COLUMBUS — The Republican-controlled Legislature appears poised to pass Gov. Ted Strickland’s plan for using Ohio’s tobacco settlement money to pay for the construction of new schools and create tax relief for elderly homeowners.
However, some senators have said they’d rather see the expected $5 billion go toward higher education, while others are concerned about how the Democratic governor’s plan would be administered.
Collecting the settlement in 40 years of installments would net the state an estimated $18 billion. But a lump sum payout through a process called securitization — where the state would sell the right to its future settlement payments to investors in return for an immediate influx of cash — would allow Ohio to speed up planned school construction.
Ohio would be the 19th state to take a lump sum; California, New York and Michigan are among those that have already used payments to plug budget holes.
Strickland would use the annual savings from not having to borrow money for the school projects to expand property tax cuts. Homeowners who are 65 or older or permanently disabled would benefit from the tax cuts.
Republican House Speaker Jon Husted of Dayton and others have called for setting income limits on the tax break so that wealthy homeowners don’t qualify. But House Republicans did not alter Strickland’s tobacco plan before passing the budget unanimously in April.