Nov. 6 (Bloomberg) -- JobsOhio, Governor John Kasich’s initiative to spur private economic development by selling bonds backed by state liquor sales profit, has twice eluded a legal challenge by a nonprofit citizens’ group that claims the program is unconstitutional.
Today, ProgressOhio.org, which says it has 350,000 members, went before the justices of the state’s highest court in Columbus seeking to revive the case. Two lower Ohio courts have ruled the group hasn’t shown it suffered any injury that would entitle it to redress under Kasich’s plan to use public money to spur private development.
“The JobsOhio arrangement violates numerous key structural limitations imposed by the Ohio Constitution on state government,” including one barring the state from making equity investments in private corporations, ProgressOhio said in an Ohio Supreme Court filing.
If the state supreme court agrees with the lower appeals court that the group didn’t have public interest or taxpayer standing to oppose the measure, “no Ohioan has the capacity” to question the JobsOhio initiative, ProgressOhio said.
“We’re here today because the appellate court wrongly held Ohioans always need a personal stake to enforce the Ohio Constitution,” Maurice Thompson, a lawyer for ProgressOhio, told the justices.
“Who is positioned to bring this sort of challenge?” Chief Justice Maureen O’Connor asked.
“That is the question we have also been asking all along,” Thompson said. “Because it appears as though nobody has standing if the plaintiffs here don’t have standing.”
The product of legislation signed by Kasich, a Republican, in 2011, JobsOhio is a private entity that earlier this year sold $1.5 billion in bonds to raise money for job creation and to finance its 25-year lease of the state’s wholesale liquor distribution system. Liquor sale profits -- a record $251 million last year -- will be used to pay the bond debt.
In its first full year, the agency worked with 277 companies to create almost 21,000 jobs while retaining over 54,000 more, according to its 2012 annual report. It ended fiscal 2013 with more than $181 million available for job-creation loan and grant programs, according to an audited financial statement.
The state maintains that the program is constitutional. Stephen Carney, an attorney for JobsOhio, told the justices today that the state constitution only allows those who have actually suffered to bring a grievance into court.
“This case is not about the merits of JobsOhio as an organization, it’s about constitutional limits to hear disputes between actually affected parties,” he said. “There is no investment of public money here. They say taxpayer standing, but there is no taxpayer money being spent.”
A Kasich plan to expand Medicaid under President Barack Obama’s health-care overhaul was challenged in a state Supreme Court lawsuit brought by six lawmakers and anti-abortion organizations in Cleveland and Cincinnati.
Those plaintiffs claim that initiative was unlawful because Kasich obtained approval for expansion of the joint federal-state insurance program for the indigent from a state panel that considers agency spending requests after the governor was unable to persuade legislators to go along with the plan.
The JobsOhio case is ProgressOhio.org Inc. v. JobsOhio, 12-1272, Supreme Court of Ohio (Columbus).
To contact the reporters on this story: Andrew Harris in federal court in Chicago at firstname.lastname@example.org; Denise Trowbridge in the Supreme Court of Ohio in Columbus at ;
To contact the editor responsible for this story: Michael Hytha at email@example.com