The Indiana Senate Appropriations Committee heard testimony Thursday, Feb. 16, on a bill that would authorize Gov. Mitch Daniels to lease the Indiana Toll Road to a Spanish-Australian group for nearly $4 billion. The bill previously passed the state's House on a 52-47 party line vote.
Opponents and supporters of the effort took turns speaking at the capitol.
OOIDA Executive Vice President Todd Spencer was among those on hand to speak in opposition to the plan.
Spencer told lawmakers that despite the huge dollar amounts that are being promised to cover Indiana's transportation funding gap, it's important not to lose sight of the fact the state still hasn't been able to come up with a solution to its funding woes.
"Letting foreign entities operate toll roads is not sound public policy," Spencer told "Land Line Now" after he testified.
"Our whole system of highways was built with dedicated highway user taxes for dedicated highway purposes. What has created the problem is that for a number of years now we've been diverting more and more of those monies to non-highway uses. That's what's undermining the whole highway system."
Spencer said the governor's proposal would actually make that problem even worse.
"All he's doing is trying to dump a whole bunch of money into the system to build roads that may or may not be needed or wanted. It's simply foolhardy to proceed with this plan."
The bill, which is the largest part of the Republican governor's "Major Moves" road plan, is expected to undergo a few changes before an expected committee vote Feb. 23.
"We're going to try to modify it somewhat. Tone it down a little," Senate Appropriations Chair Robert Meeks, R-LaGrange, told Land Line prior to the meeting. "There are some things in there that need to be fixed."
Among the likely modifications is removal of a provision that would place a 10-year freeze on tolls for passenger vehicles that belong to residents in Indiana Toll Road counties.
The provision was added to the bill - HB1008 - during debate on the House floor.
But some lawmakers say unequal pricing would violate the interstate commerce clause of the U.S. Constitution.
"It's unconstitutional to (freeze tolls). There's no way to regulate that," Meeks said.
"There is a cleaner way to do that. We might give everybody that travels there up to a $150 tax credit on their tax bill for tolls they incurred during the year. That might be a better way to do it."
A similar proposal was offered by Sen. Joe Zakas, R-Granger. The Senate approved a maximum annual credit of $300 for those who file an Indiana individual income tax return. The effort - SB17 - has been sent to the House.
Meeks also questioned whether language involving a regional development authority in northeast Indiana should remain in the bill.
The House-approved effort would authorize an economic development authority in Elkhart, LaGrange and Steuben counties and provide $100 million in lease proceeds to the counties in the next decade, The Associated Press reported.
That revenue could come from an up front payment of $3.85 billion that Macquarie Infrastructure Group of Sydney, Australia, and the Cintra firm, based in Madrid, Spain, has bid to lease the toll road for 75 years. The bid needs approval from the state's Legislature to be completed.
In the next decade, supporters said the lease would cover a gap of $2.8 billion needed for road and bridge work throughout the state, as well as pay for an extension of Interstate 69 from Indianapolis to Evansville and make it a private toll road.
A private lease would include a noncompete clause barring the state from building a new east-west highway 10 miles north or south of the toll road. And the state would have to compensate the toll road operator if it built more than 20 miles of east-west highway within the buffer zone.
While lawmakers discuss privatization, plans are to go ahead and increase tolls along the toll road by 72 percent for cars and 120 percent for large trucks by 2009.
If the fare increase is approved after public hearings in March, the rate for tractor-trailers traveling from the Illinois line to Ohio would rise from $14.55 to $18 this year. The rate would climb to $22.50 in 2007, $27.25, in 2008 and $32 in 2009.
Passenger vehicle rates for driving the same distance would rise from $4.65 to $8 this year. No other increases are planned until 2011, when car and truck tolls would be pegged to inflationary indexes.
The fair increases, which could take effect as early as April, could generate an additional $770 million in 10 years.
State officials are relying on in-state and out-of-state vehicles in their toll revenue projections. Indiana Department of Transportation figures show that 66 percent of 2004 toll road revenue came from out-of-state vehicles, 18 percent from in-state cars and 16 percent from in-state truck traffic.
Spencer said Indiana truckers shouldn't be shy about contacting their lawmakers about the issue of leasing the toll road and higher fees to run the route.
"I think the overwhelming majority of people in the state think this is a lousy idea but they aren't the ones talking to lawmakers on a regular basis," he said. "This is crunch time in terms of Indiana residents letting their lawmakers know how seriously they view this issue. The skids are greased on this thing and you must some noise if you're going to bring some commonsense to the equation."
If the leasing bill is approved by the committee, it would head to the full Senate for further consideration. The House would have to sign off on any changes before sending it to the governor.
- By Keith Goble, state legislative editor
Staff writers Reed Black and Mike Throop contributed to this report.