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Ohio Plans Frugal Budget for Construction, Repairs

Thu January 05, 2012 - Midwest Edition
Construction Equipment Guide

COLUMBUS, Ohio (AP) A budget for construction in Ohio will likely be tight, focus on repairs and leave little money for new building or local projects.

A memo to state agencies from Budget Director Tim Keen said it is “imperative” that money set aside for construction projects be limited and focus on necessary maintenance, “with an extremely high threshold that would have to be met in order to fund new construction,” The Columbus Dispatch reported.

The state can borrow up to $2.75 billion to pay for projects that have in the past cost about $1.5 billion over a two-year period. Keen told the newspaper that the administration of Gov. John Kasich has no interest in going that high.

For every $100 million the state borrows in its construction budget, it will pay $60 million in interest over 20 years, assuming the interest rate is 5 percent. The interest rate is currently lower than 5 percent.

“It’s not responsible to commit to spend more money than you can reasonably expect to pay back in the future,” Keen said.

The budget for state construction projects is usually passed every two years by lawmakers. It typically covers projects at state prisons, universities, school and other state agencies, in addition to road, bridge and water projects.

The money also funds a number of local projects, such as parks, museums and zoos. A more frugal approach could see less cash set aside for that kind of construction or maintenance.

“Those projects are nice to have, but not necessities,” Keen said. “We ought to take care of the necessities first. These are not core responsibilities of the state.”

Columbus Mayor Michael Colman’s spokesman Dan Williamson called the lack of local funds “disappointing.”

“We certainly understand the balance, that there is not as much money as you like, but these things do play a role in stimulating the economy.”

Some lawmakers agree, saying now is not the time to cut state construction money with Ohio unemployment still around 9 percent.

“This is a time that we need dollars put into our communities to spur economic development and job creation, rather than funneling it to private corporations through JobsOhio,” said Lakewood Democrat Sen. Michael Skindell. JobsOhio is Kasich’s semi-private economic development engine designed in hopes of spurring job growth in the state.

“I think it’s a failure and hurts jobs creation in this state when we don’t do a capital budget that supports community projects.”

The budget would be put into a bill before Ohio’s General Assembly and likely be passed sometime after February.

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