What Happens to JobsOhio After Kasich?

What Happens to JobsOhio After Kasich?

No matter who wins the governor's race in the midterm election, experts say JobsOhio is probably here to stay.

The job creation program, developed by Gov. John Kasich in 2011, faced controversy around its transparency and job-production numbers, which has led to uncertainty about its survival this election season.

According to the U.S. Bureau of Labor Statistics, in the past eight years, Ohio has gained more than a quarter-million jobs. Critics of the program say it's hard to tell whether the new jobs are a direct result of JobsOhio.

Dave Cohen, assistant director of the Ray C. Bliss Institute of Applied Politics at the University of Akron, explained that job creation has increased mostly because the nation's economy has been on the rise. But he gives some credit to Kasich and JobsOhio.

"Ted Strickland just happened to be the current governor in a time when the economy crashed...but yet, there were some Ohioans that blamed him for that," Cohen said. "So I don't think it's very fair to necessarily blame a governor for everything that goes wrong in an economy - just like I don't think it's very fair to give 100 percent credit to a governor when things go right. These are economic forces."

Although it is funded through public monies, JobsOhio is a nonprofit organization, and therefore isn't required to disclose financial records like state agencies.

It is funded partly through the state's liquor tax, now part of the JobsOhio Beverage System. In its 2018 fiscal year report, JobsOhio reported that its beverage system generated nearly $1.2 billion from liquor sales to spend on operating expenses. Most revenue goes toward maintaining the beverage system, but approximately $1.2 million is spent on economic development, programs, administrative and marketing efforts.

In addition to the liquor tax, JobsOhio reports that in its tenure, it has produced $6.2 billion in new revenue from created jobs, and has earned $24.3 billion from retained jobs and produced $38.2 billion in capital investment.

Cohen said both candidates want to build a strong economy, and he doubts any large changes to the program would happen.

"Both DeWine and Cordray support economic development," Cohen said. "I don't see JobsOhio going anywhere. Maybe there will be some reform, maybe there will be a name change, but I think the basic idea will still exist, and some governmental structure."

Gubernatorial candidates Richard Cordray (D) and Mike Dewine (R) both called for greater transparency from the program, most recently in last month's debate. Cordray has said he wants the government to focus on assisting small and medium-sized businesses, while DeWine is focused on increasing job-training programs.

But Cohen said this may be just talk from both sides of the political aisle.

"It sounds great," he said. "Everyone is for transparency until they actually get into office and they see that making laws, making policy, is a bit like making sausage. When you have too much transparency, it prevents the kind of deals that are necessary that go on behind the scenes."

Michael Jones, an economics professor at the University of Cincinnati, said economic development should be a bipartisan issue, expanding beyond JobsOhio to encourage companies to relocate to the state.

"Both parties, regardless of who ends up winning the election, do recognize that there's a role to play at the state level for attracting these companies and putting together the tax incentive packages, and loans and grants, and connecting resources locally to the company," Jones said.

Cordray and DeWine both expressed support for keeping the program alive if elected, but Jones thinks they will likely emphasize different goals.

Under Ohio's Job Creation Tax Credit, companies get a tax credit based on the amount of jobs and payroll value they bring to the state. For example, a Democratic governor may require companies to hire more underrepresented minority workers to receive a higher tax credit.

Jones said one of Ohio's biggest challenges today isn't job creation, but population growth. The U.S. Census Bureau found Ohio's growth rate in 2017 to be only .67 percent, 43rd in the country. By contrast, the nation's highest population growth is in the District of Columbia, which grew more than 15 percent last year.

"It's weak; it's pretty anemic. [Companies] say the biggest challenge they have is that they can't find qualified people to fill their jobs," Jones said. "We just don't have the people available."

The candidates, including Libertarian Travis Irvine and Constance Gadell-Newton of the Green Party, plan to respond to this talent gap with initiatives to encourage career advancement in Ohio's labor force. While the state's current unemployment rate of 4.6 percent has dropped significantly from a high of more than 11 percent in 2010, Ohio still hasn't reached the current national unemployment rate of 3.9 percent.

Cordray is working on a workforce plan split into two categories: placing an emphasis on individuals, and helping employers do the same.

Spokesman Mike Gwin said in an email statement that Cordray would build upon JobsOhio to "further improve workforce development" and "support our homegrown small businesses."

The campaign site for Cordray and running mate Betty Sutton lists deeper goals, such as driving more funding toward education, offering higher numbers of apprenticeships, and creating Lifelong Learning and Training bank accounts to encourage workers "to invest in their own education and training."

The Cordray/Sutton campaign site also lists appointing a Small Business Chief and 24/7 team to help small business owners and entrepreneurs navigate the state's licensing and regulations, along with other business responsibilities.

Dewine's approach is focused on closing a skills gap in Ohio to make workers better suited for in-demand jobs. Josh Eck, Dewine's campaign spokesman, said the administration wants to fund 10,000 "nanodegrees," or short-term job-training programs that take between six weeks and six months to complete.

"We also need to make sure students know the opportunities that are available to them and know that there are a lot of different pathways to success in this economy, and they have to find the path that's best for them," said Eck.

Green Party candidate Constance Gadell-Newton is focused on creating jobs in clean energy and environmental sustainability, said running mate Brett Joseph.

Travis Irvine's Libertarian platform calls for fewer federal taxes and a reduction in government interference in order to spur the economy and support small businesses.

Economist Michael Jones has one warning for future Ohio politicians, no matter who wins: Don't turn the economy into a political tool.

"I think attracting companies like Amazon to come to your state - we should all be getting behind this," said Jones. "Try not to bring the battles that happen in the legislative chambers into these other areas.”

This collaboration is produced in association with Media in the Public Interest and funded in part by the George Gund Foundation.
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