{"id":1801,"date":"2026-05-13T21:33:33","date_gmt":"2026-05-13T21:33:33","guid":{"rendered":"https:\/\/sandiegorelocationnews.com\/index.php\/2026\/05\/13\/high-speed-rail-wants-to-capture-local-taxes-central-valley-cities-are-willing-to-sue\/"},"modified":"2026-05-13T21:33:33","modified_gmt":"2026-05-13T21:33:33","slug":"high-speed-rail-wants-to-capture-local-taxes-central-valley-cities-are-willing-to-sue","status":"publish","type":"post","link":"https:\/\/sandiegorelocationnews.com\/index.php\/2026\/05\/13\/high-speed-rail-wants-to-capture-local-taxes-central-valley-cities-are-willing-to-sue\/","title":{"rendered":"High-Speed Rail wants to capture local taxes. Central Valley cities are willing to sue"},"content":{"rendered":"<article><!-- --><!-- --><!-- WPS-5038 -- removed the script from WPS and added the placeholder for trinity player --><!-- --><!--[--><!-- AiSummaryComponent.html --><\/p>\n<div>\n<div>\n<div>\n<div><svg><title>Key Takeaways<\/title><defs><lineargradient><\/lineargradient><\/defs><\/svg><\/p>\n<div>Key Takeaways<\/div>\n<\/div>\n<p>AI-generated summary reviewed by our newsroom.<\/p>\n<\/div>\n<p>Read our AI Policy.<\/p>\n<ul><!--[--><!--[--><\/p>\n<li>Letter from Central Valley mayors says lawsuits likely over rail authority\u2019s proposal.<\/li>\n<p><!--]--><!--[--><\/p>\n<li>Rail authority proposes capturing portion of local tax revenues to fund infrastructure.<\/li>\n<p><!--]--><!--[--><\/p>\n<li>Mayors say the proposal is likely unconstitutional and hurts cities.<\/li>\n<p><!--]--><!--]--><\/ul>\n<\/div>\n<\/div>\n<p><!--]--><!-- --><!-- --><!-- --><!-- --><!-- --><!-- CONTENT --><!--[--><!--[--><\/p>\n<p>Nine California mayors, including Fresno\u2019s Jerry Dyer and four others from the Central Valley, say cities would likely sue the California High-Speed Rail Authority over its proposal to capture a portion of local tax dollars and zoning power in its future station areas.<\/p>\n<p>Read more <a href=\"https:\/\/sandiegorelocationnews.com\/index.php\/2026\/05\/13\/petes-restaurant-brewhouse-in-arden-temporarily-closed-2\/\">Pete\u2019s Restaurant &amp; Brewhouse in Arden \u2018temporarily\u2019 closed<\/a><\/p>\n<p><!-- --><!--]--><!--[--><\/p>\n<p>The agency says it would use the money and zoning power to build infrastructure and make sure its station areas are correctly planned. But a letter signed by Central Valley mayors and sent to rail authority CEO Ian Choudri says the plan is likely unconstitutional in California and an attempt \u201cto divert local tax growth through a legally dubious scheme.\u201d<\/p>\n<p><!-- --><!--]--><!--[--><\/p>\n<p>\u201cIt represents an unprecedented intrusion into local governance and sets a dangerous statewide precedent,\u201d the letter, dated April 23, says of the rail authority\u2019s proposal.<\/p>\n<p><!--]--><!--[--><\/p>\n<p>Local governments use their portions of sales and property tax revenues to pay for various essential public services, including public health, safety and local transportation, according to the letter.<\/p>\n<p><!-- --><!--]--><!--[--><\/p>\n<p>The rail authority is not proposing new or increased taxes, but it would like a portion of the rise in property and sales tax revenues \u2014 known as tax increments \u2014 created within a half-mile of a station by the bullet train project. The proposal\u2019s details have not been finalized, but the agency said it would like to work with local governments to form special districts to administer infrastructure financing.<\/p>\n<p><!--]--><!--[--><\/p>\n<p>The funding model, known as tax-increment financing, is based on the idea that property values and sales tax revenues will rise with the arrival of the new high-speed rail and stations, so some portion of the extra money should help pay for the project.<\/p>\n<p><!-- --><!--]--><!--[--><\/p>\n<p>The proposal is one of several put forth in the past year by Choudri, who\u2019s led the project since 2024, that could require changes to state law but that he says are considered best practices for rail delivery around the world. The CEO has sought alternative ways to advance money to pay for a train that\u2019s lost federal money and that the rail authority says has never been fully funded.<\/p>\n<p><!-- --><!--]--><!--[--><\/p>\n<p>The project\u2019s current focus is completing a 171-mile Merced-to-Bakersfield segment that the rail authority says it can do for $34.76 billion. It\u2019s become controversial in the 17 years since the state\u2019s voters first approved a system intended to connect Los Angeles and San Francisco that at the time carried an estimated price tag of $45 billion.<\/p>\n<p><!--]--><!--[--><\/p>\n<p>But the tax increment financing proposal has drawn sharp criticism this year even from the high-speed rail\u2019s supporters \u2014 including Dyer, who has long described high-speed rail as a potential economic boon for downtown Fresno.<\/p>\n<p><!-- --><!--]--><!--[--><\/p>\n<p>Other Central Valley mayors who signed the letter to Choudri include: Merced\u2019s Mathew Serratto, Bakerfield\u2019s Karen Goh, Hanford\u2019s Mark Kairis and Stockton\u2019s Christina Fugazi.<\/p>\n<p><!-- --><!--]--><!--[--><\/p>\n<p>\u201cThe responsibility for funding a state megaproject lies with the state, not with local taxpayers whose revenues are constitutionally protected for local purposes,\u201d says the mayors\u2019 letter to Choudri.<\/p>\n<p><!--]--><!--[--><\/p>\n<div> <iframe aria-label=\"Locator map\" data-external=\"1\" frameborder=\"0\" height=\"868\" id=\"datawrapper-chart-05km1\" scrolling=\"no\" src=\"https:\/\/datawrapper.dwcdn.net\/05km1\/1\/\" style=\"width: 0; min-width: 100% !important; border: none;\" title=\"Half-mile radius from future HSR station area covers huge part of downtown Fresno's core\"><\/iframe><\/div>\n<p><!-- --><!--]--><!--[--><\/p>\n<h2>Rail Authority proposal would \u2018almost certainly\u2019 trigger lawsuits, CA mayors say<\/h2>\n<p><!-- --><!--]--><!--[--><\/p>\n<p>The letter sent to Choudri cites Prop 1A, an amendment to California\u2019s constitution approved by voters in 2004 that limited the state\u2019s power over local government revenues.<\/p>\n<p>Read more <a href=\"https:\/\/sandiegorelocationnews.com\/index.php\/2026\/05\/13\/homeless-count-in-sacramento-county-increases-13-from-2024-report-shows-2\/\">Homeless count in Sacramento County increases 13% from 2024, report shows<\/a><\/p>\n<p><!-- --><!--]--><!--[--><\/p>\n<p>A 2004 analysis from the California Legislative Analyst\u2019s Office says the constitutional amendment prohibits the state from \u201cchanging the allocation\u201d of local sales tax revenues. The analysis says any change in how local governments share property tax revenues within a county requires the approval of two-thirds of each house in the Legislature.<\/p>\n<p><!--]--><!--[--><\/p>\n<p>The mayors\u2019 letter says any mandatory diversion of those revenues to state agency that isn\u2019t legally recognized as a taxing entity \u201cwould almost certainly invite extensive litigation.\u201d The letter adds that the proposal would financially hurt communities the state is asking to \u201caccommodate this project.\u201d<\/p>\n<p><!-- --><!--]--><!--[--><\/p>\n<p>\u201cSimply put: the state cannot solve a state funding problem by raiding local tax bases,\u201d the letter says.<\/p>\n<p><!-- --><!--]--><!--[--><\/p>\n<div> <iframe loading=\"lazy\" class=\"scribd_iframe_embed\" data-aspect-ratio=\"0.7729220222793488\" data-auto-height=\"true\" frameborder=\"0\" height=\"600\" scrolling=\"no\" src=\"https:\/\/www.scribd.com\/embeds\/1038700278\/content?start_page=1&amp;view_mode=scroll&amp;access_key=key-tAwaE3KGRZAS2RhGhuEG\" tabindex=\"0\" title=\"CA mayors' letter opposes HSRA tax increment financing proposal\" width=\"100%\"><\/iframe> <\/p>\n<p>  CA mayors&#8217; letter opposes HSRA tax increment financing proposal  by  egalicia  <\/p>\n<\/div>\n<p><!--]--><!--[--><\/p>\n<h2>High-Speed Rail says it\u2019ll work with cities on tax capture execution<\/h2>\n<p><!-- --><!--]--><!--[--><\/p>\n<p>State Sen. Tony Strickland, R-Huntington Beach, told rail authority leaders during an oversight hearing in late April that he also believes its tax increment capture proposal is unconstitutional.<\/p>\n<p><!-- --><!--]--><!--[--><\/p>\n<p>\u201cThis Legislature would have to change that,\u201d said Strickland, who last year introduced legislation to defund high-speed rail.<\/p>\n<p><!-- --><!--]--><!--[--><\/p>\n<p>Choudri and rail authority Chief of Staff Mark Tollefson told Strickland and other lawmakers on the Senate Transportation Committee that the rail authority\u2019s proposal is in the early-conversations stage with cities. They indicated that special financing districts that result could come about from agreements with local governments.<\/p>\n<p><!--]--><!--[--><\/p>\n<p>\u201cWe want to continue working with communities around how we actually execute on that,\u201d Tollefson said.<\/p>\n<p><!-- --><!--]--><!--[--><\/p>\n<p>Choudri said the idea is not unusual for infrastructure financing and that the rail authority believes it is appropriate because of the state\u2019s investment and land purchases in station areas.<\/p>\n<p><!-- --><!--]--><!--[--><\/p>\n<p>The CEO added that the agency is not proposing to take all of the tax increments generated by its stations.<\/p>\n<p><!--]--><!--[--><\/p>\n<p>\u201cWhat we are proposing is to have some of it shared back so that we can build more,\u201d he said. \u201cThe rest stays with the local jurisdiction.\u201d<\/p>\n<p><!-- --><!--]--><!--[--><!-- --><!--]--><!--]--><!-- --><\/p>\n<p>This story was originally published <span>May 13, 2026 at 2:00 PM<!-- --><\/span><span> with the headline  &#8220;High-Speed Rail wants to capture local taxes. Central Valley cities are willing to sue.&#8221; <\/span><\/p>\n<p>Read more <a href=\"https:\/\/sandiegorelocationnews.com\/index.php\/2026\/05\/13\/former-newsom-becerra-aide-may-plead-guilty-in-corruption-case-2\/\">Former Newsom, Becerra aide may plead guilty in corruption case<\/a><\/p>\n<p><!-- --><!-- --><!-- --><\/article>\n","protected":false},"excerpt":{"rendered":"<p>Central Valley mayors warn the California High-Speed Rail Authority its plan to capture local tax increments near stations could prompt litigation.<\/p>\n","protected":false},"author":1,"featured_media":1800,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,55],"tags":[],"class_list":["post-1801","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-california","category-high-speed-rail"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.5 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>High-Speed Rail wants to capture local taxes. 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