Holcomb calls to use $500M fund from Toll Road lease to fund entrepreneurship

Gov.-elect Eric Holcomb’s legislative agenda includes Gov. Mike Pence’s idea to invest $1 billion over 10 years to “make Indiana an innovation hub” by investing in Indiana companies—but his plan to pay for it is different than the one Pence proposed.

Holcomb, who will be sworn in as governor next week, called Thursday to convert the state’s existing $500 million Next Generation Trust Fund—set up years ago from proceeds of the Indiana Toll Road Lease—to invest in entrepreneurship and support of early-stage and mid-size Indiana companies.

"We want the world to know that Indiana is a magnet for tomorrow’s economy today," Holcomb said.

Pence’s plan instead called for $500 million to come from the Indiana Public Retirement System.

Holcomb plans to ramp up the investment capabilities of the Next Generation fund, which is run by the Indiana Finance Authority, and set up an investment board to run it. The Indiana treasurer would remain the trustee of the fund, which would be called the Next Level Indiana Fund.

Interest generated from the Next Generation fund annually (about $20 million) is used for road funding now and that would continue, under the plan.

Holcomb said “the pension fund has [its] own fiduciary responsibilities” and thought using the Next Generation fund to spur entrepreneurship would be a “much more direct and deliberate approach."

Other parts of the $1 billion entrepreneurship plan remain as discussed in the summer. Holcomb’s team would also invest $20 million in the Indiana Biosciences Research Institute, $4 million per year on the Regional Cities program, and $10 million per year to support entrepreneurship-focused programs at higher education institutions. 

Holcomb’s legislative agenda also calls to “create a 20-year plan to fund roads and bridges,” doubling the state’s pre-kindergarten pilot program spending from $10 million per year to $20 million per year, and tackling the state’s heroin and opioid problem.

On that front, Holcomb has hired an executive director to coordinate strategy among the state’s government agencies. He also called for local governments to be able to implement their own needle-exchange programs.

Though Holcomb didn’t release a specific road-funding proposal, he said he thought the plan put forward by House Republicans on Wednesday was a great start. He included increasing fuel taxes that were indexed to inflation, creating public-private partnerships, fees for alternative-fuel vehicles and new tolling options as acceptable options. But he said he was against tolling on existing roads.

His agenda was cheered by state Republican leaders, including Senate President Pro Tem David Long, who said he “applaud(s) Governor-elect Holcomb for embracing an agenda that can find common ground with the General Assembly and the people of Indiana.”

House Minority Leader Scott Pelath of Michigan City said of the governor’s agenda that it was “candidly … a lot more taxes and a lot more spending than I would have expected to see from a Republican governor.”

Pelath said many of the agenda items are “laudatory.”

“There isn’t much with which to disagree regarding building our workforce, modernizing our infrastructure here in the state,” Pelath said. “I’m gratified he’s talking about some of the right things."