The Trump administration announced yesterday that it will cancel the $926 million awarded to the state of California as part of funding for a high-speed railway line from San Francisco to Los Angeles. The White House will also demand that the state returns an additional $2.5 billion that has already been spent on the project. The decision was announced by the Department of Transportation. This comes after Trump threatened to claw back $3.5 billion in federal funding to California. The amount had already been allocated towards building the bullet train between the two cities.
But the Golden State is expected to push back. In fact, newly elected Governor Gavin Newsom called the decision “political retribution” from the White House. California is among a handful of states that have sued the president over his declaration of emergency in an effort to raise money for the border wall. The wall has already run into many congressional challenges. This is not the first time though that California is getting involved in a public spat with the White House.
In a tweet sent on Tuesday, Trump stated that California had “wasted billions of dollars on their out of control fast train.” The president also added that there’s no hope that the project will be completed anytime soon. There’s no doubt though that the project has faced repeat cost overruns ever since it was conceived. It was first approved by California voters in 2008 and is still not finished a decade later.
The White House said that California has failed to provide matching dollars needed to make sure the train is up and running before the 2022 deadline. Governor Newsom, on the other hand, said during his first State of the State address that he intends to scale down the bullet train project in favor of a 171-mile track in central California. Newsom noted that even though he still intends to complete the line, the current plan is too expensive and it may take too long.
The Department of Transportation quoted Newsom’s remarks as additional justification for cutting the funds. A letter written by the department noted that Governor Newsom had presented a new proposal on the project that was different from the state’s initial vision. The department added that this had frustrated the purpose for which federal funding was approved in the first place. The Department of Transportation also noted that it’s exploring all legal options to make sure that this directive is complied with.
The grant agreement between the state of California and the federal government was signed in 2010. The agreement clearly highlights the scenarios in which the funding can be withdrawn including situations where the state is no longer capable of completing the project. The federal government may also request a return of funds if the state fails to meet its dollar contributions or if the state fails to make adequate progress. It’s not clear whether California has failed to meet these conditions but so far it has already spent $2.5 billion on the project. The California High-Speed Rail Authority had a budget of $3.5 billion for the train.
