California’s high-speed rail project has produced a fresh document that should have settled the
debate over its finances. Instead, the state’s own watchdog says the document itself can’t be
trusted at face value. In a July 31 letter to Governor Newsom and legislative leaders, High-Speed
Rail Inspector General Ben Belnap delivered the sharpest official rebuke yet of the California
High-Speed Rail Authority’s final 2026 Business Plan — concluding the agency “has obscured
basic facts about the project, hindering lawmakers’ ability to provide effective oversight.”
What Changed Since the Draft
The Authority’s draft plan, released in February, claimed a $1.7 billion reduction in projected
Phase 1 costs through “streamlining,” putting the San Francisco-to-Anaheim price tag at roughly
$126.3 billion — a figure the Authority stands behind against outside estimates running as high as
$231 billion. In April, Belnap’s office reviewed that draft and found it “objectively incomplete,”
missing statutorily required elements. The Authority made what the Inspector General called
“meaningful improvements” in the final version submitted this summer. But one gap remained, and
it’s the one that matters most: the plan still does not clearly disclose that the Merced-to-Bakersfield
construction window has slipped from the long-stated 2032–2033 target to as late as September
2034, based on the Authority’s own risk-based statistical analysis.
The Money Runs Out First
The more urgent finding is financial, not just semantic. Belnap’s review concludes the Authority
“will exhaust its current funding resources as soon as December 2027” without new financing — a
$9.5 billion funding gap over the next five years. Closing that gap through borrowing could tack on
$3.6 billion to $6.6 billion in interest costs that don’t appear anywhere in the project’s official cost
estimate. The final plan identifies $39.3 billion in available funding for the Merced-to-Bakersfield
segment specifically — down from the $43 billion assumed in last year’s Supplemental Project
Update Report, a drop directly tied to the roughly $4 billion in federal funding the Trump
administration withdrew and the Authority subsequently abandoned litigating. The Authority
describes intent to build a reduced-scope version of that segment, but has not published a funding
plan for the fuller, SB 198-compliant scope state law otherwise requires.
The Watchdog Without Teeth
Perhaps the more damning update involves the Inspector General’s office itself. Created in 2023
after Assembly Democrats made oversight a condition of continued bullet-train funding, Belnap’s
office is supposed to audit contracts, investigate fraud, and flag cost problems early. Instead, CBS
California Investigates reporting this summer found the office has spent roughly $1.15 million —
including nearly $945,000 tied to state procurement and oversight requirements — just to get
authorization to purchase $300,000 worth of case-management software it still doesn’t have. The
office’s planned review of the Authority’s change-order process, including scrutiny of a settlement
exceeding $500 million, hasn’t even started; understaffing has pushed it into next fiscal year.
Governor Newsom has quietly signed part of AB 1608, the legislative package meant to
strengthen the Inspector General’s authority, while reportedly weighing a veto of the provision
Belnap’s office considers essential to actually doing the job.
Congressional and Federal Pressure Continues
The state-level findings arrive alongside sustained federal scrutiny. Rep. Kevin Kiley has formally
asked FBI Director Kash Patel to open a criminal investigation into the project’s cost trajectory —
from $33 billion approved by voters in 2008 to well over $100 billion by the Authority’s own
admission — though no confirmed federal probe has been announced. Separately, CBS California
Investigates reported this year that despite the governor publicly attributing construction delays to
the federal funding withdrawal, records show the state had not purchased the trains it promised
regardless, and that what the Authority calls active construction remains, in the Inspector
General’s words, “a railyard created that has track on it” rather than functioning high-speed rail
infrastructure. The Authority has since moved to cut its train procurement order in half and is
courting private investors — Momentum Alliance Partners was named co-development partner
earlier this year — as a hedge against the federal funding it can no longer count on.
Where the Accountability Stands
Taken together, the last several months mark a shift in tone from prior reporting cycles. This is no
longer primarily a story about ballooning cost estimates — those have been documented for years.
It is now a story about whether California’s own oversight infrastructure, built specifically to prevent
this outcome, has the funding and authority to function. The Inspector General’s office was
designed as the taxpayer’s check on the Authority. Right now, by its own account, it can’t audit the
largest recent contract dispute, can’t get the software it needs to do its job, and is watching the
project it monitors head toward insolvency on a timeline shorter than the reviews meant to catch
problems before they happen. The Authority disputes the Inspector General’s framing as
“differences in interpretation rather than gaps in information,” a response Belnap’s office appended
to the report while standing by its original findings. Sacramento will need to decide, likely this fall,
whether that distinction is one taxpayers can afford to take on faith — particularly with a state
budget that was signed as “balanced” only months before an independent watchdog flagged a
$9.5 billion hole in one of its largest capital commitments.
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