The “new” Ohio development department looks for its focus

Courtesy of the Associated Press

February 24, 2014

Now that nonprofit JobsOhio leads the state’s efforts on business attraction and job creation, the “new” Ohio development department is retooling. Its focus has shifted to small business services, retention of existing businesses, and holding companies accountable for tax breaks, Director David Goodman told this newspaper in a one-on-one interview.

Before JobsOhio was created in 2011, the former Ohio Department of Development had grown to become a cumbersome agency. Development offers more than 70 programs for businesses to navigate, Goodman said. The department, which previously led business attraction and retention efforts, had lost its focus over time, Goodman said.

Follow-up on companies receiving tax credits was nonexistent prior to this administration, Goodman says.

Goodman, former director of Ohio Department of Commerce and former Ohio senator, was appointed in April 2013 by Ohio Gov. John Kasich to lead the since re-named Ohio Development Services Agency. He’s the fourth development director appointed by Kasich.

Goodman in 2013 put in place a new internal initiative, One DSA, so named to get staff to function as a singular agency, not as separate programs.

Here are more excerpts from our February interview, while Goodman visited Cincinnati.

Q: Tell us about the “new” development department.

Goodman: “Back in the early ‘70s, James A. Rhodes created the department of development and I would say the department of development looked a lot like JobsOhio does today. It was about going out and trying to find businesses to relocate in Ohio, helping large businesses expand and grow, providing incentives to make sure that businesses stay in Ohio as opposed to leaving the state. Over the years, a lot of different programs were created and put within the department of development and I would say that it became 70-odd programs operating programmatically, but not as one big development agency.”

“It lost its direction or focus.”

“At Development Services Agency, we work very hand-in-hand with JobsOhio. I would say that I’m over in their offices about three times a week and there are people from JobsOhio who are at DSA on a regular basis working on various projects.”

“This is all very new. There hasn’t been this kind of interaction between departments ever. It’s a good holistic approach to how you can best serve the general public.”

Q: What does the ODSA do now that JobsOhio is created?

Goodman: “Really JobsOhio is doing this for large companies. We are still here serving small business which is 90 percent of businesses in the state of Ohio.”

“We provide incentives and we provide assistance via guidance and counseling to small business throughout the state.”

Q: We have two things going on. Maybe an over-burdensome, over-bureaucratic development department. Also, we created JobsOhio and then shifted some efforts there. How has the ODSA reorganized?

Goodman: “We’re all about accountability. We are actually digging out from a lot of loans and incentives that (were) provided in the last administration… that didn’t have the processes in place to monitor and work with those customers, constituencies to make sure that when we provide an incentive, they’re accountable to make sure that they created those jobs.”

“We’re putting in place processes and clawback processes, and work-out processes that had never existed before.”

“We’re about accountability, but we’re also about working with these companies so that number one, we don’t get to them after they go under, but we get to them when they see signs of trouble to renegotiate and work through the incentive process.”

“It’s kind of going from nowhere to where we are.”

“We have a bunch of menu items we can bring to bear to provide incentives to businesses to come to Ohio. Some of them are JobsOhio programs, some of them are state of Ohio programs.”

“We have to agree to it at the end of the day. No tax credit is provided without it going through the Ohio Tax Credit Authority, which is an independent body I’m a member of.”

“There’s still a lot of checks and balances before any of these incentive programs are utilized. It’s actually more than it ever has been before.”

“Truth be told, back in the day, before JobsOhio, someone like me was actually providing the decision making, the discretion on what was funded and what wasn’t funded. I answer to obviously the general public, but I work at the pleasure of the governor of the state of Ohio. He has never put any political pressure on me to make any decision but to do the right thing, but that is part of the structure that could actually exist.”

“JobsOhio has a separation from all those political pressures that could exist because they answer to a board of directors which is an independent board of directors. People on that board are people that have incentives and interests that aren’t necessarily just worrying about what the governor’s wanting or not.”

“…they’re people that have large businesses and shareholders and constituencies. They’re business people and they want to make sure decisions are made under good business considerations.”

“The people that work at JobsOhio are insulated from politics unlike someone like me. So you’ve got an added protection at JobsOhio that never existed before.”

“We have put in place metrics and return on investment considerations that never existed before. We have a calculator that reviews the cost of these incentives and the revenue that would be generated by the jobs created and we make sure that the deals we make with these businesses give a solid good positive return on investment, bang for the buck for Ohioans.”

“There’s more eyes looking on these projects than ever before.”

Q: How do you follow up?

Goodman: “Back before this administration had responsibility for it there was no follow up. So businesses could very well not exist anymore and no one would know and no one was keeping track of it.”

“We now have a systematic process for reaching out to all these companies on a regular basis to discover how things are progressing. They have reporting requirements.”

“We are even sending people out to the locations to make sure that they are where they say they are.”

“Are we completely there to where I’m fully comfortable with our processes? We can improve and we’re going to continue to improve.”

Q: What would you say you do for existing businesses in Ohio besides incentives?

Goodman: “We have our export assistance program. This is a… revenue stream for the state of Ohio that I think is under-utilized. We have a lot of businesses I think that are not taking advantage of foreign markets because they are potentially intimidated or think that there’s a lot more complexity to doing it.”

“We have export assistance programs… that do outreach to show small growing businesses how to reach foreign markets.”

There are “small business development centers, (for) folks that are trying to grow their business and have questions and need some advice and counseling how to do it.”

“What I discovered is that we have over 70-odd programs at the Development Services Agency. Some of it’s in community development, some of it’s business development, small business, minority business.”

“When I got here, I looked at the list of programs that we have. I read them over and I couldn’t quite understand what they were and the language that was being used wasn’t clear to me, and I would look at one and I’d look at another and they seemed like the same thing and I’d get confused.”

“I thought about the fact that we have customers that probably do the same thing. They think we’re a development services agency, and they can’t utilize our programs because they don’t know they exist or they don’t understand because it’s not in a readily available fashion.”

“I’ve developed a program that is now an evolutionary process called One DSA, getting us to function as a singular agency, not 72 different programs.”

“We have very smart, experienced people that work at the development services agency, but they’re very focused on their programs. They’re not thinking about how it all fits together.”

Q: Is your goal to reduce the number of duplicate programs? What is the end goal?

Goodman: “The end goal is to be accessible to our constituency, to our customers. Are there some programs that are duplicative, are there some programs that may or may not be successfully administered or necessary? We’re looking at that.”

“Are there some that could be in other departments because they don’t really fit with what our overall focus and direction is? We’re looking at that as well.”

“We are evaluating all of our programs and figuring out how they all fit together.”


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