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The Ohio Public Facilities Commission (OPFC) issues general obligation bonds for common schools, higher education, natural resources, coal research and development, conservation projects, local infrastructure improvements, Third Frontier research and development, job-ready site development, and veterans' compensation. Each of these currently authorized programs is described below.
Coal Research and Development - A 1985 constitutional amendment authorizes $100 million of general obligation debt to be issued to finance grants, loans, or loan guarantees for research, development, and implementation of coal technology that will encourage the use of Ohio coal. Funding is available to any individual, association, or corporation doing business, or to any educational or scientific institution located in the state. Additional debt may be issued as outstanding debt is retired, provided that not more than $100 million is outstanding at any time.
Common Schools - A 1999 constitutional amendment authorizes general obligation debt to be issued to pay the costs of school buildings and related capital facilities for a system of common schools throughout the state. There is no constitutional limit on the amount of debt that can be outstanding at any time. The full faith and credit, revenue (including net state lottery proceeds, if pledged) and taxing power (excluding highway user receipts) of the state are pledged to retire this debt.
Conservation - Constitutional amendments in 2008 and 2000 authorize $400 million of general obligation debt to be issued to finance preservation of green space and natural areas, development of recreational trails, and protection of farmland through the purchase of agricultural easements, all through partnerships with local governments. Not more than $50 million may be issued in any fiscal year. Additional debt may be issued as outstanding debt is retired, provided that not more than $400 million is outstanding at any time.
Higher Education - A 1999 constitutional amendment authorizes general obligation debt to be issued to pay the cost of school buildings and related capital facilities for state-supported and state-assisted institutions of higher education. There is no constitutional limit on the amount of debt that can be outstanding at any time.
Infrastructure Improvements - A 2014 constitutional amendment authorized $1.875 billion of general obligation debt as a 10-year extension of this program to finance public infrastructure capital improvements of municipal corporations, counties, townships, and other local government entities as designated by law, with an annual issuance limit of $175 million in the first five years increasing to $200 million in the second five-years. This extension followed a prior 10-year extension passed in 2005 which authorized an additional $1.35 billion of general obligation debt. Additionally, there were two prior debt authorizations for this purpose (passed in 1985 and 1995) that each authorized $1.2 billion in debt.
Natural Resources - A 1993 constitutional amendment authorizes $200 million of general obligation debt to be issued to finance capital facilities for parks and natural resources improvements. Additional debt may be issued as outstanding debt is retired, provided that no more than $200 million is outstanding at any time. Not more than $50 million may be issued in any fiscal year. The full faith and credit, revenue (excluding net state lottery proceeds), and taxing power (excluding highway user receipts) of the state are pledged to retire this debt.
Site Development - A 2005 constitutional amendment authorizes the issuance of $150 million of general obligation debt for the development of sites for industry, commerce, distribution, and research and development by preparing those sites for immediate development by business prospects. Not more than $30 million was permitted to be issued in each of the first three fiscal years and not more than $15 million in any other fiscal year.
Third Frontier Research and Development - Constitutional amendments in 2010 and 2005 authorize the issuance of $1.2 billion of general obligation debt to provide grants to nonprofit and for-profit entities for research and development projects in support of Ohio industry, commerce and business. Project awards focus on biosciences, advanced materials, information technology, power and propulsion, and instruments-controls-electronics. No more than $450 million total may be issued in state fiscal years 2006 through 2011, no more than $225 million in fiscal year 2012 and no more than $175 million in any fiscal year thereafter.
Veterans' Compensation - A 2009 constitutional amendment authorizes the issuance of state general obligation debt to provide compensation to persons who have served in active duty in the United States armed forces at any time during the Persian Gulf, Afghanistan, and Iraq conflicts. Not more than $200 million may be issued and no obligations may be issued later than December 31, 2013.
Moody's Investors Service Friday lifted Ohio's issuer default and general obligation ratings to triple-A based on strong nancial management and an economy that's "poised for diversi cation and growth."
The state now boasts the coveted top issuer rating from Moody's and Fitch Ratings, which upgraded it in September, 2022. S&P Global Ratings pegs the state one notch below the top mark at AA-plus
with a stable outlook.
Moody's upgrade re ects Ohio's "sound budgetary and nancial management, highlighted by a trend of strong and growing reserves and liquidity, and affordable xed costs associated with Ohio's low and declining leverage," the agency said in the upgrade report.
Though the state's economic and demographic trends have typically lagged the nation and "that will not change rapidly," Moody's predicted that "recent major investments related to electric vehicles and microchips will drive growth in high paying manufacturing jobs."
Moody's last rated Ohio with its highest credit rating in 1979, according to the state.
Republican Gov. Mike DeWine called the upgrade "strong external validation that our strategy is delivering results for Ohio. I am proud that our record shows we are the best state to live, grow or start a business, and raise a family."
The upgrade affects $6.7 billion of Moody's-rated GO bonds, which includes $864 million of highway capital improvement bonds that feature a GO pledge. The ratings agency also upgraded $2.9 billion of outstanding lease appropriation bonds and certi cates of participation to Aa1 from Aa2.
Moody's lifted several other state-related credits, including $879 million of Garvee bonds issued by the Ohio Department of Transportation.
"Our finances are stronger than at any time in history, our economy is surging ahead, and our budget is focused on ensuring that all corners of Ohio grow," said Ohio Of ce of Budget and Management Director Kimberly Murnieks in a statement. "We have reduced taxes and invested in results, and our priorities will continue to provide unlimited opportunities for Ohioans."
The upgrade makes Ohio the 17th state that's rated triple-A by Moody's.
Moody’s Investors Service last rated Ohio with its highest credit rating in 1979.
(COLUMBUS, Ohio)— Ohio Governor Mike DeWine, Lt. Governor Jon Husted, and Ohio Office of Budget and Management (OBM) Director Kimberly Murnieks announced today that the credit rating agency Moody’s Investors Service upgraded Ohio’s Issuer Rating to “Aaa” from “Aa1” citing a “continuing trend of very strong financial management, improving reserves and liquidity, low and declining leverage and a state economy that is poised for diversification and growth.”
"Moody’s decision to upgrade Ohio's rating to 'Aaa' is strong external validation that our strategy is delivering results for Ohio," said Governor DeWine. "Ohio is the heart of it all, and I am proud that our record shows we are the best state to live, grow or start a business, and raise a family."
"Ohio’s economy and the state's financial footing are both stronger than ever before and we will keep building on our winning record into the future," said Lt. Governor Husted. "This is the most success that Ohio has achieved in decades and our progress is built on careful, intentional planning that is paying off. This upgrade from Moody’s is more proof that our state is fiscally strong and expertly managed.”
“Under Governor DeWine’s leadership, Ohio continues to build on our record of success," said Director Murnieks. "Our finances are stronger than at any time in history, our economy is surging ahead, and our budget is focused on ensuring that all corners of Ohio grow. We have reduced taxes and invested in results, and our priorities will continue to provide unlimited opportunities for Ohioans – today and for generations in the future.”
Ohio’s “Aaa” long-term Issuer Rating reflects a trend of positive demographics that Moody’s expects “to continue as the announced economic development projects come online over the medium term. The outlook also incorporates the state’s strong financial position, including its purposeful efforts to build reserves and budget conservatively that will support Ohio’s strong credit quality going forward.
The Moody’s “Aaa” credit upgrade comes one year after the organization elevated Ohio’s credit outlook to positive and Fitch Ratings upgraded the State Issuer Default Rating to “AAA.”
Ohio’s “Aaa” rating upgrade comes in connection with the State’s planned issuance of approximately $393 million in General Obligation Refunding Bonds expected to price the week of December 12.
Simultaneously with the change to the State’s issuer rating, Moody’s upgraded the general obligation bonds including the GO highway program to “Aaa” from “Aa1”, lease appropriation debt and certificates of participation (COPs) to “Aa1” from “Aa2”, the Ohio Community and Technical College Credit Enhancement and Ohio School District Credit Enhancement programs to “Aa1” from “Aa2”; and the rating on the Ohio Department of Transportation (ODOT) Federal Grant Anticipation Program's outstanding Major New State Infrastructure Project bonds, also known as GARVEE bonds.