JobsOhio, holding $261 million, gets fiscal-health OK
by Andrew Bainbridge | Oct 02, 2014 | In the News
JobsOhio ended its 2013-14 fiscal year with a bumper crop of $261 million in cash and investments on hand – money yet to be put to use in satisfying Ohio’s hunger for more jobs.
John F. Minor Jr., president of Republican Gov. John Kasich’s privatized economic-development agency, said that high number is easily explained and partly by design.
About half of the nonprofit’s cash is committed, off the books, to 129 projects still in the works that could create and retain about 38,400 jobs, Minor said in discussing JobsOhio’s annual financial audit, released yesterday.
If realized, a few of the projects would represent multimillion-dollar outlays in job-creation loans and grants, the largest ever awarded by JobsOhio, Minor said.
JobsOhio is funded largely by its $1.5 billion, 25-year lease of state liquor operations, which delivered a $214 million profit in the past fiscal year as Ohioans consumed 3.1 percent more liquor and revenue increased 5.5 percent.
JobsOhio drew down $100 million of the profit, with the remainder devoted to operating the liquor enterprise and paying $59 million in debt incurred in selling bonds to finance its liquor lease.
It spent $20.6 million in the year ending on June 30 on operations and economic-development grants and loans, an increase of $5.5 million.
The legally required exam by independent auditor KPMG gave JobsOhio a clean bill of fiscal health.
“We’re using our funds in a smart way,” Minor said. “We’re not going to chase bad projects and bad deals. … Is it a good investment? We’re not going to spend it as quickly as we can.”
Ed FitzGerald, the Democrat opposing Kasich in the gubernatorial race, said JobsOhio has yet to demonstrate it is a private-sector answer to the state’s jobs woes.
“This supposed audit of JobsOhio raises far more questions than it answers. … With wages failing and new jobs growing fewer and fewer by the day, Ohioans deserve a job agency that is fully accountable to them – not a pet project of the governor’s that exists only to help his wealthy and well-connected friends,” he said.
Kasich disputes such assertions.
The leader of the liberal nonprofit Progress Ohio, which unsuccessfully sued to challenge JobsOhio’s constitutionality, also said the agency needs to be accountable beyond its board of appointed corporate leaders.
“For a governor who insisted that he had to have this in order to create jobs, you kind of have to scratch your head and wonder why he has all this money and is not creating jobs with it,” said executive director Brian Rothenberg.
Minor disagrees, saying that JobsOhio finally has emerged from its 2011 startup pains and cleared the decks to pursue more and better jobs with new strategies and a doubling of its staff to 50 employees over the past 15 months. Salaries and benefits rose 83 percent to $4.6 million as a result. That would calculate to roughly $92,000 per employee.
Ohio is working to restore jobs lost in the recession that began in late 2007. Numbers bottomed out with the loss of 455,000 jobs in early 2010. The state has restored 329,000 jobs but needs 126,000 more to match pre-recession levels.
In terms of jobs, JobsOhio is coming off its best quarter in its young history, booking 75 projects with promises of investing $1 billion and creating or retaining 24,369 jobs.
Since its inception, JobsOhio reports it has created 61,778 jobs and retained 193,215 others with a combined payroll of nearly $2.7 billion a year. It has played a role in 820 projects involving $14.2 billion in investments while providing $24.8 million in grants and loans.
Coming quarters will show increasing amounts being spent on marketing and loans and grants as the nonprofit matures, Minor said.
Minor is convinced his operation is nimbler and more effective in pursuing new companies and jobs than its former public-sector counterpart, and in cultivating corporate relationships that eventually could pay off.
He views his job as attracting and landing companies on the front end and then handing them off to the public Development Services Agency for potential big-dollar tax incentives to locate or expand in Ohio.
“We’re getting noticed by players who didn’t notice us before,” he said. “We have a great product to sell here.”
This story was written by Randy Ludlow of the Columbus Dispatch. Link to this article can be found here:
http://www.dispatch.com/content/stories/local/2014/09/30/JobsOhio-report.html