Legislators working on compromise
Indiana Gov. Mitch Daniels' "Major Moves" highway legislation is facing a potential speed bump as the Indiana House of Representatives voted to reject amendments to the legislation added by the state Senate last week.
Because two different versions of the bill were passed in the House and the Senate, the legislation, known as HB 1008, is now in Conference Committee, where Republicans and Democrats from both chambers must reach a compromise on what version of the bill ultimately lands on the governor's desk for his signature.
Most of the political debate that has accompanied the "Major Moves" bill through the Statehouse during this legislative session has focused on the governor's plan to lease the Indiana Toll Road to Macquarie Infrastructure Group, an Australian/Spanish company, for $3.5 billion plus capital improvements.
Democratic opponents have been especially vocal in questioning the decision to privatize Indiana highways, allowing a foreign company to reap billions of dollars in profits over the 75-year term of the lease that would otherwise go into the state budget.
"This is not about whether or not Indiana needs more highways, jobs or construction projects," Sen. Vi Simpson (D-Bloomington) said in a Democratic press conference last week, "because we all agree we do. The real issue is determining if this is the best deal, the best price and the best program for Indiana."
According to a Macquarie document distributed to potential investors and a Jan. 24, 2006, recorded teleconference led by Macquarie Infrastructure Group CEO Steve Allen, the company expects a huge profit from the lease deal.
In the teleconference, Allen lists five reasons why this is a phenomenal deal for the company and its investors. Among them is the elongated length of the lease, the ability to produce profits by increasing the tolls and the company's analysis that the asset was undervalued.
"What this information confirms is that this is indeed a great business deal. It's a great deal for the company's private investors," added state Sen. Lindel Hume (D-Princeton), a member of the Senate's Appropriations Committee. "However, we continue to question whether or not this is a good deal for Indiana taxpayers."
The company's documents show that it would recoup its initial 75-year investment in just 15 years, while projecting profits of 12.5 percent to 13.5 percent each year throughout the entire length of the contract.
"If a foreign company can use the toll road to issue bonds to make a 13 percent profit off the taxpayers and motorists of Indiana, then why can't the State of Indiana keep this asset and do the same thing?" Simpson asked.
But Republican supporters and Gov. Daniels maintain that the "Major Moves" initiative is the best and perhaps only plan for improving the state's highways anytime in the near future.
According to House Speaker Brian Bosma, "This plan transforms Indiana from a state in flux to a state in motion. It is the jobs plan of a lifetime; employing Hoosiers by the thousands, connecting Hoosiers faster through road construction and improvements and truly making Indiana the crossroads of America."
In addition to the debate over the privatizing of the Indiana Toll Road in the northern part of the state, much of the compromise needed to work out differences in the House and Senate versions of the "Major Moves" bill centers around the I-69 "new terrain" highway to be built from Indianapolis to Evansville.
If the legislation passes according to Daniels' version of "Major Moves," construction on the I-69 project would begin in 2008, and it would include transforming Highway 37 from Indianapolis to Bloomington into a new toll road from Indianapolis to Evansville. Daniels plans on leasing this toll road in the same fashion as the proposed lease for the Indiana Toll Road.
The House of Representatives approved "Major Moves" with a vote straight down party lines, all Republicans in favor and all Democrats opposed. But members of both parties broke ranks in the Senate. Five Senate Republicans - Ron Alting (Lafayette), Dennis Kruse (Auburn), Paul Allen (Richmond), Brent Waltz (Greenwood) and John Waterman (Shelburn) - voted against the governor's plan. Sen. Glenn Howard (Indianapolis) was the only Democrat to vote in favor.
A final version of House Bill 1008, "Major Moves," is expected to be returned by committee for House and Senate approval before the legislative session ends on March 14.