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07/08/2011

Budget bill gives legislature approval authority over possible Turnpike lease

Both houses of the Ohio General Assembly will have to give their permission before the state can proceed with any plan to lease the Ohio Turnpike to a private operator.

The $55.7 billion, two-year state budget bill signed by Governor John Kasich Thursday requires that both the Ohio House of Representatives and the Senate approve a concurrent resolution before the state could invite private operators to submit proposals for a long-term lease of the 241-mile toll road that crosses northern Ohio.

If the two houses were to approve an invitation for submission of qualifications or proposals, the director of the Office of Budget & Management would evaluate competing proposals using a  QBS-type evaluation and selection procedure, then negotiate a lease agreement with the highest-rated proposer.

Any contract negotiated by the OBM director would be limited to no more than 75 years and would include limits on turnpike tolls, standards for maintenance of the turnpike, compensation to be paid by the lessee, and procedures for termination of the contract and retaking possession of the turnpike in the event of a default by the lessee.

The budget bill language also specifies that all revenue received from the lease of the turnpike will be deposited into a new "highway services fund."

At a press conference Friday, Kasich reiterated his argument that leasing the turnpike could potentially be a financial boon for the state.

"We can get a big chunk of money that can be used to improve our infrastructure in the state," he said.

He pointed to the experience in Indiana, which five years ago leased its turnpike to foreign investors for $3.8 billion, much of which the state has spent on highway projects.  It also established a $500 million investment fund for future road construction.

Despite the governor's strong support, legislators from northern Ohio, both Republicans and Democrats, have expressed reservations about turning the turnpike over to a private operator, fearing the result would be higher tolls that would force traffic onto adjacent roads and highways.

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