Gov. John Kasich used his year-end speech to reporters last month to tout the accomplishments of his administration’s first year.
Front and center was the creation or retention of nearly 83,000 jobs, 240-some business expansion projects and billions in new capital investment.
Those jobs were secured through the work of the Ohio Department of Development and the new private nonprofit JobsOhio, headed by Mark Kvamme, Kasich’s longtime friend and jobs adviser and poised to take control of the state’s economic development efforts.
“We have been a part of creating 21,000 new jobs,” Kvamme said during the year-end presentation. “... It’s fantastic for 21,000 families, but it’s close to a billion dollars of new payroll. That billion dollars is going to be spent at the nail salon, at the pizza parlor, at the dry cleaners. It’s going to be spent at all these places that really employ a ton of people. You’re going to start seeing that acceleration throughout the entire state.”
That’s all good news for Ohio, to be sure. The state and national economies were in the toilet, and news of job losses dominated headlines too often in recent years.
But a report released by Attorney General Mike DeWine a week or so after Kasich’s comments isn’t so rosy.
DeWine is required to track whether companies that receive economic incentives from the state have followed through with their commitments to create or retain jobs.
The latter often is the tradeoff for accepting millions of dollars in tax breaks, low-interest loans or government grants — you generally don’t get the money unless you agree to create jobs and employ Ohioans in years to come.
Review of incentives
DeWine’s office reviewed nearly 3,000 active economic incentives awarded by the state to determine whether businesses were meeting their obligations.
What he found wasn’t encouraging.
Of 420 businesses that were required to file reports at the end of 2010, only 220 had met the terms of their incentives. The other 200 did not.
Companies that received government grants had a terrible compliance rate, with only 12 of 77, or about 16 percent, of recipients meeting job creation and other requirements.
Only 24.4 percent of low-interest loan and 54.3 percent of tax credit beneficiaries fulfilled their obligations.
You can find a copy of the report on DeWine’s website (online at www.ohioattorneygeneral.gov). It lists all of the companies that received incentives and the reasons why they didn’t create the jobs they promised.
In many cases, businesses left incentive dollars on the table after abandoning their expansion plans. In others, the state required the companies to pay back what they had already received.
To Kasich’s credit, he’s been cautious when presenting the jobs numbers from 2011. The positions he discussed in his year-ender speech are committed but not yet in place.
Eighty-three thousand jobs is a big deal. Let’s hope they all come to fruition, unlike the positions promised by other companies in recent years that did not.