Treasurer Sprague Unveils the Ohio Gains Initiative to Modernize Investment Strategies

COLUMBUS – Treasurer Robert Sprague is putting the state’s balance sheet to work for Ohioans through the newly announced Ohio Gains initiative. The proposal centers around three new investment reforms that will help bolster support for the state’s agriculture community, health systems, and institutions of higher education.

“The Ohio Gains initiative is an opportunity to be bold and implement new and innovative investment strategies to secure a more prosperous future for the Buckeye State,” said Treasurer Sprague. “By tapping into our office’s financial expertise and unlocking the power of the Treasury, we can create significant cost-savings opportunities for our homegrown businesses and institutions. Through this modernized approach, the Treasurer’s office is working to strengthen Ohio’s financial foundation for the years ahead.”

Legislation including the three proposed reforms will soon be introduced in the Ohio Senate by Senators Michael Rulli and Jerry Cirino and in the Ohio House by Representatives D.J. Swearingen and Andrea White.

“Putting Ohio’s tax dollars to work in Ohio is something we can all agree on,” said State Senator Michael Rulli. “By partnering with Treasurer Sprague, we can employ new financial strategies that go the extra mile to support our farmers, hospitals, and universities. I’m proud to stand with my colleague, Senator Cirino, to introduce and carry this very important piece of legislation.”  

“I am proud to partner with Treasurer Sprague and Representative White to carry this legislation and advance the Ohio Gains initiative,” said State Representative D.J. Swearingen. “Through this effort, we’re working to securely invest more of our treasury dollars in Ohio’s farms, hospitals, and public universities. Investing in Ohio-based businesses and institutions is a commonsense step in building a stronger Ohio.” 

The legislation will make reforms in the following three areas:

Modernizing the Ag-LINK Program:

For decades, the Ag-LINK linked deposit program has helped Ohio farmers and agribusinesses drive down the cost of doing business by providing interest rate reductions on new or existing loans. However, Ohio law currently restricts the loans for each borrower to $150,000 per year – deterring many from participating in the program.

The proposed legislation would eliminate the existing program caps, so Ohio’s agriculture community has access to an ample amount of lower-cost capital when they need it most. Eliminating the caps will also align Ag-LINK with the other linked deposit programs available through the Treasurer’s office. 

Additionally, agricultural co-ops will become eligible Ag-LINK borrowers for the first time in the program’s history, further recognizing the valuable contributions they make to Ohio’s economy.

Reducing Costs for Ohio’s Hospitals:

A Variable Rate Demand Obligation (VRDO) is a borrowing tool commonly used by large institutions – including some of Ohio’s major hospital systems -- to finance capital projects. Using a VRDO for debt issuance requires an entity to act as a “buyer of last resort,” effectively agreeing to purchase the debt if the market yields no investors.

While large Wall Street banks typically serve in this capacity, the Ohio Treasury can leverage its strong liquidity position to step into this role on behalf of Ohio’s hospital systems and lower their overall borrowing costs.  

The proposal was tested in 2020 and proved to be effective. As an already eligible entity under Ohio law, the Treasurer’s office entered into a partnership with the Cleveland Clinic. 

“Since October of last year, the Cleveland Clinic has witnessed first-hand the positive impact the Treasurer’s liquidity support has had on the Clinic’s VRDOs. This initiative has helped the Clinic achieve more favorable liquidity pricing and terms, and diversify its liquidity providers,” said Cleveland Clinic Chief Financial Officer Steve Glass. “Our Series 2013B-1 Bonds have also continued to reprice at yields at or below our other comparable variable rate obligations – resulting in a lower cost of capital for the Cleveland Clinic. We support Treasurer Sprague’s proposal to extend this program to other eligible entities that utilize VRDOs.”

The proposed legislation will extend this cost-savings opportunity to more Ohio hospital systems and other large entities that utilize VRDOs.

Reducing Costs for Ohio’s Public Universities:

Under current Ohio law, the debt of the state’s four-year public universities is an eligible investment for the Ohio Treasury. The proposed Ohio Gains legislation would allow the institutions to leverage their State Share of Instruction (SSI) when issuing debt to the Treasury.

Doing so automatically enhances the university’s credit rating, thereby making it a more attractive and secure investment for the State of Ohio. Since Ohio provides significant financial support for its universities, the proposal will provide savings for higher education institutions while generating a meaningful return on investment for the Treasury -- thus maximizing the value of those state funds like never before.

Additional Information:


Robert Sprague became Ohio’s 49th Treasurer of State on January 14, 2019, bringing to the office his extensive experience working on financial matters in both the public and private sectors. Under Treasurer Sprague’s direction, the office manages the state’s $29 billion investment and $11 billion debt portfolios, collects and deposits all state revenues, and oversees custodial assets.