LOS ANGELES — President Donald Trump and Elon Musk have California’s $100 billion high-speed rail project in their crosshairs — but Democrats are the biggest threat to its future.
While Trump is trying to eliminate the project’s federal funding, it’s state lawmakers in charge of deep-blue California who control the vast majority of the money it needs to succeed. And that Democrat-dominated bloc is signaling growing resistance amidst financial negotiations now getting underway.
California voters largely back the high-speed project, according to a new POLITICO-UC Berkeley Citrin Center survey. Roughly two-thirds of voters said they support the effort, with the figure climbing to 82 percent among Democrats. But the state’s funding stream is finite, with the potential for even deeper cuts from the federal government, forcing lawmakers to choose between supporting high-speed rail at the current rate or throwing their weight behind other climate programs.
“Is it at the top of my priority list? I’ll give you a hard ‘no’ on that,” said Assemblymember Corey Jackson, a Democrat from Riverside County in Southern California.
Trump’s attacks have overshadowed the fast-moving, in-state dynamic since he returned to office for a second time, saying the project has the “worst overruns that there have ever been in the history of our country.” The Transportation Department duly began an investigation in February into $4.1 billion in grants awarded under former President Joe Biden, echoing Trump’s efforts in his first term to withdraw a $1 billion grant awarded by the Obama administration.
Transportation Secretary Sean Duffy said during a Wednesday appearance on Fox Business that the Federal Railroad Administration is close to wrapping up the investigation and that if “what many people have reported on is true, we’re gonna pull the funding for this boondoggle endeavor.”
And Musk’s Department of Government Efficiency, tasked with slashing federal spending, has called out the project as wasteful. The billionaire has long opposed the rail line, even admitting he proposed his futuristic “hyperloop” transportation system to disrupt high-speed rail.
But federal funding is a drop in the bucket of the project’s overall budget, which has ballooned from $33 billion when voters approved an initial — and so far only — $10 billion in state bonds to an estimated $88 billion-$128 billion now. The main funding source is the state’s cap-and-trade program for greenhouse gases, which has sent the project 25 percent of its revenue — some $32 billion — since its inception in 2012.
That program is up for reauthorization, as Democratic lawmakers and Gov. Gavin Newsom emphasize affordability in the wake of Trump’s victory and higher-than-expected inroads in California. That is putting a target on the back of an expensive high-speed rail project that residents would not see benefits from in the near future.
Despite expressing overall support for the high-speed rail program, California voters in the POLITICO-Citrin-Center overwhelmingly selected “housing and homelessness” from a list that included the budget, education, infrastructure, immigration and public safety in terms of areas that most need attention. The survey was conducted on the TrueDot.ai platform from April 1 to 14 among 1,025 California registered voters.
“This is taxpayers’ dollars that we’re supposed to be responsible with,” said Sen. Shannon Grove, a Bakersfield Republican who represents a large portion of the region where rail construction is underway. “We can build water infrastructure, provide water for our farmers, create jobs in our Central Valley. There’s a lot of things that we could be spending taxpayer dollars on, and this is not one of them.”
Newsom threw his weight behind reauthorizing cap-and-trade this week after Trump issued an executive order targeting the program, kicking off negotiations with lawmakers in earnest.
The governor has said he’d like more money to go to electric vehicle rebates but has been mum about whether he wants to maintain high-speed rail’s carveout, which was established by former Gov. Jerry Brown. A Newsom spokesperson said the governor plans to release his cap-and-trade proposal in the coming weeks.
Lawmakers have signaled that they want to see more auction revenues go to funding affordability initiatives that keep utility bills down and support low-income residents. A pair of legislative working groups leading negotiations on the programs haven’t released specific proposals yet, but funding new programs means less to go around for those already in place.
“What does the other 75 percent cover?” Jackson said in December. “That will determine how concerned I am about the 25 percent.”
Union leaders have made it clear that maintaining high-speed rail’s slice of the pie is their top priority. The project has employed nearly 15,000 union workers since construction started in 2015, more than any other infrastructure undertaking in the country.
“We believe it’s worked extremely well,” said Chris Hannan, president of the State Building and Construction Trades Council of California. “We’d like to see it get reauthorized for a longer period of time to help us have even more vision as we’re building out the state of California.”
Their vocal support of the project is also a sign that they see a loss of funding support from Sacramento as a real threat.
“I do know that there are other Democrats who would like to see this whole thing go away,” said Michael Quigley, executive director of California Alliance For Jobs. “The conversation around cap and trade reauthorization is going to be very critical to the future of high-speed rail.”
The project has long faced geographic frictions over the decision to start construction in the sparsely populated Central Valley, a move required by the Obama administration to qualify for funding through the federal American Recovery and Reinvestment Act in 2009. That means the benefits have flowed to a region outside of the urban hubs that represent Democrats’ power base.
While Democrats’ grip on labor is still dominant in California, Trump’s overtures to working-class voters have shifted allegiances among rank-and-file union members in purple parts of the country that look more like the Central Valley. And a Democratic retreat from high-speed rail could force trade unions to look elsewhere for support.
“There’s a realignment of political interests,” said Tal Eslick, a Republican consultant who was previously chief of staff for Reps. Devin Nunes and David Valadao, both Republicans from the Central Valley. “Things are happening elsewhere in the country that could eventually impact this project as well.”
The project still maintains support among influential Democratic lawmakers like Senate Transportation Chair Dave Cortese and Senate Budget Chair. Scott Wiener, along with the Central Valley’s Democratic contingent.
Cortese and Wiener have introduced bills that attempt to increase private investment in high-speed rail and require local governments and utility companies to quickly relocate facilities in the project’s path.
“There will be points of view and political positions on all sides of that question, those who want to abandon the project, those who think it should have more, and those who think it should be the same,” Cortese said. “I think the strongest argument is to keep the funding the same so we don’t disrupt it.”
But even if high-speed rail maintains its carveout, lawmakers are clear the project needs more to get on track.
“I think it’s imperative that we demonstrate we’re putting a self-help plan together for the project that isn’t dependent on cap and trade,” Cortese said.
Lou Thompson, a longtime rail consultant who previously chaired a Legislature-established peer review group that studies the project, said the project’s focus on the Central Valley means it poses a challenge to lawmakers in other parts of the state.
“Is there really committed Democratic support to the idea of high-speed rail?” Thompson said. “I don’t know. It’s certainly not uniform.”
Thompson pointed to Democratic strongholds in Southern California and the Bay Area that are unlikely to see benefits from the project in the near future. The High-Speed Rail Authority estimates it is about $4 billion short on funding to complete an initial 171-mile stretch from Bakersfield to Merced in the Central Valley. That line is scheduled to open by 2033, though a February state inspector general report found that construction is unlikely to be completed by that timeline. Expansion to Southern California and the Bay Area could take decades longer.
HSRA CEO Ian Choudri has downplayed the potential impact of a federal funding freeze, saying the project can withstand four years of Trump. The agency, however, is blunt about cap-and-trade dollars being crucial.
“It’s in our financial plans. It’s built into the plan, it’s built into the strategy,” Choudri said at an event in January when asked about the 25 percent carveout. “That’s what lays out the importance of it.”
But the competition for cap-and-trade funds has only intensified in recent years, as the state rolled back budget funding for climate programs amid an economic downturn and groups looked elsewhere for cash flow.
Marie Liu, a climate lobbyist and longtime legislative staffer who served as climate and environment adviser for former Assembly Speaker Anthony Rendon, a Democrat, called high-speed rail a jobs project that is still years away from producing greenhouse gas reduction benefits.
“The case for high-speed rail gets really hard when you’re not getting any [emission] reductions, versus spending dollars on things that have more tangible immediate impacts, like forestry or credits to people’s electricity bills, wildfire hardening,” she said. “You’re gonna get a lot more bang for your buck and support for climate programs than you do for investments on high-speed rail.”