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The Kasich Reign of Terror

  • It is now pretty transparent to how Gov. Kasich is going to make himself look good and try to help himself a viable candidate for a national office. Here's how his plan is going to work. Like all Republicans he will tell the public that what he is doing is good for the state of Ohio and will help balance the budget without, are you ready, raising taxes. This, of course, makes a large portion of the public giddy with excitement, no new taxes and everything is going to be great. They say, Kasich is a great governor, he cares about the people and won't raise taxes. Until Kasich is out of office. Then the proverbial chickens come home to roost.
    Here's the grand plan. Kasich wants to sell the Turnpike, sell the Prisons and sell the liquor licence dept. Look at all the money he will make for the state of Ohio. All the public, with their 30 seconds of paying attention used up, will say isn't that great, we just made billions. How smart they will be except for one thing. All these departments also raised money for the state of Ohio. They put people to work. What happens when the private company that runs the Turnpike ups the price? What happens when the private company that owns the prisons cuts back on guards? What happens when the private company raises the cost of liquor licences?
    But here is the clincher that no one is thinking about. Where is all the money that these three departments brought in every year going to come from? It's 4 years later and Kasich is gone, declared a miracle worker for his deficit cutting in Ohio and the poor schmuck that's governor is left with another mess. Now what happens? It happened to Strickland because Taft was so bad, it happened in Michigan when the Governor refused to raise any taxes and the infrastructure of the state suffered .
    So this is Kasich's plan, mark it down and call me a fool if it's not what happens. I'll be around.

    dave1954

  • dave1954 said...

    It is now pretty transparent to how Gov. Kasich is going to make himself look good and try to help himself a viable candidate for a national office. Here's how his plan is going to work. Like all Republicans he will tell the public that what he is doing is good for the state of Ohio and will help balance the budget without, are you ready, raising taxes. This, of course, makes a large portion of the public giddy with excitement, no new taxes and everything is going to be great. They say, Kasich is a great governor, he cares about the people and won't raise taxes. Until Kasich is out of office. Then the proverbial chickens come home to roost. Here's the grand plan. Kasich wants to sell the Turnpike, sell the Prisons and sell the liquor licence dept. Look at all the money he will make for the state of Ohio. All the public, with their 30 seconds of paying attention used up, will say isn't that great, we just made billions. How smart they will be except for one thing. All these departments also raised money for the state of Ohio. They put people to work. What happens when the private company that runs the Turnpike ups the price? What happens when the private company that owns the prisons cuts back on guards? What happens when the private company raises the cost of liquor licences? But here is the clincher that no one is thinking about. Where is all the money that these three departments brought in every year going to come from? It's 4 years later and Kasich is gone, declared a miracle worker for his deficit cutting in Ohio and the poor schmuck that's governor is left with another mess. Now what happens? It happened to Strickland because Taft was so bad, it happened in Michigan when the Governor refused to raise any taxes and the infrastructure of the state suffered . So this is Kasich's plan, mark it down and call me a fool if it's not what happens. I'll be around.

    Governor Kasich's turnpike plan is a 3 billion dollar, 40 year lease. 600 million would be allocated to pay off the bonds. Private entity would then pay for infrastructure, upkeep and road maintenance. Also, fees increase would be restricted. Private enterprise in Indiana lowered full time employee income by about 10k a year. Ohio has 230 full time toll road employees that make on average 66k a year. The turnpike revenues in 2010 were just over 232 million dollars.
    There are 32 state run prisons in Ohio and two privately run prisons. There are just under 7000 prison employees and over 51,000 inmates. Daily costs per inmate vary from about 46 dollars a day in minimum to 146 per day in maximum prison. Prison populations are growing. The need will be for more prisons with an expected increase of employees though at the present there are too few guards per inmate numbers. Over 1000 guards were laid off since 2001. Then Gov. Strictland threatened to close a prison unless inmate numbers came down. He argued for sentencing laws changed to allow more half way house assignments.
    There are currently 1254 licensed liquor stores (not bars or clubs) at a cost of almost 4k per license. One might assume that there would be a marked increase in liquor license granted under private enterprise but that is not a given. State regulations and liquor control agency would still monitor applicants but the upside is that liquor entities could focus on this service only whereas the State is like an octopus with arms and interests going in everying direction. A multi-tasker for sure. The problem is that it is trying to be all things to all people.
    So, the State of Ohio, sells or leases two revenue producers and one money pit. No more tax resources or minimum amount will be spent on administration, upkeep or maintenance of any of them. Private enterprise pays to take them over which produces a cash windfall of unknown amounts but certainly not at a loss. The State no longer takes in tax revenue from liquor or license fees and lets private enterprise take over employment opportunities and salaries, benefits costs, etc. State still receives tax revenue. Size of government shrinks. That's just for starters. Maybe not perfect but private enterprise succeeds or fails on it's merits, unlike municipal, state and federal government which spends and hires even while operating at a loss. All at taxpayer expense. Not good.

    csoto47

  • Thanks csoto47 for an articulate, substantive, and well reasoned response.

    This post has been edited 2 times, most recently by sryan2 on 8/21/2011 at 10:28 PM

    sryan2 ●

  • csoto47 said...

    Governor Kasich's turnpike plan is a 3 billion dollar, 40 year lease. 600 million would be allocated to pay off the bonds. Private entity would then pay for infrastructure, upkeep and road maintenance. Also, fees increase would be restricted. Private enterprise in Indiana lowered full time employee income by about 10k a year. Ohio has 230 full time toll road employees that make on average 66k a year. The turnpike revenues in 2010 were just over 232 million dollars. There are 32 state run prisons in Ohio and two privately run prisons. There are just under 7000 prison employees and over 51,000 inmates. Daily costs per inmate vary from about 46 dollars a day in minimum to 146 per day in maximum prison. Prison populations are growing. The need will be for more prisons with an expected increase of employees though at the present there are too few guards per inmate numbers. Over 1000 guards were laid off since 2001. Then Gov. Strictland threatened to close a prison unless inmate numbers came down. He argued for sentencing laws changed to allow more half way house assignments. There are currently 1254 licensed liquor stores (not bars or clubs) at a cost of almost 4k per license. One might assume that there would be a marked increase in liquor license granted under private enterprise but that is not a given. State regulations and liquor control agency would still monitor applicants but the upside is that liquor entities could focus on this service only whereas the State is like an octopus with arms and interests going in everying direction. A multi-tasker for sure. The problem is that it is trying to be all things to all people. So, the State of Ohio, sells or leases two revenue producers and one money pit. No more tax resources or minimum amount will be spent on administration, upkeep or maintenance of any of them. Private enterprise pays to take them over which produces a cash windfall of unknown amounts but certainly not at a loss. The State no longer takes in tax revenue from liquor or license fees and lets private enterprise take over employment opportunities and salaries, benefits costs, etc. State still receives tax revenue. Size of government shrinks. That's just for starters. Maybe not perfect but private enterprise succeeds or fails on it's merits, unlike municipal, state and federal government which spends and hires even while operating at a loss. All at taxpayer expense. Not good.

    Do you have references for your numbers? I'm seeing difference figures. For example the "average 66k a year" is 3 or 4k higher than the figures I could find.

    Given that you admit that the turnpike and liquor stores make profits, there is no financial reason to lease and sell these except to cover Kasich's inability to balance the budget for four years without raising taxes. Selling off profitable parts seem to make dave1954's case.

    You do not respond to the thread starter but think that selling the liquor stores should be done because "the State is like an octopus with arms and interests going in everying direction. A multi-tasker for sure. The problem is that it is trying to be all things to all people." That is just empty rhetoric, given that they are money makers evidently the State is more than capable of handling them.

    As far as privatizing prisons, there are lots of arguments against it. See:
    http://www.nytimes.com/2011/05/19/us/19prisons.html?pagewanted=all

    And:
    http://www.acluohio.org/issues/criminaljustice/PrisonsForProfit2011_04.pdf

    Though often asked, God does not take sides in politics or college football.

    TimMcM

  • dave1954 said...

    It is now pretty transparent to how Gov. Kasich is going to make himself look good and try to help himself a viable candidate for a national office. Here's how his plan is going to work. Like all Republicans he will tell the public that what he is doing is good for the state of Ohio and will help balance the budget without, are you ready, raising taxes. This, of course, makes a large portion of the public giddy with excitement, no new taxes and everything is going to be great. They say, Kasich is a great governor, he cares about the people and won't raise taxes. Until Kasich is out of office. Then the proverbial chickens come home to roost. Here's the grand plan. Kasich wants to sell the Turnpike, sell the Prisons and sell the liquor licence dept. Look at all the money he will make for the state of Ohio. All the public, with their 30 seconds of paying attention used up, will say isn't that great, we just made billions. How smart they will be except for one thing. All these departments also raised money for the state of Ohio. They put people to work. What happens when the private company that runs the Turnpike ups the price? What happens when the private company that owns the prisons cuts back on guards? What happens when the private company raises the cost of liquor licences? But here is the clincher that no one is thinking about. Where is all the money that these three departments brought in every year going to come from? It's 4 years later and Kasich is gone, declared a miracle worker for his deficit cutting in Ohio and the poor schmuck that's governor is left with another mess. Now what happens? It happened to Strickland because Taft was so bad, it happened in Michigan when the Governor refused to raise any taxes and the infrastructure of the state suffered . So this is Kasich's plan, mark it down and call me a fool if it's not what happens. I'll be around.

    You forgot one.

    Taft left Strickland with a mess and Strickland left Kasich with a mess, or in your world did Strickland have the State thriving and solvent?

    Both Taft and Strickland were a joke, taft using tobaco money and Strickland using Stimulas money to prop up the budgets and pass the buck to the next schmuck to get into office.

    gpracer73

  • TimMcM said...

    Do you have references for your numbers? I'm seeing difference figures. For example the "average 66k a year" is 3 or 4k higher than the figures I could find.

    Given that you admit that the turnpike and liquor stores make profits, there is no financial reason to lease and sell these except to cover Kasich's inability to balance the budget for four years without raising taxes. Selling off profitable parts seem to make dave1954's case.

    You do not respond to the thread starter but think that selling the liquor stores should be done because "the State is like an octopus with arms and interests going in everying direction. A multi-tasker for sure. The problem is that it is trying to be all things to all people." That is just empty rhetoric, given that they are money makers evidently the State is more than capable of handling them.

    As far as privatizing prisons, there are lots of arguments against it. See: http://www.nytimes.com/2011/05/19/us/19prisons.html?pagewanted=all

    And: http://www.acluohio.org/issues/criminaljustice/PrisonsForProfit2011_04.pdf

    I have also seen numbers all over the place, it is very hard to get a gauge on all 3 of these subjects.

    I have also not been able to find anything on the state turning any kind of profit on the turnpike. between salaries, benies and maintenance I highly doubt the State receives any profit, I was able to find monies from taxes going to road projects on the turnpike, so that tells me there is not a profit. The turnpike deal does look pretty good for the people of Ohio on the surface, it is a long term lease so money will be coming into the State over a long period of time and a one time shot of capital. plus elimianting the expense of oeprating it does not sound like a bad deal for the State, I have read other states doign the same, some to success some to failure depending ont he deal that was done. Jobs will not go away, these folks will transfer over to the private company doing the deal. will salries go down? who knows, persoanlly 66000 dollars plus benis to sit in a booth if true is assinine.

    Liqour is a unknown. we will still make money on the taxes off the sale, but I was not able to find anything concrete on what we make off the sale and what expenses are there to operate? I can see both sides of the issue here. I kinda thought this was done allready, you rarely see a state ran liqour stand alone store anymore, they are mostly in grocery stores now, staffed by store employees, so honestly, I dont know if this would be a boon or a bust. I know most other states privatized this a long time ago?

    The prisons I dont like. I have no problem with a private company wanting to open a new prision and running it, but I really dont see where this will save us anything long term, from what I have read and I could be wrong, this would be a one time shot of capital and that is it, sure save the expense but unlike the turnpike or liqour where the State still receives money long term, this one doesnt seem right. I do agree with Strickland that we have too many folks in prision, I do think sentancing laws need to be revamped, a shoplifter or a drug user shouldnt be in prision being paid to be taken care of, they should be on house arrest or cutting grass in some park somewhere or picking up trash, etc, but that is just my opinion.

    gpracer73

  • TimMcM said...

    Do you have references for your numbers? I'm seeing difference figures. For example the "average 66k a year" is 3 or 4k higher than the figures I could find.

    Moot point - substitute 62-63K per year, it is still a reasonable wage - this is an example of arguing the shade of blue in the crayon box.

    nwbucknut ●

  • The bottom line is the state of Ohio should not own a turnpike, prisons or the liquor franchise. Private industry can run all three better (and yes, probably with less jobs). There is to much govenment that spends to much money. Kasich is taking action to balance the state's budget unlike Stickland and Taft. It may not be perfect, but it is a lot better than kicking the can down the road like the previous governors did. What Kasich has done takes a lot of courage. It is not easy being the "adult" in the room and fixing the sins of decades past. Kasich is getting Ohio's spending under control. Now we need to make big changes at the federal level so the US can do the same.

    NEOhio77

  • And by the way, "reign of terror". Are you serious?? That is the problem with people like you, making a mountain out of a mole hill.

    NEOhio77

  • dave1954 said...

    It is now pretty transparent to how Gov. Kasich is going to make himself look good and try to help himself a viable candidate for a national office. Here's how his plan is going to work. Like all Republicans he will tell the public that what he is doing is good for the state of Ohio and will help balance the budget without, are you ready, raising taxes. This, of course, makes a large portion of the public giddy with excitement, no new taxes and everything is going to be great. They say, Kasich is a great governor, he cares about the people and won't raise taxes. Until Kasich is out of office. Then the proverbial chickens come home to roost. Here's the grand plan. Kasich wants to sell the Turnpike, sell the Prisons and sell the liquor licence dept. Look at all the money he will make for the state of Ohio. All the public, with their 30 seconds of paying attention used up, will say isn't that great, we just made billions. How smart they will be except for one thing. All these departments also raised money for the state of Ohio. They put people to work. What happens when the private company that runs the Turnpike ups the price? What happens when the private company that owns the prisons cuts back on guards? What happens when the private company raises the cost of liquor licences? But here is the clincher that no one is thinking about. Where is all the money that these three departments brought in every year going to come from? It's 4 years later and Kasich is gone, declared a miracle worker for his deficit cutting in Ohio and the poor schmuck that's governor is left with another mess. Now what happens? It happened to Strickland because Taft was so bad, it happened in Michigan when the Governor refused to raise any taxes and the infrastructure of the state suffered . So this is Kasich's plan, mark it down and call me a fool if it's not what happens. I'll be around.

    I don't agree with all Kasich is doing but at least he's smart enough to
    realize that we have a significant budget problem and man enough to try
    correct it.

    For example,
    SB-5 is not perfect but it is an effort to try to solve the enormous
    problem in the pension and salary structure of the public employees.

    I don't have a pension and why should I pay for the public employees
    pension. They should also pay for some of there health insurance.

    How about they pay for mine! Maybe that might even things out.

    hammerhead

  • TimMcM said...

    Do you have references for your numbers? I'm seeing difference figures. For example the "average 66k a year" is 3 or 4k higher than the figures I could find.

    Given that you admit that the turnpike and liquor stores make profits, there is no financial reason to lease and sell these except to cover Kasich's inability to balance the budget for four years without raising taxes. Selling off profitable parts seem to make dave1954's case.

    You do not respond to the thread starter but think that selling the liquor stores should be done because "the State is like an octopus with arms and interests going in everying direction. A multi-tasker for sure. The problem is that it is trying to be all things to all people." That is just empty rhetoric, given that they are money makers evidently the State is more than capable of handling them.

    As far as privatizing prisons, there are lots of arguments against it. See: http://www.nytimes.com/2011/05/19/us/19prisons.html?pagewanted=all

    And: http://www.acluohio.org/issues/criminaljustice/PrisonsForProfit2011_04.pdf

    Tim, the turnpike numbers I quoted come from a May 15, 2011 Plain Dealer article about how turnpike worker make 17% more than ODOT workers. I tried to link it but it didn't take. Sorry. I've found a couple articles that seem to give conflicting numbers as well. Having worked in the news media for 18 years, I can only tell you than some sources are better than others and lazy reporters want to be first with the story which accounts for some inaccuracy.
    My point with the liquor stores is that it doesn't seem hard for me to understand why Kasich would want to see them privatized given that it would be consistent with a conservative's mindset. That is, getting government out of the business of competing with private enterprise. Getting the numbers on this is like walking through a maze. I would like to see the numbers on just how profitable the state liquor stores are. There is an operating cost associated with them as well. I apologize for the seeming "empty rhetoric" - my only excuse is that English is a second language for me.
    As for the prisons, I see them as a money pit for the state government. There is no revenue generating opportunity from running a prison, imo. Unless, making license plates and widgets are profitable. I am not saying that private enterprise would do a better job of administrating prisons, but they must see an advantage in acquiring these facilities. I expect the State of Ohio will do their due diligence and make a decision that they feel will benefit the citizens of the State. I don't believe they will take into account how you and I feel about it. Personally, I don't care who runs them, I really don't. All in all, I wanted to share some information that would lend to this discussion. You and I might find ourselves in different camps but hopefully, that won't prevent us from offering points of view that we will find useful and informative.

    csoto47

  • gpracer73 said...

    I have also seen numbers all over the place, it is very hard to get a gauge on all 3 of these subjects.

    I have also not been able to find anything on the state turning any kind of profit on the turnpike. between salaries, benies and maintenance I highly doubt the State receives any profit, I was able to find monies from taxes going to road projects on the turnpike, so that tells me there is not a profit. The turnpike deal does look pretty good for the people of Ohio on the surface, it is a long term lease so money will be coming into the State over a long period of time and a one time shot of capital. plus elimianting the expense of oeprating it does not sound like a bad deal for the State, I have read other states doign the same, some to success some to failure depending ont he deal that was done. Jobs will not go away, these folks will transfer over to the private company doing the deal. will salries go down? who knows, persoanlly 66000 dollars plus benis to sit in a booth if true is assinine.

    Liqour is a unknown. we will still make money on the taxes off the sale, but I was not able to find anything concrete on what we make off the sale and what expenses are there to operate? I can see both sides of the issue here. I kinda thought this was done allready, you rarely see a state ran liqour stand alone store anymore, they are mostly in grocery stores now, staffed by store employees, so honestly, I dont know if this would be a boon or a bust. I know most other states privatized this a long time ago?

    The prisons I dont like. I have no problem with a private company wanting to open a new prision and running it, but I really dont see where this will save us anything long term, from what I have read and I could be wrong, this would be a one time shot of capital and that is it, sure save the expense but unlike the turnpike or liqour where the State still receives money long term, this one doesnt seem right. I do agree with Strickland that we have too many folks in prision, I do think sentancing laws need to be revamped, a shoplifter or a drug user shouldnt be in prision being paid to be taken care of, they should be on house arrest or cutting grass in some park somewhere or picking up trash, etc, but that is just my opinion.

    Turnpike budget shows profit of 90 million last year. See Table on page 4:
    http://www.lsc.state.oh.us/fiscal/redbooks129/otc.pdf

    Liquor stores: net profits in 2010 were over $228 million. Kasich is actual leasing them to JobsOhio (which he created) to fund it and to get at least $500 mil into the general fund to help him balance the budget. It is a state agency which will be run privately. Sounds like some of his friends are about to get even richer.

    Point is he is looking at a 20 to 25 year lease with estimated profits of at least $6 billion. This does not look like a good deal to me. Note: this article is from March 2011. I am assuming nothing has changed but I don't know that for sure. Could not find anything more recent.
    http://www.cleveland.com/open/index.ssf/2011/03/ohio_gov_john_kasich_hopes_boo.html

    One of the worse issues with private prisons is they have a huge financial interest in keeping every inmate for as long as they can. By either lying or setting up inmates for bad reports it could delay their release and/or probation date. Whether that might be a good or bad thing is not my point - that the cost will go way up significantly is my point. Check out the two articles in my previous post for the problems with privatizing prisons.

    Another solution to prison costs would be to legalize pot and cut sentences for non-dealers for other street drugs.

    Though often asked, God does not take sides in politics or college football.

    TimMcM

  • NEOhio77 said...

    The bottom line is the state of Ohio should not own a turnpike, prisons or the liquor franchise. Private industry can run all three better (and yes, probably with less jobs). There is to much govenment that spends to much money. Kasich is taking action to balance the state's budget unlike Stickland and Taft. It may not be perfect, but it is a lot better than kicking the can down the road like the previous governors did. What Kasich has done takes a lot of courage. It is not easy being the "adult" in the room and fixing the sins of decades past. Kasich is getting Ohio's spending under control. Now we need to make big changes at the federal level so the US can do the same.

    Given the profitability of the turnpike and liquor as run by the state, based upon what, other than political ideology, are your assertions made.

    BTW, the State of Ohio along with counties and municipalities own all of the roads in Ohio.

    Kasich changed the tax laws so that over 3 billion dollars now goes into the general fund that use to go to school systems and local gov - to balance his budget. He is using up front "lump sums" from his leasing/selling of the three entities being discussed here to balance the budget. I am sure he would use tobacco or Stimulus money for balancing if he could get hid hands on either of them.

    He is no better in that respect than Taft or Strickland.

    Though often asked, God does not take sides in politics or college football.

    TimMcM

  • csoto47 said...

    Tim, the turnpike numbers I quoted come from a May 15, 2011 Plain Dealer article about how turnpike worker make 17% more than ODOT workers. I tried to link it but it didn't take. Sorry. I've found a couple articles that seem to give conflicting numbers as well. Having worked in the news media for 18 years, I can only tell you than some sources are better than others and lazy reporters want to be first with the story which accounts for some inaccuracy. My point with the liquor stores is that it doesn't seem hard for me to understand why Kasich would want to see them privatized given that it would be consistent with a conservative's mindset. That is, getting government out of the business of competing with private enterprise. Getting the numbers on this is like walking through a maze. I would like to see the numbers on just how profitable the state liquor stores are. There is an operating cost associated with them as well. I apologize for the seeming "empty rhetoric" - my only excuse is that English is a second language for me. As for the prisons, I see them as a money pit for the state government. There is no revenue generating opportunity from running a prison, imo. Unless, making license plates and widgets are profitable. I am not saying that private enterprise would do a better job of administrating prisons, but they must see an advantage in acquiring these facilities. I expect the State of Ohio will do their due diligence and make a decision that they feel will benefit the citizens of the State. I don't believe they will take into account how you and I feel about it. Personally, I don't care who runs them, I really don't. All in all, I wanted to share some information that would lend to this discussion. You and I might find ourselves in different camps but hopefully, that won't prevent us from offering points of view that we will find useful and informative.

    The empty rhetoric was related to the conservative reasons for privatizing. If English is your second language then you speak one more language then most of us on here. Never need to apologize for that accomplishment.

    I posted links with numbers on the profitability turnpike ($90 million last year) and liquor stores (over $228 million last year) in one of the posts above.

    With prisons I just think it will be more expensive down the road for reasons explained in multiple posts on this thread. Also see the two links in the first one.

    Though often asked, God does not take sides in politics or college football.

    TimMcM

  • TimMcM said...

    Turnpike budget shows profit of 90 million last year. See Table on page 4: http://www.lsc.state.oh.us/fiscal/redbooks129/otc.pdf

    Liquor stores: net profits in 2010 were over $228 million. Kasich is actual leasing them to JobsOhio (which he created) to fund it and to get at least $500 mil into the general fund to help him balance the budget. It is a state agency which will be run privately. Sounds like some of his friends are about to get even richer.

    Point is he is looking at a 20 to 25 year lease with estimated profits of at least $6 billion. This does not look like a good deal to me. Note: this article is from March 2011. I am assuming nothing has changed but I don't know that for sure. Could not find anything more recent. http://www.cleveland.com/open/index.ssf/2011/03/ohio_gov_john_kasich_hopes_boo.html

    One of the worse issues with private prisons is they have a huge financial interest in keeping every inmate for as long as they can. By either lying or setting up inmates for bad reports it could delay their release and/or probation date. Whether that might be a good or bad thing is not my point - that the cost will go way up significantly is my point. Check out the two articles in my previous post for the problems with privatizing prisons.

    Another solution to prison costs would be to legalize pot and cut sentences for non-dealers for other street drugs.

    Tim

    thanks for the articles, there is some good info in those.

    On the Turnpike, I find it interesting that the Turnpike commision is claiming a 90 million dollar profit in there budget but yet the State is holding and showing a 600 million dollar debt on the Ohio turnpike. Now I know the Govt is very good at funky accounting and I am not a accountant but dont the 2 contradict each other?
    It is hard to say on the turnpike right now if it is a good deal to sell it or not? since there is no deal to sell it yet, you almost have to wait and see. Kasich wants 3 billion on a 20 to 30 year lease. if he would get that, than it would be a good deal for the State, if he would get less than 2 billion than it would not make sense. Indiana got 3.5 billion for theres and they ended up on the plus from what it was pulling in before. here is a article explaining what he is hoping for.
    http://www.cleveland.com/open/index.ssf/2011/02/gov_john_kasich_wants_3_billio.html

    On the Liqour stores, your article had some good things in it, I was surprised that 32 states have privatized liqour at one point, so there must be a advantage or it was 32 dumb decisions, I guess you would have to look at each State and see? but technically Kasich isnt privatizing Liqour per se, he is leasing it to Jobs Ohio, which is another debate all together, a semi private jobs development department. really he is only shifting funds from whatever previous Gov used the liqour money for to job development. so in essence, the State general fund wont change much liqour money will be repalced with the lease payments from job ohio. I think it is too early to tell if this is a good move or not?
    I kind of like the idea of Jobs Ohio over a dept of development. the idea sounds like it will work, take local business folks and let them bring in business instead of a department that has been shedding jobs for over 10 years and just wasting money. but other than a couple small victories for the Jobs ohio, they have not done much yet, I think after a year or so would be a better judgement. but really the privatizing of liqour is just a shell game of moving the money around instead of selling it out right, at least how I read your posted article.

    The prisons thing I agree with you, although I can see the other side of saving expenses to run them, I just dont have a good feeling for private prisons, but to be honest, I dont know enough about them to know. I do agree with serious sentancing reform though. I think we waste money at all levels on keeping some crimes in prision, I think there could be cheaper ways to handle those crimes. and I am all for legalizing pot and taxing the hell out of it, we ceartainly are wasting money trying to stop it so why not make money off people using it?

    gpracer73

  • So the turnpike is what would be leased for 20 to 30 years at about $3 Billion total? At 25 years $3 bills equates to $120 Mill per year, straight cash homey.

    The $600 million debt shown by the TP is likely due to capital expense like resurfacing. Haven't looked but I'd imagine the $90 million number is more of an EBITDA number that only accounts for operational expenses. So it would not account for amortizing the $600 million debt.

    Columbuck

  • Columbuck said...

    So the turnpike is what would be leased for 20 to 30 years at about $3 Billion total? At 25 years $3 bills equates to $120 Mill per year, straight cash homey.

    The $600 million debt shown by the TP is likely due to capital expense like resurfacing. Haven't looked but I'd imagine the $90 million number is more of an EBITDA number that only accounts for operational expenses. So it would not account for amortizing the $600 million debt.

    The point of the post is that Kasich is selling off assets of the state of Ohio to make himself look good. He couldn't care less what happens when he leaves, just a stepping stone to higher office. He's an arrogant sob, hates cops and teachers but loves rich people and companies that donate to his campaign. Oh yeah, he loves Wall St.

    dave1954

  • gpracer73 said...

    Tim

    thanks for the articles, there is some good info in those.

    On the Turnpike, I find it interesting that the Turnpike commision is claiming a 90 million dollar profit in there budget but yet the State is holding and showing a 600 million dollar debt on the Ohio turnpike. Now I know the Govt is very good at funky accounting and I am not a accountant but dont the 2 contradict each other? It is hard to say on the turnpike right now if it is a good deal to sell it or not? since there is no deal to sell it yet, you almost have to wait and see. Kasich wants 3 billion on a 20 to 30 year lease. if he would get that, than it would be a good deal for the State, if he would get less than 2 billion than it would not make sense. Indiana got 3.5 billion for theres and they ended up on the plus from what it was pulling in before. here is a article explaining what he is hoping for. http://www.cleveland.com/open/index.ssf/2011/02/gov_john_kasich_wants_3_billio.html

    On the Liqour stores, your article had some good things in it, I was surprised that 32 states have privatized liqour at one point, so there must be a advantage or it was 32 dumb decisions, I guess you would have to look at each State and see? but technically Kasich isnt privatizing Liqour per se, he is leasing it to Jobs Ohio, which is another debate all together, a semi private jobs development department. really he is only shifting funds from whatever previous Gov used the liqour money for to job development. so in essence, the State general fund wont change much liqour money will be repalced with the lease payments from job ohio. I think it is too early to tell if this is a good move or not? I kind of like the idea of Jobs Ohio over a dept of development. the idea sounds like it will work, take local business folks and let them bring in business instead of a department that has been shedding jobs for over 10 years and just wasting money. but other than a couple small victories for the Jobs ohio, they have not done much yet, I think after a year or so would be a better judgement. but really the privatizing of liqour is just a shell game of moving the money around instead of selling it out right, at least how I read your posted article.

    The prisons thing I agree with you, although I can see the other side of saving expenses to run them, I just dont have a good feeling for private prisons, but to be honest, I dont know enough about them to know. I do agree with serious sentancing reform though. I think we waste money at all levels on keeping some crimes in prision, I think there could be cheaper ways to handle those crimes. and I am all for legalizing pot and taxing the hell out of it, we ceartainly are wasting money trying to stop it so why not make money off people using it?

    Turnpike
    See the "Refunding Bonds Issued" section under "Cost Savings Measures" on page 2 in the Redbook, it shows the bonds that were issued and why. In the budget there is a line item, Debt Service Payments, that reflects the yearly payment to retire the bonds. It is somewhat like the national debt versus the yearly budget deficit, but in this case it is a yearly surplus even after the debt (bonds) are paid down. This is a yearly budget, not an audit of value. In the latter the $610 million plus the projected $309M in interest would be counted as debt but the billions in assets (the property, future tolls, etc) would show it to be very healthy. http://www.lsc.state.oh.us/fiscal/redbooks129/otc.pdf
    You are right, we will have to wait for deal. I just think it is another way to get a lump sum for Kasich to help balance his budget without raising taxes. For an interesting analysis of what Kasich is doing see: http://www.communitysolutions.com/assets/1/Page/sbmV7N7UnspinningtheNumbersAckerman0815111.pdf

    Liquor Stores
    I too am hopeful for JobsOhio but leasing the stores to it seems like a slight of hand to get another half a million dollars on the books to balance the budget. Hopefully it is more than a budget trick, but I do not see how the general fund can help but lose money on the deal. See the same article/anaysis.

    Prisons
    Again it gives him $75 million towards a balanced budget.

    Though often asked, God does not take sides in politics or college football.

    TimMcM

  • Columbuck said...

    So the turnpike is what would be leased for 20 to 30 years at about $3 Billion total? At 25 years $3 bills equates to $120 Mill per year, straight cash homey.

    The $600 million debt shown by the TP is likely due to capital expense like resurfacing. Haven't looked but I'd imagine the $90 million number is more of an EBITDA number that only accounts for operational expenses. So it would not account for amortizing the $600 million debt.

    You are right about the debt. See my response above.

    IF and that is a big IF he gets that much. Plus that does not take into account the possibility of increase costs if not on the per diem (if there are contractual constraints, hopefully) then on the total days served. Did you read the articles about the problems with it? Didn't think so.

    Though often asked, God does not take sides in politics or college football.

    TimMcM

  • nwbucknut said...

    Moot point - substitute 62-63K per year, it is still a reasonable wage - this is an example of arguing the shade of blue in the crayon box.

    Maybe getting the correct shade of blue is important sometimes. $4000 x 900 (FT employees) + $2000 x 300 (PTs) = $4.2 million per year. Plus I was just using it as an example of questioning all his numbers because he did not reference them.

    Though often asked, God does not take sides in politics or college football.

    TimMcM

  • TimMcM said...

    You are right about the debt. See my response above.

    IF and that is a big IF he gets that much. Plus that does not take into account the possibility of increase costs if not on the per diem (if there are contractual constraints, hopefully) then on the total days served. Did you read the articles about the problems with it? Didn't think so.

    Are you referring to prisons in your 2nd paragraph? I've made no remarks towards prisons, but no I haven't read articles. But don't think they should be privatized purely because prisoners are guests of the state and if prisons are privatized the state would pay per prisoner per day to an outside company, which, as stated here, provides motivation for privateer to extend length of stay.

    The turnpike is totally different as it has a built in revenue stream that an operator would be willing to give money (lease) for the rights to collect (tolls) while eliminating government involvement in day to day operations (expenses).

    Columbuck

  • I haven't studied the material, but it appears the thread has taken an "ideology" perspective and politically charged/motivated stance versus examining the business case.

    General premise for/against:

    1) The argument on outsourcing assumes that the state has made a bad deal and would have been better off to retain the asset, flipside being government is inefficient at running business the private sector could perform cheaper. The unfortunate piece is that government accounting is so bad, they may not know the real apples to apples comparison.

    Questions:

    2) Is it possible the state comes out neutral or possibly even ahead (less liabilities on the books) of the current earnings considering the pay, benefits, healthcare, and retirement are the responsibility of the leasee? I see arguments that liquor/toll programs make money, could they make the same or more by privatizing?

    3) Would shifting the responsibility off the books create an offset of expenditures, thus capping liability to the state/taxpayers? At some point in the future does this become an advantage to the state? By privatizing, could we create competition and thus benefit the consumer? By creating tolls, would we shift demand for certain roads or would folks accept the usage fee for convenience? If accepted, what pricing power do the toll operators habe and how would that add to the state's share of earnings? The outsourcing would decrease ODOT involvement to some extent and reduce the expense of government contracts (estimate 20-30% more for a govt contract) to maintain and repair roads. This is similar to what has been pitched regarding health care, shape the usage pattern on the front end, control the expense on the back end.

    4) Since the state is pitching leases/outsourced management, will the state lose or retain ownership at the end of the lease period. If we retain the rights to the assets and make the same amount of money (or more), why would we keep the resource/asset under state control?

    5) If ownership is lost, shouldn't we be looking for much higher returns that account for the resource and the discounted future value of the revenue stream? If we are losing ownership, I would agree that this is a bad deal and should be revisited. You can't just sell taxpayer assets/infrastructure, etc without a proper valuation.

    As an aside, I think prisons should be run by the states. I would argue that they inmates should be providing work to the public such as road crews, mowing, landscape, snow removal, etc

    This post has been edited 3 times, most recently by nwbucknut on 8/24/2011 at 10:04 PM

    nwbucknut ●

  • Columbuck said...

    Are you referring to prisons in your 2nd paragraph? I've made no remarks towards prisons, but no I haven't read articles. But don't think they should be privatized purely because prisoners are guests of the state and if prisons are privatized the state would pay per prisoner per day to an outside company, which, as stated here, provides motivation for privateer to extend length of stay.

    The turnpike is totally different as it has a built in revenue stream that an operator would be willing to give money (lease) for the rights to collect (tolls) while eliminating government involvement in day to day operations (expenses).

    My bad, not sure why I shifted subjects. Guess I responded too many in a row.

    The first sentence was about the TP - if he gets the 3 billion is what I was referring to. If he gets less like 2 billion for 30 years then there is a problem.

    Though often asked, God does not take sides in politics or college football.

    TimMcM

  • TimMcM said...

    My bad, not sure why I shifted subjects. Guess I responded too many in a row.

    The first sentence was about the TP - if he gets the 3 billion is what I was referring to. If he gets less like 2 billion for 30 years then there is a problem.

    Why is this a problem? It would allow for $66 million a year in rent to the state, without having to manage it. On the surface, yes it is some $30 million less but that requires more capital and management resources, not to mention the on-going investment expenses ($600 million debt).

    Again, logically I would assume some of the capital intensive projects would still be a burden of the state because most of the time in the real world a 10% return is near the base line for leases like this. Which would equate to around $9 million (assuming the $90 million net income) in annual revenue for a totally hands off sit there and collect a check lease.

    If the $60 million (worst case scenario of $2 billion for 30 years) annual lease is a sit there and collect a check lease then sign us up yesterday!

    So what's the problem? not getting to show $30 million?

    Columbuck

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