Welcome to Jobs Inc., Where States Have Little Say in Economic Development

Several states have decided the way to juice up economic development is to turn it over to a corporation outside the government bureaucracy. Is it working?

Parma, Ohio, could use some help. The Cleveland suburb is still recovering from a plague of foreclosures, and deep cuts in state aid have made it difficult to keep the local budget in order. General Motors remains the city’s largest employer, but it long ago shuttered a 750,000-square-foot powertrain and transmission plant in the heart of the city’s industrial section. Under the circumstances, Parma officials were more than delighted when they heard a trucking company called Pitt Ohio was interested in expanding its operations, hiring hundreds of people and taking over a good-sized chunk of disused GM property.

Working with JobsOhio, the state’s economic development corporation, city officials put together a package of incentives that convinced the firm to consolidate truck terminal operations at the Parma site. Construction is just getting underway on a 23-acre complex where Pitt Ohio will eventually employ 240 workers. Parma Mayor Tim DeGeeter hails the facility as the city’s largest job creation project in a decade. “JobsOhio was a very helpful intermediary with the Ohio Department of Transportation, so we could get a [$180,000] grant,” says Shelley Collins, an economic development officer for the city.

It’s the sort of thing that makes for a great press release. Out on the presidential campaign trail, Gov. John Kasich loves nothing more than touting the number of jobs created in Ohio since he took office in 2011. Overhauling the state’s economic development effort is central to his claim. One of his earliest acts in office was abolishing the state Department of Development and handing its functions over to JobsOhio, a private nonprofit.

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