Wednesday, August 10, 2011

C&W: Roads Are a One-Time Expense

Over at the conservative blog Capitol & Washington (the successor to Frugal Hoosiers), Mike O'Brien talks about the difference between mayoral nominee Melina Kennedy (D) and incumbent Mayor Greg Ballard (R). Specifically, he focuses on the differences in how they'd use the money from the water utility sale (you know, the money that just magically fell from the sky):

In 2006, during the toll road debate, when Democrats weren’t opposing Major Moves outright they were trying to spend the money on everything else. In the years since – especially since 2008 when state tax revenue collapsed – Democrats have recommended that road money be spent on everything from Medicaid to education. When I was working for the governor in 2006 during the toll road debate, he had a simple response to these proposals: we spend one-time money on one-time expenses.

If you spend one-time money on on-going expenses you’re going to run deficits when the money runs out.

I actually agree with O'Brien on that. One-time money, revenues that aren't part of an ongoing revenue stream, should be spent on one-time expenses. The Indianapolis-Marion County City-County Council recently approved the use of a federal grant to level the blighted, vacant, city-owned properties where Keystone Towers and Winona Hospital now stand. That's a good use of one-time funds. They aren't paying salaries of an ongoing employee, it's just money used for a specific task, and that specific task won't ever be needed again because...well, you can't destroy the same building twice, right?

But last time I checked, roads, sidewalks, and bike lanes are not one-time expenses. When you build a road or sidewalk (and yes, new sidewalks are being built with the water utility money), you have to then also maintain them after they're built. At some point, this money is going to no longer be there. So what will happen when, 5-10 years down the line when these roads and sidewalks will need work on them again, and this money is long gone, what will be done then?

This one-time money should've gone into an expense that would last for a while. Roads tend to go over well for about 10 years, tops. An updated water infrastructure could last a lot longer. Sure, it's not as visible as paving roads, but it'd make progress on our EPA-mandated updated, and maybe we wouldn't have water shortage warnings every summer.


  1. What they mean by a "one-time" expense" is that it doesn't generate a string of future expenses. If you build a new road, it generates future expenses. If you pave an existing road, it doesn't.

  2. Building new sidewalks and bike lanes, which is being done with the water money, is certainly going to be a future expense. And even after fixing the currently existing roads, they'll need to be fixed again. But in 10 years, there won't be another water company to sell.

  3. I couldn't agree more IS. Paving roads with money generated from a 30 year loan doesn't make sense. It should go to improvements lasting 30 years plus like new storm water sewers.

    We will still be paying for 2011 road paving in 2030. It's insanity.


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