Details were released this week by the Kasich Administration on the establishment of its privatized economic development agency known as JobsOhio. Many of the traditional job creation duties that fell to the Ohio Department of Development will be shifted to JobsOhio.
Along with the restructuring of development duties, the Administration is shifting the State's liquor profits to help fund the Agency. Last year the liquor profits took in around $700 million in revenue to the State. In return for a 25 year agreement to fund JobsOhio with liquor profits, JobsOhio will make a one-time $1.4 billion dollar payment back to the State. Details of how those funds would be utilized were discussed in the Plain Dealer:
The $1.4 billion agreement calls for Ohio to collect $500 million for its general revenue fund, money already factored into the current state biennial budget, $750 million to pay off existing liquor revenue backed bonds, and $150 million to continue "Clean Ohio" environmental programs for the next three years.
The reference in the Plain Dealer Article regarding Clean Ohio is a bit confusing. Based upon an article in Columbus Business First, the $150 million is set aside to pay for the grants that were awarded or will be awarded by July 1, 2012. In the future, funding will be set at $43 million per year.
The agreement, which will be reviewed and possibly voted on Jan. 30 by the state Controlling Board, includes a provision for the $43 million for economic revitalization projects as well as $150 million to cover Clean Ohio Fund projects approved by the state before July 1, 2012.
Impact on Clean Ohio
The transformation of the Ohio Department of Development and creation of JobsOhio has resulted in tremendous uncertainty regarding the State's $50 million dollar per year brownfield redevelopment program.
This fall, when the Administration made the announcement that liquor profits would be shifted, the Administration said it would look for a new revenue source to support Clean Ohio. It now appears that the same revenue-a portion of liquor profits- will be used to support the program for the next three years.
What remains uncertain is when that money will be available. Currently, the Ohio Department of Development announced the end of funding for the Clean Ohio Assistance Fund (COAF) which pays for Phase II environmental assessment on brownfields. Also, the Department announced the current round of the Clean Ohio Revitalization Fund (CORF) would be its last. Now that the funding source has been announced, the question is when will the State start accepting grant applications again?
Due to the fact the $150 million is being allocated pay for COAF and CORF grants in the pipeline and the last round of CORF, it appears no new funding will be available for Phase II work prior to July 1st.
Who Will Administer Clean Ohio in the Future?
What also remains uncertain is whether the current process for grant selection and administration will remain. During yesterday's announcement, the Administration indicated that the current process will remain in place through the summer. However, the Kasich Administration also suggested that legislation could be introduced this Spring to modify the program.
What the Administration did make clear is that they want to see more direct economic development benefits for use of Clean Ohio funds in the future. This means it is unlikely grants such as the Redevelopment Ready track of the Clean Ohio program will continue.
The Redevelopment Ready track provided grants up to $2 million to clean brownfields that were primed for development based on their location but lacked a specific end use (i.e. development project). Some argued that the Redevelopment Ready Track allowed areas outside Cleveland, Columbus and Cincinnati to better compete for the grant money.
While this week's announcement seemed to answer the question as to whether funding will remain in place for Clean Ohio in the near future, there remains three major questions:
- When will the grant process open up again:
- Who will administer the program- the newly created Ohio Development Services Agency or JobsOhio; and
- What will the grant application and selection process look like in the future?