Three months after canceling a $929 million federal grant to the troubled California bullet train project, the Trump administration has unexpectedly given its go-ahead to the state to approve environmental documents that are needed to complete planning for the long-delayed project.

In May, after the funding was canceled, the relationship between the federal and state government seemed so bumpy that bullet train officials worried that Washington would try to sabotage the project by delaying approval of necessary paperwork. Instead, on Monday, the Federal Railroad Administration fulfilled a long-standing state request and moved environmental reviews of pending plans for the project’s full Los Angeles to San Francisco route from the federal to the state level. According to the Los Angeles Times, previously the agency had only approved segments from Bakersfield to Fresno and from Fresno to Merced.

“This action is an important milestone for the high-speed program,” said Brian Kelly, chief executive of the California High-Speed Rail Authority. “We’ve lost valuable time waiting with the FRA’s disengagement, so I am very thankful for this action and I am hopeful this step is the beginning of a more collaborative and cooperative relationship prospectively.”

But while state officials were relieved by the federal decision, funding obstacles still remain. The state only has about one-quarter of the $80 billion-plus it would take to link Los Angeles and San Francisco – and that’s for a plan that doesn’t use high-speed rail for segments from San Francisco to San Jose or from Los Angeles to its northern exurbs. This downscaling has led some longtime backers of the project, such as former state Sen. Quentin Kopp, to renounce it as a betrayal of promises made to state voters in 2008 when they approved $9.95 billion in bond seed money for what was then envisioned as a $43 billion statewide train system.

The lack of funding was behind Gov. Gavin Newsom’s February decision to pull back from predecessor Jerry Brown’s commitment to building a statewide system. Instead, Newsom said all $20.5 billion in available funding should be used to build a high-speed route between Bakersfield and Merced in the Central Valley. 

Speaker wants changes to Newsom’s focus on Central Valley

But it now appears that even that scaled-back plan will face opposition from some key Democrats in the Legislature. On Thuesday, the Times reported that Democratic Assembly members from the Los Angeles and Bay areas – including Speaker Anthony Rendon – have for weeks discussed shifting the state’s rail focus. They hope to take up to $6 billion that Newsom wants to use in the Central Valley to improve rail service from Pasadena to Anaheim and commuter rail in and out of San Francisco. They believe a shorter, scaled-down version of the Central Valley route is viable with funding in the $14 billion range.

“I like the concept,” Rendon told the Times. “Any project that doesn’t have a significant amount of service to the largest areas in the state doesn’t make much sense.”

The prospect of taking state bullet train money for the Los Angeles area was first raised publicly in April by several members of board of the Los Angeles County Metropolitan Transportation Authority.

Any reduction in the scope of the Central Valley route proposed by Newsom is likely to face bitter opposition from the area’s politicians, who see the bullet train as crucial to improving the economy in one of the state’s poorest regions. They were enthusiastic about Newsom’s comments during last year’s campaign that a bullet train would be ideal to connect Silicon Valley workers with relatively inexpensive housing in the Central Valley.

Will news about the California bullet train’s cost overruns and

These are the key questions prompted by a concession that some Republican state lawmakers gained in return for helping Gov. Jerry Brown keep alive the state’s greenhouse-gas emissions cap-and-trade program until 2030. The provision could eventually end the state’s high-speed rail project, leaving a massive white elephant in the agricultural fields of the Central Valley. Or the concession could end up yielding a second vote validating a project first approved by state voters in 2008.

The concession – secured by Assembly Republican leader Chad Mayes of Yucca Valley – places a constitutional amendment drafted by Mayes before state voters in June 2018. If passed, it would lead to a one-time up-and-down vote in the Legislature in 2024 on whether to continue allowing the use of cap-and-trade revenue to fund the project. But the threshold wouldn’t be a simple majority. A two-thirds vote would be required to allow continued use of the funds – presumably giving GOP lawmakers a prime chance to pull the plug.

So far, the funding has been substantial in one sense but marginal in the big picture of trying to pay for a $64 billion project. After the fifth year of cap-and-trade distributions, about $1 billion has gone to the California High-Speed Rail Authority, with another $500 million expected this fiscal year. But it is considered crucial because it is the only new funding source Brown has found for the project, which has been unable to gain outside investors because of rules banning public subsidies for bullet-train operations.

Rail authority chair Dan Richard says he isn’t worried about a public veto in seven years: “By 2024, we’re going to be deep into construction. We’re going to be on the verge of opening the first service. We’ll be seeing Google and others making massive investments in areas around high-speed-rail stations. The case will be there for the importance of continued funding,” he told the San Francisco Chronicle.

The authority’s 2016 business plan said the state expected to have $21 billion in hand from state bonds, federal grants and cap-and-trade funds to build a segment from San Jose heading south.

Feds expect cost overrun of 48% or more on first segment

But Mayes and other GOP lawmakers are betting that from here until 2024, the bad news about the project will never stop.

Lawyers for the Central Valley farmers and the government and civic officials they represent in lawsuits against the state government like to point out that – apart from court victories allowing the project to continue to spend public monies – there has been no substantial encouraging news about the project in years.

In January, the Los Angeles Times reported that it had obtained a confidential Federal Railroad Administration risk analysis that predicted a cost overrun of 48 percent or more on the initial 118-mile segment in the Central Valley. What the Brown administration has been saying would cost $6.4 billion is instead likely to be $9.5 billion to $10 billion, federal officials warned.

The idea that voters will be pleased with what they see in 2024 could be difficult to square with what rail authority officials told a visiting congressional delegation in August 2016: that construction is expected to stop in the middle of an almond orchard 30 miles northwest of Bakersfield when the money runs out.

This is contrary to promises made to voters in 2008 to get them to provide $9.95 billion in bond seed money for the project. They were guaranteed no construction would begin until the state could guarantee its initial segment would have financial viability without any more train tracks being laid.