California officials have reached an agreement with the Federal Railroad Administration that places $4 billion in federal grants for the state’s high-speed rail project into a legal trust while a lawsuit challenging the funding cancellation moves through court.
The agreement, which the California High-Speed Rail Authority confirmed to Newsweek, would set aside the funding while state authorities worked to prevent President Donald Trump‘s funding revocation.
Why It Matters
Years of delays and an inflated budget have damaged public and political faith in California’s high-speed rail project, but the past few years have seen progress, with construction happening throughout the state and tracklaying set to begin later this year. Proponents of the project say that to call if off now, as many of its detractors in the White House desire, would waste years of advancement.
That has not stopped Trump, a long-standing critic of the project, from regularly threatening to take away the federal funding that has been vital to the project’s progress, a threat he and Transportation Secretary Sean Duffy carried out in July.
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What To Know
The agreement with the Federal Railroad Administration places the contested $4 billion into a legal trust, which state officials said would prevent the funds from being redirected while the legal challenge proceeded.
The California High-Speed Rail Authority, which does not comment on pending litigation, confirmed to Newsweek that the agreement had been reached.
The authority has previously called the Trump administration’s funding decision an “unwarranted and unjustified” move that was “based on an inaccurate, often outright-misleading, presentation of the evidence.”
The project has faced long-running delays and cost increases since voters approved it in 2008, with early estimates near $33 billion and more recent estimates ranging broadly in reporting between roughly $128 billion and $135 billion.
The authority and state officials have pointed to continuing construction milestones. Officials said the project had entered or neared a tracklaying phase, with 171 miles under active construction and more than 50 major structures completed.
What People Are Saying
California Senator Dave Cortese, the chair of the Senate Transportation Committee, said in a statement on the agreement: “I’m encouraged that the California High-Speed Rail Authority has reached an agreement with the Federal Railroad Administration to prevent $4 billion in federal high-speed rail funding from being lost while litigation is pending.
“These funds were terminated under the Trump Administration following a compliance review, despite no findings of fraud, waste, or abuse. The Authority promptly challenged that decision in court, and this agreement ensures that the funding will remain available until the legal process is resolved.
“As Chair of the California Senate Transportation Committee, I will continue to defend our progress on high-speed rail, and efforts like my bill SB 545 will help secure opportunities for major residential and commercial development along the high-speed rail corridor, creating the kind of public-private synergy that can help fund the infrastructure of the project itself and deliver long-overdue economic benefits to communities across the state.”
What Happens Next
The state’s lawsuit challenging the federal withdrawal was filed in U.S. District Court. Initial litigation is expected to proceed in the coming months, with the trust arrangement intended to keep the grants intact until the court resolves the dispute.