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California Drops Lawsuit Over $4 Billion High-Speed Rail Grants

State planners will rely on cap-and-trade revenue plus private co-development after declaring Washington unreliable.

Overview

  • The state dismissed its case this week challenging the Trump administration's funding withdrawal, even after a judge rejected a bid to toss the suit earlier in December.
  • California says it will proceed without federal dollars, leaning on roughly $1 billion per year from cap-and-trade through 2045, and notes only 18% of program spending to date came from federal funds.
  • The rail authority is courting private co-development partners, having issued an RFQ on Dec. 19 with a target to select a partner by summer 2026 to help monetize stations and right-of-way.
  • The U.S. Transportation Department cut about $4 billion in July and canceled another $175 million in August, citing the lack of a viable plan to complete a major Central Valley segment.
  • A June FRA report flagged missed deadlines, budget shortfalls and questionable ridership projections, as cost estimates now put the 171-mile initial segment near $36.8 billion and full buildout as high as $128 billion.