by German Lopez
Posted In: News
at 07:13 PM | Permalink
Ohio ranks No. 3 for massive subsidy deals with corporations
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
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
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
Posted In: News
at 12:13 PM | Permalink
Lease moves parking plan forward
Cincinnati is officially leasing its parking meters, lots and garages to the Greater Cincinnati Port Authority. The agency announced today that it had signed a lease agreement with the city, putting an end to a four-day controversy over whether the Port would sign the lease to begin with.The Port will now move forward with establishing contracts with the four private companies it will use to operate and upgrade the city's parking assets.What remains unclear is whether the Port actually worked out the problems that supposedly delayed the lease's signing. The Cincinnati Enquirer originally reported that the Port wouldn't sign the lease until it got a financial guarantee from the city that the local government would not cut future funds to the agency. City Council had considered cutting $100,000 out of $700,000 in annual funds to the Port as part of broader cuts to outside agencies in the fiscal year 2014 budget, but the cut to the Port was ultimately eliminated.Port spokesperson Gail Paul said she doesn't know whether the issue is under review, but she pointed out the agreement isn't supposed to address future funding concerns and only sets the terms of the parking lease.In return for the lease, the city is getting a $92 million lump sum and at least $3 million in annual payments, according to city estimates. The city plans to use that money to pay down future budget deficits and fund development projects, including the I-71/MLK Interchange.Critics argue the lease gives up too much control over the city's parking assets and will ultimately hurt downtown and neighborhoods by raising parking meter rates and expanding meter operation hours.Update (1:35 p.m.): Added a comment from Port Authority spokesperson Gail Paul.
by German Lopez
Council to rework "responsible bidder" ordinance
Cincinnati and Hamilton County today announced a compromise that will end the county's funding hold on sewer projects, allowing the projects to move forward. As a condition, the city will have to rework and repeal the controversial laws that incited county commissioners into approving the hold in the first place.As part of the deal, Commissioner Chris Monzel will ask the Hamilton County Board of Commissioners to immediately repeal a hold on Metropolitan Sewer District (MSD) projects.On the city's side, Councilman Chris Seelbach will ask City Council to immediately repeal so-called "local hire" and "local preference" rules, which require a certain percentage of contractors' workforce be local residents.The city, county and their partners will then work on changing the city's responsible bidder ordinance before new rules are officially implemented on Aug. 1.In May, City Council modified the responsible bidder ordinance originally passed in June 2012. The changes were supposed to trigger in August, but the compromise may alter those changes altogether. Under the current language, the ordinance forces MSD contractors to establish specifically accredited apprenticeship programs and put money — based on labor costs — toward a pre-apprenticeship fund.The city argued the programs will help create local jobs and train local workers, but the county criticized the rules for supposedly favoring unions and imposing extra costs on MSD projects.Meanwhile, MSD is facing pressure from the federal government to comply with a mandate to retrofit and replace Cincinnati's sewers. MSD estimates the project will cost $3.2 billion over 15 to 20 years, making it one of the largest infrastructure projects in Cincinnati's history.But the project was effectively halted by the county commissioners' funding hold, which forced the city and county to hastily work out a compromise.CityBeat covered the county-city conflict in further detail here.
by German Lopez
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
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
Posted In: News
at 11:38 AM | Permalink
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.
0 Comments · Wednesday, June 12, 2013
City Council’s Budget and Finance
Committee on June 10 approved development plans for Fourth and Race
streets to build a downtown grocery store, a luxury apartment tower and a
parking garage to replace Pogue’s Garage.
by German Lopez
Downtown grocery advances, city pension in trouble, county to investigate “double voters”
Got questions for CityBeat about, well, anything? Submit them here, and we’ll try to get back to you in our first Answers Issue.City Council’s Budget and Finance Committee approved a development plan for Fourth and Race streets to build a downtown grocery store, a luxury apartment tower and a garage that will replace Pogue’s Garage. The project will cost $80 million, with the city paying
$12 million through a five-year forgivable loan and private financing paying for the remaining $68 million. The city’s loan is being financed through urban renewal
funds, which are generated through downtown taxes and can only be used
for capital investment projects downtown. The project was originally attached to the city’s plan to semi-privatize its parking assets, but the city administration says the urban renewal funds opened up after a hotel-convention center deal collapsed.
The city’s pension fund saw a return of 12 percent in
fiscal year 2012, but the amount of money the city owes and should
contribute to the pension fund continues to go up.
The higher costs will likely force City Council to put more money
toward the pension, which means less money for other services. City Council has underfunded the pension system by varying
degrees since 2003 — a problem that was further exacerbated by the
economic downturn of 2008, which cost the city’s pension fund $102
million. Consultants suggested City Council view the pension fund
as “not being of good health” and make changes that would help make the
pension fund more “robust” and less volatile.As county and state officials move to investigate and potentially prosecute 39 “double voter” cases, local groups are pushing back with warnings that the investigations could cause a chilling effect among voters. Most of the cases cover voters who mailed in an absentee
ballot then showed up to vote on Election Day. Although the voters voted
twice, their votes were only counted once. Critics of the investigations, including Hamilton County Democrats, cite Ohio Revised Code Section 3509.09(B)(2),
which says voters who show up to vote on Election Day after filing an
absentee ballot should be given a provisional ballot. Hamilton County
Republicans say they’re not prejudging anyone and just want an
Following a report that found Ohio’s juvenile correction facilities are among the worst in the nation for rape and other sexual assaults against incarcerated youths, the state is assigning assessors to the facilities to ensure proper protections and improvements are being put in place.The Greater Cincinnati Port Authority is looking to expand its coverage to better market the region. The Port Authority’s plans call for enlisting 18 counties across Ohio, Indiana and Kentucky.
A derailed train hit a local electrical tower yesterday, temporarily shutting down power for part of the region.
Fatal collisions between cars and trains at public railroad crossings increased in 2012 to the highest level since 2008.
The former Terrace Plaza Hotel was sold, but it’s not clear what will come next for the building.An experimental form of male birth control involves injecting gold into testes and zapping them with infrared light.
Another one of Saturn’s moons may contain an underground ocean.
by German Lopez
Plan also includes parking garage, luxury apartments
In a 7-0 vote today, City Council’s Budget and Finance
Committee approved development plans for Fourth and Race streets to
build a downtown grocery store, 300 luxury apartments and a parking
garage to replace Pogue’s Garage.
Following the city’s $8.5 million purchase of the
property, the project will cost $80 million. The city
will provide $12 million through a five-year forgivable loan, and the
rest — $68 million — will come from private financing.
The committee hearing largely focused on the downtown
grocery store, which Odis Jones, the city’s economic development
director, called the “next step” of the city’s overall plans to
invigorate residential space and drive down office vacancy downtown.
Development company Flaherty and Collins will oversee the grocery store project, which was originally attached to the city’s plans to semi-privatize its parking assets.
The grocery store will be 15,000 square feet — slightly smaller than the Kroger store on Vine Street, which is about 17,000 square
feet — and open daily from 7 a.m. to 10 p.m. It will be run by an
independent operator, which is so far unnamed.
Flaherty and Collins CEO David Flaherty acknowledged it’s
“a compact space,” but he said it will be enough space for a
“full-service grocery store” with all the essentials, including fresh
The grocery store will be at the base of a new, 30-story residential tower, which will include 300 luxury apartments and a pool.
Across the street, the city will replace Pogue’s Garage, which city officials have long called an “eyesore,” with a new garage.
The seven Democrats on City Council voted in favor of the
plan, with Independent Councilman Chris Smitherman and Republican
Councilman Charlie Winburn abstaining.
Democratic Councilman P.G. Sittenfeld questioned the
funding sources for the project. City officials explained the $12
million loan will come through urban renewal bonds, which were
previously set aside in an urban revival plan that encompasses all of
Jones said the money was going to a hotel-convention
center deal when the city originally pitched the parking plan, but that
deal has since collapsed.
City officials also noted the urban renewal fund, which is generated through downtown taxes, can
only be used on capital improvement projects that support development
and redevelopment downtown. Although the fund could be modified by
City Council, it could never go to operating budget expenses such as police
Public dollars will go to the public garage, while private funds will carry the rest of the project.
The city’s $12 million investment comes through a
five-year forgivable loan, which means the city will get its money back
if parts of the project, including the privately funded grocery store,
fail to meet standards within five years. After the five years are over,
the loan is forgiven and any failure would result in a total loss on
Smitherman, who opposed the city’s parking plan,
criticized the city administration for not presenting the current
funding plan as an alternative to the parking plan: “What I’d like as a
public policymaker is to see all of the options in front of me so that I
can choose not just one option but maybe three options.”
Sittenfeld also questioned Flaherty about two previous projects Flaherty and Collins undertook that went bankrupt. Flaherty said the bankruptcies were mostly related to the economic downturn of 2008, but admitted the bankruptcies forced the company to make changes.
The city estimates the project will produce 650
construction jobs and 35 permanent, full-time jobs.
For the city, the project is part of a much bigger plan
that includes getting 3,000-5,000 new residential units built
downtown in the next five years to meet rising demand.“It’s hot to be downtown right now,”
Jones explained the property would have cost Cincinnati millions of dollars regardless of the city’s buyout and development plans because of a liability agreement the city made in the 1980s.“When you start from
there and you gradually come up and look holistically at the project,
taking action was not only necessary, it was prudent,” he said.
by German Lopez
Group ordains woman priests, Quinlivan suggests budget plan, county halts sewer projects
A group is ordaining Roman Catholic women priests despite Vatican opposition, and Debra Meyers will be Cincinnati's first woman to go through the ordination on May 25. Meyers told CityBeat the Association of Roman Catholic Women Priests' movement is about pressuring the Catholic Church to be more inclusive, including with women, LGBT individuals and other groups that may feel left out by the Church's current policies. The full Q&A with Meyers can be read here.In the latest budget plan, Councilwoman Laure Quinlivan is asking all city employees, including cops and firefighters, to take eight furlough days, which she says would save enough money to prevent all layoffs. That plan follows a motion co-sponsored by council members Roxanne Qualls and Chris Seelbach, which would eliminate all fire layoffs and reduce police layoffs to 25.Hamilton County commissioners voted to stop all sewer projects yesterday in opposition to the city's "responsible bidder" policy, which requires most contractors working with the Metropolitan Sewer District (MSD) to have apprenticeship programs. City Council, spearheaded by Seelbach, passed the measure to encourage more job training options for workers, but the county government says the measure is unfair and puts too much of a strain on businesses working with MSD. The issue will likely head to court.Commentary: "Good News Reveals Budget Deception."At last night's budget hearings, Councilman Charlie Winburn repeatedly brought up the city's so-called "credit cards," which are really procurement cards that are often used by the mayor to entertain and attract businesses to Cincinnati. Winburn says the use of the cards is outrageous when the city is considering laying off cops and firefighters, and Councilman Chris Smitherman says the system needs more controls. The cards are set up so they can only be used by city employees for certain services, and City Manager Milton Dohoney Jr. says the cards make the system more efficient, which means lower prices for the city.A bill in the Ohio House revives the Medicaid expansion, which was previously opposed by Republicans as part of the budget process. Gov. John Kasich is one of the top Ohio Republicans who supports the expansion, but it's unclear how far the bill can move this time, considering many Republicans are still opposed. CityBeat
covered the expansion, which would insure half a million Ohioans and
save the state money in the next decade, in further detail here.The Ohio General Assembly passed a bill
yesterday that would effectively ban Internet "sweepstakes" cafes,
which state officials say are prone to illegal gambling activity. State
Sen. Bill Seitz, a Cincinnati Republican, says the bill is a "shoot ‘em
and let God sort it out" approach because the bill generalizes against
all Internet cafes instead of imposing specific regulations that would
only target offenders. If Kasich signs the bill, it will become law.The Ohio Public Interest Research Group, a nonprofit advocacy group, submitted 589 petitions to the Ohio Senate opposing a measure that would force Ohio's public universities to decide between $370 million in out-of-state tuition revenue and giving out-of-state students documents required for voting. The measure was originally sneaked into the Ohio House budget plan, but Senate officials are removing it from the budget bill and appear likely to take it up in a standalone bill. CityBeat covered the original measure here.Greater Cincinnati home sales are continuing picking up. There 2,388 homes
sold in the region in April, up 22.65 percent from the year before —
even better than March's 13.5-percent year-over-year rise.Researchers are now suggesting rubbing a certain kind dirt on wounds.
0 Comments · Wednesday, May 22, 2013
City officials were either disastrously wrong or misleading the public when they insisted the parking plan was required to avoid massive public safety layoffs.