The Ohio Statehouse in Columbus. Legislators are all the way down to the wire on a $2.5 billion general obligation bond authorization, which they hope to pass Wednesday.
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Ohio legislators plan to vote Wednesday on a resolution that may put a $2.5 billion general obligation bond measure on statewide ballots May 6.
The measure, which might not raise taxes, would fund road work, bridge construction and repair and water system work, amongst other capital projects, through the State Capital Improvement Program, which is run by the Ohio Public Works Commission, state Sen. Brian Chavez, R-Marietta, who co-sponsored the resolution within the state Senate, told The Bond Buyer.
Ohio is rated triple-A across the board.
The Senate and House passed separate but an identical resolutions, Senate Joint Resolution 4, which passed Nov. 20 by a vote of 30 to 1, and House Joint Resolution 8, which passed Dec. 4 by a vote of 87 to 4. As of Tuesday, each resolution remained in committee in the opposite chamber.
Certainly one of the legislative bodies now must adopt the opposite’s resolution. The ultimate resolution doesn’t require the governor’s approval, nevertheless it does require 60 votes within the 99-member House and 20 votes within the 33-member Senate.
“We’re confident that this vital laws will pass before the top of the General Assembly… on Wednesday,” state Sen. Hearcel Craig, D-Columbus, an SJR4 co-sponsor, said.
Craig’s office said on Tuesday afternoon that it appeared “greater than likely” the House resolution would pass the Senate.
If passed by each houses, the authorizing resolution would then should be filed with the secretary of state prior to its placement on the May ballot.
“It’s critical that our state government continues to support local public works projects in Ohio,” Craig added. “This laws was passed with overwhelming bipartisan support on account of the recognition of this system.”
Craig said it’s their duty as legislators to collaborate to enhance Ohio’s infrastructure and maintain the elemental operations of counties, municipalities and water sanitation districts across the state.
“It is going to be our last session day of the 12 months,” Chavez said, noting that the SCIP “has proven its importance over the past 40 years.”
The brand new legislature that was elected in November is sworn in in January, and unfinished bills from this legislature will die when it adjourns.
The SCIP program was created in 1987 and has been renewed 3 times since then: in 1995, 2005 and 2014.
“I went and talked to a bunch of county engineers, and to a county, all of them told me this could be very vital to them to get infrastructure projects accomplished,” Chavez said. “If the state’s going to be collecting taxes to support communities, what higher way [to use the funds]?”
In accordance with the text of the laws, the bonds should be issued in $250 million increments every ten years, with each issue maturing in 30 years or less from the date of issuance. Craig noted the resolution allows the state to make use of general revenues as debt support for the bonds.
Rep. Daniel Troy, D-Willowick, who together with Rep. Scott Oelslager, R-North Canton, was certainly one of the unique sponsors of the bond authorization when this program was created, said the present Ohio Structure needs to be amended to allow the issuance of those bonds.
This system is popular partially because “all the choices on which projects get funded are made on the local level,” he told The Bond Buyer. There are district integrating committees, whose members rating projects throughout the district, after which the counties rating them, he said.
“Principally, it allows the locals to determine what’s most vital, what are the projects we actually need to do,” he said. “Numerous times, there are projects that small communities can be unable to do [without the small community set-asides].”
For instance, he said, there was a village in his district along the shores of Lake Erie with only just a few hundred residents that desperately needed to exchange its septic systems with sewers. The village sought funding through the SCIP.
The authorization for the present iteration of this system expires June 30, so approval by the voters in May will ensure a smooth segue from one authorization to the subsequent, Troy said.
“It’s probably top-of-the-line ideas that Ohio’s ever had,” he said. “It generates $2 billion over 10 years, but a whole lot of times it leverages two or 3 times that funding… I might anticipate that somewhere between $7 and $7.5 billion will actually be spent on projects due to the matching funds that communities provide.”
Dan Tierney, press secretary for Gov. Mike DeWine, said the governor’s office has no comment yet on the bond proposal, but supports the work of the Public Works Commission.
At a Senate Finance Committee hearing in November, Ohio Mayors Alliance Policy Director Sarah Biehl urged the Senate to pass the bond authorization, noting that “projects face starkly increasing costs in 2024 and beyond” and that infrastructure projects involve a protracted process which requires the planners to know what funding will likely be available.
“Our mayors, together with other local government leaders across Ohio, depend on SCIP to fund crucial public infrastructure projects and upgrades,” Biehl said then, noting that the last time this program was approved, in 2014, it passed the Senate unanimously.
“Our infrastructure improvement needs are dire, with crucial projects needed in every city in our membership,” Biehl said.
“We’re very hopeful that the laws will pass — it is a slam dunk,” Bevan Schneck, director of public affairs for the Ohio Municipal League, told The Bond Buyer. “They [Ohio municipalities] are strapped for money because it is. In order that they need the skin help through this method to assist them pay for his or her infrastructure.”
Schneck said Ohio has stellar bond rankings and might afford this measure, which is a slight increase over what was last approved by voters.
“They needed this funding before the pandemic,” he said of local governments. “Our municipalities, like the remaining of the world, not only have they got the prices of projects [to contend with], but inflation is one other pressure on them.”
Ohio has relatively low debt service costs, Troy said, and the position of this bond measure on May ballots would get the cash out the door before costs rise.
“Everyone knows that material and labor costs are going to go up,” he said. “You wait and do a project five years from now, you will likely pay a heck of lots more.
“The price of borrowing this money is greatly offset by the savings,” he said.
State Sen. Niraj Antani and Reps. Ron Ferguson and Brian Lorenz, Republicans who voted against the laws, didn’t reply to requests for comment by press time.