Friday, May 6, 2011

Ohio House Budget Favors Corporations and Wealthy

Many corporate and wealthy investors to the Governor and Republican Ohio House members celebrated yesterday. And it wasn’t because it was Cinco de Mayo. Rather, the Ohio House passed a budget bill that will, if enacted, directly benefit corporations and wealthy Ohioans.

Business corporations received (appropriate on Cinco de Mayo) five legislative piñatas by the Ohio House stuffed with potential windfalls for various business corporations.

1. Leasing liquor sales. Ohioans like to drink alcohol. Liquor sales is very profitable for the state. The House bill calls for leasing liquor distribution operations to a corporation. The money from the lease will be used to fund the already privatized (“corporatized” is a more descriptive term) JobsOhio — the corporate entity created earlier this year meant to replace the public Ohio Department of Development. JobsOhio itself is unconstitutional ( see ). A lawsuit was filed recently by Progress Ohio challenging the constitutionality of JobsOhio. You knew liquor would be involved in this bill passed on this day in some way!

2. Charter schools. The Ohio bill permits more charters across the state and for-profit corporations to launch and operate charters without the oversight of a sponsor. Charter advocate and head of White Hat Management corporation, Akronite David Brennan, is a major political contributor/investor to Republicans. If this provision stands, he got much more than his moneys worth.

3. Cut funding for local governments. The House bill slashes $555 million in the Local Government Fund over the next two years. This compounds cuts from other state sources (including the estate tax) and the federal government. Local governments will be increasingly forced to consider corporatizing local services — which would benefit a variety of corporations all too willing to take over water, sewer, parking, trash and many other services.

4. Corporatize prisons and turnpike. Governor Kasich had originally called for corporatizing five Ohio appropriate number for the day the bill passed. One more was added in the House bill. The estimated take by the state is $200 million. Prisons are very profitable businesses across the country. The history of corporate prisons is a history of corners cut (i.e. reduction of staff and services) to increase profits. A former Kasich congressional chief of staff and longtime advisor, Don Thibaut, is now a lobbyist. A new client is Corrections Corporations of America (CCA), one of the major corporate operator of prisons in the nation. CCA operates one federal prison in Ohio, the Northeast Ohio Correctional Center in Youngstown. That facility has had a host of safety issues over the years, including murders and stabbings.

Separately, the bill empowers the Governor to explore over the next two years selling or leasing a real state financial jewel — the Ohio Turnpike.

5. Drilling for oil and gas in state parks. An amendment to the House bill to ban drilling for oil and gas in Ohio’s state parks was defeated. The ban would have covered the highly risky type of horizontal gas drilling known as “fracking.” Out-of-state gas and oil drilling corporations have rushed into the state recently vying for the “right” to drill on farmland, backyards and state parks above both the Marcellus and Utica shale gas formations. Gas drilling could yield tens of billions, if not more, for gas drilling corporations.

These corporate interests weren’t the only winners in the House budget bill. The wealthy benefited in at least two ways.

1. Abolishes the estate tax. Only 7% of all estates in Ohio are taxed — those valued over $338,000. The House bill eliminates the tax altogether starting in 2013. It’s ironic that many, if not most, who supported this measure also talk about how people should be economically rewarded for their own success and not simply live off the dole of others.

2. No tax increases. There was no mention in the House bill of closing any portion of the $8 billion state budget gap by raising taxes on the wealthy. The term “progressive tax” has virtually disappeared from political discourse. This despite the fact that Sociologist William Domhoff in his recent update of Who Rules America documents that the richest 10% people in this country own 98.5% of all financial securities. The middle class, working class and poor will all have to make sacrifices under this budget. The richest 5-10% of Ohioans can certainly contribute their part.

All in all, corporations and the wealthy did very well under the House bill. It next goes to the Senate.

In the immediate term, resistance to these measures must take the form of pressuring your State Senator. Contact yours at

In the longer term, corporations and the wealthy will continue to get their way so long as corporations continue to have constitutional "rights" (including political "Free Speech") and money is constitutionally defined as speech. Move to Amend seeks to abolish both notions and affirm that corporations are not people and money is not speech. To sign the Move to Amend peititon calling for a constitutional amendment addressing both counts, go to

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