The Third Frontier Revisited: Constitutional and Fiscal Implications of State Issue 1
October 19, 2005
A new Issue Brief, The Third Frontier Revisited: Constitutional and Fiscal
Implications of Issue 1, finds that the proposed amendment would change the relationship between the public and private sectors in Ohio but also notes that the legislature has improved the amendment over the version rejected by the voters in 2003. The Issue Brief discusses some of the highlights of the proposed amendment and updates an earlier report issued in 2003. Issue 1 permits the state, state universities, and local governments to become stockholders in private companies and to share in any resulting financial gains, overturning constitutional prohibitions that have been in place for over 150 years. The amendment also permits the issuance of general obligation bonds to provide direct aid to industry, which is a departure from the historical use of public sector bonding authority. The General Assembly has improved the amendment as compared to the 2003 version by
requiring implementing legislation to include the accountability of state funding, ensuring that all of Ohio’s regions receive benefits, and providing for access to the program by economically and socially disadvantaged individuals and businesses.