http://www.bloomberg.com/news/2011-02-25/florida-s-scott-defends-refusal-of-high-speed-rail-money-criticizes-obama.html

Summary
On February 16, 2011, Florida Governor Rick Scott declined funding for President Obama's proposed high-speed rail plan that would link the Tampa and Orlando metropolitan areas. The plan called for 2.4 billion dollars of federal money to be handed over to the state to finance the project. Gov. Scott has several issues with the rail plan including the fact that, historically, these projects have cost much more than originally budgeted for and many operate at a loss once completed. On top of that, if the project were to not be completed for whatever reason, then the Florida taxpayer would be on the hook to the federal government for the $2.4 billion. Gov. Scott believes the answer to fixing Florida's economic issues, and even those of the nation, lies with lowering taxes, cutting government spending, and not adding to an ever increasing deficit. Scott uses the Miami to West Palm rail line as an example of his point. That line costs more than $65 million per year to operate, but that fairs only cover $10 million of that. Scott's opposition says that the line was financially viable and that Florida taxpayers would not have been responsible for any costs associated with the project. Transportation Secretary Ray LaHood, also a Republican, said that Gov. Scott's position was incorrect and that the project would have created thousands of new jobs for the state. Gov. Rick Scott joins newly elected Republican governors John Kasich of Ohio and Scott Walker of Wisconsin in the rejecting of federal funds for high-speed rail projects.

Economic Impact
The job creation potential for a project of this magnitude is something that deserves to get looked at very closely. But the real issue here is whether this government funded high-speed rail project equates to us "cutting off our nose to spite our face". The risk/reward for a project like this is something that probably would have been embraced during the economic boom of the late-90's but we find ourselves today in rather dire economic straights. While the influx of the estimated 25,000 new jobs would definitely help to boost the economy, but these numbers include many temporary jobs which would lessen the impact. And if history has taught us anything, it is that government construction projects can often times become unwieldy and bogged down in bureaucracy. Should this project fail to completed, similar to what happened in New Jersey, then the federal government would hand Florida a $2.4 billion dollar bill and I'm not sure that is what the state needs at a time when we are having to make heavy cuts in order to balance the state budget. For whatever reason, high-speed rail, like soccer, is having a hard time catching on in the U.S. as opposed to other parts of the world; Europe in particular. With rising oil prices in the U.S., many argue that high-speed rail presents a cleaner, ultimately cheaper solution to long-range travel within the country. Others would say that the massive investment involved in building the system is far too costly at a time of economic hardship. Critics also say a high-speed rail system simply is not practical in a country the size of the U.S. given how spread out we are. Given the economic status of the state of Florida right now, I think we can find less "capital-intensive" investments to make with our tax dollars that, while cannot single-handed create 25,000 new jobs, can help us get a bit closer to economic recovery. The government is not a revenue producing entity, and any money that it returns to the taxpayers is simply giving back what was already once ours.



Critical Thinking Questions
1) Does Gov. Scott assessment that high-speed rail projects often times go over-budget hold true?

A) Historically, 90% of these high-speed rail projects have run over-budget based on their initial estimated costs, as well as 67% having inflated ridership projections upwards of 65% per year. It is projected that 3.07 million people will use the train annually. Gov. Rick Scott put out a press release reiterating this point, "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." The federal government has allotted the San Francisco to Los Angeles rail line around $3 billion, but private estimates put the cost of that project closer to around $43 billion. The facts, in this regard, do back up the Governor.

2) What are the historical positives of high-speed rail on the economy?

A) The Tampa-Orlando line is a small piece of a much larger picture. The project is reminiscent of the "highway project" of the 50's in that it was not all built in a day. Large investments of taxpayer dollars will have to be invested if this project is ever going to come to fruition. Once the rail-lines and trains are built, however, are when the rewards begin to pay off. While I do not believe America will move away from the internal combustion engine until it's pried out of our cold, dead fingers; I do think that high-speed rail is a convenient, safe, cost-effective, and fun alternative to jumping in the car and driving cross-country. The Tampa-Orlando line was fast-tracted due to the fact that once the funds were received, the project would be off and running in a matter of months. This influx of new jobs, however temporary, would stimulate the economy, even if only for a short time.

3) What alternative moves could be made to move Florida's economy back in the right direction?

A) Supply-side economics. Put money back in the hands of job creators by cutting taxes on business owners and corporations within the state. Reduce state laws concerning gambling and tax earnings. Cut government spending. Improve ports and interstate travel to accommodate better shipping and entice new businesses to use our ship yards and highways. All of these are viable options for fostering a "business-friendly" environment within the state of Florida.

Sources
Bloomberg
NY Times
Time
CNN
Flagov.com