So today, our Budget Watch wrote about a small provision buried in Kasich’s budget that would seem to give the Office of Budget and Management practically unlimited authority to privatize any State service the Administration desires subject only to Controlling Board approval.
After the jump, we’ve got the four relevant pages from the non-partisan Legislative Service Commission’s analysis of this provision. The bill only limits the Administration to contracts “no longer than 75 years in duration,” because apparently 72 years after he is no longer Governor struck even Kasich as too ridiculous of a time period to bind the State to his Administration’s decision.
But the LSC analysis ends with what I hope to be a sentence that is misleading and not what it appears to say:
“The gross receipts and income of a proposer derived from providing a service under a contract are to be exempt from taxation levied by the state and its subdivisions.”
Again, I haven’t had time to locate and read the statutory language myself, but I generally trust LSC’s analysis. And unless I’m misreading what they’re saying, it sounds like that not only does Kasich create a massive executive power grab that lets him privatize State functions at his pleasure, but it creates a massive tax break to the businesses he awards these contract to.
Folks, even for-profit charter schools don’t get as generous of treatment as this provision would seem to give. How do you even score something like this fiscally?
Seriously, someone tell me this budget doesn’t do this. That the LSC statement is a little misleading or something. We seriously aren’t thinking of handing government services over to the private sector and declaring any income they make off of providing such services tax-exempt.
That would be crazy, right? Right?!?
On top of that the bill says that if your service is privatized, even partially, then your work is no longer covered by your collective bargaining agreement, nor does the contractor have to pay prevailing wage. Yep, even if you are still considered a State employee who is just working at or on the privatized project, no public employee collective bargaining for you applies. Period. No exceptions.