CA High-Speed Rail funding needs among ‘transparency concerns’ in critique

A new report from the California High-Speed Rail Authority’s inspector general says the agency has not been forthright enough about the possibility that the project could run out of cash soon.

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In to Gov. Gavin Newsom and legislative leaders, Inspector General Benjamin Belnap, whose position is state-funded, said the rail authority’s “does not sufficiently emphasize” the agency will burn through the money it has on hand by December 2027 unless it obtains more cash before then. If it doesn’t obtain more money, Belnap’s report says the project will face more delays.

The finding was one of “transparency concerns” the inspector general described in his criticism of the business plan, which was approved behind schedule this year by the rail authority because it required various revisions.

The California Legislature has yet to approve the plan, which the rail authority has touted as a viable path to completing its Merced-to-Bakersfield segment for $35.7 billion and expanding beyond the Central Valley. Belnap, who is tasked with performing independent reviews of the project, says the plan still obscures too much information about the project’s potential costs and timeline.

“As a result, neither decisionmakers nor members of the public have had the full benefit of opportunities that the law provides to oversee and comment on the project,” Belnap said in his letter.

In responses from the rail authority included in Belnap’s report, the agency disagreed with the inspector general and said its recent plans “provide the clearest picture to date” for how it could complete its Central Valley segment by 2033.

In a statement to The Bee, the agency said it “values constructive oversight” and is committed to making the rail system a reality.

“The Authority has fundamentally reoriented the high-speed rail project by moving into its tracklaying phase, while making real, measurable progress through strong collaboration with the private sector and our partners across the state,” the agency said.

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Inspector general says CA High-Speed Rail needs billions for next fiscal year

Rail authority leaders have previously acknowledged the project faces a cash flow problem.

Lawmakers last year approved $1 billion annually for the project through 2045 from the state’s Cap-and-Invest program, which generates public dollars from companies that buy credits at state auctions to offset their greenhouse gas emission. The rail authority has said it will need that money advanced faster than on an annual basis and has proposed borrowing against the state’s guarantee, among other ideas.

If it runs out of on-hand cash by the end of next year, Belnap’s report says the agency will need at least $2.2 billion to cover its planned expenses in the remainder of the 2027-2028 fiscal year.

The inspector general also said the rail authority did not include in its business plan the potential cost of borrowing interest in its Central Valley cost estimate — at least $3.6 billion, according to Belnap. His report estimates the agency is still facing a funding gap of up to $9.5 billion through 2032.

In its response included in the report, the rail authority said it did not include “speculative interest costs” in its business plan because those costs “depend entirely on future policy choices — such as borrowing levels, timing, and the mechanism ultimately authorized.”

The rail authority added that its business plan acknowledges the need to quickly turn Cap-and-Invest revenues into on-hand funding and said it “intends to address financing risks and schedule considerations” in its 2027 report.

Sacramento Bee reporter Madison Smalstig contributed to this report.

This story was originally published August 12, 2026 at 1:07 PM with the headline “CA High-Speed Rail funding needs among ‘transparency concerns’ in critique.”

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