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At the crossroads: Indiana's infrastructure.

Indiana's motto is "Crossroads of America." The state boasts more interstate highways than any other state in the union, but economic developers say they are a man-made resource that is being neglected.

Soon, the state's motto might read, "Caution: Rough road ahead."

indiana's infrastructure-its roads, bridges, wastewater treatment plants and airports-has been a valuable tool in attracting new business to the state. So far, the state has not lost any prospects because of its deteriorating infrastructure, but planners say it could happen if more emphasis is not given to improving roads and bridges.

Graham S. Toft, president of the indiana Economic Development Council, Inc., in Indianapolis, has examined the state's infrastructure needs extensively. In the August issue of Hoosier Banker magazine, Toft said 54 percent of the state's highways, 44 percent of its bridges and 20 percent of its sewers are in either poor or fair condition, or face capacity constraints because of federal guidelines.

"Strategically, Indiana is in a competitive geographic position in the United States," said Toft. "Our interstates give us a competitive edge, but regrettably, they are not being managed properly."

Part of that reason, he said, is that state government is not picking up the slack for cuts in federal highway and infrastructure spending. In 1981, the federal government paid 43 cents of every public works dollar. in 1989, that had been slashed to 27 cents.

But a solution, or at least a partial solution, may be at hand. The Build Indiana Fund, said Toft, is an example of a non-tax revenue source that could be tapped for the state's infrastructure needs.

Build Indiana was created by the Indiana General Assembly in 1989 to set aside a portion of Hoosier Lottery funds to support infrastructure projects around the state. The amount of money available is estimated to be between $88 million and 125 million a year. Unfortunately, the requests from cities and towns during the first year came in at more than $1.1 billion, 10 times the amount that will be available.

Even so, the Build indiana Council, a not-for-profit organization composed of engineers, contractors, equipment dealers and others involved in the construction industry, says spending lottery money on the infrastructure is a positive step. According to James A. Purucker, executive director of the organization, from 1964 to 1986, of all the states in the Midwest, spending on infrastructure as a percent of the gross state product was the least in Indiana. It was 1.3 percent in 1986. "There has been a slowdown of infrastructure development," Purucker says. "We really ought to be out front with this in Indiana since we really are the Crossroads of America."

"The state has to realize that the federal government is getting out of paying for massive road, street and bridge projects like they did in the past," Purucker continues. "It is not a good picture.' An alarming number of communities, for example, have wastewater treatment plants that are already above 80 percent of capacity, he says. "That is different problem than a congested road. if it is a road, you just sit there in traffic for a while and you're inconvenienced. But if it is a sewage plant, then you simply cannot expand."

The state's need for infrastructure improvements, Purucker continues, was underscored by the $1.1 billion in requests it received for Build Indiana money. Of that money, more than 40 percent, or $438 million, was requested for transportation improvements: $289 million for surface transportation, $81 million for air transportation and $68 million for mass transportation.

Although the Build indiana Council is not lobbying for specific projects around the state, Purucker says there are some needs that do need to be met. "The Borman (Interstate 94 in Lake County) certainly is a bottleneck. With the amount of traffic going through, Lake County, something has to be done." Fort Wayne, furthermore, "is in a terrible spot," he says. "They need a bypass. And a connector highway from Fort Wayne to Lafayette would help."

Other than that, Purucker says it is up to local governments to push for individual projects. And the wish lists for the different regions around the state run the gamut.

For Fort Wayne and northeastern indiana, John Gerni wants an improved airport. Gerni is vice president of governmental and community affairs for the Greater Fort Wayne Chamber of Commerce. If he could get only one project, he says, it would be the airport. Lincoln National Corp., our biggest employer, is expanding its operations in Fort Wayne. But right now, that project is on hold until Fort Wayne and Allen County solve the infrastructure problems at the airport," Gerni says.

At a press conference on July 18, Ian M. Rolland, Lincoln National Corp.'s president and CEO, said the company sees uncertainties in the Fort Wayne business environment. Also at the press conference, Fort Wayne Mayor Paul Hemke said: "We can't expect a private business to invest upwards of $60 million in a new office when we, as a community, are hesitant about taking the steps necessary to strengthen our schools, our airports, our roads and our utilities."

It was eight years ago that Fort Wayne's biggest employer, international Harvester, pulled out of town, citing similar concerns.

Many of the problems, Gerni says, basically stem from neglect. The city, for instance, has only been receiving regular allotments of discretionary funding from the Federal Aviation Administration since 1985. That money is being used to upgrade runways and taxiways at the airport. The city also has submitted two airport funding requests to the Build indiana Fund, but, Gerni admits, Fort Wayne is playing catch-up.

In Northwest Indiana, the most pressing need is relieving highway congestion. Charles Oberlie, president of the Northwest indiana Forum, a private, three county economic development group based in Merrillville, says growth in Northwest Indiana has surpassed the capacity of most highways. "Physically, the Borman needs some attention on its entrance and exit ramps,' he says. During the past two years, the Borman has been resurfaced from the Illinois state line to Indiana 51 in eastern Lake County.

"One of the more critical issues we have is to get traffic back and forth from Northwest indiana to Chicago," says Oberlie. "That is why we continue to look at the needs of mass transit."

On Oberlie's wish list is a unified transportation system that would combine the South Shore Railroad, Amtrak commuter service and area service into a single operation.

"Basically, we need $8 million annually for the commuter lines, another $2.5 million to expand local bus service and $12.9 million for operating costs," estimates Oberlie. It is money that simply isn't available now. Finally, Oberlie says, the region's waste water treatment facilities need to be upgraded to the tune of $108 million over the next three years. "We're okay now, but," he asks, "what if the government says you can't hook on anything new?"

In Evansville, Susan Sauls, vice president for community development for the Metropolitan Evansville Chamber of Commerce, says the city's infrastructure needs are not critical. "We have an airport that is 18 months old, and the bridges here are probably in better shape than in other parts of the state. At least they are not crumbling," Sauls says.

At the airport, Sauls would like to see more jet traffic beyond USAir and the commuter lines that serve the area. Topping her wish list, however, is a direct road link from Evansville to Indianapolis. Essentially, it would be an extension of Interstate 69. Sauls sees that link as crucial in turning Evansville into a major economic hub surrounded by St. Louis, Indianapolis, Cincinnati, Louisville, Ky., and Memphis, Tenn. Even though the link has been the dream of the city for several years, the project is still several more years away. in the meantime, the new interstate 164 spur on the city's east side connects Evansville to Interstate 64, but 164 is still about 20 miles away.

In Indianapolis and Marion County, the focus for infrastructure improvements is on mass transit. The city has made the biggest single request from Build Indiana for a mass transit rail system. In all, Build Indiana has received requests from Marion County that total more than $331 million, far ahead of second place Lake County's 109.4 million.

According to Joe Stahler, director of the Indianapolis Department of Transportation, in the city alone, there are 3,100 miles of streets to maintain. The current budget allows for about 100 miles a year to be resurfaced, which leaves the city on a 31 -year repaving cycle.

"And a highway lasts only 15 to 20 years," Stahler points out. "Traffic density in Indianapolis is getting worse. We get help with a wheel tax and parking meter money." Still, that provides only $7 million to $8 million a year, he says.

Stahler's wish list is topped by an increase in the revenue base. And that increase, he says, is not merely to expand what is taking place now, but simply to maintain today's pace. "We really have to educate the public," Stahler says. "They don't realize the resources that are involved in projects like this."

Thomas A. King, president of the indianapolis Chamber of Commerce, says that the city also has to improve its sewer system, since parts of it are more than 100 years old. in 1989, Indianapolis spent $25 million on street repairs, less than one-third of what it should have spent to keep pace with everyday wear.

That's not all the city has to improve, and the chamber recognizes this. To assure that Indianapolis is competitive into the 21st century, the chamber has authorized a $750,000 study of the city's present and future infrastucture needs. The Infrastructure Commission, which consists of 180 representatives from the business community, was the outgrowth of a task force the chamber assembled o consider alternative ways of generating income for capital improvements.

Quickly, it became clear that "the b u s i n e s s folks (on the task force) would rather see the big picture and what it would take to fix it rather than be nickled and dimed with no overall plan to meet the total infrastructure needs of the community," says King. The commission, which is chaired by Ramon L. Humke, president of indianapolis Power and Light Co., was patterned after a similar effort in Cincinnati. it expects to report its findings to the City-County Council next spring.

If Toft, whose organization is based in Indianapolis, had an agenda for the state capital, the first item on it would be a second international airport. That, he says, would indicate that the state acknowledges the existence of a global economy and that Indiana's economy will be increasingly involved in it.

Although the deterioration of the infrastructure in the state is not yet crucial, it is important to move quickly to avoid such a crisis, says Toft. Part of the problem will be convincing state and local legislators that there is a need for massive spending on infrastructure improvements. Additional taxes are not popular, so one alternative would be to begin charging user fees. "If user fees are adequate, fair and managed in a professional way," Toft believes, Hoosiers will prefer such approaches."

Even so, according to Toft, the cost is mind-boggling. The price tag for taking care of the state's wastewater treatment needs, highways, roads, bridges, airports and railroads is $28 billion. That was a figure presented in a 1986 Congressional study. The figure would be even higher today, concludes Toft.
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Author:Richards, Rick
Publication:Indiana Business Magazine
Date:Sep 1, 1990
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