Ohio really does plan to fund Browns and other stadiums by seizing billions in money it owes to private individuals

Remember how the Ohio legislature proposed borrowing $600 million from the state’s unclaimed property fund to use on a new Cleveland Browns stadium and repaying it with money from an omni-TIF collecting all kinds of tax money from in and around the stadium, and then the bill passed and it was described as providing “$600 million for the proposed Cleveland Browns domed stadium in Brook Park using unclaimed funds,” and I said it wasn’t really because that was just where Ohio would be borrowing the money from temporarily? Well, about that:

The $600 million for a new Cleveland Browns stadium that the state is raiding from the state’s unclaimed property fund won’t be repaid to the fund, and the state will eventually seize any unclaimed funds held longer than 10 years….

Cleveland.com and The Plain Dealer initially reported that under the plan, first proposed by Senate Republicans, such tax revenue would be used to return the $600 million to the state’s unclaimed funds account, which includes private property from things like inactive bank accounts, old safe deposit box holdings, and uncashed checks and insurance policies.

But, in fact, money seized for the new Sports and Cultural Facility Fund will never be returned to the pot of unclaimed funds.

And beginning in 2036, any unclaimed funds that have been held by the state for 10 years will automatically be diverted to the new development fund for construction work on other sports stadiums and cultural facilities around Ohio.

That’s, uh, real different, Cleveland.com and The Plain Dealer! Under the final budget bill, the news sites report, stadium-related taxes will continue to flow into the state’s general fund as usual, meaning Ohio actually will be funding a new stadium for the Browns — and possibly new or upgraded buildings for the Cincinnati Bengals and Columbus Blue Jackets and who knows who else — by seizing money it’s been holding on behalf of people who left it in inactive bank accounts, old safe deposit box holdings, uncashed checks, or the like, and handing it over to sports team owners.

If you think that sounds of dubious legality, you’re not alone: Attorneys including former Ohio attorney general Marc Dann (never mind for the moment how he became former) have filed a class action suit on behalf of the owners of the unclaimed funds, saying “that’s private property that the state has decided to take for itself.” Previous to the new law, anyone with money in the accounts could claim it in perpetuity — instead, Ohio will now be able to seize anything left in the fund for ten years, and use it to pay off the sports stadiums.

States laying claim to unclaimed property after a set period of time is actually pretty common in other states, where it’s known as “escheatment,” (The word comes from an Old French term for inheritance, not from the word “cheat,” though I’m sure plenty of people will still make that connection.) Northern Kentucky University law professor Ken Katkin told WLWT that “there’s a lot of smoke here, but I think there’s no fire,” and said he expected the class action suit would face an uphill battle.

Even so, there’s another question here, which is what happens if enough people start filing claims for their unclaimed money that Ohio doesn’t have enough left to pay for its unending series of stadium projects? That’s pretty unlikely for just the Browns — the fund currently sits at a staggering $4.8 billion, and Browns owner Jimmy Haslam is only asking for $600 million of it — but if enough team owners eventually demand a cut, and publicity about the unclaimed property fund leads enough people to start reclaiming their money before the ten-year clock runs out, it could eventually be an issue.

For now, though, Ohio legislators look to have found a way to funnel billions of dollars of public money to private sports team owners without breaking the state budget, by taking the money from an escrow account where it was holding it on behalf of private individuals. Even if courts end up ruling that’s just legal escheatment, it’s money the state could have used for literally anything else — but sports team owners were shouting the loudest, so they’re the ones who end up getting the benefit of all those uncashed checks.