Buildingon thetracks

What the video shows

In a 50-second reel, independent journalist Nick Shirley stands on a construction site in Shafter, a Kern County city on California's high-speed rail route, where new houses are going up on land the railroad is supposed to cross.

Shirley says the land was bought in 2006 for developers to build on, and that the state set its rail plan in 2008. As he puts it, “in order for the high speed rail to actually happen, they have to go through and buy each and every single one of these houses.”

He then puts the question to Shafter City Manager Lance Lippincott: “How is it possible right now here in California you have a government who is spending billions upon billions of dollars for this high speed rail, meanwhile a construction site is right here where they're building houses on where that high speed rail is supposed to go?”

Lippincott's answer was blunt:

“We don't really know. Typically government buys all of the alignment upfront. That way you don't have cost of buying it once it's developed.”

He estimated that development “will bring it up 10 or 11 times what bare land value would be.” On how much the state has told the city, he said: “Communications pretty sparse, so we're left mostly in the dark.”

The reel's on-screen title calls the project “California's Fraudulent High Speed Rail.” Lippincott himself does not use the word fraud. His concern is cost and silence: the state may end up paying many times more for land it could have bought cheaply, and the city doesn't know the plan.

Quotes are transcribed from the video's on-screen captions.

The project behind it

Voters approved high-speed rail in 2008 on a promise of about $33 billion and trains by 2020. Today the state's own plan puts Phase 1 at roughly $126 billion, with the first trains in 2033.

Sources: KMPH, April 2026; Legislative Analyst's Office, March 2026.

The money behind it has been unstable. Proposition 1A authorized $9 billion in 2008. In July 2025 the federal government rescinded $4 billion in grants, and the Authority gave up trying to keep them that December. Lawmakers then guaranteed the project $1 billion a year from the state's cap-and-invest program through 2045.

Even that may not finish the first 171 miles. The Legislative Analyst's Office found the Merced-to-Bakersfield segment is still about $2 billion short once borrowing costs are counted. It also warned that hitting the budget depends on roughly $14 billion in assumed savings that may not materialize.

State Sen. Tony Strickland summed up the mood in April, saying the public's trust in the Authority has been “a major failure.” The Authority says the $231 billion figure reflects outdated assumptions, and that its redesign avoided roughly $105 billion in costs.

Who pays

The rail project's original $9.95 billion in voter-approved bonds is being repaid out of California's General Fund, and that fund runs mostly on the state income tax.

The 2008 voter guide said the bond money could be used to buy right-of-way, the very land now being built on in Shafter. It estimated repayment at about $647 million a year from the General Fund.

The income tax dominates that fund. In the 2026-27 budget, the personal income tax brings in about $146 billion of the $226 billion California collects from its three largest taxes, roughly 64%.

The state's own budget analysts also flag a risk Washington should note. California's revenues swing sharply from year to year because its tax system relies heavily on high-income taxpayers, according to the Legislative Analyst's Office.

Waste versus fraud

The Shafter clip shows waste, not fraud. Fraud is someone deliberately deceiving the government to take money; waste is the government overpaying through its own poor decisions. Buying land after houses are built on it, at what Lippincott estimates is 10 or 11 times the cost, is the second kind.

California's documented fraud problem is somewhere else: health programs. In a separate video in March, Shirley visited Los Angeles hospice and daycare sites and claimed over $170 million in fraud, adding that Californians “pay too much in taxes for this to be happening.” Those are his allegations, but official records back up the broader pattern:

• 2022 State Auditor report: found the state's weak controls created the opportunity for large-scale hospice fraud, with Los Angeles County hospice agencies up 1,500% in a decade (CalMatters).
• April 2026 charges: Attorney General Rob Bonta charged 21 suspects accused of defrauding the state of $267 million. His office has filed 119 hospice-related criminal cases since 2021.
• Licenses: the state revoked 280 hospice licenses over two years and is reviewing 300 more, but tighter licensing rules are still delayed.

One caution for the argument: most hospice fraud is billed to Medicare, which federal taxpayers fund. The link to California's income tax is real for Medi-Cal and the General Fund, but it is not the main channel.

What Washington should take from it

Washington's new millionaires tax is projected to bring in $3.5 to $4 billion a year. California's experience shows what happens when money arrives faster than the oversight meant to follow it.

Three lessons stand out:

• Do the basics before the big spend. Lippincott's point is simple: buy the land before it's developed. A project that skips that step pays for it many times over.
• Fraud follows weak controls. California's auditors blamed hospice fraud on lax licensing. Washington has its own warning: in 2020, the Employment Security Department lost $647 million in known fraudulent payments, and the State Auditor found it lacked a proactive anti-fraud unit.
• Taxing the top is a volatile foundation. California's budget analysts say its revenue swings sharply because it leans on high-income taxpayers. Spending built on that revenue is exposed when markets fall.

Before Olympia spends the first dollar, voters should expect four guardrails:

• An independent performance audit by the State Auditor of every new program the tax funds
• A public online ledger showing where each dollar goes
• For construction projects, land and full funding secured before work begins
• Fraud controls in place before any benefit program expands