I-69 leg gobbling up state’s road funding

As legislators brace for a $250 million annual transportation spending gap down the road, the Indiana Department of Transportation has designated more than one-third of its entire federal highway aid this year toward building 27 miles of Interstate 69 between Crane and Bloomington.

A report INDOT filed with the Federal Highway Administration states that 36 percent—or $281.3 million—of the $791 million Indiana will receive this year in federal road funding has been allocated to this stretch of I-69 in 2013.

That’s in addition to the $70 million in state highway funds budgeted in 2013 for so-called Section 4.

INDOT spokesman Will Wingfield counters that the $281.3 million in federal funds apportioned to Section 4 this year is merely an accounting technique for FHWA. It’s not clear that much will be spent this year on the 27-mile section until contracts are awarded, he said.

But some think it’s time to apply the brakes on the controversial interstate driven by former Gov. Mitch Daniels at a time local governments are clamoring for more money and as INDOT grapples with its own deteriorating roads and bridges.

“The General Assembly is in a state of denial when it comes to the cost of I-69,” said State Rep. Matt Pierce, D-Bloomington. “This project is sucking up such a huge amount of money that is unavailable for other projects.”

State Sen. Tim Lanane, D-Anderson, said he’s heard pleas from local highway officials in his district for more funding to maintain roads. A recession and property tax caps have strained county and municipal coffers.

“They just can’t entice businesses if their roads are falling apart,” said Lanane, who has proposed tapping about $50 million from the state sales tax on gas for transportation needs.

That I-69 was begun without an assurance of funding for the entire 142-mile length is especially “aggravating” now that funding for other projects and I-69 is becoming more of an issue, he added.

With proceeds from the $3.8 billion in Indiana Toll Road lease winding down, INDOT essentially is without enough money to build the final two sections of I-69 between Bloomington and I-465 on the south side of Indianapolis.

That is, at least not under current funding allocations to transportation projects.

The agency said its preferred approach is exploring the potential of private-sector financing to cover a portion of the I-69 completion cost. The big kahuna of private financing techniques was leasing the Indiana Toll Road to a Spanish-Australian consortium six years ago for the one-time payment of $3.8 billion.

Asked whether there’s sentiment for putting I-69 funding on hold, with toll road money running down, Lanane said, “I think it renews that debate, in my opinion.”

To no surprise, the biggest opponent of the new-terrain I-69 route wants leaders to jam on the emergency brake.

The Hoosier Environmental Council said state budget data shows INDOT plans to spend 40 percent of its traditional state and federal highway funding on I-69 this year.

HEC included in its calculations how much is being spent to wrap up the other three portions of I-69 downstate that have either opened up to traffic or soon will.

Some of INDOT’s follow-up work will involve repairing a stretch of I-69 at mile marker 37.5, near the Patoka River bridge, that recently sunk more than 6 inches.

INDOT attributes the problem to former coal mines under the interstate, although critics have pointed to techniques to reduce costs such as substituting asphalt for concrete pavement.

“All the chickens are coming home to roost on I-69. It merits further evaluation by Gov. [Mike] Pence,” said Tim Maloney, senior policy director of Hoosier Environmental Council.

Pence has said previously that he’s committed to completing I-69. A spokeswoman for the governor declined to comment.

Tennessee kills I-69

But Indiana’s commitment to I-69 is in stark contrast to another state working on its share of the so-called NAFTA highway.

Last month, Tennessee DOT Commissioner John Schroer said his state can’t afford its 65-mile, $1.5 billion stretch of I-69 and halted work.

Schroer said the project amounted to more than 100 percent of Tennessee’s annual federal construction funding. Continuing “would be downright irresponsible and potentially dangerous” because I-69 wouldn’t leave money to fix bridges and make other safety improvements, Schroer announced.

INDOT could spend $1.5 billion on the first four of six planned sections of I-69. But the two remaining sections between Bloomington and Indianapolis could cost at least that much, given the higher level of urbanized development along the corridor. INDOT proposes upgrading the existing State Road 37 and adding numerous interchanges.

Though Daniels is now out of office, it seems unlikely funding will be pulled for further work on I-69. Over Daniels’ eight years in office, “the Legislature has been subservient to the governor,” Pierce said.

I-69 has been such a priority, and one in which successor Pence has expressed support, that “I guess it would surprise me if they backed off,” said Dennis Faulkenberg, former deputy commissioner and CFO of INDOT under governors Evan Bayh and Frank O’Bannon and now president of transportation consultancy Appian.

The attitude is not whether I-69 will be completed but “it’s, how do we do I-69?”

Faulkenberg also said controversy about how much is being spent on a single project isn’t new, recalling criticism that the state was spending too much years ago on the South Bend bypass and on I-469 around Fort Wayne.

“Those [major projects] rotate around the state,” Faulkenberg said.

Shortfall on horizon

But allocating substantial dollars to a single project is more problematic at a time future highway funding is expected to come up short.

Gasoline tax revenue—18 cents on each gallon of gasoline—is declining as vehicles become more efficient. Indiana’s Senate Appropriations Committee estimated recently that Indiana could need another $100 million a year for upkeep of existing roads, plus a similar amount for local government road projects.

The state also needs $50 million a year to help finance big projects such as I-69.

State Sen. Luke Kenley, R-Noblesville, suggested raising the excise fee on license plates but later pulled the idea. Lanane has proposed pulling out for transportation projects $50 million from the money the state raises through its sales tax on gasoline.

None of the roughly $550 million a year in sales tax collected on gasoline goes to roads or bridges, currently.

Asked whether money to be spent on I-69 could be redirected to other highway projects in the state, Kenley said, “It’s a good question.

“We’re not desperate this year. But if we don’t make some plans, we’re going to put Indiana in a bad position” later, Kenley said.

The Hoosier Environmental Council said I-69 arguably has already hurt the state’s ability to fund other projects.

One project it points to is the old Cline Avenue Bridge, in northwestern Indiana, which INDOT closed in 2009 over safety concerns.

INDOT said it didn’t have money to replace it and, with local officials in East Chicago, tapped a Florida-based firm to rebuild the bridge at a cost of $150 million to $250 million. Users of the bridge would have to pay tolls.

Mahoney said local officials shouldn’t have had to take such extreme measures because “this high level of spending on I-69 is depriving other road and bridge projects around the state of Indiana of needed funding.”

INDOT’s Wingfield said opponents of I-69 forget that the state’s Major Moves transportation program funded by toll road lease proceeds also pumped in millions of dollars for additional road repairs and new construction statewide.

The Major Moves program over its 10 years will result in 104 new roads and 1,699 lane miles. Among projects funded by Major Moves was the reconstruction and reconfiguration of aging I-465 on the west side.

INDOT wouldn’t have built I-69 section 4 if not for additional infrastructure money from the Toll Road lease, Wingfield said.

The total cost of I-69 Section 4 is estimated at $589 million. Major Moves funds will cover $95.7 million of that amount, according to INDOT reports.•