The Ohio Turnpike Commission would issue as much as $1.5 billion in new debt backed by toll revenue to help pay for state road and bridge projects under a proposal Governor John Kasich will announce today.
The plan, which requires legislative approval, calls for the Turnpike Commission to issue about $1 billion in bonds as soon as next year, and about an additional $500 million in the coming years, according to an administration official, who asked not to be named ahead of Kasich’s announcement. The proceeds would be used to increase available funding for highway projects in northern Ohio and elsewhere in the state, as well as refurbish the turnpike, the official said.
While Kasich had considered leasing the 241-mile (388- kilometer) toll road to a private operator, it would remain under the control of the Turnpike Commission, the official said. Tolls could increase up to the rate of inflation annually, less than historic toll increases, with a 10-year freeze on the charge for trips of less than 30 miles, the official said.
“We think we’ve arrived at the right place,” Kasich told reporters in Columbus on Dec. 10 in advance of today’s announcement. The goal is to “capture greater wealth from a great asset to benefit the state,” he said.
Ohio’s revenue from state and federal gasoline taxes has declined by $328 million since 2007 as construction costs have increased, delaying as much as $1.6 billion of major highway projects for lack of funding, the Department of Transportation has said.
The state commissioned a study in November 2011 by KPMG for alternatives to tap the toll road to help address the shortfall. The options included a lease, selling bonds backed by toll revenue and a state takeover of the toll road, the administration has said.
About 90 percent of the proceeds under the governor’s plan would be spent on state highway projects in northern Ohio, addressing concerns of residents living near the turnpike who opposed having toll revenue pay for work in other parts of the state, the official said. A majority of Ohioans didn’t want a private lease, according to a 2011 Quinnipiac University poll.
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