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Other States Have Tried Kasich’s Plan To Privatize Job Creation, With Unimpressive Results

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"Other States Have Tried Kasich’s Plan To Privatize Job Creation, With Unimpressive Results"

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I’ve already noted that Ohio gubernatorial candidate John Kasich’s (R) contention that his tax cutting proposal will lead to job growth is contradicted by Ohio history (though the plan will double his state’s budget deficit). But Kasich has a second prong to his jobs plan — transforming the Ohio Department of Development into a non-profit corporation called JobsOhio — and if other state’s experiences are any indication, it too will be a dud when it comes to creating jobs.

The idea is that JobsOhio would be run by businesspeople and would provide advice and assistance to companies looking to locate in the Buckeye State. “We are now creating an independent operation called Jobs Ohio, which is going to take private-sector people working aggressively to work with businesspeople to help them or to remove barriers, or to help them find financing,” Kasich told Real Clear Politics.

But as the Columbus Business Journal pointed out, Michigan tried a similar system, with underwhelming results:

Former Michigan Gov. John Engler, a Republican, and legislators in that state took a similar step to what Kasich is proposing in 1999, when they replaced the government’s jobs commission with the Michigan Economic Development Corp., a quasi-public agency governed by a board drawn from the private and public sectors…The Mackinac Center for Public Policy did a study in 2009 that found deals made from 1995 through 2004 by the Michigan Economic Development Corp.’s tax credit authority were expected to produce 61,043 jobs, but 17,971 were created.

“MEDC has presided over one of the most significant collapses of economic well-being in state of Michigan history,” said Michael LaFaive, a director at the Mackinac Center for Public Policy.

Florida also created a private economic development council, which the State Comptroller found “treats its top executives to bonuses and lavish travel while making grants to businesses whose officers sit on its boards.” A program review by the Florida legislature found that the council “exaggerated its role in creating jobs particularly in distressed urban and failed to provide adequate economic development services in rural areas.”

West Virginia used to operate a private development agency, but actually switched back to a state-run agency. Plus, as the Columbus Business Journal also noted, the Ohio Department of Development has other important tasks — such as administering work-force training programs — and Kasich has not explained which entity will take those over.

Much like California gubernatorial candidate Meg Whitman (R), Kasich seems to believe that cutting taxes in a vacuum and ditching regulations is the key to booming job creation. Unfortunately, reality hasn’t conformed to their rhetoric.

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