Overview of project finances The 2008 California voter approval required the project to be financed with matching funds from other sources, including private and federal. The government of Japan offered long-term, low-interest financing if California employed
Shinkansen bullet-train technology. The project is now financed mainly by the state of California, supplemented by federal grants. By the end of 2023, the share of committed funding borne by the state was 76 percent. The Authority has only one source of persistent cash flow: an annual $1 billion dollars from California
cap-and-trade auctions set to expire in 2045. All other funding had been granted as a fixed nominal sum. This implies that if expenditures are delayed, funding does not increase to offset inflation. Headline numbers for cost estimates also depend on an assumed schedule due to inflation; compared to initial funding in Q4 2008, by Q4 2023 the national price level had increased by 39.1 percent. By the end of 2023, the Authority had been granted funding of $22.9 billion and expended $11.2 billion. To bring the IOS into revenue service (including trainsets, stations, and maintenance facilities) along with ongoing project development for Phase 1 and statewide connectivity programs (blended corridor investments, such as the
Caltrain electrification), it estimates nominal expenditures at around $28.5–$35.3 billion, adjusted for schedule. Except for environmental clearance and investments into the blended corridors, no funding had been obtained for engineering and construction of segments outside the IOS.
Current status of funding and expenditure The following table provides a summary over funding granted and expenditure realized by the end of 2023, as well as expected future funding and expenditure:
Funding history Proposition 1A, a 2008 state-wide ballot was the authorization by voters for the CAHSR project itself and for the sale of $9.95 billion in state bonds, to be made available to the Authority. Out of this sum, $950 million were earmarked for other passenger rail services, such as the
Caltrain Electrification, to improve connection to the future high-speed rail system. Formally, bond proceeds have to be appropriated to the Authority in the California state budget. By the end of 2023, $8.516 out of $9.95 billion had been appropriated. However, the federal funding agreement entailed a tight schedule, targeting construction start of the Merced-Bakersfield section by 2012 and its completion by 2017. In particular, the Authority had to spend the funds in the Central Valley and expend them by September 2017 for risk of losing them. To adhere to the deadline, the Authority signed construction contracts before design, land acquisition, and utility relocations were completed. This would lead to severe disruptions during construction and delays persisting to date (see ). In 2014, the
California State Legislature voted to appropriate $250 million in state
cap-and-trade revenue for the Authority, along with 25% of all future revenue until the end of 2030. By December 2023, it had received $11.7 billion through the cap-and-trade appropriation. In June 2021, the
Biden-Harris Administration reinstated the funding. In September 2023, the Authority obtained a $202 million
FRA grant to design and construct six grade separations in
Shafter, California, part of the southward extension from the initial towards Bakersfield. In December 2023, the Biden-Harris administration awarded the CAHSR project $3.1 billion of federal funding under another FRA grant program, making it the largest federal commitment since the ARRA-grant in 2009. The same grant also approved $3 billion for
Brightline West, a similar but privately-run high speed rail project aiming to connect
Los Angeles with
Las Vegas. Both FRA grant programs were funded under the
Infrastructure Investment and Jobs Act (IIJA). In February 2025, the FRA under Transportation Secretary
Sean P. Duffy of the
Trump-Vance administration ordered a compliance review of the project. Its goal was to determine whether the Authority has been non-compliant with stipulations in agreements between the FRA and the High-Speed Rail Authority, which were accompanying two major federal grants. In June 2025, the FRA released a report on its compliance review, concluding that the Authority has been non-compliant with the grant agreements and thus recommended the termination of those grants, totaling federal obligations of around $4 billion. The report claimed that minimal progress has been made on the project, ridership forecasts have been sharply reduced, project deadlines missed, and that there was no viable path for the IOS to be in revenue service by 2033 given a $7 billion funding shortfall just for that segment. In its formal response, the Authority rejected the validity of the findings such as on minimal progress, citing 54 completed structures and of completed guideway as well as the completed
Caltrain electrification. The rail authority further contended that the FRA under the Biden-Harris administration executed the $3 billion IIJA-grant just eight-months prior when faced with the same factual basis, and that the findings were politically predetermined given a series of prior critical public statements by President Trump and Secretary Duffy. In April 2025, the administration further cancelled $175 million for grade separation, over-crossing and design work. The state of California challenged its legality, calling the decision "illegal". On July 16, 2025, Acting FRA Administrator
Drew Feeley issued the final decision to terminate two federal grant agreements under FY10 and IIJA, which had carried a remaining federal commitment of $4 billion, marking the second attempt of an administration under Trump to cancel federal funding awarded to CAHSR. In response, the state of California under Governor
Gavin Newsom filed a lawsuit with the
U.S. District Court in Sacramento in the
Ninth Circuit seeking declaratory and injunctive relief, alleging that the move from the federal government was a "petty, political retribution, motivated by President Trump’s personal animus". In December 2025, the state dropped its lawsuit challenging the funding rescission, and opted to move forward with the project independently, without a federal funding partner. Meanwhile in September 2025, the California State Legislature voted to extend the state cap-and-trade program from 2030 to 2045, under the rebranded name "cap-and-invest". The previous appropriation from 2014, which saw 25 percent of revenue given to high-speed rail, was changed into instead prioritizing $1 billion annually for the project ahead of other uses of the fund. According to the CEO of the high-speed rail authority, this guarantees full funding for the initial operating segment from Merced to Bakerfield. The stable funding guarantee allows the Authority to borrow against that future annual income, so that funding flows do not limit the pace of construction.
Current cost estimates The table below shows capital cost estimates as of 2026 for the active project scope of the Authority: putting the IOS into revenue service by 2030–2033, investments into blended corridors, and project development such as environmental clearance of Phase 1. Unfunded segments are listed in the next table. The next table displays capital cost estimates for the full Phase 1. Cost uncertainty for unfunded segments remains high, as preparatory work that can inform cost estimates have not yet been undertaken. Major steps for those would be: environmental clearance to determine the final alignment and necessary mitigation measures, preliminary engineering and geotechnical studies, and advanced design. However, the estimated ranges below do not factor in cost revisions that are expected to occur upon environmental clearance for two sections in Southern California (Palmdale to Burbank, and Los Angeles to Anaheim), planned for the end of 2025. Similarly, the extensive tunnels on the Northern and Southern California segments require geotechnical studies and engineering to inform more precise cost estimates, but those have not yet been funded. partially funded and underway
Past cost estimates Cost estimates have increased significantly since program inception. In the first business plan of 2008, the cost estimate for civil construction of the Merced-Bakersfield section, now termed the IOS, was $6.2 billion ($ billion in 2025). The same scope of work was projected to be $30.5 billion in 2024. The initial 2008 total cost estimate for Phase 1, developed by consultants
WSP USA for the Authority and presented to voters, was $45 billion ($ billion in 2025). No timeline for completion was presented to voters, but the Authority initially anticipated a possible completion date by 2020. At that time, when the project was voted on in Proposition 1A, the alignment was not specified yet and no major engineering had been undertaken to inform those estimates. By 2024, this forecast had risen to $106.2 billion. Regular public controversy about project cost increases is centered around the latter headline number for the total cost of Phase 1. Up until 2016, cost estimates were reported as
nominal prices, only subject to overall
inflation. Since 2018, these estimates have been reported in terms of
years-of-expenditure. This means that total expenditure is calculated as a sum of expense flows, with each expense being inflated forward to the year in which the expense is expected to occur. Hence, since 2018, the commonly discussed increase in headline costs reflects a combination of increases in real costs, overall inflation, and push-backs in the expense schedule. The table below hints at the difference between current-year prices and year-of-expenditure prices by showing the estimates in 2018 for both. The table shows the evolution of cost estimates made by the Authority over a period spanning project inception in 2008 up to 2024. These numbers are reported in biannual business plans, which the Authority is mandated to report to the California legislature. Each row states cost estimates of civil construction for one section. For most years, this includes grade separations, guideway, tracks, and systems. The bottom row sums over all sections and additionally includes program-wide non-construction capital costs, such as trainsets and maintenance facilities. substantially funded and underway Although price levels for projects around the world are not directly comparable due to differing topographies, required mitigations measures, and construction prices, high-speed rail projects in the Western hemisphere with similar timelines have also experienced significant cost increases since those were proposed:
A high-speed line in Southern Germany that opened in 2022 saw its budget nearly double, from €2.03 billion in 2009 to €3.99 billion by 2022.
High Speed 2, a high-speed line currently under construction in the United Kingdom that will connect
London with
Birmingham, has seen its headline cost almost quadruple, from £15.8–17.4 billion in 2010 up to possibly £66 billion by January 2024. Construction inflation was cited as the main reason for recent cost increases, with prices for steel, rebar, and concrete having risen by 47, 53, and 48 percent respectively during the period since the
COVID-19 pandemic. Similar cost increases have occurred on major California infrastructure projects in the 21st century when faced with similar challenges like the CAHSR project. The
Bay Bridge replacement span increased from an initial $1 billion in 1996 to $6.5 billion by 2013, due to initial estimates being made before detailed engineering studies, and due to inflation in the cost of labor and building materials. The cost of widening a section of
I-405 in
Sepulveda Pass rose from $1 billion in 2010 to $1.6 billion in 2016, due to "repeated changes to the project's design and failure to identify and relocate utilities." The cost of the planned long third phase of the
Silicon Valley BART extension rose from $4.7 billion in 2014 to $12.2 billion in 2024, due to years of delays and inflation, and to design changes following complaints from property owners along the route. In 2023, the Authority published a major cost revision for putting the IOS into revenue service, significantly increasing estimates from $23.4 billion in its 2022 business plan to a range of $26.2–33 billion, depending on the degree of confidence. Including past and future expenses outside the IOS, total expenditure of the California High-Speed Rail Authority would increase from $25.7 billion to a range of $28.5–35.3 billion. This increase of potentially up to $9.7 billion, or 37 percent, was explained with the following major factors: $2.1 billion, or 21 percent of the increase, were attributable to delays in schedule combined with inflation; $3.9 billion, or 40 percent of the increase, were supposedly due to changes in scope, such as building stations in downtown Merced and Bakersfield upon stakeholder agreement, rather than stopping trains further outside the city centers; and the remaining $3.7 billion, or 39 percent of the increase, were added as risk contingencies for the higher risk scenario, along with other unspecified elements related to the first two factors. == Setbacks and challenges ==