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About Major Moves

Indiana's Transportation System

Indiana is within a day's drive of 80 percent of the United States population. Known as the "Crossroads of America," the state has several major lake and river ports; rail lines; airports and a comprehensive highway network. Because of its location, Indiana can become the global distribution and logistics leader that encourages companies to expand or locate their operations in the Hoosier State.

Background

Upon entering office in 2005, Indiana Governor Mitch Daniels directed the Indiana Department of Transportation (INDOT) to examine the highway construction budget and evaluate its ability to deliver projects. A May 2005 study revealed a $1.8 billion gap over the next ten years (2006 - 2015) to build necessary road improvements. Governor Daniels directed the department to review and prioritize projects based on a solid set of criteria including safety, mobility and economic development. In August 2005, INDOT developed a draft project plan and held 12 meetings across Indiana to gather local input - more than 3,000 citizens attended these unprecedented meetings. Also, during the summer, INDOT and the Office of Management of Budget began reviewing innovative financing solutions to close the gap.

Major Moves Plan Announced

In September 2005, Governor Daniels introduced his draft Major Moves highway plan. The plan included more than 200 new construction and 200 major preservation highway projects. In addition, funds would be made available to counties for local transportation projects. The funding would come from a combination of federal and state gas tax monies and revenues from leasing the Indiana Toll Road (ITR) to a private company. The ITR was an underperforming asset that had lost millions in three of the past five years - including more than $16 million in fiscal year (FY) 2005. A lease was anticipated to bring in the $1.8 billion necessary to fill the construction gap. In November 2005, the Indiana Finance Authority (IFA), which owns the ITR, began soliciting bids to manage and lease the highway.

Legislative Approval

Leasing the ITR required approval from the Indiana General Assembly. In January 2006, legislators began considering House Bill 1008 (Major Moves). In the third week of the legislative session, IFA opened bids and announced a $3.85 billion offer to maintain and operate the ITR for 75 years. The offer came from Cintra-Maquarie, an Australian-Spanish consortium which operates more than 40 toll facilities worldwide - including the Chicago Skyway which connects at the ITR's western end. After much debate, HB 1008 passed the House and four weeks later was approved by the Senate, largely on a party-line vote. In late March 2006, Governor Daniels signed the Major Moves legislation into law.

Final Major Moves Plan

In May 2006, INDOT introduced the final, funded 10-year Major Moves highway plan. Annual new construction will quadruple during the program from $213 million in FY 2006 to $874 million in 2015. In addition to state highway projects, the counties where the ITR is located will receive one-time payments of between $40 million and $120 million for local transportation projects. In 2006 and 2007, all 92 Indiana counties also will receive additional funds for their local transportation projects. The amount varies by county and is based on the Motor Vehicle Highway formula. The legislature also directed $500 million from the lease proceeds be dedicated to a Next Generation Fund to be used later for transportation projects.

On June 28, ITR's operations were transferred to Cintra-Maquarie (now known as the Indiana Toll Road Concession Company - ITRCC). ITRCC deposited $3.8 billion with Indiana in the largest public-private partnership agreement in the world. Interest on the money currently earns about $500,000 each day. ITRCC has also committed to completing at least $4 billion in improvements to the highway during the lease agreement.

Major Moves is praised as the "jobs bill of a generation" and is anticipated to employ tens of thousands of Hoosiers directly on highway projects and in industries that expand or locate new operations in the state. In July 2006, Honda Motor Company announced Greensburg would be the location of its newest plant. The $500 million plant will employ nearly 4,000 people. The company cited Indiana's commitment to infrastructure as one of the deciding factors in their decision.