Back in 2011 we made some predictions about John Kasich’s plan to change the way Ohio conducts business development activities. Kasich had starting moving much of the work done by the Ohio Department of Development to his new, semi-private, totally-secret organization called JobsOhio which would, in turn, rely on a set of regional “partner” organizations to make recommendations on who should get loans, grants, and tax credits from JobsOhio and the state.
We warned that by “adding more layers” to the business development process, while making the decision makers “harder to reach”, Kasich’s plan would result in additional bureaucracy and ultimately makes the state less responsive to the needs of Ohio’s businesses and local leaders.
Sadly, that’s exactly what happened.
A must-read story from Sunday’s Journal News documents the disaster in Hamilton and surrounding counties. According to the piece, local economic development directors are pissed off at JobsOhio and its region partner, the Cincinnati USA Partnership, “because they aren’t getting the job-generating leads and attention from the agency that they used to before JobsOhio entered the picture.”
Under Kasich’s plan, dozens of local Department of Development offices were closed, including the local Cincinnati Office, leaving JobsOhio’s local partners to pick up the slack.
Once that happened, “things stagnated”, according to Monroe County Development Director Kevin Chesar. “There was confusion about who had responsibility for what; how incentives, jobs and investment were to be calculated; and what qualifies companies for tax incentives.”
“There has been a lack of clear communication on strategies,” according to Clermont County Development Director Andy Kuchta. “Core marketing materials promoting Cincinnati are outdated.”
Local leaders are so frustrated with the lack of responsiveness and support from the Partnership since JobsOhio became involved, that many are pulling their funding for the organization. Warren County Commissioner Dave Young expressed concern about “the long-term viability of the relationship” with JobsOhio’s regional partner. “I don’t think the taxpayers in Warren County have gotten an adequate return for the past couple years on the Partnership investment.”
Other local officials have questioned recent staffing changes at the Partnership, which lost the majority of its experienced employees and replaced them with people who appear to be unfamiliar with the region. Butler County Development Director David Fehr worried that new partnership employees may not even be able to find Butler county on a map, and all they may know “about Cincinnati is the airport and Skyline Chili.”
There is also concern that JobsOhio’s involvement has brought about – surprise! – conflicts of interest within the Cincinnati USA Partnership because the group accepts donations from “investors” that include “private corporations and local governments.” According to the Journal News piece, the Partnership continues its policy of providing access to information and events based on the amount of money a company or city donates to the group. At the same time, the partnership is directly responsible for recommending which companies will receive loans, grants and/or tax credit from the state.
Jack Cameron, administrative assistant to the mayor of Evendale, asserts that JobsOhio’s involvement has caused a “built-in conflict” for the Partnership. “They never made a clear distinction between what they did for the investors and what they did for JobsOhio,” according to Cameron. This is a very scary prospect when you consider that the Partnership will very like be asked to make grant or tax credit recommendations to JobsOhio for a company that may also be a big investor in the group.
What could POSSIBLY go wrong??
At least in the case of the Cincinnati USA Partnership, a list of investors is made public on their website, with the names of companies like Duke Energy, PNC Bank and Enquirer Media showing up right next to one of the other top donors: JobsOhio. JobsOhio, however, has refused to release the names of its private donors that, in total, have given over $7 million to the secret state agency. So there’s no way to know if JobsOhio is simply funneling money to the Partnership on behalf of one of it’s secret corporate or political donors.
Speaking of shady JobsOhio-related conflicts of interest, The Columbus Dispatch reported this week that OMNOVA Solutions received $381,000 in tax credits as recommended by JobsOhio. The company plans to move its corporate headquarters from Fairlawn to Beechwood.
Dispatch reporter Joe Vardon followed up with a story about the state’s Controlling Board further approving the release of $10 Million in loans and bond funds to OMNOVA at the their September 23rd meeting.
Vardon points out that OMNOVA’s CEO Kevin McMullen is a board member of Team NEO, JobsOhio’s regional partner in Northeast Ohio. And while JobsOhio spokespeople claim Team NEO played no role in hammering out the deal, Vardon reports that OMNOVA used the threat of moving to another state as one of its bargaining tactics.
That’s right, one of the guys Kasich’s JobsOhio has entrusted with preserving and creating more jobs in Ohio threatened to move his own company out of Ohio if JobsOhio and the Kasich Administration didn’t give him over $10 Million.
Meanwhile, Ohio’s unemployment rate continues to rise and Ohio is ranked almost dead last on job creation compared to the rest of the country.
“Ohio Miracle”, my ass!