CHICAGO — Indiana Gov. Mike Pence unveiled a $1 billion, four-year road and bridge construction plan that draws from reserves and calls for new borrowing.
Pence's "21st Century Crossroads" plan would allow the Indiana Department of Transportation to resurface 16,000 miles of state highways and repair more than 5,200 bridges over the next 15 years, he said.
“These additional funds will help INDOT make future maintenance and repairs as the interstate system comes of age, and will help ensure that our roads can support the economic and employment growth our state has seen over the last few years,” the Republican governor said in unveiling the legislative plan Tuesday.
"This administration knows roads mean jobs,” he said.
The plan’s funding scheme does not require a tax hike and the increased funding does not take effect until fiscal 2017. It relies on $240 million of borrowing.
Pence said low interest rates and the state’ high bond ratings make it a good time to borrow. An additional $6.5 million in annual savings through 2029 would come from savings through refinancing existing debt.
The program would draw on $241 million from the state’s budget reserves, which are expected to hold more than $2 billion in July 2016. The state would maintain 11.5% of its annual budget in reserves. An additional budget appropriation of $150 million during fiscal years 2018, 2019 and 2020, for a total of $450 million, would also go to fund the program.
The state also would accelerate distribution of $50 million in interest in 2019 from its $500 million Next Generation Trust Fund established under the 2006 Major Moves capital program.
The new funding would supplement $3.2 billion in spending already planned by the state’s transportation department over the next five years on road and bridge preservation.
The state said the additional funding would allow ratings on state bridges that in fair or better condition to rise to 97% in 10 years. The administration said the state’s rating has already risen to 95.3% from 93% since Pence took office in 2013. The national average is 94%.
Pence sought to highlight the state’s increased investment of $1.26 billion from the general fund in transportation in recent years. The current two-year state budget includes an additional $200 million for state highways.
The administration has been on the defensive over several high profile transportation issues.
Thirty-three miles of a major interstate have been shut down for a month due to a dangerous bridge and published reports have raised questions over the handling of dozens of road projects. State officials are looking into whether contractors failed to use the proper asphalt mix, leading to premature road deterioration.
The legislature's minority Democrats attacked the plan.
“It’s reassuring that Governor Pence now acknowledges that Indiana’s infrastructure needs attention, but it seems the scope and immediacy of that need continues to elude him,” Senate Democratic Leader Tim Lanane said in a statement. “His proposal is a drop in the bucket when you consider Indiana’s infrastructure situation as a whole.”
Lanane also warned the plan falls short because funding wouldn’t begin until mid-2016 and doesn’t address local road funding.
“Until we have a comprehensive plan for state and local governments to fund infrastructure in a sustainable way, the governor’s announcement is the equivalent of filling potholes,” he said.
The Republicans who control the Legislature praised the idea of putting more money toward transportation but stopped short of an outright endorsement of the specific proposals with some also raising concerns about new borrowing.
"We appreciate the governor’s proposals and will keep his proposals in mind as we work together to address challenges facing infrastructure funding in both the short term and long term,” House Speaker Brian Bosma said in a statement.