Assemblymember Macedo requests legislative audit of state’s high-speed rail project

SACRAMENTO, Calif. (KEYT) – Last week, Assemblymember Alexandra Macedo filed a formal request to audit the state's High-Speed Rail Authority Project with the state's joint legislative oversight authority.

The audit request was filed with the Joint Legislative Audit Committee, a bicameral oversight group that works alongside the California State Auditor's Office to investigate the state's investments and operations.

The 14-member groups is split between members of the state's Assembly and Senate and requires at least four members from each chamber before conducting business.

Requests for audits can end up approved, denied, retained, or referred to another agency by the Chair of the group and can focus on financial or performance oversight depending on the analysis of the request by the State Auditor's Office the statewide watchdog explained.

That analysis remains confidential until a hearing is held by the Audit Committee and then made publicly available. A searchable database of reports between 1993 and 2023 can be found here and a list of upcoming reports can be found here.

Once the audit is approved, the full analysis of the request can take up to six months noted the Audit Committee.

After a decade of preparation, a $9.95 billion down payment on an 800-mile, high-speed train system between San Francisco and Los Angeles was approved by California voters in 2008.

"Californians will be able to travel from Los Angeles to San Francisco in less than two hours and 40 minutes, cruising at speeds of 220 mph," boasted the 2008 California High-Speed Train Business Plan. "California’s high-speed train will be built with major capital contributions from multiple sources, including the State of California, the federal government, local and regional governments and private sector investors. Under Proposition 1A, state bond funding for construction cannot be spent until matching federal, local and private funding is also secured."

The system's backbone, linking Los Angeles/Anaheim and San Francisco was initially expected to cost the state $33 billion with an estimated $12-$16 billion from federal sources in 2008 dollars shared the 2008 High-Speed Train Business Plan.

The initial construction cost projections were developed by international engineering and management firm Parson Brinckerhoff as well as financial projections by Infrastructure Management Group with input from Barclays Capital and Goldman Sachs and was reviewed by European and Japanese government rail agencies noted the 2008 Business Plan and the High Speed Rail Authority which expected the system to be operational by 2030.

The Rail Authority cautioned at the end of its 2008 business plan that completing the mega-project came with notable funding risks stating, "Due to the project’s size and the duration of the expected construction period, full funding is not expected to be available when the project commences. Completion risk could arise if full funding does not materialize even after state, federal and local monies have been spent to begin construction, resulting in an incomplete system."

California's Legislative Office detailed multiple issues in 2010 with the business plans submitted by the High-Speed Rail Authority noting that, "[The High-Speed Train Business Plan] contains no discussion of the authority's plans or processes to (1) identify potential threats or (2) manage, respond, and mitigate those threats. The plan only states that the authority 'believes it is aware of all existing threats and is taking the appropriate steps to prevent or mitigate those threats.'"

Since then, costs associated with the project have ballooned to an estimated $128 billion and now, "ranks among the most expensive megaprojects in world history" stated Assemblywoman Alexandra Macedo in her audit request with the Joint Legislative Audit Committee filed last week.

"Since voters approved funding in 2008 to initiate construction, the project has been plagued by mismanagement, delays, cost overruns, and broken promises," Assemblymember Macedo continued. "There have been 1,588 changes to the Authority’s three construction contracts that have more than tripled the original contract price, with nearly $6 billion in cost overruns."

In 2022, the state government created an independent inspector general position to reign in costs and review the multiple organizations who were outsourced the construction elements of the project.

On June 19, 2023, Governor Newsom selected Benjamin Belnap to serve in the position for a four-year term in accordance with the state law authorizing the new oversight position.

Since then, the inspector general has issued a handful of reports providing updates about the project that can be found here.

In July of last year, the Trump Administration announced the termination of roughly $4 billion in grant funding for the high-speed rail project citing major funding gaps for an initial segment of the system detailed by the Office of Inspector General for the High-Speed Rail Authority.

"The waste ends here. As of today, the American people are done investing in California’s failed experiment," stated Secretary of Transportation Sean Duffy in August of 2025. "Instead, my Department will focus on making travel great again by investing in well-managed projects that can make projects like high-speed rail a reality."

In response, the Office of Inspector General for the High-Speed Rail Authority argued, "Although we have described in past reports the funding gap that has existed on the Merced-to-Bakersfield segment, and have provided recommendations for the CHSRA [California High-Speed Rail Authority] to improve its associated funding plans, we have never concluded that the lack of funding for certain components of the Merced-to-Bakersfield segment would prohibit the Authority from meeting its federal grant provisions ('commitments to the FRA'). We have identified no citations by the FRA [Federal Railroad Administration] supporting its assertion that the OIGHSR [Office of Inspector General, California High-Speed Rail] ever made this conclusion."

The Inspector General went on to admit in the same June 2025 public response that the funding gap for the initial segment and rescinded federal funding would result in the Merced-to-Bakersfield segment, "not likely be completed within the schedule envelope of 2030 to 2033."

While the selection of the Central Valley segment was made with an eye towards the most affordable part of the construction as shown in figure 21 below, the initial plan in 2008 was to use revenue from commuters to cover management and upkeep.

"Overall operation, buttressed by ridership in heavily traveled corridors, is expected to generate passenger revenues in excess of operational and maintenance costs," shared the 2008 California High-Speed Train Business Plan. "As currently envisioned, private funding is expected—backed largely by the projected operating surplus of the system. If ridership or revenues were to be lower than forecast, the project could suffer from constrained private funding."

"The problem here is that there’s no guarantee they’re going to finish that first segment, and there’s no guarantee that even if they did, it would provide any benefits or enough of a benefit to where the majority of the voters are in California, which is the Bay Area and LA," explained UC Berkeley transportation expert Ethan Elkind.

"It’s an area where it becomes unfortunate for a state like California that is generating a lot of tax revenue for the United States, but it's transportation needs are not really reflected in the federal priorities," continued Elkind.

In August of last year, the state reached an agreement with the Federal Railroad Administration to keep the previously canceled $4 billion in federal funding while the case is heard in court.

With an estimated $15 billion already spent, the state legislature authorized an extension of the state's cap-and-trade program and committed $1 billion annually to the high-speed rail project through 2045 in a companion bill.

The state is now trying to leverage that latest 20-year investment into the project to entice private investors while it awaits the fate of federal funding.

"The extension of the Cap-and-Invest program and the minimum annual $1 billion provided to the project
makes completing the M-B [Merced-to-Bakersfield] segment within the 2033 schedule envelope possible," stated the Office of Inspector General for the high-speed project in its latest review. "However, for this landmark effort to be achieved, state lawmakers will likely need to enact further reforms as suggested by the Authority in its supplemental report.

"[S]hifting the project’s focus beyond the M-B segment could place further strain on the limited resources available for completing the segment and compound existing risks to its timely completion," warned the Inspector General. "A steadfast focus on successfully building and operating this initial operating system—as currently defined in state law and in the Authority’s federal grant agreements—is the clearest near-term path to demonstrating the benefits of high-speed rail in California and subsequently extending those benefits to other parts of the State."

Your News Channel reached out to the California High-Speed Rail Authority and a spokesperson on behalf of the state organization shared the following, "The Authority operates with a level of transparency that is unmatched for megaprojects of this scale. Our budgets, schedules, risks, progress, and more are regularly disclosed publicly and reviewed by the Board of Directors, State Legislature, the Administration, federal partners, and independent oversight bodies. This program is being delivered in full public view, and the Authority remains committed to that standard."