The states of Kentucky and Indiana expect the tolling revenue for the Ohio River Bridges project to generate a surplus of more than $3 billion through 2054.
The state of Indiana expects that after construction, maintenance and operations costs through 2054, it will have nearly $1.2 billion left over. The state of Kentucky projects a surplus of about $2 billion. Both states emphasized that the figures are projections.
Construction on the $2.3 billion Ohio River Bridges Project began on May 28, 2013, on the East End Crossing. Officials from Kentucky and Indiana have said the project would reduce traffic congestion, increase public safety and produce an economic impact of nearly $87 billion over 30 years.
Tolling is projected to generate revenue of more than $8.2 billion through 2054, according to consulting firm Steer Davies Gleave. The money will be split evenly between the two states.
Kentucky will incur bond payments through 2054 of nearly $1.4 billion and operations and maintenance costs of about $730 million. That would leave the state a projected surplus of about $2 billion.
That’s only slightly less than the full-year budget of the Kentucky Transportation Cabinet, or about $450 for every man, woman and child in Kentucky.
Toll revenue first has to pay for financial obligations of the project, said Mindy Peterson, senior strategist for Louisville-based C2 Strategic Communications, who has been tasked by the state of Kentucky to answer media inquiries about the project.
Peterson told IL via email that the bridges plan “is very forward-thinking,” with future surplus funds available to fund a replacement for the Kennedy Bridge.
“The Kennedy is a 53-year old bridge that just underwent major renovations that will extend its life for at least 35 years. Toll revenue would help ensure the money would be there for a replacement,” Peterson told IL via email.
If tolling generates any surplus, the bond on the initial project has to be paid back early, she said.
“If after all the debt on the project is paid we determine we should keep tolls in place, that money can be spent on things outside of the project assuming we are maintaining the road pursuant to our agreement with” the Federal Highway Administration. “Until then, no toll money can be spent outside of the project,” Peterson said.
Indiana has financed its portion of the bridge through a public-private partnership, which demands initial payments of $392 million, of which just over $300 million has been paid.
Through 2054, Indiana also will have to pay the developer, WVB East End Partners, $2.3 billion for maintenance and debt service. The state also will incur payments of $209 million for operations, which covers items including snow plowing and refuse removal.
That would leave the state of Indiana a surplus of nearly $1.2 billion, or about $181 for every Indiana resident.
Jim Stark, P3 director of the Indiana Finance Authority, told IL via email that adjusted for inflation, Indiana would have a possible surplus of $400 million.
“Any tolling surplus will be used for federally approved roadway projects, which would include those in the immediate bridge communities,” Stark said.
Once tolling begins, crossing the Abraham Lincoln Bridge, the East End bridge and the Kennedy Memorial Bridge will cost $2 per passenger vehicle — so long as the vehicles are equipped with a transponder. A local transponder is free and will be mailed to people when they set up their prepaid account. People also can use their E-ZPass transponder, which works in 16 states, or buy one for $15.