To Lighten Debt Load, Revised Ohio Plan Redirects Tobacco & Other Funds

In a deal ironed out earlier this month by Gov. Ted Strickland and legislative leaders, the state will move forward with an economic stimulus plan that borrows far less than the governor’s original proposal while using existing state revenue such as tobacco settlement funds to supplement the plan – a move that has prompted legislative action to secure control of the tobacco funds.

Under the agreement, the state will invest $1.57 billion over five years in emerging industries, alternative and renewable energy, local infrastructure, logistics and distribution, and higher education workforce development. The plan would borrow $400 million in bonds with additional funding sources of $970 million from the sale of bonds, $370 million in general fund revenue projected for future years and $230 million from the Ohio Tobacco Prevention Foundation. The governor’s proposal called for an investment of $1.7 billion in bonds.
 
The agreed upon economic stimulus plan invests in many of the same areas outlined by the governor during his State-of-the-State Address in February (see the Feb. 14, 2008 issue of the Digest), including:

• $150 million ($100 million less than the governor’s recommendation) to create new jobs in advanced and renewable energy production;
• $100 million ($100 million less) to help create jobs in the biomedical industry;
• $100 million ($50 million less) for logistics and distribution to expand and support businesses that move and distribute products; and,
• $50 million ($50 million less) to support and grow an industry that aims to produce bio-based products.

Additionally, the new plan invests $200 million in Clean Ohio Fund conservation to help preserve farmland and green space and $200 million to help revitalize cities and industrial areas. Another $400 million would support local infrastructure such as roads, bridges and sewers. Similarly, the governor’s plan called for $400 million to the Clean Ohio Fund and $400 million for Ohio Public Works.
 
New to the plan is $250 million to be matched with private sector donations for a higher education workforce initiative linking college graduates with internship programs and co-operative education programs to help keep the graduates in-state upon graduation. Legislators also included $120 million for a new Historic Preservation Tax Credit.
 
Details of the bipartisan plan to boost Ohio’s economy are available at: http://governor.ohio.gov/Default.aspx?tabid=921