Ohio State Auditor David Yost, a Republican, has been making a lot of headlines lately in his disagreement with the Kasich administration over the power of his office and just how far into private entities the law allows him to probe. We have a lot of respect for Yost, think he’s doing a terrific job as Auditor and believe that he has the best of intentions here. However, we disagree with much of what he is claiming he has the authority to do under current law, because it sets a dangerous precedent that could lead to massive government overreach. Here’s why.
Yost claims that he has the authority to obtain any and all records from any private entity that does any business with the state in any form. For example, if you are a private construction company doing contract work on a project for ODOT? According to Yost, he can subpoena all of your financial records. The non-profit that obtains a small grant from the state? He can subpoena all your financial records. A company that accepts an incentive from the state in exchange for jobs? He can subpoena all your financial records.
That, my friends, is an open invitation for abuse and overreach.
What led to this? In 2011, shortly after Kasich was elected, he and the state legislature created JobsOhio, which effectively privatized Ohio’s economic development department to remove the slow government bureaucracy and red tape from attracting new businesses and jobs to Ohio. Mitch Daniels created a similar system in Indiana which still operates under Governor Mike Pence today. JobsOhio has been a success, securing $9 billion in new private investments and 158,000 jobs created or prevented from leaving the state. Ohio is among the top job-creating states and boasts an unemployment rate that has been a full point below the national average for some time now. In short, Ohio is recovering faster than almost every other state in the nation, partially due to JobsOhio and improved business friendliness since Kasich took office.
Yost wants to conduct a full audit of JobsOhio. Kasich and JobsOhio have no issue with him auditing the state tax dollars that initially went into the organization, but Yost wants to go further. He says he has the power to audit any private entity that does business with JobsOhio. From his interview with The Columbus Dispatch:
Kasich’s concerns about where Yost might go with his audit of JobsOhio are not without merit. In following the financial incentives flowing from JobsOhio to private companies — say, for instance, Chrysler — might Yost then assert purview to audit all of Chrysler’s financial records?
Legally, Yost said, he would have authority to do that under state law authorizing his office to audit “the accounts of private institutions, associations, boards and corporations receiving public money for their use.” Practically speaking, Yost said he has no intention of doing so.
We’ll give Yost the well-deserved benefit of the doubt when he says he would not exercise such power. But what about future Auditors? Ohio elects politicians from all over the political spectrum, not just Republicans and moderates. Do we really want to give such power to a far-left, Occupy Wall Street anti-business Democrat in the mold of Sherrod Brown or Betty Sutton, who get their marching orders from Big Labor? I sure don’t.
Beyond the principled argument of preventing government overreach, this would have a negative effect on bringing jobs to Ohio. What message does it send to a prospective company looking to expand or relocate? Are they going to want to come to Ohio knowing that they may have to turn over the entirety of their financial records to Big Brother at the whim of one official, should they accept an incentive offer from the state to invest in Ohio? That would put us at a serious disadvantage to neighboring states like Indiana.
Kasich has called for legislation to clarify Ohio law to ensure the state auditor wouldn’t maintain such power, and it’s disconcerting that a Republican made this necessary. If the legislation is unsuccessful, it’s frightening to think what message it may send to other state auditors around the nation looking for ways to enhance their power and the oversight of government over private business.
One final thought. Some in the Tea Party oppose the idea of state government being involved in economic development at all. Well, that’s a nice, rigid piece of ideology you’re planting your flag in there, but it’s woefully naive. Unless you get all 50 states to cease any and all programs to incite job creation within their borders, doing away with state-sponsored economic development within Ohio would be just plain stupid. Reality is what it is. Just like the United States competes with foreign nations for jobs, so does Ohio compete with other states. Disarming entirely would be suicidal, so as long as we have to compete, let’s do it right and fight to win.