Gov. Newsom Signs High-Speed Rail Bill Creating Funding Plan for Merced to Bakersfield Segment

California Governor Gavin Newsom signed a bill Wednesday that requires the California High-Speed Rail Authority (CHSRA) to create a detailed funding plan for the Merced to Bakersfield “phase one” segment following years of pressure from Republicans and some Democrats wanting fiscal accountability.

Assembly Bill 377, authored by Assemblyman David Tangipa (R-Fresno), would specifically require CHSRA to provide a detailed funding plan for the Merced to Bakersfield segment that includes certain information, including an updated estimate of the funding gap for completing the segment and a strategy for addressing the $14 billion funding gap. Specified updates in the bill include new cost estimates, new risk assessments and new service initiation options. The plan itself is due no later than May 1, 2026.

Tangipa wrote the bill earlier this year to help nail down the actual costs of the initial phase one segment, which goes through his district and the city of Fresno. With no legal funding plan on the books since High-Speed Rail Began in earnest in 2008, Tangipa said that the “mismanagement, delays, and ballooning costs” and the “endless spending” needed to come to a halt.

Republicans and Democrats backed AB 377 in the Assembly and Senate, finding little resistance with unanimous votes in both houses. The GOP was happy to finally have a spending plan on paper and show just how much more costs have risen. Democrats hope that the bill will help show the efforts CHRSA has taken to help reign in spending, building off of last year’s business plan update. Democrats also want to show how they will be formally addressing the $14 billion funding gap. The governor hopes to have his plan to extend the cap-and-trade program approved, which would bring in $1 billion annually for 15 more years to 2045.

Following passage in both houses earlier this month, Newsom signed off on the bill on Wednesday.

“After years of mismanagement, delays, and ballooning costs, it’s no surprise that the High Speed Rail has become a nationally recognized failure,” Assemblyman Tangipa said in a statement. “After 15 years without a legal funding plan, AB 377 will finally put an end to the endless spending. Republicans have consistently pushed for real accountability, and it’s clear the decision to sign AB 377 was a political necessity.

“My bill is an important step to make sure Fresno and the Central Valley are not left with an unfinished monument of wasted taxpayer dollars.”

A new detailed funding plan

Governor Newsom, meanwhile, gave his own statement on the matter, seemingly signing the bill more out of necessity.

“This bill primarily reflects longstanding work the Authority is already undertaking-including efforts captured in last year’s business plan update,” added Newsom in his signing message. “Looking ahead, I encourage the Legislature to prioritize measures that are additive and help advance project delivery-particularly by improving timely and accountable third-party utility coordination, expanding energy capacity to support the system, and addressing other constraints that continue to hinder progress.

“California’s High-Speed Project is a critical investment in our future, and we must remain focused on policies that help clear the path to completion.”

However, the bill does not address what it plans to do about more cost overruns and construction delays, both of which frequently happens. Originally estimated to cost $33 billion in 2008 with a San Francisco to Los Angeles line to open by 2028, the California high speed rail system has since ballooned to $128 billion, then $135 billion+, with an estimated partial completion somewhere in the late 2030’s. And last year, CHRSA actually confirmed that the system still needed $100 billion to link up San Francisco and Los Angeles. The true cost may also be much higher than anticipated, with some estimates during the Governorship of Jerry Brown putting that figure at around $350 billion.

While infrastructure construction continues in the Central Valley, CHRSA is also hard at working suing the federal government over the $4 billion in funding cut by the Trump administration, as well as trying to get private funding for the project. AB 377 simply brings in another challenge by now having to show what the actual funding gap is in phase one and how they will deal with them.

AB 377 is the latest high-speed rail bill signed by Governor Newsom with others, including a $700k High-Speed rail study bill, likely to be signed off on later this year.