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U.S. News and Commentary



Wednesday
Mar162011

Nelson ‘fighting’ for rail money as NPR, other media misinform on study

Gov. Rick Scott turned down $2.4 billion taxpayer (or borrowed from foreign countries) dollars the US Dept. of Transportation offered Florida. The money would’ve helped to create a high speed rail line between Tampa and Orlando. Supporters also want future lines between Orlando and Miami and maybe one day Orlando and Jacksonville.

The Florida Times-Union ran a story on Saturday suggesting US senator Bill Nelson (D-Fla.) might go after the money despite Scott’s concerns. The header to the story in the print edition was “Nelson fighting to get back rail money.” The header to the online story read “Florida loses high-speed rail money, but Tampa and Orlando might get it back.”

My problem: the newspaper and National Public Radio misinform the readers about a study touted by supporters as proof the rail line would be profitable.

The T-U said Nelson talked to the chief at Transportation and the outcome suggests possibilities for a new transit authority. The authority would have to operate, however, “in conjunction with Amtrak or another established transportation authority.”

Supporters of high speed rail believe it would be a bonus for the Sunshine State. Doubters believe it would end up in an Amtrak dilemma—needing taxpayer money to stay afloat. Supporters claim there’s a great demand for such transportation; they believe the line(s) would be profitable. Doubters have trouble reconciling the word ‘profitable’ with ‘government’ because of history involving institutions like the US Post Office, Fannie Mae, Freddie Mac and healthcare.

Scott had concerns about putting taxpayers on the hook for another government subsidized entity whose future may be impossible to accurately predict. A study was done—by those the paper described as “independent contractors working for the Florida Department of Transportation.” The newspaper and National Public Radio said study authors concluded the line would yield a $10 million or more operating surplus in its first operational year. The authors of the study estimated millions of paying customers.

There’s a problem with the claims. The full study won’t be out until mid-April, according to a public information specialist with FDOT. I obtained the material that has been released. Both the newspaper and NPR implied all the data is in hand. It isn’t. The preliminary data consists of tables of projected usage and estimates for operating and maintenance expenses.

The preliminary data tables showed costs do not include police, security or environmental safety estimates. It’s a no-brainer there will be costs because of environmental issues—there always are. Translating for laymen: courtesy of my background in environmental matters, it is possible that the discovery of a single rare flower or even an insect can spark the re-rerouting of a highway. Or a rail line.

The revenue and ticket sales are based on projections that include ‘induced demand.’ That means if you make or provide more of something, more will be consumed. If mortgage lending comes to mind, you're as sharp as I am.

As Florida debated high speed rail, the US House Committee on Transportation and Infrastructure headed by Congressman John Mica (R-Fla.) held hearings on Friday. Topic: “Finding Ways to Encourage and Increase Private Sector Participation in Passenger Rail Service.” Here’s a bottom line that came out of that hearing: “In fiscal year 2010, Amtrak carried 28.7 million passengers, 6 percent more riders than in 2009, and the same ridership level as fiscal year 2008. Even with higher ridership, however, the cost to the federal government to cover the railroad’s capital and operating costs results in an average taxpayer subsidy of $54.48 per ticket.”

Bearing Amtrak’s passenger volume in mind, consider the preliminary data projections released by FDOT for the Tampa-Orlando corridor in 2016: 39,066 million (including ‘induced demand’).

Nelson and other rail supporters might want to study the figures a bit closer. And newspapers and National Public Radio might want to be accurate in stating as yet unsupported claims of a $10.2 million operating surplus in the first year of operation.

Repeating: the full study results won’t be available until mid-April. The NPR article states the “full study” has been released.

Without knowing methodology or having the full study in hand, allied media are simply lobbying for something they do not have all the data on. FDOT said the study was conducted by Wilbur Smith Associates and Steer, Davies, Gleave.

I do realize Amtrak and high speed rail are very different in some regards but they are obviously alike in others.

Scott’s concerns are well-placed.

(Commentary by Kay B. Day/March 16, 2011)

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