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03/24/2011

Transportation budget bill on its way to Governor's desk

Public-Private Partnerships, design/build stipends back in bill

A $7 billion, two-year state transportation budget bill awaits the signature of Governor John Kasich after the Ohio Senate approved the bill Wednesday and the House of Representatives concurred in the Senate's amendments.

The bill won unanimous approval in the Senate, while the House approved it by a 56-38 margin. Most House Democrats voted against the bill on concurrance due to changes made by the Senate in the measure that originally pased the House March 10.

Kasich commended the General Assembly for including in the final bill his proposal to allow the Ohio Department of Transportation to develop transportation projects using so-called "Public-Private Partnerships."

“Knowing that a modern and efficient transportation system is critical to creating jobs and reviving Ohio’s economy, Governor Kasich applauds the legislature for its work on the transportation bill,” spokesman Rob Nichols said.

“New construction requires access to capital, and through the bill’s Public-Private Partnerships, Ohio can partner with the private sector to leverage the funding necessary to improve our infrastructure to help Ohio’s businesses compete and grow.”

Sen. Tom Patton (R-Strongsville), chairman of the Senate Highways & Transportation Committee, said the bill would provide funding to preserve thousands of jobs for highway construction. “You’re voting on one of the largest jobs bills you’ll ever have the opportunity to vote on.”

The Senate restored Kasich's plan to authorize ODOT to use PPPs after the House knocked it out of the original version of the legislation due to the concerns of some Democrats about the possible use of eminent domain to take property for economic development projects.

Patton said the Senate had tightened up the eminent domian language, adding, "This bill is iron clad as it relates to the eminent domain issue.”

Over in the House, some Democrats didn’t agree.  Rep. John Carney (D-Columbus) said Senate changes to require ODOT to consider local planning needs when entering PPPs were insufficient.

Rep. Ron Amstutz (R-Wooster), chairman of the House Finance & Appropriations Committee, said he was comfortable that Senate’s decision to strictly limit PPP’s eminent domain authority to transportation purposes would prevent its use for economic development.

Senate Minority Leader Capri Cafaro (D-Hubbard) voiced support for inclusion of the PPP provision as a way to generate funding for construction projects at a time that gas tax revenues and federal assistance is dwindling.

“We have no choice but to authorize ODOT to enter public-private partnerships,” she said. “If ODOT can’t engage in public-private partnerships and be able to toll, we simply will not be able to meet our demands to provide for major new construction.”

Also included in the final bill is language giving ODOT permanent authority to use a "value-based selection process" in awarding design/build construction contracts.  This process, also known in the industry as a "two-step" process, allows ODOT to consider both the technical qualifications of teams submitting design/build proposals, as well as their construction bids.

The department also is authorized to pay stipends to up to two teams that submit unsuccessful proposals on design/build projects.  That provision also was reinstated by the Senate after having been deleted from the bill originally pased by the House.

One Kasich Administration proposal rejected in the House – a $10 increase in motor vehicle title fees to support the Ohio Highway Patrol – didn't find it's way back into the Senate bill.

Instead, the Senate left unaltered the House’s proposal to divert $49 million in International Registration Plan revenue away from highway construction to fund the Patrol.

The budget bill, which takes effect July 1, is funded primarily through gas tax revenue, bonds, and federal funding.  It appropriates $2.7 billion for the Department of Transportation in fiscal year 2012 and $2.8 billion in FY 2012. It also allocates $655 million in FY 2011 for the Department of Public Safety and $650 million in FY 2012.

Download HB 114 or the Legislative Service Commission analysis of the legislation.


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