The Associated Press August 19, 2011, 8:03AM ET

Private JobsOhio move will cost 211 state jobs

Gov. John Kasich said Thursday that his effort to privatize Ohio's job-creation functions will mean about 200 fewer state jobs as many parts of the state Department of Development are shut down and moved to the nonprofit JobsOhio.

In a report sent to state lawmakers by a Thursday deadline, Kasich proposed shifting a host of state functions to JobsOhio, including strategic business investment, loans and loan servicing, a portion of the grants and tax incentives program, and tourism.

The restructuring will mean 211 fewer public positions at the department, or 40 percent, by next year, the report said.

Development director Chris Schmenk said the actual number of layoffs will be "minimal" because many of the jobs will be eliminated through attrition or retirement.

Kasich announced his plans to create JobsOhio earlier this year. He maintains the semi-private nonprofit board of appointed business and education leaders can move more quickly to offer incentives and strike deals that keep jobs and attract new work to the state.

The governor told reporters during a teleconference Thursday that JobsOhio is helping lift "a malaise" that has plagued the state.

"When you take a look at an ability to meet your problems head-on, when you're able to solve your fiscal problems -- which we all know they have not been able to do in Washington, when you are able to have a Cabinet that is able to assist in solving common problems between the public and the private sector, and you do not overregulate or hassle people, you begin to develop a reputation as a state that is very interested in being business-friendly," Kasich said. "It's all about the jobs in Ohio and bringing things back."

Under the plan, the state would be divided into six regions, each with its own director. Local economic development groups in each region would partner with JobsOhio to spur job growth and keep employers from leaving the state. Much of the focus would be on technology and innovation.

Regional groups partnering with JobsOhio include Cincinnati USA Partnership; Columbus 2020; the Appalachian Business Council; the Dayton Development Coalition; Team NEO; and the Toledo Regional Growth Partnership.

For staffing and operating costs, the six regional groups would get $24 million over two years from the Third Frontier Commission. Ohio voters approved the money for the state's signature high-tech grant program.

The report, based on a review by TechSolve, recommended keeping the remaining divisions of the Development Department Offices that receive federal funds that cannot be accepted by a private board or that are doing an outstanding job where they are. The state agency would be renamed the Development Services Agency.

Rep. Matt Lundy, D-Elyria, criticized the Republican governor's job-creation strategy. Lundy said the governor has supported a collective bargaining overhaul that hurts middle-class families and noted that the state has seen its first increase in unemployment in 15 months.

"Now as the governor has detailed how Ohio's economic recovery will be left to a small group of unaccountable, private interests with the authority to award millions in tax dollars to whomever they see fit, I pause with great concern," Lundy said in a statement.

He said JobsOhio would be allowed to operate "in complete darkness" outside of state public records laws, which could open it up to corruption.

Development spokeswoman Katie Sabatino said JobsOhio will be held accountable.

"We're confident that its commitment to that mission, together with its legally-required independent audit, annual report, experienced board of directors, legally-binding contract with the state, contract enforcement and oversight from DSA, as well as the diligence of passionate legislators such as Representative Lundy will serve their intended purposes and ensure that JobsOhio stays focused on its mission of job creation," she said.

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Associated Press writer Ann Sanner contributed to this report.


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