JobsOhio is bringing business to the state while its intended funding stream remains on hold.
Taking the place of the state's former, public Department of Development, the privatized JobsOhio worked with businesses to finalize 267 projects involving an estimated 70,000 new or existing jobs worth about $2.3 billion in annual payroll and $4.5 billion in capital investment this year, according to Gov. John Kasich.
That's an improvement, by all accounts, over 2011.
But the $100 million Kasich intended for JobsOhio to receive through a complicated lease of the state's wholesale liquor profits is still blocked by legal challenges, and the entity continues to operate on private donations.
Additionally, JobsOhio has spent the balance of the $1 million the legislature appropriated for various startup costs.
The same theme and questions arise almost every time a benchmark is reached or status report is released by Kasich's not-for-profit economic-development agency --created by lawmakers nearly two years ago and fully operational since July 1, 2011.
So as Kasich reviewed JobsOhio's accomplishments during a year-end news conference recently, he was asked the question he's heard before and probably will continue to hear until the transfer of liquor profits is completed --does JobsOhio need that money?
"We haven't begun to scratch the surface of it yet," Kasich said, affirming his belief that JobsOhio needs the liquor-profits funding stream. "We have (former Proctor & Gamble executive) Mark Patton over there, he's doing IT, agriculture, I don't even know what else. He's from California, and he's not like, from a farm, you know, and he's trying to do agriculture. The goal is to build this out so we can bring in more people with the expertise to work with these CEOs."
Kasich was referring to JobsOhio's operational structure --the agency has identified several economic sectors it thinks will help Ohio grow and wants to hire staff members with expertise in each sector. JobsOhio's first chief investment office, Mark Kvamme, previously said the primary use for the liquor profits would be to offer supplemental loans to companies as part of the incentive deals reached with the state.
Kvamme left JobsOhio in November, and the agency began to place emphasis on brokering state-sponsored incentives for companies earlier in 2012. But JobsOhio says it still would use the money for loans and grants.
"JobsOhio has the opportunity to do things that have never been done before," said Kvamme, who was succeeded as JobsOhio's chief by John Minor.
The liquor-profits lease agreement between the state and Jobs Ohio would last for 25 years --a deal that would involve a$500 million infusion into the state's coffers, the paying off of existing debt against the liquor-profits stream, and about $100 million left over for JobsOhio to push economic development. With the liquor-profits lease on hold, JobsOhio officials say the agency is considering "alternatives" for funding, but for now is operating on undisclosed private donations.
Laura Jones, a spokeswoman for JobsOhio, said "no recommendations for state tax incentives have been made for companies that have donated to JobsOhio; such recommendations would not be good business practice."
The liberal group ProgressOhio and two Democratic lawmakers have a case before the Ohio Supreme Court relating to their right to sue over JobsOhio, and it's this case that is essentially stalling the liquor-profits transfer. If the Supreme Court would rule for ProgressOhio and the Democrats, legal challenges would continue and likely further stall the lease. A ruling against the plaintiffs likely would clear the way for the lease.
"I am pleased that we are creating jobs," said ProgressOhio's Brian Rothenberg. "My intent is to protect the constitution, but JobsOhio's success does beg the question, 'Can we find another way forward without doing something unconstitutional?'"
When it was his turn to make remarks during Kasich's year-end review, Republican Ohio House Speaker William G. Batchelder called JobsOhio one of "the most misunderstood" initiatives of Kasich's tenure as governor. Batchelder compared it to former Gov. James A. Rhodes' creation in the 1960s of the Department of Development, which JobsOhio replaced, adding that Kasich's agency "long-term will be much more accountable."
"I've been a little bit concerned by some of my colleagues on the other side of the aisle who seem to think that what we really need to do is litigate this thing," Batchelder said. "JobsOhio is crucial. We have to, have to create more jobs in this state."
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