Gregg seeks $500M for transportation investment

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Gubernatorial candidates are outlining their plans to enlist more corporate help for transportation needs as Indiana faces a new drop in road funds.

Democrat John Gregg said Thursday the state should amass a $500 million investment fund to leverage support for road construction, and said the next governor should work with companies on creative financing models.

"We will ensure that Indiana invests wisely in the essential infrastructure that maintains and enhances our quality of life, allows our businesses and industries to operate efficiently, and keeps us connected to the economy of the future," said Gregg's Democratic running mate, Vi Simpson.

Republican Mike Pence has yet to say exactly how he would cover the drop in road spending, but has said he plans to use public-private partnership rules approved by state lawmakers in order to with private investors to build new roads.

"Mike Pence believes that roads mean jobs," Pence spokeswoman Christy Denault said in a statement. "The first task of the next administration should be to maintain our existing infrastructure and finish the business of Major Moves, including [Interstate] 69, U.S. 31 and the Ohio River Bridges."

Gov. Mitch Daniels has paid for road projects largely through the $3.8 billion reaped by leasing the Indiana Toll Road in 2006. But that money, with the exception of a half-billion socked away in a trust fund, has been either spent or committed to projects already, leaving the next governor with roughly $500 million a year less to spend on roads.

With no plan to raise taxes to cover the new spending, Gregg said the state should dedicate the state's gas tax to paying for construction exclusively — it's currently used to pay for operations at the state's tax-collection agency and the Bureau or Motor Vehicles, in addition to transportation projects — and tap the toll road reserve fund to create a new investment fund.

Gregg estimates, using a Federal Highway Administration formula, that his plan to invest a total of $3.5 billion across the state would create 97,300 jobs.

David Holt, vice president of operations and business development for Conexus Indiana, said candidates are weighing a new dynamic in transportation where the gas tax is no longer sufficient to pay for road construction.

Drivers have always paid "user fees" to pay for road construction via gas taxes, he said, but the increase of alternative fuels has cut into the gas tax as a source, Holt said.

Public-private partnerships, like the toll road leasing or former Chicago Mayor Richard M. Daley's leasing of the Chicago Skyway, have gained traction with states facing budget crunches and politicians wary of raising taxes, he said.

The "P3s" could mean a lot of things, but generally involve private companies collecting tolls to pay for the operation of a road, Holt said.

"It allows us to build infrastructure where currently we can't" Holt said.


  • Umm
    The whole point of leasing the toll road was to use the money on I69 and replacing a large portion of the states decaying infrastructure. Do we really need to keep investing that much money into something that has little effect on drawing CEOs and residents to Indiana? Lets look into ways we can progressively spend money in a way that increases Indiana's brand image... not just throw more asphalt on the ground.
  • Increase taxes!
    We need more money for road construction? How about increasing the taxes on gasoline, which haven't been increased since the 1990s. Taxes on fuel aren't perfect (a per-mile fee would be best, though administratively complex), but they allocate the costs of road construction to those using the roads. Double or triple the tax on gas, the result will be higher tax revenues and a disincentive to drive everywhere. Everybody wins.
  • Fascinating, the party that decried the toll road lease, public-private partnerships and spending extra money on roads as being a horrible idea is not wanting to make it a cornerstone of their campaign? Gregg had some respect when he was house speaker and in his role as a retired lawmaker. He has thrown that all away by allowing the democrat party twist him into a pretzel to try to be the pro-life, pro-choice, pro-union, pro-business, pro-welfare, pro fiscal responsible candidate. You can only twist a pretzel so many times before it breaks. No matter how folksy and hilljacky you try to be.

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  1. Apologies for the wall of text. I promise I had this nicely formatted in paragraphs in Notepad before pasting here.

  2. I believe that is incorrect Sir, the people's tax-dollars are NOT paying for the companies investment. Without the tax-break the company would be paying an ADDITIONAL $11.1 million in taxes ON TOP of their $22.5 Million investment (Building + IT), for a total of $33.6M or a 50% tax rate. Also, the article does not specify what the total taxes were BEFORE the break. Usually such a corporate tax-break is a 'discount' not a 100% wavier of tax obligations. For sake of example lets say the original taxes added up to $30M over 10 years. $12.5M, New Building $10.0M, IT infrastructure $30.0M, Total Taxes (Example Number) == $52.5M ININ's Cost - $1.8M /10 years, Tax Break (Building) - $0.75M /10 years, Tax Break (IT Infrastructure) - $8.6M /2 years, Tax Breaks (against Hiring Commitment: 430 new jobs /2 years) == 11.5M Possible tax breaks. ININ TOTAL COST: $41M Even if you assume a 100% break, change the '30.0M' to '11.5M' and you can see the Company will be paying a minimum of $22.5, out-of-pocket for their capital-investment - NOT the tax-payers. Also note, much of this money is being spent locally in Indiana and it is creating 430 jobs in your city. I admit I'm a little unclear which tax-breaks are allocated to exactly which expenses. Clearly this is all oversimplified but I think we have both made our points! :) Sorry for the long post.

  3. Clearly, there is a lack of a basic understanding of economics. It is not up to the company to decide what to pay its workers. If companies were able to decide how much to pay their workers then why wouldn't they pay everyone minimum wage? Why choose to pay $10 or $14 when they could pay $7? The answer is that companies DO NOT decide how much to pay workers. It is the market that dictates what a worker is worth and how much they should get paid. If Lowe's chooses to pay a call center worker $7 an hour it will not be able to hire anyone for the job, because all those people will work for someone else paying the market rate of $10-$14 an hour. This forces Lowes to pay its workers that much. Not because it wants to pay them that much out of the goodness of their heart, but because it has to pay them that much in order to stay competitive and attract good workers.

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