Ohio House Budget Would Let Kasich Sell Assets Such as Prisons
Ohio Governor John Kasich could sell or lease six prisons and the state turnpike under the $55.6 billion, two-year budget that passed the Republican-led House of Representatives 59-40 yesterday.
The plan, which goes to the Republican-run Senate, erases a deficit of almost $8 billion without raising taxes while eliminating an estate levy and maintaining “as much as possible” funding for education and other services, Republicans said. It passed without any support from Democrats.
“This is a responsible budget,” Representative Ron Amstutz, a Wooster Republican and chairman of the Finance Committee, said during debate before the vote. “It’s only those who feel a responsibility to lead our state forward that are going to be voting for this budget.”
The spending plan would cut local aid by about $1.44 billion, including about $800 million from school districts. That would force cities to raise taxes or slash services, Democrats said. They also said the state won’t get fair value for the assets to be sold. The fiscal biennium begins July 1.
“This budget sets the wrong priorities,” Representative Armond Budish, a Beachwood Democrat and his party’s leader in the House, said during debate. “This budget sets priorities that will decimate Ohio’s middle class, and that is wrong.”
Kasich, a first-term governor, sent buttons to fellow Republicans that read “Balanced budget, no new taxes” and show a circle and red line drawn through “8B.”
Lifting Up Ohio
“We’re doing what folks didn’t think anyone could do -- fill a massive $8 billion budget gap without raising taxes,” Kasich said in a statement after the vote. “Together, we’re going to get this thing done and lift up Ohio.”
One item sought by Kasich was left out. The governor proposed raising the pension contribution of government workers by 2 percentage-points of wages. The House plan omitted the provision as lawmakers sought more time to weigh the change.
Kasich’s March 15 spending proposal called for raising an estimated $200 million by selling five prisons to companies that would run them. The House plan would add a juvenile correctional facility for sale or lease.
The House budget also calls for transferring wholesale liquor distribution, now run by the state, to JobsOhio, a nonprofit group created to oversee economic development.
The proceeds of any asset sales or leases could only be spent with legislative approval, according to budget documents. Kasich has estimated that the state could get $3 billion for a lease of the 241-mile (612-kilometer) Ohio Turnpike.
Permission Required
“It is our responsibility to give permission,” House Speaker William G. Batchelder, a Republican from Medina, told reporters on May 4.
The state may not get an adequate return, said Representative Alicia Reece, a Cincinnati Democrat who voted against the plan.
The state will get appraisals and expert opinions before selling the assets to ensure a fair price is received, Batchelder told reporters after the vote.
The House plan also calls for ending the estate tax starting in 2013. The levy of as much as 7 percent generated $333.8 million in 2009, according to the Taxation Department.
To contact the reporter on this story: Mark Niquette in New York at mniquette@bloomberg.net
To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net
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