COLUMBUS — Public money would be used to repay investors in private programs that make measurable progress in solving problems such as recidivism, infant mortality and opiate addiction under a program wrapped into the proposed state budget.
Ohio Treasurer Robert Sprague’s office would administer the Results Ohio initiative, a “pay for success” contracting program in which businesses and nonprofits are reimbursed by the state if they hit statistical benchmarks.
State lawmakers or the governor’s office would select public policy initiatives to tackle, and the legislature would set aside funding in an interest-bearing account with the treasurer’s office for the business or nonprofit.
The organization would find private investors to back its program with up-front funding. It would negotiate with the treasurer’s office on metrics that would be used to determine whether it receives the state payout, plus interest.
The treasurer’s office would hire a third-party evaluator to track the outcomes and whether the organization is hitting the mark.
If it meets those benchmarks, the state would pay for the program, plus a negotiated interest payment, and the nonprofit could return money to investors. If it doesn’t, the state wouldn’t pay.
“We describe it in terms of black and white, but in reality there may be a sliding scale there where you get paid a little for doing a little and then you get paid a lot for being able to achieve a lot,” Sprague said.
Results Ohio could be the state’s testing ground for new solutions to some of its most complicated problems without putting public money at risk if the program doesn’t work, Sprague said.
“These are high-risk projects. You’re dealing with problems we can’t fix right now,” he said.
Rep. Don Manning, R-New Middletown, and Sen. Steve Wilson, R-Maineville, originally introduced the initiative as stand alone legislation in the spring. But the House and Senate folded separate versions of the program into their versions of the budget.
The legislature went into overtime on the budget this week, though, approving a 17-day interim budget while the two chambers work out differences for the new biennium.
The Results Ohio initiative was not included in Gov. Mike DeWine’s original budget proposal, but his spokesman said DeWine is supportive of the idea.
“We’re appreciative that the treasurer’s office allowed us to review and work on the language. We think that this could be a useful tool for the administration,” said Dan Tierney, DeWine’s spokesman.
The Ohio Department of Administrative Services has a limited pay-for-success contracting program already that, depending on how the differences between the two budget versions are worked out, could be wrapped into the treasurer’s program.
“We’ll carry out whatever the legislature asks us to carry out,” said Bill Teets, the department’s spokesman.
The Senate also included in its version of the budget $5 million to seed the first program: ZeroBack, a for-profit company that would work with inmates in five state prisons to help them find post-release careers.
ZeroBack co-founder Tom Johnston’s background is as an executive recruiter, and he said he wants to teach prisoners who are about to be released how to find jobs that align with their passions.
“I believe at the core when somebody comes out of prison they have to get gainful, meaningful employment,” he said. “You can’t just get them a job that checks a box. We want to get them into a job that really aligns with what they ultimately want to do.”
If the funding is included in the final approved budget, ZeroBack would have to raise $5 million from investors to launch its program in Lake Erie, Lorain, Mansfield and Richland correctional institutions and Northeast Reintegration Center.
The company would negotiate with Sprague’s office on metrics, such as recidivism, that they will track, to qualify for the state payout.
Johnston said the company expects to start working with prisoners as early as possible, but it would accelerate training four to six months before they are released.
“Having meaningful employment is a key to everything. We kind of take it for granted,” he said.