Budget Will Likely Include Money From Privatizing Government Functions

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The last state budget was balanced with more than 2 billion dollars in federal stimulus dollars. And Gov. John Kasich has railed against using that one-time money more than once – most recently, in his State of the State speech.

Kasich said, “No family would operate on one-time money to just have business as usual when they know the change is coming.”

The governor has set a big goal for this budget – resolve the deficit that’s he’s said is 8 billion dollars without raising taxes. And the idea that he would privatize some state functions to deal with the deficit isn’t new at all – here’s what Kasich said in December: “Privatization with a lot of the activities in the prisons or with some of the prisons is definately on the table.”

Kasich also talked about the turnpike in December: “If you’re going to do a lease arrangement for decades, you want to make sure you’re getting what it’s worth. And there may be alternatives to just a lease, a long term lease, there may be – we’re looking at everything.”

So if Kasich is opposed to using one-time money for regular state operations, how would the huge sums that privatizing the prisons and the turnpike be used? John Begala with the Center for Community Solutions admits it’s hard to tell right now, because the details of these deals are critical.

Begala says, “You know, there are only so many tricks in the hat, and once of these days we’re going to run out of tricks.”

Begala also says real savings can be wrung out of the prison system with sentencing reform and alternative sentencing options for non-violent offenders with short-term sentences.

He says, “And if you think that it costs $25,000 a year, give or take, to house a prisoner for a year, we get that down by 10% from the 51,000 that we have incarcerated right now, then you’re talking real money. That is a much more substantive, has a much greater long term impact on the structural deficit than the one-time stuff does.”

Dale Butland at the progressive think-tank Innovation Ohio is also interested to see the details. He notes that there may be operational problems to privatizing some things – such as the Ohio Lottery, the profits of which go to Ohio’s public schools. A proposal to privatize the lottery was submitted to the state agency that researches possible laws last week, and Lt. Gov. Mary Taylor said in an audit she did last year that the lottery could be better run as a quasi-corporate agency. Butland also says leasing the turnpike might solve the immediate budget problem, but could bring other financial trouble down the road.

Butland says, “Every other state that has tried that has seen a large increase in tolls on the toll roads. So it in a sense it becomes an unvoted tax on truckers and others who use the toll road.”

Another proposal that is said to be in the governor’s budget is a plan to allow private drilling for oil and gas and for timber sales in state parks. The Sierra Club says it worked with other environmental groups last year on a study that showed the state’s logging program costs more than it brings in.

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