U.S. yanks high-speed rail funds for Wisconsin and Ohio

WASHINGTON Thu Dec 9, 2010 5:18pm EST

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WASHINGTON (Reuters) - The Obama administration on Thursday rescinded $1.195 billion intended to fund the development of high-speed rail in Ohio and Wisconsin and said it will redirect the funds to "other states eager to develop high-speed rail corridors" in the United States.

"I am pleased that so many other states are enthusiastic about the additional support they are receiving to help bring America's high-speed rail network to life," Transportation Secretary Ray LaHood said in a statement.

Wisconsin and Ohio both recently elected Republican governors who criticized the federal government for wasteful spending and the high-speed rail program for distracting their states from more pressing infrastructure needs.

Rep. John Mica, incoming chairman of the Transportation Committee in the U.S. House of Representatives, told Reuters that he "generally agreed" with rescinding the money.

"We need to move money away from projects that aren't going anywhere to projects that have some chance for success," Mica said. "Newly-elected officials got a clear message from the public."

The Obama administration said Wisconsin had suspended work on its existing high-speed rail agreement. Last month, Wisconsin Governor-elect Scott Walker asked if his state could apply the money intended for a Milwaukee and Madison train line to road construction instead.

The $814 billion federal stimulus plan passed last year included $8 billion to begin building up a network of "bullet trains" across a country that has long relied on interstate highways for passenger travel.

Wisconsin and Ohio were set to receive $810 million and $400 million, respectively, for developing rail routes.

Now the money will be given to 14 other states with California, which is the farthest along in its high-speed rail plans, receiving the most. The Transportation Department said California will receive up to $624 million, and Florida will receive the next largest sum, up to $342.3 million.

Wisconsin will still receive up to $2 million for another Midwest rail project.

Ted Strickland, Ohio's outgoing governor, said he was disappointed and said the state could regret the decision.

"Today is one of the saddest days during my four years as governor because I see jobs leaving Ohio, I see resources leaving Ohio, I see vital infrastructure leaving Ohio," Strickland, a Democrat, said in a statement.

"And I see other states being enriched by resources that would otherwise have created thousands of new jobs, revitalized our cities and helped keep our young people in Ohio," he said.

Wisconsin's Walker considered the Transportation Department's announcement a victory against excessive government spending.

"That's the decision they've made and we're going to move forward," he told reporters at a meeting in Pewaukee.

Democrats in the state, including outgoing Gov. Jim Doyle who called it a "tragic moment," were outraged.

"We were positioned to be not only a center of the line, but to be a manufacturing center as well. Now we are moving from being the leader to the back of the line," Doyle said.

One manufacturer has already threatened to leave. Spanish-owned train-building company Talgo Inc said last month it would move its plant from Milwaukee to Illinois if Walker killed high-speed rail in the state, taking 125 jobs with it.

"This is a terrible loss of family-supporting, good-paying jobs in Milwaukee and throughout the state of Wisconsin, and a shameful slap in the face to all the workers who would have benefited from this significant investment in transportation and infrastructure," said Milwaukee Mayor Tom Barrett, a Democrat, who lost the gubernatorial election to Walker.

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