This post is part of an occasional series examining state and local reports evaluating economic development incentive programs. Here we look at Ohio’s 2016 Report to the General Assembly: Compliance with State Awards for Economic Development, prepared by the Ohio Attorney General.
As the title suggests, this report’s purpose is to monitor the compliance of economic development award recipients with agreed-upon terms and conditions. It does not consider economic impact in Ohio or company actions beyond the performance period. Here is a summary of key points:
The report considers 329 projects in four major award categories with a performance period ending in 2015.
279 of the 329 awards were substantially compliant (meaning they met 90% of their commitment), yielding an 84.8% compliance rate. Compliance means the company met the performance metrics defined in the award agreement, which typically included commitments for job creation, job retention, payroll, and/or workforce training.
The compliance rate varied substantially by award category:
- 100% compliance for workforce training awards, which had a total value of over $4 million
- 86.3% compliance for grants, which had a total value of $34 million
- 80% compliance for tax credits, which had a total value $47 million
- 82.8% compliance for loans, which had a total value $112 million
- Compliance rates range from 33% to 100% among the seven loan programs evaluated
- The Innovation Ohio loan program had the lowest levels of compliance
The Appendix lists the individual companies that did not comply, the award program, amount received, reasons for non-compliance, and the remedial action taken.
The report also compares compliance rates from past years. Compliance has increased steadily in each category and across the board, improving from a 59.1% overall compliance rate in 2011 to 84.8% in 2015, with the greatest improvement in the tax credit category.