Trump Administration Cancels Nearly $1 Billion In California High-Speed Rail Funding

Capital Public Radio | By Ben Adler

Published May 16, 2019 at 6:33 PM EDT

One of the elevated sections of the high-speed rail under construction in Fresno, Calif., seen in 2017. The Trump administration announced on Thursday that it will pull federal funding from the multibillion-dollar project.

The Trump administration says it's terminating a federal agreement with California's high-speed rail project and taking away nearly $1 billion in funding, setting up yet another legal fight between California and the White House.

In a statement released Thursday, the Federal Railroad Administration says California has "repeatedly failed to comply" with the agreement and "failed to make reasonable progress on the project."

It adds that the state has "abandoned its original vision of a high-speed passenger rail service connecting San Francisco and Los Angeles, which was essential to its applications for FRA grant funding." The statement also said the FRA was still exploring "all options" to get back $2.5 billion in federal funds it had already awarded for the project from the state.

In a statement Thursday, Gov. Gavin Newsom called the termination "political retribution," illegal and "a direct assault on California."

Calif. Gov. Gavin Newsom receives applause after delivering his first State of the State address. In that address he said he planned to scale back California's high-speed rail project and focus immediately on building 171 miles of track in central California.

He would argue California has not abandoned its original high-speed rail vision, though cost hikes and delays already have led the state to scale back the project — now estimated at $77.3 billion.

But Newsom did himself no favors in his February State of the State address, when he said that "right now, there simply isn't a path to get from Sacramento to San Diego, let alone from San Francisco to L.A."

Newsom has directed the California High-Speed Rail Authority instead to focus on getting trains running in the Central Valley.

Even without the $929 million in federal funding that the Trump administration now says it will "deobligate," the High-Speed Rail Authority believes it will still have enough money to complete the expanded Central Valley segment — as long as revenues from California's cap-and-trade auctions perform strongly.

The Trump administration's move isn't a surprise. Federal officials had already stopped cooperating with the state long before Newsom's remarks.

Newsom struck a defiant tone in his statement Thursday.

"This is California's money, appropriated by Congress, and we will vigorously defend it in court," he said.