This week, the California High-Speed Rail Authority approved the next major procurement to extend construction from **Merced to Madera**, calling it a major expansion of active construction. Track installation on the initial Central Valley segment is also scheduled to begin later this year.

TL;DR: The governor actually can make CAHSR happen, even without the feds, if they have the cojones to do it. There are also a ton of financing sources possible here, listed below.

So, after reviewing Lucid Stew's video on what is next for CAHSR and associated funding sources, some of whose commentary I disagree with, I thought I'd post about different potential funding sources that could get the project over the line sooner rather than later. I project about $4B in funding that is possible and feasible based on this broader strategy. These amounts are rough and conservative estimates.

1. Highway Funds & CalTrans Projects

• Maintenance and capital projects funding, as Lucid Stew mentions. However, the main flaw in his argument is that highway funds can't really be reallocated. I disagree - the governor of California is able to do so in some cases, as Shapiro did in PA, especially if they are federal block grants, where states are free to decide how to allocate the block of funds. Realistically, I think reallocating maintenance funding is a bad idea, especially politically. To that end, the best source of funding would be to raid a portion of the capital projects for HSR and rail funding and reallocate that. Let's say $500M to $1B a year here.
• CalTrans Projects: One big issue here is how grade separations and road projects are tacked onto the HSR budget. A smart governor could put CalTrans in charge of most road grade separations, e.g., SR43, and move those separations into the CalTrans budget instead of the HSR budget. We would also see a bit more efficiency here because this is Caltrans's bread and butter - road and highway projects. Let's say, $500M a year here.

2. Improved Implementation and Grant Programming

• Transit and Intercity Rail Capital Program (TIRCP) Reform: As the Californians for Electric Rail group has mentioned, multi-year investment funding would help reduce costs for projects that HSR interfaces with (e.g., Caltrain), as well as introduce savings in the longer run for CAHSR. Also, reforms should include a more aggressive criterion that mandates that projects meet state rail plan goals and/or HSR goals, getting us key pieces earlier and quicker, such as the San Jose-Gilroy segment of Caltrain or an electrified Metrolink.
• State Capacity: Related to that, improved state capacity, e.g., a state rail agency that supports programs and projects with implementation, design, establishes standards, and has in-house engineering, permitting, design, and contracting teams, will serve to cut costs across the board.
• Permitting & Other Reforms: Finally, other reforms HSR needs include SB 445, a proposed bill (now dead in the water) that would allow HSR to streamline permitting and utility relocation, a significant barrier to timely progress.
• Total Savings: This is difficult to parse, but let's assume an average of $150M per year in savings, especially if HSR can plug into the state agency and benefit from these reforms. Part of the calculation is that each year of delay results in a 7% to 9% increase in costs, so each year of delay eliminated yields savings.

3. Alternative Tax Schemes & Financing

• Tax Increment Financing and/or Enhanced Infrastructure Financing Districts: HSR could work to establish small property tax increment financing around stations. A recent study shows that just 3 EIFDs around the HSR stations in LA would be enough to fund most, if not all, of HSR Phase 1. One issue is that the funds won't come in until the service is almost at the station, as the funding mechanism relies on the property's appreciation. Let's say $10M a year for the first 10 years and then $250M a year for the remaining years.

4. Congress!

• FRA / Rail Grants: A Democrat controlled Congress could choose to fund HSR and other rail improvements. While this is unlikely, it's a large enough source that it could be meaningful.
• An interstate high-speed rail program: Pie in the sky and likely unrealistic, but still possible! One area Democrats should focus on is establishing an interstate high-speed rail program as a follow-on to the interstate highway project. This is an easy win for Congress to get pork to districts and revive manufacturing in the US. Even more so, if paired or merged with freight rail pork to get them to play ball. Some examples of this pork for freight rail could include financing rail "interstates" with 4 tracks across key corridors (e.g., 2 for freight, 2 for passenger). Imagine a red state like Ohio that could benefit greatly from improved freight and passenger service, as well as from its manufacturing facilities. It'd be hard for Ohio Republicans to say no if the bill got serious momentum.
• Total: Let's say we get about $25M a year from Congress, federal funds, and other sources. This number is wildly variable, so I'm just using a placeholder lower bound or estimate.

5. Public-Private Partnerships & Other External Revenue Sources

• Public-private partnerships (P3s): A co-development agreement was signed to commercialize the project and secure funding. While this is still 6 months to 1 year out, it has the potential to generate significant revenue over time. Some examples of this include operating agreements in which a private partner manages and operates the system, stations, etc., and shares revenue with HSR. These private partners would also develop lots around the stations that HSR owns for retail, residential, and office use, as they would purchase or lease land from HSR.
• Solar, Fiber, Utilities, Data Centers: Related to P3s, there is significant potential for revenue generation by leveraging the corridor and infrastructure to generate profits. For solar/battery systems, HSR could construct and sell solar power early in its implementation, before trains even run, and sell the excess power even when trains are running. HSR will need advanced telecommunications infrastructure along the corridor, so adding fiber would be trivial and generate significant revenue. The same goes for electrical distribution and other related utilities - for example, a new electrical line over Techapi Pass would close a major electrical distribution gap in California. What's more, HSR, as a trunk in this sense, would make it an attractive candidate for colocating data centers along the corridor (e.g., power and fiber).
• Total: Initially, not much revenue, but in the long term, this could account for as much as $2B a year. For comparison, George Washington University in DC has about $4.4B in real estate and generates well over $100M a year in lease revenue from its land alone. Scaling this up for HSR gets us to a few billion dollars pretty quickly if they figure out how to lease land around their ~24 total stations, from real estate alone.

So, putting it all together, some potential revenue sources include:

	Revenue Sources	Estimated Amount
Short-Term (6 months to 2 years)	Highway funds & CalTrans	Up to $2B per year
Medium-Term (2 years to 4 years)	Improved implementation; P3s; Congress	$500M to $3B per year
Long-Term (4 years or more)	P3s; Tax Financing; Congress	$2B+ per year

Based on this analysis, the short-term financing from highway projects alone is enough to close the gap to get Merced-Bakersfield built. If some P3 revenue on top of the highway funds is secured, we get to Gilroy (maybe San Jose) and to Palmdale. By this time, Congress should be in a much better place and can hopefully finance or invest in the final legs (e.g., Palmdale to LA).

• Funding gap for Merced - Bakersfield: $2.6B to $6B
• Full Phase 1 Buildout - $86B
• Potential maximum revenue from all proposals, combined: $7B/year which means 12 years to meet the Phase 1 gap using these funding mechanisms alone.

What do you think?

Source links:

• https://penncapital-star.com/transportation-infrastructure/shapiro-directs-153m-in-federal-highway-funds-to-stop-septa-death-spiral/
• https://hsr.ca.gov/2026/06/24/news-release-global-infrastructure-and-investment-consortium-joins-california-high-speed-rail-to-advance-future-expansion-through-private-investment/
• https://moulton.house.gov/news/press-releases/moulton-re-introduces-american-high-speed-rail-act-calling-41-billion-annual
• https://data.streetsforall.org/blog/cahsr_eifd/
• https://scag.ca.gov/post/enhanced-infrastructure-financing-district-eifd
• https://calelectricrail.org/wp-content/uploads/2025/06/AgainstPatchWorkFunding-CER-June25.pdf
• https://catc.ca.gov/programs/transit-intercity-rail-capital-program
• https://www.youtube.com/watch?v=SHVQ1WXhOws

Yesterday, I was driving through Hanford and saw the Hanford Viaduct up close. I got these pictures of what looks like the future platform.

https://youtu.be/BjnlGPBUP7Q?si=f-ezRKzBeMfURgN3

Millbrae Station is going to become one of California's most important rail hubs once High-Speed Rail arrives. Unfortunately, it's also one of the Bay Area's most constrained stations.

Today, Millbrae already serves Caltrain, BART, SamTrans, and SFO. In the future, it will also serve California HSR, requiring more tracks and more space. Also, the BART wye into SFO creates awkward transfers for Caltrain passengers and operational inefficiencies for BART.

My proposal/TL;DR: make Millbrae the Bay Area's primary rail-airport interchange by extending SFO's AirTrain to both San Bruno and Millbrae, while simplifying BART operations.

Phase 1: Extend AirTrain to San Bruno

The first step is extending AirTrain about one mile north from the Rental Car Center/Long-Term Parking to San Bruno BART and Tanforan.

Benefits:

• Creates a second rail gateway to SFO during future construction.
• Provides another BART-AirTrain transfer point.
• Opens opportunities for airport airside expansion (more taxi/apron/runway/terminal space), hotels, and a relocated rental car center, etc.
• Reduces pressure on airport roadways by allowing passengers to transfer outside the terminals.

Phase 2: Rebuild the SFO/Millbrae Interface

Once AirTrain reaches San Bruno, the southern leg of the BART wye can be rebuilt with minimal impact on travelers.

Instead of continuing BART south from SFO to Millbrae, AirTrain would use the same corridor and most of the existing structures to reach a new station adjacent to the Millbrae parking garage, connected directly to the existing mezzanine. This would not affect BART, because BART would continue serving SFO directly from the north into SFO, and maintain separate service to Millbrae.

This simplifies BART operations while giving Caltrain and future HSR riders a much shorter transfer to SFO. BART will also keep paying rent to SFO to have a station at the international terminal, keeping SFO happy.

Phase 3: Rebuild Millbrae Station

With AirTrain moved to the eastern side of the station, space is freed for a more efficient Millbrae layout.

That creates room for:

• Additional HSR capacity (4 tracks!), where BART gives up the western platform of their 3 platforms
• Better Caltrain-HSR transfers (potentially cross-platform).
• Direct mezzanine access to AirTrain.

Millbrae is now the region's primary transfer point for HSR, Caltrain, BART, and SFO, with SamTrans buses feeding Millbrae.

Another advantage is that the AirTrain stations at San Bruno and Millbrae can now also serve as pick-up and drop-off locations, as well as bag check locations, making the experience and operations easier for everyone.

Phase 4: Long-Term Opportunities

Once the project is complete, SFO now has the flexibility to do things like:

• Add AirTrain infill stations serving airport employees and nearby development, e.g., in the industrial area north of the airport, around the FedEx or Costco sites.
• Extend AirTrain west toward the office/hotel/YouTube district near I-380 and/or southeast toward the Bayshore hotels (airport-oriented development, anyone??).
• Relocate airport-support facilities (such as the rental car center) to free up land for future airport expansions or improvements.

What's more, because Millbrae becomes the primary transfer hub, San Bruno Caltrain can now be closed, improving travel times for both Caltrain and HSR while maintaining airport access to that area via the extended AirTrain.

Relevant Links:

• SFO AirTrain system
• Caltrain system
• California HSR system
• BART system & BART to SFO
• SFO future plans/airport development plan
• An old post from Caltrain-HSR Compatibility Blog, but still relevant today
• An old post I made on improving Bay Area airport transit that partially inspired this

PS: Feel free to suggest additional links or other content for me to add to the post for reference!

Sorry I messed up the formatting, here is the link