American communities have always competed for economic advantage.
In the 19th century, St. Louis and Chicago competed to attract the transcontinental rail line: Chicago won, and it made a lasting difference.
Two centuries later, in an era of global markets, capital consolidation, and accelerating technological change, public investment in economic development has grown, but the return on investment is dubious.
For example, Ohio’s poverty rate continues to outpace the nation. In real dollars, wages are lower than they were 40 years ago.
These days, Ohioans are busy collecting signatures for a ballot issue to stop the state from incentivizing certain deals. It’s time for new strategies.
Maybe JobsOhio was experimenting with new strategies by dabbling in podcasts.
Former Ohio Gov. John Kasich, expressing his disappointment in the “Cartergate” scandal, said on social media that JobsOhio has lost its way and that the quasi-private economic development entity — funded by the liquor profits tax — should be about “creating jobs.”
But how do you do that in the 21st century?
Maybe Gov. Kasich meant that JobsOhio should stick to the traditional competitive approach to economic development, honed in by the intertwined relationship between utilities and government.
Utilities are not a public entity, but they provide a public good. In the 1970s, overly optimistic projections of energy shortages spurred the construction of massive nuclear plants.
Instead of growth, markets shrank as old factories were closed and production was moved offshore.
In Washington State, an enormous utility project defaulted on $2.5 billion in municipal bonds. Ohio’s utilities, building the Davis-Besse and Perry Nuclear Power Plants, faced the same fiscal challenges.
In the 1980s and 90s, Ohio officials went into hyperdrive to bolster utilities’ sagging industrial customer base.
The ostensible public purpose was to protect the modest shareholders of public utilities and investors in the municipal bonds that supported them (the ‘widows and orphans’ argument).
In fact, utilities maintained a file room in the heart of the Ohio Department of Development’s Business Development Division, where they planned taxpayer-financed “smokestack chasing” trips with state employees, legislators, and/or administration officials.
They went to Los Angeles, Pennsylvania, Japan, and everywhere in between.
They offered taxpayer-funded incentives to attract ‘footloose’ factories hunting for production sites with the lowest cost of land, labor, and operations.
That utility financial crisis passed, but investments in “smokestack chasing” grew larger in state and local government budgets.
As automation eliminated well-paid manufacturing jobs, states engorged subsidies, slashed taxes, and squeezed public services.
Ohio wasn’t alone. It’s still the way the game is played in a “race to the bottom” as states try to outdo one another by cutting taxes for corporations and gutting public services.
Over time, Ohio’s policymakers tried new strategies, but the benefits of these strategies are largely obscured by inadequate accountability.
Reporting relies on economic modeling shaped by consultants’ assumptions or on promises of job creation that were made, but not necessarily kept.
Ohio Auditor Faber’s 2025 audit of the Ohio Department of Development found that in two-thirds of the cases reviewed, beneficiaries failed to deliver contractual obligations for job creation and/or capital investment, often without consequences.
The metrics for understanding the return on investment of economic development are ill-defined. However, we do know that Ohio’s rankings on indicators of well-being, such as poverty, median household income, population health, and even infant mortality — the international metric for quality of life — are mediocre or poor compared with other states, and that they vary widely from neighborhood to neighborhood and community to community.
Too many families struggle, even as legislators authorize ever bigger tax incentives for developers and smokestack chasing.
Growing headwinds confront traditional economic development efforts.
Ohio’s “Megaproject” incentive subsidized the $28 billion deal for Intel, the faltering semiconductor manufacturer whose half-built factory sits idle in the fields of rural central Ohio.
In the wake of Trump’s tariffs, Honda’s incentive-fueled electric-vehicle production is headed to Canada because of shifting federal policy.
The long and cozy relationship of Ohio’s lawmakers, regulators, and utilities culminated in HB 6, a bailout for failing nuclear power plants (the same power plants mentioned earlier) that led to the biggest bribery scandal in the state’s history.
And today, Ohioans are gathering signatures to ban the mega-data centers that have garnered millions of dollars in public incentives.
Ohio’s next governor must harness all the state’s resources, including JobsOhio, under a coordinated, clear mission focused not on the economic conditions of the past but on the economic needs of the future.
Our future and well-being will depend on uniformly resilient and sustainable communities with living-wage jobs, good schools, safe streets and roads, clean air and water, and other essential public services, including a strong social safety net to protect families in today’s turbulent, fast-changing economy.
To get from here to there, all branches of state government must work together under a unified mission for improving the lives of Ohioans.
The work must be transparent and free of ethical violations and scandals.
The measures of success must be improvement in key indicators of population well-being.
Our next governor can and should make that happen.
This story is republished from the Ohio Capital Journal. View the original article.
