Scott rejects high speed rail
In a major victory for the tea party movement, Gov. Rick Scott will reject the federal government money to pay for nearly all of a "costly" high-speed rail line between Tampa and Orlando.
"Government has become addicted to spending beyond its means and we cannot continue this flawed policy," Scott said at a hastily-called press conference this morning.
Rail supporters have suggested Florida could get the line without spending any state money. The federal government has promised $2.4 billion and some believed private companies interested in winning the bid for the project would put up the remaining $280 million.
But referring to Florida taxpayers as "investors," Scott said, "I don't see anyway anyone is going to get a return."
"The answer is to reduce government spending, cut government's leash on our job creators and then hold that government accountable for the investments it makes," Scott said.
Scott said his decision was based on "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," Scott said.
Scott's announcement is the latest hat tip to the conservative tea party movement that Scott helped build and used as a springboard to run for governor. In an unorthodox move earlier this month, Scott unrolled his state budget proposal not at the state Capitol buy at a tea party rally in Eustis.
Last week, Scott carved 30 minutes out of his schedule to meet a pair of Tampa-area tea party leaders. Their top priority: derail the high-speed rail project.
Scott insisted his decision was based on numbers, but he gave the press conference a political feel by closing with the "Let's Get to Work" slogan that he laced through a $60 million TV campaign as a candidate.
"You don't have to be an economic expert to understand that if you spend more money than you take in, your business will fail," Scott said. "Unfortunately, politicians haven't always seemed to grasp that same principle."
But the state has more obligation for the SunRail project, a $1.2 billion Central Florida passenger line. Scott recently put a hold on $235 million in SunRail contracts, but said today that he is "still reviewing" that project.
Republican state Sen. Paula Dockery, a Scott ally who opposed SunRail, had urged Scott to put the high-speed rail project out to bid and require private companies to pay for cost overruns.
Scott has put his faith in the private sector to pull Florida out of its economic slump, but said today that there was too much risk for the state even with a privately-run rail line.
"As you know, I was elected to get Floridians back to work and change the way government does business in our state. I'm committed to making good on those promises."
More from Scott today:
• Scott spent several minutes blasting President Obama's budget proposal, saying it included $1.6 trillion in "higher taxes" that would hurt Florida's ability to compete in a global 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 get returns for the shareholders, Florida's taxpayers."
• Scott said a "smart investment" would be improving state ports, rail and highway infrastructure. Scott has made it a priority to prepare Florida for the large container ships that expected to use the Panama Canal when a widening project is completed. Scott said Florida cited a Florida Chamber of Commerce study that projects 143,000 new port-related jobs.
"Our state will be better served by spending these funds on projects that will benefit Florida and not turn into a spending boondoggle," Scott said.
• While putting his faith in the chamber report, Scott cast doubt on projections for high speed rail. He said that nine out of 10 high-speed rail projects have capital cost overruns. He said two-thirds of projects "inflate revenue projects by an average of 65 percent."
• He compared the said the Amtrack Acela train carried 3 million riders in Washington D.C., Boston, Philadelphia, New York and Boston last year. Scott said he doubted a the ridership study that projected 3.2 million riders on the Tampa-Orando line, noting the market population is "eight times" less than for the Northeast line.
More reactions today:
U.S. Rep. John Mica, R-Winter Park, House Transportation & Infrastructure Committee chairman: "I am deeply disappointed in the decision to not move forward with the Orlando to Tampa passenger rail project. This is a huge setback for the state of Florida, our transportation, economic development, and important tourism industry. I have urged the Governor to reconsider going forward and allow the private sector to assume the risk and any future costs for the project. I made this appeal to the Governor this morning. With the federal government assuming 90% of the cost of the project, I am disappointed the private sector will not have an opportunity to even offer innovative proposals to help finance the balance of the costs and to construct and operate this system. I will continue to work with the Governor and all those interested in developing cost-effective 21st century transportation alternatives for Florida and the nation, with systems that can improve quality of life and help meet our future transportation needs."
Florida House Speaker Dean Cannon, R-Winter Park: "I have not spoken to the Governor regarding today’s announcement, but I watched the Governor’s press conference. I'm encouraged that he is focusing on the practical realities of government programs, and their long-term impacts. As the Constitutional officer charged with carrying out transportation policy, the Governor seems to have determined that at this time he cannot feasibly implement high-speed rail in Florida. I have confidence that he will bring the same level of scrutiny to other issues.”
Florida Democratic Party spokesman Eric Jotkoff: "Over the past month Governor Rick Scott has become a one man wrecking crew for Florida’s economy, putting at risk over 100,000 jobs as he tries to impose his extreme philosophy on the Sunshine State. Gov. Scott’s rejection today of high-speed rail not only ends the hope of less congestion on our roads for Central Floridians stuck in I-4 traffic every day, but also stops a critical investment in Florida’s infrastructure that will cost our state 71,000 job-years. Between the Governor’s actions today and his budget, which promised pink slips to tens of thousands of police, firefighters, and teachers, Rick Scott is putting Florida’s future at risk."
Rep. Hazelle Rogers, D-Lauderdale Lakes, House Transportation Economic Development Appropriations Subcommittee member: "One year after Florida lawmakers took historic, bipartisan action to spur the state’s economy with a job-creating high-speed rail proposal, Governor Rick Scott is making a misguided, unilateral decision to overturn the will of the Republican-led Florida Legislature. Designing and constructing the proposed Tampa to Orlando high-speed rail project that federal and state agencies recommended would create thousands of needed jobs and help rebuild our state’s economy. Transportation modernization helps Florida compete in the ever-growing global economy. I’m appalled by Governor Scott’s shortsighted thinking and his decision to choose politics and ideology over job creation for Florida. Let’s put Floridians to work, Mister Governor."