Jan 23 The Ohio Supreme Court on Wednesday
resuscitated a lawsuit challenging the constitutionality of a
state law behind the scheduled sale of about $1.5 billion of
revenue bonds this week.
The high court agreed to take up the question of whether a
liberal advocacy group has standing to sue over the 2011 law
that spun Ohio's job and economic development programs off to a
private entity called JobsOhio, according to Brian Rothenberg,
executive director of ProgressOhio, which filed the lawsuit.
Under the law, Ohio's liquor enterprise and its revenue were
transferred to JobsOhio, which in turn was authorized to sell
long-term bonds backed by future liquor revenue.
Rothenberg said the bonds should not be sold until the
constitutional question of Ohio Governor John Kasich's plan
funneling public money to a private entity to oversee job
creation and economic development efforts is resolved.
"It's reckless and irresponsible for the Kasich
Administration and Wall Street to even entertain selling the
bonds while the constitutional question is out there," he said.
JobsOhio Beverage System was slated to sell on Wednesday
about $1.1 billion of taxable senior lien liquor profits revenue
bonds through J.P. Morgan Securities and another $423 million of
tax-exempt bonds through Citi.
The status of the bond sale was not clear, although JobsOhio
issued a supplement on Wednesday to the deal's preliminary
official statement that noted the court's decision to take up
the standing issue without adding new details. An attorney
representing JobsOhio could not be immediately reached for
Laura Jones, a JobsOhio spokeswoman, said in a statement
that the bond sale involved a number of steps and that JobsOhio
was continuing to work on those steps.
"While we don't comment on pending litigation I can tell you
that we are confident in our legislated mission to help
businesses grow and create jobs for Ohioans," the statement
Proceeds from the bond sale were earmarked to pay off
outstanding state debt backed by liquor revenue, provide $500
million for Ohio's general fund and raise about $225 million for
JobsOhio's operations, according to Moody's Investors Service,
which rated the bonds A2 with a developing outlook due to the
Connie Wehrkamp, a spokeswoman for Kasich, said the
governor's office remained confident the supreme court will
uphold lower court rulings that found ProgressOhio and others
that filed the lawsuit have no standing to sue.
"Additionally, it continues to be beyond our understanding
why anyone would fight against job creation when it's so
important to Ohio and our continued economic recovery," she
added in a statement.