The question has to be asked: With such high unemployment in the state, is JobsOhio more concerned with growing its bureaucracy or with creating jobs in the private sector?
The number of unemployed Ohioans grew 3,000 in October with a jobless rate of 4.2 percent, more than half a percentage point above the national average of 3.6 percent, according to state data.
The rate of 4.2 percent in October was unchanged from the previous month, said the Ohio Department of Job and Family Services. The number of workers unemployed in Ohio in October was 246,000, up 3,000 from 243,000 in September.
The U.S. unemployment rate for October was 3.6 percent, up from 3.5 percent in September, and down from 3.8 percent in October 2018.
A cut of 1,000 workers in October means the state has 10,300 fewer positions since January, The Columbus Dispatch said in a story based on the state data. This calendar year could be the first that Ohio has cut jobs since 2009, when nearly 200,000 positions were lost during the Great Recession.
“October’s jobs report signals concern for Ohio’s job market — even though the unemployment rate remained unchanged at 4.2 percent. The household survey shows fewer people employed and more people searching for, but not finding jobs. Combined with a 4,000-net private sector job loss reported in the establishment survey, job growth in Ohio continues to slow with only 3,600 new jobs being added in 2019.
But, one might say, isn’t the vaunted JobsOhio organization supposed to be taking care of this by creating jobs?
State Rep. Jay Edwards (R-OH-94) says JobsOhio has created more internal jobs for itself than it has for his Appalachian portion of Southeast Ohio, WCBE reported.
When JobsOhio was proposed by former Governor John Kasich in 2011, he intended to replace the Department of Development with an entity that would move quickly to create and retain economic activity. It was backed by money from liquor sales, which JobsOhio leased from the state for $1.4 billion.
JobsOhio operates as a private non-profit company, and is reviewed annually by a private third party auditor, not the state auditor. But over time, there’s been concern that those audits don’t give a comprehensive overview of JobsOhio, where its 39 employees made an average of $100,000, and got an average 18 percent raise last year. Former president and CIO John Minor’s salary was more than $621,000.
JobsOhio claims it worked with companies to create more than 27,000 new jobs and $1.3 billion in payroll last year.
JobsOhio lists its mission as: “JobsOhio is a private nonprofit corporation designed to drive job creation and new capital investment in Ohio through business attraction, retention and expansion efforts.”
JobsOhio’s annual statement dated June 30, 2019-2018 provides some insight into its operations. Financial statements prepared by JobsOhio include its sole component unit, JobsOhio Beverage System (“JOBS”). JobsOhio is the sole member of JOBS, which operates the franchise for the sale of spirituous liquor throughout the state. The purchase was financed in fiscal year 2013 by JOBS’ issuance of $1,510,685 of special obligation bonds.
The organization was entrusted with the franchise for the sale of liquor throughout the state so it could move quickly to create jobs. How did it perform in its most recent financial report?
(JobsOhio describes its operating expense details by the thousands, meaning add three zeros to the end of the figures):
Operating expenses increased by $43,538 in the fiscal year ended June 30, 2019, from $118,569 in fiscal year 2018 to $162,107 in fiscal year 2019, primarily due to an increase in the amount of grants issued as part of JobsOhio’s mission and reported as economic development program expense. In the fiscal year ended June 30, 2018, operating expenses increased by $22,322 from $96,247 in fiscal year 2017 to $118,569 in fiscal year 2018, primarily due to an increase in the amount of grants issued as part of JobsOhio’s mission and reported as economic development program expense. JobsOhio had an increase in workforce over the past three fiscal years as it continues to build upon its employee base to facilitate economic development in the State. Other operating expenses for the fiscal years ended June 30, 2019, 2018, and 2017 included professional services, marketing, insurance, and administrative and support expenses.
So, JobsOhio increased its operating expenses from $115,133,000 in FY 2018 to $157,847,000 in FY 2019, working on its core mission, while Ohio gained only 3,600 jobs during much of the last half of FY 2019 (January-June).
Another detail that stands out from the above referenced operating expenses detail is that JobsOhio is increasing its own workforce.
The organization’s 2016 federal tax Form 990 was the latest such document available at this time. Even then, the organization had 83 employees that year, earning salaries and benefits of $11,037,384, up from $9,188,976 the previous year. During that year, JobsOhio reported economic development expenses of $90,141,215, including grants of $55,950,421 and revenue of $2,917,106.
The organization in 2016 spent over $1.69 million one consultant based in each world region: Europe; East Asia/Pacific; and North America. These “market consultants” represent “interests in other countries for foreign direct investment in Ohio. The countries are Ohio’s top markets for both current international investment and active economic development projects.”
Even the Form 990 numbers do not tell the whole story on staff salaries.
The Columbus Dispatch and TimesReporter in March 2018 published a story pointing out that officials including Auditor Dave Yost, a Republican, and State Rep. David Leland (D-OH-22) accuse JobsOhio of only reporting the taxable income of staff, not total compensation such as nontaxable retirement contributions and health-insurance costs.
The critics say there are 34 staff who make at least six figures annually.
JobsOhio, which took over the duties of the former Department of Development in 2011, is funded largely by its $1.5 billion, 25-year lease of state liquor operations, which produced a profit of $110 million on record revenue of $1.15 billion.
With JobsOhio spending tens of millions each year for such anemic unemployment reports, one may ask if the payback is worth it, or are state economic development officials drunk on increasing their own bureaucracy?
– – –
Jason M. Reynolds has more than 20 years’ experience as a journalist at outlets of all sizes.