Monday, May 12, 2014

Rebuild Indy 2 - How We Pay for Roads Is Important

What's holding up Rebuild Indy 2?

To hear some tell it, Council Democrats.

Let me disclose right here, I am a Democrat, even though many party leaders would wish it otherwise.  I'm not going to talk party philosophy in this blog entry - rather, simple math.

So, lets back up to the beginning

What's holding up Rebuild Indy 2?

To hear some tell it, Council Democrats.  Hooray !  They are doing exactly the right thing.

RBI 2 was proposed last year, too.  For several months now, Mayor Ballard has been holding public forums pushing for its resurrection this year, although nothing has been introduced at the Council yet.  After hearing the DPW presentation at the March McANA meeting, I asked detailed questions about the proposed funding to pay the $350 million price tag.  None other than DPW Director, Lori Miser, replied that she would get me the information.  More than a month has passed and I have heard nothing but crickets.

So, I am left to believe that the funding plan for RBI 2 this year is the same funding plan proposed for RBI 2 last year.

In a nutshell, of the $350 million, $215 million is ready to roll out the door and $135 million would be raised from a bond issue.  The bond issue would be paid back over 30 years at $9 million per year, for a total repayment of $270 million.  $3.5 million of the nine, would come from increased gas tax revenue from the State.  The remainder would come from existing revenue streams normally used for other things.

First - why doesn't the Mayor propose a $215 million streets and sidewalks program that uses existing money?  Why does it need to be tied up with the $135 million bond issue?

Second - the bond issue is irresponsible any way you look at it.

The bond would be repaid over 30 years but the improvements would last half of that - 20 years if you think patch  on patch is good enough to call 'lasting'.
The bond would be repaid with mostly existing money, and not 'new' money.  That decreases the number of pay as you go projects we can do for 30 years.
The federal government will 'leverage' our road expenses 1 to 4 -  we pay 20%, the feds pay 80%.  The Mayor wants to 'leverage' $9 million a year for 30 years into $135 million.  If we go with the feds method of leverage, that $9 million a year for 30 years would give us $1,350 million.
Why would we pick the pocket of future taxpayers - taking $10 from what they could have to spend, so we can spend $1 today?

I'm glad the Democrats on the Council aren't signing off on RBI 2 - at least as long as the bond issue remains part of the plan.

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