More Cost/Benefit Foolishness

You can read another example of the foolishness of Cost/Benefit analysis in the story from the NY Times below. At least the governor of Florida realized that the phony numbers would leave Florida with a huge, ongoing debt if the phony numbers were accepted. Good for him!!

Florida’s Governor Rejects High-Speed Rail Line, Fearing Cost to Taxpayers

By TIMOTHY WILLIAMS

In the most significant blow yet to the Obama administration’s vision of a national high-speed rail network, Gov. Rick Scott of Florida on Wednesday rejected plans for a high-speed link between Tampa and Orlando, in the process turning down more than $2 billion in federal money.

Mr. Scott is the third newly elected Republican governor to turn down a portion of the administration’s national rail system, joining John Kasich of Ohio and Scott Walker of Wisconsin. Each of the three replaced governors who had lobbied for the funds.

Mr. Scott’s move comes a little more than a week after Vice President Joseph R. Biden Jr. called for spending $53 billion on passenger trains and high-speed rail projects over the next six years as part of the administration’s goal of making high-speed rail accessible to 80 percent of Americans within 25 years.

The 85-mile Tampa-to-Orlando segment, on which trains would travel as fast as 170 miles per hour, was to be the showpiece of that initiative — in part because the government already owned much of the right-of-way along the route, which would allow it to be built relatively quickly, and because the fast-moving train would contrast with slow-moving traffic along Interstate 4.

But critics — including the Republican majority in the House of Representatives, which has questioned the White House’s rail strategy — say the need to link Tampa and Orlando pales in comparison with the need for high-speed rail serving places that have received relatively little in federal economic stimulus funds for transportation projects, including the busy Northeast rail corridor between Washington and Boston.

Mr. Scott said at a news conference in Tallahassee on Wednesday that cost overruns related to the Tampa-to-Orlando line could leave Florida taxpayers stuck with a $3 billion tab. Further, he said that if the state deemed the project too costly after having started construction, it would be required to return the $2.4 billion to the federal government. He also said he believed that estimates of riders and revenue for the rail line were too optimistic, and that state taxpayers would have been left to pay for subsidies to keep the line running because it would be unable to pay for itself.

Mr. Scott said that although one study had projected that three million people would use the Tampa-to-Orlando line annually, he said only 3.2 million people rode Amtrak’s Acela trains in the Northeast Corridor in 2010, even though the population centers along the Acela route have as many as eight times the population of the area that would be served by the proposed Florida line.

When commuter rail passengers are included, about 12 million people ride trains annually along the Northeast Corridor. “The truth is that this project would be far too costly to taxpayers, and I believe the risk far outweighs the benefits,” he said at the news conference.

Ray LaHood, the transportation secretary, said in a statement on Wednesday that he was “extremely disappointed” by Mr. Scott’s decision, but that the money would most likely be redistributed to other states.

Mr. Scott’s decision left Democratic as well as Republican lawmakers saying Wednesday that they had been taken by surprise, particularly given that Florida’s unemployment rate is about 12 percent. The rail line had been expected to create thousands of new jobs.

Representative John Mica, a Florida Republican and the new chairman of the House Transportation and Infrastructure Committee, told reporters Wednesday that he had tried but failed to talk Mr. Scott out of turning down the project.

Mr. Mica said the “federal government has done everything” it can, including agreeing to put up 90 percent of the rail link’s financing. He added that it “defies logic” that Mr. Scott would cancel the rail line before the state had received bids on the project.

The current proposal for a high-speed Tampa-to-Orlando line, which was supposed to eventually connect with Miami, was one of two high-speed lines approved by Congress. The other would connect San Francisco and Los Angeles at speeds up to 225 miles per hour. That project has received federal pledges of about $3 billion, though the cost has been estimated to be $43 billion.

Gary Fineout contributed reporting.