JobsOhio Seeks Early Extension of Liquor Profit Agreement

BY MATT URBAS

Article Originally published here

STATEWIDE - JobsOhio is a private nonprofit corporation that came into existence during the Kasich administration 2011. Most states have a department that works on "economic development", using state funds to do perform various functions under that nebulous term. Typically these include using grants or loans to companies to invest in new capital expenditures in the state, with the hope of creating new jobs or luring them from across state lines.

Prior to 2011, this was a function of the Ohio Department of Development. In addition, the state's sole control over liquor sales was also under the purview of a state agency. The idea behind JobsOhio can broadly be outlined as follows: the state of Ohio turned over operation of liquor sales over to this private nonprofit; a subsidiary called the "JobsOhio Beverage System" now runs the state liquor agencies across the state. The period of the lease was set at 25 years (2013-2038) and for this privilege, JobsOhio agreed to pay the state $1.51 billion dollars. The profits earned from the sales of liquor are then used by JobsOhio to engage in the aforementioned "economic development". The state continues to collect all the taxes on liquor it normally would, and additionally gets 75% of the profits in excess of 3% growth over the prior year.

This arrangement appeals to Republican politicians because it enables them to claim that no tax dollars are being used to fund the "economic development" activities. JobsOhio's status as a private entity gives it the veneer of independence from the stink of being a government operation, although members of JobsOhio's Board of Directors are all appointed by the governor.

JobsOhio is also explicitly exempt from public records requests, and critics have long held that the this lack of transparency means there is little oversight in how grants are awarded, either from elected officials and none from the public at large. With Elon Musk and the Department of Government Efficiency (DOGE) exposing waste and cancelling contracts with nonprofits at a rate never seen in government, and Robert F. Kennedy advocating for a “radical transparency” in government and the nonprofits who get access to massive sums of government money, is JobsOhio now an anachronism, a creature created in a climate of blind trust in public-private partnerships quickly vanishing in favor of demands for actual accountability to citizens?

Extension Sought

In the previous General Assembly's budget that was passed in 2023, language was inserted during the bill's time in the Senate authorizing a 15-year extension of the lease agreement, which would grant the JobsOhio entity the continued exclusive franchise rights to liquor sales and the lion's share of the profits through the year 2058. The extension must be approved by the State Controlling Board, a 7-member panel consisting of the Director of the Office of Budget and Management (a gubernatorial appointee), three Senators, and three members of the House of Representatives.

This issue has been elevated in the public eye very recently by a public relations blitz by Attorney General and gubernatorial candidate Dave Yost, who earned headlines from mainstream media as well as independent sources such as the Ohio Press Network with a letter urging a delay of the extension. It should be noted that the 15-year extension was on the agenda twice in the summer of 2024 and Yost issued no such letter or appeal at that time. Representative Jay Edwards, who is no longer in the General Assembly due to term limits, was a vocal opponent of JobsOhio and the extension of the agreement last year, and the decision on approval was deferred at least twice.

For its part, JobsOhio makes bold claims about its effective use of those liquor profits that would otherwise be going into the state's General Revenue Fund. "JobsOhio has been responsible with its dollars and bringing a return on investment for the people of Ohio," JobsOhio spokesman Matt Englehart said last year. "For every dollar JobsOhio invested into its projects, $17 is returned in taxes and fees to Ohio's treasury." JobsOhio also argues that the nature of the long-term investments the organization would like to enable means that the 15-year extension is necessary to "bring certainty and flexibility for long-term economic development projects."

JobsOhio has been scrutinized for some of its projects by critics. An audit by Deloitte & Touche found that three board members had financial interests that overlapped with 4 projects funded by JobsOhio, with two of those projects failing to include a disclosure of conflict of interest. Fuyao Glass America, a subsidiary of a Chinese glassmaking giant, was given an incentive package including a 75% tax credit worth up to $9.69 million by the state in a deal Jobs Ohio touted heavily, but the company’s Dayton-area manufacturing plant was one of several locations raided by the Department of Homeland Security in 2024 in an ongoing investigation into money laundering, human trafficking, labor exploitation, and financial crimes.