Nearly two-thirds of the companies that got tax credits, loans and other economic incentives from the state of Ohio aren’t fulfilling their end of the deal, according to a report from the state auditor. That means companies have gotten millions of dollars in large and small incentives, but are failing to deliver on the promises they made to get those state dollars.
A total of 65% of companies that got state incentives between July 1, 2024 and June 30 fell short of job or payroll benchmarks last year. The annual review of economic development awards from the Department of Development was put into the state budget in 2021.
Republican Auditor Keith Faber said those deals are meant to deliver economic growth, and if they don’t, that’s money that could be used elsewhere or offered to other businesses.
"If you're going to agree to get state tax grants or state tax benefits to do certain things, you darn well better do those things or expect to pay the state back," Faber said in an interview. "The people who get those incentives have to meet the terms of whatever the incentive was, and that should just be a minimum expectation."
The report noted the compliance rate of the businesses based on jobs and pay. Some companies were compliant in one category but not the other. Two companies didn't create any jobs or pay. The auditor's report identified them as Surati, an Indian snack food company based in Canada that planned a site in Springfield and Truepill, an online pharmacy in Sharonville.
Faber said not all of these situations represent fraud, and that the Ohio Department of Development may have reworked some deals. But he noted 39 of 92 companies found non-compliant since 2021 haven’t been held accountable and could face clawbacks.
"The department may have gone back and renegotiated deals because of changes in circumstances," Faber said. "That still doesn't alleviate the business from having to meet the contract terms that it agreed to when it got the money or got the agreement to get the money."
Faber said the attorney general’s office and the Department of Development are investigating.
