STATEHOUSE DISPATCH: Passing 'Major Moves' initiative will mean major work

January 9, 2006

While most Hoosiers are focused on just how legislators are going to be able to cut residential property taxes again this year, the real battle to watch will be the one over what Republican Gov. Mitch Daniels refers to as the jobs program of a generation or more-his "Major Moves" roads initiative.

What he wants boils down to this: finding a funding source for road building and repair that will not rely upon taxes.

He made it clear shortly after taking office that he believed most of the state's infrastructure plans were essentially Potemkin-like puffery, an illusion that had no chance of being translated into mortar because of funding shortfalls.

That means, Daniels insists, that the Interstate 69 extension between Evansville and Indianapolis cannot be built in a timely manner, nor can promised upgrades to U.S. 31 between South Bend and Indianapolis, I-69 improvements between Anderson and Castleton, the "Fort to Port" link from Fort Wayne east into Ohio, or new lanes on Interstate 65 between Lafayette and Chicago. Not without some outside-the-lanes thinking.

His preferred choice: leasing Interstate 80/Interstate 90, the Indiana Toll Road, to a private entity that would provide a massive upfront payment to Indiana in return for future toll income. That lease payment, expected to be no less than $2.5 billion and perhaps as much as $5 billion, would be distributed throughout the state in road construction and repair funds.

Combined with toll hikes-Indiana's cost per mile for turnpike travel is as low as any between New Jersey and Iowa-we should have the cash in hand to invest in key infrastructure upgrades.

But there is bumpy road between the starting point and the governor's intended destination. No domestic entities are expected to have the wherewithal to drive solo on this, and when proposals are opened Jan. 20, we may find the international consortia is not interested in investing as much as the state believes the Toll Road should be worth.

Assuming, however, that the responses show bids well north of $2.5 billion, counties and municipalities in the northern part of the state along the Toll Road-particularly those controlled by Republicans-want the bulk of the lease revenue to remain in the areas immediately adjacent to the Toll Road. They want as much as 40 percent of the proceeds to be directed to local investments, not shared with others throughout the state.

They also are concerned that increased tolls could drive truck traffic onto local roads.

Some legislators-mostly Republicans from the northern part of the state-want the Indiana Department of Transportation to make firm commitments about construction deadlines for U.S. 31 and other major routes.

Other lawmakers-especially Democrats from south of Indianapolis-are concerned about the impact tolling the new portion of I-69 would have on, for example, people from Bloomington, Mitchell and Bedford who can now hop on State Road 37 and travel toll-free.

Democrats also question why the governor feels compelled to "sell off," in their words, valuable state assets to foreign investors after the governor's professed antipathy to doing business with out-of-state entities.

The deal is a no-brainer, the governor insists, because we would be importing dollars into Indiana to build projects with Hoosier workers that will help us maintain our Crossroads of America reputation as the nation's logistics and distribution hub.

There is no question being able to invest billions in road-building would prove a huge boost to the construction industry, and that modernized roads and new routes that make the state more accessible will boost economic development.

But this will not be an easy sales job.

Daniels has chosen Rep. Randy Borror, R-Fort Wayne, chairman of the House Commerce Committee, to carry this bill for him. Borror successfully shepherded through the Indiana Economic Development Corp. bill in 2005, and is expected to hang his hat on the economic development and job creation consequences.

Daniels still has a lot to do to sell this measure, however. He will not only have to sell the public-private partnership concept to lawmakers; he must also build public support for Crossroads: The Next Generation.

Feigenbaum publishes Indiana Legislative Insight. His column appears weekly while the Indiana General Assembly is in session. He can be reached by e-mail at edf@ingrouponline.com.
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