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Privatization of Liquor Revenue

JobsOhio, a non-profit public and private organization intended to spur economic development in Ohio, is starting its first large scale projects. In 2012, Governor Kasich allowed JobsOhio to take over liquor sales in the state. JobsOhio paid $1.4 billion to control liquor sales for 25 years. While the state retains 75% of profit, JobsOhio will receive 25% of profit, if everything goes as planned. Due to the nature of the contract, JobsOhio makes 25% profit off projected numbers, not actual profit. Since liquor sales in Ohio have been hitting all time highs, this also means extra profit for JobsOhio.

JobsOhio will take the money it raises from liquor sales, and provide loans to businesses in Ohio. These loans are specifically designed to fund new jobs in Ohio, and are selectively awarded on that basis. Last year the loans amounted to less than $500,000.  However, liquor profits are coming in and now JobsOhio will have considerable cash on hand.

Some argue JobsOhio is not the proper vehicle to retain Ohio’s considerable liquor revenue. Expenditure estimates on future projects remains relatively flat, whereas profit will increase dramatically. This could mean JobsOhio will take in a lot more money than it will spend, even in future years. Critics have suggested billions of dollars with be “left over cash” for JobsOhio, and strict monitoring of this money is required to ensure the money be used for public interest. Also, many feel uncomfortable with a partly private entity determining where tax revenue is spent.

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