CHICAGO - Indiana lawmakers are considering for the first time dipping into a fund created with proceeds from the lease of the Indiana Toll Road to finance $500 million in local road and highway projects.
The measure is part of a state-sponsored, $1 billion roads and highways stimulus plan. The bill is part of a larger debate between Republicans and Democrats over how to fund the program.
The bill, which passed the Democrat-controlled House last week, would nearly deplete the so-called Next Generation trust, set up in 2006 with $500 million in proceeds from the toll road lease.
Acting in opposition to the measure, the Republican-controlled Senate has passed a bill that would protect the fund by writing it into the state constitution. The Republican proposal would stipulate that the state could spend only the interest from the fund, not the principal.
The Next Generation trust fund is one of several funds created with proceeds from the state's $3.8 billion, 75-year lease of the Indiana Toll Road to a consortium made up of Australian-based Macquarie Infrastructure Group and Spain-based Cintra Concesiones de Infraestructuras de Transporte.
The trust fund was created to finance future infrastructure projects by setting aside interest earned on the trust every five years. Under current law, the money was to remain untouched until 2011, and after that only interest was to be tapped. Other proceeds from the lease are currently being used to finance other road-related projects across the state.
The Democrat's House Bill 1656 would use $500 million from the trust fund along with $500 million in federal stimulus funding to finance local road and highway projects. The Republican-sponsored stimulus plan would use $500 million in federal funds Indiana already receives, along with $500 million in federal stimulus money.
If the General Assembly passes the Senate's constitutional proposal - though most expect it won't get a hearing in the House - it would need to be approved again either in 2011 or 2012 and then go before voters.
In related news, the Macquarie Infrastructure Group reported last week that it saw a modest revenue increase from its road assets over the last six months despite significant declines in traffic across most toll roads. The 1.5% climb in revenue for the six-month period that ended Dec. 31, 2008, is largely due to increases in tolls.
The Indiana Toll Road saw a 14.8% decline in traffic in the last six months of 2008 compared to the last six months of 2007, according to MIG. Traffic was down nearly 8% over the same period at the Chicago Skyway, the firm said. Macquarie-Cintra also operates the Skyway as part of a $1.8 billion, 99-year lease deal with Chicago.
The firm blamed traffic declines on the weak economy, high fuel prices over most of last year, higher-than-average snowfall, and improved alternative routes.
Despite less traffic, revenues from the Indiana Toll Road climbed 1.8% to $82.6 million for the six-month period ending Dec. 31. MIG attributed the increase to toll increases implemented in April 2008, as well as lower operating expenses as the toll road enacted electronic toll collection and automatic ticket machines. Debt service coverage for the Indiana Toll Road remained at one times during all of 2008.
The Chicago Skyway, despite its traffic decline, saw its revenue jump 20.7% to $33.3 million for the last six months of 2008 compared to the same period in 2007. The increased revenue is due to a 20% increase in light-vehicle tolls and a 50% increase in heavy-vehicle tolls, first implemented on Jan. 1, 2008, the firm said.
Revenue also grew after the firm took over toll collection services from the Illinois State Toll Highway Authority.
The firm also made more money after the Chicago Police Department began issuing citations to nonpaying customers. MIG's former policy had been to issue collection forms to nonpaying drivers.
In an effort to increase future revenues, MIG said the Skyway would move to open-road tolling over the next three years.
