The Trump Administration moved earlier this summer to cancel the funding, a move state leaders and bullet train supporters fought in court.
Democratic State Sen. Dave Cortese, who chairs the Senate Transportation Committee, said the agreement is good news for the project.
“There’s just a tremendous amount of potential in terms of billions of square feet of residential and commercial development,” said Cortese, who represents San Jose, noting his bill to promote development along the rail corridor — SB 545— could help finance the project and boost the Central Valley economy.
Delays and ballooning budget
The bullet train project, designed to connect San Francisco and Los Angeles, has faced delays, cost overruns and political pushback since voters approved it in 2008. Initial cost estimates of $33 billion have soared to around $135 billion — more than four times the original projection.
Ethan Elkind, a transportation expert at UC Berkeley who has studied the project since its inception, said several factors led to those increased costs. According to him, fragmented governance across different jurisdictions slowed decision-making; extensive environmental reviews and lawsuits delayed progress. Early reliance on expensive outside consultants instead of in-house expertise also added costs, he said.
Elkind added that $1 billion went toward complying with the California Environmental Quality Act, or CEQA.
But Elkind said he’s hopeful that the project is now heading in the right direction.
“They have a lot more expertise now,” he said. “At this point now, they’re just dealing with higher costs and the fact that they’ve got just a very expensive route that they’re building.”
Still, Elkind questioned whether the full route could ever be completed without large funding commitments from the state, which he said would likely need to be approved by voters through a new ballot measure. He also argued that starting the project in the Central Valley was a “potentially fatal mistake” because the vast majority of voters don’t live there.
“The problem here is that there’s no guarantee they’re going to finish that first segment, and there’s no guarantee that even if they did, it would provide any benefits or enough of a benefit to where the majority of the voters are in California, which is the Bay Area and LA. Those voters aren’t really seeing any benefits from all this time and expense.”
If the project doesn’t move forward, Elkind said the Central Valley segment could serve as a viable stand-alone service.
A waste of taxpayer money?
Critics, including the Howard Jarvis Taxpayers Association, have called the project a waste of taxpayer money. Susan Shelley, vice president of communications for the association, pointed to California’s cap-and-trade program, which she described as a “hidden tax” used to help fund the project.
“The purpose of the cap-and-trade program is supposedly to stop global warming, but it doesn’t because what California does doesn’t really affect the global climate,” she argued. “So, it’s a huge tax on the people of California to send a message to the rest of the world that ‘we care.’”
Shelley said the program uses $1 billion in taxpayer money a year through the program, which she argued is “doomed.”
“They have no path to finishing it,” she added.
The project is currently under construction in the Central Valley, but supporters and opponents alike say completing the full route will require securing tens of billions in additional funding, including the $4 billion now held in a trust.
CapRadio reached out to the California High-Speed Rail Authority but a spokesperson declined to comment.