By Joshua Benton
Blade Columbus Bureau
COLUMBUS — State treasurer candidate John Donofrio wants to change the way Ohio deposits its money.
Yesterday, Mr. Donofrio, a Democrat facing Republican Joe Deters in the Nov. 3 election, announced a plan to commit $150 million to a program he calls Deposit 2000. It would make it easier for small, local banks around Ohio to take advantage of the money the state deposits every day.
Now, that money goes almost completely to a few large banks, Mr. Donofrio said. Under Deposit 2000, the state treasurer’s office would set up a computer network linking all the state’s banks and set aside part of each day’s deposits for smaller institutions.
Then, the banks would bid electronically for the deposits.
Mr. Donofrio said the bidding would resemble the way U.S. Treasury bills are sold.
“It works like a treasury auction. The money we deposit is from all the taxpayers, and it should help taxpayers all across the state, not just areas with the largest banks.”
If smaller banks gain state deposits, they will have more money to lend, he said.
He said the guarantee of giving some deposits to smaller banks would not decrease interest revenue that the state earns. In fact, he said, the added competition among the banks could raise interest revenue.
Deposit 2000 is the second major plan Mr. Donofrio has announced that he would enact as treasurer. His other plan, Schools First, would give discounts for early tax payments by businesses and earmark money gained from investing those early payments for education.