Gregg seeks $500M for transportation investment

September 20, 2012

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.


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