Innovation Ohio

What you need to know about Ohio Politics and Policy

Innovation Ohio Calls for Audit of Worker’s Compensation Council

On April 26th, Innovation Ohio delivered a letter to Auditor Yost calling for a complete audit of this council, noting that  “Performing both a performance and special audit of the WCC is consistent with your pledge to bring “clean, accountable and efficient government” to the people of Ohio. “  Ohio’s taxpayers deserve to know how their tax dollars are being spent. The full text of the letter can be viewed here.

Innovation Ohio Responds to Watchmann: Asks Auditor to Look into Workers’ Comp Council

For Immediate Release: April 21, 2011 Contact: Dale Butland 614-783-5833
INNOVATION OHIO REPLIES TO WACHTMANN; ASKS AUDITOR TO LOOK INTO WORKERS’ COMP COUNCIL
Columbus–Innovation Ohio, a progressive think tank headquartered in Columbus, said today that Rep. Lynn Wachtmann’s April 20 news release regarding the Workers Compensation Council (WCC) raised “a host of new questions about the WCC that merit review by Auditor of State David Yost.”Late Wednesday evening, Rep. Lynn Wachtmann (R-Napoleon) issued a news release defending the WCC and criticizing Innovation Ohio for raising questions about the agency’s million dollar budget, the exorbitant salary paid to its sole employee, Virginia McInerney, and the WCC’s lack of work product over the past three years.  Read IO’s original release here. Said IO Communications Director Dale Butland: “Yesterday, the mess at the WCC looked like a boondoggle.  Today–after reviewing Rep. Wachtmann’s news release–it looks more like a scandal.  The WCC is rife with waste, mismanagement, and a use of state funds that is at best questionable. Auditor of State Yost should give the WCC a thorough review. “This is an agency that has a single employee, who was once Director but apparently no longer is, who has no apparent supervisor and who presumably reports to no one.  According to the Columbus Dispatch, the four “reports” cited by Rep.Wachtmann as WCC work product appear to have been completed in 2009.  Yet Ms. McInerney continues to receive a salary of over $102,000 per year — the same salary she received when she was Director. Since 2008, she’s raked in over $330,000 — not including benefits. At a minimum, Auditor Yost should determine: what, precisely, has Ms. McInerney done to earn this large amount of money?   Why is her salary the same as when she was Director? If her last completed reports were in 2009, how has she occupied her time in 2010 and 2011?  Who supervises her work and to whom is she accountable? “In the meantime, perhaps Rep. Wachtmann would be good enough to give Ohio taxpayers and the businesses who pay assessments to fund the WCC some answers to the following questions raised by his own April 20 news release: 1)  You say that Ms. McInerney is “no longer the Director” and “currently, there is no Director.”  When did she cease being Director?  Were all legislative members of the WCC informed when she vacated that position?  Why is Ms. McInerney still receiving the same $102,000 salary got when she WAS the Director?  DAS records indicate Ms. McInerney is the WCC’s sole employee. To whom does she report? If the WCC’s function is as important as you say it is, how can it operate without a Director? When will a new one be hired? 2)  You also assert that the WCC completed 4 different reports and several analyses. Will you release these documents? When was the last one authored? Why were they not put on the WCC website for public inspection? 3)  You say that a half million dollars appropriated for a WCC actuarial study “has not been spent” and that the WCC has “used only 66% of the total budget approved by the legislature.” If the WCC is only spending a fraction of the money appropriated for it, why are you and the Kasich administration asking for another nearly $1 million appropriation in the proposed budget for FY 11 and 12? Why is the Office of Consumers Counsel funding being cut by 50%, but WCC funding remaining the same? And why are Ohio businesses still being asked to pay assessments in order to fund this agency? 4)   Gov. Kasich and legislators such as yourself have told local governments and school districts to tighten their belts and accept substantial budget cuts.  You’re asking police, firefighters and teachers to sacrifice on their wages and benefits.  Why should such sacrifices not also be expected of the WCC and Ms. McInerney, especially since she no longer serves as Director?
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The Workers’ Compensation Council: Boondoggle Supreme

For Immediate Release: April 20, 2011 Contact: Dale Butland 614-783-5833

Innovation Ohio’s Taxpayer Rip-Off Of the Week: The Workers’ Compensation Council: Boondoggle Supreme A $100,000 Director, a $950,000 budget, 0 staff, and 1 Report in 3 years

Columbus—Innovation Ohio, a progressive think tank headquartered in Columbus, today presented its “Taxpayer Rip-Off of the Week” Award to the Workers’ Compensation Council, a state agency created by the General Assembly in 2007 at the behest of then Representative and now Speaker William Batchelder to provide legislative analysis and oversight for the Ohio Bureau of Workers’ Compensation. Despite doing virtually no work, the Council pays its sole employee—Director Virginia McInerney—over $100,000 annually.

The Council’s budget—set for $942,400 in the next biennium—is paid through assessments on Ohio businesses. According to the agency’s own website (www.wcc.state.oh.us) the Council has produced exactly one (1) report since it began operations in 2008. In February, 2010, Ms. McInerney abruptly fired all three of the Council’s staff members who, in turn, filed wrongful termination suits alleging religious harassment by the Director, and citing bizarre workplace prayer rituals and scripture readings in which they were expected to participate. The Cleveland Plain Dealer reported that the suits were settled in August, 2010 for a total payment of $70,000 ($55,000 for the staffers and $15,000 for their attorney), and that these costs were eventually borne by Ohio businesses. Read the story here. Said Innovation Ohio Communications Director Dale Butland: “In a target rich environment, the Workers’ Comp Council is the hands-down winner of this week’s Tax Payer Rip-Off Award. In three years, the Council has produced a grand total of one report. Yet the Director—who last year fired the only three staff members she had—is paid more than $100,000 per year for doing essentially nothing. Even worse, her apparent religious proselytizing in the workplace ended up costing Ohio businesses another $70,000 to settle a lawsuit filed by the three staffers she fired. “Surely Gov. Kasich and his allies who control the General Assembly will be outraged over this million dollar boondoggle. At a time when they’re slashing the budget of the Ohio Consumers Counsel and asking local governments and school districts to “do more with less”, there is an agency right under their noses doing nothing with more. So we’re confident that they’ll end this abuse ‘at the speed of business.’ After all, it’s a golden opportunity to show that they’ll be as tough on conservative political appointees as they are on police, firefighters and teachers.”

Taxpayer Rip-Off of the Week Award: The Kasich Budget’s “Secret Six”

For Immediate Release: April 12, 2011 Contact: Dale Butland 614-783-5833
INNOVATION OHIO’S TAXPAYER RIP-OFF OF THE WEEK: THE KASICH BUDGET’S “SECRET SIX” LITTLE KNOWN BUDGET PROVISIONS MAKE OBM DIRECTOR A CZAR; FAVORED CONTRACTORS WOULD PAY NO BUSINESS TAXES
Columbus—Innovation Ohio, a progressive think tank headquartered in Columbus, today presented its second “Taxpayer Rip-Off of the Week” Award to the “Secret Six” pages of the Kasich budget which would not only give the Administration unprecedented contracting authority, but also exempt winning contractors from paying any state or local business taxes, including the state “CAT” that all other businesses are required to pay. Squirreled away between pages 261 and 266 of HB 153 (Kasich’s proposed two-year budget) are 200 seemingly innocuous lines that would make OBM Director Tim Keen the most powerful unelected person in Ohio. These passages authorize him to contract out—for up to 75 years—ANY state service to ANY applicant that he alone deems “qualified” to “more efficiently and effectively provide those services.” Best of all, contractors Keen picks as winners would pay no business tax on gross receipts or on any income “derived from providing public services.” There is no requirement that the favored bidder be current on taxes, operate a safe workplace, pay a legal wage or even be an Ohio company that employs Ohioans. Nor is there any prohibition against awarding contracts to major Kasich campaign contributors. And awards would not be subject to review or approval by the state Controlling Board or anyone else. Said Innovation Ohio’s Communications Director Dale Butland: “With these “Secret Six” pages, the Governor’s proposed budget takes “taxpayer rip-off” to a whole new level. They transform the OBM Director into an unaccountable modern day Czar, vested with unchecked power to contract out any state service to any company he alone deems ‘qualified.’ The lucky companies get a contract for up to 75 years and—as an extra bonus—don’t have to pay taxes on the money they earn! “So let’s review. A generous Kasich campaign donor behind on his taxes—who operates a call center in Bangladesh paying workers $4.00 per day—would pay no business taxes on income from a state contract providing job re-training advice to unemployed Ohioans over the phone. “Of course, public scrutiny, legislative oversight, and tax fairness don’t mesh with privatizing state services ‘at the speed of business.’ It’s a ‘new day and a new way.’ And transparency and fairness are so yesterday.”

Kasich Budget Could Destroy Over 51,000 Jobs

 

For Immediate Release April 7, 2011

Contact:  Dale Butland 614- 783-5833

KASICH BUDGET COULD DESTROY OVER 51,000 JOBS Think Tank says losses could derail Ohio’s economic recovery
Columbus—Innovation Ohio, a progressive think tank headquartered in Columbus, released an analysis today which finds that passing the Kasich Administration’s proposed two-year budget could mean a direct loss of 51,052 existing Ohio jobs. The study, including the methodology used to calculate the losses, is posted at www.innovationohio.org and can be accessed directly by following this link. Job losses of that magnitude—which are more than double the 22,000 jobs that have been created since Gov. Kasich took office—could easily stall the state’s still-fragile economic recovery. IO’s study is believed to be the first to project the total number of direct job losses that would result from the Administration’s proposed cuts to K-12 education, higher education, state personnel, and local governments. Indirect job losses—which would occur as the decreased spending of newly unemployed workers rippled throughout the state economy—would have an added impact, as will the job losses from cuts to nursing homes and hospitals. Innovation Ohio communications director Dale Butland had this to say: “When Ohioans hear Gov. Kasich boast about his ‘jobs budget’, they mistakenly think he means a budget that creates jobs—not destroys them. But if the legislature enacts all the cuts contained in the Governor’s proposed budget, the 51,000 jobs we stand to lose is more than double the 22,000 jobs Ohio has gained since Gov. Kasich took office. The effect could be catastrophic to Ohio’s still-fragile economic recovery. “School districts and local governments will, of course, do everything possible to avoid laying people off. But they’ve already made the easy cuts and pared their budgets dramatically. So when the Governor proposes to cut school funding by $3 billion and local government funding by 50%, firing workers or raising local taxes are the only realistic choices they have left. By stubbornly insisting that an $8 billion deficit must be closed through cuts and one-time money alone, Gov. Kasich is intentionally pursuing a policy that will cost tens of thousands of Ohioans their jobs. But attacking workers—whether through a job-killing budget or the unfair Senate Bill 5—will not fix Ohio. It will only destroy the middle class. And that’s not what Gov. Kasich was elected to do.”

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Direct Job Loss from Cuts in the Kasich ‘Jobs Budget’

Research Overview
Governor John Kasich recently introduced his proposed two-year ‘Jobs Budget,’ HB153. While the Administration claims to be creating “a platform for growth, for job creation and for a resurgence of this state,” it appears that the Governor’s budget does just the opposite. The extensive cuts contained in this budget will result not only in the elimination or reduction of key services, but also in extensive job loss throughout the state. Innovation Ohio conservatively estimates that in the absence of large local tax increases to offset the Administration’s proposed cuts to K-12 education, higher education, state personnel, and local governments, 51,052 direct jobs are likely to be lost. Read the Report. Read the Press Release.

Unanswered Questions: Liquor Privatization

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.

Innovation Ohio’s Taxpayer Rip-Off of the Week Award

For Immediate Release April 4, 2011 Contact:  Dale Butland 614- 783-5833
INNOVATION OHIO’S “TAXPAYER RIP-OFF OF THE WEEK AWARD” The Kasich Utilities Game: Gut the Counsel, Gouge the Consumer
Columbus — Innovation Ohio, a progressive think tank headquartered in Columbus, today kicks off a new feature: the “Taxpayer Rip-Off of the Week Award.” Awardees will be carefully selected from budget or other public policy proposals advanced by the Kasich Administration, the General Assembly or others that would cause harm to Ohio taxpayers and consumers. Special consideration will be given to proposals that reward the wealthy by sticking it to the middle class. And now, with no further ado, the first Taxpayer Rip-Off Award winner is… drum roll, please…

SLASHING THE OFFICE OF CONSUMERS’ COUNSEL BUDGET BY OVER 50%

Against stiff competition, this Kasich Administration budget proposal wins for the following reasons:
  • While cast as a “budget savings measure,” this attack on Ohio’s best known consumer watchdog agency would have absolutely zero impact on the state budget. Not a single cent of the OCC’s entire budget comes from state money; it is funded entirely from fees on utility companies.
  • The OCC has saved consumers millions of dollars and provided an eye-popping return on investment. On a budget of $17 million, the OCC delivered in Fiscal years 2010 and 2011 nearly $55 million in savings to Ohioans—or a return of $3.22 for every dollar in fee assessments.
  • By defending its gutting of the OCC on the grounds that the agency is redundant with PUCO (the Public Utilities Commission of Ohio), the Kasich Administration betrayed—in the words of the Cleveland Plain Dealer—“a fundamental lack of knowledge about utility regulation in Ohio.” Or as Ohio newspaper columnist Tom Suddes colorfully puts it: “if the PUCO is a watchdog, it needs dentures.” That’s because while the OCC’s sole mission is protecting Ohio consumers, PUCO’s mission includes protecting the interests of the utilities. (We’re pretty sure that the futility of trying to serve two masters is even mentioned in the Bible)
  • By slashing the OCC budget more than 50%, the Administration cravenly sacrifices the interests of electric, gas, water and phone customers—individual as well as commercial—on the altar of enlarged profits for the utility industry. Perhaps unsurprising since—as columnist Suddes points out—utility company lobbyists include at least 7 prominent Republican political operatives, some of whom are personally or professionally close to Gov. Kasich himself.
  • But what makes Gov. Kasich’s proposed de-funding of the Consumers’ Counsel stand out from all the other bad ideas in his budget and elevates it to “award winner” is that it also threatens to sabotage what the Administration says is its own top priority: creating new jobs and bringing new businesses to Ohio. Few things are more important to business location or expansion than affordable and predictable energy prices. Thanks to the OCC’s advocacy for consumers, Ohio’s energy prices have been both. Thanks to the Administration’s advocacy for utility companies, future energy prices in Ohio are likely to be neither.
  • In short, by gutting the OCC, Gov. Kasich would achieve a “damage trifecta”… a policy that manages to hurt both individual consumers and industrial utility users—while simultaneously making Ohio’s business climate worse and less inviting. Hats off to the winner!
IO Communication Director Dale Butland offered his congratulations: “If what they’ve done to the Office of Consumers’ Counsel is any indication of what to expect in the future, the Kasich Administration will be hard to beat when it comes to ripping off taxpayers and the middle class. After all, hammering consumers, enriching utility companies, and making it even more difficult to attract new businesses to our state—all while not reducing Ohio’s $8 billion budget deficit by a single dime—is a very tough act to follow.”

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Consolidated school funding spreadsheet [updated with House and Senate amendments]

Starting with the Governor’s as-introduced budget, Innovation Ohio has consolidated and posted all district-by-district school funding figures released to date, including funds districts can expect to lose from stimulus money that will not be replaced. We provide this spreadsheet as a service to Ohio school officials and parents who deserve both transparency and a ‘one-stop shop’ where they can easily learn the true and total impact of the Administration’s proposed budget on their school districts. While the Administration released the TPP and public utility tax figures, showing districts what they stand to lose, the numbers were broken down into four different spreadsheets. And they do not reveal the district-by-district impact resulting from the loss of federal stimulus funds.  To eliminate great frustration, Innovation Ohio’s spreadsheet pulls all those figures together in one simple document. [Updated 5/18/11 – House Amendments to Governor’s proposal added; 6/2/11 – Senate substitute bill; 7/14/11 – Final, enacted legislation] Download the spreadsheet: Read the press release.

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