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Tax Panel Weighs How to Boost Minority Hiring
YOUNGSTOWN, Ohio -- The city panel that reviews tax breaks granted companies under the enterprise zone program wants to put more teeth into future agreements so more city residents, minorities and women are hired.
The panel meets annually to review the extent companies are complying with their agreements to hire residents, women and minorities in return for abatements and other tax breaks.
“I often find that it’s compelling to look at some of the numbers throughout the history of this program, considering what our region and this country’s been through,” said Mahoning County Auditor Michael Sciortino, of the Great Recession and its aftermath.
By statute, Sciortino serves as chairman of the tax incentive review council. From 1992 through the most recent reporting year, the abatement program saw 120 companies invest nearly $150 million in real estate, nearly $500 million in personal property and create or sustain nearly 2,000 jobs.
The council reviews whether companies have kept their promises to hire, and invest under the enterprise zone law. Although the panel lacked a quorum at the Aug. 7 meeting, those present discussed the results of the annual report and what steps should be taken at a future meeting that attracts a quorum.
In 2012, companies that have enterprise zone agreements reported they collectively employ 1,280 and they hired 234 new employees last year, said Yvonne Mathis, president and CEO of The Mathis Group. Under a subcontract with the Youngstown Area Development Corp., the Mathis Group works with the city on tax abatement issues.
Companies operating under current agreements reported total investment in real and personal property of $208.6 million through last year, compared to the $130.9 million originally committed.
Of the 1,280 employees, 227, or 18%, are residents of Youngstown. Minorities employed at those companies totaled 107, or 8%, a number Mathis termed “largely unchanged” over the past few years. By sex, women constitute 14% of the employees at those companies, or 177. “Those numbers have increased somewhat since [the previous] year but not appreciably,” she adds.
Of the companies with enterprise zone agreements, 14 with a total of 1,182 employees were without either a single city resident, minority or woman in their workforces. Three stood out. Mathis said: Exterran Energy Solutions and M-7 Technologies employed no city residents, and Rudick Forensic Engineering Inc. hired no employees last year.
“I think most of the companies are putting forth an effort based on these numbers,” Mathis said. She plans to go out with William Carter, executive director of Youngstown Area Development Corp. and a member of the city human relations commission, to meet with companies that have fallen short on meeting their hiring goals.
One company Mathis said she wants to meet with is Exal Corp. Last year, the company, which manufactures aluminum containers for a variety of consumer products including beverages and spray cans, hired 58, just five of whom are city residents, three are minorities and one is a woman.
It should be a priority to meet with these companies to determine their challenges and find ways to work with them so they hire more residents, minorities and women, said T. Sharon Woodberry, city economic development director.
Agreements call for companies to put forth their “best effort” and they are supposed to submit their job postings to the state of Ohio’s One Stop System. The nearest One Stop is operated by Mahoning and Columbiana Training Association, which the city identifies as the “preferred source of recruitment,” she said.
“But clearly there are some gaps” because of an inability to follow up, Woodberry added. She also suggests postings could be forwarded to YADC.
“I would like to explore how tightly we can engage the contract to specify certain things,” Sciortino said, such as being notified when positions are advertised.
“Maybe we can put a bit more punch in the contract … We have to balance the equities here but short of terminating [an agreement], what is a consequence for the company?” he asked.
While acknowledging the investments companies are making, “Something needs to be done on the hiring end,” he said.
“I would like to explore how far we can go in the agreement,” he adds, a subject to be discussed with city law department.
Carter called for putting in place a process that involves the human relations commission “that would be beneficial to companies that are locating in the city.”
Companies are hiring individuals with the skills they require to provide the services they want, skills that members of the targeted groups don’t always possess, Carter noted.
“We’re looking at going in the door with these companies and being able to put together a process that would prepare the minority and female communities” to have the backgrounds required, he said.
EDITOR'S NOTE: This story appears in our MidAugust 2013 print edition, published this week.
Copyright 2013 The Business Journal, Youngstown, Ohio.
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