The analysis is in: the Tampa-to-Orlando high-speed rail (HSR) project that was shot down by Florida Governor Rick Scott would have been profitable for the state.
The analysis, conducted by the Florida Department of Transportation and sent to the Federal Railroad Administration this past November, found that losing the $2 billion the U.S. government was offering “Pink Slip Rick” will cost the state for decades to come:
The heart of the report is an analysis by two consulting firms of projected ridership, costs and the resulting surplus – or loss. If the project to link Tampa and Orlando would have gone forward, the research would have been used in determining an investment grade for bond sales.
According to data from both consulting firms hired by the state, the project, which would have given Florida the nation’s first high-speed rail line, would have been a fiscally sound decision.
The firm of Steer, Davis, Gleave projected Tampa-Orlando ridership of 2.5 million and a $9.1 million deficit in 2016, the first year of operation. By 2026, though, the high-speed rail would be carrying nearly 5 million passengers a year and generate an annual surplus of $31.1 million, according to the firm.
The projection by Wilbur Smith Associates was even rosier. The firm estimated 3.6 million riders in 2016, producing a $17.6 million operating surplus. By 2026, Florida’s high-speed rail would carry more than 5 million riders and produce a $44.8 million surplus, according to its analysis.
The state used the information from the two consultants to come up with a midrange estimate: 3 million passengers and $4.3 million surplus in the first year, and a ridership of nearly 5 million and an annual surplus of $38 million by 2026.
Did you hear that, California?
Projects like these eventually pay for themselves. Florida’s HSR in particular, with two phases (Tampa-to-Orlando and, later, Orlando-to-Miami), would have boosted the state’s already profitable tourism industry. The second phase was not included in the study’s findings, but was referenced in the report:
“Ridership and revenue for the (proposed second phase) Orlando-Miami corridor would be expected to be substantially higher and produce large operating surpluses,” the state report said.
Governor Scott, in true Tea Party fashion, refuses to admit his mistake and stands by his decision despite facts flying at him like winged monkeys in The Wizard of Oz:
A Scott spokesman last week said the governor stands by his decision to turn down the federal offer to pay $2.4 billion of the projects estimated $2.65 billion cost. The governor’s office has said Scott was “verbally briefed” on highlights of the study before it was completed.
“The governor thoroughly explored all of the issues surrounding High-Speed Rail, especially ways to lessen the financial risk to Florida, but he ultimately reached the same conclusion that California is now reaching – that the concept just isn’t going to be able to pay for itself,” Scott’s communication director Brian Burgess said in an email.
When making his decision a year ago, Scott relied heavily on a January 2011 Reason Foundation policy brief, whose project director Robert Poole Jr. served on Scott’s gubernatorial transition team.
Using comparisons with overseas high-speed rail projects and one envisioned for California, the report by the libertarian group said it was likely the project would cost significantly more to build than estimated and that the state could be on the hook for significant operating subsidies for years.
Who knows which “overseas” HSR projects the Governor’s office compared themselves to. Spain’s HSR, for one, has been a huge success. In a tourist driven economy, high-speed trains between your three major cities should be a no-brainer. But, not when your Governor strives for historically low approval ratings and is the man who defends Bain Capital with a famous Holocaust quote:
“I’ve got a quote in my office,” he said before paraphrasing Martin Neimöller’s famous statement criticizing the complacency of some during the Nazi-era. “First they came for the Jews, and I wasn’t a Jew so I didn’t say anything…”
Bad news Floridians: your Governor is not Jewish. Wait…WHAT!? Oh, I get it. I think he means there’s $31 million at the bottom of the Biscayne Bay.