Ohio ranks third in the nation, tied with Texas, for the number of “megadeals” awarded companies in tax subsidies, according to a new report by nonprofit Good Jobs First.
State and local governments have been awarding economic development subsidy packages to corporations more frequently than before, Good Jobs First said in releasing findings of a study into tax incentive practices in the U.S. Tax credits and abatements are meant to encourage investment and/or the creation and retention of jobs.
The group identified 240 tax incentive packages that cost at least $75 million a piece over the past 35 years. The cumulative cost of these deals is more than $64 billion, Good Jobs First said, a Washington, D.C., think tank studying public economic development issues.
Eleven deals identified cost $1 billion or more, Good Jobs First said. Since 2008, the group also found the average frequency of “megadeals” per year has doubled compared to the previous decade.
Michigan has awarded 29 such deals, New York has done 23, and Ohio and Texas has done 12 each, according to the report.
“Despite their high costs, some of the deals involve little if any new-job creation,” said Good Jobs First Executive Director Greg LeRoy in a statement. “Some are instances of job blackmail, in which a company threatens to move and gets paid to stay put. Others involve interstate job piracy, in which a company gets subsidies to move existing jobs across a state border, sometimes within the same metropolitan area.”
Ohio companies that received “megadeals”
*Includes single projects in last 30 years that received tax incentives package of more than $75 million
1997: Chrysler, Lucas County, $232 million for automobile assembly plant
2002: Ford Motor Co., Lorain County, $83.4 million for new assembly line at auto plant
2003: Convergys, Hamilton County, $196.4 million for business services corporation
2004: USEC, Pike County, $125.1 million for uranium enrichment plant
2004: DHL Worldwide Express, Clinton County, $114.7 million for expansion of air cargo hub and packaging sorting center
2007: Goodyear, Summit County, $152 million for headquarters retention
2007: Amylin Pharmaceuticals, Butler County, $117 million for expansion of biotech manufacturing facility
2008: General Motors, Trumbull County, $82.1 million for expansion of automobile assembly plant
2009: GE Aviation, Hamilton County, $121 million for improvements at aviation manufacturing complex
2009: Eaton Corp., Cuyahoga County, $85 million for manufacturing company headquarters relocation within state
2011: American Greetings, Cuyahoga County, $146.1 million for corporate headquarters retention and regional relocation
2011: Marathon Petroleum, Hancock County, $78.5 million for oil company headquarters
SOURCE: Nonprofit Good Jobs First report released June 19