Ohio tax breaks have 91% success rate

July 12, 2010 at 12:00a.m.

Associated Press

COLUMBUS

An Ohio program that offers companies tax breaks to create jobs has a 91 percent success rate, according to data compiled by the state.

Records released to The Columbus Dispatch for a Sunday report show that Ohio has given incentives amounting to about $525 million through the Department of Development’s job-creation tax-credit program since 1993. The money has gone toward 955 projects of which 875 have made it beyond the three-year period during which companies promise to meet certain job and investment goals.

Overall, 91 percent of promised jobs have materialized; of the 875 projects past the three-year point, 92 percent of promised jobs have been created.

The newspaper reports that the state also took 182 enforcement actions in 2009 against companies that did not make good on promises. That compares with 107 in 2008 and 18 in 2007. Officials also have sought to retrieve about $10.6 million from 70 projects that closed down before meeting obligations.

More than 100 projects created at least 50 fewer jobs than promised without any reported ramifications. Among them is Ford Motor Co., which received more than $1 million in tax breaks for a 2002 project to create 800 vehicle-production jobs in Avon Lake. The data say no jobs were created. Ford moved production to Missouri, and tax breaks ended at that time, officials said.

The newspaper notes that officials said data from before 2005 may not be reliable, because of a database switch.

Officials at the development department are working to make the data more accurate with a $500,000 plan to study and upgrade reporting systems.

“I think we are moving ahead, finally, in a direction that I think is the right direction,” said Lisa Patt-McDaniel, director of the Department of Development. “But we still have a ways to go, and it will take more investment on our part.”

Other moves by the state include a law passed last year that requires the attorney general to survey each company that was given a tax break from July 2004 through June 2009.

The office has received responses to about 2,000 of the 3,310 surveys mailed in October, and Attorney General Richard Cordray aims for a report by year’s end.

Since 2008, staff at the development department have created databases that track projects receiving tax credits since 1993, grants since 2001 and loans since 2002.

They show that 2,090 projects have been approved for tax credits through February, but not all approved companies get the breaks due to various reasons, including failing to sign a contract or to create promised jobs.

Overall, the state has anticipated tax breaks of about $1.6 billion since 1993, but only about 40 percent of that has been issued.