Caltrain commuter route became a ridership success. Eventually, California HSR will use the corridor too.
Burbank Airport-Los Angeles-Anaheim corridor should be modernized like Caltrain for Metrolink commuter, Amtrak Pacific Surfliner, and California HSR trains.
Unfortunately, in January 2019, Trump 45 started a petty dispute with California’s new Governor, Gavin Newsom. He withheld the remaining $929 million from Obama’s California HSR grants and threatened California to repay the $2.5 billion grant already spent.
By not funding more segments and sowing doubt about the HSR project, Trump added 4 years of California HSR construction delay.
Disappointing HSR Funding By Biden
In 2021, public polling for California HSR project was slightly stronger than in November 2008, when California HSR Bond Measure passed. VP Harris was from California, the largest Tax Donor State with the most Congresspersons. California also committed $9 to $11 billion more funding thru 2030 from the state’s Cap & Trade Program revenues. California HSR project had over 400 miles of Environmental Clearance.
Despite 8 years without proper federal funding, California HSR project was ready to blossom. Transportation Secretary Buttigieg needed a few months to staff-up and review construction projects. If Biden restored the delayed $929 million in February 2021 and convinced his Congressional-majority Democrats to allocate $15 billion to California HSR and $5 billion more to Commuter Rail & Amtrak California grants by May 2021, Buttigieg could announce momentum for those symbiotic projects.
They could have funded 40 railroad over/underpasses, new electrical & signaling systems, and 4 parallel tracks where needed in urban area in routes shared by 3 Commuter Rail lines, 3 Amtrak California lines, and California HSR.
Pandemic malaise slowed everything from March 2020-January 2022. Though Biden entered office in January 2021, he did not restore Obama’s $929 million grant to California HSR project until June 2021. Bigger disappointment followed.
BIL negotiations completed in November 2021. Federal bureaucracy delayed Biden’s paltry $3.5 billion in California HSR grants until December 2023. The Biden-Buttigieg USDOT did not allocate $500 million for the rail tunnel to downtown San Francisco before leaving office on 20 January 2025. Instead, it became a $500 million proposal for the next president to stall.
Federal funding delay on Biden’s watch added nearly 2 years to the project timeline. All together, funding delays explain how California HSR Phase 1 completion forecast slipped from 2029 to now 2039. For larger context about halted funding by Trump and possibilities for all HSR projects in America, see Interstate High-Speed Rail Funding.