DOT Secretary Announces “Review” of Cal. HSR, Draws Protests

By Sean Jeans-Gail | VP of Gov’t Affairs + Policy

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Secretary Sean Duffy, flanked by members of California's Congressional delegation, announced that his Department of Transportation (DOT) will be holding up the distribution of federal grant funds awarded to the California High-Speed Rail project at a media event held in Los Angeles Union Station. However, high-speed rail supporters gathered in the wings of LAUS, drowning out prepared speeches with boos and chants of “build the rail”.

In a press release, Secretary Duffy state that the review will focus in on the California High-Speed Rail Authority’s (CHSRA) funding plan as a critical factor in determining whether roughly $4 billion in federal grant funding should remain committed to the initial operating segment between Merced and Bakersfield, currently under construction in the state’s Central Valley.

“I am directing my staff to review and determine whether the CHSRA has followed through on the commitments it made to receive billions of dollars in federal funding,” said Secretary Duffy. “If not, I will have to consider whether that money could be given to deserving infrastructure projects elsewhere in the United States.”

Secretary Duffy did open his statements to the press by clarifying that he isn’t against passenger rail or high-speed rail as a mode, pointing to his support for the Brightline West project, which will connect Las Vegas to southern California via 200 mph service.

After reviewing the press release and the media event, it’s not clear what precisely the DOT is meant to investigate, since most of the issues raised are a matter of public record. CHSRA’s business plans are all publicly available, its funding plans are publicly available, and their capital outlay and budget reports are all publicly available. CHSRA emphasized this fact in its response the Secretary's announcement.

“Of approximately $13 billion spent on the project, $10.5 billion have been funded exclusively by the State of California (not hundreds of billions) and those expenditures have created over $22 billion in economic impact,” state the Authority. “Every dollar of the project is accounted for and has been thoroughly reviewed by the independent Office of the Inspector General [whose] sole focus is improving oversight and accountability of the California high-speed rail project.”

The major discrepancy between the two seems to center around one crucial point of contention: CHSRA’s funding program assumes that the federal government will act as stable partner that it can continue to work with in future rounds of grantmaking, whereas Secretary Duffy's statement assumes California will receive no federal assistance going forward.

(It’s worth taking a moment to emphasize that, for highway projects, states are only expected to cover 20 percent of project costs, with the federal government footing the rest of the bill. This is inverted for California's high-speed rail project, where 80 percent of funding has come from the state. Credit to transit and housing advocate Alfred Twu for raising this point.)

For the moment, CHSRA has struck a conciliatory note, saying they look forward to working with the Trump Administration to answer their questions about the project.

“We welcome this investigation and the opportunity to work with our federal partners,” Chief executive Ian Choudri said in a statement. “With multiple independent federal and state audits completed, every dollar is accounted for, and we stand by the progress and impact of this project.”

High-Speed Rail Supporters Out in Force

The people of Los Angeles, however, were less sanguine. As Representative Kevin Kiley (R-CA-03) launched into his remarks, a crowd of high-speed rail supporters erupted into chants, boos, and jeers from behind a curtain that organizers had erected to shield the event from the public.

[Rep. Kevin Kiley reacts to pro-rail protesters as Secretary Duffy looks on in the background. Click through for the full video from FOX 11 Los Angeles.]

The public support for the project shouldn’t have come as a surprise to the event organizers. A recent poll by Emerson College found that 54% of Californians still believe the project is a good use of state funds, even with the numerous delays and difficulties the project has suffered through. And that support is even higher in Los Angeles County and the Bay Area, where residents are frustrated by a lack of meaningful alternative to increasingly crowded roads and airports. It’s also important to remember that the California high-speed project is only one piece of a comprehensive statewide intercity and transit rail plan (albeit a very important piece); when supporters defend CHSRA, they’re also defending the larger program of rail and transit upgrades.

Secretary Duffy Doesn’t Know What Comes Next

When asked by reporters if the state should “eat the cost” for the many structures that have been built and are currently under construction, Secretary Duffy didn’t have an answer, telling reporters to refer those questions to California Gov. Gavin Newsom (D) and the state legislature.

That is an inadequate response from the Secretary, since many of these projects were launched in response to DOT’s awarding of the 2023 Federal-State Partnership grant. An Administration has every right to establish its own priorities, but pulling the rug out from under an agency in the middle of construction isn’t efficient, and it certainly isn’t fiscally conservative.

The same reporter also asked if Secretary Duffy had a vision for what high-speed rail in California could actually look like. The Secretary again deflected the question to Gov. Newsom, raising his own questions about the cost overruns and delays.

Now, passenger rail advocates must be clear-eyed about the problems that have bogged down the California high-speed rail project. This project has a lot of problems to overcome before we can declare that it is on stable footing. It is the absolute peak of irony, however, for the USDOT Secretary—any USDOT Secretary—to be asking wide-eyed “why is it taking so long?”-type questions, since the wildly inconsistent federal support has been a key driver of these delays and increased cost.

The federal government, as an institution, has steered the national intercity passenger rail program with all the stability and coordination of a drunk toddler. Congress will throw $8 billion at it one year, $2.5 billion the year after, zero it out the next, then wait almost a decade to provide any meaningful funds. This week marks the second time President Trump has attempted to claw back a CHSRA grant awarded under a prior administration. It is no small miracle that California has kept this project limping along, and a testament to its political leadership and the unique economic resources available to the state. If the federal government had employed the same approach for the interstate highway, Americans would still be traveling over dirt roads.

The good news is, in the absence of reliable federal leadershiup, California’s state legislators are advancing solutions to address the state's high construction costs and byzantine permitting process.

In September of 2024, Governor Newsom signed AB 2503 into law, which will speed rail electrification by exempting zero-emission railway projects on existing lines from requirements of the California Environmental Quality Act. And just this week, California State Senator Scott Wiener (D-San Francisco) introduced SB 445, legislation which will contain costs and cut delays by streamlining the byzantine permitting process for rail and transit that cross multiple jurisdictions, reducing the ability of a single entity to halt a major project by refusing to issue a permit.

“Public transportation is critical to California’s future, but a broken permit process has eroded Californians’ trust in transit agencies’ ability to deliver projects on time and on budget,” said California State Senator Scott Wiener. “We need to rebuild that trust to deliver the affordable transportation and pollution reductions that public transportation makes possible. That starts by fixing our Rube Goldberg permitting process.”

We may well wish these bills had been passed a decade ago, but it is a positive sign that California's leadership is confronting structural problems. These obstacles certainly aren’t unique to California, and Rail Passengers Association is looking at how we can incorporate these policy solutions into our blueprint for the upcoming surface transportation reauthorization.