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The Trump administration officially informed California about its plan to cancel nearly $1 billion in federal funding for the state’s high-speed rail project and to pursue legal action to get back $2.5 billion in funding, which was previously granted for the project.

Last week, President Donald Trump tweeted that California must return the federal funds given to the high-speed rail project after several media entities created confusion by reporting that Governor Gavin Newsom hit the brakes on the project.

In his State of the State address, Newsom said the state has the ability to complete the high-speed rail line between Merced and Bakersfield. However, right now, he doesn’t see a path towards the completion of the Sacramento to San Diego and San Francisco to Los Angeles lines. Some reporters and Republicans including Rep. Kevin McCarthy misinterpreted the governor’s statement that he is stopping the project. Thus, prompting Trump’s demand for the reimbursement of federal funds.

California fails to make reasonable progress on high-speed rail project

On Tuesday, Federal Railroad Administration (FRA) Chief Batory notified California High-Speed Rail Authority (CHSRA) Head Brian Kelly regarding the plan.

Batory told Kelly that the FRA intends to terminate its Cooperative Agreement (FR-HSR-0118-12-01-01) with the CHSRA effective March 5, 2019. After the termination, it will cancel the full $928.42 million in federal funding for the California high-speed rail project under the Agreement. The agency is also “exploring all available legal options” to recover the federal funds granted under the Agreement.

In his letter, Batory wrote, “FRA has determined that CHSRA has materially failed to comply with the terms of the Agreement and has failed to make reasonable progress on the Project…substantially endangering substantial performance.”

In addition, he said California’s decision to significantly change its plans for its high-speed rail system reinforces the FRA’s concern about CHSRA’s previous performance. Batory noted Newsom’s new proposal in his State of the State address is a “significant retreat” from California’s original vision and commitment for the project.

Newsom slams the FRA’s action as “political retribution” by Trump

Newsom immediately released a response to FRA’s action. According to him, “It’s no coincidence that the Administration’s threat comes 24 hours after California led 16 states in challenging the President’s farcical “national emergency.” The President even tied the two issues together in a tweet this morning. This is clear political retribution by President Trump, and we won’t sit idly by.  This is California’s money, and we are going to fight for it.