You’ve got to read Mark Naymik’s story in the Cleveland Plain Dealer.
On Sunday, Naymik reported that a private lottery operator had its lobbyist hand deliver a written piece of legislation to the Chairman of the Senate Finance Committee that would… amazingly, privatize the Ohio Lottery Commission’s operations. The company presenting the proposal just happens to have retained longtime political confident Donald G. Thibaut as a lobbyist.
Mind you, there never was a single witness, let alone a single hearing, that discussed the merits of privatization of the Lottery Commission. Normally, such privatization efforts are the subject of hearings and studies. None of these occurred here unless you count last year’s special audit by then Auditor Mary Taylor that seemed to be present a preconceived conclusion absent any facts to support it.
Today, Naymik reports (although yesterday Joseph reported the same thing in this post) that the bill the Senate included is essentially a word for word copy of what the industry proposed. Oh, and it included a massive tax break for the company, too:
And like GTECH’s proposal, the Senate budget bill would exempt the company that wins the lottery contract from paying taxes on its fees.
"The management fee, including any performance-based incentive or other compensation paid to the private lottery manager, shall not be subject to any type of taxation by this state or any political subdivision of this state," the bill reads.
The management fee is 5% of the lottery commission’s total revenues, by the way, so we’re talking a heck of a tax-free fee. Of course, once the Plain Dealer called the lobbyist who delivered this proposal to the Senate Finance Chairman to ask about this tax break, the lobbyist now claims that his client can live… with having to pay taxes. So generous of them, no?
Reaction to these developments was bipartisan:
“This is not how a transparent government should work,” said Democratic State Sen. Mike Skindell of Cleveland. “This is of great importance to the state and worth a lot of money and it not getting a proper vetting.”
Ohio Lottery Commission Chairman Pat McDonald, a Republican, said the commission was not asked for any input on the proposed legislation.
“One can question how a vendor with a history at the lottery and self-interest can get that legislation infused in the budget bill,” said McDonald, who was unaware of it until The Plain Dealer wrote about it on Sunday.
The Senate Finance Committee didn’t even consult with the Republicans on the Ohio Lottery Commission about this proposal before they included it into the budget.
There’s all sorts of contradictions here. The Senate slows down the Turnpike privatization by making it permissive. The lottery privatization is mandatory, with no further legislative action necessary.
Then, there’s the issue of Kasich’s position on the casinos.
Kasich has decried as bad deal for taxpayers Issue 3 – the amendment to the state constitution passed by voters in 2008 that was written by the casino operators. But Kasich did not offer a similar condemnation of the budget language written by GTECH.
“We are taking a look at the Senate language now, but at first blush, we are encouraged by the fact that they have embraced the idea of trying to increase the Lottery’s benefit to education by exploring private sector options,” Kasich spokesman Rob Nichols said Wednesday in a statement.
Remember, the casinos were a “bad deal” for Ohio because it was written by the casino operators and adopted unchanged. Now, the Senate is about to do the same thing. Kasich opposes the last; supports the former. One big difference is that the latter had his closest political aide on its payroll when it introduced the proposal. Kasich opposes the casinos, thus giving the casinos a reason to hire his closest political aides as lobbyists.
Kasich didn’t get the special interests’ snouts out of the trough, he just served them more slop to feast on.