Our View

Congratulations to our new governor, businessman/entrepreneur Rick Scott. As of Wednesday morning, the bigger test for Gov. Scott has begun. And if he wants to begin his term with the kind of bold action he promised on the campaign trail, he should pull a Chris Christie (the governor of New Jersey):

Say “no” to accepting $2.4 billion in federal funds to construct the proposed 84-mile, high-speed rail line connecting Orlando and Tampa.

Mark these words: If built, this will be one of the biggest financial boondoggles and taxpayer drains in the history of Florida.

Here’s where this idea stands at the moment:

In typical big-government fashion (i.e. print and borrow more money than the government has and saddle future generations with higher taxes and more debt), President Obama and the Pelosi-Reid Congress have committed to spending (borrowing) $2.4 billion and giving it to Florida to build this transportation black hole.

As of this writing, Scott has indicated he wants to study the matter before saying he would accept this federal largesse.

But at the same time, all sorts of special-interest groups — in particular, Tampa and Orlando business organizations and construction companies — say this project is just what Florida needs to put people back to work and ease traffic congestion on Interstate 4. What’s more, these groups, in typical American-entitlement fashion, say it’s about time Florida obtains its share of federal transportation dollars.

Add to these voices such venerable pro-government, socialistic institutions as the St. Petersburg Times and other leftist Florida newspapers that say: What a bargain and return on investment for Floridians! The federal government will contribute $2.4 billion of the $2.6 billion cost, with Florida taxpayers having to contribute only $280 million to build this first leg of the rail system. What a deal!

Au contraire.

This kind of thinking and action are exactly what have put the United States in the position we’re in today — printing money and borrowing more money from the Chinese to the point of devaluing the purchasing power of Americans’ dollars and sentencing future generations to higher and higher taxes. Indeed, have you noticed lately how much less your money is purchasing?

But the special interests are blind to the other side of the coin. They only see opportunity for themselves — a classic case of providing benefits to the few at the expense of the many. These groups disregard the unequivocal, undeniable facts. To wit:

As Robert Poole, founder of the Reason Foundation and foremost expert on U.S. transportation policy, has written and proven many times: Every rail project in America has failed to live up to its ridership and revenue projections; has always cost more than projected; and has always become a drain on taxpayers, requiring endless subsidies from people who never, ever ride the trains.

Just take a look at the headlines in the above box. These are just a few of the stories staffers at the Reason Foundation wrote in 2010 about California’s disastrous high-speed rail system. That has been going on there for 14 years.

Or read below Poole’s blog that he wrote a year ago, shortly after President Obama began committing federal dollars to Florida’s high-speed rail project. One of Poole’s points is the $2.6 billion estimate of Florida’s high-speed rail cost is more likely to be $4.28 billion. Who will cover that extra $1.6 billion? Floridians? Let’s not forget the Legislature will start its next session with a $3 billion deficit.

All too often the proponents of these taxpayer-subsidized projects like to say the United States needs to emulate the rail systems of Europe and Japan. But here again, they are ignorant of the differences.
European and Japanese central cities are far more dense than U.S. cities, and driving costs far more than it does here — Paris to Marseilles, France, costs $75 in tolls and $6 a gallon.

If we know Gov. Scott, he indeed will study all of these facts. And knowing what we do about his objections to government spending what it doesn’t have, there should be no doubt in his conclusion. Our greatest hope is that he will pass his first big test: Say no to high-speed rail. Floridians and American taxpayers can’t afford it.

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FLORIDA’S FUTURE: CALIFORNIA HIGH-SPEED DISASTER
Go to “www.reason.org/topics/trains” on the Reason Foundation’s website, and the list of articles below pops up. Peruse the list. The articles and reports focus primarily on California’s high-speed rail experiences, and the messages are clear:

1) High-speed rail has been a financial and ridership disaster for California taxpayers for 14 years.

2) There’s no reason to expect the outcome will be any different for Florida.

• “High Speed Rail Goes Loco,” Tim Cavanaugh, Dec. 3, 2010
• “Robert Samuelson on High-Speed Trains: ‘People prefer fashionable make-believe,’” Matt Welch, Nov. 1, 2010
• “L.A. Transit Spends $5 Billion to Decrease Ridership,” Tim Cavanaugh, Oct. 28, 2010
• “Gubernator Cuckoo for Chinese Choo-Choo,” Tim Cavanaugh, Sept. 14, 2010
• “SF Chron: Put a Bullet In This Train!,” Tim Cavanaugh, Sept. 2, 2010
• “California Roundup: Would the Bullet Train Be Good for the Jews?,” Tim Cavanaugh, July 28, 2010
• “California Roundup: $8 Billion Rail Project Results In Fewer People Riding Public Transportation,” Tim Cavanaugh, July 23, 2010
• “California Still Going Off the Rails on a Crazy Train,” Tim Cavanaugh, July 1, 2010
• “Reason.tv: Reason Weekend 2010-Robert Poole and Adrian Moore on High-Speed Rail Boondoggles,” June 28, 2010
• “Silver Bullet Train! California’s Low-Flying Rail Boondoggle Gets Off to High-Paying Start,” Tim Cavanaugh, May 7, 2010
• “Out-of-Control Bullet Train Destroys Hundreds of Homes, Businesses,” Brian Doherty, April 5, 2010

Florida’s high-speed rail: costly for taxpayers

The old saying about not looking a gift horse in the mouth should be challenged by Florida taxpayers, when it comes to the announcement of a $1.25 billion grant to start development of a high-speed rail line between Orlando and Tampa. If Florida accepts this money without figuring out how to pay for the rest of the project, there could be very serious consequences for hard-pressed taxpayers.

Unlike most of the other “high-speed” rail projects receiving federal grants, this one is not to upgrade an existing rail line for a top speed of 110 miles per hour (mph) vs. the current 79 mph trains. No, the Florida project is for brand new, truly high-speed rail on exclusive, new right of way, along the I-4 highway corridor. This is by far the most expensive form of high-speed rail. A 2009 GAO report that looked at recent high-speed rail projects in France, Spain and Japan shows them averaging $51 million per mile (excluding one very high-cost Japanese line). For the 84 miles of the Tampa-Orlando route, that totals $4.28 billion. So merely to build this project is going to require another $3 billion from somewhere. Florida is facing a several billion-dollar budget deficit this year, so it’s hard to see where the extra money could come from.

It definitely won’t come from private investors, since these kinds of projects do not make a return on their investment. Indeed, a December 2009 report on high-speed rail from the Congressional Research Service (CRS) helpfully points out that of all the dozens of high-speed rail projects built worldwide over the last several decades, only two are “estimated” to have paid for their capital cost out of farebox revenues. All the rest, in Japan, France, Spain and elsewhere, have been largely paid for by general taxpayers.

Then there’s the little matter of operating and maintenance costs. Both GAO and CRS note that whether such a line can cover those costs out of passenger revenues is highly dependent on ridership. The ideal situation is a corridor several hundred miles long anchored by two large, centralized metro areas. The federal fact sheet on the Florida line claims that both Tampa and Orlando are among the largest 20 metro areas; in fact, while Tampa ranks 17th, Orlando is 32nd in size — and both are very spread-out, low-density areas.

This corridor does not make CRS’s list of the top 12 city-pairs for potential high-speed rail ridership. In fact, CRS estimates that the train in this corridor would likely reduce traffic on I-4 by less than 2%. That doesn’t bode well for high-speed rail ridership, especially since 84 miles is way too short for people to fly, so all potential riders must come from those who would otherwise drive.

Given all this, I estimate that Florida taxpayers will get stuck with an annual operating deficit that they will have to pay for, indefinitely.

Bottom line: This gift horse looks to me like a gift that will keep on taking.

Robert Poole is director of transportation policy and Searle Freedom Trust Transportation Fellow at Reason Foundation, the free-market think tank he founded. Poole, an MIT-trained engineer, has advised the previous four presidential administrations on transportation and policy issues. He wrote this article for the Reason Foundation one year ago.