Ohio Governor John Kasich won't privatize Turnpike

Bond issues will raise money for highway projects

Ohio Gov. John Kasich discusses plans for the Ohio Turnpike, and future funding of Ohio highway projects, during a news conference at Modern Builders Supply in Toledo.

Unused borrowing capability at the Ohio Turnpike, backed by turnpike tolls, would be used to finance major highway improvements throughout Ohio -- but mostly in the northern part of the state -- under a plan Gov. John Kasich is announcing today at a series of news conferences that began in Toledo.

An initial bond issue could raise $1 billion for such projects as the $173 million final phase of rebuilding the I-75/I-475 interchange in central Toledo as well as accelerate reconstructing the turnpike's worn-out original roadway, the governor said during the local event at a building-supply company near I-75.

A second round could finance another $500 million to $1 billion in construction, and federal and local funding matches for those funds could bring the total program to $3 billion, Governor Kasich said while promising that turnpike tolls would be frozen for certain short-distance travelers and indexed to inflation for everyone else.

RELATED SITE: www.ohturnpikeanalysis.com

The governor's proposal followed by about 13 months the commissioning of a $3.4 million study by Texas-based KPMG Corporate Finance LLC of Ohio's alternatives for "leveraging" the turnpike's value for transportation improvements in Ohio. Other options included leasing the toll road to a private operator in exchange for up-front cash, contracting out some or all of its operation, or maintaining its current status.

The governor's proposal, which Mr. Kasich said is likely to be presented to the Ohio General Assembly in a state transportation bill by February, would re-cast the Ohio Turnpike Commission as the Ohio Turnpike and Infrastructure Commission and require its approval for any use of turnpike funds for off-turnpike projects recommended by the Ohio Department of Transportation.

"I would prefer to get it done yesterday," the governor said, "but there is a legislature that I have to work with."

As outlined in an ODOT statement, "more than 90 percent of new bond money will go directly to northern Ohio highway projects," although Mr. Kasich and ODOT director Jerry Wray balked when asked if such a standard would be incorporated into enabling legislation.

"Whether it's exactly 90 percent or not will depend on a project by project basis," Mr. Wray said. "Northern Ohio," he said, could be defined as everywhere north of U.S. 30, although "that's not written in stone somewhere."

"I can only tell you that projects that would not occur [without this funding] will occur," the governor said.

Current state law requires all turnpike funds to be used on projects within one mile of the toll road.

The plan calls for a 10-year toll freeze for passenger-vehicle trips of 35 miles or less for drivers who pay using E-ZPass electronic tolling, while capping fare increases for other motorists to the rate of inflation.

The ODOT statement said that using turnpike financing for northern Ohio projects would allow the transportation department to focus its own revenue and federal funds allocated to Ohio on projects in the southern half of the state.

Mr. Kasich, a Republican, advocated leasing the turnpike to private operators during his 2010 election campaign and advanced study of turnpike "leveraging" after taking office. He said during the news conference that he had listened to hundreds of people across the state about turnpike options, and keeping the turnpike state-run would address concerns about toll rates, maintenance, and job preservation that arose repeatedly during those discussions.

Chris Redfern, chairman of the Ohio Democratic Party and a state representative-elect from Ottawa and Erie counties, has announced a news conference later today to rebut what his statement decried as a plan "to raid the Ohio Turnpike and its assets, which will result in increased tolls, tax raises for Ohioans, and job loss across the state."

The proposal, which would require state legislative approval, would not raise tolls for passenger cars using the electronic pass for 10 years. Regular tolls would be capped at the rate of inflation. No turnpike layoffs are planned, and Mr. Kasich is to announce that rehabilitation of the turnpike would move at a faster pace.