INDIANAPOLIS – Gov. Mitch Daniels was fond of touting Indiana’s fully funded 10-year highway plan – thanks in large part to the $3.8 billion from the long-term lease of the Indiana Toll Road.

But as economic concerns intercede, the Indiana Department of Transportation has started plucking projects off the list and delaying others into years after lease funding would exist.

That puts more pressure on traditional funding sources, such as state and federal gas taxes.

“How can this be? We were guaranteed these projects,” Rep. Win Moses, D-Fort Wayne, said sarcastically. “I think this is absolutely predictable. It was always oversold.”

Regional projects that include Indiana 930 in New Haven, Indiana 8 in DeKalb County and Indiana 5 near Shipshewana are now questionable.

Overall, the state plans to spend almost $1 billion less over the 10-year-period than originally estimated on new highway construction – from $6.4 billion to $5.5 billion, according to the initial plan compared with updated data provided by INDOT.

This is only new highway spending – not money spent on preservation and maintenance.

Economic realities have caused a pruning of the list in recent months. But part of the drop in spending is the result of the good side to a bad economy – cheaper construction costs.

INDOT spokesman Will Wingfield said the state has accelerated several key projects, such as upgrading the Fort to Port corridor, which means the state spends less on the projects overall. That’s because today’s construction costs are cheaper than estimates that are years out.

INDOT officials also say the 10-year plan ranging from 2006 to 2015 was always a living document and there were bound to be changes.

“We look at the revenue, and we have to compare the projects and continue to refine so the most important projects get out the door,” said Bob Alderman, superintendent of INDOT’s Fort Wayne district. “We have to be mindful of the limited dollars.”

Malleable plan

Since the plan was originally adopted in 2006, INDOT has added five projects with an estimated cost of $219 million.

And Wingfield released data showing 19 projects worth $295 million have been moved to a “to-be-determined” status or their start dates have been pushed past 2015.

He did not, however, include $475 million worth of spending on a major bridge project in southern Indiana that has now been pushed out of the 10-year plan while development plans continue.

The biggest drops in proposed spending come in 2013, 2014 and 2015 – after Daniels leaves office. Originally, the plan called for about $2.5 billion in new highway construction those years. Now that number is only $1 billion.

Some of that spending was pushed forward into earlier years, which is why the drop in spending is still about $1 billion.

The reason for revamping the plan is largely due to a drop in gas tax and interest revenue. Wingfield said people are driving less and buying more fuel-efficient cars, resulting in about $120 million less in taxes.

Another large part of funding for the 10-year construction plan was the $3.8 billion received from the 75-year lease of the Indiana Toll Road.

In addition to spending the principal on road projects, state officials aggressively estimated how much interest would come from the money and applied that to projects.

But the amount of money the state is reaping in interest from the Toll Road lease has not met expectations.

In 2008, INDOT said the interest shortfall had already reached $220 million. Wingfield did not have an updated number.

The agency completed a three-year federal look-ahead at the end of last year, which was the primary reason for the project adjustments.

It now shows 18 projects with completion dates that are “to be determined.”

Up in the air

In northeast Indiana for instance, projects in Allen, DeKalb and LaGrange counties are now questionable.

In Allen County, Indiana 930 in New Haven was supposed to be upgraded from west of Interstate 469 to Minnich Road. The cost was estimated at $22 million and was supposed to start in 2015.

Alderman said the traffic counts aren’t there to justify the project, so it has been removed.

“They told me they are not sure when they could get it reprogrammed, but it isn’t forgotten,” New Haven Mayor Terry McDonald said.

But he also conceded he always thought the project was a bit larger than necessary to accommodate limited congestion.

In DeKalb County, Indiana 8 from Indiana 327 to Interstate 69 was supposed to be upgraded from two lanes to five to accommodate a growing industrial area.

The cost was estimated at $25 million and was supposed to start in 2014. Alderman said his office spoke with every business along the corridor and decided the plan was “overbuilding.”

After consultation with Auburn Mayor Norm Yoder and several state legislators, INDOT has agreed to reduce the scope of the project to a three-lane upgrade with bi-directional turn lanes and some intersection improvements. The new cost will be about $15 million.

A state fact sheet on the project says it has been pushed out to 2018, but Alderman said a recent agreement has moved the start date to 2012.

“They were going to pull the whole project off and reallocate the money someplace else,” Yoder said.

“It’s frustrating when you thought you had a project locked in, and they pull it out from under you.”

But Yoder agrees that the new version of the project will aid the area.

In LaGrange County, Indiana 5 from U.S. 20 to U.S. 120 was supposed to be widened to help with congestion near the Shipshewana flea market. The estimated cost of the project was $5 million and was supposed to start in 2011.

Alderman said local traffic counts didn’t match the state’s, and the project was removed.

Shipshewana Town Manger Mike Puro said he is trying to get INDOT to reinstall the project.

“We found out late last year that it was going to get pushed out,” he said. “There is a concern here because the project was to handle the traffic we get in the summertime.”

Moses said he expected that the money wouldn’t go as far as Daniels initially expected. That’s because the administration gave away too much of the Toll Road lease proceeds to get the bill passed. That includes $240 million worth of one-time payments to the counties along the Toll Road and paying for a toll freeze.

He believes the state also used higher interest estimates than could have been reasonably expected.

“In just a few years tolls will start to rise and the state will have spent all the money,” Moses predicted. “And our kids and grandkids will be paying for it for years.”

nkelly@jg.net