CHICAGO — Ohio is set to begin issuing nearly $1 billion in tax-exempt bonds later this year as part of a $1.57 billion economic stimulus package signed into law last week by Gov. Ted Strickland.
Officials say the package will create up to 57,000 jobs across several sectors, many in the renewable energy or biomedical industries, amid a sagging local economy and a budget shortfall that could reach as high as $1.9 billion.
The measure is a bipartisan compromise crafted after Strickland agreed to trim his original $1.7 billion plan, that was almost entirely funded through tax-exempt borrowing, amid Republican concerns that such borrowing would place too much of a burden on the state.
Under the new measure, the state will issue roughly $970 million in tax-exempt bonds, with the remaining $600 million coming from a mix of future state revenues, cash, and $240 million from the Tobacco Prevention Fund. The tobacco fund's members are attempting to block the use of that money, which would essentially drain it.
Of the $970 million in borrowing proposed, voters will have to sign off on about $400 million in a measure on the November ballot.
In signing the legislation, Strickland used his line-item veto to strike three provisions from the bill, including one that assigned a July 1 deadline to shift $200 million out of the state's rainy-day fund in order to finance a series of highway projects.
Strickland originally wanted to use Ohio Turnpike revenues to fund those projects, but a group of legislators who represent the area near the turnpike were opposed to using turnpike revenue to fund statewide projects. In vetoing the July 1 deadline to transfer the money from the rainy-day fund, Strickland said he would try to find another source of revenue within one year.
Ohio's rainy-day fund balance is currently at $1.1 billion.
