Wednesday, May 6, 2009

ODOD incentive study gives recommendations for efficiency, effectiveness

The Ohio Department of Development (ODOD) has released the Ohio Economic Development Incentive Study (PDF), an in-depth evaluation of its tax credits, loans, grants, and workforce training programs.

Prepared by a task force of experts from the economic development community and local governments as directed by Section 701.10 of 2007's H.B. 119, the study finds that Ohio's incentives and tax structure are competitive with those of other states, but that opportunities to reduce those incentives through tax reform are limited.

Instead, the study says that the state can increase its competitiveness through "highly targeted" modifications to its current incentive programs.

"The study documents that Ohio can further enhance its competitiveness by improving its reputation as a state that provides exceptional service to companies considering locating or expanding in Ohio," the study says. "Doing so would enhance the quality of the Ohio Department of Development's interactions with companies and potential investors, and earn Ohio a reputation of being able to 'operate at the speed of business'."

The 69-page study recommends:

  • The simplification of annual reporting requirements and the broadening of eligibility for the Job Creation Tax Credit
  • The extension of eligibility for loans to include and minority-owned company that has already been certified by a federal or state public agency
  • The streamlining of offices administering the incentives and better coordination among agencies
  • The creation of a bipartisan working group to draft a detailed proposal for reforming tax incentives
"With a global economy that is more competitive every day, Ohio needs to ensure our business attraction and retention tools are responsive, effective, and easy for companies to navigate," said ODOD interim director Mark Barbash in a media release. "Many of the study's recommendations go hand-in-hand with our Department's strategic vision to grow jobs as well as Governor Ted Strickland's current budget plan to improve and accelerate Ohio's economic incentives."