CHICAGO -- The administration of Gov. George Voinovich of Ohio proposed a $1.76 billion a capital bill this week that would be almost entirely financed through debt sales.
The bill, for fiscal 1995, which begins July 1, and fiscal 1996, calls for $1.73 billion of debt financing to maintain, construct, and improve facilities in the state.
The remainder of the capital bill would be financed with general revenues and other funds.
In testimony yesterday before the Senate Finance Committee, Ohio Office of Budget and Management director Greg Browning said most of the debt would be issued by the Ohio Public Facilities Commission and the Ohio Building Authority.
"The 1995-96 capital bill is an investment document reflecting the primary capital needs and priorities of state government and the important concerns that can exist between state capital spending and job-generating economic development projects," Browning said.
He outlined the largest spending categories under the bill, saying $594 million is allocated for higher education, $248 million for public works infrastructure, $193 million for rehabilitation and corrections, $170 million for the department of education, and $157 million for the department of natural resources.
The proposed bill is about $350 million higher than the fiscal 1993-94 capital bill because it includes some new spending initiatives for schools, Browning said.
The bill also includes $60 million in bonds for a super-maximum security prison to relieve overcrowding that led to last year's riot at a prison in Lucasville. Another $100 million marks the first half of $200 million of general obligation bonds voters approved last November for recreation and park improvements, Browning said.
The capital bill also includes investments in community projects. One of the projects is a bond-financed sports complex in Cleveland. Browning's office confirmed that the bill includes $10 million to help complete building the complex, which received $15 million under the fiscal 1993-94 capital bill.
The $10 million would mark the7 last piece of public money needed for the stadium and arena developed by the nonprofit Gateway Economic Development Corp.
"Basically, this fills up all the components of the financing plan," said Timothy Offtermatt, Gateway's chief financial officer.
Since 1990, the Gateway corporation, the city of Cleveland, and Cuyahoga County have issued more than $300 million of tax-exempt and taxable debt for the complex.
Meanwhile, the Voinovich Administration has decided to wait until next year to seek legislative approval to place on the ballot a referendum on restructuring state debt to allow for more GO issues.
Herb Kruse, Ohio's debt coordinator, said yesterday that the administration decided to bypass the Nov. 8 election and place the measure on the ballot in May or November of 1995. Too many referendums are already on the fall ballot, Kruse said. Those referendums include questions on workers' compensation, gambling, a soft drink tax, and murder conviction appeals.
Kruse said the administration fears that the debt restructuring would be lost on the crowded ballot and could be voted down.
An Ohio debt management plan completed last year recommended replacing lease debt issued by the state building authority and state public facilities commission with GO debt. The move would allow the state to take advantage of its double-A GO rating, which is higher than ratings on its lease debt.
State budget officials have said the change could result in an $80 million savings over 20 years. The proposal would cap annual debt service on GO debt at 5% of the state's general fund.
All Ohio GO debt must be voter approved.