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California has not pursued a high-speed rail infrastructure that would truly connect the Bay Area to Southern California, as promised to voters in 2008, since Governor Gavin Newsom’s first State of the State address six years ago. Politicians, commentators, and a partisan minority of voters howled and yelled boondoggle in that void, dismissing the new focus on construction of solely the Central Valley stretch in the same sentence.
The California High-Speed Rail Authority revealed the most recent ridership and income estimates for the Central Valley line and a number of other possible lines in a project update for state lawmakers on Friday. The project’s first fresh data in two years presents a stark image of a bullet train that is not lucrative, plagued by a lack of passengers in the state’s agricultural heartland and maintenance expenses that would outweigh its revenue unless it expanded.
The narrow debate surrounding the project frequently obscures the fact that authority officials have already admitted that the 171-mile Merced to Bakersfield route would need a subsidy to function. After a year in office, Authority CEO Ian Choudri appears to be placing a wager that lawmakers will support a different course through frank discussion and a fresh finance plan devoid of government assistance.
The caveat is that it might only be possible if the project is permitted to postpone the northernmost extension to Merced.
Gilroy, the garlic center of the world, appears to be the answer to high-speed rail’s salvation. By 2038, it may link Silicon Valley with the Central Valley or perhaps as far south as Palmdale. Long regarded as the best hope for high-speed rail to reach San Francisco, the rural community serves as the southern terminal for the Caltrain system.
Despite the substantial political, legal, regulatory, and technical obstacles, it’s a daring notion that deserves support. As several international bullet trains have done, Choudri, who has experience working on high-speed rail in France and Spain, seems determined to bring the project’s reliance on erratic government funds to an end and draw in private investors.
I didn’t come here to simply ask, “What is permitted to be built?” stated in an interview by Choudri. I came here with a plan that would work for the whole high-speed rail system, which is what we had promised to achieve from the beginning of this endeavor. I therefore had to consider alternative options.
Some of the promises made to the Central Valley, where local officials are planning and building train stations, renovating aging corridors, and hoping a new artery to Silicon Valley might attract profitable new enterprises, may be undermined by those opportunities. High-speed rail has inspired support in the most unlikely places of California’s conservative farm belt by capturing the imagination of historically underserved populations, like southwest Fresno.
The Merced-Bakersfield route, however, would produce up to 2.2 million rides annually, according to retooled calculations. This is only one-third of the number of trips predicted in the last update for lawmakers two years ago. According to the most recent figures, passenger income also fell precipitously, bringing in $55.6 million annually—a far cry from the $156 million reported in 2023.
According to authority officials, operating the Merced-Bakersfield route would cost $3.8 billion over a 40-year span. With expenditures for the Central Valley phase increasing by almost $1.8 billion from the previous estimate to $36.8 billion, the first segment today faces a $8.6 billion funding gap to reach Merced.
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More encouragingly, the new analysis projects that high-speed rail may potentially generate up to $98.1 billion in revenue for California over the course of four decades. But to do that, existing train lines in the counties of Santa Clara and Los Angeles would need to be reached.
It would cost $87.1 billion to take the most ambitious and fruitful path. The idea of a 500-mile bullet train connecting downtown San Francisco and Los Angeles seems to be doomed, at least for the time being.
Latest projections put Merced at risk
The vast majority of Californians, particularly registered Democrats and independent voters, continue to favor high-speed rail. As locals and businesses from Maderato Fresnoto Bakersfield will tell you, it doesn’t mean the construction process hasn’t been difficult.
However, in order to achieve the project’s higher goals, Merced might be abandoned. Being the gateway to Yosemite and the location of the University of California system’s newest campus, Merced has played a crucial role in the debate over high-speed rail. However, the authority also hasn’t had the money to finish the design, buy the property, and continue building after the 119-mile segmentwell that is currently under way.
The only feasible route, according to the analysis released this week, is west to Gilroy and south to Palmdale, where the system can link to Metrolink and the High Desert Corridor in Southern California and Caltrain in the Bay Area. There, the government might attempt to capitalize on the excitement around Brightline West, the privately financed high-speed train that will connect Los Angeles and Las Vegas later this decade.
The lack of ridership and high maintenance costs outweighed the benefits of continuing north to Merced in every scenario the authority presented.
The proposal, which would include lifting a $500 million expenditure cap on work beyond the Central Valley, would obviously need to be approved by the governor and the California Legislature first. However, it is evident from the most recent projections which way the project must go.
According to Merced Mayor Matthew Serratto, the city’s exclusion from the first phase would be a waste of the time and energy that many people, including local politicians, have put into the project. A grocery shop, a homeless shelter, and other businesses have been forced to relocate because of the project.
Serratto noted the community’s hostility toward the project and stated, “I think the majority of people are probably going to say good riddance.” However, I believe that many others will also argue that we have been preparing for this for a long time, particularly those in the government. Second, we acknowledge that this might have a significant positive impact on our region. Therefore, disappointment is inevitable.
The need for contagious urgency
Despite his tenacity, Choudri will require a lot of things to go his way.
The most pressing is persuading the Legislature to support Newsom’s 15-year cap and trade extension, a long-standing policy that uses an auction system of credits to make big polluters pay for their pollution. The market has contributed over $1 billion annually to the project and runs independently of the state general fund.
The governor’s plan would assist high-speed rail in maintaining that amount until 2045, securing the project’s sole source of finance aside from the $10 billion bond that voters approved in 2008 and federal grants, which President Trump has totally upended. The majority of funding, or nearly three-quarters of the budget, has come from the state, in contrast to typical transportation projects.
Cap and trade is key to attracting private investment, Choudri said, and represents the primary funding source for closing the Central Valley budget gap. The project runs the danger of failing without it.
In addition, the White House retracted a $4 billion award this year.California has filed a lawsuit to compel Trump to reimburse the money. Prior to the Biden administration returning the funds two years later, the Republican president in 2019 took the same action about a $1 billion gift.
And that only covers the financial aspect. In the report, the authority spells out a wishlist of regulatory exemptions, streamlined permitting and help getting outside players, such as courts, railroads, utility providers and local agencies, to move with some sense of urgency.
This is a lot to ask of a state that moves as fast as a horse and buggy when it comes to the things it needs. High-speed rail has always been a token of the self-styled ambition California boasted for generations even as the state enacted laws and regulations thatmake aspirations of this scale seemingly impossible.
Choudri is not Californian, which gives him a fresh view of things. He clearly believes in the transformational power of a project that can reshape the state s economy and unlock a higher living standard for countless households.
That makes him the ideal candidate to overcome what his predecessors couldn t, or be the scapegoat if the wheels fall off.
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