The Adobe Flash Player is required to view this multimedia interactive. Get it here.

Kasich approves more than $240M packages to retain jobs

State’s recent incentive deals raise questions about effectiveness, transparency, conflicts.

New pool at 'The Heights' opens
5/27/12
Huber Heights suing consultant for more than $50,000
5/26/12
4 arrested for OVI at Kettering checkpoint
5/26/12
Man found dead at bar; police seek suspect
5/26/12
Turner adopts role for Romney campaign
5/26/12
> More headlines

By Laura A. Bischoff, Columbus Bureau 10:00 PM Saturday, October 8, 2011

COLUMBUS – As promised, Gov. John Kasich is pursuing job creation at every turn, but his biggest successes have involved offering packages of more than $240 million in grants, loans and tax breaks to convince a handful of Ohio companies to sit tight or move just a few miles rather than pack up and leave the state.

The Kasich administration is in talks now with more companies that are threatening to leave Ohio: Cincinnati-based Chiquita Brands International and its 350 jobs are being courted by Charlotte, N.C., and Eastman Kodak is considering moving 500 jobs from Kettering’s Miami Valley Research Park to either Indiana or New York.

In March, American Greetings landed a state incentive package worth $93.5 million to abandon any notion of moving 2,000 jobs to Chicago and instead move its headquarters less than 15 miles, from Brooklyn to Westlake near Cleveland.

That same month, Kasich announced a $17.4 million package for Bob Evans Restaurants to move its headquarters from the south side of Columbus to New Albany, an upscale suburb 18 miles away. The restaurant chain could have moved 150 jobs to Texas where it already owns property, the governor said. Instead, the headquarters will add 360 jobs and stay in Ohio, where founder Evans started making sausage for a 12-stool diner in Gallipolis in the 1940s.

And the Kasich administration gave a $56 million package to Canton-based Diebold Corp. in April to convince the company’s leaders to keep 1,900 workers in the Akron-Canton area. The ATM-maker was reportedly eyeing a move to North Carolina or Virginia.

Three deals alone – American Greetings, Diebold and Bob Evans — added up to $166.9 million in incentive money to retain and create 4,410 jobs. It works out to be $37,845 per job.

“We know that in (the Diebold) case in particular, they were within days of making a decision to move,,” said JobsOhio Director Mark Kvamme, Kasich’s point man on jobs.

“If we did not have the job retention tax credit that we put together for them, they would have moved, just like NCR. ... We could never risk Diebold leaving. We cannot afford another NCR.”

Efforts defended

The governor defends the incentive packages as judicious and necessary.

“First of all, with Diebold, they were leaving Ohio. We should be pleased that they’re staying. The same is true with American Greetings. We had the whole Legislature involved in that. First of all, you want to retain jobs. But we should also focus on the fact that Omnicare has just moved from Kentucky into Ohio. We will have another announcement of another company moving in,” Kasich said without naming the company.

Last month, Kasich announced an $8 million package to move Omnicare and its 500 jobs from northern Kentucky to downtown Cincinnati; the jobs will be new to the state but not new to the region. (Omnicare used to be located in Cincinnati.)

Zach Schiller of Policy Matters Ohio, a left-leaning think tank based in Cleveland that studies economic development and job issues, said poaching companies from other states isn’t a good strategy.

“What it is likely to lead to is a race to the bottom because everybody will do it,” he said.

Kasich said on Fox News that he is willing to poach.

“I was accused on the front page of the Cincinnati Enquirer by people in Kentucky about wanting to steal all their jobs. And guess what: they’re right,” Kasich told host Sean Hannity on Sept. 13. “I’m going to go everywhere I can in America to make Ohio work better.”

The governor also said the state must pay attention to the jobs it already has.

Kasich said, “We have to make a determination as to what industries are critical to Ohio’s future. We think this investment (in Wilmington) is smart. Diebold, which is software and hardware, and keeps us from blowing a hole in the city of Canton, is really critical — after we lost NCR down in Dayton. And if anybody should understand the loss of a business, it’s Dayton. But, I have to tell you, we’re not going to get into a bidding war. If we think that there are other states that are plotting, and you’ve got somebody in between who’s driving up the price, at some point, we say no. And I’ve had to say no to a couple of people about things they wanted that we weren’t willing to give.”

Investment return

Kvamme said all but a handful of the 156 deals executed in the last eight months have “Return On Investment-positive” in the first year. That means the state will receive more money in taxes paid by the company than it is handing out in tax credits, loans, grants and other support.

But the public has to take Kvamme’s word for it that the deals are in the state taxpayers’ best interest, because documents detailing the taxes that companies pay are secret.

The Ohio Department of Development declined a public records request from the Dayton Daily News seeking copies of the ROI-analysis on half a dozen high-profile deals. The state considers those calculations proprietary.

This contradicts what Kasich told the Dayton Daily News in Wilmington on Tuesday during another job announcement:

“They’re not trade secrets. We release all the numbers. We’ll do that for you today. ... You’ll be able to tell exactly what the payrolls are going to be, exactly what the gains for the communities are, and exactly what we provided as an incentive. Frankly, this is the first time, I’m told, in the history of the state that people actually have ever looked at a return on investment. So we’re very pleased with where we are.”

1 | 2 next page »

Share this article