Facing cash crisis, High-Speed Rail wants early access to billions promised by state

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Key Takeaways
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• California rail officials seek early access to $20 billion state lawmakers pledged.
• Inspector general warned the rail project will run out of cash by end of 2026.
• The authority said delayed funding could alter its 2027 report.

The California High-Speed Rail Authority wants early access to the $20 billion state lawmakers have committed, as the project faces a potential cash shortage by the end of next year.

It’s not yet clear how early access to the money would work, but the rail authority has submitted a request to the California Department of Finance to start the conversation.

If they don’t get help from the state in the coming months, rail officials have said the project will not meet goals in its 2026 business plan, which aims for completion of the long-delayed 171-mile Merced-to-Bakersfield segment by 2033 for $35.7 billion.

“We (would) have to revise everything that we presented in the business plan,” CEO Ian Choudri said at the agency’s late June board meeting.

The project’s money issues came to the forefront in late July, when rail authority Inspector General Benjamin Belnap warned the agency could run out of cash by December 2027 despite the state’s $20 billion commitment to the train. The problem is that money is being allocated to the project at $1 billion annually through 2045 — a rate too slow to keep up with high-speed rail’s spending schedule, rail officials say.

The rail authority has floated bonding against the $20 billion, but the state program expected to generate that money over the next two decades — called the Cap-and-Invest program — is itself facing uncertainties. The agency will also have to contend with the priorities of a new governor as it tries to solve its cashflow problem.

At the same time, the rail authority is dealing with increased scrutiny after a recent report from Belnap found the agency improperly paid $700,000 for consultants’ luxury flights and visits to restaurants and bars. The project has become increasingly controversial for its costs and delays, though the rail authority has repeatedly promised it will begin laying the train’s first tracks in the Central Valley by the end of the year.

The agency says it currently has a “healthy $3 billion fund balance.”

“Ultimately, providing earlier access to committed funds would allow the Authority to build more efficiently and avoid the escalating that comes with inflation,” the agency said Thursday in a statement to The Fresno Bee.

Uncertainty around CA rail funding, bonding

The state’s Cap-and-Invest program raises public dollars from companies that pollute by requiring them to buy allowances for their emissions. That revenue is put into the state’s Green House Gas Reduction Fund, which helps pay for projects that help meet the state’s climate goals, including high-speed rail.

Earlier this year, the California Air Resources Board approved changes to the program that will reportedly result in fewer allowances sold to polluters and, therefore, less revenue in the fund.

Helen Kerstein, a fiscal and policy analyst with the California Legislative Analyst’s Office, told The Bee there’s no guarantee the fund will produce $1 billion for high-speed rail in the long-term.

“It’s a revenue stream that can go up and down,” she said, “and the long-term trend is probably going to be down.”

In order to bond against the high-speed rail commitment in that fund, Kerstein added, investors will need certainty that they will be repaid. She said the project will need legislation to provide that certainty in Cap-and-Invest revenues, find some other source of revenue that could repay a bond, or borrow a smaller amount.

To Kerstein, who prepares reports about high-speed rail for state lawmakers, the state will soon have to decide what level of a train system it wants to fund — whether a full or reduced scope — and how it is going to pay for it.

CEO says CA rail will again miss schedule without solution

H.D. Palmer, a spokesperson with the California Department of Finance, said the agency does not comment on specific proposals from other agencies during budget development for the following fiscal year. He added that the end result of that process will come in January, when the governor proposes the next budget.

“I’d also note that unlike recent years, the final decisions on next January’s budget proposal will be made by the incoming governor’s administration, and not by the outgoing administration,” Palmer said in an email.

Rail authority officials said during their June 24 board meeting that they need a response from the Department of Finance by the end of the year. If it’s clear the train is not going to access the cash it needs on time, the rail authority's 2027 report could look vastly different from its 2026 plan.

“If we don’t solve the cash issue ... and go back to a billion-dollars-a-year construction, the project is not going to be on the schedule that we have today,” Choudri, the rail authority CEO, said during the meeting.

This story was originally published September 21, 2026 at 6:00 PM.