JobsOhio Math, v. 2


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Given the lawsuit filed yesterday over Kasich’s JobsOhio plan, I am reminded that the math in the Governor’s budget about funding JobsOhio has never been adequately explained. We posted about it before, but that was before the budget bill was available and before the administration had testified in committee. Since then, the details seem to have changed slightly, but still don’t add up.

From today’s Columbus Dispatch:

Kasich’s two-year budget proposes funding JobsOhio by leasing the state’s liquor operation to the entity. JobsOhio would pay $1.2billion – $700 million to pay off debt backed by liquor profits, and $500million to the state general fund, giving the entity about $100 million a year in liquor profits to use for economic development.

In other words, they are taking $229 million a year for 25 years (which works out to $5.7 billion) and selling it for $1.2 billion. That is a ridiculously bad deal, and apparently arch-conservative Senator Tim Grendell and Senate Finance Chairman Chris Widener agree with us:

Grendell said the price should be more like $3 billion, and Widener also said he’d like to see a higher price.

But never mind that. The administration explains that $1.2 billion will be used for two purposes: $700 million to pay off bonds and $500 million to the GRF to fill the budget hole. $700m+$500m=$1.2b

So where does the extra $100 million a year come from for JobsOhio? It’s baffling.

Sadly, the House let the administration off the hook without providing a satisfactory explanation in testimony. Given the comments of the two Senators, above, we don’t think they’ll escape Senate hearings without a better accounting. But it remains to be seen whether the funding mechanism for JobsOhio will remain after the House completes the amendment process. We’ll be watching.

 

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4 Comments

  1. Sounds like Wall Street math.

  2. Sounds like the same math used by Obama to support the recent federal bailout programs.

Trackbacks

  1. Senator Grendell wants to fix horrible liquor privatization plan | Ohio Budget Watch
  2. Selling off the state: an update | Ohio Budget Watch

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