CHICAGO — Ohio voters would get to vote on a plan to issue up to $950 million of general obligation debt to finance a popular jobs technology program under a resolution passed by the Democrat-controlled state House this week.
The measure now moves to the Republican-controlled Senate, where leaders have said they support the proposal, but would like to scale back the size of the borrowing, possibly by 50%.
Proponents, including Democratic Gov. Ted Strickland, said the Third Frontier jobs program has generated up to $6.6 billion in economic development and up to 40,000 new jobs across the struggling state since it was first implemented in 2003.
Critics, including some Republican lawmakers, have said they’re reluctant to take on the additional debt — which could total $300 million over the life of the debt — at a time when the state is struggling with declining revenues.
The fate of the resolution was briefly caught up in the upcoming gubernatorial elections, with some political observers saying Republicans opposed putting the measure on the May ballot as successful passage could give a boost to Strickland as he faces off in November with a Republican opponent, expected to be U.S. Rep. John Kasich.
Lawmakers must approve the resolution by Feb. 3 to get it on the May 4 ballot.
Under the measure, which was passed by an 85-to-13 margin in the House late Wednesday, the state would issue up to $950 million of new-money debt over five years. Debt issuance would be limited to $190 million a year, starting in 2012. The bonds would mature between 2013 and 2026 with interest costs totaling roughly $300 million over the life of the debt, proponents said.
The original resolution called for issuing $1 billion of debt, but Democrats trimmed it to $950 million to secure needed votes from some Republican representatives. The final measure also included a provision requiring an independent review of how the bond proceeds are spent.
Proceeds from the borrowing would finance the Third Frontier program, which invests state money in local technology companies. It was launched in 2002 with a $1.6 billion bond issue under former Republican Gov. Bob Taft. Proceeds from the original issue were intended to last 10 years, but the program is now expected to run out of money by 2011.
“Third Frontier is the foundation for Ohio’s transition to compete in a global economy and therefore should be renewed,” Rep. Jay Goyal, D-Mansfield, who sponsored the resolution, was quoted as saying in local press reports.