SPECIAL REPORT: Legislators negotiating on Indiana Toll Road lease

| 3/7/2006

A quartet of influential lawmakers began negotiations Tuesday, March 7, on a bill that would authorize Gov. Mitch Daniels to lease the Indiana Toll Road to a foreign group for 75 years for $3.85 billion.

The measure, which would authorize the lease of the 157-mile toll route to a Spanish-Australian consortium, is the biggest chunk of the Republican governor's 10-year, $10.6 billion statewide construction plan.

A conference committee made up of two state representatives and two state senators gathered at the Indiana statehouse Tuesday morning to work out differences in the versions of the bill approved by the House and Senate.

Three of the participants - Rep. Randy Borror, R-Fort Wayne; Sen. Robert Meeks, R-LaGrange; and Sen. Glenn Howard, D-Indianapolis - previously voted in favor of the bill, while Rep. Pat Bauer, D-South Bend, opposed it.

Since the bill was introduced in the Legislature it has encountered wide opposition from various organizations and the public.

An Indianapolis Star poll published Sunday, March 5, showed that 60 percent of those polled said they thought the lease deal was a bad idea.

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. All toll revenue, including toll increases that are built into the deal, would go to the foreign consortium leasing the road.

Opponents also expressed concern about the precedent the deal would set for allowing the governor to privatize other roads or bridges in the state, which the governor has already said he wants to do.

The Senate version of the bill, approved Thursday, March 2, would require legislative approval of any future public-private partnerships to toll existing or planned highways. The governor has said he wants to make a planned extension of Interstate 69 from Indianapolis to Evansville a private toll road.

Another provision in the Senate version 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 section in the bill 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.

The Senate version also dropped 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.

Meeks, the bill's Senate sponsor, said he 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 lawmakers 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.

If the committee is able to hammer out a compromise version of the bill, it would need one last favorable vote in both chambers prior to the end of the session March 14. It would then head to the governor's desk for his signature.

If lawmakers cannot reach agreement before the session ends, a special overtime session could follow.

- By Keith Goble, state legislative editor