The Ohio School Facilities Commission (OSFC) notified 57 school districts, including Pickerington, that they are on track for state money for new buildings.
Governor Ted Strickland and the Ohio Legislature made the funding possible by the "securitization" of Ohio’s tobacco settlement money.
In 1988, 46 states including Ohio, received money from big tobacco companies as a result of the Master Settlement Agreement. Ohio accepted $18 billion in the form of 40-year bonds backed by the tobacco industry. Strickland and the legislature recently sold the bonds for a $5 billion lump sum.
"Under the terms of tobacco securitization, we will be able to finance $4.1 billion in new construction projects over the next three years. This is a tremendous opportunity for communities to address their school facilities needs. Our children will have access to the educational enhancements of new and renovated buildings much more quickly," OSFC Executive Director Michael Shoemaker said.
The OSFC, the agency that oversees the construction of public schools, received the majority of the securitization money. Currently, OSFC is assisting Pickerington Local Schools with building three new schools financed through a $59.9 million bond issue approved by voters last November.
Details regarding Pickerington’s share of the tobacco money will come this fall, Immediate Past Superintendent Dr. Robert Thiede said. Thiede "guesstimates" the district will receive $90 million.
Pickerington Schools and OSFC have a 10-year master plan to meet the needs of the growing district, including separate freshman facilities for both high schools, a new junior high, a middle school and a new elementary. The board will discuss a bond issue in 2009 once the state’s contribution has been confirmed. With the state providing "a major amount of money, a future bond issue would be very limited," Thiede said.
The OSFC selects school districts to fund based on financial need. Of 612 public school districts in Ohio, Pickerington ranked 294 in funding for 2007.
The districts notified this week are in addition to 44 districts offered funding in May.
Other states such as California and Virginia have preceded Ohio in "securitization" of their bonds. Many fear that the big tobacco companies lack the stability to pay the states for 40 years.
The remainder of the $5 billion "securitization" will provide a $25,000 Homestead Shield to all Ohio citizens 65 and older regardless of income. Residents certified permanently disabled and some widows and widowers are also eligible. To receive the tax shield, qualified individuals must apply with their county auditor by Oct. 1 or visit www.tax.ohio.gov. A person who qualified for the Homestead Exemption in prior years need not reapply.
The Strickland administration reasoned that expanding the Homestead Shield to protect more people from local taxes would enable school districts to pass more bonds and levies.
After the "securitization" money is spent in three years, the OSFC will receive most of its financing from the state’s general revenue fund as it did before receiving the new tobacco money. It is unclear how the Homestead Exemption will continue to be supported.
Originally a portion of the tobacco settlement money had been allotted to the Ohio Tobacco Prevention Foundation. Since the "securitization," OTPF lost its funding source.
