Selling off the state: an update

Going into conference committee negotiations (more on that later), I thought it might be handy to provide a little scorecard of various state assets and programs that will be, or were proposed to be, privatized in the state budget process:

Ohio Lottery
  • Governor’s proposal: none; at the time the budget was introduced, he said he needed more time to get advice. His best buddies promptly lined up lobbying business with the two prime, rival suitors for any private Lottery operation. His budget did exempt Lottery rules and fees from legislative oversight.
  • House amendments: none
  • Senate amendments: first introduced a requirement, written by one of two main Lottery vendors, to privatize Lottery by a date certain in 2012; after massive criticism,¬†(including an expression of “shock” by Speaker Batchelder), the Senate¬†rewrote the provision to require the state to examine Lottery privatization and report back to the Legislature later in 2011.
  • SCORE: the public gets a rare, if partial, win
  • By the way, if Kasich tells you he had nothing to do with this provision, don’t buy it. The amendment was written and submitted into the Senate bill by the partner of Kasich’s lobbyist BFF Doug Preisse. There’s no way this wasn’t done without the Governor’s approval.
Liquor Enterprise
  • Governor’s proposal: transfer the state’s liquor enterprise to JobsOhio, who will then, in turn, sell the revenue stream from liquor profits to the private sector for pennies on the dollar (see our earlier coverage), break up various parts of the enterprise and further outsource them without oversight
  • House amendments: specifies that only the Division of Liquor Control can be hired by Jobs Ohio to operate the liquor enterprise; and JobsOhio can sell the enterprise back to the state at some later date
  • Senate amendments: provides oversight of all contracts between JobsOhio and the state to operate the liquor business; notably, the Senate did not incorporate Grendell’s amendment to ensure the state didn’t underprice liquor profits, and use the proceeds to fund local governments and schools
  • Status: still in the bill, with some modifications by both House and Senate
  • SCORE: massive loser for the people of Ohio who will see a revenue stream in excess of $250-million a year dry up to launch a very dubious “private non-profit corporation” to conduct state economic development activities without public oversight or transparency.
  • Governor’s proposal: sell off five prisons to the private sector
  • House amendments: make it six, and exempt the operators from all state and local taxation
  • Senate amendment: killed the House exemption, requiring private operators to pay taxes
  • SCORE: still in the bill; very unlikely to save taxpayers any real money as high-risk prisoners will be transfered to state-run, not private facilities.
Oil and Gas drilling in state parks
  • Governor’s proposal: expands oil and gas drilling into state lands, including state parks; reduces funding for state parks, which have a maintenance backlog in the $100s of millions. Drilling has been estimated to be worth less than $5 million per year for the state and have potentially huge environmental consequences. Meanwhile, the Governor’s budget de-funded county soil and water districts completely–the very entities who could assist in ensuring discharge from drilling operation was properly routed away from streams and drinking water.
  • House amendments: restored funding for soil and water districts
  • Senate amendments: removes state parks from the mix, proposing to deal with it in separate, standalone legislation. The parks, meanwhile, are still drastically underfunded.
  • SCORE: still a big loser; drilling may not come to state parks, but it’s coming to other public lands, and the parks still continue to be underfunded (personally I wouldn’t mind paying a couple bucks entry fee to use a state park, as is done in other states, rather than see them go without maintenance or perhaps even close, but god forbid we raise taxes on “Bob and Betty Buckeye”)
Everything else
  • Governor’s proposal: give his budget director broad, unchecked authority to privatize anything in the state without involvement of the legislature for whatever price feels good. See our previous coverage (this was our site’s most visited and shared article)
  • House amendment: removes authority to privatize anything except the Turnpike
  • Senate amendment: requires legislative oversight and approval for any future Turnpike privatization
  • SCORE: big fail for Kasich, a win for the legislature and the public
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