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by German Lopez 06.23.2013
Posted In: News, Economy, Budget at 07:13 PM | Permalink | Comments (0)
 
 
convergys

Report: Government "Megadeals" Fail to Produce Jobs

Ohio ranks No. 3 for massive subsidy deals with corporations

Ohio 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 with 23.

In the Cincinnati area, local and state agencies agreed to pay $196.4 million to Convergys in 2003 and $121 million to General Electric in 2009 to keep and create jobs in the area.

It’s 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.

The 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 expectations.

“Despite 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.

The 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.

“These 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 routinely.”

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.”

 
 
by German Lopez 06.21.2013
Posted In: News, Taxes, Streetcar, Economy at 09:09 AM | Permalink | Comments (1)
 
 
ohio statehouse

Morning News and Stuff

Ohio unemployment unchanged in May, budget overhauls taxes, streetcar vote Monday

Ohio’s unemployment rate was 7 percent in May, unchanged from April and down from 7.3 percent in May 2012, according to Bureau of Labor Statistics data released today by the Ohio Department of Job and Family Services. Although the number of unemployed increased by 5,000 between April and May, the number of employed also increased by 32,100, keeping the rate relatively stable. Most sectors tracked in the report, including government, gained jobs.

The final version of the state budget would cut income taxes and create a state-based earned income tax credit, but it would also hike the sales tax and make changes to property taxes that effectively increase rates. Republican state legislators rolled out the tax plan yesterday as a compromise between the Ohio House and Senate plans. The final version looks a lot more like Gov. John Kasich’s original tax proposal, which left-leaning Policy Matters Ohio criticized for favoring the wealthy. The budget must be signed by Kasich by June 30.

City Council is expected to vote on the streetcar project’s $17.4 million budget gap on Monday. The gap is a result of construction bids coming in much higher than expected, and solving it would involve making cuts for a slew of capital programs, including infrastructure projects around the Horseshoe Casino. The cuts will all come from the capital budget, which can’t be used to fund operating budget expenses like police and fire because of limits established in state law.

Three days after City Manager Milton Dohoney signed an agreement leasing the city’s parking meters, lots and garages to the Greater Cincinnati Port Authority, the Port Authority still hadn’t signed the lease, and it remains unclear when the agency plans to do so. City spokesperson Meg Olberding told CityBeat she’s confident the Port Authority will sign the lease. But the delays have raised questions about whether there truly will be local control over the city’s parking assets through the Port Authority, given that the agency is already going against the wills and assumptions of the city government by failing to sign the lease.

City Councilman Chris Seelbach announced on Twitter that he and Hamilton County Commissioner Chris Monzel will release a joint statement on the city’s “responsible bidder” ordinance later today. The city and county have been clashing over the ordinance, with county commissioners most recently putting a hold on all Metropolitan Sewer District projects. CityBeat covered the conflict in greater detail here.

Federal data released this week shows Ohio has some of the weakest gun laws and, as a result, is a top source for guns for crimes committed in other states.

Construction is expected to cause some downtown ramp closures and restrictions next week, so prepare for delays or a change in commute.

A Japanese scientist may have to grow his human organs in pigs.

The world’s first 3-D printed battery is as small as a grain of sand.

 
 
by German Lopez 06.17.2013
Posted In: News, Economy at 11:38 AM | Permalink | Comments (0)
 
 
cover-kasich-2

Ohio Is No. 46 for Job Creation

State has added 4,400 jobs in past year

An infographic from Pew Charitable Trusts shows Ohio ranked No. 46 out of all the states for job creation in the past year, beating only Wisconsin, Maine and Wyoming and tying with Alaska.

Between April 2012 and April this year, Ohio added 4,400 jobs — a 0.1-percent increase in the state's employment.

The three states below Ohio and Alaska — Wisconsin, Maine and Wyoming — had a drop in employment ranging from 0.2 percent to 0.5 percent.

North Dakota topped the rankings with 15,900 new jobs — a 3.7-percent increase in employment — largely driven by the state's ongoing oil and gas boom.

The statistics coincide with previous warnings from liberal and conservative think tanks about the state's economy, signifying that Ohio is not undergoing the "economic miracle" that Gov. John Kasich and other state officials often tout.

Here is the full infographic, which uses job data from the Bureau of Labor Statistics:

Update (1:57 p.m.): Clarified that Ohio tied, not beat, Alaska.

 
 
by German Lopez 05.22.2013
Posted In: News, Economy, Development, Budget at 09:00 AM | Permalink | Comments (0)
 
 
news1_banks_condos_ck

Morning News and Stuff

Local job numbers improve, housing supply lags behind demand, The Banks gets price tag

Local job numbers continued their positive trend in April, with Cincinnati’s unemployment rate dropping to 6.9 percent and the rest of the region following suit. Michael Jones, research director at the University of Cincinnati Economics Center, attributed the job gains to improvements in manufacturing and continued growth in health care jobs. Still, the public sector continued to lag behind the private sector — a trend Jones says could change in the coming months as government budgets are adjusted to match higher tax revenues resulting from the recovering economy.

Downtown’s population growth slowed last year as available housing failed to match demand, according to Downtown Cincinnati Inc.’s annual report. In the past few years, the city has pursued multiple actions to meet demand, particularly through public-private partnerships. Most recently, City Council approved leasing the city’s parking assets to raise funds that would help build 300 luxury apartments, but that plan is currently being held up in court.

The second phase of The Banks riverfront project will cost $62 million, according to the report from Downtown Cincinnati Inc. That’s smaller than the first phase, which cost $90 million. The second phase of the project is expected to begin this fall, and it should bring 300 apartments and 60,000 square feet of street-level retail space to the area by the end of 2015. The Banks also plans to build a $45 million hotel, which is also expected to be complete in 2015. The funding for the projects is coming through multiple public-private partnerships.

After the final public hearing on the city budget Wednesday, Councilwoman Laure Quinlivan plans to introduce her own budget plan that would avoid all city employee layoffs. A statement from Quinlivan did not give much in the way of details: “My plan saves all city jobs and restores all neighborhood programs. It requires common sense and shared sacrifice of all city employees.” Most recently, council members Chris Seelbach and Roxanne Qualls co-sponsored a motion that would eliminate fire layoffs and reduce police layoffs to 25 by making cuts elsewhere.

The Ohio Senate plans to vote today on a measure that would effectively close down hundreds of Internet “sweepstakes” cafes around the state in an effort to eliminate illegal gambling activities. The cafes’ operators insist their activities are not gambling but rather a promotional tool that helps sell Internet time and long-distance phone cards.

Cincinnati’s zoning hearing examiner says he’s trying to reduce the time it takes to go through the zoning hearing process to less than 60 days.

Three major Ohio universities, including the University of Cincinnati, and four hospitals, including Cincinnati Children's Hospital, are teaming up to find out what causes premature birth.

Beginning July 1, some Ohio interstates will allow drivers to go 70 miles per hour. Find out which ones here.

At congressional hearings yesterday, U.S. senators criticized Apple for legally taking advantage of the complex American corporate tax system, but Kentucky Sen. Rand Paul put the blame on Congress:

Russia is building robots to “neutralize” terrorists, and other researchers are working on robots that will attempt to rescue people after disasters.

The creator of the GIF says it’s pronounced “jif.”

 
 
by German Lopez 05.21.2013
Posted In: News, Economy at 02:01 PM | Permalink | Comments (0)
 
 
city hall

Local Job Numbers Continue Positive Trend

Cincinnati unemployment rate drops to 6.9 percent

Local joblessness fell sharply in April, continuing a positive trend as Cincinnati’s economy recovers from the Great Recession, according to new data from the Ohio Department of Job and Family Services (ODJFS).

“We’re continuing to see the same positive trend at both the local level and the state level,” says Michael Jones, research director at the University of Cincinnati Economics Center.

Cincinnati’s seasonally unadjusted unemployment rate dropped to 6.9 percent in April, down from a revised 7.4 percent in March and 7.4 percent in April 2012.

In the past, the unemployment rate sometimes dropped as people gave up on looking for work and left the civilian labor force, but the April report reflected genuine improvements in the local economy. The civilian labor force and amount of people with a job were higher, and the amount of people without a job dropped.

The news was similarly positive for the rest of the region. Greater Cincinnati’s seasonally unadjusted unemployment rate dropped to 6.5 percent, down from 7.2 percent in March and 7 percent in April 2012. Hamilton County’s rate hit 6.3 percent, down from 6.9 percent in March and 6.8 percent the year before.

Jones says the health care sector has been one of the leading areas of growth in the local economy, but the April report also showed strong gains in manufacturing — allaying fears raised in recent months that the industry, which Jones calls “volatile,” was beginning to recede.

“We’re starting to see that upward swing again,” Jones says. “We’re not back on track ... but we’ve erased the last couple months of losses.”

Still, the public sector has continued to decline, reflecting budget cuts made at all levels of government in the past couple years.

Jones says it’s common for the public sector to lag behind the private sector, so it’s possible there will be government job gains in a few months once government budgets are updated to match higher tax revenues resulting from the recovering economy.

In Ohio, the seasonally unadjusted unemployment rate was 6.7 percent in April, down from 7.3 percent the month before. Nationwide, the rate was 7.1 percent, down from 7.6 percent.

Job numbers are obtained through household surveys by the U.S. Bureau of Labor Statistics, which uses the data to measures the amount of people employed relative to the civilian labor force. The numbers are adjusted for seasonal factors at state and national levels, but not at the local level. Since the numbers are obtained through surveys, they are often revised with stronger data in later months.

 
 
by German Lopez 05.17.2013
Posted In: News, Budget, Economy, Health at 09:10 AM | Permalink | Comments (0)
 
 
city hall

Morning News and Stuff

Public safety layoffs reduced, state unemployment drops, county agency wins award

Council members Roxanne Qualls and Chris Seelbach proposed a motion yesterday that would reduce the amount of police layoffs to 25 and eliminate all firefighter layoffs previously proposed in budget plans for fiscal year 2014. The huge layoff reduction comes despite months of warning from the city administration that the city would have to carry out big public safety layoffs without the parking plan, which is currently stalled in court. But it’s come with large cuts and shifted priorities in other areas of the budget, such as reduced funding to parks, health, human services, parades and outside agencies. (For example, the Health Department warned that cuts to its services could lead to more rats and bedbugs.) The motion from Qualls and Seelbach came just in time for last night’s public hearing, which mostly focused on the cuts to parks and public safety.

Ohio’s unemployment rate was 7.0 percent in April, down from 7.1 percent the month before, thanks to increases in the amount of people employed and decreases in the amount of people unemployed. The gains coincided with decent job growth throughout the rest of the nation in April, which dropped nationwide unemployment from 7.6 percent to 7.5 percent. But the state gains were fairly mixed, and the amount of construction, professional and business services and federal and local government jobs actually dropped. The mixed, slow growth helps explain why conservative and liberal think tanks seemingly disagree with Gov. John Kasich that Ohio is undergoing an “economic miracle.”

The Hamilton County Public Health’s (HCPH) food protection program is apparently the best in the United States and Canada. The Conference for Food Protection awarded the program the 2013 Samuel J. Crumbine Consumer Protection Award, which “recognizes unsurpassed achievement in providing outstanding food protection services to communities,” according to a statement from HCPH.

Homophobic Boy Scouts supporters are rallying nationwide today to support the continuation of the Boy Scouts’ homophobic rules.

The Taste of Cincinnati and the the Cubs-Reds series may have helped downtown Cincinnati earn the No. 42 spot in Priceline.com’s top 50 Memorial Day destinations.

The Ohio Department of Natural Resources confirmed Ohio has been undergoing a boom in oil and gas production in the past two years thanks to developments in a drilling process known as fracking, which CityBeat previously covered in further detail here.

Duke Energy hired a new contractor — Southern Cross Co. — to carry out gas and line inspections.

Cincinnati-based Kroger developed a new system that will convert food that can’t be sold or donated into clean energy to power one of its distribution centers.

Convergys is selling is downtown Cincinnati headquarters as the company goes through big changes. So far the buyer is unknown.

Jim Kingsbury, CEO of UC Health since 2010, is retiring.

Using an optical illusion to make white people look darker can diminish racial biases, according to a new study.

Earth’s super-dense core is weak.

 
 
by German Lopez 04.29.2013
Posted In: News, Economy, Energy, Streetcar at 09:25 AM | Permalink | Comments (0)
 
 
streetcar

Morning News and Stuff

Streetcar meeting today, Ohio Senate to modify energy law, state is no 'economic miracle'

City Hall will be hosting a meeting on the streetcar project at 6 p.m. today to figure out what the project’s options are now that it has a $17.4 million budget gap. The meeting was called by Vice Mayor Roxanne Qualls after City Manager Milton Dohoney Jr. explained in a memo that the project has a budget gap because construction bids came in $26 million to $43 million over budget.

State Sen. Bill Seitz, a Cincinnati Republican who chairs the the Senate Public Utilities Committee, says he wants to “modify,” not repeal, Ohio’s Clean Energy Law to have more clear-cut compliance standards. Environmentalists say they’re concerned Seitz will use the review as a front to water the law down, especially since electricity giant FirstEnergy is pushing against the law’s energy efficiency standards. CityBeat wrote more about the conflict between environmentalists and FirstEnergy here.

It’s one issue Ohio’s leading liberal and conservative think tanks apparently agree on: Ohio is not the “economic miracle” often touted by Gov. John Kasich. In the past year, job numbers for the state have been particularly weak, with public sector losses nearly making up for very weak private sector gains. The right-leaning Buckeye Institute for Public Policy Solutions says a complicated tax system is largely to blame for the stagnant job growth, while the left-leaning Policy Matters Ohio is mostly focusing on governments’ budget austerity.

A student allegedly shot himself in front of classmates at LaSalle High School today. Police say he is currently at a hospital, and there are currently no reports of anyone else being shot. As of 10:30 a.m., the situation was still developing.

After misleading media reports sent the public into a furor, Mayor Mark Mallory agreed to rescind salary raises that were part of his office’s deficit-reducing budget plan. The plan gave the mayor’s top aides raises to make up for an increased workload following staff reductions. Even with the raises, the plan reduced the deficit by $33,000 during the mayor’s remaining time in office — a fact originally omitted by The Cincinnati Enquirer.

Music Hall’s facelift is not happening just yet, even though approvals from City Council and the Music Hall Revitalization Company have already paved the way for Cincinnati Center City Development Corporation (3CDC) to begin renovations. As project manager, 3CDC will take four to six months to develop a budget, review designs and go over the legal and financial work necessary to start the project.

Hamilton County is currently tracking to be $1.5 million over budget this year — a budget hole the Board of Commissioners hopes to plug by using the rainy day fund.

One section of the Ohio House budget bill would allow charter schools to enroll out-of-state students and charge them tuition. The policy could involve online schools, which were previously found to have poor results in a CityBeat report. The relaxed rules potentially add more controversy to a budget plan that’s already mired in criticism for defunding Planned Parenthood and forgoing the Medicaid expansion, which CityBeat covered in further detail here.

Ohio gas prices are starting 9 cents down this week.

Bad news: The largest HIV vaccine study was shut down after patients contracted the AIDS virus more often than those who didn’t take it.

 
 
by German Lopez 04.26.2013
Posted In: News, Economy at 03:34 PM | Permalink | Comments (0)
 
 
cover-kasich-2

Ohio Is No ‘Economic Miracle’

Liberal, conservative think tanks warn of bad signs in state’s economy

It’s one issue Ohio’s leading conservative and liberal think tanks seemingly agree on: The “economic miracle” often touted by Gov. John Kasich is not really happening.

The bleak economic news has been highlighted by recent reports from the right-leaning Buckeye Institute for Public Policy Solutions, which supports little government intervention in the economy, and the left-leaning Policy Matters Ohio, which focuses on policies that can benefit low- and middle-income Ohioans.

The March “Ohio by the Numbers” report from the Buckeye Institute did acknowledge that Ohio has a lower unemployment rate than the national average, but the report was particularly hard on Ohio’s lacking private sector job growth. It pointed out the state lost 16,800 private sector jobs in February, ranks No. 27 in the nation for private sector job growth since January 2010 and ranks No. 47 for private sector job growth since January 1990.

Policy Matters’ March report was similarly harsh: “Since the end of the recession, Ohio has added 133,700 jobs, growing at a rate of 2.7 percent. But that growth leveled off in the second half of 2012, and the reported zigzag of the last two months means that Ohio has only added 2,700 jobs over the past year, growing at a very weak 0.1 percent.”

The news may come as a surprise to those who have been reading seemingly positive job news in recent months. Policy Matters places the problem on the inherent volatility in job reports, which are based on household surveys: “This volatility should serve as an important reminder: Monthly numbers are preliminary and will likely be revised, so it is unwise to make too much over the month-to-month changes. Longer-term trends provide a more accurate gauge of the state’s economic health.”

While they agree on the problem, the two think tanks disagree on the causes and solutions.

Greg Lawson, policy analyst at the Buckeye Institute, says the biggest problem is Ohio’s tax system. In this area, he points out three major problems: higher income tax rates than other states, an unusual amount of municipalities in Ohio with income taxes and complicated filing for individuals and businesses.

“You find nowhere else in the entire country a situation in which someone has to file multiple income tax forms ... for different jurisdictions they work in,” he says, citing the different tax rates and credits someone working in multiple municipalities might have to deal with. “That creates a drag on the efficiency of being able to set up businesses.”

As far as tax cuts are concerned, another report from Policy Matters found a series of tax cuts passed by the Ohio General Assembly in 2005 had little impact on the state’s economic growth. The report found Ohio experienced job losses while the rest of the country grew, and not a single Ohio sector outpaced national performance. The report concluded, “State economies are complicated and there are many reasons why Ohio’s job growth is lagging. However, it is clear that the 2005 tax cuts did not bring about the promised job growth. There is no reason to think that further tax cuts will, either.”

Instead, Policy Matters has focused on austerity, which led to the public sector job cuts outlined in Policy Matters’ March report: “A private-sector gain of 16,900 jobs has been nearly erased by the 14,200 jobs lost in the public sector. Most of those public job losses happened at the local level.”

Indeed, federal sequestration has already caused some damage in Ohio, and local government funding cuts approved by Kasich have also forced local governments to cut back (“Enemy of the State,” issue of March 20).

 
 
by German Lopez 04.26.2013
Posted In: News, Economy, Health, Environment at 08:59 AM | Permalink | Comments (0)
 
 
ohio statehouse

Morning News and Stuff

Ohio may allow open containers, Medicaid may be on ballot, pollution afflicts region

State Sen. Eric Kearney, a Cincinnati Democrat, introduced a bill in the Ohio Senate yesterday that would allow opened alcoholic beverages in “entertainment districts,” which must have populations of more than 50,000 within one-half mile by one-half mile. Kearney said Over-the-Rhine would be an ideal benefactor of the new bill. “Senate Bill 116 will promote tourism and business development across the state,” Kearney said in a statement. “By modifying Ohio’s law, this will provide an opportunity for developments such as the Over-the-Rhine Gateway in Cincinnati and The Flats in Cleveland to create an entertainment experience and attract more customers.”

Supporters of the Medicaid expansion say they may attempt to put the issue on the November ballot if the Ohio General Assembly fails to take action by fall. Republicans in the Ohio House and Ohio Senate have so far rejected Gov. John Kasich’s pleas for an expansion, instead moving toward asking the federal government for a Medicaid waiver that would allow the state to make broader reforms. At least 90 percent of the expansion would be funded by the federal government. CityBeat covered the Medicaid expansion and other aspects of the Ohio House budget bill in further detail here.

The Greater Cincinnati region and Hamilton County ranked among the worst in the nation in the American Lung Association’s annual “State of the Air” report. The report, which used 2009-2011 U.S. EPA data, found Greater Cincinnati to be No. 10 worst for year-round particle pollution and No. 14 for ozone pollution. Still, the report did find overall improvement around the nation, with Greater Cincinnati making some advances in pollution reduction in the past few decades.

A new Ohio law going into effect today will require school coaches to acquire additional concussion awareness training. State Superintendent of Public Instruction Richard Ross says the training will make it easier for coaches to identify symptoms of concussions and get help for students.

A University of Cincinnati study found it could be cost-effective to screen at-risk populations for hepatitis C.

A vegetarian lifestyle may fit some of CityBeat’s most beautiful employees, but Cincinnati-based Procter & Gamble says pets need a more expansive diet.

Not only do they have multiple cultural traditions, but humpback whales also learn new tricks by watching their friends.

 
 
by German Lopez 04.23.2013
Posted In: News, Economy at 01:58 PM | Permalink | Comments (0)
 
 
city hall

Local Joblessness Falls Despite Slower Growth

Cincinnati unemployment rate down to 7.5 percent

Cincinnati’s seasonally unadjusted unemployment rate fell sharply in March, according to data released today by the Ohio Department of Job and Family Services (ODJFS).

Michael Jones, research director at the University of Cincinnati Economics Center, says the numbers, while positive, were a slowdown from previous months. “The punchline is that growth is improving, but the rate of growth is slowing down,” he says. “But up is good.”

Cincinnati’s seasonally unadjusted unemployment rate dropped to 7.5 percent in March, down from a revised 7.9 percent in February and 8 percent in March 2012. The lower unemployment rate coincided with other positive factors: a larger civilian labor force, more people employed and less people unemployed.

Hamilton County’s seasonally unadjusted unemployment rate also dropped from 7.2 percent to 6.9 percent, and Greater Cincinnati’s rate dropped from 7.5 percent to 7.2 percent.

Jones attributes most of the drop to the region’s strong growth in health care services, but manufacturing has also played a role. “Our manufacturing has come back stronger than the nation,” he says.

In Ohio, the seasonally unadjusted unemployment rate fell from 7.8 percent in February to 7.3 percent in March. The U.S. seasonally unadjusted unemployment rate also fell, from 8.1 percent to 7.6 percent.

But seasonally adjusted numbers for Ohio and the nation were widely considered weak, particularly in comparison to previous months.

Job numbers at the state and national levels are typically adjusted for seasonal factors, but local numbers are not.

Unemployment numbers are collected through a household survey. The unemployment rate measures the amount of people employed relative to the civilian labor force, which accounts for the amount of people looking for jobs and people employed. Since the numbers are obtained through surveys, they are often revised in later months.

 
 

 

 

 
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