Economist questions Ohio Tax Credit Authority approval of JobsOhio tax incentives for three projects

Ohio officials have approved tax credits for three economic development projects across the state.

The Ohio Tax Credit Authority approved the credits that JobsOhio and regional partners brought to the board during its monthly meeting. Officials contend the projects could lead to at least $65 million in new payroll and generate more than $13 million in investments across the state.

While lauded by Ohio politicians, John C. Mozena, president of The Center for Economic Accountability, is less optimistic.

“These announcements raise the fundamental question: Why?” Mozena told Ohio.news. “Ohio’s unemployment rate is below 5%, which is historically very low. Employers across the state are having trouble finding qualified employees for mission-critical jobs,” he said.

“In that kind of environment, it makes no sense for Ohio’s government to give a couple of businesses special treatment and make it easier for them to hire away other local businesses’ workers,” Mozena added. “Because, let’s be realistic, that’s what will overwhelmingly happen here. Very few of these jobs will be taken by people currently sitting around at home collecting unemployment benefits. Instead, they’ll be workers changing jobs.”

The authority approved two different incentives for Great Day Improvements, a direct-to-consumer provider and manufacturer of premium home improvement products that began as two Cleveland-grown brands: Patio Enclosures and Stanek Windows.

The first is a 1.743% 10-year Job Creation Tax Credit for a Great Day Improvements project in Walton Hills, Bedford Heights, and Twinsburg, near Cleveland.

“Great Day Improvements will become an anchor tenant and major participant in the successful redevelopment of the former Ford Stamping Plant into the Forward Innovation Center East,” Walton Hills Mayor Don Kolograf said in a release.

The company plans to create 412 full-time equivalent positions, resulting in $22 million in new annual payroll. As planned, the project involves reallocating business across various locations and acquiring a new facility to expand manufacturing capabilities.

The second is a 1.743%, 10-year Job Creation Tax Credit for the Great Day Improvements project in Sharonville near Cincinnati.

The company expects to create 583 full-time equivalent positions, resulting in more than $30 million in new annual payroll as a direct consequence of the expansion project. The proposed project involves adding shifts to the weekly production schedule to increase manufacturing capabilities.

“Great Day Improvements’ newest investments reinforce Ohio’s position as one of the nation’s leading building material and products manufacturers,” Republican Gov. Mike DeWine said in a release. “The company’s decision to expand in Ohio and bring nearly 1,000 new jobs reflects our statewide strength in manufacturing and a second-to-none workforce that supports multiple industries and applications. In Ohio, we just make things better.”

The authority also approved a 1.599%, nine-year Job Creation Tax Credit for the Picanova Inc. project in Obetz.

The company, a manufacturer of decorative and lifestyle accessories and producer of custom wall décor, expects to create 246 full-time equivalent positions, generating more than $13 million in new annual payroll as a result of its new location in Obetz. The proposed project involves relocating Picanova’s Arizona operation to Ohio.

“There’s nothing wrong with companies luring away their competitors’ employees, other than it’s not something that Ohio’s government should be subsidizing,” Mozena said.

“At the end of the day, companies like these make mission-critical decisions based on fundamental business factors,” Mozena said. “They try to figure out where it makes the most business sense to do business, and something like a small payroll tax break is going to play a very, very small role in that decision when compared to things like where their customers are, where their suppliers are, whether the workers are there, what the broader corporate tax and regulatory environment is like, whether they can rely on the power grid and road infrastructure, etcetera.”