COLUMBUS, Ohio—Ohio Senate Republicans are rejecting plans to issue $600 million in state bonds to help pay for a new Cleveland Browns stadium in suburban Brook Park.
Instead, the Senate GOP’s initial state budget plan, unveiled Tuesday, would get the money from a very different source: raiding the state’s $4.8 billion unclaimed property fund.
Under the plan, which is still a long way from becoming law, $1.7 billion would be taken from the fund to create a state Sports and Culture Facility Fund, according to Senate Finance Committee Chair Jerry Cirino, a Lake County Republican.
Of that, $600 million would be used to help cover the estimated $2.4 billion cost to build a new, covered Browns stadium in Brook Park, according to Cirino. The remaining $1.1 billion would be used for other stadium projects, he said, one of which will likely be proposed upgrades to Paycor Stadium, home of the Cincinnati Bengals.
The $600 million to the Browns would be repaid over 16 years with state tax revenue generated from the stadium and a proposed$1 billion mixed-use development surrounding it, Cirino said. As the state would charge interest tied to the inflation rate, he said, an estimated total of $636 million in stadium tax money would end up being diverted to repay the unclaimed property fund.
To address concerns over whether the Browns’ stadium project can generate enough in taxes fast enough to pay off the bonds, the Senate GOP plan – like the bond plan passed by the Ohio House in April – would require team owners Jimmy and Dee Haslam to put $50 million into an escrow account that could be tapped into if there’s not enough tax revenue to cover the bond payments, Cirino said.
But, unlike the House plan, the Senate’s proposal would require the Haslams to provide an additional $50 million if their initial $50 million runs out. “That gives us more security,” Cirino said.
The state would assess every four years whether the tax revenue is sufficient to repay the unclaimed property fund, or whether the escrow fund needs to be dipped into, according to a Senate GOP press release.
Since the Browns first approached Gov. Mike DeWine and Ohio lawmakers more than a year ago to request the $600 million toward a new stadium, the debate among most Republican lawmakers – who dominate both the Ohio House and Senate – hasn’t been about whether to provide the money, but rather how to pay for it.
DeWine, a Republican, has calledfor doubling the state’s tax on sports-betting companies to fund stadium projects for the Browns and other pro sports teams in Ohio. The governor has argued that the state needs a permanent source of funding for stadium projects, rather than having teams lobby state lawmakers for money out of the state’s general-revenue fund.
However, the Ohio House unceremoniously dumped DeWine’s plan in favor of a proposal put forward by the Browns for the state to issue $600 million in bonds. Like with the Senate’s new plan, the bonds would be repaid over time with state tax revenue from the stadium development.
Cirino, in an interview, said the Senate looked at both of those plans “and said, ‘there’s got to be a better way.’”
By getting the $600 million from the state’s unclaimed property fund, Cirino said, lawmakers can back a major economic-development project without having to pay an estimated $400 million in interest on the bonds.
“I think it’s very creative,” he said. “This is money that is sitting idle, and we’d like to put it to work.”
Ohio’s Unclaimed Property Fund is composed of money that has been sent in by financial institutions and other businesses after no one has claimed them for three to five years. It includes money from inactive bank accounts, old safe deposit boxes, and uncashed checks and insurance policies, among other things.
The public can find if there are any unclaimed funds in their name by visiting unclaimedfunds.ohio.gov.
The Senate GOP press release asserted that the state’s unclaimed funds program will remain solvent even with the $1.7 billion withdrawal and will still be able to pay out money to people who file a claim for missing money until 2036.
The Senate budget plan would also set aside an additional $1 million to help Ohioans locate and receive unclaimed funds in their name, the release stated.
Cirino said both the Browns and the National Football League – whose commissioner, Roger Goodell, was recently in Columbus to lobby DeWine and legislative leaders for state help for a new Browns stadium – have given their blessing for the Senate’s plan.
The Plain Dealer/cleveland.com has reached out to spokespeople for the Browns and DeWine for comment on the Senate’s plan.
It remains to be seen whether the House, as well as DeWine, will also endorse the idea, one of a number of major changes the Senate made Tuesday to the state’s enormous two-year budget bill.
The Browns stadium funding plan is just one of several major policy changes proposed by Senate Republicans. Their $60 billion, two-year budget plan would also slash state income taxes for wealthier Ohioans, cut state Medicaid funding, and alter the state’s funding formula for K-12 schools, among other things.
The Senate is expected to make further revisions before passing their final budget plan later this month. A House-Senate conference committee, made up of a handful of lawmakers from each chamber, will likely then meet behind closed doors at the very end of the budget process to hammer out a final plan by June 30.
The budget would then be sent to DeWine, who has the power to veto individual parts of the budget that he doesn’t like. Lawmakers could override such line-item vetoes, but only with the support of at least 60% of each chamber.