An Indiana House panel heard discussion this week on a bill
that would allow the state to lease the Indiana Toll Road to private investors – even foreign private investors.
The leasing initiative is the biggest chunk of Gov. Mitch
Daniels’ 10-year, $10.6 billion statewide construction plan dubbed “Major
To help pay for the plan, the state sought bids from firms
wanting to lease the toll road for 75 years. Bids are due Friday, Jan. 20. They
are expected to be revealed to the public Monday, Jan. 23.
“There’s a good chance that again, we’ll be offered money
that we could not generate in this state without doubling the gas tax, or doing
something equally unthinkable,” Daniels recently told WISE-TV of
In the next decade, the estimated $2 billion lease – would
help the state to cover a gap of $2.8 billion needed for road and bridge work
throughout the state, as well as possibly pay for an extension of Interstate 69
from Indianapolis to Evansville and make it a private toll road.
In return for taking over operation and maintenance of the
toll road, a private group would keep all of the toll money collected.
Congress encouraged such public-private partnerships in the
Highway Bill, which became known as SAFETEA-LU after President Bush signed it
in August 2005. The legislation authorizes $15 billion in tax-exempt bonds for
privately financed highways and simplifies their environmental planning
Any leasing plans in Indiana would require approval from state
lawmakers. With that in mind, Rep. Randy Borror, R-Fort Wayne, is carrying the leasing
plan in the General Assembly.
The House Ways and Means Committee held two days of hearings
this week to discuss Borror’s bill – HB1008.
Supporters told lawmakers road privatization is the way of
the future because traditional funding mechanisms, such as the state’s fuel
tax, are proving more inadequate, TheIndyChannel.com reported.
Opponents say the plan could turn operations of state assets
to private ventures that would aim for bigger profits by raising tolls higher
and higher. Others say the concept is so new that more study is needed.
A private lease would include a “noncompete” clause barring
the state from building a new east-west highway within 10 miles north or south
, The Munster Times reported. 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.
In addition to leasing roads, the bill would give the
governor sweeping authority to impose an extensive menu of toll rates. That
would change existing state law that requires tolls to be uniform by distance.
Daniels wants to be able to increase or decrease tolls for a
number of reasons. Among the options being pursued are peak-time rates,
high-occupancy tolls, as well as adding electronic tolling.
The bill also authorizes privatizing airports, cargo ports
and transit systems.
The panel could vote on the bill as early as Tuesday, Jan.
While lawmakers discuss privatization and specialized tolls,
plans are to go ahead and increase tolls along the 157-mile route by 72 percent
for cars and ultimately 120 percent for large trucks.
Daniels’ office reached an agreement with the state’s
trucking association to phase in proposed toll increases on the Indiana Toll
Road over four years.
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.
In exchange for the phased-in truck rate, the Indiana Motor
Truck Association has endorsed the governor’s transportation initiative.
The toll increases could generate as much as $770 million in
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.
Todd Spencer, executive vice president of the Owner-Operator
Independent Drivers Association, said the gradual phase-in is more reasonable
than the alternative. But he said Indiana truckers should demand a credit for
fuel taxes paid on toll road miles.
“Different people can have different views about appropriate
toll charges, but what should infuriate every Indiana resident is the
governor’s plan to auction the road off to the highest bidder for up-front
cash,” Spencer said.
“This is not only a publicly owned road; it’s an integral
part of the National Defense Highway System. As far as we know, every company
bidding for the road is from a foreign country. Have these folks lost their
– By Keith Goble,
state legislative editor