Federal Highway Report Raises Questions About $2.3 Billion Ohio River Bridge At Ohio

I've previously discussed the one-sided agreement the state of Indiana reached with the state of Kentucky for construction of a $2.3 billion bridge over the Ohio River at Louisville that has Indiana bearing a disproportionate share of the costs. Debt service on Indiana's share of the bridge's cost is being paid out of the state's general fund, while Kentucky is relying exclusively on toll charges to cover its share of the debt service. According to a new report from the Federal Highway Administration, traffic numbers on I-65 have been on the decline. The Louisville Courier-Journal's Marcus Green reports on the study's numbers:

Total vehicle miles traveled in Indiana fell by more than 5 percent in March, compared with the previous year. Kentucky saw a close to 4 percent decline, according to the federal report, which uses roughly 4,000 traffic counting locations nationwide to compile its data.

In the past decade, miles driven have ebbed and flowed in both states. Since 2007, for instance, driving in Kentucky remained essentially flat in three years and increased in one. And in both states, miles driven fell in the first three months of the year — 1 percent in Kentucky and 3 percent in Indiana.

In addition, daily traffic on the two interstate bridges between Louisville and Southern Indiana — the Interstate 65 Kennedy and the I-64 Sherman Minton — were lower in 2012 than during most of the previous decade, according to the consultant hired by Kentucky to prepare a forecast meant to assure bond buyers that revenues from bridge tolls can cover the construction debt.

Kennedy Bridge traffic was 122,000 vehicles per day, or about 14,000 fewer than in 2007, said consultant Steer Davies Gleave, while the Sherman Minton carried 78,200 vehicles per day, down from 87,800 in 2002.

From 2010 to 2012, daily traffic across the river fell by 1 percent — 224,300 trips, down from 226,700.

Such numbers are important because tolls on the Kennedy Bridge, a new span next to it and a bridge upriver are key to the states’ financial plans for the project, even though actual rates haven’t yet been determined and final toll revenue projections haven’t been made public.

According to Green, neither Indiana nor Kentucky officials will release their own traffic studies they relied upon for their debt funding assumptions. Transportation officials of both states reassured Green their numbers are solid. “The way that we’ve done our forecasting, we’re comfortable that we’ve positioned the state well with this project and believe that the tolling and the revenues — all the financials that we’ve done — will be a successful enterprise for all involved,” said Michael Cline, commissioner of the Indiana Department of Transportation. This week, Cline announced that he had accepted a new job at Purdue working for his former boss, Mitch Daniels.

Analysts tell Green that part of the problem is the driving tendencies of millennials, who tend to drive fewer miles than earlier generations on average. Phineas Baxandall, an analyst for Public Interest Research Group thinks the highway administration's report reflects that shift in driving habits. State Rep. Ed Clere (R-New Albany) tells Green he's not at all concerned. “I don’t think that Indiana would have made that commitment without a high level of confidence in the revenue stream that’s going to back it,” he said. “... I’m eager to see the final numbers and the final plan.” So am I. Drivers may wind up paying much higher tolls than anticipated if these trends hold up.