$1.5 billion in state budget at risk in lawsuits

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By Laura A. Bischoff, Staff Writer Updated 3:19 PM Monday, August 31, 2009

COLUMBUS — Two key cases before the Ohio Supreme Court this week have the chance to blow a $1.5 billion hole in Gov. Ted Strickland’s tenuously balanced state budget.

On Tuesday, Sept. 1, the seven supreme court justices will hear arguments in a lawsuit filed by the Ohio Grocers Association that challenges the constitutionality of the state’s commercial activities tax, which is a tax on businesses’ gross receipts. If the grocers win, they’ll likely ask for $355 million in tax refunds dating back to 2005 when the CAT was introduced and be excused from paying $188 million a year in future commercial activities taxes.

Then, on Wednesday, justices will listen to arguments in the LetOhioVote.org versus Secretary of State Jennifer Brunner case. LetOhioVote wants permission to hold a referendum on the law change that would put 17,500 video lottery terminals at the state’s seven horse racetracks, which is expected to generate $933 million for the state over two years.

If LetOhioVote wins and there is a chance that voters could reject the VLT plan, track owners may be reluctant to cough up $455 million in licensing fees and start building slot parlors.

Strickland spokesman Keith Dailey said, “We think both cases will stand on their merits.”

It could be three to six months, though, before the supreme court announces its decisions in the cases.

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