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State Budget Crunch May Push Huge CSX Deal Off Track

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By LINDSAY PETERSON | The Tampa Tribune

Published: December 24, 2008

A multimillion dollar deal with CSX Transportation could face problems in the Legislature in 2009 as lawmakers try to plug a growing budget gap.

"When we're scrambling to come up with $2.3 billion in the budget, it may give people some incentive to take a second look at this deal," said state Sen. Paula Dockery, R-Lakeland, an opponent of the deal during this year's legislative session.

The state proposed in 2007 to give CSX railroad about $450 million to buy tracks for a commuter system through Orlando. The deal stalled in the Legislature when lawmakers failed to approve a controversial liability agreement.

According to the plan, CSX would have leased the tracks from the state to haul freight during the off-peak commuter hours. The company wanted the state to take full responsibility for any accident involving a commuter train, even those blamed on CSX.

The state Department of Transportation will return to the Legislature in 2009 seeking approval for the liability deal, because CSX won't complete the sale without the agreement. In the meantime, money has arisen as another possible obstacle.

Dockery led opposition to the deal last time around. She didn't like it because it involved paying CSX to expand lines into a new hub in Polk County that would have increased the number of freight trains coming through downtown Lakeland.

She worked with the Florida Justice Association, the state trial lawyers lobbying group, to prevent passage of the liability agreement, and she raised questions about the high cost of the deal.

The cost of the 61 miles of tracks in the Orlando area, $150 million, is only part of the deal. It includes about $300 million to help CSX move to a new Polk hub and run more trains on tracks outside the Orlando area. CSX said it would not sell the tracks without the freight line improvements.

Another part of the deal is $203 million for construction of state road crossings over CSX rails in Central Florida.

Several lawmakers also complained about the cost last time out, including State Sen. Mike Fasano, R-New Port Richey, who leads the senate's Transportation and Economic Development Appropriations committee.

Dockery said DOT officials told them in the last session they could not use the money for the CSX deal to help close the budget gap because it was dedicated to transportation projects. Also, it was to be spent in pieces over several years.

Dockery questions that reasoning, especially in light of the worsening budget problems. The money set aside for the deal can be used anywhere, she said. Much of it came from a bill to promote growth management projects of all kinds.

"We're going to have budget problems next year and the year after that and after that," she said.

The cost of the deal is way beyond what other public agencies have spent for tracks from private railroads, she said, citing a report by Harrison, Warner, Weber & Ross, a consulting firm based in Powder Springs, Ga.

The rail purchase and freight line improvements come to $7.3 million per mile. The next most expensive rail transaction of the past decade was the $2.45 million per mile sale of 42 miles of Burlington Northern Santa Fe tracks to the Port of Seattle. Next came the $1.5 million per mile sale of 65 miles of CSX tracks to the Massachusetts Bay Transportation Authority.

Even if the state planned to spend only the $150 million for the Orlando area tracks, it would be more than any other public agency has spent for track in the past decade, according to the report from Harrison, Warner, Weber & Ross.

Gov. Charlie Crist has said that mass transit projects are more important now and that he will work harder to get the CSX deal passed.

Dockery says she will argue to find ways to complete Orlando's commuter rail project for less than the state is planning to spend.

The 61-mile project is expected to cost at least $1.2 billion, including the $450 million to buy the CSX lines. The federal government is expected to contribute $300 million to the cost of building the system but has yet to allocate that money.

Reporter Lindsay Peterson can be reached at (813) 259-7834 or lpeterson@tampatrib.com.

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