- Associated Press - Wednesday, May 6, 2015

INDIANAPOLIS (AP) - A new state grant program aimed at encouraging Indiana counties and cities to collaborate on regional development projects was signed into law Wednesday by Gov. Mike Pence.

The new state budget includes $84 million over the next two years for the Regional Cities program, which was a top priority for the Republican governor during the final days of the General Assembly’s session.

The new program will allow the Indiana Economic Development Corporation to award grants or loans to regional groups for infrastructure or amenity projects that could help attract businesses and people to those areas.

Pence said he believed having money available for such projects would encourage communities around cities such as South Bend, Fort Wayne and Evansville to work together more.

“It’s about ending something of the cross-county competition that has been with us for generations,” he said.

Money for the initiative will come from a new state tax amnesty program allowing people and businesses who owe back taxes before 2013 to pay their bills without penalties. State officials haven’t had a firm estimate on how much that amnesty effort will collect, with projections ranging from $40 million to perhaps $120 million.

The state budget plan directs the first $84 million in amnesty collections to the Regional Cities program, with the next $6 million to support Amtrak’s Hoosier State line between Indianapolis and Chicago and any additional money going into the state’s general fund.

Some lawmakers hesitated to support the Regional Cities program, saying they hadn’t received a good explanation for how it would work. The program was targeted to receive about $20 million in the budget until Pence’s late push for the full amount.

Senate Appropriations Committee Chairman Luke Kenley, R-Noblesville, said he believed the program’s concept was good, but that legislators will want to see how the governor is able to implement it before giving it a long-term funding source.

“This exercise needs to be developed if we’re going to have a manageable program,” Kenley said. “We kind of challenged him for a two-year pilot project and put him on a performance-based funding model, where he had to find the dollars in amnesty money, and said, ‘Have at it.’”

Pence said he was pleased the General Assembly found a way to provide money to start the program so it can demonstrate its value.

“Thinking regionally and improving the quality of place in regions across our state, we believe, is an idea whose time has come,” he said.

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