On Wednesday, the Ohio Controlling Board will make a decision regarding JobsOhio’s lease of the state liquor license, which is valued at millions of dollars annually, and whether to extend it until 2053.
Since it doesn’t seem like the contentious economic development organization is giving taxpayers anything in return for the extension, Attorney General Dave Yost has requested the board to postpone the decision. Policy analysts continue to wonder if JobsOhio is accountable for all of its claimed economic achievements.
In 2011, JobsOhio was established under former Governor John Kasich’s direction. Because a state-created private firm was given the only chance to bid on the lease of the state’s profitable liquor monopoly, it was contentious from the beginning.
To pay for the $1.4 billion it spent on the lease, the agency issued bonds. However, taxpayers were obviously receiving a significant haircut. In 2013, the Ohio Legislative Service Commission estimated that JobsOhio will still have $100 million year following debt service payments on the economic development bonds and state contributions.
In a subsequent briefing, the Legislative Service Commission stated that by 2021, that sum had skyrocketed to $338 million. JobsOhio’s payroll grew by more than seven times, from $2.5 million to $19.1 million, during that time. In 2021, its 106 employees took home an average salary package of $180,000.According to the agency’s annual report, salaries and compensation totaled $26.3 million by 2023.
In the meantime, the organization has given incentives totaling over $1 billion to businesses, some of whose executives were also JobsOhio insiders.
EmploymentAs soon as it was established, Ohio faced legal challenges from opponents who claimed that it went against the Ohio Constitution’s ban on the state granting special treatment to one entity, including by giving it credit. The challenge was dismissed by the Ohio Supreme Court, which ruled that the people who brought it lacked the legal authority to suit.
Then-Justice Bill O. Neill charged his colleagues with neglecting their duties in a dissent.
He wrote, “The highest court in the land is looking the other way while hundreds of millions of dollars in public funds are being funneled into a dark hole to be disbursed without public scrutiny.” Passing on this matter would be a betrayal of our responsibility as guardians of the (Ohio) Constitution, and the Supreme Court of Ohio is the last home on the street.
The state seems ready to offer JobsOhio another 15 years of profit from the state liquor monopoly for free, according to Attorney General Yost.
He wrote to JobsOhio President and CEO J.P. Nauseef last week, saying, “After looking over the current amendment to extend the deal by an additional 15 years, it seems to me that JobsOhio is required to pay nothing for a 15-year extension of this limited, one-time franchise.” Under these conditions, how is extending such a valuable franchise in the best interests of the people of Ohio?
In a follow-up letter to Ohio Office of Management and Budget Director Kim Murnieks, Yost asked the Controlling Board to postpone the franchise renewal. Murnieks responded by referencing state law, which states that the franchise may be renewed for a further amount of time in exchange for money, deferred payments, and other factors.
“The terms of the agreement between the Ohio Office of Budget and Management, the Ohio Department of Commerce, and JobsOhio are not proposed to change,” Murnieks continued, adding that the new deal only extends the time frame.
However, it was unclear from the letter if JobsOhio will pay the state more to prolong its lucrative agreement by another ten and a half years.
Murnieks continued her letter by praising the several contributions JobsOhio has made to Ohio. She gave three examples, including the expansion of the state’s economy, its diversification, and Ohio’s current AAA credit rating.
Her office, however, lacked proof to back up those claims.
Ohio has been willing to grant large corporations large taxpayer giveaways, along with many other states and towns, even when such corporations were determined to locate, expand, or remain in Ohio.
For instance, despite a Microsoft executive telling the New York Times, “I can’t think of a site selection or placement decision that was decided on a set of tax incentives,” Governor Mike DeWine continues to promote massive tax advantages to energy-guzzling data centers.
These remarks are consistent with data showing that tax incentives don’t matter when businesses are choosing where to locate in at least 75% of cases.
When asked if the governor was satisfied that the tax breaks Ohio was providing to large tech businesses were necessary or if they were a good bargain given the relatively limited number of jobs they plan to create, a DeWine spokesperson did not explicitly respond.
A representative for Murnieks was questioned on how JobsOhio ensures that the incentives it provides—which were formerly funded by the government—do make a difference in companies’ decisions to expand, locate, or stay in Ohio. He asked JobsOhio that question.
In response to the same query, JobsOhio spokesperson Matt Englehart only stated that the organization’s success claims are accurate.
Without offering more proof, he stated in an email that all JobsOhio support, with very few exceptions, is given for competitive projects that would have otherwise gone to another state or not proceeded without JobsOhio’s help. The exceptions include JobsOhio’s Ohio Site Inventory Program, which creates speculative sites and building inventory to facilitate businesses’ rapid investment in Ohio; JobsOhio’s Vibrant Communities Program, which promotes economic development in small and medium-sized communities; and JobsOhio small business grants.
In contrast to what Murnieks and JobsOhio have said, the Buckeye State has seen distinctly poor job growth.
In terms of job growth, Arizona State University placed Ohio in 35th place last year. Additionally, Ohio came close to the bottom of states when the Economic Policy Institute examined state-by-state unemployment rates since 2007, the year the Great Recession hit, in 2023.
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Eliot Pierce is a dedicated writer for ChiefsFocus.com, covering local crime and finance news. With a keen eye for detail and a passion for storytelling, Eliot aims to provide his readers with clear and insightful analysis, helping them navigate the complexities of their financial lives while staying informed about important local events. His commitment to delivering accurate and engaging content makes him a valuable resource for the community.