State Integrity Investigation
3:25 pm
Fri August 17, 2012

JobsOhio: Economic boom or constitutional bust?

Supporters say it's a boost to job creation in Ohio. Critics went to court, saying JobsOhio is an unaccountable private group with access to taxpayer dollars. Lower courts dismissed the case brought by Progress Ohio and two Democratic lawmakers. Now a limited-government legal center has sided with them, saying the enforceability of the state's constitution is at stake. WVXU's Mark Heyne and Ann Thompson look at the controversy surrounding JobsOhio.

ANN:  In existence for only a year and a half, JobsOhio has some pretty impressive statistics.  Kristi Tanner is one of four managing directors for this private non-profit corporation:

"391 companies have invested or expanded in Ohio.  Those companies have committed to create over 31,000 new jobs in the state and retain nearly 85,000 jobs in the state."

And she says those companies have promised $6.1 billion in new corporate investment over the next couple of years. JobsOhio took over this role from the Ohio Department of Development:

"The Department of Development as a state agency had become very slow and very bureaucratic in its approach to how they worked with private companies."

JobsOhio, claiming to now move at the speed of business, is focused on job retention and creation, new corporate investment and revitalizing Ohio's economy. This video featuring Omnicare CEO John Figueroa sings the praises of JobsOhio:

"We're moving our corporate headquarters to the Cincinnati area.  That will bring close to 500 jobs to Ohio.  And as a growing health care company, we think that we'll continue to bring more jobs and the future looks very bright in Ohio."

JobsOhio is run by a board of directors selected by Governor John Kasich and led by a chief investment advisor picked by the board. Managing directors handle day to day operations. The quarterly board meetings are open to the public and Kristi Tanner says the public can find a wealth of information online and through public records requests:

"When you look through the list of what is required to be provided to the state along with the annual reports or strategy documents and other items that are available through the Department of Development and on our website publicly, you'll find it's actually a very transparent organization."

MARK:  But critics question whether turning public money over to a private entity is even constitutional. In this case, they're talking about Articles 8 and 13 of the Ohio Constitution that deal with public debt, public works and corporations. Brian Rothenberg is the head of Progress Ohio. The liberal group has challenged JobsOhio in court:

"It's not Governor Kasich or the people running JobsOhio.  This is really about a fundamental tenet of government--that public money should always be transparent, and that you shouldn't be picking winners and losers based on politics or other things."

The suit has been shot down by a lower court saying Progress Ohio and other challengers did not have standing--the right to sue in court. The decision was upheld by an appeals court. Enter the 1851 Center for Constitutional Law, a right-leaning group, which says the challengers absolutely do have standing. The Center's executive director, Maurice Thompson, explains JobsOhio is the kind of issue that Ohio's Constitution was created to deal with:

"What it does is take a lot of taxpayer funds, or public funds, and fork them over to private entities.  There are prohibitions against that in the Ohio Constitution.  In fact, the Ohio Constitution was written in 1851 in response to issues exactly like that, where we bailed out all these big canal and railroad corporations that were supposedly too big to fail."

Thompson says the Center is not taking a position on whether JobsOhio is constitutional or not. Rather his group disagrees with the lower courts on the right to sue. He says the judges are using strict federal interpretations of standing, rather than state standards:

"Quite frankly, if Progress Ohio doesn't have standing to challenge JobsOhio under these articles of the constitution, then nobody has standing to use these very important articles of the constitution ever."

Thompson says that means taxpayers couldn't challenge state or local government spending or other arrangements that might be illegal.

ANN:  JobsOhio spokeswoman Laura Jones contends the organization is constitutional:

"We believe the constitutionality of JobsOhio, its funding mechanism, and that it will be held up as set forth by the Ohio legislature in House Bill 153."

The challengers are waiting to hear if the Ohio Supreme Court will take up their case, a decision that could come later this year. Meantime, funding that JobsOhio had been expecting has been delayed by the legal challenge. The budget and commerce departments had agreed to transfer the rights to the state liquor business to JobsOhio for the next 25 years in a deal worth $1.4 billion. JobsOhio is asking Ohio's high court to force the state to move forward with the agreement.