John Kasich unveiled his new approach to economic development with a typical sense of urgency, the governor promising that a new private, nonprofit agency would move rapidly, in a nimble manner the Ohio Department of Development could not match. JobsOhio would leap forward “at the speed of business,” the phrase capturing Kasich’s drive to rebuild the state’s recession-battered economy.
The reality has been far different, JobsOhio so far following for the most part the incentive programs of the now-dismantled state development department. Only now is JobsOhio’s financing in order, in the form of a complicated deal that leverages the state’s liquor profits.
Legal questions remain about diverting state money to private enterprise, but the state moved forward last month with a bond sale. The result will be a revenue stream of about $100 million a year. What now for JobsOhio?
The governor, in a year-end news conference, made plain his thinking had changed about offering financial incentives to induce companies to stay in Ohio or to get companies to relocate here. No longer will incentives play a key role, the point re-emphasized by JobsOhio’s new president and chief investment officer, John Minor.
“We’re not going to get into bidding wars with other states,” Minor recently told Crain’s Cleveland Business. Instead, JobsOhio will stress work force training and the state’s business climate, including the governor’s plan to lower income and business taxes, over a more traditional program of low-cost loans and grants.
That’s a shift in the right direction. What’s troublesome is that the tax structure Kasich has in mind fails to adequately fund the necessary long-term investments in education and technology. Cutting taxes is politically popular, but studies show it is not a major factor in spurring growth.
Another major change for JobsOhio is that some $43 million a year from liquor profits will be devoted to reviving brownfields, or abandoned industrial sites. The former brownfields program, Clean Ohio, was on hold because it relied on state liquor profits.
Cleaning up brownfields has been crucial for Ohio’s cities, the job-creating engines of the state’s economy. That said, Kasich’s approach will be to spend the money when an end-user has been identified, ignoring the successful, long-term strategy of the Clean Ohio program. It wisely placed emphasis on cleanups first. Cities could then assembled and offer attractive, ready-to-build sites to developers.
As with other initiatives announced by the governor, JobsOhio very much appears a work in progress. It is finally picking up steam, but how its various parts will fit together is only now coming into focus.