Florida Governor Rick Scott has informed US Transportation Secretary Ray LaHood of the state’s decision to reject President Obama’s Tampa to Orlando high-speed rail project.
The Governor said the decision to reject the project comes down to three main economic realities:
Capital cost overruns from the project could put Florida taxpayers on the hook for an additional $3 billion.
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). As a note, Florida subsidizes Tri-Rail $34.6 million a year while passenger revenues covers only $10.4 million of the $64 million annual operating budget.
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 DC.
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.
...Rather than investing in a high-risk rail project, we should be focusing on improving our ports, rail and highway infrastructure to be in a position to attract the increased shipping that will result when the Panama Canal is expanded when the free trade agreements with Colombia and Panama are ratified and with the expansion of the economies of Central and South America.—Governor Scott