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3/2/2006
SPECIAL REPORT: Indiana Senate OKs 75-year toll road lease

The Indiana Senate voted 29-20 Thursday, March 2, to approve a bill that would authorize Gov. Mitch Daniels to lease the Indiana Toll Road to a foreign group for nearly $4 billion.

One Democrat joined 28 of the chamber's 33 Republicans voting in favor of the bill. Five Republicans joined 15 Democrats in voting against the bill.

The vote came one day after senators considered 37 amendments to the bill that would authorize a 75-year lease of the 157-mile toll route to a Spanish-Australian consortium. The deal is the biggest chunk of the Republican governor's 10-year, $10.6 billion statewide construction plan.

Only a handful of changes were approved Wednesday, March 1, including a requirement that $15 million from the $3.85 billion toll road lease payment be spent on upgrades to the Gary/Chicago airport.

Among the failed efforts to alter the bill was an offer to generate $1.5 billion for highway projects by using toll road revenue to back bonds.

Sen. Vi Simpson, D-Bloomington, said it was just one possible alternative to help pay for such projects without leasing the toll road, The Associated Press reported.

The amended bill - HB1008 - now heads to a conference committee made up of select members of the Indiana House and Senate to negotiate the bill's provisions.

If they are able to hammer out a compromise version, it would need one last favorable vote in both chambers before it could head to the governor's desk for his signature. Lawmakers have until March 14 to get that done.

The legislature's regular session ends March 14, but a special overtime session could follow.

The bill's House sponsor, Rep. Randy Borror, R-Fort Wayne, said it was premature to talk about a special session, and pledged to "work 24-hours a day" if necessary to reach a compromise before March 14.

Since the bill passed the House a month ago, lawmakers have been busy crossing out and scribbling in provisions to the bill.

Among the modifications to the bill while it was in the Senate Appropriations Committee is a provision that would require legislative approval of any future public-private partnerships to toll existing or planned highways. Daniels has said he wants to make a planned extension of Interstate 69 from Indianapolis to Evansville a private toll road.

Another change would set aside $400 million in a trust fund that could not be tapped until it grows to $1 billion. At that time, interest from the fund could be used to help pay for highway projects beyond the state's 10-year transportation plan.

Another change would allow annual tax credits for tolls incurred by many Indiana residents.

It would allot for a maximum annual credit of $300 for residents who file an individual income tax return during the next decade. But those credits are not available for small-business truckers.

Dropped from the bill was a House-approved provision that sought to place a 10-year freeze on tolls for passenger vehicles that belong to residents in Indiana Toll Road counties.

The bill's Senate sponsor, Sen. Robert Meeks, R-LaGrange, was concerned unequal pricing would violate the interstate commerce clause of the U.S. Constitution.

Macquarie Infrastructure Group of Sydney, Australia, and the Cintra firm, based in Madrid, Spain, bid to lease the toll road for $3.85 billion. 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. The seven Indiana Toll Road counties would receive 34 percent of net proceeds.

The bill's advancement through the legislature has come despite seemingly wide opposition from various organizations and the public.

A big point of contention for opponents is the logic and fiscal sense of giving up a state asset such as the Indiana Toll Road - and its revenue stream - for 75 years in exchange for a decade-long road program.

Others expressed concern about the precedent it would set for allowing the governor to privatize any road or bridge in the state.

The Owner-Operator Independent Drivers Association remains strongly opposed to the sale and leasing of America's roadways to foreign investors.

OOIDA believes the toll road is not the governor's to sell and that it belongs to the people of Indiana and to the highway users who have paid for it and continue to pay for it with their tolls and taxes.

"The governor is mortgaging the future of the state of Indiana," said OOIDA Executive Vice President Todd Spencer, who traveled to Indiana last month to testify against the bill.

"These leases sound like a lot of money on the front end, but what about when the money runs out? What do you put on the auction block next?"

"Our children and grand children will pay the price for the governor's spending spree."

- By Keith Goble, state legislative editor
keith_goble@landlinemag.com

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