Bipartisan support for $1.9 billion bond issue

By MARC KOVAC @ohiocapitalblog mkovac@dixcom.com Published:

COLUMBUS -- In a few months, statewide elected officials and legislative candidates will be full swing into their election campaigns, with ample amounts of vitriol to fill voters' mailboxes and screens.

For the next few weeks, however, partisans from both sides of the

political aisle are walking hand in hand in support of the lone statewide issue that will be decided by voters on May 6.

Issue 1, a renewal of a decades-old program that funds road, bridge and other public works projects across the state, passed the legislature with broad support from Republicans and Democrats and both parties touting the potential benefits.

Here are five things to know about Issue 1 before heading to the polls, whether you're casting your ballot early in person or by mail or on Election Day:

State Program

The State Capital Improvement Program was initially OK'd by voters in 1987 and renewed in 1995 and 2005, establishing a process of borrowing money to pay for infrastructure projects. General obligation bonds of up to $120 million per year were allowed initially, with the amount increased to $150 million per year in 2011.

The Process

During legislative deliberations, Michael Miller, director of the Ohio Public Works Commission, told lawmakers that the funds could be used for "roads, bridges, culverts, water supply systems, wastewater systems, storm water collection systems and solid waste disposal facilities."

Projects are selected through a process that involves review "by local officials from all levels of government," using criteria spelled out in state law, according to Miller's testimony.

Translated, that means local communities shape spending plans to ensure needed projects are funded, rather than such decisions being made centrally at the state level.

"Project selection is handled at the local level, where community leaders establish regional priorities and outline the projects in need of attention," Sen. Kevin Bacon (R-Columbus), a Defiance native and primary co-sponsor of the resolution, said during deliberations on the bill.

Funded Projects

More than 11,500 infrastructure projects have been funded through the program since its inception.

In testimony to lawmakers, Suzanne Dulaney, executive director of the County Commissioner Association of Ohio, noted that more than $1 billion was spent on projects from 2006-11. That total included nearly $486 million for roads, $242 million for wastewater collection systems, $154 million for water supply projects, $73 million for bridges and culverts, $65 million for storm water projects and $2 million for solid waste systems.

Renewal

The current program ends in mid-2015. Backers say a renewal at the ballot box in May would ensure no disruption in the application process or subsequent construction activities.

"Traditionally, this planning process would begin in May of 2015 ...," Miller said in testimony to lawmakers. "The success of Senate Joint Resolution 6 will ensure timely implementation and a robust 2016 construction season."

Increased Funding

The renewal also seeks more funding than previous issues, proposing up to $175 million per year for the first five years, followed by up to $200 million annually for the remaining five years.

6) Debt: The proposed constitutional amendment would authorize nearly $1.9 billion in general obligation bonds. That's up from a current 10-year program of about $1.4 billion.

State Budget Director Tim Keen explained to lawmakers in committee testimony, "The state's total outstanding general revenue fund-backed debt at the end of this fiscal year is projected to be $9.5 billion. Annual GRF debt service of about $1.2 billion represents 3.9 percent of GRF plus lottery profit, well below the state's 5 percent constitutional debt-service limitation."

He added, "Given the state's strong fiscal condition ... this proposal's additional annual debt service of $40 million, relative to the existing level of debt service for this program, is clearly manageable and affordable -- both in absolute terms and relative to the state's 5 percent debt service limitation. Furthermore, the proposed increase is both reasonable and justifiable given the increased cost of construction and materials that we've experienced since the program was last renewed."

7) Proponents: The votes on the joint resolution for overwhelmingly bipartisan. The Senate OK'd the measure, 31-0, while the House approved it, 90-2.

There was little opposition to the plans voiced publicly during floor votes and no opposition testimony during committee deliberations.

Groups that are supporting the bond issue include the County Commissioners Association, the County Engineers Association, the Township Association, the Municipal League and the Ohio Contractors Association.

Arguments in favor of the issue were prepared by Bacon and five other lawmakers, including Rep. Chris Redfern (D-Catawba Island), who serves as chairman of the Ohio Democratic Party.

They noted that Issue 1 "brings needed repairs," will pay for projects in all 88 counties, create an estimated 35,000 jobs and not require a tax increase.

8) Little Opposition: No group stepped forward to offer a counter argument against the issue, so the secretary of state's office had to develop one for the Ohio Ballot Board for review by voters.

The argument against notes that "all Ohio taxpayers will be paying interest on those bonds to cover local government projects ... These are community-based projects from which many Ohioans may not see a direct benefit and which local governments should prioritize and pay for using locally raised dollars."

The opposition argument also states that Issue 1 represents an increase in state borrowing and spending.

9) Public Works: The bond issue is the latest in a series of efforts backed by lawmakers and Gov. John Kasich to fund infrastructure and building needs around the state.

A year ago, Kasich signed the biennial budget for the Ohio Department of Transportation and several other state agencies that included a plan to leverage some $3 billion for road projects via bonding against future turnpike tolls.

Earlier this month, the governor signed a $2.4 billion capital budget for new and improved roads, bridges, state parks, recreational trails and public buildings.

Some conservatives are questioning such plans and their impact on state debt and spending.

In response to a question about new borrowing for the capital budget, Rep. Ron Amstutz (R-Wooster), who serves as chairman of House finance committee, responded, "This bill is well within our ability to pay back the debt service. We have a constitutional limit on us of 5 percent of our operating revenues, and we are well below that. So I think we're being prudent there."

10) More Information: The full language of the proposed amendment, along with arguments for and against it and a summary of the package is available on the Secretary of State's website, online at www.sos.state.oh.us.

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