The Attorney General’s Office completed its review of compliance with job commitments the state received in exchange for various incentives. Here is the summary of its findings:
- Workforce Compliance Rate: 100% (49 of 49 awards in substantial compliance)
- Grant Compliance Rate: 74.4% (29 of 39)
- Tax Credit Compliance Rate: 62.4% (78 of 125)
- Loan Compliance Rate: 57.1% (24 of 42)
The chart and figures show the break down of compliance by type of incentive. The report also contains an appendix which identifies all of the specific incentive packages by company and the status of compliance.
The report really doesn’t provide much insight as to why some incentives have a greater level of compliance than others. One explanation for the 100% compliance with workforce development is that the commitment is really just a training commitment, not a job creation commitment.
The state not only reviews compliance with the job commitments in state incentive agreements, it takes enforcement against those companies that it deems are not in substantial compliance. This from the Columbus Dispatch Article discussing the Attorney General’s Report:
The state has taken action against many of the companies behind the 75 projects that were not in compliance. It demanded the return of some grant money, modified terms on loans and shortened periods in which the companies were able to collect the tax credits. In other instances, the state found the companies were mostly in compliance despite coming up short and ordered no remedial action.
Incentive agreements also contain an out clause in the event there is an economic slowdown which prevents the company from meeting its commitments.
One type of grant not covered in the report are brownfield grants. This is because under the Clean Ohio Program, the grant agreement required a commitment to cleanup the property to Ohio EPA’s Voluntary Action Program standards, not a specific job creation commitment. While job creation was a metric evaluated when projects competed for Clean Ohio funding, the pledges did not make it into the grant agreements.
That has changed under the JobsOhio Revitalization Program. Under the new grant template being used by JobsOhio, companies are required to make specific commitments in terms of job creation, job retention and/or capital investment. The JobsOhio agreement contains a specific deadline for meeting that commitment and the ability to require repayment of the grant in the event those commitments are not met.
The JobsOhio agreement focus on job creation and investment is similar to other State economic incentives. It is an example of the shift in philosophy behind brownfield redevelopment in Ohio. Clean Ohio was focused on cleanup and redevelopment of contaminated property. The JobsOhio Revitalization Program is focused on economic redevelopment.