Audit JobsOhio
3/14/2013JobsOhio, the public-when-it-needs-to-be, private-when-it-wants-to-be economic development corporation championed by Gov. John Kasich, is causing friction among top Republicans in Columbus. State Auditor Dave Yost is demanding to see financial records from JobsOhio; the governor and GOP legislative leaders say Mr. Yost lacks the legal authority to audit the nonprofit agency fully. On behalf of Ohio taxpayers, Mr. Yost has the stronger argument.
The GOP-run General Assembly created JobsOhio soon after Mr. Kasich took office in 2011. The governor argued that Ohio needed a business-attraction agency that could act more quickly and decisively than the former state Department of Development, which JobsOhio largely has replaced.
Then as now, critics objected to the secrecy and lack of formal oversight with which JobsOhio was allowed to do much of its work. Proponents claimed such a lack of transparency was necessary to safeguard proprietary business information. The law that set up the agency was deliberately vague about the state auditor’s authority to monitor it; assembly leaders now threaten to pass legislation that would greatly restrict that scope.
JobsOhio initially was allocated $1 million in taxpayer money to launch its operations, but that total grew to $5.3 million with little public attention or even, apparently, lawmakers’ approval. A recently disclosed independent audit conducted by the accounting firm KPMG concluded that JobsOhio raised $6.6 million in private donations through mid-2012. The givers remain unidentified.
That audit also concluded that half of JobsOhio’s 26 employees are making six-figure salaries. Separately, the annual report JobsOhio released this month acknowledged that the number of jobs created and retained in the state for which the agency took at least partial credit fell to 76,000 last year from 83,000 in 2011.
JobsOhio’s constitutionality remains the subject of a court challenge. But that hasn’t stopped it from borrowing against future profits of the state’s liquor-sale business, which the Kasich administration shifted to the agency. That leasing scheme provides JobsOhio with revenue that could amount to as much as $125 million a year.
What will happen if JobsOhio ultimately loses the legal battle? Neither the agency nor the administration seems to want to address that question.
Meanwhile, Mr. Yost is subpoenaing JobsOhio’s chief financial officer, ordering him to produce records that he says the agency has refused to release after months of discussion. Mr. Yost argues sensibly that the extent of JobsOhio’s taxpayer subsidies makes the agency, even if it is defined as essentially private, subject to his full review.
Governor Kasich and his legislative allies assert that Mr. Yost can audit JobsOhio’s “public” money, but not its “private” funds. They haven’t explained how the two pots can reasonably be separated.
The secrecy in which JobsOhio operates makes it virtually impossible for taxpayers to determine how well it performs its government functions, and how wisely it spends the large sums of public money it receives. That lack of accountability creates the suspicion, fairly or not, that the agency is up to something that it doesn’t want Ohioans to know.
That’s isn’t the climate in which Ohio will attract business and create jobs. Mr. Yost’s audit needs to proceed.