Daniels’ Legacy: Infrastructure

November 28, 2011

For release Nov. 30 and thereafter (650 words)

As a reporter covering the Indiana Statehouse 30 years ago, I followed a hard and fast style rule imposed by my employer: Don’t ever use the term infrastructure. Instead use words that actually mean something to readers like “highways,” “bridges” or “overpasses.”

When it comes to assessing Mitch Daniels’ legacy, that rule has to be broken. With a full year left of his governorship, there’s not much left on his “to do list” because he’s done it already. His foremost accomplishment boils down to one word: infrastructure.

According to the dictionary, “the term infrastructure has been used since 1927 to refer collectively to the roads, bridges, rail lines, and similar public works that are required for an industrial economy, or a portion of it, to function.”

According to Daniels, infrastructure is the secret to economic health.

In his book “Keeping the Republic,” Daniels writes, “The provision and upkeep of first-rate public infrastructure is a core duty of any responsible government, clearly within the sphere of government’s legitimate purposes. It furnishes the backbone to which men and women of enterprise can attach their investments; it is a major part of government’s role in promoting the flourishing of the private sector.”

The problem with infrastructure is that it’s expensive to maintain. When government budgets get tight, as they’ve been in this recession, it’s first on the cutting board.

Therein lies Daniels’ legacy. When he took office in 2005, Indiana faced a $3 billion shortfall in its transportation construction program.

Today, as Daniels describes it, Indiana is “midway through a record building boom, with several years of new construction at three times the historic rate.”

You can’t drive anywhere in Indiana without being stopped or slowed by one of more than 200 construction projects funded through Daniels’ Major Moves initiative.

Although it continues to get flak from Democrats, Daniels’ decision to lease the Indiana Toll Road to a private operator for an upfront payment of $3.8 billion made it possible.

In a chapter of his book titled “The Road Back,” Daniels recalls “high-fives all around” in his office after the state opened the winning bid from a partnership that included Spanish and Australian interests. In his head, Daniels had set a minimum bid of $2.5 billion, almost twice what the road was worth under government management. He was stunned when it came in so much higher.

“What a thrill to think that we could not only close but eliminate the state’s ‘impossible’ infrastructure shortfall, put thousands to work building projects we could never otherwise have afforded and create a great new backbone for Indiana’s long-term, economic future,” Daniels says.

What Daniels accomplished sounds easy, but it wasn’t. No Democrats in the House and only two in the Senate voted for Major Moves. When Pennsylvania’s Democratic Gov. Ed Rendell attempted something similar in 2007 — a deal to lease the Pennsylvania Turnpike for $12.8 billion — legislators from both parties fought him and the plan collapsed. Despite the benefits, they said they didn’t want to turn their turnpike over to a business owned by foreigners, an objection that seems short sighted and xenophobic.

At the federal level as well, proposals for public private partnerships that could reduce the cost of infrastructure projects have been stymied. One recent suggestion quickly shot down would have granted private companies a federal tax deduction for contributing to the cost of transportation infrastructure improvements needed for their businesses to prosper. Such innovation should be encouraged in light of the nation’s $1.1 trillion five-year infrastructure spending shortfall.

Daniels lucked out with solid majorities in House and Senate who were willing to try something different over the objections of the defenders of status quo.

Hoosiers lucked out too. Under Daniels, Indiana has the distinction of awarding more highway and bridge contracts than any other state in the nation. Major Moves will benefit Indiana’s transportation-based economy long after the governor leaves office

Andrea Neal is an adjunct scholar with the Indiana Policy Review Foundation. Contact her at aneal@inpolicy.org.



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