JobsOhio bond sale moves forward despite lawsuit
COLUMBUS, Ohio (AP) — Ohio’s new private job-creation entity said Tuesday that it will move forward despite legal uncertainty with a nearly $1.2 billion bond sale intended to fund its 25-year lease of the state’s liquor business.
JobsOhio and Republican Gov. John Kasich’s administration said the bond sale will be held Jan. 23, with proceeds going toward economic development grants.
JobsOhio Chief Investment Officer John Minor and Kasich’s budget and commerce directors said they’re confident in moving forward after Moody’s and Standard and Poor’s issued favorable ratings Monday.
“It’s valid to interpret the strong ratings received from two major rating agencies as recognition of the soundness of this plan,” they said in a joint statement.
Minor Moody’s issued an A2 rating, its sixth highest, with a developing outlook stemming from the unsettled lawsuit over JobsOhio’s constitutionality. S&P rated them AA, or very strong.
The liberal group ProgressOhio, which sued the Kasich administration over JobsOhio along with two Democratic state lawmakers, said the administration is disregarding a constitutional prohibition against allowing a private entity to control public money.
“There are serious legal questions about the funding of JobsOhio. Gov. Kasich’s own commerce director said his duty to uphold the Ohio Constitution was stopping him from moving JobsOhio forward until these questions were resolved,” the group said.
It continued: “Legally, nothing has changed since then. John Kasich has shown when there is a question about the Ohio Constitution, he’ll decide based on input from Wall Street financiers, instead of Supreme Court justices.”
Representatives of the ratings agency told The Associated Press on Tuesday that they based their ratings of the bonds on the current state of Ohio law, taking into account the series of defeats for plaintiffs in the dispute in lower courts.
In its report, Moody’s said the history of the case appeared to lean against opponents’ victory, but “we note that the substance of the plaintiffs’ assertions has not yet been resolved. Moreover, the issuer has not made any significant contingency plans that would protect bondholders from adverse rulings.”
ProgressOhio’s case has been joined by the libertarian 1851 Center for Constitutional Law.