Ohio DOT’s plan to generate $3 billion without leasing its Turnpike

| December 13, 2012

Image courtesy of the Ohio Department of Transportation, http://www.ohturnpikeanalysis.com

Wow. No layoffs and a solid plan to generate funds. Imagine that!

Public-private partnerships have become all the rage and are an excellent, sound opportunity to generate funding to accomplish transportation projects. They are becoming the new norm (outside of the transportation realm as well).

However, I must say, it’s refreshing to hear that the Ohio Department of Transportation (ODOT) has found a way to generate nearly $3 billion for highway and road construction without leasing the Ohio Turnpike – and without laying off Turnpike employees.

The Ohio Jobs and Transportation Plan would generate $1.5 billion in new funds for Ohio highways from bonds issued by the Ohio Turnpike Commission and backed by future toll revenues, according to ODOT. Up to an additional $1.5 billion could be generated from matching local and federal funds coming to a combined total of about $3 billion for Ohio’s major highway construction projects, ODOT says. (To see the complete study, click here for a downloadable PDF.)

Ohio Department of Transportation (ODOT) Director Jerry Wray notes that bonding against future Turnpike revenue generates enough money to erase Ohio’s highway budget.

ODOT has cut the agency’s $1.6 billion highway budget deficit by $400 million, but the agent contends that more money and more innovation is needed. Money generated from the Ohio Jobs and Transportation Plan will help fill budget gap. The launch of the new plan concludes a year-long study of options for the revenue generated by the Ohio Turnpike.

ODOT tells Better Roads that the agency looked at forming a public-private partnership. However, after the results came in from an Ohio Turnpike study ODOT determined that bonding was the best way to generate funds for the overall transportation system in Ohio.  (Look for coverage of the study results in an upcoming blog post on BetterRoads.com and via our social media platforms.)

“This plan just makes sense as we continue Ohio’s economic resurgence, grow jobs and make our state prosperous once again,” Ohio Gov. John R. Kasich said in a written press statement. “Billions of dollars in new highway funds further strengthens Ohio’s jobs-friendly climate and keeps our state moving by delivering more projects faster.”

Kasich, Wray and Ohio Turnpike Director Rick Hodges have started a two-day state tour to unveil what ODOT is  calling its “first-of-its-kind plan” to generate the nearly $3 billion.

“Bonding against future Turnpike revenue generates enough money to erase our highway budget deficit,” Wray said in a press statement. “Combined with ODOT’s work to reduce our cost of doing business and improve service to the state’s motoring public, this plan puts the resources we need into our major construction budget.”

ODOT has cut the agency’s $1.6 billion highway budget deficit by $400 million thanks to new savings and operational efficiencies, but more money and more innovation is needed.  Money generated from the Ohio Jobs and Transportation Plan will help fill budget deficit without raising taxes that would kill jobs. The launch of the new plan concludes a year-long study of options for better using the revenue generated by the Ohio Turnpike.

Phillip L. Parker, president & CEO of the Dayton (Ohio) Area Chamber of Commerce says he commends ODOT “for identifying new revenue opportunities to advance statewide infrastructure projects.” Parker notes that “it is critical that we have an efficient highway system. ODOT has proven that [it is] committed to identifying new and innovative revenue generating opportunities for statewide projects that do not over burden the Ohio business community.”

The proposal by Gov. Kasich’s Administration to keep the Ohio Turnpike in state control while issuing bonds to raise $1.5 billion to fund critical new construction is the kind of innovative thinking that will continue moving Ohio forward, said Chris Runyan, president of the Ohio Contractors Association.

“The governor listened to the people of Ohio,” Runyan said. “He did what he said he would do at the beginning of this process – gather as much data as possible, study it carefully, and reach decisions that are best for all Ohioans.”

Runyan says that  having the Ohio Turnpike Commission (OTC) and ODOT work collectively to address transportation issues “is a huge step forward for the state.”

Under the governor’s plan, the OTC will remain an independent agency, but the two agencies have pledged to work collaboratively on projects outside the OTC’s traditional role, according to the Ohio Contractor’s Association.

The Ohio Jobs and Transportation Plan at a Glance

  • No long-term, private lease;
  • A continued public, independent Turnpike with expanded authority and renamed the “Ohio Turnpike and Infrastructure Commission”;
  • More than 90 percent of new bond money will go directly to northern Ohio highway projects, including the Turnpike itself;
  • Rebuilding the Ohio Turnpike will occur decades sooner than planned;
  • Tolls for local trips paid with an EZ Pass are frozen for 10 years;
  • All other toll rates are capped at inflation, which is significantly less than historic toll increases;
  • No Turnpike employee lay-offs are anticipated.

 

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