Senate subcommittee examines May Revision transport plan as GGRF shifts put transit and high‑speed rail under scrutiny

The California Senate Budget Subcommittee No. 5 at the State Capitol heard an informational briefing on the governor's May Revision transportation package, which would reauthorize cap‑and‑trade as "cap and invest," set a suggested $1 billion‑per‑year floor for high‑speed rail, and zero out the administration's discretionary greenhouse gas reduction fund (GGRF) allocations in the current proposal.

Why it matters: The administration's May Revision would preserve certain continuous appropriations while removing discretionary GGRF commitments that had been programmed for transit capital and other transportation priorities. That change would immediately affect competitive and formula transit programs and has prompted concern from regional transit agencies and the Legislative Analyst's Office (LAO).

Overview and administration framing James Moore of the Department of Finance told the committee the administration seeks a multiyear GGRF expenditure plan developed with the Legislature. "The intent of the administration is to develop a multiyear GGRF expenditure plan with the legislature to fund shared priorities," Moore said, but he noted the May Revision "does not include any of the discretionary GGRF included in last year's budget." Moore listed discretionary reductions by program category and said the administration still hopes to negotiate a multiyear plan with the Legislature.

LAO caution and priorities Rachel Ehlers of the Legislative Analyst's Office told the subcommittee the three key funds for transportation—General Fund, GGRF, and the Motor Vehicle Account—do not have enough resources to support all current commitments. She said the administration "eliminated all of the planned discretionary ... pot of funding from GGRF in the proposal" and urged the Legislature to weigh priorities. The LAO recommended withholding action on some long‑term proposals until the Legislature receives additional detail, particularly about the high‑speed rail proposal and the trailer‑bill language related to the Olympics.

High‑speed rail request and debate Officials from the California High‑Speed Rail Authority joined the hearing to describe the authority's request and updated cost work. Authority representatives said they provided a supplemental cost estimate for the Merced‑to‑Bakersfield segment showing a low‑end estimate of $34.9 billion and a high‑end estimate of $38.5 billion to complete that segment; authority staff also said the program has expended approximately $14 billion to date. The governor's May Revision proposes at least $1 billion per year from GGRF for high‑speed rail and language to extend funding beyond 2030 into the 2040s.

High‑speed Rail Authority CEO Ian Choudhury told the committee the authority believes a guaranteed $1 billion per year would create a stable base for potential securitization and private investment and help avoid the prior stop‑and‑go funding that harmed the project. Several senators expressed skepticism about committing long multiyear funding without a more complete Project Update Report and cautioned that securitization adds borrowing costs. Helen Kersting of the LAO said the administration has not yet supplied specific statutory language for changing the 25% statutory share historically directed to the project and recommended the Legislature withhold final decisions until it has more project scope, schedule and financing detail.

Transit and other GGRF impacts Committee members and transit agency representatives warned that removing GGRF discretionary pots would endanger projects that were already committed or in the pipeline. The administration's May Revision explicitly zeroes out discretionary GGRF allocations that had been set aside for programs including formula transit, the Transit and Intercity Rail Capital Program (TIRCP), and the zero‑emission transit capital program. Transit agencies, Metro and regional commissions told the committee that already‑awarded projects—some of them in active procurement or construction—rely on those commitments.

Caltrans, CalSTA and Olympics spending Finance staff said Caltrans would lose a $75 million discretionary GGRF allocation for the "highways‑to‑boulevards" program under the May Revision, although the administration said it remains open to negotiations. Caltrans requested $27.7 million one‑time from the Public Transportation Account to maintain and overhaul passenger rail equipment used by joint powers authorities that support Amtrak service, and $17.6 million one‑time from the State Highway Account for planning and design tied to the 2028 Olympic Games' route network. Caltrans staff described that Olympic request as traffic‑management, signage and operations work on the state highway system that would be temporary and coordinated with LA 28 organizers.

Public safety, CHP and DMV items The May Revision also included multiple proposals for the California Highway Patrol and Department of Motor Vehicles. LAO staff noted a $5 million Motor Vehicle Account allocation for a CHP highway violence task force that continues prior funding and a separate request for DMV IT modernization funding tied to the Department's Driver Experience Project and other federal compliance projects. DMV staff described proposals ranging from continued truck emission check IT work to trailer‑bill authority for a partner automation fee increase for business partners to support the DMV's modernization.

Reaction and next steps Transit agencies, labor groups and local leaders urged the Legislature to protect previously committed transit funds. The LAO urged caution and additional reporting before making long‑term funding decisions, especially for securitization plans for high‑speed rail. Finance staff repeatedly described the May Revision as the start of negotiations, framing the package as a multiyear conversation with the Legislature rather than a final plan. The subcommittee did not take votes; members asked for additional documentation and timeline details before budget actions.

Votes and formal actions This hearing was informational; the subcommittee did not take any formal votes. Administration budget requests described above were presented for legislative consideration and potential negotiation.

What to watch next Legislators asked for a fuller project update report from the High‑Speed Rail Authority, further detail on the proposed GGRF multiyear plan, and written clarifications on which transit commitments would be at risk if discretionary GGRF remains zeroed in the May Revision. Transit agencies requested that the Legislature protect funds already programmed through 2030 and urged preserving discretionary support for local zero‑emission conversions and TIRCP awards.