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Carol Polsgrove

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Meet Mitch Daniels, Big Spender

Posted: 05/16/11 09:29 AM ET

The idea that possible presidential candidate Mitch Daniels represents fiscal restraint sounds like hogwash to opponents of three pricey projects moving forward on his watch as governor of Indiana.

At Edwardsport, Ind., construction cost overruns have skyrocketed at a Duke Energy plant that would convert coal into synthetic gas to generate electricity. Consumer groups and industrial customers have balked at the $2.72 billion bill that Duke wants ratepayers to pick up.

Then there is the proposed Rockport gasification plant, which would turn Indiana's high-sulfur coal into synthetic natural gas. While at Edwardsport ratepayers are paying to build the plant, for Rockport the state had the bright idea of having utility ratepayers assure 30-year revenues for the company financing it (Leucadia National). Six gas distribution companies have opposed the plant, and even a legislator who sponsored the bill authorizing the arrangement -- State Rep. Win Moses -- believes it "represents too great a risk for ratepayers and the economy of the state to bear." He has urged the Indiana Utility Regulatory Commission (IURC) to reject it. A letter to the IURC signed by 21 legislators also opposes the project. The Indianapolis Star reported: "According to the letter, Leucadia's project faced 'multiple barriers in the free market,' so it turned to the government for 'intervention on private business dealings.'"

In a further example of second thoughts, local officials have changed their minds about letting the state run Interstate 69 through my town, Bloomington -- in part because of the state's manifest inability to show where it would get the money for the project.

I wish some of the pundits touting Daniels' financial prudence had sat in on that local Metropolitan Planning Organization (MPO) meeting May 13. Encouraged by a forceful letter from lawyers representing I-69 opponents, the MPO took a closer look at ways the multi-billion-dollar highway would lay waste to local and state finances. Would I-69 slurp up funds needed to repair the state's existing bridges and roads? Probably. Might the state scrape together enough dollars to build the highway from Evansville to Bloomington -- then run out, dumping interstate traffic on local roads instead of going all the way to Indianapolis? Likely. Would local governments have to repair the damage the interstate would leave behind-- divided townships, shattered karst with its sinkholes, water flowing where it had not flowed before? Certainly.

The MPO voted 8-3 to reverse its earlier decision to put I-69 into its Transportation Improvement Program (TIP), a decision made under threats from the state to withhold discretionary funds (see "Bloomington Bulldozer"). Without I-69 in the federally mandated TIP, the state cannot get federal dollars to build I-69 through our metro area -- a hitch that should at least slow construction down.

Anti-I-69 groups plan to keep up the pressure to stop I-69 construction altogether, while groups like the Citizens Action Coalition keep hammering away at the Rockport and Edwardsport plants -- both plagued by ethical issues brought to light by opponents and Indiana media. Several Duke Energy executives have lost their jobs as a consequence of backroom dealings over Edwardsport and so has former IURC chief, David Lott Hardy, who has also been implicated in ethical irregularities involving the Rockport plant.

Those of us watching all this play out in Indiana can't help but wonder at the national image of Mitch as a clean-jeans kind of guy careful with money. To some of us, he looks like a bully who can tighten the belts of teachers and civil servants and fatten the wallets of energy and construction companies -- a man who uses the power of the state to transfer wealth from Indiana citizens to the pockets of companies that I imagine understand how to return the favor.

You want Mitch to the run the country? Better first take a closer look at what he's done in Indiana. 2011-05-16-Bloomingtonprotest.jpg
Protesters welcomed Mitch Daniels to Bloomington this spring. Photo by Michael Redman