For immediate release:
Jan. 25, 2006
House Democrats: Major Moves road projects can be
completed without selling Indiana to foreign investors
INDIANAPOLIS – Indiana House Democrats today unveiled an alternative proposal to finance the governor’s Major Moves infrastructure improvement program without auctioning off the Indiana Toll Road to foreign investors.
The proposal, outlined by House Democrat Leader B. Patrick Bauer of South Bend, would enable the state to generate $1.6 billion in revenue for road and bridge projects and avoid turning over toll road proceeds to a private firm from Australia and Spain for a period of 75 years.
“House Democrats agree with our governor that the infrastructure projects contained in Major Moves will be a key element in the future economic growth of Indiana,” Bauer said. “However, we believe there are funding alternatives that will allow the state to make wiser use of revenues and stop this administration’s policy of selling off our state’s assets.”
The House Democrat plan would generate $1.6 billion in revenue to sell bonds that would finance improvements. Bauer said the plan has two parts:
- Using the revenue generated from the toll increases already announced by the Daniels Administration to float $800 million in bonds over the next 20 years. The governor has proposed doubling toll rates, which would generate $160 million a year.
- Using Garvee Bonds, a process by which the state can borrow against future federal gasoline revenue, Indiana can generate another $800 million over the next 20 years.
“All of this can be done without the risky business that is so much a part of the governor’s plan,” Bauer said. “Under the House Democrat proposal, there would be no worries about foreign control of public assets, non-compete clauses, private taxation, unfair toll increases or increased liability for Hoosiers if the foreign investor defaults.”
The House Democrat plan also would ensure that revenue generated by the toll increases would stay in Indiana.
“Under the governor’s plan, all revenue generated by the toll increases announced by the administration would be turned over to the foreign investors,” Bauer said. “It would take just over 17 years for those toll increases to generate the $3.8 billion that the investors are paying to gain control of the toll road. Under the terms of a 75-year lease proposed by the administration, every nickel generated by those toll increases over nearly 58 years would go into the pockets of foreign investors. That means about $21 billion in profit will be leaving Indiana.”
Bauer said House Democrats will offer their proposal as an amendment to House Bill 1008, which contains the administration’s plan, when the measure comes to the House floor.
“As the public finds out more about Major Moves, they get more concerned about the implications of a proposal that seems to put Indiana up for sale, and moves billions of their dollars into the pockets of foreign investors,” Bauer said. “Our plan keeps Hoosier dollars in Indiana, and it is the safest way to keep our state on the right track.”
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