INDIANAPOLIS —As Indiana approaches the end of a one-time highway-building bonanza, the candidates campaigning for governor are pledging to finish the Interstate 69 project — but they have not yet said how they will pay for it.
The "Major Moves" deal — Gov. Mitch Daniels' 2006 decision to lease a northern Indiana toll road for 75 years to a Spanish-Australian consortium in exchange for $3.85 billion in upfront cash — approximately doubled what Indiana has had to spend on new road construction in recent years. But that money is running out.
A year from now, what's left of that money will be spent, and a new governor will have to find ways to finish the Bloomington-to-Indianapolis stretch of the I-69 project and pay for other major construction efforts.
It's a financial pinch that transportation departments in most states are feeling, as gas tax revenues dwindle and alternatives like Indiana's Major Moves program become more difficult to identify.
"That toll road money is like Santa Claus: It's come and gone," said John Gregg, the Democratic gubernatorial hopeful who will face Republican Mike Pence and Libertarian Rupert Boneham on the November ballot.
But it left a huge haul of presents under the tree, including 100 miles of the 142-mile I-69 extension that will be open or under construction by the end of this year, as well as several key northern Indiana projects.
"Not only is this happening years ahead of schedule, but it's not clear how this would have ever been accomplished without Major Moves," said Will Wingfield, a spokesman for the Indiana Department of Transportation.
That deal set aside $500 million for a trust fund with its interest swept into Indiana's transportation coffers every five years — a fund that gave Indiana an extra $124 million during the first sweep in April 2011.
Other than that side pot, though, the Major Moves money is all either spent or slated to be spent before Indiana's current budget expires in June 2013.
Its absence means Indiana will rejoin other states that rely mostly on gas tax dollars. That's about $500 million per year for Indiana, which covers debt service, the transportation department's operating budget, mandatory expenses such as snow plowing and more.
How important has Major Moves been? In fiscal year 2011, $633 million of the $1.3 billion in state money that INDOT had to spend on transportation came from the deal.
But that's not the full picture. Federal funding has doubled the amount Indiana has to spend on transportation each year, sending the state an extra $1.3 billion in fiscal year 2011.
However, while federal money was Indiana's main source of capital projects funds prior to Major Moves, much of that money is earmarked for specific purposes, giving states relatively little flexibility to spend the whole chunk how they see fit.
That money is up in the air, too. Congress is currently working to hash out a new transportation funding bill before June 30, and with the Federal Highway Trust Fund in trouble and deficit reduction a central focus, maintaining current spending levels could be difficult.
Wingfield said the state is working with Republican U.S. Rep. Larry Bucshon of Newburgh, who sits on the House Transportation Committee and a joint House-Senate conference committee that is working to hash out an agreement on a final bill.
Public-private partnerships are another avenue for new road construction projects, and Indiana has started toward several such deals with private businesses that would pay for the roads' construction and then collect tolls from motorists.
A two-state panel is working toward the construction of a new bridge over the Ohio River near Louisville. A 47-mile expressway connecting northern Indiana to Illinois is in the works. And East Chicago has signed a deal with a private company to build a toll bridge.
However, Indiana lawmakers have said they want the Evansville-to-Indianapolis portion of I-69 to remain toll-free, like the already-existing Fort Wayne-to-Indianapolis leg of the highway.
The I-69 extension is broken into six sections, the first four of which are already under construction and funded through Major Moves.
The fifth section, which runs north from Bloomington to the Martinsville area, is being planned now and is estimated to cost between $250 million and $320 million.
The sixth section, from Martinsville to the southwest side of Indianapolis, is not as far along, and there is no recent price estimate. Like section five, it will run mostly along the current route of Indiana 37. But it could involve more costly land purchases near Indianapolis.
Pence said if he is elected, he will find a way to make sure the I-69 project is finished.
"We're going to complete I-69 to our capital city. For more than 20 years, I've believed we had a spoke missing in our 'bicycle wheel' in Indiana," Pence said.
"The Daniels administration has taken great strides to complete that, and if I have the privilege of serving as governor, we're going to complete I-69 to Indianapolis."
Gregg said he, too, wants to finish the project, largely because of its impact on the Crane Naval Surface Warfare Center. Failing to complete it, he said, would jeopardize about 5,000 jobs at and around the facility.
Still, he said, Indiana will feel a pinch without Major Moves dollars.
"When you start realizing the cost of mowing, buying salt, maintaining all the vehicles and all the design — just the maintenance and keeping up the existing construction poses an enormous problem," Gregg said.
"If we're going to be the logistics capital — and that's an unbelievable opportunity — we've got this challenge," he said. "What I'm trying to do now is to remind people that we have to have a discussion on what we're going to do, because I don't think most people know this.