Caltrain already runs all the way to Gilroy. You can't really extend it much. But you can run it more frequently; and that's where you run into union issues. It's not propaganda that public employee unions are quite resistant to change; just look at MUNI's Union (in SF) for example.
The problem is that a lot of rich people live right along the Caltrain line and have been opposing its expansion for decades.
<sarcasm>But it's the unions' fault.</sarcasm>
Try not swallowing so much propaganda next time.