Ohio gov outlines private jobs agency's next moves

JULIE CARR SMYTH Associated Press Published:

COLUMBUS, Ohio (AP) -- Ohio officials have agreed to transfer rights for 25 years to Ohio's lucrative wholesale liquor business to the state's new private job-creation entity, JobsOhio, in a deal worth $1.4 billion.

Ohio Gov. John Kasich announced the deal during a teleconference with reporters Monday, as part of a package of changes he says are needed to bring his economic development vision to life. He was joined by JobsOhio investment chief Mark Kvamme, and the state directors of budget, commerce and development.

Kasich said the panel of business experts comprising JobsOhio has already begun showing results.

"They've made some real progress in terms of renewing economic development in Ohio," the governor said.

Under the transfer agreement struck by the state budget and commerce departments, JobsOhio will issue bonds backed by future liquor profits, pay the state a lump sum and ongoing annual payments, and use proceeds from each year's liquor sales to fund incentives for businesses to relocate to or retain jobs in Ohio. State liquor profits totaled $247 million last year, and sales have been growing.

Kvamme said the bond sale will take place during the first quarter.

Patrons of state liquor stores shouldn't notice a difference, said state Commerce Director David Goodman.

Under a contract up for approval Monday, the state will be paid by JobsOhio to continue its existing role buying and distributing liquor to private retailers. The Division of Liquor Control will also retain its regulatory role.

Licensed retailers sell about 1,500 liquor products a year through 450 outlets, the department estimates. Liquor sales last year totaled nearly $794 million. Spokesman Matt Mullen said sales figures have been on the rise in recent years, though volume has not.

"We're really not drinking more, customers are drinking better (quality liquor)," he said.

State Budget Director Tim Keen said the liquor deal was complex, and took months to finalize. He said he is confident it is fair to Ohio taxpayers.

"Our objective has been to protect the interests of the state, both financial and otherwise," he said.

As a follow-up to getting financial details ironed out, a bill fine-tuning elements of JobsOhio's operations is expected to be introduced within the next couple of weeks.

The bill gives the Ohio Department of Development a new name: the Ohio Development Services Agency. Kasich said the JobsOhio concept grew in part out of his belief that the department had become "calcified."

Director Christiane Schmenk said the legislation will propose giving JobsOhio chief investment officer Mark Kvamme, a Kasich friend and Silicon Valley venture capitalist, a spot on the Ohio Third Frontier Commission, Ohio Tax Credit Authority, and a newly created Tourism Advisory Board.

Schmenk said the administration has not requested the bill be treated as an emergency, which will allow it to undergo detailed hearings in the Ohio House and Ohio Senate.

She said the privatization effort has left the Development Department 30 percent to 40 percent smaller than it was a year ago, when it had 500 employees.

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