Trump Administration Says It Will Rescind $929 Million In Funds For California High-Speed Rail

The announcement comes one day after California joined a 16-state lawsuit challenging the president's emergency declaration to fund a border wall.

The U.S. Transportation Department on Tuesday said it intends to terminate an agreement that would have granted nearly $929 million in federal funds for California’s ambitious and controversial high-speed rail project.

The department said it had determined that the California High-Speed Rail Authority had “materially failed to comply with the terms of the agreement” and had “failed to make reasonable progress on the project.”

The department also said in a statement it was “actively exploring every legal option to seek the return from California of $2.5 billion in federal funds.” It is unclear whether the department has legal recourse to do so.

Gov. Gavin Newsom (D-Calif.) responded by accusing President Donald Trump of “political retribution” after California was joined by 15 states in a lawsuit on Monday challenging the president’s declaration of a national emergency at the U.S.-Mexico border.

“It’s no coincidence that the Administration’s threat comes 24 hours after California led 16 states in challenging the President’s farcical ‘national emergency,’” Newsom said in a statement. “The President even tied the two issues together in a tweet this morning.”

Trump referenced California’s high-speed rail in a tweet on Tuesday about the lawsuit.

“This is clear political retribution by President Trump, and we won’t sit idly by,” Newsom continued. “This is California’s money, and we are going to fight for it.”

In a letter to Brian Kelly, the rail authority’s chief executive officer, Federal Railroad Administration official Ronald Batory referenced Newsom’s Feb. 12 State of the State address.

In the address, Newsom confirmed his plans to scale back the high-speed rail project, which was expected to take passengers from San Francisco to Los Angeles in less than three hours. The project has been repeatedly delayed since construction started in 2015, under then-Gov. Jerry Brown, after costs doubled from initial projections, private investment failed to materialized and public support for the project deteriorated.

Newsom said he planned to refocus the high-speed rail project to link Merced and Bakersfield, a Central California route that by car can take up to three hours. Newsom made his plans clear during his gubernatorial campaign last year.

“I know that some critics will say this is a train to nowhere, but that’s wrong and offensive,” the governor said in his address. “The people of the Central Valley endure the worst air pollution in America, as well as some of the longest commutes. And they have suffered too many years of neglect from policymakers here in Sacramento. They deserve better.”

The Transportation Department said Tuesday that Newsom’s plan “represents a significant retreat from the state’s initial vision and commitment and frustrates the purpose for which federal funding was awarded.” The department gave the California High-Speed Rail Authority until March 5 to provide counterarguments before it said it would finalize the termination of its agreement.

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