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Ohio Governor to tap Turnpike for cash

By Kevin Milliken for La Prensa

December 2012: After months of speculation and study, Ohio’s governor has decided not to lease the Ohio Turnpike. Instead, the turnpike commission would issue bonds backed by future toll revenue, using the money for critical transportation projects-- mostly in northern Ohio.

Gov. John Kasich announced the plan to leverage the assets of the Ohio Turnpike during a two-day tour across northern Ohio, which started in Toledo and included stops in Cleveland and Youngstown.

“This plan just makes sense as we continue Ohio’s economic resurgence, grow jobs and make our state prosperous once again,” Gov. Kasich said. “Billions of dollars in new highway funds further strengthens Ohio’s jobs-friendly climate and keeps our state moving by delivering more projects faster.”

“Bonding against future Turnpike revenue generates enough money to erase our highway budget deficit,” said Jerry Wray, director of the Ohio Dept. of Transportation (ODOT).

The Ohio Jobs and Transportation Plan would generate $1.5 billion in new funds for highway projects from bonds issued by the Ohio Turnpike Commission and backed by future toll revenues. Up to an additional $1.5 billion could be generated from matching local and federal funds coming to a combined total of approximately $3 billion for major highway construction projects.

Details of the plan also include:

  • No long-term, private lease;
  • A continued public, independent turnpike with expanded authority which would be renamed the Ohio Turnpike and Infrastructure Commission;
  • More than 90 percent of new bond money will go directly to northern Ohio highway projects, including the turnpike itself;
  • Rebuilding the Ohio Turnpike will occur decades sooner than planned;
  • Tolls for local passenger trips paid with an EZ Pass are frozen for 10 years;
  • All other toll rates are capped at inflation, which is significantly less than historic toll increases;
  • No turnpike employee layoffs are anticipated.

The region’s legislative delegation lobbied hard for months to ensure any money generated by the turnpike would remain in northern Ohio, arguing that the tolls came mainly from trucking firms and travelers from across the North Coast.

Many Toledo-area legislators also contended that leasing the turnpike to a private company would cause the highway to fall into disrepair and result in skyrocketing tolls. They cited the controversies surrounding the long-term lease of the Indiana Turnpike as an example of what could happen in Ohio.

Rep. Teresa Fedor (D-Toledo) criticized the governor’s plan as “fiscally irresponsible” and one designed for “partisan political gain.” She argues the plan  would still result in job loss across the state, increased tolls, and raise taxes for Ohioans.

“The turnpike is the economic pipeline of northern Ohio and its assets should not be taken from northern Ohio,” said Rep. Fedor. “But it is not just northern Ohioans who are affected:  the governor’s plan does not benefit other Ohioans, either, because it is not a fiscally sound plan. In exchange for a smoothly operating turnpike, the governor is giving us a lump of coal.”

She cited a recent Ohio Supreme Court ruling determined that highway transportation projects must be funded with approximately $140 million in annual CAT tax revenue, not with money from the state’s general fund. Rep. Fedor contends that revenue should be accounted for before increasing tolls that could hurt communities and businesses the Ohio Turnpike helps to support.

However, backers of the governor’s plan point out that for every $1 billion in new road construction spending, 30,000 jobs are created. Some Northwest Ohio Republicans applauded the governor’s effort to find a way to leverage turnpike assets in a way that keeps the revenue in the region.

“This plan not only keeps tolls low for the local drivers, but assures that trucking firms can use the Turnpike, will continue to be able to afford that,” said State Rep. Lynn Wachtmann (R-Napoleon).

Toledo’s mayor and port authority officials also expressed support for the governor’s turnpike plan, stating it avoids their biggest concern: that the turnpike would go private. The Ohio Trucking Association (OTA) applauded the governor for choosing what the  association’s president called “the best option for all travelers in the state.”

“I'm gratified that as a trade association representing a major user of the turnpike, we have had many opportunities to voice our concerns,” said OTA President Larry Davis in a statement. “They listened to us and that means a lot.”

OTA represents more than 900 trucking and supplier companies throughout the state. The association’s president called the Ohio Turnpike “too valuable of an asset” to give to an outside company for lease or purchase.

“We have a top-notch turnpike now with a stable and fairly predictable funding source,” explained Davis. “It makes more sense to leverage the value of what we already have to better our state's roads and bridges, than to roll the dice on an outside operator who may not have the best interests of efficient transportation in mind.”

Fulton County Recorder Sandy Barber, Northwest Ohio’s only Ohio Turnpike Commission member, also found something to like about the governor’s plan.

“I am personally very pleased about the partnership being forged by the Ohio Turnpike Commission and the Ohio Department of Transportation, which will benefit residents along the turnpike corridor and all Ohioans," said Barber.  “This plan is going to help create new jobs and I like that the funding will help maintain Ohio's transportation system as well as allow us to continue making improvements.”

With future turnpike tolls capped at the rate of inflation, or approximately 2.7 percent annually, state officials believe those toll hikes will be less than half the rate of increase that passenger tolls have seen over the past 20 years and almost a full percentage point less than past increases to truck tolls. Tolls for local passenger trips that are paid with EZ Pass will be frozen at current levels for the next decade.

Funding for future projects to be paid for with turnpike bonds still will be based on Transportation Review Advisory Council (TRAC) recommendations. The nine member, bi-partisan group is chaired by the ODOT director and is responsible for overseeing the selection process for capacity-adding and congestion-relieving highway projects which cost more than $12 million.


Copyright © 1989 to 2012 by [LaPrensa Publications Inc.]. All rights reserved.
Revised: 12/18/12 19:47:40 -0800.




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