California's Bullet Train Gambit

California drops suit over federal funds, seeks private investors for bullet train

California's $35 Billion Train to Nowhere: How a Bait-and-Switch Left Taxpayers Funding a Rail Line Nobody Needs

The Central Valley segment now consuming billions in public funds was never what voters authorized—and serves no identified transportation demand in one of America's least-traveled corridors

California's high-speed rail project entered a new phase this week when state officials quietly dropped their lawsuit against the Trump administration over $4 billion in withdrawn federal funding. But the decision to forge ahead without federal partnership obscures a more fundamental problem: the segment currently under construction serves virtually no transportation need and represents a dramatic departure from what voters authorized in 2008.

When Californians narrowly approved Proposition 1A sixteen years ago, they were promised a transformative rail system connecting San Francisco to Los Angeles—the state's major population centers separated by one of the nation's busiest air travel corridors. What they're getting instead is 171 miles of track between Merced and Bakersfield, connecting medium-sized Central Valley cities that generate minimal travel demand between them.

President Trump's characterization of the project as a "train to nowhere" may be politically charged, but it accurately describes the current reality. The Central Valley segment would never have been approved by voters as a standalone project—because it solves no identified transportation problem and serves no significant travel market.

The Promise Versus the Reality

Proposition 1A's ballot language was explicit about the system's purpose and routing. The measure authorized bonds for "a clean, efficient high-speed train service linking Southern California, the Sacramento/San Joaquin Valley, and the San Francisco Bay Area." The accompanying materials emphasized service between major metropolitan areas, with travel times competitive with air service: San Francisco to Los Angeles in approximately 2 hours and 40 minutes.

The economic justification centered entirely on this intercity service. The California High-Speed Rail Authority projected robust ridership based on existing travel patterns between the Bay Area and Southern California—markets with genuine demand driven by business travel, tourism, and family connections. More than 10 million people fly between the San Francisco Bay Area and the Los Angeles Basin annually, creating an obvious market for alternative transportation.

The Central Valley was always part of the planned route, but only as the connection between major destinations—not as a destination itself. No credible transportation analysis suggested significant unmet demand for travel between Merced and Bakersfield, or between these cities and the smaller communities in between like Madera, Fresno, and Hanford.

Current reality bears this out. The segment under construction would serve a transportation corridor with minimal existing demand. Fresno, the largest city in the Central Valley segment, has a metropolitan population of approximately one million. Bakersfield and Merced are considerably smaller. These cities are separated by relatively short distances easily covered by automobile on existing highways, and they generate negligible air travel between them because there's insufficient demand.

A Standalone Segment That Would Never Pass Voter Scrutiny

If California officials had approached voters in 2008 with a proposal to spend $35 billion building high-speed rail exclusively between Merced and Bakersfield, the measure would have been rejected overwhelmingly. The project makes sense only as part of a larger system connecting major population centers—the system voters actually authorized.

The decision to focus on the Central Valley segment was driven by expedience, not transportation need. Rail authority officials argued this segment faced fewer environmental and right-of-way challenges than urban portions of the route. Building in the relatively flat, sparsely developed Central Valley would be cheaper and faster, they claimed, allowing the project to demonstrate progress and build momentum.

This logic proved flawed on multiple levels. Construction in the Central Valley has been neither cheap nor fast, with costs exceeding projections and timelines extending indefinitely. More fundamentally, building a segment that serves no standalone transportation purpose squanders resources on infrastructure with no near-term utility.

The Central Valley segment cannot operate as a meaningful high-speed rail service because it connects cities between which few people need to travel at high speed. A train running between Merced and Bakersfield would attract minimal ridership and generate negligible revenue—certainly nothing approaching the operating costs of maintaining and staffing a high-speed rail system.

The Numbers Don't Lie

Transportation planning relies on origin-destination studies that identify actual travel demand. Such studies consistently show that Central Valley intercity travel represents a tiny fraction of California's transportation needs.

According to California Department of Transportation data, the overwhelming majority of travel in the Central Valley is local—within individual metropolitan areas or between adjacent communities. Long-distance travel from the Central Valley is overwhelmingly oriented toward the Bay Area or Southern California, not between Central Valley cities.

The San Francisco-to-Los Angeles corridor, by contrast, represents one of the heaviest traveled routes in the United States. In addition to millions of annual air passengers, the corridor sees substantial automobile traffic on Interstate 5 and Highway 101, plus Amtrak service that, despite long travel times and limited frequencies, attracts significant ridership.

This existing demand is what justified the high-speed rail project in the first place. Voters were told the system would capture a significant share of this intercity market, reducing airport congestion, highway traffic, and greenhouse gas emissions from short-haul flights and automobile travel.

A Merced-to-Bakersfield segment captures none of this demand because it doesn't connect the origins and destinations where people actually need to travel. It's the equivalent of building a bridge to nowhere—expensive infrastructure that serves no identified need.

The Bait-and-Switch

What California is pursuing represents a fundamental departure from what voters authorized—arguably a bait-and-switch that violates the compact between government and taxpayers.

Proposition 1A authorized bonds for a specific project: high-speed rail connecting California's major metropolitan regions. The measure included explicit requirements that the system achieve certain performance standards, including maximum trip times between major city pairs and minimum ridership levels.

The Central Valley segment, pursued in isolation, cannot meet these requirements because it doesn't connect major city pairs and will not attract anywhere near projected ridership levels. If the remainder of the system is never built—an increasingly plausible scenario given fiscal realities—taxpayers will have funded tens of billions of dollars in infrastructure that serves virtually no purpose.

This outcome was never presented to voters as a possibility. Proposition 1A did not ask Californians to authorize $9.95 billion in state bonds for a Central Valley rail segment. It promised a transformative statewide system, with the Central Valley portion valuable only as part of that larger network.

Rail authority officials argue that building the Central Valley segment first keeps the project alive and demonstrates progress that could attract future federal funding or private investment. But this logic is circular: the segment demonstrates nothing except California's willingness to spend enormous sums on infrastructure of questionable utility. Private investors remain absent precisely because sophisticated financial analysts recognize the standalone segment has no viable business case.

Operating Costs and Revenue: A Fiscal Black Hole

Even if the Central Valley segment is completed—optimistically projected for the "early 2030s"—it will require ongoing operating subsidies that will drain resources from other transportation needs.

High-speed rail systems are expensive to operate. They require specialized maintenance facilities, trained personnel, sophisticated signaling and communications systems, and regular infrastructure upkeep. Track, electrical systems, and rolling stock all demand continuous investment to maintain safety and reliability.

These costs are typically covered through a combination of fare revenue and public subsidy. Successful high-speed rail systems like Japan's Shinkansen or France's TGV achieve relatively high cost recovery because they serve dense travel corridors with robust ridership. Even so, most high-speed rail systems worldwide require some level of public support.

A Central Valley segment would face the worst of both worlds: high operating costs with minimal revenue potential. Ridership between Merced, Fresno, and Bakersfield would be negligible, generating fare revenue far below operating expenses. The resulting subsidy requirements would consume resources indefinitely, reducing funds available for other transportation investments that serve actual needs.

California already struggles to maintain its existing transportation infrastructure. The state faces an estimated $70 billion backlog in deferred road and bridge maintenance. Urban transit systems require substantial capital investments and operating support. Rural communities lack adequate transportation options. Dedicating hundreds of millions annually to subsidize a Central Valley high-speed rail segment serving minimal ridership would represent a gross misallocation of scarce resources.

Environmental Claims Ring Hollow

Proponents justify the high-speed rail project partly on environmental grounds, arguing it will reduce greenhouse gas emissions by shifting travelers from automobiles and aircraft to electric trains. This argument has merit for the San Francisco-to-Los Angeles corridor, where substantial existing travel could potentially shift to rail.

For the Central Valley segment in isolation, the environmental argument collapses. The segment would induce minimal mode shift because it doesn't serve a corridor with significant existing automobile or air travel. Building 171 miles of high-speed rail infrastructure where few people need to travel produces negligible environmental benefit while consuming billions in cap-and-trade revenues that could fund more effective climate programs.

The construction itself generates substantial emissions—from cement production, steel manufacturing, earth moving, and materials transport. These embodied emissions must be offset by operational emission reductions, which requires actual ridership shifting from higher-emission modes. A segment serving minimal travel demand would take decades to achieve carbon neutrality, if ever.

Moreover, dedicating $1 billion annually in cap-and-trade revenues to the project diverts funds from climate initiatives with more immediate impact. California could use those resources for expanded urban transit, electric vehicle infrastructure, building efficiency programs, or renewable energy development—all with faster and more certain emission reductions than a Central Valley rail segment that won't be operational for years and will serve few travelers when complete.

The Federal Government's Perspective

The Trump administration's decision to withdraw $4 billion in federal funding reflected hard-headed analysis of the project's viability. The U.S. Transportation Department's conclusion that the rail authority had "no viable plan" to complete the Central Valley segment was based on objective assessment of the project's mounting costs, extended timelines, and uncertain funding.

From a federal taxpayer perspective, investing billions in a California rail segment with no identified transportation need and no prospect of attracting the private investment promised in the original project plan represents indefensible use of limited federal transportation dollars. Those funds could support projects nationwide with demonstrated needs and realistic delivery plans.

California officials characterized the federal decision as politically motivated punishment. But the Transportation Department's assessment was consistent with reviews by the California State Auditor, the Legislative Analyst's Office, and the project's own peer review group—all of which have documented serious management problems, unrealistic cost estimates, and questionable strategic decisions.

The rail authority's statement that "the federal government is not a reliable, constructive, or trustworthy partner" inverts reality. Federal officials provided billions in funding over many years while the project repeatedly missed deadlines, exceeded budgets, and failed to demonstrate progress toward completing a viable system. The unreliable partner has been the rail authority, not the federal government.

What Voters Actually Approved

It's worth revisiting what Proposition 1A actually promised California voters:

• A high-speed rail system connecting the San Francisco Bay Area, the Central Valley, and the Los Angeles Basin
• Maximum trip times of 2 hours, 40 minutes between San Francisco and Los Angeles
• Electric trains capable of sustained speeds exceeding 200 miles per hour
• Service to major population centers including San Francisco, San Jose, Fresno, Los Angeles, Anaheim, and San Diego
• Funding through a combination of state bonds, federal grants, and private investment
• No requirement for ongoing operating subsidies from the state general fund

The Central Valley segment under construction satisfies none of these core promises. It connects no major metropolitan areas (Merced and Bakersfield are not among the principal destinations identified in Proposition 1A). It cannot demonstrate the promised trip times because it doesn't extend to the promised destinations. It will require substantial ongoing operating subsidies. And it has attracted no private investment despite explicit promises that such investment would materialize.

If current plans represent the project's final form—a Central Valley segment without extensions to the Bay Area or Southern California—California will have violated the essential bargain with voters who authorized the bonds.

The Path Forward: Honest Assessment Required

California faces a choice: continue pouring resources into a Central Valley segment that serves no identified transportation need, or acknowledge the fundamental problems with current strategy and pursue alternatives.

An honest assessment would recognize several uncomfortable truths:

First, the Central Valley segment in isolation has no transportation value. It should never be completed unless and until it can be extended to major population centers that would generate actual ridership.

Second, extending the system to the Bay Area and Southern California would require $70 billion to $100 billion in additional funding that doesn't exist and shows no prospect of materializing. Neither federal funding nor private investment appears forthcoming, and California's fiscal constraints preclude state funding at that scale.

Third, the original project vision is almost certainly unachievable given current realities. California cannot build a San Francisco-to-Los Angeles high-speed rail system through the patchwork funding approach that has evolved.

These realities suggest several possible paths forward:

California could suspend construction on the Central Valley segment and redirect cap-and-trade revenues to transportation investments with demonstrated needs—urban transit expansion, regional rail improvements, electric vehicle infrastructure, or maintenance of existing systems.

Alternatively, the state could dramatically scale back ambitions, acknowledging that the voter-approved system will not be built and focusing instead on incremental improvements to existing rail corridors that serve actual travel demand—such as upgrades to Capitol Corridor service between Sacramento and the Bay Area, or improvements to the Pacific Surfliner between San Diego and Los Angeles.

A third option would be to pause the project entirely pending development of a realistic funding plan that includes federal partnership and private investment. This would require acknowledging that current state-only funding through cap-and-trade revenues cannot support a viable high-speed rail system.

What California should not do is continue the current approach: spending billions on a Central Valley segment that serves no purpose except perpetuating a project that has become unmoored from its original justification and purpose.

The Political Courage Question

Terminating or substantially redirecting the high-speed rail project would require political courage that has been absent throughout the project's troubled history. Too many officials have invested too much political capital defending the project to easily acknowledge its fundamental problems.

Governor Newsom has positioned himself as a champion of the project, characterizing critics as short-sighted and arguing that California must think big about infrastructure. Abandoning or drastically scaling back the project would invite criticism from supporters who view high-speed rail as essential to California's environmental and economic future.

But continuing to pour resources into a train to nowhere serves neither California's transportation needs nor its environmental goals nor its fiscal health. At some point, sunk costs must be recognized as sunk, and resources must be redirected to investments with genuine value.

The question is whether California's political leadership can summon the honesty to acknowledge what transportation experts, fiscal analysts, and even the federal government have concluded: the current project path makes no sense and should not continue.

Conclusion: A Fundamental Betrayal

California's decision to continue the high-speed rail project without federal involvement, sustained by carbon credit revenues alone, represents more than questionable transportation policy. It constitutes a fundamental betrayal of the compact with voters who authorized the project in 2008.

Those voters approved bonds for a transformative rail system connecting California's major metropolitan regions. They were promised private investment that would validate the project's economic viability and reduce taxpayer burden. They were assured of federal partnership that would spread costs across the nation.

What they're receiving instead is a $35 billion Central Valley segment that serves no identified transportation need, has attracted no private investment, and proceeds without federal support. It's a train to nowhere that would never have received voter approval as a standalone project—because it solves no problem, serves no market, and delivers no value commensurate with its enormous cost.

President Trump's characterization may be blunt, but it's accurate. California is building a train to nowhere, using public funds desperately needed for other purposes, pursuing a vision that has no realistic prospect of completion, and doing so in a manner that fundamentally departs from what voters authorized.

The state's fiscal constraints, the absence of private investment, the withdrawal of federal funding, and the lack of any identified transportation need for the Central Valley segment all point to the same conclusion: this project should not continue in its current form.

Whether California's political leadership can acknowledge this reality, or will instead continue spending billions on infrastructure to nowhere, remains to be seen. But taxpayers and voters deserve honesty about what they're getting for their money—and what they're getting bears no resemblance to what they were promised.

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Sources

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12. Trump, Donald J. Statement on Truth Social regarding California High-Speed Rail. July 2024.

13. Newsom, Gavin. "Governor Newsom Statement on Federal Railroad Administration's Cancellation of High-Speed Rail Funding." Office of the Governor, State of California, May 16, 2019. https://www.gov.ca.gov/2019/05/16/governor-newsom-statement-on-federal-railroad-administrations-cancellation-of-high-speed-rail-funding/

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