COLUMBUS – State Representative DJ Swearingen (R-Huron) and State Representative Andrea White (R-Kettering) today announced the introduction of the Ohio Gains initiative along with Ohio State Treasurer Robert Sprague.
“I am proud to partner with Treasurer Sprague and Representative White to carry this legislation and advance the Ohio Gains initiative. Through this effort, we are working to securely invest more of our treasury dollars in Ohio’s farms, hospitals, and public universities. Investing in Ohio-based businesses and institutions is a common-sense step in building a stronger Ohio,” said Representative Swearingen
"Ohioans expect their tax dollars to be invested wisely, with strong financial controls and the Ohio Gains initiative aims to achieve just that, said Representative White. “Representative Swearingen and I are carrying this legislation in partnership with Treasurer Sprague to keep more of Ohio’s investment dollars working for Ohioans – generating higher investment returns while lowering the borrowing costs for our farmers, hospitals, and universities.”
This legislation focuses on three proposed reforms. First, it enhances the Ag-LINK deposit program supporting our farming community. The Ohio Treasurer’s Office has been administering the Ag-Link deposit program for decades. It has provided our farmers with interest rate reductions on new or existing loans. However, Ohio law currently restricts the amount of each loan to $150,000 per year. Unfortunately, this keeps many from participating. This legislation will eliminate Ag-LINK’s current program caps, ensuring the agriculture community can access lower-cost capital when they need it most. In addition, agricultural co-ops which provide valuable contributions to Ohio’s economy will now be eligible for the program.
Second, this legislation will help hospitals throughout Ohio save money. Many of Ohio’s largest institutions, including major hospital systems utilize a specific borrowing tool called a Variable Rate Demand Obligation (VRDO). VRDO debt issuance requires a separate entity to agree to purchase the debt if the market yields no investors by; therefore, serving as a “buyer of last resort.” Typically, banks serve in this capacity. However, the Ohio Treasury can step into this role by leveraging its strong liquidity position. This will help Ohio’s hospital systems lower their overall borrowing costs. The proposed bill will allow more Ohio hospital systems and other large entities that utilize VRDO’s to take advantage of this cost-saving opportunity through the Treasurer’s Office.
Third, the Ohio Gains initiative will work to reduce borrowing costs for public universities. Currently, the debt of State Universities in Ohio is viewed as a legitimate investment of the Treasury. The credit rating of our public four-year institutions would automatically be enhanced if they were permitted to leverage their State Share of Instruction (SSI) only when issuing debt to the Treasury. This provides a much more attractive and secure investment for the State of Ohio. This reform aims to maximize the value of state dollars invested in our universities like never before. It will provide a unique cost-saving program for our four-year universities while also generating returns on the investments of the treasury.
The legislation awaits a bill number and referral to an Ohio House Committee for its first hearing.