Lawmakers may cancel $600M in capital funds

Money had been set for colleges, cities for capital improvements.

— The Ohio House is considering raking back $600 million promised to colleges, universities, local communities and some state agencies for capital improvement projects while state senators are looking at giving the green light to $1.3 billion in previously appropriated money.

The state constitution prohibits appropriations extending beyond two years but since capital improvement projects often take several years to complete, lawmakers have to reauthorize agencies and communities to keep using the funds. The state has the option of repurposing or canceling unused capital appropriations. The state appropriated $2.6 billion in the last two-year state capital budget but roughly $1.3 billion has yet to be spent.

Normally, a reappropriations bill is a routine matter. But uncertainty over the state’s fiscal future led House leaders to call for every capital projected to be justified, said state Rep. Derek Merrin, R-Monclova, who is sponsoring House Bill 670.

Merrin’s bill eliminates capital reappropriations for Wright State University, Sinclair Community College, Miami University and other public colleges; local cultural projects such as the Dayton Arcade, Dayton Art Institute, and YWCA Dayton; state parks; veterans services; and other state agencies.

Senate Bill 316, sponsored by state Sen. Matt Dolan, R-Chagrin Falls, includes reappropriations for colleges and universities, community projects, state parks, state agencies and others.

SB316 calls for reappropriating all the capital funds that haven’t yet been spent — $1.3 billion.

HB670 calls for reappropriating $698 million but canceling $600 million.

The two chambers need to agree on a bill by June 30 when the state fiscal year ends.

Merrin said Ohioans are goingthrough unprecedented times and lawmakers need to reexamine funding priorities. The reappropriations doesn’t impact the current operating budget but does influence future budgets since the funding comes from bond issues that must be repaid with interest in future years, he said.

Annual debt service payments may be reduced about $10 million but Ohio would be canceling $600 million in projects that are already underway, Dolan said.

“It ’ s bonded mon ey already encumbered. We are already paying the debt service and it’s paid out over 23 years. What we risk if we don’t reappropriate the entire amount is all the economic activity that these jobs would create,” Dolan said.

The Houseand Senate will also each need enough votes for an emergency clause so the bill takes effect right away, rather than 90 days after the governor signs it.

Senate President Larry Obhof, R-Medina, said he will call state senators back into work over the summer to deal with budget matters and other urgent issues.

Earlier this month, Gov. Mike DeWine ordered $775 million in spending cuts to balance the current fiscal year operating budget by June 30. Obhof predicted that lawmakers would have to pass a budget correction bill to balance the upcoming state fiscal year that starts July 1.

“We have a multi-billion dollar gap. It’s very, very large,” Obhof said.