Indiana is proposing toll revenue bonds and a potential public-private partnership to widen I-70 in a $6.5 billion plan.
Indiana has asked the Trump administration for permission to become the first state to win a waiver from federal law that generally prohibits tolling an interstate. The request follows the state's passage of a
Republican Gov. Mike Braun's office made the
Widening I-70 to six lanes and other improvements carries a $6.5 billion price tag, including financing costs and inflation. Borrowing backed by tolls would cover more than half of that, the application said, saying the capital plan would not be possible without tolls.
The proposed financing plan calls for four bond issuances, floated every two years starting in 2028, totaling $3.8 billion with an expected $3.3 billion of net proceeds. Projected cash flow shows debt service coverage levels of over 3.0 times with "substantial excess revenue after making all debt service payments and cost requirements."
Toll pay-go revenues would fill out the remaining $3.2 billion capital plan, the application said.
The Indiana Department of Transportation and the Indiana Finance Authority would oversee the program and are considering creating an entity to be the sole Indiana toll authority.
"This preliminary finance plan demonstrates that tolling of I-70 through public delivery can fund all project capital and life cycle needs," the state said. "Public delivery allows Indiana to maintain toll rate control, keep excess toll revenue and maintain operational flexibility."
The state is also "open to all procurement options," it said in the application.
"There are several potential public and P3 options available for implementing this pilot," the state said, adding that INDOT and IFA "have more than sufficient statutory authority through flexible contracting, risk allocation, and revenue-sharing mechanisms that align with state transportation policy and support the [federal toll waiver program]."
The proposed toll program does not currently call for using a Transportation Infrastructure Finance and Innovation Act loan.
The ball is now in the FHWA's court, said Baruch Feigenbaum, senior managing director of transportation policy at Reason Foundation.
"We just don't know — with this DOT, there are a lot of political dynamics," Feigenbaum said. "Indiana is the first state to formally ask for [the toll waiver], and several other states are watching them because they're interested in a similar thing."
The Federal Highway Administration did not respond to a request for comment.
