State funding for Northwest Indiana RDA funding may be tied to South Shore expansion

State Rep. Hal Slager, R-Schererville, this week filed House Bill 1618 creating a matching state grant program to provide $9.4 million annually through 2045 to help pay the local share required to obtain the federal funds needed to run the train to Dyer.

The legislation, co-sponsored by state Rep. Ed Soliday, R-Valparaiso, codifies the RDA's promise to spend $8 million a year for the expansion project and another $4 million on operating costs by obligating the agency to annually pay at least $9.4 million of its revenue for the South Shore in order to receive the same amount in state funds.

Similarly, Lake County and the 16 communities that have pledged to give $4.2 million a year to the project from their share of the county economic development income tax would be required to pay just $3.2 million going forward for the RDA to obtain the state grant.

However, should a contributing locality cancel its support, the legislation prohibits the RDA from funding transit-related development in that community, though other RDA infrastructure and economic developments projects could continue.

Slager said he believes linking continued state RDA funding to South Shore expansion is the only way the General Assembly will approve extending its commitment to the RDA beyond the 10-year period, which ends June 30, paid for with proceeds from the Indiana Toll Road lease.

He said lawmakers will not support simply handing the RDA a $10 million check with no direction on how to spend it, and he doubts the RDA would get sufficient funds through Republican Gov. Mike Pence's proposed $42 million Regional Cities Initiative.

"I thought we were far better off to talk about a specific project with a specific expected return, and in so doing I think we have a much better chance," Slager said. "This way, the people understand what the specific use of the money is."

Under the plan, $17 million a year would go toward debt service for the local share of South Shore expansion costs.

The remaining $5 million would be spent by the RDA to support high-density housing and other transit-oriented development along the South Shore Line.

Slager said improved rail access to Chicago will make Northwest Indiana a preferred place to live, especially for younger workers, and will return at least twice the state's investment back to the treasury by increasing the region's sales and income tax collections over the next two decades.

RDA President Bill Hanna agreed. He said despite Indiana's low tax rates and superior business environment, people and companies still aren't coming to the region from Illinois due to insufficient transit connections to the nation's third-largest city.

He is excited by the opportunity to turn that around through the $571 million South Shore expansion proposal and rail-adjacent development, even though it will require the RDA to put more than half its annual revenue toward the South Shore.

"It's going to take a priority position in terms of our finances for a while, but we still have enough flexibility with local funds to be doing things to help enhance the market project areas and do other work throughout the two-county area," Hanna said.

Slager's proposal is awaiting a committee assignment from House Speaker Brian Bosma, R-Indianapolis. Slager said he expects the measure will be reviewed by the House Ways and Means Committee, a panel he serves on, prior to a vote by the full chamber.

The legislation must be approved by the Republican-controlled House, Senate and governor to become law.