Ohio Gains will enable us to invest more state tax dollars right here in Ohio, and I’m proud to work with Rep. Andrea White (R-Kettering) as a primary sponsor to advance the legislation. The first three reforms focus directly on supporting our agriculture community, hospitals, and public universities.
For more than thirty years, the Ag-LINK program has supported farmers and agribusinesses by providing interest rate reductions on operating loans for feed, seed, fertilizer, fuel, and other expenses. However, government red tape has prevented Ag-LINK from keeping pace with the changing needs of the agriculture community. Currently, Ag-LINK loans are capped at $150,000, but when you’re purchasing equipment or preparing for the growing season, that won’t get you too far.
Ohio Gains removes the outdated programmatic caps and would make larger loans eligible. The proposal will also make agricultural cooperatives eligible borrowers, further recognizing their contributions to Ohio’s economy. Modernizing the Ag-LINK program will better serve borrowers and facilitate access to capital for Ohio’s ag industry when it’s needed most.
Our second proposal under Ohio Gains will benefit the state’s large hospital systems – specifically those that use a borrowing tool which requires an entity to act as a “buyer of last resort,” agreeing to purchase the debt if the market yields no other buyers. While large Wall Street banks usually serve in this capacity, the Treasury can leverage its strong liquidity position to fill this role for Ohio’s hospital systems, lowering their borrowing costs.
The Treasurer’s office has extensive experience with these debt instruments, and last year we entered such a partnership with the Cleveland Clinic. We’ve witnessed the benefits first-hand, and we’re eager to offer this cost-savings opportunity to more of Ohio’s hospital systems.
Finally, like other institutions, Ohio’s public universities often issue debt to finance large capital projects. Under current law, the Treasury can invest in the debt of our public universities. Ohio Gains will enable Ohio’s public four-year institutions to leverage their State Share of Instruction when debt is issued exclusively to the Ohio Treasury.
This change will automatically enhance a participating university’s credit and lower their interest costs. The proposal maximizes the value of these state funds like never before by providing a unique cost-savings mechanism while generating a meaningful return on the Treasury’s investment.
With Ohio Gains, we have an opportunity to be bold and modernize investment strategies while building a strong foundation for the years ahead. The savings we generate for Ohio’s agriculture community, hospital systems, and universities would allow them to focus more on their businesses, patients, and students – and that’s an investment worth making.
Robert Sprague is the Ohio Treasurer.
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