High-speed rail revolt; Central Valley mayors reject tax-share idea. So who pays the bill?

California’s high-speed rail project is piecing together a complex funding plan after losing billions in federal dollars under the Trump administration, drawing pushback from Central Valley cities along the way.

The latest proposal to tap local tax growth near future stations has prompted threats of lawsuits from mayors across the region, including Fresno Mayor Jerry Dyer. The agency says it would use the money and zoning power to build infrastructure and make sure its station areas are correctly planned.

Here are key takeaways:

• The California High-Speed Rail Authority wants to capture a portion of property and sales tax growth within a half-mile of future stations through tax-increment financing to help fund infrastructure, though the proposal’s details have not been finalized.

• Nine California mayors, including Fresno’s Jerry Dyer, signed an April 23 letter warning they would likely sue over the tax capture plan, calling it unconstitutional under Prop 1A and “a legally dubious scheme” to divert local revenue.

• California’s Legislature committed $20 billion over 20 years from the state’s Cap-and-Trade program, providing $1 billion annually through 2045 to back the project after it lost $4 billion in federal funding in 2025.

• The rail authority launched a prequalification process to bring in private investors who would design, build and operate train segments with their own money, getting repaid through public dollars and revenues from commercialization of the train’s right-of-way.

• CEO Ian Choudri plans to ask lawmakers to change SB 198, a 2022 law that capped spending outside the Merced-to-Bakersfield segment at $500 million, so investors can focus on more profitable routes like Madera to Gilroy.

• Completing the 171-mile Merced-to-Bakersfield segment alone is now estimated to cost $34.76 billion, far above the roughly $45 billion price tag voters were told in 2008 would cover the entire Los Angeles-to-San Francisco system.

Original stories by Erik Galicia

This report was produced with the assistance of a proprietary tool powered by artificial intelligence based on our own originally reported, written and published content. Before publishing, journalists reviewed this content in compliance with McClatchy Media’s AI policy.

This story was originally published May 26, 2026 at 5:00 AM with the headline "High-speed rail revolt; Central Valley mayors reject tax-share idea. So who pays the bill?."