The funding will help the Santa Clara Valley Transportation Authority finance two-thirds of the design work on the $4.7 billion project, which will bring the Bay Area Rapid Transit system to Silicon Valley. The 16-mile extension south from Fremont will include stations spread across Milpitas, Santa Clara and San Jose, a new maintenance facility, and a 5-mile tunnel through downtown San Jose.

"The (California Transportation Commission's) funding allocation emphasizes the importance of continuing work toward connecting San Jose and Santa Clara County residents and businesses with jobs and housing centers throughout the Bay Area," said City of San Jose Mayor Chuck Reed. "BART will also provide access to the ... airport, two major universities, and a host of large employers offering tremendous economic benefits for the county and its cities."

South County residents and officials who will share the costs of the project but derive few benefits from it have been less enthusiastic.

"There's no question that any money diverted to that is going to impede the ability to get other things done that could help South County," Gilroy Mayor Al Pinheiro said. "I also understand that we go north and enjoy the road, but as I said, there are probably better ways to address some of those needs than bringing BART to San Jose."

For South County officials, state transportation dollars are better spent widening highways and creating new bypass roads between the Gilroy-Hollister area and the Central Valley.

Officials expect to learn at the end of February if they will receive $108 million in state funding for a project to widen U.S. Highway 101 from four to six lanes. The project, which would expand U.S. 101 from Monterey Road in south Gilroy to the interchange with state Route 25, is regarded as a linchpin of broader plans to reduce congestion and improve safety for commuters traveling to and from the Central Valley.

VTA spokeswoman Jayme Kunz said the BART funding comes from the CTC's Traffic Congestion Relief Program and will not cut into $4.5 billion in transportation money that will be doled out at the end of the month to cites and counties across the state.

The new rail service is expected to start operation in 2016.

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