UPDATE 1-Florida governor rejects US high-speed rail funds

Wed Feb 16, 2011 10:27am EST

(Adds quote, details)

TALLAHASSEE, Fla. Feb 16 (Reuters) - Florida's Tea Party movement-backed Governor Rick Scott on Wednesday said he was rejecting federal funds to construct a high-speed railway project in the state.

"Government cannot spend more than it takes in," the Republican governor said.

Scott spoke at a news conference in the state capital, where he strongly criticized the budget proposal for 2012 unveiled on Monday by President Barack Obama and said federal grants earmarked for Florida to begin work on a high-speed rail link between Tampa and Orlando would be rejected.

The newly-elected governor, a former healthcare executive and uncompromising fiscal conservative, cited the likelihood of cost overruns for the project as the main reason for rejecting the federal funding.

The overruns could put Florida taxpayers on the hook for billions of dollars, he said.

"If the project becomes too costly for taxpayers and is shut down, the state would have to return the $2.4 billion in federal funds to D.C.," Scott said.

"The truth is that this project would be far too costly to taxpayers and I believe the risk far outweighs the benefits," he said. (Reporting by Michael Peltier; Editing by Gerald E. McCormick and Vicki Allen)

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