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Published: Friday, 1/28/2011

Vote to privatize Ohio development looms

COLUMBUS -- A bill that would create a private entity to conduct Ohio's economic development functions is headed for the full House despite questions that it would allow decisions on spending of state money to be made behind closed doors.

JobsOhio, a top priority for Gov. John Kasich, would be a nonprofit corporation that would perform many of the job-creation duties of the current Department of Development but would not be subject to the same standards applied to most state agencies when it comes to open meeting, public records, conflict of interest, legislative oversight, and collective bargaining laws.

The House Finance and Appropriations Committee Thursday voted 19-11 along party lines to send the bill to the floor for a vote next week.

Mark Kvamme, the California venture capitalist serving as the department's temporary director at a salary of $1, said private meetings and negotiations are necessary if the state wants to maintain a competitive edge.

Mr. Kvamme expressed concern that even the final contracts that emerge from those meetings and negotiations will eventually become public.

The final contracts, however, would not become public until the JobsOhio board issues its annual reports.

"Let's say you cut a deal right now in January, how is it in the best interest of the public not to know the details of that deal until, say, March of 2012?' asked Rep. John Carney (R., Columbus). "My concern is that dollars are going to be spent over that year, whether it be tax incentives or others, and we get a year out and realize that, wow, that was not a good deal [or] there was some dealing amongst the board of directors.''

In some cases, the bill applies weaker versions of open government provisions to the new private entity. For instance, the JobsOhio board of directors must open its four meetings a year to the public, but the board could move into a closed session to discuss legal matters, business proprietary information, and business strategy.

Democrats offered a series of amendments to subject the new private entity to the same level of scrutiny that applies to most government agencies, but all were tabled by the Republican majority.

Under this bill, Mr. Kvamme must report back to lawmakers within six months with his recommendations of which programs under the current Department of Development would be transferred to the new private JobsOhio entity with their taxpayer funding and employees attached.

"What we're doing now is not working,'' said Rep. John Carey (R., Wellston). "We have a lot of people who are out of work or are going to lose their jobs. … We need to take a step, even though there are risks involved.''

Contact Jim Provance at: jprovance@theblade.com, or 614-221-0496.



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