California’s long-troubled high-speed rail project just ran into another major political fight — this time from local leaders in the Central Valley who are threatening lawsuits over a proposal to siphon off local tax revenues and seize zoning control near future rail stations.
Fresno Mayor Jerry Dyer joined several other Central Valley mayors in sending a sharply worded letter to California High-Speed Rail Authority CEO Ian Choudri, blasting the proposal as unconstitutional and warning the state not to proceed.
The April 23 letter described the plan as a “legally dubious scheme” designed to raid local tax dollars in order to prop up a project that has already become one of the most expensive and controversial infrastructure disasters in modern American history.
The proposal itself does not technically raise taxes. Instead, the state wants to “capture” future increases in property and sales tax revenues generated within roughly a half-mile radius of future high-speed rail stations. California officials are also seeking expanded control over zoning authority in those areas.
To local leaders, that sounds an awful lot like Sacramento trying to bail itself out by hijacking local government revenue streams.
“The responsibility for the troubled megaproject lies with the state, not with local taxpayers,” the mayors wrote.
The letter was signed not only by Dyer, but also by mayors from Merced, Bakersfield, Hanford, and Stockton — a sign of just how widespread opposition has become in the very region where most of the project’s visible construction has occurred.
County officials piled on as well. A separate letter from the California State Association of Counties and other county representatives argued the proposal directly conflicts with multiple provisions of the California Constitution.
“Local sales tax revenues are expressly protected for local governmental purposes,” the letter stated, arguing the Legislature is prohibited from reallocating those revenues to state-controlled projects.
The backlash comes as California’s high-speed rail project continues to spiral financially and politically after years of delays, redesigns, missed deadlines, and exploding cost estimates.
A state analyst’s report released last month warned of “several issues” with the latest business plan, including what auditors described as eight major structural flaws. The report criticized the plan for lacking transparency, relying on uncertain future funding assumptions, and constantly shifting the scope of the project itself.
At the center of the controversy is the staggering projected cost.
Some estimates now place the full project at as much as $231 billion — a figure Gov. Gavin Newsom’s administration disputes, calling it a “high-end, unoptimized scenario.” The governor’s office instead claims the first phase connecting San Francisco and Los Angeles would cost roughly $126 billion after what officials described as a “bottom-up reassessment.”
Even that number, however, represents an astronomical increase from the project’s original promises to California voters.
So far, roughly $14 billion has already been spent, much of it on land acquisitions and partially completed infrastructure scattered throughout the Central Valley. Critics have repeatedly mocked many of the isolated structures and unfinished overpasses, comparing them to a modern-day “Stonehenge” rising out of farmland with little indication an operational rail system will ever fully materialize.
Earlier this year, Newsom celebrated the beginning of track-laying operations as evidence the project was finally moving forward after years of ridicule. But the new tax fight shows just how politically radioactive the rail system remains — especially among local governments now being asked to sacrifice future revenue and authority to keep it alive.
