FASTER. CHEAPER. UNCONSTITUTIONAL.

That’s the title of an article that appeared in the Case Western Reserve University Law Review last year.

And the author, Sarah Osmer, pulls no punches, arguing that the transfer of public funds to a private entity like JobsOhio is forbidden under article VIII, sections 4 and 6 of the Ohio Constitution.

After a history lesson on the massive fraud,  scandal and public debt that resulted in the early 1800’s as a result of politicians using public money to fund private enterprise, the author covers in detail the constitutional changes that were enacted to keep this type of corruption from ever occurring again.

Article VIII, section 4 of the Ohio Constitution states:

The credit of the state shall not, in any manner, be given or loaned to, or in aid of, any individual association or corporation whatever; nor shall the state ever hereafter become a joint owner, or stockholder, in any company or association, in this state, or elsewhere, formed for any purpose whatever.

Ms. Osmer’s conclusion is pretty damning for Kasich and JobsOhio,the private entity he’s trying fund with public money:

Many of the reasons that nineteenth-century Ohioans initially sought to prohibit public investment in private enterprise—concerns of inefficiencies, ineffectiveness, corruption, favoritism and fraud—are the same type of issues other states have experienced in the previous twenty years with entities designed similar to JobsOhio.

Indeed, this Comment’s analysis of H.B. 1 reveals that it may very well be a twenty-first century “plunder law” and concludes that multiple provisions of H.B. 1, including provisions that allow for joint-ownership between the state and private entities, loss of governmental decision making and authority, and subsidies to commerce, violate article VIII, sections 4 and 6 of the Ohio Constitution.  Ohio would be wise to heed the lessons of the past and prevent placing the public tax dollar and the public trust at risk with a precarious investment in a private enterprise such as JobsOhio.

Despite a pending legal challenge from ProgressOhio and other open questions about the constitutionality of JobsOhio like the ones posed by Ms. Osmer, Kasich and the JobsOhio team still plan to push forward with a bond deal that could prove disastrous for JobsOhio, bond holders and for the state.

Investors and Bond experts agree: the timing for this deal is bad and the legal issues should be resolved first.

But, of course, Kasich needs the $600 Million in one-time money he stands to get for the deal – he’s most likely relying on it in his upcoming budget.

We’d like to think logic and common sense would prevail here. But as we’ve seen in the past, what’s good for Kasich usually wins out over what’s logical and what’s good for the people of Ohio.

 

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