Imagine if you had a multimillion dollar empire with no accountability or transparency except once a quarter you had to issue a public report in which you graded yourself on metrics you got to choose and nobody outside of your organization had any way to independently verify. Now, imagine you still had to go out there and basically give yourself a D and admit that you’re doing much worse today than you were most of last year. Congratulations, now you know what it feels like to be JobsOhio.
Yesterday, JobsOhio released its 2013 First Quarterly report. But in order to consider it in context, we first have to review what John Kasich promised JobsOhio would mean back when he was a candidate and a newly elected Governor.
According to Kasich, if Ohioans were willing to sacrifice the transparency and accountability that came with a public agency like the Ohio Department of Development, he’d have a nimble corporate entity that would go out and lure major job creation projects to Ohio from out-of-state, like “Rhodes Raiders” that brought Honda to Ohio originally. Let JobsOhio be exempt from Ohio’s ethics and state government employment protection laws, and it would be internally accountable to more easily fire people who underperformed, Kasich argued.
In response to last year’s third quarter report, we pointed out that on that standard, JobsOhio was barely better than nothing at all:
Since then, there was the 2012 annual report that buried the disastrous Q4 results of JobsOhio (in which JobsOhio had to admit that the number of projects it approved had nosedived). In both that report, and in every report JobsOhio has released, it shows that on average more than 75% of the job pledges it claims its projects generate from businesses in return for JobsOhio assistance are pledges to merely retain jobs.
But, conveniently, JobsOhio does not provide any evidence that these jobs would not have been retained without JobsOhio’s assistance. In other words, most (over three-quarters) of the activity of JobsOhio is not geared at creating jobs or attracting jobs from out of Ohio, but merely providing subsidies to private sector companies for jobs in Ohio they had already created without assistance and with no evidence that they would not continue to exist without JobsOhio.
Of the few projects in which JobsOhio actually received pledges from companies to create “new” jobs in 2012, virtually none of them were cases of companies being lured into Ohio.
JobsOhio claims to have helped secure 20,979 pledged new jobs this year, but only 16% of those came from out-of-state companies who were lured to Ohio with incentives. 62% came from companies already in Ohio. That means that a vast majority of what JobsOhio does is give economic development aid to Ohio companies for jobs already created without its help. A great distant second to that, it gives assistance to companies already in Ohio to create new jobs. Virtually none of what JobsOhio actually does is geared to attracting new jobs from outside of Ohio.
As the Cincinnati Enquirer pointed out last week, that means JobsOhio gets pledges for retaining jobs at a nine-to-one ratio for every new job pledge it claims to have helped generate.
Again, we say claims because JobsOhio provides no actual evidence that these jobs wouldn’t have been maintained without its help.
So what is the ratio of new jobs from outside of Ohio to those created within Ohio in the first quarter of the year, according to JobsOhio? We can’t tell you because JobsOhio has decided to stop including that metric in its reports. Anecdotally, the report only clearly identifies one company it lured from outside of Ohio in the past quarter and the 200 new jobs it pledged to create in the move.
Here’s the metrics JobsOhio did bother to provide:
Compared to the same quarter a year prior, JobsOhio generated fewer projects (in fact, worse than all but the last quarter of last year) and generated a third of the committed capital investment it was able to do a year prior. The number of new jobs it created is 18% less than the same quarter a year before. In fact, the total number of jobs (including retained) is off by over 20% from the same quarter a year before.
The annual report of JobsOhio (see pg. 16) showed that in all of 2012, JobsOhio generated fewer pledges for new jobs or for jobs in general than it did in 2011. The first quarterly report shows that JobsOhio is on pace to generate even fewer new, or even retained, jobs this year.
Is this performance by his pet project acceptable to Governor Kasich, especially occurring when Ohio’s latest job report showed it is leading the nation in job losses while the nation as a whole actually gained 238,000 new jobs that same month?
Kasich used to trumpet Diebold and American Greetings as evidence that JobsOhio was a success story, until both of those deals imploded. In the past month, we’ve learned that JobsOhio’s own audit showed that the agency, which has less than 25 employees, spent over $700,000 on office furniture and remodeling (to construct an in-house coffee bar). Then, due to JobsOhio accidentally providing records to the Dispatch it then tried to claim weren’t public records, we learned that the same auditing firm may have a major conflict of interest in conducting such an audit while seeking JobsOhio’s assistance for one of its clients.
We’ve also learned that JobsOhio has been bloating the payroll by giving raises to ex-Department of Development employees for essentially doing the same job, as well as hiring a number of less experienced employees who just happen to have John Kasich’s gubernatorial campaign on their resume.
And for what? An agency that is so far removed from what candidate Kasich promised, it no longer even measures the number of jobs it brings from outside of the state anymore? A bloated entity with virtually no accountability in how it spends its money on salaries and office furniture? A “private” company that the Governor uses to curry favor with local businesses by providing them “economic development” funds for jobs they already created? One that is getting more expensive and delivering less?
And what was Governor Kasich’s reaction to the news that his job creation agency is doing less as Ohio is leading the nation in job losses?
But his organization drew praise from Gov. John Kasich, who led off the JobsOhio board meeting with comments on Chief Executive magazine’s annual Best & Worst States Survey on business climate that showed Ohio jumped 13 spots this year, landing at No. 22.
“To go from 44th to 22nd in (being) job friendly in two years is pretty stunning,” Kasich said. “CEOs tell me JobsOhio is on top of it, very responsive and knows what it’s doing.”
Well of course CEOs are going to say positive things about an entity that doles out millions in economic development dollars for jobs your company long ago created without assistance. Either Kasich is an idiot or thinks you are (or both).
Governor John Kasich is literally fiddling with the latest copy of Chief Executive Magazine and it’s nonsensical and totally meaningless “business climate” ranking while Ohio burns.
If Governor Kasich won’t step up and publicly hold JobsOhio accountable for its wasteful spending, misguided focus (seriously, have we all forgotten how it wanted to spend $40 million reportedly to lure Sears’ headquarters here?), and diminishing results, then Ohioans will vote next November for Ed FitzGerald. FitzGerald was able to clean up the corrupt county government of Cuyahoga County. He can clean up the State’s failing economic development efforts as well.
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