Transfer of liquor profits part of proposed budget fix, jobs plan in Ohio

Stateline Midwest: Vol. 20, No. 4: April 2011

Currently, three states in the Midwest — Iowa, Michigan and Ohio — are among the nation’s 18 “ABC” states.

The name refers to alcoholic beverage control, specifically the direct control that these jurisdictions retain over the distribution and sale of alcohol. (Other states regulate by issuing licenses to private sellers.)

It is a revenue generator for states, and in Ohio, the governor is pushing a plan that would transfer the liquor enterprise, and its profits, to JobsOhio — a private, nonprofit corporation recently created by the state to lead business recruitment and job creation efforts.

According to The Cleveland Plain Dealer, the plan calls for liquor sales operations to be leased to JobsOhio for 20 to 25 years. The state’s general fund would receive a one-time shot of $500 million, as an up-front payment for the loss of future revenue from liquor profits. JobsOhio would secure that money for the general fund by issuing revenue bonds. Republican Gov. John Kasich says the plan will create a sustainable, independent source of revenue to support economic development activities.

In his budget, Kasich has also called for selling and privatizing some state prisons. In addition, he is considering leasing the Ohio Turnpike to a private company, the Sandusky Register reports.