Akron- and Cleveland-area companies received big tax breaks as they relocated from one part of the region to another, in many cases shifting jobs from economically hard-hit areas.
So says a study released Thursday that looks at more than 60 business relocations in the region and claims to be the largest ever done of subsidized corporate moves in the United States.
The study – done by the nonprofit Good Jobs First of Washington, D.C., and called Paid to Sprawl – says that in many cases, areas with higher rates of poverty and larger percentages of minorities lost jobs to more affluent and less racially diverse locales.
Greg LeRoy, head of Good Jobs First, said information gleaned from news stories and interviews with economic development officials in various political subdivisions indicates the companies got the subsidies — property tax abatements — even though they were not threatening to leave the state.
The small and medium-size businesses, “are not playing Ohio against Indiana – they’re staying in the same metro area,” LeRoy said.
“They want to retain their skilled workforce, they want to stay close to their suppliers, customers,’’ he said.
Companies’ reasons for moving, LeRoy said, involved factors such as a desire for a larger building or better freeway access.
Communities gaining the most businesses in the relocations were Streetsboro, where six of the businesses moved; and Aurora and Avon, which each had five relocations. The biggest losers were Cleveland (which gained two and lost 11), Twinsburg (which gained two and lost six), and Mentor, which lost five.
The study looked at 63 relocations in an eight-county Cleveland-Akron area encompassing Summit, Portage, Medina, Cuyahoga, Lorain, Geauga, Lake and Portage counties. It also looked at 101 relocations in the Cincinnati metro area.
Each of the moves received a subsidy — in the form of a property tax break — under Ohio’s Enterprise Zones [EZ] program or the state’s Community Reinvestment Area [CRA] initiative. Both programs are administered at the local level. All told, an estimated 14,500 jobs were moved with the use of subsidies totaling more than $29.7 million, the study says.
Researchers looked at moves between 1996 and last year, with most of the moves happening before 2006. The number of relocation deals dropped sharply during the recession, LeRoy said.
LeRoy noted that Ohio boasts incentive programs in addition to the EZ and CRA initiatives that abate property taxes. He said the study focuses on EZs and CRAs because information involving the deals was relatively easy to get. Such information is becoming less accessible, he said.
Paid to Sprawl was released as Cuyahoga County communities consider joining an effort proposed by Cuyahoga County Executive Ed FitzGerald designed to deter what is called job-poaching among that county’s communities.
The study recommends the state encourage such initiatives, as well as regional economic development systems. The study cited an effort in Summit County designed to discourage poaching, which some communities have joined. The study also recommends that communities consider regional tax sharing, and that the state provide an online listing of details of tax-subsidy deals.
Katie Byard can be reached at 330-996-3781 or email@example.com