(The Center Square) – More than half of the companies given taxpayer incentives to expand or open new locations in Ohio over the last four years failed to meet job or payroll goals associated with the tax breaks.
A new report from State Auditor Keith Faber listed 39 of the 60 companies that committed to creating jobs as noncompliant, and no action was taken against many of those companies.
“These agreements are meant to encourage job growth and community prosperity,” Faber said. “If we’re not going to hold companies accountable for their job and payroll commitments, then these agreements are only depriving Ohioans of financial resources that could be used elsewhere.”
Faber said the findings in the report were forwarded to Attorney General Dave Yost, who decides if recoveries or other remedies are needed.
The report showed for the closeout year 2021, no action was taken against four companies that received state loans, but failed to create or retain jobs and payroll. Also, those companies could not produce documents for the use of the money.
Yost Press Secretary Steve Irwin told TCS on Friday that the AG’s office is in the process of reviewing the report.
Faber said the audit found five companies that received loans directly from taxpayers that failed to reach any of the job creation commitments, including Applied Industrial Technologies and COCRF Investor 109.
Applied Industrial has failed to meet any of its incentive requirements for its direct loan issued in 2024, while COCRF also missed all incentives for its 2024 urban development loan.
Mason Waldvogel, deputy chief for media relations at the Ohio Department of Development, told TCS the agency has a strong track record of handling taxpayer money.
“Under this administration, the Ohio Department of Development has proven it takes its stewardship of taxpayer funding seriously – including holding companies accountable for the agreements they make and taking the appropriate action, when necessary,” Waldvogel said.
Waldvogel also pointed out that job creation and payroll tax credits can only be claimed if companies meet established requirements. If those numbers aren’t met, companies do not receive the incentive.
“In other words, jobs must be created to claim a tax credit. If metrics are not met, the company does not receive the benefit. Companies that do receive tax credits are required to sustain their commitments, as outlined by the agreement the company makes with the state. Tax credits are one of several tools used to attract private investment and support job growth, bringing new opportunities for Ohioans and those looking to move to Ohio,” Waldvogel said.
He also said ODOD consistently acts against companies that fail to meet agreements, including clawing back funds or making changes to deals.
He said the department made changes or rescinded several tax credit agreements in June, and more are expected.
“We welcome the auditor’s review and share the goal of ensuring public resources are used responsibly and transparently, but it’s also important to note that this audit reflects only a snapshot in time and does not capture the full scope of the actions the Ohio Tax Credit Authority has taken – or may still take in the months ahead,” Waldvogel said.
Other companies, like Findley Machine & Tool and Hollingsworth Management Services, have far exceeded incentive requirements.
Findley Machine met 458% of its job creation goals and 671% of its payroll goals. Hollingsworth met 407% of job creation requirements.
