California high-speed rail funding: state drops lawsuit

California high-speed rail funding is shifting after the state dropped its lawsuit over the Trump administration’s decision to cancel more than $4 billion in federal grants for the high-speed rail program, as reported by Railway Supply. California said late Friday it would step away from the court fight and refocus on delivering the project.

The California High-Speed Rail Authority, which filed the case in July, said it pulled the lawsuit because it views the federal government as not a “reliable, constructive, or trustworthy partner” in advancing high-speed rail in California. Earlier this month, a judge rejected a bid to dismiss the lawsuit.

Lawsuit withdrawal and the push to proceed without federal help

State officials described the move as a practical decision. Instead of spending more time and money on litigation, the authority said it plans to move forward without federal funding. It also noted that federal sources account for only 18% of total program expenditures to date.

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The shift comes as the project continues to face delays and cost overruns. California Governor Gavin Newsom, a Democrat, argued in July that the grant termination was “petty, political retribution,” driven by President Donald Trump’s personal animus toward California and the rail effort rather than “the facts on the ground.”

Federal Railroad Administration report and Transportation Department response

The dispute over the funding cuts followed a Federal Railroad Administration review released in June. In its 315-page report, the FRA said the program was marked by missed deadlines, budget shortfalls and ridership projections it considered questionable.

On Saturday, the U.S. Transportation Department said the FRA investigation showed that after more than 15 years, the California authority would not be able to deliver on its high-speed rail promises on time or on budget. The department added that American tax dollars would be spared from being wasted and could instead support projects aimed at improving daily travel for rail passengers, local drivers and pedestrians.

Federal actions have also targeted smaller pieces of the program. After the larger cancellation, the Transportation Department in August revoked another $175 million tied to four projects that are part of the high-speed rail program, as described in a U.S. Department of Transportation briefing.

Los Angeles–San Francisco timeline, costs, and search for private investors

The project aims to link Los Angeles and San Francisco with a roughly three-hour train ride, delivering what California says would be the fastest passenger rail service in the United States. Over time, though, both the schedule and the budget have shifted sharply.

Initially, the state expected completion by 2020 with a price tag of $33 billion. The current estimate is far higher: $89 billion to $128 billion, with service now expected to start by 2033.

California voters approved the first bond issue for the rail system in 2008. The authority says it has built more than 50 major structures so far—bridges, overpasses, undercrossings and viaducts—and completed nearly 80 miles (130 km) of guideway.

To keep the program moving after the loss of federal support, the agency said this week it has begun a process to attract private investors and developers by summer 2026, outlined in a California High-Speed Rail Authority news release. It also pointed to legislation signed in September that secures $1 billion per year for the program through 2045.

“Rather than continuing to spend time and money challenging the termination, the state is moving forward without them,” the authority said, adding that it believes the loss of federal funding will not derail construction and that progress is continuing.

The current clash is not the first time federal support has been rescinded. During Trump’s first term, his administration revoked $929 million in federal grants, a move the state challenged. That dispute ended in a 2021 settlement under President Joe Biden that restored the full amount.

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