Ohio enterprise zone highlights

1981: Ohio is in the grips of a recession, and the Reagan administration is slashing aid to cities. Legislators in Columbus mobilize to pass legislation that could create jobs in depressed urban centers without committing additional state funds.

1982: The Ohio Department of Development produces literature describing the new enterprise zones as "...depressed areas in which governments provide special tax incentives...to promote job creation and economic development." Eligibility is based on levels of unemployment, poverty, population decline, and abandoned structures.

1987: In a revised law, legislators add "vacant and undeveloped land" as an acceptable distress criteria. Counties with fewer than 150,000 residents also become eligible as "rural enterprise zones." Many greenfields now qualify for abatements.

1989: The definition of "rural enterprise zones" is changed to include counties of 300,000 persons or less; all but seven of Ohio's 88 counties are now eligible as rural zones. Enterprise zone activity explodes with investment patterns sharply resembling the outflow of jobs and capital from central cities. The data to verify this trend are conspicuously absent.

1991: Despite substantial evidence that Macedonia, Twinsburg, and Hudson Township have all become large magnets for enterprise zone activity, the Summit County Enterprise Zone Committee is sharply critical of intra-regional movement. Their report concludes that "...drastic changes need to be made by the Ohio Legislature in the enterprise zone program or it should be revoked entirely."

1992: The ODOD produces the 1991 Ohio Enterprise Zone Program Report, which is mandated by state law. The report is confined to glowing aggregate numbers, however, and none of the data are separated by region or zone. The report fails to document how many out-of-state companies the zones have attracted, overstates the number of new jobs created, masks job movements within regions. Despite its limited usefulness, the 1991 Program Report is the last piece of data the ODOD will produce before a "computer switch-over" effectively cripples its database.

1992: Ohio's enterprise zone law is scheduled to expire at the end of the year. The ODOD, Governor Voinovich, and several state legislators openly fret that Ohio will soon become uncompetitive with other states. Pertinent data is still unavailable and the law is renewed for one year to permit further study.

1993 through the winter of 1994: When confronted with the idea that enterprise zones should again be restricted to depressed urban areas, ODOD Director Don Jakeway utters his most memorableand regrettablequote: "You're assuming [companies] will go into Cleveland, Akron. It's a wrong assumption. It won't happen." In early January the law is extended for six more months.

March 1994: Rep. Dan Troy thinks he has the votes to pass a bona fide reform measure in the House. The Governor and ODOD continue their lobbying blitz, and several House members from prosperous districts are afraid they will lose their enterprise zones. Sensitive to their concerns, Speaker of the House Vern Riffe halts a floor vote until a less aggressive reform package can be hammered out. A compromise measure passes on March 31.

May 1994: Summit County releases comprehensive data on its enterprise zones. The Western Reserve Zone, covering Hudson, Macedonia and Twinsburg, has added 5,239 new jobs since its inception, or 88 percent of the total county gain. Of the 92 agreements in the Western Reserve Zone, 32 are given to companies from Cleveland or Cuyahoga County. During the same period, Cleveland's five enterprise zones generate only 27 agreements and 1,037 new jobs.

June 1994: ODOD is inundated with abatement requests prior to the sunset of the old law. Professor Ned Hill of the College of Urban Affairs at Cleveland State University releases a report on the new enterprise zone law. Although he concedes that small steps were taken to rein in intrastate competition, "...a good-sized factory can be driven through a prominent loophole."



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