INDIANAPOLIS — The state is poised to invest more than $200 million in additional funds to boost the chances that the South Shore Line's proposed West Lake extension and Double Track project receive a significant federal grant.
Budget legislation unveiled Tuesday, and expected to win approval Wednesday by the Republican-controlled General Assembly, makes available $185 million, plus a $20 million contingency account, to help fund construction of the rail projects.
That money is on top of the $12 million a year the state is paying to the Northwest Indiana Regional Development Authority (RDA) for its share of the cost to extend the commuter rail line from Hammond to Dyer in west Lake County, and to double-track the existing South Shore Line between Gary and Michigan City.
Officials said the extra funds are needed because the Federal Transit Administration (FTA) recently has signaled that it may only provide a match of 38%, instead of 49%, for projects awarded a Capital Investment Grant.
House Speaker Brian Bosma, R-Indianapolis, said the possibility of a reduced federal grant forced the state to decide whether to borrow money to cover the 11% difference, and incur roughly $150 million in interest costs over 30 years, or to use other funds to directly pay for the project.
He said legislative leaders and Republican Gov. Eric Holcomb decided it'd be best to employ state funds freed up in connection with the $1 billion in proceeds from the recent Indiana Toll Road lease amendment to ensure the South Shore projects still will be fully-funded if only a 38% federal grant comes through, possibly by the end of the year or early 2020.
"We had a choice to either let them die on the vine, or invest," Bosma said. "I think that's a very wise use of the funds."
State Rep. Todd Huston, R-Fishers, co-chairman of the budget-writing House Ways and Means Committee, said the extra money also will give the RDA enough ready cash to proceed with preliminary work on West Lake while waiting for the federal grant to be awarded.
Last month, the FTA gave a "medium-high" rating for the $764 million project, putting it near the top of the list for a federal grant.
NICTD board changes
In conjunction with the additional state funds, House Bill 1001 restructures the board of the Northern Indiana Commuter Transportation District (NICTD), which operates the South Shore Line, by effectively putting it entirely under the governor's authority.
The current 11-member board, with a majority of appointments made by the county councils and commissioners in Lake, Porter, LaPorte and St. Joseph counties, will shrink to a five-member board, with one elected official from each of the four counties being appointed by the governor, and the Indiana Department of Transportation commissioner serving as the board chairman.
The four local officials appointed by the governor must include two Republicans and two Democrats, according to the legislation.
"The state's contribution has significantly increased in all this, so we felt it appropriate to reorganize the board," Huston said. "I think it gives that project a lot better chance of long-term success."
State Rep. Ed Soliday, R-Valparaiso, former chairman of the House Roads and Transportation Committee, said he has thought for a while that the NICTD board needed a shake-up.
"I've had a bill for a number of years, sitting in a drawer, to reorganize the NICTD board," Soliday said. "It's just arcane and you really need a functioning board. So I think it's going to work fine."
In addition, Soliday said the FTA has been unhappy trying to work separately with the state, NICTD and the RDA, and streamlining the NICTD board makes clear to the federal government that the state is calling the shots on the South Shore projects.
If the budget legislation is approved, as expected, by the General Assembly, and signed into law by Holcomb, the measure provides that the NICTD board restructuring would take effect immediately.
It makes no changes to the RDA, a state agency, whose programs, including the rail projects, also are partially funded by contributions from Northwest Indiana communities.
The governor has named the South Shore Line projects as a top administration priority, since they have the potential to attract new residents to Northwest Indiana and grow the Region's economy by reducing travel times to high-wage jobs in Chicago, the nation's third-largest population center.