Mayor McDermott comments on proposed South Shore Rail expansion plan

CATEGORY: Mayor's Office, News

It is widely known that Congressman Visclosky has made a $600 million expansion of the South Shore rail line to two towns south of Hammond his priority. As part of his mission, municipal governments across NWI, that are nowhere near the expansion or have more to lose than gain from this project, have been asked to “voluntarily” approve an inter-local agreement that would direct 30% of the municipalities’ CEDIT (County Economic Development Income tax) money away from city and town coffers and towards the debt financing of this massive expansion.

The total cost of this eight mile extension, that will add stations in Munster and Dyer, is pegged to be at least $600 million. If completed, NICTD (Northern Indiana Commuter Transportation District) ridership is forecasted to increase by 8,000 riders per day, close to a 50% increase. If this extension is approved and funded by the Federal Transit Administration (FTA), half of the total cost of the project could be funded by the Federal Government. It’s the other half of financing that the Congressman is concerned with at this time.

If this project is to ever happen, the Congressman is asking local northwest Indiana governments to commit around $300 million in financing. This is where the CEDIT pledges come into play, as Congressman Visclosky needs to secure $16 million in local annual funding in order to finance the significant local match for the project. If the Congressman is successful in raising this local match, Northwest Indiana will commit this $16 million annually for 30 years, which equals $480 million in local money that will be spent on the debt financing of this eight mile extension servicing two suburban communities. If all goes according to plan, the soonest the trains could start running would be in 2021.

The Congressman’s pitch to the communities of NWI calls for them to donate 30% of their CEDIT money towards this project—money that otherwise would be utilized in the respective communities. Naturally, because he is asking for a percentage of CEDIT, as opposed to a fixed dollar amount, those communities with the highest number of residents will pay the most under this scenario. For instance, Hammond ( Lake County ‘s largest city) is expected to pay close to $900,000 for 30 years ($27 million). Gary has already committed 20% of its CEDIT funds for $800,000 annually ($24 million). East Chicago is expected to drop close to $500,000 annually for 30 years ($15 million). A point that shouldn’t be lost is that these three communities are generally the communities with the most diversity and the most socio-economic challenges.

So for communities like Gary and East Chicago , who both stand to gain very little under the expansion from Hammond to Dyer, they are expected to pay the heaviest burden of this expansion. This isn’t fair, especially considering that the communities gaining the most from this expansion will pay the least. For example, Dyer is the community that stands to gain the most under this proposal as it will have the final stop on the South Shore Line. Yet Dyer has only committed $50,000 annually ($4.5 million). Munster, the other community that stands to gain the most from this extension, has pledged only $280,000 annually ($8 million).

So the poorest and most adversely affected communities are expected to pay for most of this burden? What kind of logic is that? How is that fair? Why must Hammond pay $27 million for a project that could lead to more flight from north to south? The impact on both economic and community development for the northern cities could be dire.

If the Congressman is successful, we will spend $480 million without the input of any residents of NWI. Most of the Hammond residents I have spoken with on this matter insist that Hammond keep their CEDIT money and not participate in this extension. Most of the elected officials I have spoken with in Hammond feel the same and do not support this proposal. Therefore until we have more information regarding the details of this proposal, Hammond will not pledge any of their CEDIT money towards this project. I have, however, agreed to participate in helping to fund the environmental impact study, which will help answer many significant questions. I believe this measured approach is the best approach for Hammond and it’s residents.

I would like to see this issue put to a referendum. A project of this scope and scale will significantly impact the lives of people for many many years to come. When we are spending $480 million of your money, over 30 years, why not gauge whether or not the residents of NWI support this proposal? Is it fair that a handful of your elected officials are making a decision, right now, that will affect every taxpayer in NWI for decades?

We hold referendums in Indiana for a variety of reasons: public transportation, Constitutional amendments, bond issues, school construction, and others. When an important issue faced northwest Indiana in the 1990’s—casino gaming— the legislature wisely asked each community to put it to a vote. Similarly, the South Shore expansion deserves to be on the ballot in Lake County for an up or down vote, the sooner the better. And if it is approved at the ballot box, we should have the county government take the CEDIT money off-the-top, so that all communities in NWI share the pain equally instead of the haphazard plan where the poorest communities pay the most.

The Times editorial staff are the architects of the One Region, One Vision movement. If we really want to become “One Region”, how can we justify this proposed funding mechanism? The people of Lake County deserve a public referendum on this massive public works project before any CEDIT money is committed. And, if this referendum is approved by Lake County taxpayers, the costs should be borne by all residents of NWI equally. That we can truly be “One Region” in regards to this project that will effect the region for generations to come.