U.S. DOT Revokes Ohio Grant Over Privatization Funding

CHICAGO — The U.S. Department of Transportation revoked a $1.5 million grant to Ohio after a group of Democratic congressmen from the state said Gov. John Kasich was wrongly using the money to hire a firm to advise the state on privatizing the Ohio Turnpike.

Federal transportation officials announced last Friday that they would withdraw the grant money, which was issued through the State Planning and Research Program. The move came after they received a letter complaining about the use of the federal funds from the state’s Democratic delegation on Oct. 4.

A spokesman for U.S. Rep. Tim Ryan, who led the effort, said they discovered the state’s intention after reading a request for proposals issued in early August seeking advisors to help explore privatization options for the turnpike.

The RFP marked the beginning of Ohio’s formal effort to lease the toll road, which is one of several privatization plans proposed by Kasich, a Republican.

“While we may not all agree on the state’s actions toward privatization of the Ohio Turnpike, federal taxpayer funds should not be serving to facilitate a particular policy initiative to privatize a public asset,” the delegation wrote in the letter.

Kasich has said a 75-year lease could generate up to $3 billion. Ohio currently operates only one toll road, the 241-mile Turnpike, which is one of the largest and highest-rated toll roads in the United States. It generates $187 million of annual toll revenue, according to the state.

The Ohio Department of Transportation called the federal decision political, and said it will revise its application. “But I’m not optimistic that politics won’t still interfere,” ODOT director Jerry Wray said in an emailed statement. “It’s disappointing and a little irregular that the [Federal Highway Administration] would let politics blur their process, but if it continues we’ll just find a way to get this done ourselves.” 

The toll road is operated by the double-A rated Ohio Turnpike Commission, which also sells debt for the road. It is a relatively rare issuer that last sold new-money bonds in 2001.

The state has $600 million of outstanding toll-road bonds that would need to be defeased in the event of a privatization.

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Transportation industry Ohio
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