Are Republicans supporting welfare?
Our nation’s Republicans are excited to support welfare. Well, corporate welfare that is. Not so much welfare for people in trouble, hungry or homeless.
Several new Republican governors, including Wisconsin’s Walker, New Jersey’s Christie and Ohio’s Kasich have made dramatic budget cuts this year to solve the funding crisis their states face. Most of these cuts have simply kicked the ball of funding shortfalls down to local funding sources, county governments, townships and school districts.
In Ohio the Governor has reduced just about every budget category except his new JobsOhio development group, apparently off budget altogether and scheduled to operate without any transparency as an “out-of-government” entity; an entity with the ability to waive taxes, commit state spending, and grant state loans.
And, to Kasich’s credit, his new program is already out there working. Kasich recently announced quite proudly his saving of three Ohio corporate offices, Goodyear, Diebold, and American Greetings.
It is insightful to review just how Kasich saved each company.
As in many states the process begins with a corporation mentioning it is considering relocating to another state. The very mention of such travesty will bring the new Ohio Governor to your doorstep within 24 hours, or sooner if you break the emergency glass.
The Governor will then make a determination about the veracity of the claim of moving…and, so far, has believed every such claim as true and fatal to Ohio should they occur.
So when Diebold, Inc., an Ohio company for 153 years with deep roots in the community, mentioned they may consider other states for their offices, they were taken seriously. When Goodyear, an Ohio company since 1898, noted their discontent they too were considered serious flight risks. And when American Greeting noted they were displeased with their local tax rate, they too were deemed certain to leave Ohio without intervention.
Now none of these corporate entities are in financial trouble. Goodyear had worldwide sales last year of $16.3 billion and 92,000 employees; Diebold operates in 90 countries with $2.8 billion in sales in 2010; American Greetings made $32 million in the fourth quarter of 2010 with a sales increase of 8 percent.
But Kasich deemed them each to be flight risks and quickly mobilized to save them as Ohio corporations.
Kasich saved Goodyear’s 2,900 Ohio jobs with $161 million in corporate grants, loans, and new tax credits, and an additional $30 in new state loans. The cost of building Goodyear’s’ new Worldwide headquarters, planned for Akron, happens to be, oddly enough, $161 million. So the State if Ohio gives Goodyear a brand new headquarters for free and then grants future tax incentives for…well, for being there.
Diebold was saved for only $100 million. Of this amount, $56 million is in state grants and loans, plus future tax breaks, and $44 million in local tax incentives. In another coincidence, Diebold plans to build a new corporate office facility for exactly $100 million. This will allow their 1, 500 Canton employees to stay in generous Ohio.
American Greetings has 2,000 Ohio employees, about 200 less than a year ago. And the company is seeking a smaller corporate office than their present space. They were saved with $15 million in state loans and $30 million in state grants.
All told, the three companies have about 5,500 Ohio employees.
All told, their current gifts, grants and loans, not including the promised future tax breaks, total a nifty $309 million. So for only $562,000 per employee the Governor was able to save these jobs for Ohio…that is if they were ever actually leaving Ohio.
We will never know if they were really leaving, but we do know that every Ohio corporation will be calling Columbus claiming they may leave the state to see what goodies may come their way.
A budget crisis? Not in Ohio business development.
Oh, and the number of jobs created for $309 million? Zero.
Jim Crawford is retired educator and political enthusiast living here in the Tri-State.