Economic and Community Development
Infrastructure Part 1: Louisville
Federal dollars are still flowing to states for infrastructure projects, but there’s not enough money to keep up with needed infrastructure expansion. Knowing the impact that transportation has on attracting new business to communities, chambers are seeking infrastructure project funding through alternate strategies such as new taxes, partnering with neighboring states or working with public and private partnerships.
Infrastructure is critical to economic competitiveness says Business Council of Fairfield County President, Chris Bruhl. As economic development becomes more ingrained in the chamber’s mission, chambers must step in to help solve regional infrastructure problems. Some chambers have tackled this challenge in unusual yet instructive ways.
Louisville, Ky.: Two Bridges and Two States
Louisville is a major transportation hub, with three interstates—I64, I-65 and the terminus of I71—converging downtown near the Ohio River. Logistics, distribution and manufacturing are key economic development sectors for the region, and each depends on safe and reliable bridges and a connecting highway network. But Louisville is currently served by only three Ohio River bridges that are near or over capacity, creating congestion and safety issues.
In 2003, after more than 450 public meetings and a five-year study, the federal government recommended two new bridges and reconstruction of a major interchange known as Spaghetti Junction to address the region’s current and future cross-river transportation needs.
Almost immediately, the project stalled because costs had ballooned to $4.1 billion. Nearly nine years later, a scaled back project that includes all the original major elements is on a fast track to construction. The recent progress is largely the result of strong support, perseverance and creative direction from business, community and political leaders.
Under the 2003 Bridges Project plan, Kentucky was to pay 70 percent of the cost and Indiana was to cover the rest. Relying on traditional highway funding generated from gas taxes, Kentucky’s Transportation Cabinet estimated 20 years for project completion, but long before that the project would absorb more than half of the state’s available road transportation funds—a politically unpopular option.
By 2007, with no definitive construction plan, business leaders stepped in, forming the Bridges Coalition, a bi-state advocacy group. Led by Greater Louisville Inc. (the metro chamber of commerce) and One Southern Indiana (Southern Indiana’s chamber of commerce), the coalition united business, labor and bi-partisan government leaders from both sides of the river. Nearly $2 million was raised to support the coalition’s work. Employing communications and legislative strategies, the coalition touted the project’s benefits of reduced congestion, improved safety and job creation, both during construction and after completion.
After three years of coalition work, a milestone was reached with passage of Kentucky legislation that allowed the use of tolls as a potential funding source for the project and the creation of a bi-state Bridges Authority to develop a project financing plan.
In 2011, Kentucky Gov. Steve Beshear, Indiana Gov. Mitch Daniels and Louisville Mayor Greg Fischer—all strong project supporters—agreed to a revised project design and accelerated construction timetable that reduced the $4.1 billion price tag to $2.6 billion. The governors also agreed to split the cost of the project more evenly. Kentucky would be responsible for the new downtown bridge and approaches including Spaghetti Junction, and Indiana would oversee construction of the East End span and approaches. This modification allowed each state to pursue its preferred financing method for its part of the construction.
Earlier this year, the two states approved the project’s finance plan. Electronic high-speed tolls on the two new bridges and the existing I-65 span will cover about half the cost of the project. (Federal law currently prohibits tolling on existing interstates. Kentucky and Indiana have applied for a waiver to allow tolling on the existing I-65 bridge as part of the project.) The remaining $1.3 billion will come from each state’s traditional highway funds. In June the Federal Highway Administration approved the plan. Construction is slated to begin in 2013.
Carmen Hickerson, V.P. of public affairs and communications at Greater Louisville Inc., says creative funding for major highway projects is a must in today’s economic environment of limited federal funding. Large projects like these are increasingly difficult to fund without the inclusion of user fees. The Ohio River Bridges Project fortunately had two governors and a mayor who were willing to work together to find a solution. Through determination and partnership, Kentucky and Indiana overcame challenges and cleared the path for improved transportation for the region.