State’s Agency Must Borrow $150M

Mon September 24, 2007 - Midwest Edition

COLUMBUS, Ohio (AP) The state’s agency for school construction must borrow $150 million over the next six weeks to fill a gap created by the end of a bond program and the start of a new funding source, a state panel said Sept. 12.

The Ohio School Facilities Commission, which matches local shares of school construction costs, will need to borrow money from other funding sources within the state budget that haven’t been committed, state budget Director Pari Sabety said.

General obligation bonds that currently fund school construction will not be renewed in anticipation of Ohio’s sale to investors of future payments from a 1998 settlement with tobacco companies. The result is a one-and-a-half-month gap that must be filled to continue construction, Sabety said.

The state’s sale of future tobacco payments, expected in November, is expected to generate approximately $5 billion, most of it going toward school construction. Some of the money also will go toward a property tax break for all Ohio homeowners 65 and older.

Sabety, along with representatives from the governor’s office and the treasurer, make up the Buckeye Tobacco Settlement Financing Authority, which is supervising the tobacco settlement sale to investors.