California’s high-speed rail project is slated to receive $1 billion a year in funding through the state’s cap-and-trade program for the next 20 years — a relief to lawmakers who had urged the Legislature to approve the request as billions of dollars in federal funding remain in jeopardy.

State leaders called the move, which is pending a final vote from the Legislature, a necessary step to cementing investments from the private sector — an area of focus for project officials. And the project’s chief executive, Ian Choudri, said the agreement is crucial to completing the current priority — a 171-mile portion from Merced to Bakersfield — by 2033.

“This funding agreement resolves all identified funding gaps for the Early Operating Segment in the Central Valley and opens the door for meaningful public-private engagement with the program,” Choudri said in a statement. “And we must also work toward securing the long-term funding — beyond today’s commitment — that can bring high-speed rail to California’s population centers, where ridership and revenue growth will in turn support future expansions.”

The project was originally proposed with a 2020 completion date, but so far, no segment of the line has been completed. It’s also about $100 billion over the original $33 billion budget that was originally proposed to voters and has received considerable pushback from Republican lawmakers and some Democrats. The Trump administration recently moved to pull $4 billion in funding that was slated for construction in the Central Valley; in turn, the state sued.

Still, advocates of the project believe it’s crucial to the state’s economy and to the nation’s innovation in transit.

“We applaud Governor Newsom and legislative leaders for their commitment and determination to make High-Speed Rail a success,” former U.S. Secretary of Transportation and Co-Chair of U.S. High Speed Rail Ray LaHood said in a statement. “The agreement represents the most important step forward to date for this transformational project.”

State Sen. Dave Cortese (D-San Jose), who chairs the Senate’s Transportation Committee, said the Legislature “must act quickly to pass this plan and keep California on track to deliver America’s first true high-speed rail.”

Construction on the project has been limited to the Central Valley. Choudri has said that the project could take decades to connect the line from Los Angeles to San Francisco and it’s unclear when construction would begin elsewhere in the state. A recent report from the authority proposed next alternatives for the project that would connect the Central Valley to Gilroy and Palmdale. In those scenarios, regional transit would fill in the gaps to San Francisco and Los Angeles.

L.A.-area lawmakers recently requested an annual $3.3-billion investment in transit from the state’s cap-and-trade fund, acknowledging that although high-speed rail is a state priority, L.A. County should not be overlooked when it comes to increasing more immediate transit investments in the state’s most populous county. Citing equity, health and climate needs, the delegation pushed for greater investment in bus, rail and regional connectors.

According to a recent report from the Southern California Assn. of Governments, L.A. County accounts for 82% of Southern California’s bus ridership. Although public transit use is high, lawmakers and transit leaders have said that expansion and improvements are necessary.

“Millions of Los Angeles County residents already depend on Metro bus and rail, Metrolink, and municipal operators. Yet service has not kept pace with need: transit ridership is still 25-30% below pre-pandemic levels, even as freeway traffic has nearly fully rebounded,” the delegation’s letter stated. “Without significant investment, super commuters from the Valley, South LA, and the Inland Empire remain locked into long, expensive car trips.”

Funding commitments for L.A. County transit were maintained from the last budget, but the delegation’s request for billions in cap-and-trade funds has yet to come through.

“The state budget deal in June 2025 restored $1.1 billion in flexible transit funding from the GGRF, which benefits transit operations statewide, including L.A. County,” Sen. Lola Smallwood-Cuevas’ (D-Los Angeles) office said.

Smallwood-Cuevas said the point of the request was to ensure that transit needs of the Los Angeles region aren’t lost.

“We recognize what it means when folks in L.A. County get out of their cars and onto public transit — that is the greatest reduction that can happen,” she said. “We fully intend to see an opportunity where we can address some of that ridership and look at ways to ensure an equitable opportunity that invests in our regional transit public transit, while we also work to build what I call the spine of our transit, a high speed rail program that will run up and down the state and connect to our regional public transit arteries.”

State Sen. Henry Stern (D-Los Angeles) said that the state’s investments toward wildfire recovery in Pacific Palisades and Altadena “does not mean that you should leave the largest segment of drivers anywhere in the world languishing in traffic forever.”

“It’s not that there’d be nothing [for transit funding],” Stern said. “It’s just that we think there should be more.”

The Los Angeles area isn’t facing the same state funding hurdle of the Bay Area, where lawmakers have scrambled to obtain a $750-million transit loan, warning that key services like BART could be significantly affected without the funds.

Roughly $14 billion has been spent on the high-speed rail project so far, which has created roughly 15,000 jobs in the Central Valley. Theoretically, the train will eventually boost economies statewide.

Eli Lipmen of MoveLA believes that the investments will help transit in the Los Angeles region by expanding access, long before there’s a direct high-speed rail connection.

“Wer’e building an incredible transit system with LA Metro, but we need that regional system to get out to Orange County, San Bernardino, Riverside, Ventura County,” Lipmen said.

“So we’re making those investments even if high-speed rail doesn’t come here right away to improve those connections for constituents. That’s a good thing.”