Funding elusive for Pence’s bicentennial projects

Vice President Mike Pence has a new home in Washington, D.C., and an office in the White House, but back in Indiana, state officials are still scrambling to figure out how to pay for several bicentennial construction projects Pence initiated as governor without a solid financing plan.

At issue are $53.5 million in new projects Pence sought as part of the state’s 200th birthday celebration last year. They included a new $2 million Bicentennial Plaza at the Indiana Statehouse, a $2.5 million education center at the neighboring State Library, a new $25 million state archives building and a $24 million inn at Potato Creek State Park in St. Joseph County.

Construction on the plaza — with its two large sculptures and water features — and the education center already are complete. Some design work for the archives building also has occurred. So far, the state has spent more than $5 million.

Skeptical lawmakers allowed Pence to spend taxpayer money on the projects as part of the state's 200th birthday celebration after he assured them he could pay for projects by leasing excess space on the Indiana's 340 state-owned cell towers.

But two years after those assurances were made, a cell tower deal has yet to materialize.

Now, Gov. Eric Holcomb, Pence's successor and fellow Republican, is trying to find a way to fill the $5.5 million hole those projects left in the state budget.

He initially proposed dipping into a fund traditionally reserved for public health initiatives, but is now reworking that plan after questions from IndyStar.

The need to find $5.5 million for the bicentennial projects comes at a time when Holcomb is already grappling with a $378 million revenue shortfall compared to what lawmakers had originally budgeted for this year.

"We did the projects. We have to pay for the projects," said Stephanie Wilson, Holcomb's spokeswoman.

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A Pence spokesman did not respond to a request for comment for this story.

In the two-year state spending plan Holcomb sent to lawmakers earlier this month, he sought to use money from the state's Tobacco Master Settlement fund to pay for the projects.

Money in that fund comes from a 1998 multistate lawsuit settlement with big tobacco companies over the health impact of their products. Indiana receives about $128 million a year from the settlement. Other states have used their share of the settlement for unrelated purposes, but Indiana traditionally has reserved the funds for public health initiatives such as children’s health insurance, community health centers, mental health treatment and programs to combat HIV and AIDS.

Holcomb's proposal to use the fund to pay for bicentennial projects raised concerns among public health advocates given the state’s HIV outbreak last year, a sharp uptick in opioid abuse and deaths and the state's 12th-highest-in-the-nation smoking rate.

“That money was intended for health-related programs and that’s where it should go,” said Rep. Greg Porter, D-Indianapolis. “Our governor talks about having an honestly balanced budget with no gimmicks. I think this would be a nice gimmick.”

He and other lawmakers raised concerns when Pence first proposed funding the projects with a cell phone tower deal. Even Republican fiscal leaders expressed doubts about Pence's proposed funding mechanism after IndyStar exposed last year that any cell tower deal likely would fall short of fully funding the projects.

“I’m going on faith," Senate Appropriations Chairman Luke Kenley, R-Noblesville, said last year. "They assured me they can get this done.”

Amid such concerns — and in the heat of the presidential campaign — Pence announced in September that a cell phone tower deal had been reached with Ohio-based Agile Networks. The deal would provide the state with $50 million upfront and more during the life of the 25-year lease, his administration said.

“This agreement, if approved, will put underused assets into full play, enhance Indiana’s communication capabilities throughout the state and fund the state’s bicentennial projects,” Pence said at the time.

What Pence didn't say was that the deal with Agile Networks was far more expansive than advertised. Not only would it have given Agile control over the state's cell phone towers, it also would have allowed the company to use the state's vast fiber network.

That stirred fierce opposition from the state's cable and broadband trade groups, which represent companies such as AT&T, Comcast and Time Warner.

A spokesman for Agile declined comment for this story.

The deal was supposed to go before the state budget committee for final approval in December, but it did not end up on the agenda amid the behind-the-scenes controversy.

Now, the fate of the deal is uncertain.

Wilson said the governor is reviewing "the entire deal."

"It’s not done," she said. "We don’t know if or when it will be done."

In the meantime, Holcomb is backing off his initial proposal to pay for the bicentennial projects with money from the tobacco settlement fund.

Wilson said Tuesday that Holcomb is now asking House lawmakers to change the funding source for the projects to the general fund.

The tobacco settlement money will instead be used to support a planned increase in funding for the state’s adult protective services, which an IndyStar investigation found last year is woefully understaffed and ineffective in protecting vulnerable adults exposed to abuse and neglect.

“This is in keeping with the governor’s commitment to using health-related funds for health-related purposes,” Wilson said.

When asked about the bicentennial funding problem, fiscal leaders in the General Assembly tried to cast it in diplomatic terms.

"Let’s say we had some friendly jousting going on between me and the (Pence) administration over the bicentennial projects," Kenley said. "At one time I said, 'I’m not sure I can afford to celebrate our bicentennial.' But we went ahead and celebrated. Now that we’ve celebrated, we’ve got to pay the bills."

Call IndyStar reporter Tony Cook at (317) 444-6081. Follow him on Twitter: @indystartony.

Bicentennial projects

The state has spent about $5.5 million of the $53.5 million in planned bicentennial projects under then-Gov. Mike Pence. Here are the projects, their expected cost and their status: