Pence’s plan for roads faces financing, partisan hurdles

The condition of Indiana's roads and how to raise enough money to maintain them has emerged as a volatile political issue. The issue could become even more charged as Gov. Mike Pence seeks re-election next year.

Still to be worked out in the months ahead is where to find financing for ongoing road repairs, whether the state should look to a tax increase as part of a long-term solution and whether Pence will face political fallout over his handling of the matter.

Democrats have sought to exploit the issue ever since a monthlong emergency closure of an Interstate 65 bridge near Lafayette last summer. They accuse the governor of stockpiling a $2 billion budget reserve at the expense of funding important state needs. Republicans point out the bridge closure was actually caused by construction, not neglect.

Pence fought back against criticism last week, proposing a $1 billion plan to rehab state highways in the coming five years—a plan he characterized as a good start. But administration officials have walked a delicate line, acknowledging road improvements are needed while pushing back against the suggestion that the state faces a "crisis."

"Accusations that Indiana's infrastructure is crumbling only serves to scare the public for purposes of political gain," said Matt Lloyd, a longtime Pence aide, noting that the governor and Republican-dominated Legislature have increased road funding every year since 2013.

Here's a few things to keep in mind as the debate unfolds:

Upcoming legislative session

Pence's plan requires legislative approval to divert $241 million from the state's reserve fund while borrowing an additional $240 million to meet a 2017 spending target.

Trouble could be in the forecast once the Legislature convenes in January. Key Republicans in the House offered only a tepid response to the governor's plan. House Speaker Brian Bosma said lawmakers "appreciate" the governor's ideas and "will keep his proposals in mind." House Ways and Means Chairman State Rep. Tim Brown, R-Crawfordsville, said he was "concerned about taking on any debt against the state's ongoing operating expenses."

It received a more favorable response from Senate Republican Leader David Long, R- Fort Wayne. He said he looked forward to working with Pence and was "glad to see our governor proposing ideas here in Indiana."

Governor's campaign

John Gregg, a Democrat challenging Pence for governor next year, has been more than happy to needle him over roads. In concert with other Democrats, Gregg's campaign has sought to brand Pence as a chief executive who deals with pressing issues only after they've become a public relations liability.

But Gregg, a former speaker of the House, hasn't yet released a competing vision.

"If John Gregg thinks the governor's plan is so terrible, then where is John Gregg's plan to invest a billion in our roads without raising taxes?" said Indiana Republican Party spokesman Robert Vane.

Gregg's campaign has promised an update to a $3.5 billion infrastructure blueprint he campaigned on in 2012 when the Democrat last squared off against Pence. And Gregg's campaign manager, Tim Henderson, brushed off criticism as "laughable."

"Four years ago John recognized there was a problem and he put together a plan to address it," Henderson said. "It took another three years and another crisis for Mike Pence to" do the same.

Paying for it

Days after Pence proposed his plan, a state-commissioned report cited unwelcome news for fiscal hawks: a long-term solution to the state's infrastructure woes requires more money. Lots of it.

"Do we have a problem? Yeah we do. We don't invest in our infrastructure in the U.S.," said John Haddock, a professor of civil engineering at Purdue. "I'm glad we're having a discussion about this issue. I just wish it wasn't so politicized."

Current yearly spending is pegged at about $570 million, but the state will need to push that up to a yearly total of about $1.5 billion over the next 20 years to keep existing infrastructure in "good or fair" condition, according to Cambridge Systematics, the consultant that wrote the report.

Gas tax revenue that currently pays for roads has dropped as cars have become more fuel efficient. That means a tax increase or alternative source of financing would be required.

Pence's plan ramps up roads spending in the short term, but the governor has all but ruled out a tax hike, which wouldn't likely fare well with lawmakers anyway.

The locals

Left out of Pence's plan is any funding for local governments, which maintain the vast majority of Indiana roads. That could sow hard feelings in the midst of an election campaign.

Lloyd, the Pence aide, pledged that the administration will "work with local officials and the General Assembly on local funding and looks forward to addressing it in the next legislative session."