California HSR Secures Dedicated State Funding

California has brokered an agreement to secure critical funding for the state’s high-speed rail program, with Governor Gavin Newsom and Democratic legislative leaders reaching a landmark deal to extend the state’s “cap-and-invest” program and allocate $1 billion annually from its revenues towards the project. The deal, finalized just before the legislature’s scheduled adjournment on September 13, 2025, represents a pivotal moment in securing predictable, dedicated funding for the California High-Speed Rail Authority (CAHSRA).

Under the new agreement, the program will be reauthorized through 2045, providing the Authority much-needed stability as it continues construction work in the Central Valley. The project had been thrown into uncertainty by the Trump Administration’s decision earlier this year to cancel a $4 billion federal grant awarded under the Biden Administration—a move that is currently being challenged in court.

“I am grateful to Governor Newsom, our legislative leaders, and allies across the state and the nation – including those in the labor community – whose partnership and resolve helped make this possible,” said CAHSRA CEO Ian Choudri. “Today’s agreement has made a big, bold statement about California’s future—one that will create jobs, cut pollution, and connect and transform communities across the state.”

This deal will close the funding gaps for the Early Operating Segment in the Central Valley. There are 171 miles currently under design and construction from Merced to Bakersfield, with nearly 70 miles of guideway complete.

Choudri emphasized that statutory and regulatory enhancements to accelerate construction are still needed, an acknowledgement that California’s permitting structure has been a key obstacle, raising the project's overall costs by extending development timelines.

The Authority recently unveiled a proposal that outlined new alternatives for the configuration of the system’s Initial Operating Segment (IOS), looking for ways to connect San Francisco and Southern California populations centers at system launch.