Gov. Gavin Newsom commits major funding boost to California high-speed rail project

Erik Galicia, The Sacramento Bee on May 15, 2025

By clicking submit, I authorize Arcamax and its affiliates to: (1) use, sell, and share my information for marketing purposes, including cross-context behavioral advertising, as described in our Privacy Policy , (2) add to information that I provide with other information like interests inferred from web page views, or data lawfully obtained from data brokers, such as past purchase or location data, or publicly available data, (3) contact me or enable others to contact me by email or other means with offers for different types of goods and services, and (4) retain my information while I am engaging with marketing messages that I receive and for a reasonable amount of time thereafter. I understand I can opt out at any time through an email that I receive, or by clicking here

SACRAMENTO, Calif. — California’s high-speed rail project could see a major infusion in funding over the next 20 years of at least $1 billion annually from the state’s cap-and-trade program.

The greenhouse gas-reduction program is the sole source of ongoing funds for the bullet train project, generating $6.4 billion for high-speed rail construction from 2012 to 2023. The cap-and-trade funding for high-speed rail expires in 2030, and project officials have long sought to extend that authorization.

Gov. Gavin Newsom’s revised budget for fiscal year 2026, released Wednesday, proposes extending the funding allocation from the state’s cap-and-trade program through 2045. The governor’s proposal would stipulate that a minimum of $1 billion in cap-and-trade funds be allocated for high-speed rail each year, meaning the project could receive nearly $20 billion from the state for construction.

California’s cap-and-trade program generates public dollars from companies that buy credits at state auctions to offset their greenhouse gas emissions. The money generated is then invested in pollution-reducing projects, such as the electrically-powered high-speed rail project.

According to Newsom’s revised budget, an annual cap-and-trade allocation of $1 billion will allow the California High-Speed Rail Authority to count on stable, predictable funding. The authority will be able to plan with “greater certainty” and deliver the project more efficiently, the summary says.

“That’s our commitment,” Newsom said Wednesday at a news conference. “And our commitment is firm.”

The governor’s proposal comes a week after President Donald Trump said the U.S. government is “not going to pay” for California’s bullet train, fueling fears that the project will not be able to rely on federal dollars for the foreseeable future. Trump has long criticized the project and rescinded $1 billion in federal funds in 2019 — which the Biden administration later restored.

The project was initially envisioned as a Los Angeles to San Francisco railway that would cost up to $33 billion and be operational by 2020. But 17 years after California voters first approved a bond to help fund its construction, the project’s main focus is now a Merced to Bakersfield railway to be operational between 2030 and 2033.

State funds have covered most of the bullet train project’s costs, so far. But it still needs about $7 billion to complete the construction already underway in the Central Valley.

Authority CEO Ian Choudri said Wednesday at a national high-speed rail conference that Newsom’s commitment will give the project enough funding to build the high-speed rail system beyond the Central Valley. He said It will also help attract private investors who have been waiting for a stable commitment from the state.

“We are now able to complete what we committed in the Central Valley, and then go beyond that,” Choudri said.

Choudri did not respond directly to Trump’s comments about halting federal funding for California’s high-speed rail, but said that putting a stop to the project is not on the table.

“This is the first true high-speed rail system in North and South America combined,” he said. “How can we fail? It’s just not an option. We’re going to build.”

Public-private partnerships past Central Valley

Choudri said that obtaining stable state funding would allow the authority to build the high-speed rail system from Bakersfield to Palmdale and from Madera to Gilroy. That puts the project closer to its goal of a bullet-train system connecting Los Angeles and San Francisco, which would cost $100 billion, according to recent estimates.

If the rail authority can bank on stable and greater funding from the state’s cap-and-trade program, “we should be starting design activities in a couple of years on both sides — Gilroy and Palmdale,” Choudri said. “Then, we should be looking at starting construction two years from there.”

Choudri said long-term state funding for the project will help attract financial investment from potential private partnersto work on the Gilroy and Palmdale connections.

In Palmdale, the high-speed rail can also connect to the Metrolink and the planned Brightline high-speed rail from Southern California to Las Vegas, which will be primarily funded by the private sector.

In Gilroy, Choudri said, the high-speed rail can connect to the Caltrain commuter rail system that operates from Gilroy to San Francisco.

“Gilroy and Palmdale gives us not only connectivity with these other systems, but also provides us a projection of the revenues that we can generate from that,” he said. “Then, it starts giving us capital money to put back into the program, so we’re not always relying on the state and federal (money).”

____