Privatization is all the rage these days in right-wing states, but Ohio's John Kasich may have just crossed a line he may want to reconsider. Ohio, like other states, runs a liquor concession for anything harder than beer or wine. The profits
March 23, 2011

Privatization is all the rage these days in right-wing states, but Ohio's John Kasich may have just crossed a line he may want to reconsider.

Ohio, like other states, runs a liquor concession for anything harder than beer or wine. The profits from that concession go directly back to the state. It's one of the few bright spots in an otherwise miserably sad revenue stream, especially after Kasich's tax cut plans.

In accordance with his "laser-focused" jobs strategy which included killing a high-speed rail project among other things, Kasich has introduced legislation to create an agency for job creation called Jobs Ohio. Here's a January description of the plan:

Duffy said House Bill 1 is still being crafted and few specifics were available. The governor's office said Jobs Ohio will be run by a nine-member board, with the governor serving as chairman. Board members will be appointed to four-year terms by the governor and will be compensated for expenses only.

Board members will be bound by ethics guidelines similar to those regulating university trustees, Kasich said. The board will produce an annual report, hold four public meetings a year, and "they will be closed at times in executive session to discuss specific issues because you don't want to be negotiating out in the public," Kasich said.

The names and salaries of Jobs Ohio employees will be made public, Kasich said, assuring that transparency "is really important."

The House bill will appropriate $1 million to start-up Jobs Ohio, but Kasich said he will seek private funding for it.

"Part of it will be public, part of it will be private," Kasich said. "Ultimately, we hope to push it into the all for private."

Now this sounds benign. Sort of. Until you toss in the revenue from liquor sales and make Kasich the Chairman of the Board. Then, not so much.

Here's a more recent FAQ:

Q. Why not make leasing the liquor operation available on the open market to potentially increase revenue?
A. Kasich said that he wants Ohio to be able to continue controlling the day-to-day operation of liquor sales, which would not be guaranteed if he sold it to the highest bidder.
For example, by controlling the operation in-house, Kasich can direct liquor profits for public purposes such as job creation or to aid the general revenue fund. This approach also guarantees JobsOhio can take what it wants from the profits for its own operating procedures.
Q. How will JobsOhio use the liquor profits?
A. It is expected to use the money to help companies either start up or relocate to Ohio. But instead of giving loans, JobsOhio could ask to be partial owners or investors in the business and thus gain equity in companies.
"The profits from this will go back into supporting job growth, not government growth," Kvamme said Tuesday.

Let's stop and give that a few minutes' thought. 2010 liquor revenue was $238 million. What JobsOhio does is create a great big slush fund for Kasich to use as "walking around money" to bribe businesses to relocate and or start up in Ohio? Also, what's this business about "can direct liquor profits for public purposes such as job creation or to aid the general revenue fund?" That smells like a way to ram through some more tax cuts for corporations and wealthy folks to me.

The way I see it, Kasich is setting himself up to dip into public funds to pay off cronies and campaign financiers via barely-legal means. It is an arrangement which begs public officials to behave in corrupt ways. Begs.

And it's not only the liquor concession at risk.

Kasich also plans to sell 5 jails to "reduce costs." Corrections Corporation of America, the largest national private jail owner was a HUGE donor to the Republican Governors' Association in the 2010 races, and is a big money friend of Governor Jan Brewer's. But hey, Kasich swears they'll get no special treatment. To which I say sure they won't. Because there aren't any relationships with people close to CCA in the governor's office, are there?

Gary Mohr, director of the Ohio Department of Rehabilitation and Correction, has pledged to remove himself from Gov. John Kasich's recent proposal to sell five Ohio prisons to avoid even the appearance of a conflict of interest.

Mohr is a former consultant and managing director for Corrections Corporation of America, a Nashville-based company that is eligible to bid on the state prison contracts once they are made available next month.

The company, which bills itself the leading private-sector provider of corrections services to governments, also hired Kasich's former congressional chief of staff, Donald Thibaut, as a lobbyist in January.

That's not all. There's also the Ohio turnpike.

The governor's spokesman confirmed the plan to lease the turnpike is still on the table.

The governor's decision to exclude the plan from the 2012-13 budget proposal shouldn't be taken to mean he'll wait until 2013, when it's time to propose another two-year budget, said Rob Nichols, Kasich's spokesman.

"The turnpike could be brought up at any point in time and not necessarily in conjunction with the budget," Nichols said.

If the turnpike is leased, any money a private company pays the state for the lease would be used to improve the state's transportation system, said Melissa Ayers, a spokeswoman for the Ohio Department of Transportation.

If Kasich leases the turnpike, he'll be following in the footsteps of Mitch Daniels, Indiana's Republican governor.

The article goes on to note that post-privatization, tolls in Indiana went from $4.65 to $8 in 2008, and were raised again in 2010.

And still more: Kasich slashed the budget of the state Public Utilities Commission, giving his energy cronies a nice effective tax cut, since it is funded entirely by fees paid by utilities. Less costs; less fees. Oh, and as an added bonus, less regulation, too.

The Consumers Counsel office is not funded by the State’s general revenue fund. It’s entire funding is based on fees levied on the utilities. Cut the Counsel’s budget, and the money goes back to the utilities.

So Kasich found the perfect corporate giveaway. A double whammy. In his budget he slashes the agency’s budget by more than half. That creates a virtually impotent, underfunded consumer watchdog to fight against the utilities’ army of hired guns of industry lawyers and economists, many of whom are just biding their time around the revolving door that is the PUCO/utility relationship.

So, there you go. Private Ohio is in boot camp, ready to be promoted to...private. Why is it that there isn't more discussion about what it means to privatize services like this? Why doesn't it occur to these people to point out that privatization means for-profit, and that profit is going to come from somewhere?

These conservative governors are intentionally bankrupting states and state governments to hand them over to the corporations, many of whom can already buy the whole damn state if they want to. And corporations aren't creating jobs. They're sitting on capital and doing things like acquiring T-Mobile for $25 billion in cash, plus stock, which will mean MORE layoffs, not more jobs.

How long do they get to do this?

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