CHICAGO — Ohio Gov. John Kasich Wednesday unveiled a $1.74 billion, two-year capital plan that would rely on $1.36 billion of general fund-backed bonds.
It will be the state’s first capital plan since 2009.
Tim Keen, the director of the state’s Office of Budget and Management, presented the spending proposal, which requires legislative approval, to the House Finance and Appropriations Committee Wednesday.
Kasich’s capital plan is part of what the first-term Republican dubbed a “mid-biennium review,” a wide-ranging policy overhaul that comes halfway through the state’s current two-year budget and focuses on changes in energy and tax policies.
Kasich’s proposals include an income tax cut, new taxes and regulations on oil and gas companies, and a new financial institutions tax.
“There’s so much to get done in Ohio that the governor was not prepared to wait two more years for the next biennial budget,” Keen said Wednesday at a press conference with Kasich and other top administration officials.
The $1.74 billion capital budget would be the state’s first since 2009 and would be financed mostly with general fund bonds.
“This is a restrained capital bill,” Keen said.
The proposed capital budget includes $675 million for school facilities construction. Of that, $425 million would come from general fund-backed bonds and the rest from lottery profits, Keen said.
The bill includes $400 million for higher education projects. Of that, $31 million would be for statewide projects and $369 million for various campus projects.
For the first time this year, Ohio’s higher education facilities joined together to make one capital budget request to the state. Keen praised the effort and said the $400 million fulfills the full request.
Another $300 million would finance local infrastructure, all of it coming from general fund bonds. Another $290 million would go to state agency facilities, mostly for renovation and maintenance, and $63 million would be set aside for a state revolving fund operated through the Public Works Commission, Keen said.
For the first time, the capital budget will include no money for community projects, according to Kasich. “That’s pretty unprecedented,” the governor said. “We want to create a formula for community projects in the next capital bill, and we want to make sure it makes very good sense.”
On the tax side, the proposed income tax cut would be financed almost entirely by a series of new taxes and fees on oil and gas companies.
Oil companies would pay a severance tax that could would start at 1.5% and reach 4%, generating up to $1 billion by 2016. Depending on how much the new energy taxes generate, the income tax cut could be as high as 5%, Keen said.
The governor’s plan also includes a tax on financial institutions based on net worth.
