Columbus Dispatch and Vindicator staff report
A proposed state construction budget will be limited, unlikely to fund new buildings, and contain no money for community projects craved by local leaders, the Kasich administration says.
State leaders usually pass a construction budget every two years to fund about $1.5 billion worth of construction projects at state prisons, universities, schools and other state agencies, along with a variety of road, bridge and water projects. But financial and political forces combined to persuade then-Gov. Ted Strickland not to introduce one in 2010.
The most-recent capital budget, in 2008, had about $120 million for community projects.
State Rep. Robert F. Hagan, a Democrat from Youngstown, says he expects Kasich to use the construction budget as a way to punish those communities that didn’t support Senate Bill 5, the controversial collective-bargaining law for public workers that voters overturned this month.
“He had strong feelings toward that [Senate Bill 5], and I think that will be reflective when he starts awarding capital projects,” Hagan said Saturday.
“I don’t put anything past this governor. He’s shown vindictiveness for those who didn’t support him.”
Hagan says he remembers when the Ohio House, Ohio Senate and governor each controlled $100 million for community projects and wonders if the governor will just take control of it all this time.
Kasich will argue that there’s no money for construction projects, but that’s because tax breaks to corporations took the money away, Hagan said.
Ohio can borrow another $2.75 billion for the new construction budget, but state Budget Director Tim Keen said the administration has no interest in going that high. A recent memo from Keen to state agencies said it is “imperative” that the capital bill be restrained and focus on necessary maintenance, “with an extremely high threshold that would have to be met in order to fund new construction.”
Hagan said that threshold also could pose problems for areas such as the Mahoning Valley, because most communities here don’t have the funds to provide matching money of 30 percent, 40 percent or 50 percent.
Among the projects that have been funded in Youngstown with community construction funds are ones that cleaned up the Mahoning River and assisted the Youngstown Symphony Orchestra, Paramount Theater, Stambaugh Auditorium and Ballet Western Reserve.
The state construction budget also provides money for prison operations, Youngstown State University, and roads and bridges, Hagan said, noting that YSU got a new cooling system recently with the funds.
“These projects are nice to have, but not necessities,” Keen said. “We ought to take care of the necessities first. These are not core responsibilities of the state.”
For every $100 million borrowed in a capital budget, the state pays about $60 million in interest over 20 years, if the interest rate is 5 percent (it is lower now). Some Republican leaders worry about the shaky national economic future.
“It’s not responsible to commit to spend more money than you can reasonably expect to pay back in the future,” Keen said.
Senate President Tom Niehaus, R-New Richmond, agreed. “You have to evaluate how prudent it is to borrow money in this economic environment,” he said. “There always are very worthwhile programs. But how much do you want to borrow to pay for those programs?”
But some say that with Ohio’s unemployment still around 9 percent and local governments struggling with state budget cuts, now is not the time to trim state construction dollars.
“This is a time that we need dollars put into our communities to spur economic development and job creation, rather than funneling it to private corporations through JobsOhio,” said Sen. Michael Skindell, D-Lakewood. “I think it’s a failure and hurts job creation in this state when we don’t do a capital budget that supports local community projects.”
Dan Williamson, spokesman for Columbus Mayor Michael B. Coleman, a Democrat, called the lack of community funds “disappointing.”
“We certainly understand the balance, that there is not as much money as you like, but these things do play a role in stimulating the economy,” he said.
So what will the bill fund when it is introduced, probably after February? There are significant questions regarding how much will go toward state universities and the Ohio School Facilities Commission.
Keeping the program funded at current levels would require $800 million to $1.2 billion in new revenue.