The cities in America most competitive in today's global economy all have one thing in common: commuter rail. That's why the proposal for a 61-mile rail line through greater Orlando, the world's theme park capital, is so promising. This is the most ambitious effort outside South Florida to begin fashioning a rail line to serve major cities. The goal, the route and the timing are right, and success in Orlando could boost the emerging plans for rail throughout Tampa Bay. But the deal with rail carrier CSX has major financial and legal flaws, and the Florida Legislature needs to fix them.
Under the plan, the state would convert an existing freight line into a commuter rail system from DeLand south through Sanford and Orlando to Poinciana. The state would pay CSX $150 million for the tracks and make an additional $496 million in improvements to CSX facilities and to a CSX freight line west of the commuter system. That makes the up-front payout $646 million. The government would spend another $615 million to actually build the commuter line. That money would double-track the line to accommodate both rail and freight traffic and build the stations, parking lots and other necessary infrastructure. The federal government would pay half the capital costs, the state would pay one-quarter and five local funding partners — Volusia, Seminole, Orange and Osceola counties and the city of Orlando — would pay one-quarter.
Pay for tracks, not extras
Managed right, the $1.2-billion system could ease congestion on Interstate 4, curb the spread of suburban sprawl in Orlando's bedroom communities and serve as the initial leg of a cross-Florida commuter rail system. But none of those goals are served by a deal that pays hundreds of millions of tax dollars in freight improvements for CSX that have nothing to do with moving people. Why should taxpayers pay twice to enhance CSX's freight capacity when the company would have access to the state's commuter line? Why should the state pay $23 million to build the company a rail yard? The $150 million price tag for the commuter rail tracks is misleading, because the deal hinges on other costs that primarily benefit CSX. This is the pricing gimmick car dealers use — tacking add-ons to inflate the purchase price. The state should pay a fair and transparent price for the tracks, and this deal needs to be renegotiated to reach those goals.
Legislative sponsors also want taxpayers to pick up too much of the costs if CSX causes an accident in the commuter rail corridor. In single-train accidents, the state and CSX would be responsible for the losses their trains would cause. But the state would pay for any damages to passengers or anyone at the station or along the rail corridor regardless of whether its train, or CSX's, was involved in a single-train crash. The same would go for crashes involving multiple trains. The state would still be responsible for passengers and other people caught in the way. That would include anyone buying a ticket, parking a car at the station or saying goodbye on the platform. The state would protect CSX from liability even if it caused an accident out of negligence or misconduct. And the state would charge vendors at the stations, among others, to pay for a $200-million liability policy to protect CSX. The guy selling coffee on the platform, in other words, would be taxed to indemnify a multibillion dollar rail company.
Despite the significant legal exposure this deal forces on taxpayers, the proposal sailed through a House committee last week, where Republican conservatives did their best to downplay the burden on taxpayers. Supporters lauded the project as a jobs bill, a cheaper alternative to highways and a deserved share of federal pork. But those are weak excuses for wasting tens of millions of tax dollars and exposing the state to tens of millions more in liability. The state can create jobs without overpaying CSX. While building rail is cheaper than expanding I-4, who believes that I- 4 will not be widened anyway? And the federal money is not in hand. The rail project must still apply for federal funding, although it already has received some federal money for design work. If Washington rejects the project, the deal is dead.
Shift liability back to CSX
The state Senate killed the deal last year because of the liability concerns, but the same forces are not aligned this time. Trial lawyers are on board now that a cap has been removed on damages and attorneys' fees in accident claims. Lawmakers may have satisfied the interests of personal injury attorneys, but they have not done the same for the general public. The costs and liability exposure affects taxpayers in every corner of the state. This is not an issue to leave to the Orlando-area local governments. Three-fourths of the cost for building the rail line would come from the federal and state governments. The state would also cover the first seven years of debt on $173-million in bonds to buy the tracks and the first seven years of operating and maintenance expenses, expected to cost $64-million.
The Legislature needs to trim the cost and shift CSX's liability back to CSX. But the project is still strong enough to warrant attention this legislative session. The counties and cities involved have limited their taxpayers' financial risk and committed to improve bus service to feed the commuter rail system. Getting the Orlando project moving should also help the efforts in the Tampa Bay area to build a regional rail network. But for the deal to be a statewide model, it needs to be reasonable about cost and legal liability.