California’s $231 billion High-Speed Rail project could be dramatically downsized to a small track segment ending at a remote Central Valley orchard if funding runs out by December 2027. The state could then cancel plans to link Merced and Bakersfield. Instead it would finish just a short section between Madera and Poplar Avenue in rural Kern County. Project Inspector General Benjamin Belnap told KCRA that if Sacramento doesn’t provide more funding, officials may be forced to scale back construction plans even more. In the meantime, the California High-Speed Rail Authority is in a serious cash crunch that threatens the decades-long project.
The state’s scaled-back plan to finish a 171-mile stretch from Merced to Bakersfield is projected to cost up to $36 billion, and even that smaller goal may be at risk. In particular, the Rail Authority now estimates the total cost of the California High-Speed Rail project to be approximately $126.3 billion, with some estimates as high as $231 billion. The looming fiscal cliff is thus another possible blow to a project that has yet to put a single mile of track into operation despite construction starting in 2015.
Another rail project that is moving from conceptualization to implementation is the Atlanta Belt Line project. The Atlanta City Council unanimously approved 14-0 Monday to support the $3.5 billion Atlanta Beltline light rail project for the entire 22-mile route. The resolution therefore urges the mayor’s office to collaborate with MARTA and Atlanta Beltline, Inc. to implement and fund.
California High-Speed Rail Consultant Expense Audit Reveals Spending Violations
An Inspector General audit found approximately $680,000 in consultant travel expenses that were not approved in advance or in compliance with state regulations. In particular, the audit looked at travel payments made to four consulting firms for two fiscal years, and concluded that roughly 60% of the expenses reviewed were not approved in advance. In addition, some reimbursements were allegedly for premium airline tickets, rideshare trips to recreational destinations, and international travel in excess of contractual limits. The Inspector General report said the costs “clearly appear to be for personal enjoyment rather than for the benefit of the State. Belnap said that lax enforcement leads to repeat behavior, which is “learned behavior.
California High-Speed Rail Funding Gap Requires Legislative Action by July 2027
State officials need to act swiftly next year to find more funds in the budget or borrow to avoid further cuts in the California High-Speed Rail construction. In particular, the Rail Authority did not get the language in this year’s legislation that would enable it to use future proceeds from the California cap-and-invest program to finance. The next chance to get that power is not likely until July 2027, only months before the anticipated funding cliff. The Merced-to-Bakersfield stretch is slated for completion in 2032, but the December 2027 deadline may be the deciding factor on how much of that stretch California can afford.
Project Overview
- Project Name: California High-Speed Rail Project
- Total Project Cost: $126.3–231 Billion (estimated range)
- Current Segment: Merced-to-Bakersfield, 171 miles
- Location: Central Valley, California
- Status: 119 miles under active construction, funding crisis looms
Scope
- Bullet train connecting Los Angeles and San Francisco (ultimate vision)
- Merced-to-Bakersfield operational segment (current focus)
- 171-mile initial operating segment estimated $36 billion
- Track-laying phase recently commenced
- Multiple tunnel, viaduct, and bridge construction
Project Highlights
- Construction began 2015
- 119 miles currently under active construction
- Recently entered track-laying phase
- Multiple major infrastructure components
- $36 billion estimated for Merced-to-Bakersfield segment
Key Developments
- Funding cliff projected December 2027
- Inspector General audit identified $680K in improper expenses
- Failed to secure cap-and-invest legislative authority in 2026
- Next funding authority opportunity July 2027
- Republican lawmakers seizing on audit findings
Key Challenges
- Massive funding gap approaching December 2027
- Consultant expense controls inadequate
- $126.3–231 billion total project cost estimates
- Merced-to-Bakersfield segment alone requiring $36 billion
- Potential downsizing to Madera-Poplar Avenue only
Outlook
- Critical funding decisions needed by July 2027
- Potential project downsizing to remote orchard endpoint
- Merced-to-Bakersfield completion targeted 2032
- Sacramento budget and borrowing decisions pending
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