House Bill (HB) 153, the state operating budget for fiscal years 2012 and 2013, provides the mechanism for funding JobsOhio, the newly created private nonprofit responsible for handling the state’s economic development. HB 153 authorizes the state to transfer the distribution system for spirituous liquor and all its associated assets, defined as the “enterprise acquisition project,” to JobsOhio for no more than 25 years. In turn, JobsOhio is expected to issue bonds supported by liquor profits, allowing for a one-time transfer of $500 million to the General Revenue Fund (GRF) to compensate the state for the transfer of the state’s wholesale distribution system. The bonds will also provide JobsOhio with an estimated $700 million to pay off existing debt and $300 million to fund undefined economic development programs.
Selling nearly $7 billion in state assets, which represents the amount of revenue Ohio would receive from liquor profits over a 25 year period, for $1.5 billion of one-time money is a risky proposition that should be approached cautiously and be fully vetted by the Ohio General Assembly. Thus, Innovation Ohio has compiled a list of policy areas that need to be properly addressed to fully weigh the merits of such a proposal.
Read the report here.