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 with stops yields a 3-hour or less Express Trip Time, a 3-hour 15 minute or less Limited-Stop Trip Time, plus a 3-hour 25-30-minute All-Stop Trip Time typically attract high ridership and operating profit.

As refinement of the project plan 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 state-of-the-art HSR route (“Next-gen LGV”) that was used to set a 357 mph (575 kmph) world-record by train. Shortly afterwards, France announced plans to modify current-generation TGV to run up to 199 mph (320 kmph) on Next-gen LGV to generate time savings between Paris and Strasbourg in Eastern France.

France added that Next-gen TGV would operate up to 224 mph (360 kmph) on Next-gen LGV in the future. Such speed would generate more Trip Time Savings, extra daily roundtrips using the same staff for higher operating profits that contribute to LGV expansion. Next-gen TGV on Next-gen LGV would further reduce regional flights and eliminate more costly highway expansion in the same corridor.

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 these targets:

• 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. You can 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.

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, without context, 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:

“At project start, Base Cost Estimate is co-dependent on federal grants for a 60% federal/40% state funding formula similar to current highway and major airport projects. 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 significant private contribution for a rebalanced federal/state/private funding formula.”

In 2008, California HSR Authority and California Department of Highways did not have good cost estimation tools available that exist today. Nor California’s highway, rapid transit, and airport authorities have those tools. All of them routinely underestimated materials & labor costs for projects. Nor could they accurately forecast the amount of inflation from NIMBY (Not In My Back Yard) lawsuits.

Scholarly transportation studies are still developing analytical models for better infrastructure cost forecasts, as you see in the Mineta Transportation Institute video below.

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 $7.5 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 $45-50 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.

Events did not unfold that way, in part, because America’s problem building HSR infrastructure started decades earlier in the Northeast Corridor and continues today for California and all other HSR projects.

Disappointing HSR Funding by Clinton and Bush II

The Highway and Aviation lobbies successfully established a public narrative that American passenger rail requires taxpayer subsidy to operate. Knowing that Americans pay little attention to infrastructure history, those lobbies also amplified a false narrative that High-Speed Rail (HSR) infrastructure is too expensive in a country dominated by automobiles and airplanes.

To negate public comparisons with highway construction costs, those lobbies flooded the public with PR to over-justify the $27.2 grant for Interstate Highways in 1955.

Interstate Highways were granted $27.2 billion in 1955
— that’s equivalent to a $338 billion grant in 2025

Since the 1952, Northeast Corridor passenger rail accumulated 60-120 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 nearly 400 hundred daily Amtrak high-speed, Amtrak regional, commuter & freight trains. Straiter High-Speed Rail was also needed between Providence and New Haven.

In January 1993, President Clinton had Congressional backing to help the nation recover from an economic recession quicker. He could use some of that to overcome that false narrative about passenger trains to convince a majority of Congress to approve about $20 billion, attract $12 billion from governors, and $1 billion from freight rail companies in the Northeast Corridor:

Boston-Providence-New Haven-NYC-Newark-Philadelphia-Wilmington-Baltimore-Washington

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, followed by engineering and construction.

Since major tunnels and bridges take 12-13 years of construction, the project needed that $33 billion spread over 1993-2006.

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 nearly $6 billion total only produced high-speed trains on mediocre Northeast Corridor 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 between NYC and DC when Northeast Corridor HSR operations began in December 2000. Boston-NYC Average Speed was much slower.

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.

Worst of all, Bush II threatened to kill all Amtrak funding outside the Northeast Corridor.

Despite the Northeast Corridor’s mediocre HSR infrastructure, Amtrak Acela and Amtrak Northeast Regional 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 $15 billion federal funding for “No-brainer” upgrade projects between Washington-NYC. Partner states and freight rail companies would have kicked in $10 billion. Projects in Washington-New Haven and Providence-Boston segments would have shrunk the corridor Trip Times by nearly 1.5 hours and increased train frequencies & reliability.

If Bush II worked with a majority of Democrats & some Republicans over 2006-08, California HSR Authority 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 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, Secretary 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 during the Great Recession, Obama had political capital to eliminate wasteful Defense programs for larger ARRA grants to Intercity Passenger Rail and Rapid Transit projects when CPI Inflation was only 1.2% over 2009-10.

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 USDOT policy was placing ridiculous requirements on how California HSR Authority could invest the grant. For example, $929 million of federal funding got held up twice by Trump because it has to be spent on laying 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 total of $15 billion to California HSR project by September 2010, with the only stipulation that be coupled with state funds in a 60% federal/40% state funding formula.

In November 2010, Congressional Republications reclaimed the House-majority. Florida elected an anti-HSR Republican governor. True to his word, in February 2011 the new Florida governor rejected its unspent HSR grant funds.

Though Obama reallocated most of Florida’s HSR unspent grant to California by May 2011, California HSR’s federal grants only summed to $3.4 billion — a far cry from $15 billion needed to construct Gilroy to Bakersfield segment and plan Bakersfield-Palmdale segment in that less inflated time.

Despite his many proposals to Congress for $54-60 billion/5 years of federal HSR grants over 2011-16, the Republican House-majority halted new funding for Obama’s agenda. The impact on all HSR projects in America was severe.

With reliance on mostly state money, California HSR Authority had to focus on 119 miles in the Central Valley instead of 280 miles connected to the edge of San Francisco Bay Area. Thus, 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.

Using Caltrain corridor modernization as a model, Burbank Airport-Los Angeles-Anaheim corridor should be modernized  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 45 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. Secretary of Transportation 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. Nor did the Biden-Buttigieg USDOT 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 2040. For larger context about halted funding by Trump and possibilities for all HSR projects in America, see Interstate High-Speed Rail Funding.

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