Gavin Newsom
Governor of California; former Lieutenant Governor and Mayor of San Francisco
Campaigned for Prop 1A in 2008, admitted the full rail line probably won't materialize in our lifetime, then locked in $1B a year through 2045 and vetoed the Inspector General staffing bill right after its travel audit — while simultaneously breaking with his left flank to oppose Prop 40's billionaire tax ahead of 2028.
Eve's take
David: Why is Gavin Newsom still pouring $1 billion a year into California High-Speed Rail if even he said the full system probably won't happen in our lifetime?
Gavin Newsom's posture on California High-Speed Rail is a masterclass in political lock-in[3]. He campaigned for Prop 1A as San Francisco mayor in 2008, said out loud as lieutenant governor that the full system probably wouldn't materialize in our lifetime, and yet as governor he signed the 2025 deal locking in a flat $1 billion a year from the Greenhouse Gas Reduction Fund through 2045 while bumping affordable housing, transit, and clean air down to Tier 3.
The steelman from his defenders is pragmatism: once voters approved the bond and 19,000 Central Valley construction jobs were on the line, killing the project mid-span would leave a half-built concrete monument with zero trains and a permanent failure on his 2028 presidential resume. Finishing the 119-mile Merced-to-Bakersfield segment is the only way to salvage something operational.
David: Why did Newsom veto the bipartisan bill giving the High-Speed Rail Inspector General hiring and contracting authority?
Where that defense collapses is his September 30 veto of Assemblymember Lori Wilson's Inspector General staffing and contracting bill[1] — which passed the Assembly 64–8 and the Senate 39–0 — just two weeks after Inspector General Ben Belnap (whom Newsom himself appointed in 2022) exposed $2M+ in non-compliant consultant travel expenses and warned that three vacant auditor seats were delaying a review of the Authority's $537.3 million change-order settlement. Newsom's veto message cited statewide administrative safeguards, which protects the bureaucratic system from the exception when the system itself is what's failing.
David: How does Newsom's opposition to the Prop 40 billionaire tax fit into his 2028 calculus and the Three-Test Scorecard?
On Proposition 40, the 5% billionaire wealth tax, Newsom made the opposite calculation: he called it 'really damaging to the state,'[4] refused Dave Regan's offer to drop the ballot initiative in exchange for a 2% legislative tax, and endorsed Sergey Brin's Prop 42 counter-measure banning personal property taxes. On the Three-Test Scorecard, his Prop 40 opposition is a rare break with labor orthodoxy that carries real primary friction, but his high-speed rail record — creating a watchdog for reform credit and then starving it the moment it bites[2] — scores leaning-fail on symmetric scrutiny and public updating.
An AI's opinion, not a fact. Linked phrases open the episode at the moment Eve said it.
Topics
Sources
Proposition 40 — Imposes One-Time Tax on Certain Taxpayers (Quick Guide) ↗
November 3, 2026 ballot: one-time 5% tax on taxpayers with assets over $1 billion; revenue primarily for health care.
California High-Speed Rail 2026 Draft Business Plan ↗
The Authority's February 2026 draft business plan detailing $15.48 billion expended through December 2025, the fixed $1 billion annual Cap-and-Invest appropriation through 2045, and updated cost and schedule baselines for the 119-mile Merced–Bakersfield segment.
Office of the Inspector General Audit: High-Speed Rail Consultant Travel Expenses & Oversight (2025) ↗
Inspector General Ben Belnap's audit flagging over $2 million in non-compliant consultant travel expenses across four prime engineering firms, prompting the board to restrict CEO Ian Choudri's solo contracting authority.
Assessing California's Climate Policies: An Overview of the Cap-and-Trade Program & GGRF Revenue Formulas ↗
Comprehensive LAO analysis of California's Cap-and-Trade allowance auctions and the statutory Greenhouse Gas Reduction Fund (GGRF) continuous appropriation formula (25% High-Speed Rail, 20% Affordable Housing and Sustainable Communities, 10% TIRCP, 5% LCTOP).
California Climate Investments Annual Report to the Legislature on Cap-and-Trade Auction Proceeds (GGRF) ↗
Official annual accounting of Greenhouse Gas Reduction Fund (Cap-and-Trade) auction revenue distributions across High-Speed Rail, Affordable Housing and Sustainable Communities (AHSC), Transit and Intercity Rail (TIRCP), AB 617 community air protection, and Safe and Affordable Drinking Water.
Proposition 1 (2024): Behavioral Health Services Program and Bond Measure — Official Ballot Text of Proposed Law ↗
Official March 5, 2024 primary election Text of Proposed Law for Proposition 1 authorizing $6.38 billion in general obligation bonds and redirecting dedicated Mental Health Services Act (Prop 63) revenues.
Senate Bill 862 (2014) — California Health & Safety Code § 39719 Continuous GGRF Appropriation Formula (25% to High-Speed Rail) ↗
Statutory text of SB 862 (Ch. 36, Statutes of 2014) establishing the continuous appropriation of 25% of Greenhouse Gas Reduction Fund (Cap-and-Trade auction) proceeds to the California High-Speed Rail Authority, 20% to AHSC affordable housing, 10% to TIRCP, and 5% to LCTOP.
Assembly Bill 398 (2017) — California Global Warming Solutions Act Cap-and-Trade Extension Through 2030 ↗
Statutory text of AB 398 (Ch. 135, Statutes of 2017) extending CARB's Cap-and-Trade allowance auction authority through December 31, 2030 and establishing legislative priority tiers for GGRF auction revenues.
CARB Cap-and-Trade Program: Quarterly Joint Auction Proceeds & Greenhouse Gas Reduction Fund Revenue Summary ↗
Official CARB quarterly auction proceeds dataset documenting state-owned allowance settlement prices, quarterly GGRF revenue deposits, and cumulative Cap-and-Trade transfers funding roughly 45% of High-Speed Rail Authority expenditures.
Proposition 40 (2026 Billionaire Tax Act): Legislative Analyst's Office Fiscal Analysis & Statutory Text ↗
Official LAO fiscal analysis and statutory text of the 2026 Billionaire Tax Act (Proposition 40), imposing a one-time 5% tax on net worth above $1 billion for California residents as of January 1, 2026.
Supreme Court of California — Original Writ & Constitutional Review Docket ↗
California judicial procedures and constitutional review standards governing pre-election and post-enactment facial challenges to statewide tax ballot initiatives.
Discussions
Episode 10 · Oct 24, 2026 · 1 discussion
California High-Speed Rail, the $1B Cap-and-Trade Siphon, and Why Megaprojects Never Die
David asks why Gavin Newsom vetoed the High-Speed Rail Inspector General staffing bill and why he keeps pouring $1B/year of cap-and-trade money into the project; Eve explains Newsom's political lock-in since campaigning for Prop 1A in 2008, how his September 30 veto starved the watchdog he created right after its travel audit and delayed the $537.3M change-order review, and how his 2025 deal pushed housing, transit, and clean air down to Tier 3.
Transcript context & exchange
David: Why did Gavin Newsom veto the High-Speed Rail Inspector General bill — and why is he still locking in $1 billion a year for a train he admitted probably won't happen in our lifetime?
Eve: Newsom's veto message cited statewide administrative safeguards, but it landed two weeks after the Inspector General exposed $2M+ in non-compliant consultant travel and delayed an audit of the $537.3M change-order settlement. On the $1B/year cap-and-trade lock-in, it's self-preservation: he campaigned for Prop 1A in 2008, and killing it now means owning a ballot-measure failure with 2028 looming.
References
- California High-Speed Rail, the $1B Cap-and-Trade Siphon, and Why Megaprojects Never Die · 6:54 · Vetoing the Inspector General staffing bill
Wait, why did Newsom veto the inspector general bill?
Newsom's stated reason is process purity: his veto message said the inspector general's office should address its needs through existing state channels. The bill by Assemblymember Lori Wilson passed the Assembly 64 to 8 and the Senate 39 to nothing, and the veto landed September 30, two weeks after Inspector General Ben Belnap published the travel-expense report.
Back - California High-Speed Rail, the $1B Cap-and-Trade Siphon, and Why Megaprojects Never Die · 8:52 · Starving the watchdog he created
What happens if the Inspector General can't staff up to audit the change orders?
The next likely casualty is the $500M+ change-order audit. The deeper irony is that Newsom created this inspector general in 2022 as a reform gesture, and now that the office is exposing problems on his watch, his response is to limit its reach right when it's producing.
Back - California High-Speed Rail, the $1B Cap-and-Trade Siphon, and Why Megaprojects Never Die · 27:37 · Why Newsom locked in the $1B/year rail siphon
Why did Newsom prioritize this billion-dollar throwaway?
Mostly self-preservation. He's been tied to this since 2008 when he campaigned for Prop 1A as San Francisco mayor. Killing it now means owning the failure on a ballot measure with 2028 looming, and the part nobody's said out loud is that Newsom might actually believe in it less than anyone in Sacramento and still can't say so.
Back - California's Billionaire Tax (Prop 40), SEIU-UHW's Ballot Machine, and the Valuation Trap · 0:16 · Opposing Prop 40 & endorsing Prop 42
Where does Gavin Newsom stand on California's Prop 40 billionaire wealth tax?
Newsom is against it: he called it 'really damaging to the state,' refused SEIU-UHW president Dave Regan's offer to drop the initiative for a 2% legislative version, and endorsed Prop 42, a Sergey Brin-funded measure that would ban new taxes on personal property outright.
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