Subsidized Job Flight in Ohio

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Study: Companies Get Subsidies to Move, Mostly Leaving Hard-Hit Areas in Cleveland and Cincinnati Metro Areas

Cleveland, Ohio, July 7, 2011—One hundred and sixty-four companies were given lucrative property tax breaks as they moved facilities around within the Cleveland and Cincinnati metro areas.  The subsidized relocations, affecting an estimated 14,500 workers, were overwhelmingly outward bound and by many measures fueled suburban sprawl, especially in the Cleveland region.

By dispersing jobs away from the urban cores, the relocations worsened inequalities in wealth and opportunity. They moved jobs away from areas hardest hit by plant closings and with higher rates of poverty, unemployment and people of color to more affluent and less diverse areas. Most also moved to locations that are inaccessible via public transportation, denying job opportunities to carless workers and denying thousands more any commuting choice.

Ominously, Ohio’s economic development programs are becoming much less transparent, denying taxpayers the ability to see how their job investments are performing—or where.

Those are the key conclusions of Paid to Sprawl: Subsidized Job Flight from Cleveland and Cincinnati, a study released today by Good Jobs First at a press conference in Cleveland. The study is available at www.goodjobsfirst.org.  Funded by the Ford Foundation, it is the largest study of subsidized relocations ever performed in the United States.

“Ohio’s enterprise zone program is so loose it has been perverted,” said Greg LeRoy, the study’s lead author. “It has become pro-sprawl, which is tragic given that it was originally created to revitalize older areas.” The study also examines Community Reinvestment Areas, a program succeeding enterprise zones.

To remedy these problems, the study recommends that the state encourage the creation of cooperation systems among local officials and anti-poaching protocols like those in effect in Montgomery County (Dayton) and Summit County (Akron) and that being debated in Cuyahoga County (Cleveland).  To reverse declining transparency, the study recommends that all economic development deals’ costs and benefits be disclosed online. It also recommends that proposed deals should be ineligible unless they are accessible via public transportation. Finally, regional revenue-sharing would reduce tax-base competition and complement a cooperation system.

Founded in 1998, Good Jobs First is a non-profit, non-partisan research center promoting accountability practices in economic development and smart growth for working families. Headquartered in Washington, DC, it has a project office in New York.

2 Responses to “Subsidized Job Flight in Ohio”

  1. Brent Pittman Brownsburg, IN Says:

    How to CUT government spending, debt and present tax rates without causing inflation or high interest rates:
    Create GOOD PAYING American JOBS with GOOD BENEFITS for American citizens by REPEALING ALL RETAIL SALES TAXES & replace the lost revenue with an IMPORT TAX/tariff on IMPORTED LABOR & MANUFACTURED GOODS. INCREASE the USA FEDERAL INCOME TAX STANDARD DEDUCTION from $5700 (2010) to $15000 for AMERICAN CITIZENS. INCREASE the INDIANA STATE EXEMPTION for non-dependent adults from $1000 to $5000; if disabled, increase to $10000. In addition, ALL AMERICAN CITIZENS over the age of 55 should have their TOTAL STATE EXEMPTIONS INCREASED from $1000 to $10000 and when they reach the age of 65, increase the exemption from $2000 to $15000; if their total federal AGI is less than $40,000. ALL standard deductions and exemptions should be adjusted for inflation. COLLECT a STATE EXPORT TAX on NATURAL RE-SOURCES/COMMODITIES such as coal, oil, natural gas & grains.
    REPEAL ALL Business & New Development/Construction TAX INCENTIVES such as tax abatement, tax increment financing, grants, deductions, credits, tax free bonds, earmarks and/or ANY other CORPORATE WELFARE that SHIFTS Business & New Development & Construction COSTS & TAXES (without IMPACT FEES) to other taxpayers that EXPORT AMERICAN JOBS to foreign countries and/or that create POVERTY WAGE AMERICAN JOBS. OR, require these Corporate Welfare KINGS & their Businesses & New Development & Construction to pay a LIVING WAGE, MINIMUM WAGE of $15/hour with good benefits (parent and one child; and adjusted for inflation). COLLECT MANDATORY IMPACT FEES (IN code: 36-7-4-1300, only infrastructure today); but, expand the code to collect impact fees for schools, libraries, parks, police and fire.
    Where are the TEA PARTY endorsements for these strategies?

  2. dansullivan0 Says:

    Cleveland would not have these problems if mayor Tom Johnson had his way with tax reform in the 1890s. He wanted
    Cleveland to levy a land value tax, but was blocked at the state level by Mark Hanna. Land value tax would have curtailed land speculation in Cleveland and attracted development inward.

    In 1913, Pittsburgh adopted a land value tax, and never again suffered the housing booms and busts that plagued most American cities. Pittsburgh sailed through the Great Depression, the ’60s recession, and the end of Big Steel while Cleveland took it on the chin each time. Today Pittsburgh is the only city in the country where housing prices have not been falling.

    The original progressives were tax reformers par excellance, and Tom Johnson was the best of the progressive mayors. If that original progressive spirit were alive today, we would be focusing the entire tax burden on land values, pollution charges and resource royalties. Employment would be full, and no corporate-welfare subsides of any kind would even be considered.

    For a history of how Pittsburgh succeeded by adopting Tom Johnson’s Cleveland reforms, see:

    “Why Pittsburgh real estate never crashes: the tax reform that stabilised a city’s economy”

    http://www.feasta.org/2011/06/02/why-pittsburgh-real-estate-never-crashes-the-tax-reform-that-stabilised-a-city%E2%80%99s-economy/

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