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Agency charged with Ohio job creation not subject to open records law

Says confidentiality required to remain competitive
Jobs Ohio
Posted at 4:54 PM, Dec 09, 2021

COLUMBUS, Ohio — The Ohio agency responsible for job creation and attracting new business to the state says it is ending its first ten years with hundreds of thousands of new jobs and more than 3,000 projects while battling critics who believe it operates in secret with not enough accountability for its performance.

JobsOhio was created as a non-profit in 2011 to replace the state agency that was charged with business and economic development.

From the very beginning, critics raised concerns over transparency and openness since it was no longer a state agency by funded tax dollars but instead a not-for-profit agency funded by Ohio liquor profits that is not subject to Ohio Open Records laws.

The Ohio Supreme Court ultimately ruled JobsOhio is not required to make public the same records as other state agencies that are subject to under the law.

The ruling shields JobsOhio from releasing everything from how it is spending money to details about how many companies it has attempted to attract to Ohio and how many actually have resulted in new deals.

For example, all emails and correspondence are protected from disclosure as well as details about spending on travel, entertainment and conventions.

Matt Lundy is a former state representative who strongly argued in the years after JobsOhio was created that it failed the public in not being more transparent.

Matt Lundy
Matt Lundy, former state senator

“JobsOhio is open for business,” said Lundy, “but you can’t see through the windows.”

Ten years later, Lundy remains skeptical.

“People simply aren’t aware of what projects are successful and what projects aren’t successful.”

The Buckeye Institute, a Columbus-based think tank that analyzes economic policies echoes similar concerns.

“I think it’s reasonable to know—are you having in-person meetings or are you spending money at the Ritz kind of thing—maybe there’s a reason to do something like that,” says Greg Lawson, Buckeye Institute Research Fellow.

Meanwhile, JobsOhio points to what it believes is a strong track record of achievement over ten years including:

  • 3,161 projects
  • 239,567 new jobs
  • $11.5 billion in new payroll
  • 643,185 retained jobs

J.P Nauseef is JobsOhio's President and CEO, and argues there “has never been a better time to do business in Ohio” and stands by its record as “absolutely successful.”

With regard to questions about transparency, Nauseef said, "We want to make sure that we use our status as a private entity not to have a veil of secrecy, but to make sure Ohio receives the benefit of a competitive advantage.”

J.P. Nauseef
J.P. Nauseef, JobsOhio President and CEO

“They share very sensitive information,” says Nauseef, "and those companies need to have confidence that that information will stay private—they don’t want to share that information with their competitors or the financial markets until they’re ready to share it.”

While JobsOhio is not funded directly by taxpayers, Ohioans do pay for it through liquor profits.

JobsOhio’s most recent annual report reveals it has $677 million in the bank, but exact details of how it's spent remain shielded.

The reports reveal it has spent $225 million on economic development, and just last month announced it gave the Cleveland Clinic, which recently reported earning $1.3 billion in profit, $45 million to create a global research center in Cleveland.

Yet critics question why profitable entities like the Cleveland Clinic should be receiving valuable funding.

When asked whether the Clinic needs help from JobsOhio, Nauseef argues, “The Cleveland Clinic is a global brand —best in class — and we are very fortunate to have them here in Ohio,” adding, “the Governor challenged us to be bold and invest in innovation.”

Nauseef says the funding is part of an overall strategy to create “innovation districts” and seek out businesses and prevent them from investing elsewhere.

Even so, several economic indicators paint a picture of a state that is still struggling.

For example, Ohio’s 5.1% unemployment rate ranks 30th when compared with other states, according to the U.S. Bureau of Labor Statistics.

Other indicators show Ohio is 42nd in Overall Job Growth and 45th in manufacturing growth according to the latest numbers available from the ASU Seidman institute. Ohio ranks 39th in measuring how attractive its business climate is in attracting new business, according to The Tax Foundation, a leading independent tax policy non-profit.

Ulrik Boesen is a Senior Policy Analyst with the foundation and blames Ohio’s corporate tax structure for making Ohio less attractive than other states to establish new business.

He also raises concerns of the use of tax incentives to attract new business.

Ohio, for example, has offered companies over $1 billion in tax breaks that are dependent on delivering on promised job creation since JobsOhio was created 10 years ago.

“The danger when you just do credits is you might force companies to think short-term—we get this credit for four or five years—what happens after that?" Boesen said. He said companies could decide to stop investing or even leave.

Amazon is one company, for example, that has benefited from tax incentives — they were offered $49 million in tax breaks dependent on job creation.

So far, the company has created at least 8,770 new jobs, but other economists question whether those jobs are really new.

Ben Zipperer is an analyst with the Economic Policy Institute that says his recent study suggests that employees are simply quitting jobs for new ones.

“So what happens,” says Zipperer, “Amazon is kind of changing the mix of employment in an area but it’s not actually adding on net jobs—it’s shuffling people around.”

But other economists, like Dr. Dennis Hoffman, Director of the Seidman Research Center at the University of Arizona, say Ohio's is plagued by issues out of its control when it comes to challenges in attracting new business.

"In my opinion, it's about government and less about tax policy and more about underlying demographics and the preference of young, innovative people to urban centers who choose other states," Hoffman said, adding that warmer climates are more competitive.

JobsOhio says this year alone it has created $1.4 billion in new payroll and $6 billion in new capital investment.

Jobs Investment

At the same time, it believes it is already releasing more information on its web site than required to—earning the highest level of transparency by GuideStar, which rates the nation’s non-profit agencies on their performance.

Nauseef stresses the role its partners play across Ohio play in job training.

For example, The Advanced Technology Academy based at Cuyahoga Community College, partners with JobsOhio to train and place workers in skilled manufacturing jobs that has served 667 students, placing 72% in jobs between 2016 and 2020.

In addition, Nauseef says JobsOhio partners with the Ohio Department of Jobs and Family Services providing advanced career resources, coaching and industry-targeted training.

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