Will Indiana get screwed again?


January 29, 2017 10:36 PM


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For nearly 50 years I’ve followed compilations of how much revenue Indiana contributes toward versus how much we get back on federal grants to states.  We gotten back somewhere between 80 cents and 92 cents for every dollar we ship eastward.  There are various reasons for this, it oscillates over time, and the precise answer depends on the methodology being used.  But the answer is always generally the same:  Indiana is a “donor” state.  Our representatives love to strut when they announce bringing home some federal bacon.  They seldom (never) add the postscript, “And here’s how much more it cost us to get those federal dollars.”

Now we see a critical mass  of Washington pooh-bahs signing up to dump buckets of money into “infrastructure”.  I don’t want to enter the swamp of which party proposed how much infrastructure spending first, or whether such a plan makes macroeconomic sense.  Let’s just ask the naked self-interest question:  Will Indiana taxpayers wind up getting screwed again, paying on net for other states’ infrastructure goodies?

Gauging the rhetoric from President Trump and recent counter-rhetoric from Senate Democrats, we have good reason to be nervous.  The President’s mantra for public projects (as opposed to things like pipelines and natural gas terminals) has been “roads, bridges, tunnels, airports and schools”. Senate Democrats echo that list in their proposal.  It’s the last three that should give pause.  Indiana, particularly central Indiana, is already pretty well stocked through our own efforts (schools, airports) or not inclined by nature to be much in need (tunnels).

For big time tunnels you need mountains to tunnel through or big rivers to tunnel under.  We have neither.  President Trump may have routinely landed his 757 at LaGuardia and Dubai and concluded from that sample that U. S. airports are “Third World”.  Indianapolis International doesn’t fit that description.

When Mike Pence was President of the Indiana Policy Review, the IPR studied every school construction project in the Great Lakes census region (Indiana, Minnesota, Wisconsin, Michigan, Ohio, Illinois, and Kentucky) over a 15-year period.  Indiana had 11% of the kids but 40% (sic) of the bricks and mortar spending.  Why?  Indiana was the only state with virtually no constraint on what amy local school board could spend on facilities.  Poster child was a $95 million Carmel High School remodeling (!!) project.  The  IPR study inflamed legislators (and then Governor Bayh) and led to today’s referendum requirement. Since then, some referenda have failed, but those in districts with growing enrollments where a building program could be justified to the voters have generally succeeded.   Indiana won’t have much of a “need” case for any new federal school building dollars.

We don’t stand to get much in the way of school, tunnel or airport money.  But you can bet we’ll be required to pony up our share of everyone else’s.



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