DALLAS -- Indiana Gov.-elect Eric Holcomb is eyeing the state's existing $500 million Next Generation Trust Fund -- set up years ago from proceeds of the Indiana Toll Road Lease – to fund investments in entrepreneurship and to support early-stage and mid-size Indiana companies.
Holcomb, who will be sworn in on Monday, unveiled the proposal as part of his legislative agenda on Thursday.
The trust fund, established with proceeds from the 2006 Indiana Toll Road lease, currently must be invested in products with extremely limited risk. Lawmakers must approve converting the trust to support entrepreneurship in the state. Interest generated from the Next Generation fund annually, which is about $20 million, is used for road funding now and that would continue under Holcomb's plan.
The $500 million investment would be part of Holcomb's proposed $1 billion, 10-year plan to expand state investment in business.
Holcomb said on Thursday that his top priority is to make Indiana a national leader in economic growth and employment, in part by maintaining the predictable business climate made possible by the state's balanced budget, strong reserve fund and maintaining the state's triple-A credit ratings.
Holcomb also laid out his agenda for infrastructure spending and said the state needs to take a long-term approach to funding Indiana's roads and bridges. He didn't lay out any further details on a road-funding proposal but said he supported the plan put forward by House Republicans on Wednesday.
Indiana House Republicans introduced a $1.2 billion per year transportation funding proposal that raises the state gasoline tax and require transportation planners to study the tolling of Indiana's interstate highways.
The 20-year plan would raise the state gasoline and diesel taxes by 10 cents per gallon, levy a new vehicle fee of $15 per year dedicated to transportation infrastructure improvements, and add a $150 per year registration fee for electric vehicles.
Also on Holcomb's agenda is a plan to increase state-funded pre-kindergarten. The gov.-elect is looking to double funding to $20 million a years to serve more low-income children.
The proposed spending comes as Holcomb says he'll maintain the state's reserves around current levels at $1.8 billion a year. The state is slated to unveil a new two-year budget this month.
A new revenue forecast for Indiana says the state will collect about $300 million less in general fund revenues than had previously been anticipated next year, though the projection for the following two years is up $1 billion.
The extra revenue is expected to go to priority items such as new highway spending, combating opioid addiction and expanding the state's preschool pilot program for low-income students.
The 2% drop in projected 2017 general fund revenue from a prior December 2015 forecast was largely attributed to a $265 million expected drop in sales tax revenue due to lower gas prices.
The state closed out fiscal 2016 with a structural surplus of $50.6 million, $545 million in its rainy day fund, and a total of $2.24 billion in various state reserve accounts.
Revenue in the fiscal year that ended June 30 finished $111.3 million below a revised forecast and $78.5 million below revenue collected in fiscal 2015.
Indiana holds triple-A ratings from the three largest rating agencies. S&P Global Credit Ratings reaffirmed Indiana's AAA credit rating in April and Fitch Ratings reaffirmed the state's AAA credit rating in June.