Questions loom on how locals, state fund growing MSC cost
The Mid-States Corridor highway project has long been pitched by the state as a transformative economic project for Southern Indiana. But as the price climbs and the state now pushes counties to contribute tens of millions of dollars, Dubois County officials are increasingly signaling that the math – and the long-term obligations – may be fundamentally unworkable.
As we have been detailing for you in our pages over the last year, the Mid-States Corridor project from the Indiana Department of Transportation is intended to link S.R. 66 near the Natcher Bridge with I-69. The project is currently in early stages with Tier 2 studies underway. That phase began in 2024 and focuses on refining roadway design, evaluating environmental impacts, and finalizing the route. Construction is expected to begin in 2027 after right-of-way approval.
But the difficult money conversation is already underway, with the expected estimated costs for the project continuing to grow, and the latest estimates from the Tier 2 materials between $900 million and $1.35 billion. The state requires a 10% local match, as much as $135 million now, but in Dubois County, elected officials see a price tag that simply doesn’t square with their budget reality.
Dubois County Board of Commissioners President Chad Blessinger (R) lays out the scope of those concerns bluntly to your favorite transportation newsletter. Residents fear the county could be financially overwhelmed . . . especially if the county is required to take over the existing U.S. 231 after the new highway opens.
“Many people are afraid that it will bankrupt the county, that we won’t be able to afford, mainly the upkeep if we took the relinquishment of the existing 231,” he explains.
The county has never maintained a road of that size or traffic load, and Commissioner Blessinger warned the differences aren’t trivial. “It’s a larger road than any of the other roads in our inventory, and it would have more traffic than any road in our current inventory,” he notes. That’s before accounting for upgrades the county might have to cover on connecting roads if the state only improves limited segments where the new highway crosses them.
INDOT, in meetings with commissioners, Blessinger tells us, describes the local contribution as mandatory, but negotiable in form. The department floated several options: in-kind services, turning over U.S. 231 to the county as credit toward the match, partnering with Jasper and Huntingburg, tapping the Regional Development Authority, or phasing construction to stretch out payments.
INDOT mainly proposes that the county and cities meet part of the match by assuming long-term maintenance responsibility for U.S. 231. The division would look like this: Huntingburg would take 3.5 miles. Jasper six miles, and Dubois County 10.5 miles.
INDOT has asked the county to commit to taking the road once construction of the new corridor is complete. Blessinger questions both the timing and the financial implications, and he previously stated earlier this month during a commissioners meeting that he would not support spending county dollars on the highway.
The agency also acknowledged that failing to secure the local match could slow down the timeline or force INDOT to break the road work into segments.
To Commissioner Blessinger, the state’s message contradicted itself. “They say that the 10% match is a requirement .… We have to have the money, or we can’t do the road, but we’re going to find a way to do the road and make the match work. So, I don’t know. It doesn’t make sense to me.”
We reported in our previous issue that the cities of Jasper and Huntingburg commissioned a $69,000 financial impact study through Avenew to examine whether assuming U.S. 231 is viable. Jasper Clerk-Treasurer Kiersten Knies (D) told the council the highway could cost almost $1 million per year to maintain, estimating the city would need an endowment of roughly $184 million to responsibly take over the road.
Dubois County declined to participate in the study, with officials saying the answer is already clear – the county probably cannot afford the deal INDOT is proposing. Blessinger called the match ask “insurmountable.”
Commissioner Blessinger questioned during a commissioners meeting this month, according to the Dubois County Free Press, if the local match is not met, then will the project be scrapped? The answer from INDOT appears to be no . . . because where there’s a will, there’s a way.
We can tell you that the Mid-States Corridor continues to be a top-priority project for Governor Mike Braun (R), as the roadway will run right through his home turf, and he has long supported the project even before moving into a more direct position overseeing it as commander-in-chief of the state. So, don’t be surprised if the Governor prioritizes it; state resources can be redirected to make it happen.
“I’ve been told that the governor is the boss. And if he has a priority, then resources can be shifted to make those priorities a reality,” Blessinger confirms to us. But he made clear he doesn’t track the state’s internal financial strategy: “Finding the money for the project, that’s somebody else’s problem.”
INDOT officials have floated a phased construction plan if the local match can’t be secured, and intend to move forward with at least the first contract. We informed you in our most recent issue that the agency is hosting an Industry Day on December 15, which is essentially a callout meeting for potential contractors to learn about MSC. There, a draft corridor-wide plan will be communicated with a request for industry feedback. Detailed information on Contract 1 limits, procurement type, and schedule will also be shared. One-on-one meetings with potential prime contractors are to be held following the Industry Forum on December 15 and on December 17.
INDOT will likely bond for the project when the time comes, though we won’t see any groundbreaking until at least 2027, when Tier 2 studies are complete.
In terms of paying for the project, the plan presented so far is that the federal government pays 80% of the cost, the state pays 10% and a local match of 10% is required. Keep in mind, too, that last year, INDOT and legislators warned Indiana could hit a road funding cliff soon, potentially in the middle of the MSC construction, should it begin in 2027, as the Funding Indiana’s Roads for a Stronger, Safer Tomorrow (FIRSST) Task Force projected a $2.4 billion road funding shortfall for long-term infrastructure needs. And INDOT wants to spend $1.3 billion each year over the next 10 years improving road and bridge conditions.
Of note as well, the maximum estimated cost of $1.3 billion for MSC right now does not include the troublesome land acquisition costs.
We’re also picking up whispers amid Indiana’s redistricting morass that MSC federal funding, which could pay for most of the project, could potentially be on the Trump Administration’s chopping block should the General Assembly not draw favorable new congressional maps. As our Hannah News Service sister newsletter INDIANA LEGISLATIVE INSIGHT has reported over these last few months, federal funding being at stake puts the Governor in a tough position . . . especially if it could potentially jeopardize a priority project of his.
Redistricting is also on track to burn a good number of valuable session days at the outset as the supermajority looks to devote time strictly to this political function. That’s time, attention, and resources that will be taken away from items potentially requiring a heavy lift as we move into January. Legislative leaders revealed this week that the frontloading means the session will conclude by late February, leaving little time for difficult issues – including, perhaps, road- and other transportation-related matters.
We’ll take a closer look at what the new legislative calendar means in our next issue.
INDOT Strategic Communications Director Natalie Garrett tells us, in terms of financing options, “INDOT will look at all options for funding the Mid-States Corridor as it does for all major projects. This includes typical funding mechanisms, which would be a combination of state and federal funds, grant opportunities, as well as potential bonds and loans. INDOT’s goal is to optimize all funding received by the agency each year. The agency continuously evaluates its current program and makes decisions based on asset needs, projected funding, and cost.”
Garrett declined to answer questions on where exactly funds could be “redirected” from, as Commissioner Blessinger indicated, should the state not receive the matches and funding streams expected.
She adds on the local match hesitancy that “INDOT recognizes that local participation can be challenging, and we value the partnership and commitment the local community has shown toward advancing the project and is open to working with local entities to explore potential solutions such as phased implementation, alternative funding sources, in kind services, and adjusted scopes to help make the project more feasible within available resources.”
A key here is that INDOT warned commissioners that failing to secure the full local match could slow the project, force multiple construction phases, or change the timing.
And Blessinger believes even under ideal circumstances, he doubts the state can build the road within the projected five- to seven-year window. “Even if they had the money sitting in a bank account … I’m not convinced of that,” he said.
The state has seen other large highway projects – most notably the I-69 expansion, which lasted through three governors – drag on for a decade longer than originally projected because funding came in waves, and land acquisition and lawsuits slowed construction. Blessinger tells us he thinks Mid-States is ripe for similar obstacles. Grassroots opponents have been organizing for years . . . and, as we’ve already seen to a surprising extent, some residents are prepared to fight the project aggressively.
Blessinger stresses that he sees some potential benefits from a four-lane corridor, such as economic development and easier movement, but he doesn’t believe those fully outweigh the financial exposure to Dubois County taxpayers. Support among his fellow commissioners has also fluctuated over the years, with the majority opinion among the three of them changing over different times as the project has progressed through studies.
The primary unknown remains the same, whether INDOT, local governments, and private partners can assemble enough funding to build the corridor without straining county budgets for decades.
The county also doesn’t necessarily have an appetite to put local money into the project, especially with declining revenue outlooks expected under the state property tax reform in SEA 1-2025.
“People are just concerned with the revenue situation… so it’d be additional expenses without additional funds,” Blessinger adds.