The Northwest Indiana Regional Development Authority on Friday voted 7-0 to provide $8 million per year for building an extension of the South Shore commuter railroad to Dyer.
The RDA hopes its action will rev up local communities to follow Munster's lead in pledging part of its receipts from a county economic development tax toward the project.
"We hope the other locals will get on board and work with the congressman's (U.S. Rep. Pete Visclosky) office and us to move this project forward," RDA Chairman Donald Fesko said just before the vote.
The vote marks the first time in its 9-year history the RDA has been able to make a major step forward on its original mandate from legislators to extend the South Shore to Lake County's south suburbs.
"This is a watershed moment for surface transportation in Northwest Indiana," RDA member Harley Snyder said.
The RDA's committment of $8 million per year will be used to pay off bonds expected to finance the $571 million project, according to RDA Chief Executive Bill Hanna. That means the RDA's commitment could last for decades.
Half of the $571 million price tag for the project must be raised at the local or state level in order to qualify for the Federal Transit Administration's New Starts program, which could fund the other half.
About $16 million annually will have to be committed locally for the life of the project to qualify it for the 50 percent match from the New Starts program.
Visclosky, D-Indiana, has led the push for the extension, personally lobbying local officials across the region.
The 8-mile extension would run on the Monon Corridor, an abandoned railroad right-of-way. Construction could start in 2020.
On Monday, the Munster Town Council voted unanimously to commit 34 percent of its receipts from the county economic development income tax to funding the South Shore expansion.
Lake County has carved out $2 million for the South Shore extension in its plan for its share of the county economic development income tax, Hanna said. No new taxes or tax increases will be needed because the money for the extension can all be raised from the RDA, existing tax receipts, and the New Starts program, he said.
The RDA board also voted 7-0 on Friday to contribute up to $1 million to perform an environmental impact study of the proposed route. South Shore operator Northern Indiana Commuter District will provide up to $1.9 million for that study.
The RDA is also committed to using any proceeds from SB 367, which is currently before the General Assembly, to fund annual operating costs of the new line, Hanna said. That bill could provide the RDA with up to $4 million per year in casino development funds.
The RDA at its meeting Friday also took final action on forgivable loans from its deal closing fund for economic development.