Ohio Looking to Bonds to Help With New Road Projects

Sat May 31, 2008 - Midwest Edition

COLUMBUS, Ohio (AP) As construction costs rise, Ohio’s buying power is shrinking — so quickly that, if construction were delayed a mere three years, a $100 million bridge over the Ohio River would only reach halfway across before money ran out.

That grim reality was part of a state Department of Transportation plan presented to lawmakers April 1.

With that picture ahead, Gov. Ted Strickland pitched a bond issue in January to help pay for upcoming road, rail and port projects and bolster the state’s struggling transportation budget. His $1.7 billion Building Ohio Jobs package includes $150 million for state infrastructure, as well as $400 million for local road, bridge, water and sewer projects.

Strickland, a Democrat who opposes tax hikes, surprised Republicans who lead the Legislature with his bond package idea during his State of the State speech.

House Speaker Jon Husted, a Kettering Republican, said he is concerned with the amount of debt the governor’s proposal would incur. He said payments on the debt, including principal and interest, could total $3 billion — almost twice the amount raised.

“I just can’t support it,” he said.

Husted noted that the state’s two-year operating budget already relies on nearly $1 billion in one-time spending and Strickland has proposed a shortfall of up to $1.9 billion before the budget cycle ends.

Yet Strickland, like other governors, is contending with an infrastructure picture that the transportation department dubbed “devastating” April 1.

The department’s annual business plan attributes hyper-inflation of 40.7 percent when compounded over the past four years to high oil prices, global demand for raw materials such as steel, and the lingering economic effects of hurricanes Katrina and Rita.

Though the state projects the rate of construction cost inflation will slow between now and 2012 and then flatten, the phenomenon has played havoc with cost projections, the report said.

Husted, Senate President Bill Harris and others don’t believe taking on more state debt is the answer.

Both said April 1 they would work on some individual proposals contained in Strickland’s bond package — which also earmarks $250 million for advanced and renewable energy projects, $100 million for bioproducts from renewable sources, $200 million for the biomedical industry, $200 million for an Ohio Main Street Renewal Initiative, and $400 million for the Clean Ohio effort to reclaim contaminated urban areas and preserve farmland.

Associated Press Writer Stephen Majors contributed to this report.

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