In addition to generating nearly $4 billion in cash for the state, our transaction committed the road’s operators to an additional $4.4 billion in improvements to the road itself. It now has electronic tolling, new lanes to reduce congestion, 25 additional state troopers and other enhancements that have brought it to the best condition and service levels in its history.
Bingaman (D) labels our action “short-term expediency.” False again. Every penny of the bonanza we reaped goes into long-term investments in new capital projects. Not a cent went to current operations; we balanced Indiana’s budget, cut taxes, built a sizable surplus and achieved a AAA credit rating through old-fashioned frugality.
After paying off the debt Indiana incurred to build the toll road, we protected the rest of the deal’s proceeds for roads, bridges and other infrastructure projects. The reverse of a “seller,” Indiana became a buyer — of billions of dollars of new long-term public assets, the kind the senator lamented that our nation needs. We also set aside half a billion dollars in a permanent Next Generation Trust Fund, interest from which will augment future highway budgets as needs require.
The senator’s broadside is based on the premise that the federal government is “paying twice” the Indiana Toll Road, once to build it and again through federal dollars used for its maintenance. In fact, no federal dollars built the road. Indiana borrowed money to construct it, and tolls paid for the principal and interest. By the senator’s illogic, Indiana should have been sending the federal government a bill every year for creating an interstate without a dollar of federal gas tax funds.
Nor have federal taxes paid for maintenance. Toll revenue, not federal dollars, has funded maintenance, although poorly. Before our lease was finalized in 2006, the toll road was in substandard condition. After 50 years, it still had a large debt and was losing money. That’s what you get when politicians run an enterprise as a patronage operation.
Indiana is midway through a decade of record-breaking road and bridge building, by far the biggest boom in our history and anywhere in America currently. A side benefit of acting when we did has been tremendous savings in time and money, as a starved construction industry bids aggressively for the work in our state. Every major project of the more than 200 our lease made possible has been completed ahead of schedule and far under budget; Indiana journalists have had to adjust to the term “government underrun.”
If anyone should be complaining about inequity, it’s Hoosiers, who year after year are subsidizing states elsewhere through an antique federal funding formula that bears no discernible relation to national economic development. Indiana has never received back more than 92 cents for each dollar of the federal gas tax collected here, and in some years we have gotten as little as 78 cents. Meanwhile, the senator’s home state annually rakes in $1.03 or more for each dollar contributed.
And what has New Mexico done about its infrastructure problem? Under previous leadership, New Mexico has borrowed against its hoped-for out-year federal transfers, a mortgaging of the future that cannot stand up to sound financial assessment. We in Indiana looked at this option before launching our lease transaction and rejected it as, shall we say, “short-term expediency.”
What’s sad about Bingaman’s reactionary position is that the need to rebuild America should be a point of rare mutual agreement between our otherwise quarreling parties and ideologies. Modern roads, rails, broadband and their kin are essential to a strong free-market economy, enabling private enterprises to grow on and near them and to be more efficient as they do. Even advocates of much more limited government should agree that this function belongs squarely within the sphere of public responsibility.
And even believers in the biggest government should welcome, rather than squelch, effective approaches such as Indiana’s. There is a Washington mentality — which I have experienced firsthand — that cannot bear the thought that any highway funds might flow without its ring being kissed first. But territoriality should not block progress.
Instead of castigating a state that has vigorously addressed its share of this national problem, senators should encourage innovation and more partnerships with the private sector, where tens of billions of dollars stand ready to be invested, ensuring our nation the strongest possible economic backbone.