Companies have collected at least $4.4 billion in local and state tax breaks in Ohio, according to a nonprofit that tracks corporate subsidies. While more than 10,000 awards have been made, more than a third of that money went to 10 big companies.
Local and state tax breaks awarded to businesses for economic development projects in Ohio have come with a big price tag: at least $4.4 billion since 1983, according to a nonprofit group that tracks such incentives.
More than a third of that money went to 10 big companies, including Amazon for data and distribution centers it has developed in the state, says Good Jobs First, a group based in Washington, D.C., that promotes accountability in economic development projects.
The group’s updated tracker, at goodjobsfirst.org/subsidytracker, documents subsidies that include state and local income tax incentives, breaks on property taxes, grants, infrastructure improvements and other costs. In return for those incentives, companies promise to retain and create jobs and make capital investments in plants, buildings and equipment.
Fiat Chrysler has received the most incentives of any company in Ohio, $232 million in 1997, much of it tied to the $1.2 billion Jeep plant it built in Toledo, according to the tracker.
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More recently, Amazon has received $119.3 million in incentives, with $93.4 million of that for the three data centers the company has built in central Ohio. The investment from those data centers totals $1.1 billion.
Other big projects for central Ohio include a tax break valued at $72.3 million for The Georgetown Co., Easton’s lead developer, for a property tax abatement for housing in the area. More than 10 years ago, NetJets and the failed Skybus airline project also received incentives that totaled about $120 million.
The incentives usually are paid over a period of years.
The $4.4 billion is likely a low number; some of the more than 10,000 awards that the database has tracked don’t have values associated with them yet.
The Ohio total ranks well below those for some other states. New York government agencies have awarded $36.7 billion in incentives and Louisiana $25.2 billion.
But Good Jobs First warns against making comparisons from one state to the next. Some states disclose more information than others, and incentive programs that vary from state to state can make comparisons tough.
Good Jobs First established the tracker as part of its quest to make economic development subsidies more accountable and effective. It allows for users to see company-specific subsidy data in one place.
“We believe in situations where public investment is important,” said Kasia Tarczynska, a research analyst with the group. “Affordable housing, a grocery store in a poor community where no company wants to invest or to support small businesses.”
Otherwise, providing support for big businesses looking to invest in states and cities is mostly unnecessary because those projects would proceed anyway, she said.
Amazon, for example, likely would still build distribution centers because it needs them there, she said. Automakers and other companies probably would build plants where they can get access to a skilled labor force and their customer base.
“They would go where it makes sense for them to go,” she said. “They would make business decisions based on merits.”
“I’ve seen instances where companies have received incentives to go where they were headed anyway,” Dennis McAndrew, principal of Silverlode Consulting in Cleveland, which advises companies on site selection.
Taxes, utilities, the environment and other expenses tend to have more effect on the bottom line than incentives, McAndrew said.
Still, making an overall assessment that incentives aren’t important isn’t fair either, he said. “In some cases, they are critically necessary; in some cases, they may not be necessary.”
The Ohio Development Services Agency is charged with making sure that businesses meet their commitments when state incentives are used to help them create jobs. The agency’s website includes links where users can monitor incentive awards.
JobsOhio and its regional partners are responsible for much of the work when it comes to economic development in Ohio.
The focus on incentives is in three areas: how many jobs will be created, the increase in payroll and the company’s investment, said Lyn Tolan, Development Services Agency spokeswoman.
“Each project is different,” she said. “We’re very cautious with the public dollars. We want to make they benefit the community and the workers.”