Obama Enjoining The States Into His Federal Stimulus Bankruptcy Programs

High Speed Rail to Nowhere

The Weekly Standard, February 28, 2011
From the Scrapbook
William Kristol, Editor

“Government can only give to us what it has previously taken from us.”

President Obama’s high-speed trains hit another bump last week. Florida’s governor has now agreed with Wisconsin’s and Ohio’s that the president’s dream would be a nightmare for taxpayers in his state.

As Stephen F. Hayes reported in these pages two months ago (Railing Against Big Government, December 20), Wisconsin governor Scott Walker and Ohio governor John Kasich both said thanks but no thanks to the offer of federal stimulus funds to be used as a down payment on the build-out of high-speed rail service. Both of the incoming governors had in fact come out against the project in their successful election campaigns last fall.

As Hayes noted, Walker in particular was highly vocal on the campaign trail about the obligation Wisconsin taxpayers would incur to cover shortfalls and operating costs for the $810Â million line that would have connected Madison and Milwaukee. It was a foolish undertaking, he thought, for a state with a $3 billion deficit and on a route for which there was little demand for better rail service.

Kasich, for his part, turned down $400 million in stimulus money to connect Ohio’s three biggest cities – Cleveland, Columbus, and Cincinnati – with high-speed rail. There was little public enthusiasm for the project, Hayes noted, which wouldn’t even have allowed an Ohio State fan to travel from Cleveland to Columbus and back on game day. And, as in Wisconsin, Ohio would have been on the hook for operating expenses and cost overruns. A happy outcome for taxpayers? Not so fast. The depressing postscript was that while both governors wanted to see the stimulus funds returned to the Treasury, thereby lowering the federal deficit, the Obama administration simply redirected the funds to states like California, which are friendlier to the administration, taxpayers be damned.

Last week, Florida governor Rick Scott also rejected federal funds for high-speed rail connecting Orlando and Tampa, a decision that could send up to $2.4 billion in stimulus money back to the federal government. Scott said that the red ink in President Obama’s budget and the higher taxes the White House is proposing would hurt the business environment in Florida. As Hayes noted on this magazine’s website, the decision came after Scott’s administration conducted a feasibility study to determine whether such a rail would be cost effective. It came back with the unsurprising conclusion: No, it wouldn’t be.

An independent study conducted for the Reason Foundation by Wendell Cox found that Florida taxpayers would almost certainly be on the hook for additional funding for the project, potentially a lot of money. Bob Poole, a transportation expert with the Reason Foundation, served as a campaign adviser to Scott. He told The Weekly Standard that funding shortfalls were almost inevitable. Historically, 90 percent of high-speed rail projects have had cost overruns.

In a statement announcing his decision, Scott listed three specific reasons for rejecting the money:

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).

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.

Despite this well-deserved rebuke from three governors and counting, the Obama administration’s new budget proposes an additional $53 billion for high-speed rail, one of the administration’s keys to winning the future. In his State of the Union, Obama pledged to make high-speed rail available to 80 percent of Americans in the next 25 years. As he did when Wisconsin and Ohio said no to the high-speed rail boondoggle, Transportation Secretary Ray LaHood, predictably, has promised to redistribute the money not spent by Florida to more politically compliant states.

The administration should, instead, heed Scott’s admonition: Let us never forget, whether it is Washington or Tallahassee, government has no resources of its own. Government can only give to us what it has previously taken from us.



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