Tuesday, October 13, 2015

Pence Plans $1 Billion Roads Program Without Raising Taxes

It looks like smoke and mirrors, but Gov. Mike Pence has developed a plan to invest $1 billion in road projects over the next four years by dipping into the state's reserves and refinancing existing debt. To accomplish his spending plan, he will do the following:

  • Tap $241 million from the state's $2 billion reserves;
  • $240 million will be derived from additional borrowing to take advantage of the state's AAA bond rating and historically-low interest rates;
  • $50 million will come from an accelerated distribution from the Next Generation Trust Fund;
  • Refinancing existing bonds will free up $6.5 million in annual savings through 2029; and
  • $450 million will come from $150 million in appropriations Pence will recommend for second, third and fourth fiscal years.
It looks like there's a few ifs involved in this financing scheme. Smaller than anticipated state revenues, for example, from a downturn in the economy could upset the apple cart. With automobiles continuing to become more fuel efficient, the state is already fighting a losing battle in raising enough revenues from gasoline taxes to keep pace with highway and bridge demands. 


Unknown said...

It is smoke and mirrors- ask any school corporation about their needs-- yet somehow Dept of Ed reverted $40 million! And Family and Social Services Administration reverted nearly $38 million-- in the midst of an HIV crisis ISDH reverts 1.4 million. We elect our legis who approve a budget on needs. Pence ordering them to revert is disgraceful.

Pete Boggs said...

All the while they're ignoring the key infrastructure component; hardening our electrical grid, which only requires leadership & a will to do so.

Anonymous said...

Thank you, Mike. Indiana desperately needs more roads, and we really need a lot of our existing roads widened.

I-65 should be at least three lanes all the way from Louisville to Chicago.

Anonymous said...

Couple of observations.

1. The only reason this is necessary is because the state has ignored ongoing maintenance needs for decades. There's no reason to assume that this one time fix won't be followed by decades more of ignorning the problem.
2. Even though it is absolutely necessary, it is incredibly shortsighted in ingnoring alternative modes of transportation.

I don't hate Mike Pence, but he's a gutless coward who's more interested in maintaining the status quo (like most Hoosiers) than he is growing and improving things. This is a reactionary response to union bellyaching. It will be a sop to them, for sure, and they will do what they do best which is skim. We will still have crap roads (465 is already crumbling on the west side) but what we won't have is the one time Indiana Toll Road windfall.

I sort of feel sorry for Pence and, by proxy, many of you who are stuck here. Other states are taking out dams and building roads and other transportation infrastructure that allow people to move around by train or on foot or whatever. Not here. Here we cling to the 1960s. We're still debating building more dams and we still build roads like we did way back then. It's mind boggling. The world has changed. I'm convinced that most Hoosiers believe that if they close their eyes and wish hard enough, that they can really stop time.

Anonymous said...

"2. Even though it is absolutely necessary, it is incredibly shortsighted in ingnoring alternative modes of transportation. "

No, 7:57, There are no such things as "alternative modes of transportation."

You're not going to bikeshare to Chicago, so it's time to be grownups, get out of the land of Sesame Street and the pipe dreams of first-grade teachers and get back to work making roads great, wide, and safe for high-speed auto travel.