High‑speed rail authority says Merced‑to‑Bakersfield can be completed within revised cost range; lawmakers press for more detail

The California High‑Speed Rail Authority (HSRA) provided the Senate Budget Subcommittee No. 5 an updated cost estimate for its Merced‑to‑Bakersfield segment and answered lawmakers’ questions about a May Revision proposal that would guarantee at least $1 billion per year for the program under a cap‑and‑invest reauthorization.

HSRA Chief of Staff Mark Tolleson told the committee the Authority has produced a new bottom‑up estimate for Merced‑to‑Bakersfield: “we do have updated numbers for that Merced to Bakersfield segment. So at this point we do have updated numbers for that that we have shared with the committee. So we are looking at a $34,900,000,000 at the low end to $38,500,000,000 on the high end to complete that segment,” he said on the record.

HSRA finance and legal witnesses and the LAO described how the administration’s proposed $1 billion annual floor differs from the historic statutory approach (25% of GGRF revenues). HSRA officials said a reliable floor could make securitization or loan programs more attractive to lenders and private investors, while legislators warned securitization would increase long‑term interest costs and shift risk to taxpayers.

Why the update matters

- HSRA said it has a cash balance in the GGRF set‑aside (HSRA stated about $4.2 billion in the fund) and that a multiyear GGRF commitment could be used as a basis for securing financing and accelerating construction. The authority said that with the proposed administration commitment through 2045, it would have funding capacity beyond the estimated Merced‑to‑Bakersfield cost.

- Several senators expressed strong skepticism about extending a guaranteed revenue stream for multiple decades without additional legislative oversight, and some members said they oppose further large commitments absent clearer evidence the project is viable and fiscal terms are acceptable.

Committee exchange and main claims

- HSRA’s Mark Tolleson: provided the updated Merced‑to‑Bakersfield number and said the estimate includes local support costs for projects such as Los Angeles Union Station improvements and prior Caltrain modernization contributions.

- HSRA’s CEO Ian Choudhury (introduced at the hearing) said stop‑and‑start funding in prior years has increased costs and schedule uncertainty. He described efforts to reduce cost and accelerate procurement for commodity materials and to pursue private sector partnerships where feasible.

- LAO: staff recommended withholding action on a long‑term funding commitment until the legislature receives a fuller project update report with schedule, cost, and a clear securitization plan. LAO staff also noted that HSRA’s current numbers leave a funding gap under some scenarios depending on federal participation and future cost growth.

Lawmakers’ views

Committee members split: some pressed HSRA for immediate, detailed project update reporting, including schedule, risk‑adjusted cost estimates and information on any proposed securitization or bond plans. Others said they would oppose a multi‑decade guaranteed floor without stronger assurances and legislative controls.

Ending

HSRA committed to provide fuller documentation (the Authority said a more comprehensive project update report would be delivered in the summer) and the committee asked the LAO and Finance to continue vetting the numbers. No appropriation or change to law was voted on at the hearing; senators said they expect further briefings and a more detailed project update prior to any multi‑year funding decision.