Sunday, October 17, 1999
Issue 1 could save state money
Borrowing for schools would change
BY MICHAEL HAWTHORNE
Enquirer Columbus Bureau
COLUMBUS — State leaders are asking voters again for authority to borrow money for school construction, only this time they ditched a companion sales tax increase that doomed both ideas last year.
Issue 1 on the Nov. 2 ballot would amend the Ohio Constitution to allow the state to issue low-interest bonds for construction projects at public schools and universities, up to an amount equal to 5 percent of the state budget.
If voters approve, the state could save $979,000 in interest costs for every $1 billion in bonds issued, according to the nonpartisan Legislative Budget Office.
“Think of it like refinancing your home,” said Gov. Bob Taft, leader of a bipartisan, pro-Issue 1 group called the Building to Learn Committee. “You're not borrowing more money, you're just borrowing it at a lower rate of interest.”
Known as general obligation bonds, the proposed method of borrowing costs less because it's backed by the full faith and credit of the state. That feature makes the bonds more attractive to underwriters.
State leaders say the savings would be used to finance more school improvements.
Even though lawmakers have earmarked nearly $2 billion to refurbish school buildings during the past eight years, a 1996 federal study found that Ohio had the worst school facilities of the 50 states.
Mr. Taft said Issue 1 is a key part of his plan to spend $23 billion during the next 12 years repairing and replacing school buildings across the state, many of which were built around the turn of the century.
Under the governor's plan, the state would put up $10 billion if local school districts raised $13 billion.
State lawmakers put the proposed amendment on the ballot last year in response to an Ohio Supreme Court decision that declared the state's school-funding system inadequate and unconstitutional.
Among other things, the 4-3 decision decried the abys mal condition of some buildings and ordered lawmakers to better finance construction and repair needs.
Political leaders think the amendment failed last year because it was paired with a more controversial proposal that would have raised the state sales tax by a penny on the dollar.
“If you are for better schools and against higher taxes, then you should be for Issue 1,” said Mark Weaver, a veteran Republican strategist who is helping organize the pro-initiative campaign.
Both David Leland, chairman of the Ohio Democratic Party, and Bob Bennett, chair man of the Ohio Republican Party, have endorsed the initiative.
The only announced opposition is from the National Taxpayers Union of Ohio, an anti-tax group that supported the proposal last year.
Scott Pullins, the group's executive director, now likens the proposal to giving the state a credit card without a limit. He thinks the state should privatize prisons and other assets before going deeper into debt.
Business, education and labor interests are raising money to fund a $250,000 television advertising campaign, Mr. Weaver said. The ads will run the week before the election.
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