TALLAHASSEE, Fla. (AP) - Florida Gov. Rick Scott canceled plans for a high-speed train line between Orlando and Tampa promoted by President Barack Obama, saying Wednesday it would cost the state too much even with $2.4 billion in federal help.
Cost overruns could put Florida on the hook for another $3 billion and once completed, there's a good chance ridership won't pay for the operating cost, meaning the state would have to pump more money into the line each year, Scott said.
"The truth is that this project would be far too costly to taxpayers and I believe the risk far outweighs the benefits," the Republican governor said in a press release issued after he informed U.S. Transportation Secretary Ray LaHood of his decision.
LaHood later released a statement that contradicted Scott's assessment of the risk.
"We worked with the governor to make sure we eliminated all financial risk for the state, instead requiring private businesses competing for the project to assume cost overruns and operating expenses," he said.
The move comes a week after Scott, a former CEO who took office in January, proposed state spending cuts of $4.6 billion in the next budget and tax and fee cuts totaling close to $2 billion as Florida grapples with the effects of the recession and continued high unemployment.
Scott said if the rail project failed, the state would have to return the money to the federal government.
"My background is in business, not politics. But you don't have to be an economics expert to understand that if you spend more money than you take in, your business will fail," Scott said.
LaHood said he was disappointed, but that other states would be happy to get Florida's money.
"This project could have supported thousands of good-paying jobs for Floridians and helped grow Florida businesses, all while alleviating congestion on Florida's highways," LaHood said. "Nevertheless, there is overwhelming demand for high speed rail in other states that are enthusiastic to receive Florida's funding and the economic benefits it can deliver."
Scott's decision was immediately criticized by politicians from both major parties who support the project.
"I am deeply disappointed," said U.S. Rep. John Mica, a Republican whose district reaches from Orlando to the Atlantic Coast, where the rail service could have been expanded. "This is a huge setback for the state of Florida, our transportation, economic development, and important tourism industry."
Democratic U.S. Rep. Kathy Castor, who represents the Tampa area, shared his disappointment.
"Governor Scott's decision demonstrates a devastating lack of vision for Florida and a lack of understanding of our economic situation," she said. "The governor's campaign slogan was 'let's get to work,' but his refusal to accept vital investment dollars eliminates the opportunity to put thousands of Floridians to work in construction, engineering, architecture and most all areas of Florida's economy."
The project was important enough for state lawmakers to call a special session in December 2009 solely to approve money for an Orlando-area commuter rail system that would connect with the high-speed rail. They acted with urgency because the project was needed to attract stimulus money for the high-speed rail.
High-speed rail is one of Obama's priorities, and his latest budget proposal calls for $53 billion over the next six years for projects across the country. Florida also stood to benefit when Republican governors in Ohio and Wisconsin rejected high-speed rail projects. The Obama administration committed another $342 million to Florida from the money that would have gone to those states.
Scott criticized Obama's spending plans when he announced Florida would reject the money, saying the president's most recent budget proposal would increase the country's debt.
"Higher taxes and more government spending is a recipe for disaster. Government has become addicted to spending beyond its means and we cannot continue this flawed policy," Scott said.