With his signature late Monday night, Ohio Gov. Mike DeWine has allowed a controversial funding plan for a new Cleveland Browns stadium to go forward. The state will tap its multi-billion-dollar pool of unclaimed funds — money which belongs to ordinary Ohioans — to pay for the Browns’ stadium and other sports and cultural facilities in the future.
Shortly before DeWine signed the budget, Attorney General Dave Yost urged him to veto the provision. Yost argued taking money from Ohioans to fund a privately owned stadium is “poor policy.” Two former Democratic lawmakers who threatened a class action lawsuit last week, said they’re going forward.
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DeWine did, however, make one minor tweak to the funding mechanism. The initial program set a $500 million threshold. Projects beyond that amount were eligible for up to 25% of the cost in state funds, but those costing less were only eligible for 15% in state funds.
The governor argued that cost floor “would have the perverse incentive of encouraging projects to become unnecessarily more expensive simply to meet a threshold for state funding.” Instead, all projects will be capped at a 25% state share.
Why let it go forward?
Although the governor declined to veto the use of unclaimed funds, he didn’t completely embrace the approach.
“Well, as you know, that was not my first choice, I had another way of doing it,” DeWine told reporters Tuesday. The governor’s opening bid would’ve increased taxes on sports betting to fund new facilities. “But, you know, governors don’t get everything they want. Nobody gets everything they want.”
He explained that even if “we’re all invested in our own ideas,” he took a step back and focused on his priorities.
“To me, the biggest objectives were no taxpayers’ dollars used for this, in the sense of nothing coming out of general fund — nothing competing against education,” DeWine explained, “and it couldn’t just be about the Browns, it had to be universal.”
“When you get the two prime objectives,” DeWine added, “it seems to me it’s time to say, ‘Yeah, I’m achieving what I wanted to achieve.’”
In a social media post, Browns team owners Jimmy and Dee Haslam praised DeWine for approving the plan and promised to deliver a “transformative project” that will create a “generational impact.”
Still, DeWine’s own comments underscore how fine a line he’s walking. The new fund will be built exclusively on taxpayers’ dollars in the form of old deposits or reimbursements that state officials are holding until claimed. The governor stresses that “stadiums should not compete with mental health. Stadiums should not compete with education.” By sidestepping the general fund, the budget avoids those tradeoffs.
But it’s a distinction that might not make a difference to average Ohioans.
The National Association of State Treasurers — officials typically tasked with unclaimed funds oversight — is explicit in its stance that a state’s role is merely custodial, and citizens’ right to recover property should be maintained in perpetuity.
Ohio’s new budget gives claimants a 10-year grace period, but following that, all assets left in the unclaimed funds trust for more than 10 years will get transferred to the stadium and cultural facilities fund.
The criticism
Ohio’s unclaimed funds trust is worth close to $5 billion, and much of that money has been parked there for well over a decade. But simply taking those dollars, particularly to benefit a billionaire professional team owner, didn’t sit well with lawmakers on both sides of the aisle.
In his letter to DeWine, Yost acknowledged some states have instituted similar transfers, but he expressed discomfort unclaimed dollars becoming state dollars in just 10 years.
“This timeline makes Ohio an outlier nationally,” Yost wrote, “and risks inadvertently harming taxpayers unaware they have money in the state’s unclaimed funds.”
In a reference to the Ohio constitution’s eminent domain provisions, he argued “the statutory taking of public funds without clear public benefit is poor policy.” State Supreme Court precedent in cases like Norwood v. Horney holds that governments must demonstrate a public benefit to take private property.
“Billionaires should finance their own stadiums—full stop,” Yost added. “The $600 million handout for a single professional sports facility raises serious concerns about fiscal sustainability and fairness.”
Ohio’s former Attorney General Marc Dann, and former state Rep. Jeff Crossman, both Democrats, visited the statehouse as lawmakers were getting ready to vote on the budget. They warned that if lawmakers went forward, they would file a class action lawsuit.
Tuesday morning, Crossman said, “If Governor DeWine and the legislative majority think they can betray Ohioans’ constitutional property rights without a fight — they’re dead wrong.”
“They’re getting the lawsuit they clearly invited,” he added, “and just like the case decided yesterday on (Pandemic Unemployment Assistance) benefits, we intend to win. Because when the state breaks the law, someone has to stand up for the people of Ohio”.
The governor himself appeared resigned to a fight in court. In bit of homespun storytelling, DeWine recalled being a young lawyer arguing with an older judge in Green County.
“He looked at me and said, Mister DeWine, that’s why God made the Court of Appeals,” DeWine said. “And so, you know, when don’t people don’t like things, they can go to court, and that’s what we have in our system.”
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Nick Evans
