Gov. John Kasich will not try to lease the Ohio Turnpike to a private entity and instead try to generate cash for state infrastructure projects while keeping the 241-mile toll road as a public asset, according to several lawmakers briefed on the administration's plans.
Gov. John Kasich will not try to lease the Ohio Turnpike to a private entity and instead try to generate cash for state infrastructure projects while keeping the 241-mile toll road as a public asset, according to several lawmakers briefed on the administration’s plans.
The state could leverage the turnpike by issuing new debt against it or redirecting toll revenue toward projects away from the turnpike. Kasich would need a change in state law to spend turnpike revenue more than 1 mile away from the toll road.
Legislators who spoke on the condition they not be named said the administration seems to be steering away from a private lease of the turnpike. Kasich has been hinting at a possible lease for much of his two years in office — a move that would likely be the most vexing political hurdle for him to leverage the turnpike.
“If they come out Thursday and say the turnpike will go to company ABC, then there was a lot of deception to us as well,” said one legislator who did not want to be named discussing Kasich’s intentions before the governor makes his announcement this week. “The turnpike’s going to be a state entity.”
Kasich’s office has not formally briefed either legislative chamber on its plans for the turnpike, but some “stakeholders” have been notified of what the Republican governor intends to do. Kasich, who is scheduled to unveil his plans in a two-day multicity tour beginning Thursday, said he expected word of his plans to leak early.
Lawmakers who spoke with The Dispatch said they expect the Department of Transportation to become heavily involved in the daily operation of the turnpike, which has been operated by the independent Ohio Turnpike Commission for all of its 57-year history.
Rob Nichols, a spokesman for Kasich, would only say yesterday that “the KPMG study and our plans will be made public on Thursday,” referring to Texas-based consultant KPMG’s $3.4 mil-lion study of options to leverage the turnpike, conducted on the administration’s behalf.
House Speaker William G. Batchelder, R-Medina, said the governor has done tremendous research on the turnpike.
“I think people will be surprised by some of the proponents,” he said. “I think there will be people from that part of the state who will be favorably disposed toward the governor’s proposal."
Many details relating to Kasich’s plans remain unknown to lawmakers, such as what happens to the turnpike commission, whether new debt will be issued and how turnpike revenue will be divided between projects in the northern and southern portions of the state.
Kasich said two months ago he was looking to free “more than $1 billion, and that’s a low-ball figure” by leveraging the turnpike. Should the state issue new debt, the bonds would have to cover the approximately $566 million the turnpike currently has in outstanding debt.
In October, an ODOT official said billions of dollars in revenue could be generated simply by raising tolls at the rate of inflation. Officials say the state is short $1.6 billion for needed infrastructure, with 23 major projects delayed as much as 13 years.
Even without a private lease, Kasich would still have some selling to do this week in terms of persuading those who live near the turnpike to support siphoning some of its revenue for projects elsewhere in Ohio. But handing control of turnpike revenue, personnel decisions, toll rates and road maintenance to a private entity is an unpopular option.
“I was never supportive of a traditional lease,” said state Rep. Randy Gardner, R-Bowling Green, who has not been briefed on Kasich’s plans. “Most legislators up here have not been supportive of that. It would be good news if the administration is striving to find important revenue for infrastructure and maintain clear state involvement in the turnpike.”
A lease would require the legislature’s approval.
“My view is it would be too politically painful for us to do it,” said state Rep. Lynn Wachtmann, R-Napoleon, in an interview discussing a turnpike lease last week. “Across northern Ohio, for various reasons, people love and are endeared to the turnpike. For us to take that on was more than we wanted to chew.”
Dispatch reporter Jim Siegel contributed to this story.