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Readers may be familiar with OSU President Gordon Gee’s aggressive campaign to privatize campus parking for a lump sum of cash, leaving the campus community paying more to park and depriving future university administrations of revenue for the next fifty years.

What’s unclear to us is why. In talks to campus groups, most of whom are opposed to the plan, Gee paints a gloomy picture of the school’s finances and threatens harsh consequences of not acting:

“Gee says parking could save OSU”
Ohio State’s future could be filled with huge budget cuts, layoffs and bigger-than-normal tuition increases if the university doesn’t consider taking a payout from leasing its parking operation, President E. Gordon Gee told professors yesterday.
Columbus Dispatch, June 1, 2012

Oh, so it’s to avoid job losses and tuition increases? Not so fast. In the very same article, the university outlines plans for spending the money:

Ohio State officials have repeatedly said that if the university were to get a $400?million payout from leasing its parking, $200?million would be used to hire more tenure-track faculty; $75 million would be used toward student scholarships; $75 million could go toward the campus bus service and improving other transportation; and $50 million would be used to support the arts and humanities.

So, rather than using parking funds to keep existing programs going at current levels in the face of state budget cuts, Gee plans to grow programs and departments? Meanwhile, he’s going around to professors threatening layoffs, while the University is saying they will actually hire more professors. Sounds less like belt-tightening and more like an emperor on an endless expansion mission who needs a quick cash infusion.

Reports today say the University is considering an offer to take over control of parking (and its revenues) by an unnamed bidder for 50 years in exchange for a lump sum of $483 million and permission to raise parking rates by 5.5 percent a year.

This is a horrible deal for the school and commuters.

At $28 million a year in parking revenue, OSU would be giving up $1.4 billion for that $483 million lump sum, assuming they never raise parking rates for fifty years. If they raised them the 5.5% a year allowed in the proposal, they’d actually lose out on $6.9 billion over that time. All so Gee gets nearly $500 million for who knows what.

Gordon Gee is the highest-paid college president in the nation and has been reported to milk the school for a ridiculous number of taxpayer and student-funded perks. And he’s been on a spending spree – building a $1 billion new hospital and $350 million in dorms (for his ridiculous plan of reqiuring sophomores to live on campus) – and now he wants a quick infusion of nearly $500 million more all to expand programs (or we suspect fill some holes in his ballooning capital improvement budget) at the expense of every OSU president for the next 50 years.

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  • jeffinohio

    What are the maintenance and labor costs over 50 years the university incurs if they keep responsibility?

  • pb_dirtgirl

    You’ll have to ask Gee. The point is, if they’re losing money from parking, they can raise rates. That hasn’t happened in at least 4 years. It’s still more economical than handing it over to a private company and letting them raise rates endlessly.

  • Xx

    FIRE GEE

  • Troysteelerfan

    The privatization of our state continues…..the goal of the GOP and their cronies like Gee is to make Ohio and the nation a feudal society….

  • annekarima53

    Does Jeff want to see the projection sheet or whatever you are basing your assumption on?

  • jeffinohio

    And my point is you can’t make the argument that one course of action is more economical then another if you don’t know the ALL  numbers.
    You can make the point that ceding state resources to private interests is against the common good regardless of profit and/or loss and if the university operates the parking lots at a loss, then rates either need to go up or there needs to be a justification for their being subsidized.

    Your not making that argument and “You’ll have to ask Gee” is a weak deflection.

  • I think you missed the big point: Gee says he needs to privatize the parking system or else he’ll have to start firing professors, raising tuition and cutting the budget.   

    And yet he’s already committed all of this money to new projects?  This seems to indicate that he’s full of crap.

    If you’re looking for numbers, let’s start by asking Gee to show HIS projections that back up these claims.  

    Gee has never said the parking system is losing money and there is no reason to think it is.As a matter of fact, if it was losing money, there’s no way a private company would consider investing in it in the first place.

  • Dmoore2222

    Sounds to me like we’re going to hear some bad fiscal news about OSU that Gee is trying to get out ahead of with this scheme. My guess is he’ll make a quick, unexpected exit some time soon. 

  • annekarima53

    Dirtgirl, did you actually ask for the figures or are you just regurgitating this stuff and adding your own spin?  You wrote the article to supply information.  It is not your readers place to supply you with information that you ought to have had ready when you supplied the article to the web.

  • What ARE you talking about Annekarima53?

    The $28 million a year in parking revenue figure was reported by the Dispatch.  We just did some simple calculations to come up the projections over time.

    If you multiply the current figure by 50 years:

    $28 million * 50 years = $1.4 Billion 

    If you add 5.5% to this figure each year for 50 years the result is:

    $6.9 Billion

  • annekarima53

    I’m referring to Jeff’s comment and Dirtgirl’s comment that he’ll have to ask Gee.

  • The burden of proof here is on Gee to show this is what is best for the University.  We’re simply pointing out the fact that his statements don’t match his actions, and his numbers, when you look at them over time, seem to be losing the University a lot of money.

    I don’t need to know how much to guy cleaning the parking garage costs to do that. Moreover, Gee has never claimed the parking garage is losing money or isn’t turning a profit.  It must be or else you wouldn’t see private companies falling all over each to submit the highest bid.

    Saving money was never presented as a reason for privatizing parking.

    Gee is simply trying to get a big, short-term influx of cash that he can play with.   And in doing so, he’s screwing every other University President for the next 50 years by giving away steady source of revenue.

    If you click through the Dispatch article you’ll see OSU finance experts seem to agree.  It’s unlikely that this will end up being the best financial choice for OSU, or for its student and faculty.

    It’s just like privatization at the state level (think selling prisons, turnpike) ends up hurting the state financially over the long term simply so some elected official can get a big pot of money now to help fund his/her pet projects and hopefully win some votes.

  • Green Iris

     I agree.
    none of this takes into account the reduction in funding coming from the
    state. This is happening to all public higher education institutions,
    and generally there is a small tuition hike in the offing. Perhaps Gee
    is now getting into red ink over some pet projects and has to close the
    budget.

    Or perhaps some big pocket donors have closed their wallets after the football scandal.

  • Agreed.  This is very possible.  With the big hospital, new dorms being built and Gee’s $8+ MILLION in yearly travel expenses, Gee certainly hasn’t shown he’s interested in fiscal restraint.

  • jeffinohio

    No, I got the big point. It’s in the first paragraph. The post falls down when it gets to “Why?”, which is pretty much the rest. 

    “…if it was losing money, there’s no way a private company would consider investing in it in the first place.”

    Um…ok.

  • clambake

    I thought that was pretty ridiculous too– painting a picture of financial Armageddon and then turning around and saying how this money will be spent on newfaculty, upgraded bus service, etc.
    Perhaps they could use some of that money to scrub the discredited Chesapeake Energy name from the shoe.
    Gee has no ethics– he is just interested in increasing his fiefdom.

  • darla_der

    Do you think he’s doing it strategically to make John “Get on the bus” Kay-suck happier with OSU and therefore protect them from something else? I kind of wonder. Anyway: definitely indirect connection, but I think it may be direct.

  • missskeptic

    “Ohio State’s future could be filled with huge budget cuts, layoffs and bigger-than-normal tuition increases…”

    And just what would a “bigger than normal” tuition hike look like?  At this point in time, ANY tuition hike is too big.

  • Think.

    Well… Gee and Kasich may be best buds, since President E. Gordon Gee recently dotted the
    i in John Kasich’s name as the governor signed legislation containing the state’s
    $1.74 billion construction budget.
    http://www.dispatch.com/content/stories/local/2012/04/03/gee-gets-honor-of-dotting-i-on-bill.html

  • John

    The other “savings” for OSU (my alma mater) is retirement.  I’m sure all the Parking employees are covered by PERS, so OSU pays the employer’s 12%.  Any workers “lucky” enough to get hired by the new private operator will be covered by Social Security and whatever crummy 401(k) (if any) offerred by their new employer.  Mr. Everybody-Loves-Him Gee is just another conservative Republican Morman who wants to privatise whatever he can and screw the public employees performing a public function.

  • TJsClone

    Gee I was amusing and tolerable.
    Gee II, the Sequel, is the most embarrassing rip-off artist the university has ever seen.

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