03/29/2011 10:29 am ET | Updated May 29, 2011

Look Who's Derailing High-Speed Rail

Will North Carolina be the latest to turn away federal funds for high-speed rail?

As part of the American Recovery and Reinvestment Act, President Obama set aside $8 billion to jump-start high-speed rail in regions across the country. The funds were divvied up between 13 planned high-speed corridors in 30 states and D.C., according to the allotment in the table below.

We Don't Need No Stinkin' Rail Money

That was back in 2010. But now, with a wave of new governors and legislators hitting statehouses across the nation fresh from the midterm elections, some states are choosing to opt out.

The arguments go something like this. On the "no thanks" side, it is claimed that these high-speed rail projects are just high-speed trips to financial ruin. It's all a nasty plot by the Obama administration to leave the states on the hook for mass transit systems that will never produce net revenue, thereby financially strangling states already coping with budget deficits.

high-speed passenger rail map

Click here for the White House's interactive map.

High-Speed Rail Funding Breakdown
Recipient Amount of Funds

(millions of $$)






Washington $590
North Carolina $545


New York       

Northeast Corridor* $112



Vermont $50




Pennsylvania $27

Oregon $8
Multiple** $6
Texas $4
Source: White House [pdf]

* The Northeast Corridor includes Rhode Island, New Jersey, Maryland and Washington, D.C.

** Used for planning in Alabama, Colorado, Delaware, Georgia, Iowa, Kansas, New Mexico, Vermont, West Virginia

Not so, say the folks on the other side. For them
these funds offer a valuable opportunity to build badly needed
infrastructure that will grow jobs and investment for the future as well
as provide relief from highway gridlock. High-speed rail would also help bring the United States into the 21st century, lest we be figuratively left in the dust by the modern railway systems of Europe and China.

So Who Has Sent the Money Back?

So far three states have pulled the plug on their projects.

Too bad. Not only are these states throwing away the money already spent on the projects, but taxpayers are now
on the hook
(to the tune of tens of millions of dollars) for investments that the federal funds would have covered.

Et Tu, NC?

Not to be outdone, North Carolina's legislature may be about to join the "no thank you" chorus.

A one-page bill, titled "No High-Speed Rail Money from Federal Gov't" [pdf], was introduced by State Representatives Ric Killian and Phillip Frye last week. It would send North Carolina's $545 million share of high-speed rail funds back to the feds -- and try to put any high-speed rail funds accepted by the state into a general fund that the Assembly would later appropriate as it sees fit (which, as Transportation Secretary Ray LaHood explained to Wisconsin, would actually not be an option -- in other words, either you use the money for high-speed rail or you give it back).

But refusing the federal rail dollars may be a tougher sell here given the project's support from the state's Democratic governor Beverly Perdue.

One State's Garbage Is Another's Treasure

In case you're worried about those federal funds -- don't be. Even if North Carolina does follow the lead of Ohio and company, there are other states that will gladly pick up the financial slack. (See here and here.) "We'd love to have it," said Illinois Transportation Secretary Gary Hannig as quoted in the Chicago Sun-Times. Illinois State Sen. Jeffrey Schoenberg (D-Evanston) seconded the notion: "If the new governor of Wisconsin is overwhelmed by $800 million of federal funds, we'd be happy to take that burden off his back."

Could be that fast train is going somewhere after all.

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