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The Browns bond package in the House budget gets critical reviews from two state agencies.

And environmentalists are hoping for more green from the program that fights algal blooms.

That's this weekend.

The state of Ohio.

Just.

Welcome to the state of Ohio.

I'm Karen, counselor.

It was a tough week for supporters of the $600 million package of state backed bonds to help finance the $3.4 billion dome stadium and development for the Cleveland Browns and Brooke Park.

It was added to the House budget, which all but five Republicans voted for.

The team's owners have said the income, sales and other tax revenue generated by the project will be $1.3 billion more than the billion dollars the bonds will cost the state this week, we saw the first publicly released reviews of those claimed from state officials.

The first one came Monday from the bipartisan office that does research for state lawmakers.

The Legislative Service Commission wrote that it could not verify the claims in a report from consultants for the Haslam Sports Group, which was used to develop the presentation the team brought to a House committee in March, LSC wrote, quoting here the SG projections implied an outcome that would outperform other similar developments previously studied in peer reviewed academic literature, and quote LLC also said the 1.5 million new visitors the team estimated the development would attract, quote, may be overly optimistic and said that while the Dome stadium will have a larger seating capacity than the Browns current home in downtown Cleveland, it would take 21 other sold out events to reach the predicted total, and none of the three closest stadiums had more than 12 such events in 2023.

Then Monday afternoon, a scathing memo from Office of Budget and Management Director Kimberly Mannix.

In the memo, written in March but just released Monday morning, blasted the bond proposal as risky and said with other capital projects in waiting, quote, the state does not have the capacity to accommodate these priorities, plus $600 million in bonds for a single sports facility.

And, quote, Mannix wrote the Haslam Sports Group, again quoting inappropriately overstates projections of future taxes generated by the project over inflating positive impacts of the Brook Park development and, quote, and that the projections of 6000 construction jobs.

Again, her words also appear to be wildly overblown.

Mannix also writes that the $1.01 billion in estimated bond repayment costs, again quoting, will likely cost close to twice as much as the administration's proposal to use cash from increased sports gaming tax.

Governor Mike DeWine, who appointed Myrna as budget director, proposed that to create a sports facilities fund in his initial budget that evening, the Haslam Sports Group fired back with a nine page letter and a statement about the two analyzes, HSG said the LSC report and the Ober memo included questions they had already addressed with DeWine and other state officials.

The statement also said, quoting here, we questioned many of the memo's assertions and also that the LSC memo also contains several inaccuracies and misinformation.

The team owner said the bond proposal is not risky because there is quoting here substantial excess in our revenue projections to more than cover state debt service obligations, and said the $50 million in upfront cash, as required in the House budget, would further derisk state taxpayers.

The letter from the Browns ownership team also calls out Merrick's claim that the state will own the stadium, saying, quote, the state will not own the proposed Brooke Park Stadium or be responsible for any maintenance thereof.

And quote.

But OBM followed up with a line from page 316 of the House budget, and this is a quote, The state or a state agency owns or has sufficient property interests in the major sports facility or in the site of the major sports facility, or in the portion or portions of the major sports facility financed from proceeds of state bonds, end quote.

Republican House Speaker Matt Huffman, who along with finance Chair Brian Stewart championed the bond package as a good investment for the state.

Was asked for his thoughts on those analysis on Wednesday.

Well, I haven't reviewed that.

I tell you about the LSC, I just I read a kind of a story about it, but I haven't reviewed the report, so it's hard to respond to it.

And, you know, I just a lot of times what's in a report is based on what questions were asked, and I don't know what questions were asked and what I was responding to.

So, I would also say that president McKinley did made a courtesy of taking two months to, while the House had the budget and, not commenting.

So, on various issues, you know, I'm going to extend the same courtesy to him on these issues.

Are there other things coming for the house?

Of course.

Yeah, sorry about that.

So I'd have to read it to really build I have not read that.

Is that, Director Murdochs?

Yes.

Yeah.

I haven't I haven't seen her report today, but I know that they were considering it.

I know that the state treasurer looked at they helped with some of the language, and suggested some, some language changes to it.

I think the Browns have their own outside consultant.

There's a couple of other financial institutions separately that are reviewing it.

So, I mean, you know, we can see where all of these things land.

You know, whether the, the brown, you know, the, the outside consultants, which I think, financial institutions and eventually their reports, I think will become public, have indicated to me that the, the Browns, numbers are conservative Hoffman said at the press conference, unveiling the House budget on March 31st that the Browns Dome stadium and development was the largest project in the history of the state, with the exception of the Intel project, with $1.2 billion in private money.

He said it made sense for the state to go forward with it.

other day said, well, these are general obligation bonds, aren't they.

Yeah they are.

That's different from a revenue bond, which I explained in my last press conference what a revenue bond is.

But this acts like, in my mind, a revenue bond because the new taxes within the four corners of this track, that's not there'll be a water park 12 miles away maybe, or some new home within this tract.

The their calculation.

And we've sent it to the Treasurer's office.

We've sent it to OMB.

We sent it to lots of people and everybody.

But their calculation is that all of this money will come back to the state.

And in fact, the money that the state will be paying now that there will be a positive back to the state target starting in 2029, The LSC memo says, quoting here, the bonds as described in the House passed version of HB 96 would not be general obligation bonds, i.e.

bonds backed by the full faith and credit of the state.

Rather, they are special obligation or revenue obligation bonds.

Whether this means they are constitutional is an open question, and ultimately, only a judge could make that determination and, quote, no Democrats voted for the House budget.

And several have criticized the Browns bond package.

Minority Leader Allison Russo said she's seen the leak, and OB reviews of it.

I have read them.

Not surprised to see that the estimates were likely, generous and over estimates.

And I think in the last two decades, the public funding for stadium projects all across the country, this is pretty consistent.

I don't know why we think Ohio is an exception or the Brown Stadium is an exception to that.

yes, there are members of my caucus who have huge concerns.

I think their members, in the Republican caucus as well.

And I think this speaks to, yes, the need that this plan needs to be vetted.

We need to have information and input, from multiple sources, because, again, the last couple of decades of public funding for stadium, stadium construction has proven over and over again the return on investment is not good.

It's not a good public investment.

And I think especially in this moment of time, when we are talking about, schools not getting the resources that they need, health care being at risk, through possible cuts through Medicaid, seniors not getting the services they need, food banks, needing more funding.

You know, sending our public dollars to a stadium, is not responsible governing.

And I said earlier, I think it's morally reprehensible.

The Bengals have asked for money now, and so has FC Cincinnati and so has nationwide.

So tell me, how are you feeling?

Did you expect I mean, you expected this day.

Sure.

Yes.

I mean, of course, you know, we opened the door and everyone wants their, cut of funding.

And so, you know, it's not that I don't think, these, you know, projects are worthy, but, you've got a lot of billionaires and companies that are behind these teams, and they, you know, should put up the investment, for those projects.

Now is not the time I think, for the state to be stepping in, especially given the needs that we have in the state, the very real needs of people.

The Senate is expected to pass a bill banning ranked choice voting is a bipartisan bill over there.

Do you expect there to be bipartisan support for it over here?

And what are your thoughts?

I don't know.

I mean, listen, I personally am opposed to that bill, not because I necessarily, you know, think ranked choice voting is some magic bullet, but I think any bill that, prohibits or blocks access, to voting and the ballot in the way that, local communities have decided if they decided to use ranked choice voting.

I'm not supportive of that.

What's your ideal type of reform for Delta eight?

The Senate, I believe, is looking to pass a bill.

Yeah, yeah.

Well, I think at a minimum, I think you know, having some sort of requirement that it is behind the counter that, you have to show, proper identification, that there has to be testing of what's actually in the product.

Is a good start.

I mean, frankly, if it were up to me individually, but it's not I would probably ban the products.

But I think, the easy access, particularly to teens and underage users, is pretty pervasive.

And, we need more restrictions around it, to eliminate that and put guardrails around it.

The budget is now in the Senate, and Finance Chair Jerry Serino has said Republicans in that chamber are evaluating all options right now with regard to the Browns and subsequent sports related economic development.

One of the many changes the House made from fellow Republican Governor Mike DeWine budget was with his H2 Ohio program.

He began it when he took office in 2019 as a way to reduce nutrient runoff into waters that feed into Lake Erie and replace or create wetlands to filter water and stop erosion.

DeWine had hoped it would be a $900 million decade long effort, but there's never been a dedicated funding source for it.

The House budget takes the H2 Ohio program from $270 million in DeWine's budget to $150 million, a 45% cut for a program that most agree has been working.

Advocates from farming, water quality and environmental groups are hoping that would change in the Senate.

I talked about it with Peter Booker of the Ohio Environmental Council Action Fund, who says he doesn't think the reduction shows that there's a belief that H2 Ohio's work here is done.

So H2 Ohio was started when governor Mike DeWine took office in 2019.

He had hoped eventually it would be a $900 million, decade long effort to reduce nutrient runoff in waters that feed into Lake Erie and also replace or create wetlands that, would lead to less erosion and filter the water, essentially.

So this what we're seeing in the House version of the budget, is a 45% cut from what DeWine had initially proposed.

Does that mean that H2 Ohio is no longer needed?

That's not how I would interpret that.

I think it's really just the leaders of this process maneuvering to try to find things they can negotiate with down the road.

I think if you look at the progress we've made towards our, 2025 commitment to reduce phosphorus in Lake Erie by 40%, we're not there yet.

And so I would argue we need more resources or a longer term plan for those resources to reach our commitment as a state.

Again, I think it's just trying to, to, to jockey a little bit and try to find ways they can negotiate down the road.

We're hopeful we'll get that funding restored.

Because it was proposed at a level that is where they're at right now.

And so any reduction in that could mean they just get less projects out there and can help less parts of the state.

House Speaker Matt Huffman has said of the cuts that H2 Ohio has in many ways achieved the goals that it was set out to do that there's money in the fund that can be used for other programs.

And it is true that, like in February, there were more than 200 wetlands that were done or in process announced.

So that's a milestone goal right there.

And, there have been, what, 3200 farmers who've enrolled 2.2 million acres in western Ohio in the program.

So the program has accomplished certain goals, but like you just said, it hasn't reached others.

Yeah.

I think if you're looking at quantitative, it's done a lot.

It's got a lot of acres enrolled, a lot of farmers enrolled, a lot of water, water infrastructure projects done.

But if you look at the quantitative data, we've still got some work to do.

It took a long time for the state to develop the harmful algal bloom problems that it has.

And it's going to take a long time with keeping the same type of practices in place to really reach our goals, especially when we talk about the agricultural pieces of it.

If they're going on a 1 or 2 year contract and a farmer no longer has that financial assurance, they may do it out of the goodness of their heart with their own pocketbook.

But it may also stop doing the practice, which then we lose the progress that was gained.

It's not like it stays in place.

It can roll backwards.

If we don't keep projects in place.

What does the money actually go to do?

How do how does that money get parceled out to farmers and to other partners in the program?

Yeah.

So it goes through primarily three agencies, the Ohio Department of Agriculture, which really utilizes their county.

So the water district folks to bring in farmers, get them signed up for certain types of conservation practices that fit their farm needs, as well as will ultimately reduce nutrients and then they get so solidified in a contract agreement where they get paid out.

If they complete that with the Department of Natural Resources, they usually open it up to a grant period, based off of either Western Lake Erie basin or statewide watershed.

And then applicants like park districts, land trusts, local municipalities, anyone that has a project that might fit can apply, and then they score those and vet those based off of how much nutrient reduction outcome we can see.

And then those projects are completed and then ideally kept in perpetuity so they can keep staying in place, to see that benefit.

And then the Ohio Environmental Protection Agency gets a chunk of the funding as well.

They work primarily with municipalities to work at water infrastructure or wastewater, or drinking water improvements to their system.

A lot of the communities that have gotten those grants aren't big enough to pull down the traditional infrastructure dollars, so I feel like they are really filling a critical gap that's there to make sure these small and medium water utilities have the resources available to improve their water quality as well.

And then odnr an EPA have what's called the Rivers Initiative.

It's the newest portion for the last two years where they look at anything from studying Foss in our rivers to stream bank, erosion to dam removal, where they're really just getting even further into unique watersheds because there's different needs everywhere.

And you've got a lot of different partners who are all working on this.

I mean, for instance, the United States and Canada trying to reduce the runoff into Lake Erie by 40%, which you just mentioned.

A few minutes ago, that involves Ohio, Michigan, Ontario.

You've got farms, obviously, not just farmers, but also these big factory farms.

You've got municipal sewer systems.

How can you coordinate all of these different entities that all feed into the problem of nutrient runoff in the Lake Erie?

Yeah.

Well, as far as the administration side goes, the higher Lake Erie Commission gets a small segment of funding where they're supposed to kind of help be that internal coordinator for the administration.

But outside of that, each industry that you mentioned is so different that each agency is the one really in charge of engaging their members, improving the program based on feedback, and they do it in their silos.

But ultimately knowing that it's helping, you know, across the board, as the efforts are unified, is the number of factory farms, those big, large farms that have been growing in western Ohio over the last couple of years.

Is that a big contributor here?

It's hard to say specifically for CFOs, the large factory farms.

I think there's a lot of science to show that watersheds might have a carrying capacity for livestock, as far as how much nutrients or manure that can generate it out of that.

But I think we really just need to treat nutrients as the same and try to reduce them across the board, whether they be from agricultural fields or from wastewater treatment disposal.

Or from other sources like skeptics.

We need to get rid of all phosphorus from our watersheds.

There is no dedicated funding source for H2 Ohio.

Is that something that you'd want to see, and if so, where would that come from?

Yeah, there.

There's a lot of effort and interest right now of how do we maybe secure a long term program beyond the DeWine administration to continue the work as it's been designed over the last six years or ultimately eight years?

And so the best, really a possibility in a lot of groups, minds that work on this is looking at a long term bond option, like, you see, with clean Ohio and some other programs that have done a lot of good work, that's obviously going to take support from the legislature to put it forth to voters.

But I think that could be a really interesting way to, secure program for about ten years at a time and keep that that solidity for a farmer that might want to make sure they can budget for this for ten years, as well as all the other conservation groups that, you know, have to do planning as well to know there's going to be money for wetlands down the road.

I can imagine you probably don't want to think about this, but if indeed the budget stays as is, what is the future of some of these programs that you've talked about here, like even the new part, the H2 H2 Ohio Rivers Initiative, are these programs just going to be derailed?

It's going to really be up to the agency leadership, what they do with the resources they get.

It's going to be a tough situation where they might have to just prioritize differently than they have right now.

For example, Oda recently has put money in every county in the state instead of just the northwest part of the state.

So do they continue to do that to build education?

I'm not sure that'll really be up to Director Baldridge and the governor and their team, but it's probably going to make some tougher decisions about where they put the resources they have.

You do have a lot of support from the the biggest farm group in Ohio, the Ohio Farm Bureau, that would like to see this continue.

Does that give you hope that you've got farmers on board here who are using their influence to try to keep this going?

Yeah.

The Farm Bureau has been a terrific partner on this program since it was conceived.

And have really put a lot of priority on Lake Erie because their members are right in the middle of the issue and wanted to see it fixed as well.

But I think we've got a really diverse group of stakeholders at the table.

We've got business entities that want to see this continued.

You heard a lot when Intel decided to come here.

The water was a part of the reason they wanted to come here.

And then you've certainly got conservation groups, you know, hunters, spot hunters and anglers, sportsmen groups, and of course, environmental groups that all are really binding together in a way you don't see a lot for issues.

So we're hoping the diverse coalition can help show the legislators that we really need to prioritize this.

There were some environmental advocates who said that they didn't feel like it went far enough.

They were concerned about the scope of H2 Ohio.

Has that been resolved, or are there still people out there who just don't think it's enough, that it doesn't go much further than previous administrations went?

Yeah.

I mean, I think there's always going to be entities that would like to see something go further, like maybe go down a regulatory approach to try to solve these problems.

I think for me, I look back at what we were doing under the previous administration where there wasn't a whole lot of state level resources to try to solve it.

There was a growing issue, there was federal resources.

But I think now it's been a relief that we've at least been able to add some resources and put our money where your mouth is as a state to try to solve these problems, but we always need to do adaptive management to see how we can do better.

And I think, you know, looking at other creative solutions should always be on the table.

But, right now we need to try to just improve the program we have and hopefully fund it long term and make sure the dollars are yielding impact.

A couple of years before H2 Ohio was begun, there was this crisis in Toledo where this algal bloom essentially shut down water access to the city of Toledo for three days.

And that was in 2014, I believe, we're approaching warmer weather now.

What does the forecast look like for algal blooms this year?

Last year's algal bloom was early, I think earlier than it has been in like 20 years.

So what does it look like this year?

Yeah.

So the research community that does that prediction does it closer to July 4th.

So probably mid to late June would be my guess.

And they really look at water runoff and then try to use modeling to try to predict it.

But generally the warmest months are going to be when we're most at risk because it takes the food source with the phosphorus, but then temperature for the blooms to grow and potentially grow out of control.

And so generally it's going to be from late June till maybe September, maybe October, if it's a warm fall that the lake and other watersheds probably will see some algal blooms.

If there's some rain events this year, and we could see algal blooms not only in Lake Erie, but also in other lakes throughout the mostly the western part of Ohio.

Correct?

Yeah, we've unfortunately seen in pretty much every watershed that's a significant size, including the Ohio River, which was pretty unique until recent history.

So it's a problem.

That's really something that can be fixed anywhere.

But Lake Erie gets a lot of the headlines.

Can it be fixed permanently, though?

I think a lot of people think H2 Ohio was intended to fix the problem cannot be completely resolved, I think so, I mean, it may not be perfect every single year, but the state's goal to reduce phosphorous by 40% was intended to set a target.

That is a manageable level of algal blooms for communities that might see it in the Toledo community, most notably where they may still happen.

But they're not going to overwhelm the beaches, overwhelm the water system, really hinder the charter boat fishing up there and all the other recreational activities.

And of course, the drinking water, as I mentioned.

So, there still could be years of flux.

That's just the way that the ecosystem works with rain events.

But it is something we can fix.

It's just going to take adapting our landscape to handle severe rain events, keep nutrients on the field where they're intended, as well as from other sources where they're intended.

And I think we can build a more resilient northwest Ohio to fix this.

And while I have you here, I want to ask you about House Bill 15, which is a big energy bill that's under consideration.

There's kind of two versions of it, but it looks like House Bill 15 might be the one.

It would shorten the review process to build energy generation facilities, especially for data centers, and also would repeal the subsidies for coal fired power plants that were in House Bill six, the nuclear power plant bailout law that was the center of the bribery scandal involving Republican former House Speaker Larry Householder.

You're on board with this bill.

Yeah.

Our organization has been supporting it for several weeks now, and we think it's a big step forward for Ohio with our energy policy.

The repeal, especially, has been the big one for us that we would love to see immediately repealed because taxpayers have been on the hook for too many years now, trying to subsidize these Cold War era coal plants that we really just need to move forward from towards cleaner sources of energy.

And so we feel this bill is a good vehicle to do that.

There's still going to be more to do around community solar and to demand response for the grid.

But, it might be a big step.

I think there are people who are concerned about the shortening of that process and that maybe, you know, data centers are going to go out and build these energy generation facilities.

I could be living next to one of these things.

Is this what we really want to see happen?

What do you tell people about that?

That's one small point where we advocated in the committee process with legislators that we would like to see it a little longer than what they wanted.

The mantra really was we need to get energy generation on the grid as soon as possible because of rising demand.

But we don't want to see it be so quick that community input is not considered.

And so, we will see how it goes if this is what they decide to do, but may come back and advocate for a longer process to make sure we don't skip steps just to get energy generation on line.

Is there a concern about too many of these facilities in Ohio?

Certainly long term rising demand is going to be tough.

We're going to have to meet that with different fuel sources than we have today.

Ultimately, we're hopeful that we can see more renewable sources, more cleaner sources online to generate them that might not be realized, you know, next year, in 2030.

But we're hopeful that we can meet the demand with clean energy sources.

that energy bill, House Bill 15, is now headed to DeWine for his signature.

And that is it for this week, for my colleagues, the statehouse news Bureau of Ohio public Media.

Thanks for watching.

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Please join us again next time for the State of Ohio.

Just.

Support for the Statehouse News Bureau comes from Medical Mutual, dedicated to the health and well-being of Ohioans, offering health insurance plans, as well as dental, vision and wellness programs to help people achieve their goals and remain healthy.

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The law offices of Porter, right, Morris and Arthur LLP.

Porter Wright is dedicated to bringing inspired legal outcomes to the Ohio business community.

More at porterwright.com.

Porter Wright inspired Every day in Ohio Education Association, representing 120,000 educators who are united in their mission to create the excellent public schools.

Every child deserves more at OHEA.org.