Gov. Rick Scott just announced that he has rejected federal money that would be used to build a high-speed rail line from Tampa to Orlando, saying the project would be “far too costly to taxpayers” and that he believes “the risk far outweighs the benefits.” More from his press release after the jump:
Moments ago I spoke with u.s. transportation Secretary Ray LaHood to inform him of my decision. I appreciate the secretary’s efforts to work with us and I look forward to working with him in the future.
My decision to reject the project comes down to three main economic realities:
- First – capital cost overruns from the project could put Florida taxpayers on the hook for an additional $3 billion.
- Second – ridership and revenue projections are historically overly-optimistic and would likely result in ongoing subsidies that state taxpayers would have to incur. (from $300 million – $575 million over 10 years) – Note: The state subsidizes Tri-Rail $34.6 million a year while passenger revenues covers only $10.4 million of the $64 million annual operating budget.
- Finally – if the project becomes too costly for taxpayers and is shut down, the state would have to return the $2.4 billion in federal funds to D.C.
The truth is that this project would be far too costly to taxpayers and I believe the risk far outweighs the benefits.
Historical data shows capital cost overruns are pervasive in 9 out of 10 high speed rail projects and that 2/3 of those projects inflated ridership projections by an average of 65 percent of actual patronage.
It is projected that 3.07 million people will use the train annually. Keep in mind that Amtrak’s Acela train in Washington, D.C., Boston, Philadelphia, New York and Baltimore only had 3.2 million riders in 2010. And that market’s population is 8 times the size of the Tampa/Orlando market.
President Obama’s high-speed rail program is not the answer to Florida’s economic recovery.
We must make investments in areas where we will get a return for the shareholders – Florida’s taxpayers.
The project has been a hot topic of debate since work began along the I-4 corridor. A coalition of politicians and business lobby groups recently formed in an effort to press Scott to accept the funds. The head of the powerful Associated Industries of Florida called the rail line a part of “America’s infrastructure bonanza” at a roundtable discussion earlier this month.
Scott’s decision means the federal government will likely give the money earmarked for the project to another state.
More to come.