The Ohio Supreme Court will consider whether a nonprofit group is eligible to challenge the use of state liquor profits to fund a private economic-development program backed by Gov. John Kasich.
The high court on Wednesday accepted the appeal by the nonprofit, ProgressOhio.org Inc., without comment, according to a posting on the court’s website. A lower court ruled that the nonprofit lacked standing to pursue a lawsuit challenging the funding.
JobsOhio, the private entity created by Kasich, a Republican, to spur job growth, plans to sell $1.5 billion in taxable and nontaxable bonds in the largest municipal offer by Ohio issuers since 2007.
The deal involves transferring the state’s wholesale liquor distribution system to the program for 25 years. The bonds will be backed by liquor profits, which reached an all-time high of about $251 million in fiscal 2012, according to the Ohio Office of Budget and Management.
Kasich, who took office in 2011, recommended JobsOhio and the transfer of liquor profits. The program, which was approved by the legislature, has been delayed by legal challenges.
Laura Jones, a spokeswoman for JobsOhio, had no comment on the court’s action.
The program’s goal is to complete deals more quickly and creatively to give Ohio an edge in competing for jobs. Kasich’s administration expects about $100 million will be available yearly, more than development entities such as the Michigan Economic Development Corp. have to spend.
Two Democratic lawmakers and ProgressOhio challenged JobsOhio in court, saying it violates the state Constitution by funneling public dollars to a private entity.
Brian Rothenberg, executive director of ProgressOhio, said it’s “reckless” for JobsOhio to move forward with the bond sale without a court having decided the legal questions about the entity. Until then, “it’s buyer beware” with the debt, he said.
“It’s irresponsible both of the state and the bond market not to respect the constitutional issues swirling around this program,” Rothenberg said. “I’m all for jobs, but I’m also for doing things constitutionally.”