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The government of Florida rejected federal funding for high-speed rail. The same is true for Ohio and Wisconsin. I can't wrap my mind around this — if someone else is paying, why reject basic infrastructure? The governor of Florida said:

First, he predicted construction cost overruns would put Florida taxpayers on the hook for $3 billion.

Secondly, he said, low ridership would have required state subsidies.

And finally, he said, if the project was shut down, the state would have to return the $2.4 billion to Washington.

These statements are contested; for example, the article goes on:

A spokeswoman for the U.S. Department of Transportation, though, said the state wouldn't necessarily have had to pay back the money and the issue could have been negotiated if Scott had ever raised it with federal officials.

As to his first two concerns, bid documents being prepared by state transportation officials would have required companies bidding on the project to cover the state's obligation, as well as any construction cost overruns and operating losses due to low ridership. Companies had indicated they were willing to accept those terms.

Considering that these facts are not agreed upon, were other arguments made by critics of the funding that are not being disputed by its proponents?

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    No, true reasons are that US DOT spokeswoman (or whoever writes the speech for her) are as incompetent as ever and couldn't do a realistic financial projection if it fell on their head. Look up how much money Amtrak subsidies added up to. – user4012 Feb 6 '13 at 3:24
  • -1, but only for the last paragraph. Not a bad question if you take away your personal opinion of which side you trust more to judge what "true" reasons are. – user4012 Feb 6 '13 at 3:33
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    Even if the fund never had to be paid back there is still the issue of ongoing subsidies and maintenance costs that the state would be on the hook for. Your answer is int your question. – SoylentGray Feb 6 '13 at 3:40
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    Might be because their projections on ridership were inflated. That tends to happen when you commission a study that costs millions of dollars. The two studies had a ridership difference of ~1 million riders (30% error) from a previous study, how accurate could they be? – user1873 Feb 6 '13 at 5:14
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    Even Politifact puts the states obligations at $280 million. The project was killed, before private bids were ever received, so there is no telling if the state transportation official's requirements would have been met. – user1873 Feb 6 '13 at 7:46
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As a citizen of Ohio, I had a front row seat for much of the reporting and public debate over the projects you reference in your question.

Taking the governors' arguments at face value, each state was primarily concerned with the costs of sustaining and maintaining the new rail lines once they were in place. The costs you mention in the question all center around who would pay for the initial construction of the line. While there was some disagreement on the facts there as you highlighted, the federal government never intended to pay long term support costs for the new trains and this was a financial commitment the governors in these states were not willing to accept.

If it was truly, "free money" as your question suggests, the record indicates that even these governors would have accepted the money:

Both Mr. Walker and John Kasich, the governor-elect of Ohio, had sought permission to spend the money on highway construction or other infrastructure projects. But the money was part of $8 billion in the stimulus bill for train projects.

Instead, their concern was limited to the nature of the spending.

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Michael's answer is definitely correct for that specific circumstance. I would provide another example to help round out the answer to your question.

Currently, the state of Illinois is looking at putting high speed rail between Moline and Chicago. The federal govt. has said it will make funds available for the project, but only if the state puts in $47 million (I believe that is the amount, I could be off by a little bit.) Some people in the state believe that 47 million would be better spent on other projects before a high speed rail. If they don't agree to spend that money on the rail though, they are essentially turning down the federal grant.

So to answer your question, states generally aren't turning down the money so much as they are turning down the stipulations the money comes with.

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