COLUMBUS – This week, John Kasich’s allies in the Ohio Legislature rushed through a bill that contained an amendment inserted at the last minute that effectively blocks the State Auditor from being able to investigate how the controversial JobsOhio program collects and spends its money. Why might Governor Kasich want to keep JobsOhio away from scrutiny? Here are four theories:
1) By its own admission, JobsOhio is failing to meet its goals.
2) Across Ohio, companies that pledged to create or retain Ohio jobs to much fanfare – often at press conferences attended by Governor Kasich himself – are laying people off by the thousands.
3) In the exceptionally rare instance an internal JobsOhio document is made public, a massive conflict-of-interest is inadvertently exposed.
4) Despite all the rhetoric about the ‘Ohio Miracle,’ the reality is plain: during the JobsOhio era, job creation has stagnated and that state is falling behind.
Theory #1: JobsOhio Is Failing To Meet Its Goals
JobsOhio President: “Not Only Is The Number Of Projects Down, But The Number Of Jobs Per Project Is Lower” According to The Columbus Dispatch “‘Business confidence remains soft,’ John Minor, JobsOhio’s president and CIO, said at the agency’s quarterly meeting yesterday… ‘Companies are pulling back on some of their growth,’ Minor said, citing weak business investment nationally and worries about European and Asian economies. Not only is the number of projects down, but the number of jobs per project is lower, too, he said.” [The Columbus Dispatch, 5/9/13]
- Jobsohio’s First Quarter 2013 Report: “The Overall Projects Trend Is Down Compared With The First Three Quarters Of 2012” According to The Columbus Dispatch “Business investment in projects that would bring new jobs to the state and retain others has slowed in recent months, says the top executive of the state’s private economic-development agency. ‘Business confidence remains soft,’ John Minor, JobsOhio’s president and CIO, said at the agency’s quarterly meeting yesterday… While the numbers are up from the fourth quarter, the overall projects trend is down compared with the first three quarters of 2012, according to JobsOhio’s first-quarter report.” [The Columbus Dispatch, 5/9/13]
Theory #2: Companies Like Diebold And American Greetings, Which Pledged To Create Or Retain Ohio Jobs To Great Fanfare, Are Laying Off Workers By The Thousands
American Greetings Incentives
2012: American Greetings Was Set To Receive Over $90 Million In State Tax Credits, Low-Interest Loans And Other Incentives Over 15 Years. According to The Plain Dealer “American Greetings is set to receive more than $90 million in state tax credits, low-interest loans and other incentives over 15 years, to offset the cost of its move. The 700,000-square-foot building, at the southern end of Crocker Park, will replace the company’s 1.7 million-square-foot complex in Brooklyn.” [The Plain Dealer, 11/28/12]
April 2011: The Ohio Tax Credit Authority Approved A 75 Percent Job Retention Tax Credit For 15 Years Towards A Corporate Headquarters; Incentive Was Worth $75 Million. According to The Plain Dealer “The Ohio Tax Credit Authority has approved Job Creation and Retention Tax Credits for these projects: American Greetings Corp., Brooklyn, 75 percent Job Retention Tax Credit for 15 years toward a corporate headquarters. Credit is worth $75 million over the term. Company is required to maintain operations at the site for at least 18 years. The $50 million project is expected to retain 1,750 positions.” [The Plain Dealer, 4/2/11]
- 5/9/13: Ohio’s 75 Million Refundable Job Retention Tax Credit For American Greetings Remained In The Tax Incentive Reporting Database. [Tax Incentive Reporting Database, accessed 5/9/13]
American Greetings cut 2,100 between 2012 and 2013. According to The Plain Dealer “American Greetings Corp. has quietly been cutting jobs. Tucked inside a 218-page annual report filed on Thursday was the news that the greeting card maker had eliminated about 2,100 workers between its 2012 and 2013 fiscal years. ” [The Plain Dealer, 5/24/13]
2011: The Kasich Administration Offered Diebold A $56 Million Package Of Tax Credits, Loans And Grants. According to The Canton Repository ” Gov. John Kasich appeared at Diebold’s headquarters here Tuesday afternoon to announce that the company had accepted his administration’s offer of a $56 million package of tax credits, loans and grants to induce the company to stay. ‘For the folks that are located in Akron, Canton (and) Green, this is a big save,’ said Kasich.” [The Canton Repository, 4/12/11]
2012: Diebold Announced Plans To Move About 200 Information Technology And Other ‘Back Office’ Jobs To India According to The Beacon Journal, ” Diebold Inc. said Thursday it expects to move about 200 information technology and other ‘back office’ jobs to India over the next two years. … The move is not seen as a money- or labor-saving move, Jacobsen said. Instead, Diebold seeks to make better use of specialized software-type expertise in Hyderabad, India, and to put Diebold in a position where its information technology and business services systems can accommodate major acquisitions.” [The Beacon Journal, 4/12/12]
2013: Diebold Announced Plans To Cut 700 Jobs. According to The Plain Dealer “Diebold Inc. is cutting 700 jobs as part of a multiyear global restructuring to cut up to $150 million in costs. The Fortune 1000 technology company, which had about 2,000 employees in Summit and Stark counties in 2012, said the job cuts would come primarily from North America and corporate operations. It added that ‘a majority of these job reductions have already taken place,’ but did not provide any details. ” [The Plain Dealer, 4/30/13]
Theory #3: JobsOhio Officials Once Mistakenly Released A Single Internal Record; It Showed A Massive Conflict Of Interest
KPMG Conducted An Audit Of JobsOhio — At The Same Time Another KPMG Division Was Soliciting Grants From The Organization. According to The Columbus Dispatch “KPMG was chosen by JobsOhio to conduct an audit required by law. On Nov. 5, about the time the audit was being conducted, KPMG also was listed on a sheet of eight pending grant commitments from the state for fiscal year 2013, according to a document obtained by The Dispatch through a public-records request.” [The Columbus Dispatch, 5/1/13]
- The Document Was Released By Mistake; JobsOhio Called It Confidential. According to The Columbus Dispatch “JobsOhio officials said the record is confidential and the state released it by mistake.” [The Columbus Dispatch, 5/1/13]
Theory #4: Despite All The Rhetoric About The ‘Ohio Miracle,’ The Reality Is Plain: During The JobsOhio Era, Job Creation Has Stagnated And The State Is Falling Behind.
2012-13: Ohio Ranked 47th In Job Creation
2013: Nonpartisan Study Ranked Ohio 47th In Job Creation. According to a nonpartisan study by the W.P. Carey School of Business at Arizona State University, Ohio ranked 47th in job creation for total nonfarm payroll between March 2012 and April 2013. [Job Growth Update, W. P. Carey School of Business - Arizona State University, 2013]
- Study Ranked Ohio 44th In Private Sector Job Growth. [Job Growth Update, W. P. Carey School of Business - Arizona State University, 2013]
- The Same Study Ranked Ohio 24th In Job Creation in 2011. [Job Growth Update, W. P. Carey School of Business - Arizona State University 2011]
March 2013: Ohio Led The Nation In Job Losses
March 2013: Ohio Lost 20,400 Jobs; Losses Were Larger Than Any Other State. According to The Plain Dealer “Ohio lost 20,400 jobs in March, more than any other state, theU.S. Labor Department reported Friday. The decrease comes a month after Ohio reported a healthy 16,100 gain in jobs in February. The last time Ohio lost more jobs in a month was April 2009, when the state’s employment fell by 44,000. That was during the recession, a time of peak job loss in the state and nationally. ” [The Plain Dealer, 4/19/13]
- Economic Research Analyst: ‘This Is Not Only A Bad Number — This Is Disastrous.’ According to The Plain Dealer “George Zeller of Cleveland, an economic research analyst, said posting such a large job loss now is alarming. ‘This is not only a bad number — this is disastrous,’ he said. ” [The Plain Dealer, 4/19/13]
- Leisure And Hospitality Lost 6,000 Jobs, Business Services Lost 4,300 Jobs, and Construction Lost 3,300 Jobs. According to The Plain Dealer “Industries posting big losses in March included leisure and hospitality, which lost 6,000 jobs; professional and business services, down 4,300 jobs; and construction, with a 3,300 decrease. Even the category including health services posted a 2,500 decline.” [The Plain Dealer, 4/19/13]