Issue Position: Transportation

Issue Position

Establishing Indiana's 4th Congressional District as the "Crossroads of the Crossroads of America"

Summary

The motto of Indiana is "The Crossroads of America." If Indiana's 4th Congressional District had a motto it would be the "Crossroads of the Crossroad." The 4th district contains five of the state's fourteen highway systems, the 6th largest air cargo transport hub in the nation, and one of the leading rail yards in the Midwest. It is clear why so many distribution centers and logistics companies call the 4th district their home. Indiana has firmly placed itself at the heart of global supply chain management. As a result, Indiana is one of the few states with an international trade surplus. As technology has created the Silicon Valley economic miracle, so too will logistics create an economic boom for Indiana. Most importantly, the 4th district will be the center of that economic expansion.

Background

Many areas of our national transportation infrastructure are in need of reform. Due to poor policies and pork barrel earmarks, the days of "Bridges to Nowhere" have left strategic parts of our nation's logistical infrastructure at risk of destroying an already weak economy. The 4 Initiatives Plan introduces four simple policy and cultural changes which will ensure our economy is not is not ruined by political self-interest and neglect.

Initiative Topics

1. Logistics Infrastructure Tax Credit

2. Gas Tax Reform

3. Ensure Funding for Locks and Dams

4. Jones Act Reform

If implemented , these policies will allow our nation's air, road, rail, and waterway infrastructure to keep pace with the increasing demand for capacity, as well as increase revenues for every member of the global supply chain. The result will be lower costs to consumers as well as increased resources for companies looking to put Hoosiers back to work. These initiatives, combined with specific projects impacting the 4th district, will ensure that our district remains the primary intersection within the Crossroads of America.

Specific Issues

Logistics Infrastructure Investment Tax Credit

* A key part of the "Rokita Recovery Plan" is the creation of a pro-growth business climate. A vital step in creating a business climate that expands business and creates jobs, is providing incentives for the modernization of logistics infrastructure.

* A 100% investment tax credit must be instituted for all capital investments in logistics infrastructure. This will reduce the cost of operations to logistics firms by decreasing the effective tax rate for firms in this industry. Such an incentive will immediately free up capital and cause substantial job creation.

o Air - Within view of the state of the art Col. H Weir Cook Terminal, are several aging areas of the Indianapolis International Airport. Providing a tax credit will spur an immediate increase in infrastructure investments. The incentives to invest will lead to job creation, increased air traffic, and income for the 4th district. Air cargo carriers such as FedEx, will have an incentive to upgrade their facilities, which will lead to increased capacity and further economic growth in the region.

o Local air -- As a result of this tax credit, numerous municipal airports throughout the 4th district will see an increase in capital expenditures that will fund much needed improvements. As a commercial rated pilot, I am keenly aware of the struggles faced by these important local airport facilities.

o Rail - Neighboring states already offer tax credits for rail improvements. A Federal tax credit will help bring parity among states and make Indiana more competitive in receiving capital investments by Tier I railroads such as CSX, Norfolk Southern, and Canadian National.

o Trucking - The credit crisis has made it more difficult for trucking firms to secure the necessary funds to pay for capital expansion. A tax credit will increase the availability of internal funds, as well as enhance the balance sheet of firms as they seek funding from external sources.

o Waterborne - Similar to trucking, waterborne firms are struggling to raise capital in the existing financial markets. As with trucking, a tax credit will aid ports, such as the Port of Indiana, to access capital and make necessary investments. Such activity will lead to new tenants, increased cargo traffic, and increased employment.

Gas Tax Reform

* Highway Trust Fund Firewall - When created in 1956, the Highway Trust Fund was designed to provide a long term source of funding for the creation, repair and maintenance of the nation's interstate highway system. The need was so great, that the Highway Trust Fund was created to protect this revenue from the special interest spending of Washington politicians. Overtime, however, funds from the Highway Trust Fund have been diverted away from their intended use and directed towards the discretionary spending of Washington politicians. While some of these programs may be important, they should not receive funding from the Highway Trust Fund. By establishing a permanent firewall, only authorized programs, aimed at maintaining our vital yet aging infrastructure, would draw funding from the Highway Trust Fund.

* Fair Share of Highway Funding -- Currently Indiana only receives 92 cents for every $1 it collects in fuel taxes. The remaining .08 cents is largely spent to fund the US Department of Transportation (USDOT) in Washington, DC. The USDOT must be modernized so as to eliminate bureaucratic waste and ensure the maximum amount of the revenue is returned to state where it is collected. One way to accomplish this goal is to replace the current budget allocation model with a system whereby the state retains its portion of the proceeds and forwards 5% or less to the USDOT. Tremendous inefficiency exists when tax revenues are sent to the Federal government, only to be processed and returned to the state with a processing fee removed. In addition, gas tax revenues must be spent using objective criteria, so as to remove the impact of political decisions and prevent future "Bridges to Nowhere."

Ensure Funding for Locks and Dams

* Proper Funding for the IWF - Funding for our nation's waterways is supposed to come from two sources. The first being revenue from fees paid by people who use the waterways for both recreation and commerce. The other sources is supposed to be the Inland Waterways Trust Fund (IWTF). The IWTF, however, is going broke, because money that is intended for use on the waterway infrastructure is instead being diverted to the Federal government's general budget and spent in areas not intended to receive IWTF funds. Calls for an increase in the tax rate on waterway users is not practical and will cause shipping rates to rise, the industry to struggle, and eventually lead to job loss and fiscal ruin for the industry. As with the Highway Trust Fund, the IWTF must be restored to its original use and the Federal government must get its hand out of the cookie jar.

* Appropriation Reform - The Army Corps of Engineers is responsible for maintaining and rebuilding America's locks and dams. The money appropriated to the Army Corps of Engineers, however, is not being allocated based upon strategic need, but on political influence. The money is primarily "earmarked" for pet projects that those Representatives who sit on the Energy and Water Appropriations Subcommittee deem important. The Army Corps of Engineer should be the body responsible for determining, based on a strategic need, what projects should be executed. There are two examples of locks critical to Indiana that have been neglected under the current system.

o The Soo Locks - The Soo Lock system which connects Lake Superior to the other Great Lakes is critical to Indiana and the nation's entire steel industry. Much of the iron ore required to keep the steel mills of our nation operating pass through these locks. The oldest lock, built in 1914, has been slated for replacement since 1986. Even though the ground breaking ceremony has already occurred on a new lock, no money has been appropriated for the project. If the current locks were to fail, the flow of iron ore in our economy would experience a critical failure and one that could harm substantial parts of the economy.

o The Olmsted Lock & Dam - The Olmsted Lock & Dam is an essential system that ensures that waterway traffic on the Ohio River can reach the Mississippi. A large amount of agriculture product from Indiana and other states travels on the Ohio River and passes through these locks. They feed into the Mississippi River and eventually reach New Orleans for distribution throughout the world. The current system was completed in 1929 and was authorized to be replaced in 1988. Due to appropriation issues, however, the new system is not scheduled to be completed until 2014.

Jones Act Reform

The Merchant Marine Act of 1920 contains a section known as the Jones Act. This provision requires all goods transported by water between U.S. ports, must be carried in vessels built in the United States, owned by American citizens and operated by Americans. While the goal may seem noble, such archaic law has done significant harm to the US economy, worldwide consumers, and the state of Indiana. Instead of creating jobs, it has driven them away. The restriction only serve to raise shipping costs, deter investment and actually prevented the purchase of new, more efficient vessels. As such, U.S. shipbuilders and water logistics firms have been prevented from entering the international markets due to the antiquated nature of their equipment. The lack of U.S. made international vessels is a clear indicator that this out dated law is only hurting the ship building industry it was designed to help. If Indiana has such a ridiculous law for roads and trucks, we would not be the logistics hub of the world. A 1999 U.S. International Trade Commission economic study suggested that a repeal of the Jones Act would lower domestic shipping prices by 22%. Another 2002 economic study from the same commission found that repealing the Jones Act would have an annual positive effect of $656 million dollars on the United States economy. Based on our access to Lake Michigan and he Ohio River, combined with our logistics expertise, Indiana stands to gain the most from that new inflow of $656 million.

Specific Projects within the 4th District

Avon Rail Yard
The Avon Rail Yard has the potential to expand to a major intermodal transportation hub. Near the Indianapolis International Airport and with easy access to the five interstate systems that cut through the 4th district, the Avon Rail Yard has unlimited potential to be a national bypass to the rail congestion issues always prevalent when moving goods through the Chicago area. I would fully support and encourage the above mentioned tax credits as well as a State Issued Bond paid for by private users to reengineer the Rail Yard. The potential would then be there to have rail firms come together to provide direct rail service from California to Indiana.

Commerce Connector / Reagan Parkway
In order to further enhance the status of West Central Indiana, and the 4th district, as the logistics hub of the nation, the last legs of the Reagan Parkway need to be completed in order to make the Commerce Connector a reality for Central Indiana.

Interstate 69
The completion of I-69 will provide the 4th district with a 6th interstate highway. This thoroughfare will also help build a vital North American transportation route and further enhance the logistics stature of our region. By providing a direct line of transportation to Memphis, TN and beyond, more of the nation will be within a one day's drive of the 4th district and will attract even more supply chain management industries. With 70% of the nation currently within a one-day's drive, the economic viability of firms placing their logistics hubs in the 4th district would also increase. The effect would be a stronger economy and more viable jobs for the citizens of the district.

Free Trade Zone
As other parts of the nation seek to isolate themselves from the rest of the world, Indiana's 4th district should request special status for the Indianapolis International Airport and make it an international free trade zone. The airport already benefits from its status as a Foreign Trade Zone (INZone). Goods shipped into the airport are free from U.S. Custom duties, provided they are exported again. This makes the airport an ideal location for international trade. By making all goods received through the airport free from customs duties, even those not being re-exported, Indiana will quickly become the number one entry point for goods shipped from all over the world destined for U.S. customers.

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