Ohio Attorney General Mike DeWine released his 2012 Report on award recipient compliance with state awards for economic development. The report analyzes compliance with the terms of economic development awards for 255 recipients which had performance periods ending in calendar year 2011.
The report found that 162 awards were in substantial compliance while 93 awards did not comply, resulting in an overall compliance rate of 63.5 percent.
Awards issued by ODSA fall into four main categories – workforce awards, grants, tax credits, and loans. The report listed compliance rates by award categories:-
- Workforce compliance rate: 89.9 percent (80 of 89 awards in substantial compliance);
- Grant compliance rate: 48.6 percent (36 of 74);
- Tax credit compliance rate: 59.5 percent (25 of 42); and
- Loan compliance rate: 42.0% (21 of 50).
Most of the awards analyzed were made by the Ohio Development Services Agency (ODSA) in between 2006-08, and the Great Recession in between then and now may have had a negative impact on the projections, which might account for some of the non-performers.
For example, automobile supplier YSK Corporation was given a $2.5 million loan for expansion in 2006 in return for a promise to create 30 new jobs and retain 236 existing ones. They managed to retain the jobs, but could create only two new jobs.
Similarly, ABC Manufacturing, Inc. received tax credits to create 200 jobs, and managed to create only 53 jobs. Their tax credit term is being reduced from six to four years. ABC also received a $250,000 grant, for which the ODSA has sent notice of clawback of $181,250. They were also given a $750,000 loan under the Pioneer Rural Loan program, and the ODSA has now sent them a notice that it may increase the interest rate due to non-compliance.
But some of it is just about companies not living up to their commitments. For example, Caterpillar, Inc., which received $25,694 for workforce training and committed to training for 2,000 workers, has managed to provide training for just 52 workers. The ODSA sent Caterpillar a notice of clawback of $16,594.
Similarly, Home Depot U.S.A. Inc. received $32,500 under the Ohio Workforce Guarantee program to train 200 workers. They trained only 65.
Read the full report Ohio 2012 economic development compliance report – Download (pdf)