Late last year, John Kasich and his economic development team emphatically declared they would be moving away from using assorted tax incentives to attract and retain business in Ohio. “We are not going to get into bidding wars with other states,” the governor said.
Yet that’s what appears to have happened with recent deals involving Omnova Solutions Inc. in Fairlawn and Verizon Wireless in Boardman. Although the tax credits approved by the state promise to create jobs at Omnova and save them at Verizon, both subsidize movement within the state, raising objections from locals about poaching.
Meanwhile, the Omnova deal and others continue to raise questions about possible conflicts of interest within JobsOhio, the private development agency created by Kasich. JobsOhio, whose board includes business leaders, makes recommendations to the Ohio Tax Credit Authority. In the Omnova case, the company’s chief executive officer, Kevin McMullen, sits on the board of Team NEO, JobsOhio’s regional partner in this part of the state.
Team NEO played no part in the Omnova deal, according to JobsOhio, but the agency polices itself as far as conflicts of interest are concerned. Last week, JobsOhio changed course slightly, disclosing to the Tax Credit Authority that two of its top officials had recused themselves in a recent deal with a Proctor & Gamble subsidiary.
Bill Roth, the Fairlawn mayor, offered Omnova millions of dollars in financial incentives. He felt blindsided when the state approved tax credits for the company to move to Beachwood. Roth said Omnova had never mentioned moving out of state in talks with Fairlawn; state and company officials said otherwise. In the Verizon deal, the company is closing its Boardman facility, operations to be consolidated with those at a facility in Hilliard. “We’ll do whatever we can to keep them in Ohio,” said Kasich spokesman Rob Nichols.
Offering tax incentives hardly constitutes an innovative approach to economic development — the goal the governor set for JobsOhio. As it is, JobsOhio’s policies for recommending incentives are unclear, its inner workings still shielded from outside scrutiny.