· November 18, 2011

Fact Check: JobsOhio’s dubious jobs claims

Recently we’ve noticed Governor Kasich talking about how his administration, through the newly-privatized JobsOhio development corporation, has created or retained 44,000 jobs in its efforts to lure or retain employers in Ohio.

The governor said that over 44,000 jobs have been created this year, helping to improve the states economic picture. – Ohio News Network, November 17, 2011

and two weeks earlier:

He said his nonprofit Jobs Ohio economic development program has “been involved in 174 projects to either bring them to Ohio, stay or expand here.” […] The economic development work has saved 25,245 jobs and brought in more than 12,000 new jobs, he said. – Ravenna Record-Courier, November 2, 2011

These claims are highly misleading, and here’s why: The Governor seems to be implying that 44,000 Ohioans are currently working in jobs as a direct result of the Kasich administration’s work with employers. This is factually untrue. Rather, the number represents the aggregation of job creation or retention commitments, made by employers so far in 2011, in the hope of getting state incentives such as loans, tax breaks or grants. What you need to know about job commitments:

• Job creation commitments allow hiring to occur over a period of up to 15 years. Not all jobs are – nor are they required to be – created immediately. The 12,000 promised new jobs could be created slowly over the next decade and a half — if at all.
• Job creation or retention goals may never be met; for tax incentives, the job creation and retention numbers are a maximum; failing to meet them simply reduces the amount of the tax break the employer receives.
• State incentives do not always bear fruit. In some cases, a company will use its offer from Ohio to get a better deal from a competing state. In other cases, the failure to get financing or market conditions can derail expansion plans.
• Even once an “agreement” with an employer is announced, it can take months for the employer to actually accept the award and begin creating jobs. For example, Governor Kasich announced a deal with American Greetings in March, but the company did not appear in the state’s tax incentives reporting database until October, indicating a significant lag time before the company formally accepted the state’s offer.

While deals announced with companies can be indicative of economic development activity in the state, they are by no means a true measure of job creation that has occurred since the start of the year. Other measures released monthly and based on actual hiring by employers are a better indicator of whether Ohio’s workforce is gaining or losing jobs. We report on these figures each month on our blog.