Ohio highway projects get boost from bonds, logo sales
COLUMBUS (AP) — Partnering with private businesses, offering sponsorships along highways and selling $1 billion in Ohio Turnpike bonds are among ways Gov. John Kasich’s administration has worked to boost transportation revenue amid lagging federal outlays.
Government data reviewed by The Associated Press show Ohio’s spending from the federal highway trust fund fell nearly 8 percent from 2008 to 2013. The downward trend is widespread among states.
Michael Leachman, director of state fiscal research at the nonpartisan Center on Budget and Policy Priorities, said both federal and state gas taxes are producing less revenue due to a combination of factors, including Americans driving more fuel-efficient vehicles and the tax not being adjusted for inflation for decades.
“States are in a pickle,” Leachman said. “They’re not dealing with this in Congress, so states are having to figure out how they’re going to deal with it as best they can themselves.”
Last year, Ohio launched the largest single roadway construction project in its modern history — the $429 million Portsmouth bypass — under the Ohio Department of Transportation’s first-ever public-private partnership. The department has said the unique business arrangement is allowing it to take advantage of current economic conditions and accelerate the project by decades. The private partners receive government payments to perform the work and to oversee all maintenance besides snow and ice removal on the bypass for the 35 years after it’s built.
In the same vein, the Republican governor’s administration sought and received authority to sell $1.5 billion in Ohio Turnpike bonds in 2013 to fund highway projects in northeast Ohio and on the 241-mile toll road itself. So far, $1 billion in bonds have been sold, with about $930 million going to regional road and highway projects and about $70 million going to the Turnpike.
The state opted against selling naming rights along the turnpike — say, to sports teams — after negative public feedback. But it has let companies promote themselves by putting their names on road signs, trucker lounges, snow plows and pet-walking areas.
Leachman said such programs are inventive but the cash they generate isn’t significant. The $850,000 a year in logo fees “would pay for about 3 feet of roadway,” he said.
“The financing problems are severe and so these kind of ticky-tacky things can help, but they’re not going to solve the problem,” he said.
Still, State Farm Insurance has purchased rights along Ohio’s major interstates to display its logo on a fleet of highway assistance vehicles in a program the state and the company say is mutually beneficial. State Farm is paying Ohio $850,000 a year over the next four years, with an option to extend to 10 years.
The freeway service patrol program helps stranded motorists with flat tires, dead batteries or empty gas tanks and responds to accidents from 6 a.m. to 7 p.m. weekdays on major interstates in Cincinnati, Toledo, Cleveland, Columbus, Akron/Canton, Dayton and northern Kentucky, said ODOT spokeswoman Melissa Ayers.
State Farm spokeswoman Angie Rinock said Ohio is the 12th state where the insurance company has participated in such a program.
It aligns perfectly with what we do,” Rinock aid. “It goes right back to our mission, which is to keep people safe.” She said there has been virtually no pushback about increased commercialization from the public, as has sometimes been the case with the branding of stadiums and concert venues.
A separate logo program that allows hotels, gas stations and restaurants to advertise along state roadways has brought in $2.8 million to $7.6 million a year since 2009, state figures show.
In another effort to stretch state dollars, Ohio signed an agreement in 2012 with the private firm, Management Consulting Inc., or ManCon, to manage its vehicle and equipment parts. The arrangement is projected to save the state about $5.6 million over the life of the three-year contract, Ayers said.