by David Pugh, Buckeye Staff Writer
John Kasich, Ohio governor (R), announced his plan to raise cash out of the Ohio Turnpike, Thursday morning, Dec. 13, in Toledo, and it makes remarkably few changes.
The Ohio Turnpike stays under the administration of the Ohio Turnpike Commission, and no OTC employees will lose their jobs.
Instead, state officials said the role of the Commission in the state will be expanded, and bonds will be sold against future turnpike revenues.
Kasich said there would be an initial offering of $1 billion in bonds. Out of that $1 billion, 90% of the bond revenue will be spent on projects in northern Ohio, which officials roughly defined as “north of U. S. 30.”
The Turnpike Commission still has about $500 million of its own bonds outstanding, but state officials explained that even with the issuance of new bonds, there will still be a debt-to-assets ratio that will satisfy the bond market.
Jerry Wray, director of the Ohio Department of Transportation, said with the plan in place, ODOT will be able do 20 years of highway work in six years, creating about 65,000 jobs over that time span.
For those who use EZ Pass electronic transponders to automatically bill tolls to their accounts, Kasich said tolls for trips 30 miles or under will be frozen for 10 years.
Also, the Turnpike Commission pledges to keep all other toll increases at the rate of inflation for 10 years. In the past, tolls have risen, on average, about 7% per year.
The benefit, state officials said, is that trucking companies and other users of the turnpike have a predictable future; they know what tolls will be, rather than being hit by unexpected, large increases.
In order for the plan to work, legislation must be changed to allow turnpike revenue to be spent on projects off the toll road.
Kasich said he expects the changes in the law to be included in the state’s upcoming transportation bill. The legislature will act on that bill in February, he said.
However, he added he would prefer that the legislation was passed yesterday.
He said right now is the time to go to the bond market, while interest rates paid on bonds are low. Low bond rates reduce interest expenses for Ohio.
Not A Lease?
Earlier in the year, Kasich had talked about a lease, wherein a private operator would operate the road in return for a large up-front lease payment.
“A lease would have gotten more money, but we would lose control,” he said.
“People were concerned about losing control of the turnpike. They were concerned about what would happen to maintenance, about what would happen to tolls.”
Leaders, Kasich said, have to lead. They can’t hide behind polls or listen only to those who yell the loudest.
But, he said, the people’s concerns have to be listened to.
Leadership, he said, is balancing the two.
The sale of bonds, without altering the most of the structure of the turnpike, was the best compromise between doing nothing and leasing the toll road.
“It’s the sweet spot,” Kasich said.-Posted 12.13, 12:45 pm