is No. 3 in the nation for “megadeals” — massive government subsidies to
corporations that are meant to encourage in-state job creation — but a
new report found many of the deals rarely produce the kind of jobs initially
touted by public officials.
In the Good Jobs First report
released on June 19, Ohio tied with Texas as No. 3 for megadeals,
which Good Jobs First defines as subsidies worth $75 million
or more. Michigan topped the list with 29 deals, followed by New York
no secret the deal with Convergys went sour for Cincinnati. In December 2011,
the company, which provides outsourced call center services, agreed to pay a $14 million reimbursement to the city because the company’s
downtown employment fell below 1,450 — the number of jobs required under
the initial deal. The reimbursement deal also calls for the company to pay an additional $5 million if its downtown employment falls below 500 before 2020.
Good Jobs First report finds this kind of failure is not exclusive to
the Convergys megadeal or Cincinnati; instead, the report argues that
megadeals are expensive and often fail to live up to
their high costs, some of the deals involve little if any new job
creation,” said Good Jobs First executive director Greg LeRoy in a
statement. “Some are instances of job blackmail, in which a company
threatens to move and gets paid to stay put. Others involve interstate
job piracy, in which a company gets subsidies to move existing jobs
across a state border, sometimes within the same metropolitan area.”
For the jobs that are kept and created, states and cities end up paying $456,000 on average, with the cheapest deals costing less than $25,000 per job and the most expensive costing more than $7 million per job.
report finds the number of megadeals per year has doubled since 2008,
on top of getting more expensive in the past three decades. Each
megadeal averaged at about $157 million in the 1980s, eventually rising
to $325 million in the 2000s. The average cost dropped to $260 million
in the 2010s, reflecting the price of deals made in the aftermath of the
Great Recession, which strapped city and state budgets.
subsidy awards are getting out of control,” said Philip Mattera,
research director of Good Jobs First and principal author of the report,
in a statement. “Huge packages that used to be reserved for ‘trophy’
projects creating large numbers of jobs are now being given away more
Ultimately, the report aims to increase transparency for such subsidies, reflecting an ongoing goal for Good Jobs First. To do this, the organization has set up a database (www.subsidytracker.org) that anyone can visit to track past, present and future subsidy deals.
But the report claims much of this work should already be done by the Governmental Accounting Standards Board (GASB), which “has been long-negligent in failing to promulgate regulations for how state and local governments should account for tax-based economic development expenditures,” according to a policy sidebar from LeRoy. “If GASB were to finally promulgate such regulations — covering both programs and deals — taxpayers would have standardized, comparable statistics about megadeals and could better weigh their costs and benefits.”
The latest batch of bad streetcar news provoked a harsh memo to the city manager’s office from Vice Mayor Roxanne Qualls, a Democrat who has long supported the $125 million transit project. In the memo, Qualls wrote about “serious concerns” regarding the project’s costs and timetable.
“Whether people support or oppose the streetcar project, everyone has a vested interest in getting the most for our public dollars and in having the highest confidence in the management of the project,” Qualls wrote. “While a council majority has continued to support the project, council has not given the administration a ‘blank check.’”
The memo suggested putting the streetcar project through “intensive value engineering” to bring the project’s budget and timetable back in line — preferably in time for the 2015 Major League Baseball All-Star Game.
The memo is in response to streetcar construction bids coming in $26 million to $43 million over
budget. Meg Olberding, city spokesperson, says the bids leave the city with
two options: The city could take up the current bids, which could have their costs brought down upon further review, or the city could reject the
bids and rebid the project, which would cause delays. But Olberding also cautions that the administration is still working on fully reviewing the bids — a process that could take weeks or longer.
Qualls is running for mayor against John Cranley, a former Democratic council member. Cranley has been a vocal opponent of the streetcar project — creating a strong contrast between the two candidates that has placed the streetcar in the center of the 2013 mayoral race.
Earlier today, Cranley held a press conference asking the city to halt the streetcar project. In a statement, he argued it is “irresponsible” to continue work on the streetcar in light of the higher costs.
CityBeat previously covered the streetcar and how it relates to the race between Qualls and Cranley (“Back on the Ballot,” issue of Jan. 23).
Gov. John Kasich appointed a former Republican to a Public Utilities Commission of Ohio (PUCO) seat that must go to a Democrat or Independent, according to The Plain Dealer. M. Beth Trombold will finish her term as the assistant director in Kasich’s Ohio Development Services Agency in April, when she will then take up the PUCO position. The appointment immediately drew criticism from some Democrats. State Rep. Mike Foley of Cleveland called the appointment “another example of Kasich cronyism running rampant.”
A poll from Innovation Ohio, a left-leaning policy research group, found Kasich’s budget proposals aren’t popular with most Ohioans. The poll found 62 percent of Ohioans prefer prioritizing school funding over reducing the state income tax, while only 32 percent prefer tax reduction. When asked what Ohio lawmakers should prioritize in the coming months, 56 percent said job creation, 38 percent said school funding, 24 percent said keeping local property taxes low and 18 percent said cutting the state income tax.
A school superintendent from Warren County may face prosecution for misusing public resources after he wrote a letter to parents urging them to campaign against Kasich, reports Dayton Daily News. Franklin City Schools Superintendent Arnol Elam was apparently angry with Kasich’s new school funding formula, which did not increase funding for poor school districts like Franklin Cities, but did give increases to Springboro, Mason and Kings — the three wealthiest districts in Warren County. County Prosecutor David Fornshell said he will be investigating Elam for engaging in political activity with public resources.
Kasich will give his State of the State Tuesday. The speech is expected to focus on the governor’s budget and tax reform plans.
As part of an agreement with the city, Duke Energy is suing over the streetcar project, according to WLWT. The lawsuit is meant to settle who has to pay for moving utility lines to accommodate for the streetcar. CityBeat covered the agreement between the city and Duke here and how the streetcar will play a pivotal role in the 2013 mayor’s race here.
Thousands of people in Butler County, mainly students, are benefiting from Judge Robert Lyons’ criminal record seals, according to The Cincinnati Enquirer. Lyons’ practice of sealing cases came to light after he sealed the case for the Miami University student who posted a flyer on how to get away with rape. In the past five years, Lyons has sealed 2,945 cases — more than a third of the new misdemeanor cases filed.
Ohio’s casinos are falling far short of original revenue projections, according to The Columbus Dispatch. It’s uncertain why that’s the case, but some are pointing to Internet-sweepstakes cafes. Cincinnati’s Horseshoe Casino, which will open March 4, was spurred by the original projections.
StateImpact Ohio reports that many Ohio teachers are concerned with new teaching evaluation rules.
Two Cincinnati Republicans will begin reviewing the effects of legislation that deregulated phone companies in Ohio, reports Gongwer. State Rep. Peter Stautberg, who chairs the House Public Utilities Committee, and State Sen. Bill Seitz, who chairs the Senate Public Utilities Committee, will hear testimony from PUCO Tuesday.
Downtown’s Chiquita center has landed in bankruptcy, reports WCPO. The building lost its major tenant last year when Chiquita Brands relocated to Charlotte, N.C.
“Star Trek” is becoming reality. University of Cincinnati researchers are developing a tricorder device to help users monitor their own health, reports WVXU.
Are you worried about space rocks recently? Popular Science says NASA is concerned as well.
The Medicaid expansion would add more Ohioans to the state-federal health care program by raising the eligibility threshold to 138 percent of the federal poverty level, up from 90 percent. The budget summary claims the expansion makes financial sense for the state as long as the federal government picks up most of the tab. As part of Obamacare, the federal government takes all the costs for newly insured Medicaid recipients for the first three years. After that, the federal government’s share is brought down to 95 percent and ultimately phased down to 90 percent. If the federal government reneges on its promise to pay for the bulk of the share, Kasich’s budget has a trigger to wind down the Medicaid expansion.
The budget also proposes income and sales tax cuts, which would come with some trade-offs. The state income tax would be brought down by 20 percent across the board, and the sales tax would be cut from 5.5 percent to 5 percent. To balance the cuts, Kasich has proposed broadening the sales tax to include other “economic activity,” while keeping exemptions for education, health care, rent and residential utilities.
In another slew of tax changes, Kasich’s plan proposes revamping the oil and gas severance tax. It would eliminate the tax for “small, conventional natural gas producers,” but imposes a 4 percent tax for bigger oil and gas producers.
In the past, liberals have voiced opposition to tax cuts — instead favoring investments elsewhere. Policy Matters Ohio released its own budget proposals Jan. 31, which emphasized “education, health care and human services.” The plan would also increase the income tax for top earners.
City Council Member P.G. Sittenfeld released a statement criticizing Kasich’s budget for not using the extra revenue to scale back local government and education cuts enacted in the 2012-2013 budget: “At a time when local governments around the state are being forced to slash basic services, lay off safety personnel, raise taxes, and sell off assets just to stay afloat, it's out of touch for Gov. Kasich not to reverse his raid on our local government fund. We don’t pay taxes to pad the governor’s soundbites, we pay them to maintain our roads and keep cops on the street. This should not be a partisan issue. It's simply illogical governance to make the state look good while in the process hurting Ohio's cities.”
Cincinnati Public Schools seems to be playing a big role in reforming Ohio’s school funding formula. Superintendent Mary Ronan got a call from Gov. John Kasich’s office about the per-pupil funding formula CPS uses to distribute funds to its schools. It seems the state might adopt a similar method, but Ronan is cautious: “I do think it's one of the ways you could do it, a per-pupil funding, but I have to say, we were always tweaking every year ... because sometimes those formulas can be a bit off and any time we saw one school getting a lot more than another ... we tried to refine it every year over probably the 15 years we have used it.” She also notes schools are getting “bare minimum” funding right now. CityBeat covered budget problems at CPS here.
In general, state budget cuts have led to fewer teachers in Ohio schools. Gov. Kasich previously urged schools to focus on classroom instruction, but it seems the words aren't being followed up with proper funding.
Southwestern Ohio judges are clashing over double-dipping. The practice involves government workers retiring and getting rehired so they can collect pensions and a paycheck at the same time. At a meeting, Hamilton County Judge Melba Marsh said she wants to allow Magistrate Michael Bachman to retire and then be rehired so he doesn't lose a 3-percent increase to his retirement, which is otherwise being eliminated by the Ohio Public Employees Retirement System after 2012. But the move has been met with resistance from other judges.
For Cincinnati hospitals, Medicare changes mean some loss and some gain.
The online campaign urging Macy’s to dump Donald Trump circled a “Dump Trump” billboard around Macy’s headquarters. The anti-Trump movement has gained about 680,000 signatures since it started.
On Christmas Eve, some spent time with family, while Butler County Deputy David Runnells helped deliver a baby in the back of a car during an emergency call.
Ohio will use $20 million out of $200 million in casino funds to train incumbent workers. Gov. Kasich says the program could help avoid layoffs.
It seems Mitt Romney's presidential campaign really thought they were going to win. In campaign memos leading up to the election, campaign staff said the race was “unmistakably moving in Mitt Romney’s direction,” and the campaign ridiculed the possibility of losing Ohio due to the Romney campaign’s “better ground game.” But President Barack Obama had a much larger ground game for one-on-one interaction, which is one of the factors former Romney staff now say led to their demise. But whatever. Romney didn't want to be president, anyway, says son Tagg Romney: “He wanted to be president less than anyone I’ve met in my life. He had no desire to ... run.”
Fiscal cliff talks aren’t going well. President Obama cut his vacation early to work out negotiations. If Republicans and Democrats can’t work out their problems, a series of spending cuts and tax hikes dubbed the “fiscal cliff” will kick in throughout 2013. But it’s looking more and more likely the nation will head off the cliff, considering U.S. Speaker John Boehner can’t even pass tax hikes on people making more than $1 million a year.
Ever wonder what dinosaur meat would taste like? Well, Popular Science has that covered.
The Cincinnati Enquirer reports the Cincinnati streetcar is being delayed until 2016. The streetcar has been delayed time and time again, much to the cheer of opponents. Some opponents have taken the delay as yet another chance to take shots at the streetcar, but the city says a lot of the delays have been due to factors out of the city’s control, including ballot initiatives, the state pulling out a massive $52 million in funding and a dispute with Duke Energy.The U.S. unemployment rate remained at 7.8 percent in December, with November’s rate being revised upward to 7.8 percent as well. Employers reported adding about 155,000 jobs last month, but about 192,000 entered the labor force, meaning the amount of people joining the labor force outmatched the newly employed. The unemployment rate looks at the amount of unemployed people in the civilian labor force, which includes anyone working or looking for work.
U.S. Speaker John Boehner was re-elected U.S. House speaker. Just moments after securing the top House seat, Boehner said he will make the U.S. debt a top priority. But continuing to make the debt and deficit top issues could hurt the economy, as the fiscal cliff and recent developments in Europe have shown.
Uncle Sam is helping out Cincinnati firefighters. The Cincinnati Fire Department will be getting $6 million in federal grant money to hire 40 additional firefighters. The money will be enough to fund salaries for two years.
Cincinnati’s biggest cable provider dropped Current TV after it was sold to Qatar-based Al Jazeera. The Pan-Arab news network has had a difficult time establishing a foothold in American markets, largely because of the perception that it’s anti-American. But Al Jazeera has put out some great news stories, and some of the stories won awards in 2012.
If anyone is planning a trip through New York City’s LaGuardia Airport, Dayton International Airport now has that covered.
A small town in Ohio is being accused of covering up an alleged gang rape to protect a local football team. But KnightSec, a hacking group affiliated with the organization Anonymous, is fighting back by releasing evidence related to the case.
Despite a solved fiscal cliff deal extending emergency unemployment benefits, Ohio’s unemployed will soon be getting less aid. The decrease was automatically triggered by the state’s declining unemployment rate.
Ohio’s universities are adopting more uniform standards for remedial classes.
The newest Congress is a little more diverse.
In what might be the worst news of the century, the Blue Wisp Jazz Club could close down. The club, which has the greatest spinach-and-artichoke dip in the universe, is facing financial problems.
People who recently obtained gift cards for Rave Motion Pictures may want to get a move on. The theater is being sold to AMC Theatres.
A new theory suggest Earth should have been a snowball in its early days, but it wasn’t due to greenhouse gases.
There’s even more bad news coming from Ohio’s newly privatized prison. Violence last week forced Corrections Corporation of America (CCA) to call in the state’s special response team, according to Plunderbund. Two teams from the Ohio Department of Correction and Rehabilitation were dispatched. Gov. John Kasich pushed prison privatization in his 2012-2013 budget to save costs. CityBeat covered private prisons and the shady connections CCA had to the current state government prior to the sale here.
There might be a court case disputing JobsOhio’s constitutionality, but that hasn’t stopped the state government from moving forward with implementing the private, nonprofit agency. On Friday, the state announced it transferred $500 million in state liquor funds to JobsOhio. The Ohio Supreme Court recently agreed to take up a case from ProgressOhio disputing whether state funds can be used for the private agency. Kasich established the agency in an effort to encourage job growth in Ohio.
Kasich will reveal the blueprint for his 2014-2015 budget plan later today. According to Gongwer, his proposed budget will cut personal income taxes across the board
and offset the cuts by closing loopholes and broadening the sales tax
base. The governor has long been eying an income
tax cut. He previously suggested raising the oil and gas severance tax
to help pay for a tax cut, but the plan faces bipartisan opposition.
In the 2013 mayoral race, John Cranley is currently outraising
Vice Mayor Roxanne Qualls, but both Democrats are fairly close. Qualls has raised $134,188, while Cranley
has raised $170,877. Most of the race has focused on the streetcar so far, with Qualls supporting and Cranley against the twice-voter-approved transit project.
The city of Cincinnati and Duke Energy have reached a limited agreement to meet in court to settle who has to pay for moving utility lines to accommodate for the streetcar’s tracks. As part of the agreement, Duke will begin moving lines in the next few weeks, even while the city and Duke wait for courts to decide who will pay for moving the lines. Mayor Mark Mallory also announced the city will try to finish the streetcar project in time for the 2015 Major League Baseball All-Star Game, but he added there are no guarantees. For more on the streetcar and how it relates to the 2013 mayoral race, check out CityBeat’s cover story.
Libertarian Jim Berns recently forced a mayoral primary by entering the race.
Community leaders around Greater Cincinnati are mapping out veteran services programs.
Ohio is expanding its foreclosure prevention program. The maximum benefit possible has increased from $25,000 to $35,000, and the highest annual household income allowed to participate in the program is now $112,375.
The Ohio Board of Regents finished moving to the Ohio Board of Education building.
Looks like Ohio First Lady Karen Kasich’s Twitter account was hacked.
Smokers will pay higher prices under Obamacare.
Physicists have created crystals that are nearly alive.
Republican Ohio Treasurer Josh Mandel is hiring political workers and friends at his job again. His latest hires are Joe Aquilino, former campaign political director to Mandel’s U.S. Senate campaign, and Jared Borg, former campaign political coordinator. During the 2010 campaign for the state treasurer’s office, Mandel said, “Unlike the current officeholder, I will ensure that my staff is comprised of qualified financial professionals — rather than political cronies and friends — and that investment decisions are based on what is best for Ohioans.” Mandel’s spokesperson defended the hires by touting the treasurer’s accomplishments in office.
With a vote set for tomorrow, it’s still unsure how the Hamilton County Board of Commissioners will solve the stadium fund deficit, but it seems like both options require tax increases. Commissioner Todd Portune, the lone Democrat on the board, proposed increasing the sales tax by 0.25 percent. Board President Greg Hartmann, a Republican, presented an alternative plan that reduces the property tax rollback by 50 percent for two years, but he also said he’s not sure how he’ll vote. Commissioner Chris Monzel, a Republican, says he wants to find a plan that doesn’t raise taxes.
Either parking services are privatized or 344 city employees are laid off. That’s how City Manager Milton Dohoney Jr. framed budget talks to City Council yesterday. The city has already made drastic cuts since 2000, laying off 802 employees. Dohoney also pushed for repealing the property tax rollback promised as part of the stadium deal in 1996, but City Council does not want to raise taxes in the middle of a slow economy. The fact is any form of austerity will be painful, so City Council should be as cautious of spending cuts as tax hikes. A public hearing on the budget will be held Thursday at 6 p.m.
The city of Cincinnati’s plan to buy Tower Place Mall and the adjacent Pogue’s Garage in downtown is moving forward. The city offered to buy the mall and garage for $8.5 million in order to spur economic development in the area. The parking garage and half-empty mall are currently in foreclosure.
Cincinnati State is looking to expand.
One year later, the Ohio Department of Natural Resources hasn’t followed up on a court order to compensate flooded landowners.
The State Controlling Board approved three programs that will provide transitional housing and other services to the homeless. As part of the initiative, Habitat for Humanity of Ohio will receive $200,000, the Homeless Crisis Response Program will receive $12,680,700 and the Supportive Housing Program will receive $9,807,600 from the Ohio Housing Trust Fund.
Great numbers from November from auto companies could mean more hires.
A dissolving nanofabric could soon replace condoms for protecting against pregnancy and HIV.
Hamilton County Commissioner Greg Hartmann wants Mayor Mark Mallory to live up to past promises of county-city collaboration. In a letter to Mallory, Hartmann criticized the mayor for failing to stick to his pledge of supporting the City-County Shared Services Committee. The committee seeks to streamline county and city services to end redundancies and make the services more competitive and efficient.
Cincinnati Economic Development’s director asked City Council to create a “mega incentive” for “huge impact” development. He also asked City Council to pledge $4 million of casino revenue a year to a local neighborhood project. If City Council agrees, casino revenue will be used to boost local businesses.
Metro is looking at the world’s quickest-charging electric bus. It supposedly can charge in 10 minutes and travel 40 miles.
The day before Pennsylvania’s voter ID law faced trouble in court, Secretary of Jon Husted suggested a “more strict” voter ID law for Ohio. Husted said the current ID system needs to be streamlined and simplified. Democrats criticized the suggestion for its potential voter suppression.Sept. 22 will be the “Global Frackdown,” a day where activists will protest around the world in a push to ban hydraulic fracturing — or fracking. Cincinnati will have its own “Frackdown” at Piatt Park. Activists are generally against fracking because it poses too many risks, which CityBeat covered here. But Gov. John Kasich and other supporters of fracking insist it can be made safe with proper regulations. Some have also suggested that natural gas, which is now plentiful due to the spread of fracking, can be used as part of a bigger plan to stop global warming.
A new survey says Cincinnati companies will continue hiring through the fourth quarter.It wasn’t as good as last year, but it was better than the month before. A new state report says 7,341 new businesses filed to do work in Ohio in August, down from 7,423 in August 2011.
A state commission approved $1.5 million for the Cincinnati Art Museum and a $600,000 reimbursement for the Art Academy of Cincinnati.
More than half of Ohioans could be obese by 2030, a new report found. The rise in obesity could push up medical costs by $23.8 billion.
But screw worrying about weight. Taste of Belgium (writer’s note: best restaurant in the land) is thinking about expanding.
The full footage for Mitt Romney’s controversial comments
at a May 17 fundraiser has become available here. The footage shows why
Romney prefers to be dishonest most of the time. More importantly,
Romney’s comments about Obama voters are not accurate. The Onion, a satirical newspaper, has an explanation for why Romney insists on unleashing gaffe after gaffe.
One astrophysicist says there is no such thing as time.
An analysis released June 26 found Ohio’s top 1 percent would get the biggest breaks from the tax plan included in the final version of the two-year state budget, while the state’s poorest would pay more under the plan.
The analysis, conducted by the Institute on Taxation and Economic Policy for public policy think tank Policy Matters Ohio, shows the tax plan’s slew of tax cuts and hikes balance out to disproportionately favor the wealthy in terms of dollars and percents.
Meanwhile, the bottom 20 percent would pay about $12, or 0.1 percent, more in taxes. The second-lowest 20 percent would see their taxes go down by $5, rounded to 0 percent. The middle 20 percent would see a tax cut of $9, which is also rounded to 0 percent.
Policy Matters criticizes the tax plan, claiming the revenue should go to other programs, not tax cuts.
“Rather than approving a tax plan that will further shift Ohio’s tax load from the most affluent to low- and middle-income residents, we should direct those dollars into needed public services,” said Zach Schiller, Policy Matters Ohio research director, in a statement. “That includes restoring support for local governments and schools, and bolstering human services, from foodbanks to child care.”
Michael Dittoe, spokesperson for Ohio House Republicans, says the tax plan is supposed to provide an economic boost to almost everyone, not any specific group.
“The tax plan is going to provide an overall tax cut for nearly all Ohioans,” he says. “What this plan intends to do is not disproportionately favor the wealthy at all.”
The broad tax cuts, Republicans claim, should provide a boost to Ohio’s economy that will spur further job growth.
But Schiller argues the tax cut ultimately won’t create jobs: “A 21-percent cut that was approved in 2005 has not kept Ohio’s job market from underperforming that of the country as a whole during and after the last recession.”
The tax plan cuts income taxes for all Ohioans and particularly business owners, but it balances the cuts by hiking sales and property taxes.
Specifically, the budget cuts income taxes for all Ohioans by 10 percent over three years, gives business owners a 50-percent tax break on up to $250,000 of annual net income and creates a small earned income tax credit for low- and middle-income working Ohioans based on the federal credit.
To balance the cuts, the plan raises the sales tax from 5.5 percent to 5.75 percent, increases future property taxes by 12.5 percent and graduates the homestead tax exemption to be based on need, meaning the lowest-income seniors, disabled and widowed Ohioans will get the most out of the exemption in the future.
Most recently, the conference committee added two safeguards for low-income Ohioans: a credit that wipes out income-tax liability for Ohioans making $10,000 or less a year and another $20 credit for those making $30,000 or less a year.
The Policy Matters analysis doesn’t take into account the two changes to property taxes and several other, smaller changes to income and sales taxes, but the rest of the changes, including the conference committee’s recent adjustments, are considered.
The tax plan is part of the $62 billion state budget for fiscal years 2014 and 2015, which passed the Republican-controlled General Assembly today. It's expected Republican Gov. John Kasich will sign it into law this weekend.
Update: Budget bill passed by General Assembly.
Check out all of CityBeat’s state budget coverage:
• State Budget's Education Increases Fall Short of Past Funding
• State Budget Rejects Medicaid Expansion
• State Budget to Limit Access to Abortion