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At the June 4, 2015 meeting of the Ohio Constitutional Modernization Commission’s Finance,  Taxation,  and  Economic  Development  Committee Chair Douglas Cole suggested three ways the Committee might approach recommendations for Article VIII (Public Debt and Public Works). Per a OCMC news release Finance, Taxation, and Economic Development Committee Tackle State Debt:

Cole suggested that the committee could make no changes; keep the general framework of the article and get rid of obsolete provisions; or make changes based on the March 12, 2015 testimony from Seth Metcalf, Deputy Treasurer and General Counsel, Ohio Treasurer of State, who suggested the debt be raised from $750,000 and that Ohio retain the Sinking Fund (a means by which the state sets aside money over time to retire its debt).

The testimony of Seth Metcalf referred to above can be viewed here.  Deputy Treasurer Metcalf summarizes the problems with Article VIII as follows:

Article VIII has two fundamental defects. The first is the $750,000 debt limitation that has existed since its birth. Section 1 of Article VIII permits Ohio to contract debts, but it expressly limits the amount of this debt to a total of $750,000. To provide some context, in 1851, the state’s general revenue expenditures totaled approximately $1.64 million.  For comparison’s sake, in 2014, Ohio’s general revenue expenditures totaled approximately$28.9 billion. Given this growth in the Ohio economy since 1851, the $750,000 debt limitation has become antiquated. Ohio needs the ability to borrow more than $750,000.

That leads us to the second problem with Article VIII —the so-called “cure” for this disease, which has been applied in the form of inconsistent and highly complex amendments to Article VIII. In section 2 of Article VIII, the framers of the Constitution initially carved out an exception to the $750,000 debt limitation, permitting the state to contract additional debt but only to “repel invasion, suppress insurrection, defend the State in war, or to redeem the present indebtedness of the State . . .” Rather than addressing the outdated $750,000 debt limitation head-on, over the past 70 years, section 2 has instead been amended eighteen (18) times to provide specific exceptions to the debt limitation, becoming a cancerous growth on the Constitution. A strong case can be made that the cure has now become worse than the disease.

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