Ohio legislators plan to vote Wednesday on a resolution that would put a $2.5 billion general obligation bond measure on statewide ballots May 6.
The measure, which would not raise taxes, would fund road work, bridge construction and repair and water system work, among other capital projects, through the State Capital Improvement Program, which is administered by the Ohio Public Works Commission, state Sen. Brian Chavez, R-Marietta, who co-sponsored the resolution in the state Senate, told The Bond Buyer.
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The Senate and House passed separate but identical resolutions,
One of the legislative bodies now needs to adopt the other's resolution. The final resolution does not require the governor's approval, but it does require 60 votes in the 99-member House and 20 votes in the 33-member Senate.
"We are confident that this important legislation will pass before the end of the General Assembly... on Wednesday," state Sen. Hearcel Craig, D-Columbus, an SJR4 co-sponsor, said.
Craig's office said on Tuesday afternoon that it appeared "more than likely" the House resolution would pass the Senate.
If passed by both houses, the authorizing resolution would then have to be filed with the secretary of state prior to its placement on the May ballot.
"It is critical that our state government continues to support local public works projects in Ohio," Craig added. "This legislation was passed with overwhelming bipartisan support due to the popularity of the program."
Craig said it's their duty as legislators to collaborate to improve Ohio's infrastructure and maintain the fundamental operations of counties, municipalities and water sanitation districts across the state.
"It will be our last session day of the year," Chavez said, noting that the SCIP "has proven its importance over the last 40 years."
The new legislature that was elected in November is sworn in in January, and unfinished bills from this legislature will die when it adjourns.
The SCIP program was created in 1987 and has been renewed three times since then: in 1995, 2005 and 2014.
"I went and talked to a bunch of county engineers, and to a county, they all told me this is very important to them to get infrastructure projects completed," Chavez said. "If the state's going to be collecting taxes to support communities, what better way [to use the funds]?"
According to the text of the legislation, the bonds must be issued in $250 million increments every ten years, with each issue maturing in 30 years or less from the date of issuance. Craig noted the resolution allows the state to use general revenues as debt support for the bonds.
Rep. Daniel Troy, D-Willowick, who along with Rep. Scott Oelslager, R-North Canton, was one of the original sponsors of the bond authorization when this program was created, said the current Ohio Constitution has to be amended to permit the issuance of these bonds.
The program is popular in part because "all the decisions on which projects get funded are made at the local level," he told The Bond Buyer. There are district integrating committees, whose members score projects within the district, and then the counties score them, he said.
"Basically, it allows the locals to decide what is most necessary, what are the projects we really need to do," he said. "A lot of times, there are projects that small communities would be unable to do [without the small community set-asides]."
For example, he said, there was a village in his district along the shores of Lake Erie with only a few hundred residents that desperately needed to replace its septic systems with sewers. The village sought funding through the SCIP.
The authorization for the current iteration of the program expires June 30, so approval by the voters in May will ensure a smooth segue from one authorization to the next, Troy said.
"It's probably one of the best ideas that Ohio's ever had," he said. "It generates $2 billion over 10 years, but a lot of times it leverages two or three times that funding… I would anticipate that somewhere between $7 and $7.5 billion will actually be spent on projects because of the matching funds that communities provide."
Dan Tierney, press secretary for Gov. Mike DeWine, said the governor's office has no comment yet on the bond proposal, but supports the work of the Public Works Commission.
At a Senate Finance Committee hearing in November, Ohio Mayors Alliance Policy Director Sarah Biehl urged the Senate to pass the bond authorization, noting that "projects face starkly increasing costs in 2024 and beyond" and that infrastructure projects involve a long process which requires the planners to know what funding will be available.
"Our mayors, along with other local government leaders across Ohio, rely on SCIP to fund crucial public infrastructure projects and upgrades," Biehl said then, noting that the last time this program was approved, in 2014, it passed the Senate unanimously.
"Our infrastructure improvement needs are dire, with crucial projects needed in every city in our membership," Biehl said.
"We're very hopeful that the legislation will pass — it's a slam dunk," Bevan Schneck, director of public affairs for the Ohio Municipal League, told The Bond Buyer. "They [Ohio municipalities] are strapped for money as it is. So they need the outside help through this method to help them pay for their infrastructure."
Schneck said Ohio has stellar bond ratings and can afford this measure, which is a slight increase over what was last approved by voters.
"They needed this funding before the pandemic," he said of local governments. "Our municipalities, like the rest of the world, not only do they have the costs of projects [to contend with], but inflation is another pressure on them."
Ohio has relatively low debt service costs, Troy said, and the placement of this bond measure on May ballots would get the money out the door before costs rise.
"We all know that material and labor costs are going to go up," he said. "You wait and do a project five years from now, you'll probably pay a heck of a lot more.
"The cost of borrowing this money is greatly offset by the savings," he said.
State Sen. Niraj Antani and Reps. Ron Ferguson and Brian Lorenz, Republicans who voted against the legislation, did not respond to requests for comment by press time.
