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Kasich-O-Meter

Dismantle the Department of Development and privatize job-creation efforts


Under his "JobsOhio" plan, he would abolish a state agency devoted to job creation and replace it with a privatized, corporate board that he would appoint and chair.


Sources:

The Plain Dealer, "Ohio Republican governor candidate Kasich says he will privatize the state's economic development efforts, if elected," August 18, 2010

Subjects: Economy, Government Efficiency

Updates:

Ohio’s job-creation efforts now flow through private agency

Updated: Wednesday, March 20th, 2013 | By Robert Higgs

As a candidate for governor, John Kasich wasn"t shy about his opinion of the Ohio Department of Development: It should be dismantled and its job creation functions should be taken over by a newly created privatized, corporate board.


The idea, Kasich said, was to get around some of the deal-making slowdowns caused by the pace of government and instead speed up the process with a business-minded operation working on behalf of the state.


Efforts to create the non-profit entity began almost immediately after Kasich took office in 2011. The very first bill introduced in the House of Representatives began to lay the groundwork for JobsOhio.


What ultimately was created is a non-profit corporation that is independent of state government but operates with state government.


Kasich"s early pitch was that he would chair the board. The governor isn"t on the JobsOhio board of directors. Its nine members, though, represent a broad cross section of industry, the medical community and academia.


"They are our state"s economic development entity,” said Kasich spokesman Rob Nichols, describing JobsOhio"s role with the administration.


JobsOhio doesn"t have the ability to award state grants or tax credits, but as it works with companies it can recommend to the Development Services Agency, the successor to the Department of Development, that such aid be considered, said JobsOhio spokeswoman Laura Jones.


JobsOhio has a lease with the state to run Ohio"s liquor operations through its subsidiary, JobsOhio Beverage System. It sold bonds against those liquor revenues to raise money for its own operating expenses.


With that revenue, JobsOhio will be able to offer loans and grants on its own, too, Jones said.


On its website, JobsOhio touts its efforts, saying it worked with 277 companies in 2012 that committed to creating nearly 21,000 new jobs and retaining more than 54,500 other jobs, successes it outlines in its annual report.


But the agency has faced criticism, too, over its lack of transparency. That remains part of a dispute with state Auditor Dave Yost, whose staff subpoenaed records from JobsOhio in March 2013 that it said the state should have access to for an audit. It sought to audit proceeds from the bond sales, which Yost said flowed directly from public money.


JobsOhio and the Kasich administration contend that the auditor was overstepping his authority, seeking access to records from a private corporation that did not deal with state dollars.

JobsOhio complied with the auditor"s subpoena, delivering records on March 19, 2013. But Chief Investment Officer John F. Minor Jr. also stated clearly in an accompanying letter that JobsOhio did not agree with the auditor"s interpretation of the law.


Minor, in fact, said JobsOhio would ask the General Assembly for legislation that makes clear that as a private company, it is out of the state auditor"s reach.


That"s something the Kasich administration said it would support and legislative leaders have expressed a willingness to consider.


Meanwhile, JobsOhio also announced that it would refund $1 million in startup money it got from the state in 2011 and any grant money it received since July 2011 to do economic development work for Ohio either as the JobsOhio Beverage System or its predecessor, the Ohio Business Development Coalition.


"Upon doing so, there will be no more public funds at JobsOhio," Minor said in a news release.


Still unresolved is a lawsuit by the left-leaning group ProgressOhio that questions the constitutionality of the development corporation. But in the meantime, JobsOhio appears to be up and running.


Kasich promised to dismantle the Department of Development and privatize job creation efforts. The state"s job-creation efforts now flow through the private JobsOhio. Other functions of the Department of Development now are handled by the revamped Development Services Agency.


Granted, the ProgressOhio legal action is still in the court system, but for now, we can set the Kasich-O-Meter at Promise Kept.

Sources:

The Plain Dealer via Cleveland.com, "JobsOhio complies with Ohio Auditor Dave Yost"s records subpoena but still disputes auditor"s legal authority,” March 20, 2013


The Plain Dealer, via Cleveland.com, "Auditor"s authority to check JobsOhio books sparks dispute with Gov. John Kasich,” March 8, 2013


Telephone interview with Laura Jones, spokeswoman for JobsOhio, March 20, 2013


Telephone interview and email exchange with Rob Nichols, spokesman for Gov. John Kasich, March 19-20, 2013


JobsOhio, "2012 Annual Report / 2013 Strategic Plan


JobsOhio, "JobsOhio 2012 Results and Review


The Plain Dealer, via Cleveland.com, "Gov. John Kasich's JobsOhio survives court challenge,” June 14, 2012


Politifact Ohio, "Legislation creating JobsOhio clears General Assembly, gets Gov. John Kasich"s signature,” Feb. 23, 2011  


The Plain Dealer, via Cleveland.com, "Ohio Republican governor candidate Kasich says he will privatize the state's economic development efforts, if elected," Aug. 18, 2010

Lawsuit dismissal moves JobsOhio one step closer to fruition

Updated: Sunday, June 24th, 2012 | By Reginald Fields

Republican gubernatorial candidate John Kasich said he would dismantle the Ohio Department of Development, stripping the longtime state agency of its duties of job creation and retention to be replaced by JobsOhio.

The idea, Kasich said, was to get around some of the deal-making slowdowns caused by the pace of government and instead speed up the process with a business-minded operation working on behalf of the state.

When we last looked at this promise, legislation had cleared the Generaly Assembly creating JobsOhio.

But a lawsuit from ProgressOhio, the liberal think tank based in Columbus, caused delays and  forced the administration to make changes to JobsOhio"s structure on the fly to get around some legal blocks, and generally held in limbo its efforts at becoming a full-fledged agency.

The lawsuit hinged on one question: Is it a violation of Ohio"s Constitution for JobsOhio, a private agency, to operate using state taxpayer dollars?  

Those tax dollars come from liquor sales in the state. JobsOhio is in the process of leasing control of the state"s profitable liquor sales operation in return for capturing its annual profits for its own operations.

This month (June 2012) the Ohio 10th District Court of Appeals upheld a Franklin County lower court ruling which essentially dismissed ProgressOhio"s lawsuit challenging how JobsOhio was structured.

The court ruling was a victory for the governor, moving JobsOhio one step closer to fruition. Not that the administration had been sitting around idling while the legal challenges were pending.

The quasi-private group"s board has already been meeting, discussing job-making deals and branding itself as Ohio"s official economic development agency.

The lower court and the state appeals court both said the plaintiffs had no standing to sue in their courts, meaning the judges essentially took a pass and instead dismissed the case. ProgressOhio could still appeal to the Ohio Supreme Court, but it has already been turned away from that court once so it appears that JobsOhio may finally be in the clear.

Maybe.  

The high court could choose to hear the case, if asked. And, the transaction for JobsOhio to formally acquire the liquor operation was delayed by the lawsuit, which means that the financial deal involved there will now be pushed into fiscal year 2013, which starts in July.

There is no reason to think that the financial particulars, which include issuing of bonds to raise funds to pay the state, won"t be hammered out. But the combination of that and the potential for further litigation are still potential roadblocks for JobsOhio, though with each passing day they seem to be shrinking to mere speed bumps. We"ll see.  

In the meantime, Politifact Ohio can set the Kasich-O-Meter for this promise at In the Works. 

Sources:

The Plain Dealer, via Cleveland.com, "Gov. John Kasich's JobsOhio survives court challenge,” June 14, 2012

The Plain Dealer, via www.Cleveland.com, "Ohio Republican governor candidate Kasich says he will privatize the state"s economic development efforts, if elected,” Aug. 18, 2010

Politifact Ohio, "Legislation creating JobsOhio clears General Assembly, gets Gov. John Kasich"s signature,” Feb. 23, 2011  

Legislation creating JobsOhio clears General Assembly, gets Gov. John Kasich's signature

Updated: Wednesday, February 23rd, 2011 | By Robert Higgs

Gov. John Kasich promised during his campaign to abolish and replace the Ohio Department of Development with a privatized, corporate board that he would appoint and chair. The new entity, JobsOhio, would be a more nimble and efficient vehicle for luring businesses to the state and retaining businesses already here. The development department has become sluggish and inefficient in its current structure, Kasich has said.

On Feb. 18, Kasich signed a bill establishing JobsOhio. The bill moved swiftly through the Ohio House and Senate earlier in the month, despite objections from most Democrats in the House, who said the publicly funded yet privately operated nonprofit corporation will be allowed to operate in secrecy. JobsOhio will be exempt from the state"s public-records laws. The House passed the bill Feb. 1, and the Senate approved it on Feb. 16.

"People will look back on this day, with the creation of JobsOhio, and see it as the vehicle for the transformation for our economy,” Kasich said before signing the bill. "People need jobs. With jobs comes hope. Without jobs, people become hopeless.”

The bill establishes a framework for JobsOhio. Another bill is expected to be drafted later to refine the plan.

While there clearly has been progress on this promise, there"s still work to do. JobsOhio exists on paper, but now the administration must put the plan into action. On this promise from the governor, the Kasich-O-Meter remains pointed at In the Works.

Sources:

The Plain Dealer, "Gov. John Kasich signs JobsOhio bill,”  Feb. 19, 2011

Groundwork laid for JobsOhio plan

Updated: Wednesday, January 26th, 2011 | By Robert Higgs

Gov. John Kasich made his opinion of Ohio Department of Development quite clear during the gubernatorial campaign: It should be abolished and replaced with a privatized, corporate board that he would appoint and chair.

Under his "JobsOhio" plan, economic development would be shifted to a 12-member private board while the department's other duties -- state tourism, home energy assistance programs and others -- would be moved to other agencies.

Kasich argued that the private, non-profit entity would be able work more efficiently than the Department of Development and better able to bring jobs to the state.

"They will be given the power to negotiate all the way down to crossing the T's and dotting the I's," Kasich said. "The final decision will remain inside the governor's office.

"You'll have a board of directors and I'll be the chairman of the board," he said.

At a news conference Jan. 20, Kasich and Republican lawmakers began to lay the groundwork for JobsOhio, discussing some details and saying legislation will soon follow in the General Assembly.

The corporation, JobsOhio, will be funded with public and private money, including $1 million in public money for its startup. Names and salaries of all JobsOhio employees will be public. Board members, who will be experienced business figures, will not be paid.

Kasich already has named Mark Kvamme, a wealthy Silicon Valley venture capitalist working on a $1 salary, as his director of development who will help shape JobsOhio.

"JobsOhio is an organization that is going to move at the speed of business, move at the speed of what is needed to be a job creator," Kasich said.

The details will be worked in legislation by the House and Senate, both of which are controlled by Republicans who say the JobsOhio bills are a high priority. The legislation got it"s first hearing in the House on Jan. 25. House Speaker William G. Batchelder has said a full House vote is possible by February.

That"s enough for us to move the Kasich-O-Meter for this promise to In the Works.

Sources:

The Plain Dealer, "Gov. John Kasich introduces new private economic development corporation to replace Department of Development,” Jan. 20, 2011

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