Dr. E. Eugene Webb
Local politicos are screaming their heads off trying to figure out a way to get the Fed’s high speed rail money into Florida. The thinking is all short sighted and fails to look at the realities of business and the economy.
Reason One: All of the facts are flawed and biased; cost to build, cost to operate and the number of jobs it will create.
Reason two. Private enterprise is unlikely to go on the hook for the whole deal. If they do here is the 800 pound gorilla. BANKRUPCY. It will be set up as a subsidiary or private wholly owned company. If the rail project starts to tank private enterprise, no matter who they are, what the agreed too, or what they signed, will run away from this like rats from a sinking ship. They have too. The have their equity owners to worry about and any executive who doesn’t will be out the door in a heart beat. Just how long do the leaders of Tampa, Lakeland and Orland think these guys will hang on. Answer not very long. They will sign anything, say anything and do almost anything to get their hands on the Fed’s money. But when the money is gone, ridership doesn’t materialize and it goes south all we will see is red tail lights and the taxpayers will be stuck with the bill. If you think for one minute three cities can litigate their way through that mess, then high seed rails for you.
Reason three: Local governments have a horrible history negotiating long term contracts with private industry. Even when they have lots of time to do the deals, these agreements often fail. The local high speed rail initiative being driven by Mayor Iorio is moving at lightning speed and there is little chance they can cover all the bases to protect the citizens of these communities. So here is the question. If you live in Tampa, Lakeland or Orlando are you willing to bet your future tax rates on high speed rail? If this project fails the only place the bailout money can come from is the governments who signed on for the deal.
Think about it.