By VICKI URBANIK

Like it or not, but without a court ruling to stop it, the state will lease the Indiana Toll Road to private investors for the next 75 years, and Porter County will end up with about $26 million to spend on roads.

Exactly what county and municipal officials will do with their share of the Toll Road lease funds remains to be seen. But one idea was floated at Tuesday’s Porter County Council meeting: Tie up the principal so it cannot be spent.

Council member Robert Poparad, D-1st, proposed that as a way to safeguard the bulk of the one-time payment against what he called a spend-happy county government.

“If we don’t tie up this money ... somebody’s going to spend it,” he said.

Overall, Porter County’s share of the $3.8 billion Toll Road lease will total $26 million, with the county government’s share at $15.89 million and the rest to cities and towns. The money must be used on economic development projects, specifically, roads.

Already, Porter County Commissioners John Evans and Robert Harper have expressed support for investing at least a portion of the county government’s share and using only the interest earned to spend on road projects.

Poparad’s suggestion took that concept one step further by investing the principal then floating a bond issue for road work, paying off the bond with only the interest earned.

He said if it’s decided simply to invest the funds, officials in a few years could undo that decision and freely spend all the money.

“You can’t undo a bond issue,” he said.

He admitted that a bond issue would cost the county in legal and bond fees and in interest. The plan is not ideal, he said, but it’s the only way to safeguard the prinicipal so that the interest keeps building in order to keep bonding so that road projects can continue in future years, rather than spending the money all at once.

He gave the example of investing the $15 million, issuing a bond to pay for $4 million or so for road work, then using the interest earned to pay off the bonds. Once the first bond is paid off, the county would bond again for more road work, again using only the interest to pay off the debt.

Porter County Highway Superintendent Al Hoaglund agreed that he could do much with $4 million for county roads. But he also warned the county council that his state road funds, derived in part from the gas tax, are dwindling and that he’s already down $100,000 in state funds this year.

County council member William Carmichael, R-at large, suggested that the county instead pay off its debt on county buildings, like the new jail, in turn reducing the property tax rate. Poparad said that would be a good idea but the new state law that cleared the way for the Toll Road privatization specifically requires that the money given to each county be spent on roads.

The county council made no decision on what to do with the Toll Road lease funds, but several expressed at least some support for Poparad’s idea.

Council attorney Dave Hollenbeck said Elkhart County is looking into doing the same sort of bonding approach with its Toll Road funds, and that he was assured that the approach would be legal.

Under the Toll Road lease plan, Indiana will get a one-time cash payment of $3.8 billion in return for leasing the road for 75 years to the Spanish-Australian consortium of Macquaire/Cintra, which will get to raise tolls and keep the revenues throughout the period of the lease.

The seven northern Indiana Toll Road counties will get a one-time payment totaling $240 million by this Sept. 15. In addition, all counties and municipalities in the state will share a total of $150 million this year and next for economic development and road projects, with the first half of those funds set to arrive by Oct. 15.

Porter County overall will get $25 million from that first payment, with the money divvied up among the county and municipalities. (Lake County will get $15 million while all other Toll Road counties will get $40 million each; the reason why Porter and Lake counties are getting less is because another $120 million over the next 10 years is going to the Northwest Indiana Regional Development Authority).

For county government only, the first payment will be $14.3 million followed by two payments this year and next totaling $1.58 million. The town of Chesterton, by contrast, will get a grand total of $1.45 million; Porter, $690,055; Burns Harbor, $106,311; Valparaiso, $3.8 million; and Portage, $4.6 million, according to figures released at the time the Toll Road lease bill was finalized.

All of that would be moot, however, if the Citizens Action Coalition and other individuals now contesting the Toll Road lease prevail in their pending lawsuits.

Posted 4/26/2006