Friday, December 14, 2012YOUNGSTOWN, Ohio – Gov. John Kasich wants to raise $3 billion to build, replace and repair roads and bridges across northern Ohio by issuing revenue bonds backed by tolls collected from those who use the Ohio Turnpike.
Half of that sum, $1.5 billion collected in tolls, would attract a like amount in local and federal funds, he says.
On a two-day tour across the Buckeye State, Kasich and his transportation director, Jerry Wray, stopped at Cerni Motors, Austintown, Thursday afternoon to explain and defend their proposal.
“This plan just makes sense as we continue Ohio’s economic resurgence, grow jobs and make our state prosperous once again,” Kasich told a group of labor union leaders, elected officials and a contingent from the Youngstown/Warren Regional Chamber led by its president and CEO, Tom Humphries. “Billions of dollars in new highway funds further strengthens Ohio’s jobs-friendly climate and keeps our state moving by delivering more projects faster,” he said to applause.
Wray, director of the Ohio Department of Transportation, added, “Bonding against future turnpike revenues generates enough money to erase our highway budget deficit [of $1.6 billion].”
Among the projects that could now move forward, state officials said, is the $80 million widening of Interstate 80 through portions of Mahoning and Trumbull counties, one of many projects put on hold by ODOT due to its $1.6 billion budget deficit.
In a press handout, ODOT states, “Bonding against future toll revenue will help Ohio’s highway budget deficit and dedicate approximately $1.5 billion to build critically important road and bridge projects. The first bond issue will generate approximately $1.5 billion in 2013, and the second issue will generate further proceeds of approximately $500 million.”
The mayor of Streetsboro, Glenn M. Broska, endorsed Kasich’s initiative, saying after the Kasich and Wray presentations that he hopes it will provide $5 million needed for a new industrial park in his city.
As the finances of Streetsboro stand, it would be years before the city can fund the industrial park Broska wants to build. Should the state Legislature adopt the Kasich initiative, that timeframe would be considerably reduced, construction getting under way while he’s still mayor.
And state Rep. Lynn Wachtmann, R-81, Napoleon (outside Toledo), serving his third term in the House, added his endorsement.
Also endorsing the plan is the Ohio Truckers Association whose president, Larry Davis, likes the fact that fuel taxes won’t be raised, the Ohio Contractors Association and the County Engineers Association of Ohio.
Indeed, Kasich noted that taxes on gasoline and diesel can’t be relied on because cars are becoming more fuel-efficient. Hence consumption would be difficult to project.
In addition, Wachtmann noted, “A low tax rate invites investment.” It makes Ohio more attractive to businesses, encouraging those here to reinvest while making the state more attractive to business from outside Ohio.
The proposal was considerably at variance from what Mahoning County Democratic officials feared. Before Kasich’s visit, Ken Carano, a former state representative from Austintown, county Auditor Michael Sciortino and county Commissioner Carol Rimedio-Righetti held a press conference at Democratic Party headquarters to express opposition to selling or leasing the turnpike to private interests and using the proceeds to finance needed infrastructure repairs. They were also opposed to the turnpike coming under the control of ODOT.
What Kasich proposes, however, does not sell or lease the turnpike. It would continue as an independent entity “with expanded authority and be renamed ‘Ohio Turnpike and Infrastructure Commission.’ ”
More than 90% of the revenues directed to infrastructure would go “directly to northern Ohio highway projects, including the turnpike,” Kasich promised. “Tolls for local trips paid for with EZ Pass are frozen for 10 years. … All other tolls are capped at inflation,” which the governor noted, “is significantly less than historic toll increases.”
When the Democrats expressed fear that many of the 1,000 employed by the turnpike could lose their jobs, Kasich and Wray said they do not anticipate any lay-offs should the initiative be adopted.
Both Broska and Wachtmann believe the $3 billion raised would not only finance the needed roads and bridges with no increase in taxes, the projects would begin much sooner. Some, they said, couldn’t be taken on for as long as 25 years for want of funding otherwise.
Said Kasich, “Now, you're going to have caps on the tolls and you're going to have a bunch of projects and add 65,000 jobs. … I think we ought to do it.''
In a joint press release distributed a few hours after Kasich spoke here, U.S. Reps. Tim Ryan, D-17, and Marcia Fudge, D-11) said while the plan “stopped short of fully privatizing the turnpike, the governor’s plan will bring many of the same dangers as privatization.”
Placing the turnpike under the control of ODOT “will allow the state to reallocate maintenance and infrastructure funds away from northern Ohio in order to fund projects around the state at the expense of residents in northern Ohio,” they said.
“Growth industries such as shale gas development, automotive manufacturing and advanced engineering all rely on the Turnpike for transportation, and making the turnpike less reliable and more expensive jeopardizes the state’s ability to create economic development opportunities.”
The governor's office released to news organizations a long list of supporting comments from public officials, business and labor leaders. Among them was this statement from the mayor of Cleveland, Frank Jackson: "I think it’s a good decision, good process, good outcome, good decision, good for Cleveland, good for northeastern Ohio."
Said Joe Roman, CEO of the Greater Cleveland Partnership, "Commerce of northern Ohio will get a big push from this."
Added Gary TIboni, the president of Teamsters Local 436, which represents turnpike employees, "The governor got it right. It keeps my people working.”
Copyright 2012 The Business Journal, Youngstown, Ohio.
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