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A once super-majority of Florida state senators opposed to Gov. Rick Scott's rejection of federal high-speed rail funds has evaporated just as a regional effort began to salvage the project.
At least two senators who signed a Feb. 17 letter critical of Scott's action withdrew their names, and another senator who signed it says he wouldn't spend a dime on the train.
The revelations put the $3.2 billion Tampa to Orlando passenger rail line on life-support. That cost includes $572 million in assumed publicly donated right-of-way and bridges from the state and local governments.
A group of local, state and federal leaders hope to snatch it out of state control by creating an independent regional agency to oversee it. U.S. Rep. Kathy Castor, D-Tampa, U.S. Rep. Corinne Brown, D-Jacksonville, and Tampa Mayor Pam Iorio, also a Democrat, lead that group.
State Sen. Greg Evers, R-Baker, who showed support for the project a few days before, now regrets signing the letter.
That shift could prove influential. Evers sits on a transportation budget committee and is vice-chairman of the transportation committee.
He wants to put what he now calls a “boondoggle” out of its misery. Evers directed that his name be removed from a list of senators opposing the governor's action.
“Let me be very clear,” wrote Evers to U.S. Transportation Secretary Ray LaHood. “I do not want to spend one dime on High Speed Rail and I absolutely support Governor Scott sending the money back.”
In his letters to Scott and LaHood, Evers also hammered away at SunRail, the 61-mile, $2.6 billion commuter rail project planned for the Orlando area with local, state and federal funds.
Evers writes to Scott, “I fully support your decision to send back the money earmarked for High Speed Rail and implore you to revisit your budget proposal as it pertains to SunRail.” Emphasizing the word “any” with italics, Evers adds, “We should not fund any rail projects with Florida taxpayer dollars.”
And further, Sen. J.D. Alexander, R-Lake Wales, chairman of the Senate budget committee, says there is no effort in the Legislature to resurrect the train funding. While he says he would have preferred to see the bids first, he has serious reservations about the costs to the state and does not see support for state funding of it.
Sen. Paula Dockery, R-Lakeland, and Sen. David Simmons, R-Altamonte Springs, drafted the Feb. 17 letter originally signed by 26 of the 39 sitting senators — exactly the two-thirds needed to override a veto.
That's gone, and then some. That will be the case even if the 40th senator — likely a pro-rail Democrat — sides with rail supporters following a March 1 special election.
Sen. Lizbeth Benacquisto, R-Wellington, another signer, withdrew her name from the letter the same afternoon. She sits on the transportation and transportation budget committees with Evers.
“The rail project is not in the best interest of the state at this time, and if she had the opportunity to vote on this matter she would vote against it,” says Benacquisto's legislative aide, Matthew Hunter. He says there was a “mix-up,” and that the senator's name and signature should never have appeared on the letter.
That was news to Dockery's camp a day later. On Feb. 22, her legislative aide, Rachel Rogers, told the Business Review that she doesn't understand how a mix-up might have occurred. Rogers says Sen. Dockery had not been informed yet by anyone of Benacquisto's changed status.
Bottom line: that leaves 24 signers, including 13 Republicans — but some of those are less than fully on board with Dockery.
'A dead dog'?
Sen. President pro-tempore Mike Bennett, R-Bradenton, signed the letter because he feels the governor should have worked with the Legislature first. Nonetheless, Bennett says, “I don't think we should put a dime into high-speed rail, especially a dime from Florida residents.”
Bennett, who's considering a run for Congress in 2012, adds, “Where do they think this money comes from? There's no such thing as federal money,” he says, making the point that it's all taxpayers' money and much of it borrowed from China.
Sen. Dennis Jones, R-Seminole, says although he signed the letter, it had more to do with the fact that the regular session starts March 8, allowing the Legislature a chance to weigh-in on the issue soon.
Still Jones has reservations that stem from state taxpayers' covering $34.6 million in annual operating deficits of Tri-Rail in more densely populated South Florida, and the state's own $3.6 billion budget gap. “If it's a dead dog, and we have to keep it on life support, then I certainly wouldn't be for it,” Jones says.
Other local senators who signed the letter are Sen. Mike Fasano, R-New Port Richey, Arthenia Joyner, D-Tampa, and Sen. Nancy Detert, R-Venice.
Sen. Garrett Richter, R-Naples, Sen. Ronda Storms, R-Brandon, and Sen. Jim Norman, R-Tampa, all refused to sign the letter.
Sen. President Mike Haridopolos, a U.S. Senate candidate, backed up Scott in a Feb. 18 press release, saying, the project “ ... has a questionable-at-best economic viability.”
Haridopolos adds, “We will not finance our future. We have also said that under no circumstances would we use state dollars, needed to support priorities like education, to pay for high-speed rail.”
Richter explains his reason: “I didn't sign it because I think the governor made a good decision. He made a rational decision. None of these projects come in under budget, none come in on budget.”
Revenue guarantees?
That's exactly Scott's big concern.
Calling it “a high-risk rail project,” Scott cites studies showing huge cost overruns on high-speed rail projects around the world and evidence that only two projects in high-density locations in China and France operate in the black.
Scott says a possible $3 billion construction cost overrun would burden state taxpayers, and not “provide any meaningful job creation beyond the construction phase, nor will it result in sustainable economic growth opportunities.”
In his announcing his decision, Scott noted that, “Historical data shows capital cost overruns are pervasive in 9 out of 10 high speed rail projects and that two-thirds of those projects inflated ridership projections by an average of 65 percent of actual patronage.”
Eight consortiums that plan to bid on the project would be required to fund $280 million in capital costs, plus assume ridership and revenue risk. But according to Scott, those bidders will bid on the Tampa to Orlando line to get a right of first refusal to operate the prospective line from Orlando to Miami.
Scott notes that the big capital investments would have to be made before ridership numbers are known, increasing “ ... the potential for significant capital and operating cost overruns.”
Scott writes, “ ... it is likely that even with financial guarantees from a private sector builder/operator, moving forward with such a project would likely lead to a financial obligation by the state of Florida in the future.”
Robert Poole, a transportation financing expert with California's Reason Foundation, call it “a pipedream” to expect bidders to guarantee to absorb all cost overruns and sign a long-term agreement guaranteeing no operating subsidies.
California offers a warning. There, bidders are asking for “revenue guarantees” from the state if ridership and revenue goals aren't met. That means they're looking for an operating subsidy from a state with a nearly $20 billion budget deficit. But the catch is that bidders can't get financing for the project without the revenue guarantee.
The not-so-“Golden State” may find itself run over by legal issues tied to funding. According to a Jan. 12 legal analysis prepared for the California High-Speed Rail Peer Review Group, a major segment of the project is ineligible for $9 billion in bond funds because it's not a truly high-speed project.
The report concludes, “If the Central Valley Project is to be built at all, it will have to be financed by Federal funds and private sources alone.” But the private sources need state revenue guarantees.
Writes Poole, who agrees with Scott's decision, “If the private sector required that protection in order to fund the California project, whose ridership is far higher than that in Florida, there is no way they would go unprotected in Florida.”
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