Watchdog: It’s great that Ohio’s Intel incentive deal has been inked, but there are holes

By: - July 14, 2023 5:00 am

NEW ALBANY, OH — SEPTEMBER 09: Intel CEO Pat Gelsinger, Gov. Mike DeWine joined by politicians and business leaders break ground ceremony for Intel’s new semiconductor manufacturing site, September 9, 2022, in Licking County, Ohio. (Photo by Graham Stokes for the Ohio Capital Journal / Republish photo only with original story)

A watchdog group is praising state officials for signing an agreement with Intel to make sure the chip manufacturer lives up to its promises in exchange for huge taxpayer incentives. But, it says, the deal doesn’t go nearly far enough. 

Intel announced in January 2022 that it would build an enormous semiconductor plant in New Albany, northeast of Columbus. It said it would spend at least $20 billion to create at least 3,000 jobs as early as 2025, and employ 7,000 building the new facility.

It was great news for Central Ohio, but state officials offered Intel big money in exchange. Taxpayer incentives are expected to top $2 billion — the largest such package in Ohio, The Columbus Dispatch reported last year.

That raises concerns about what will happen with that money if Intel doesn’t live up to its promises. Are the protections adequate to ensure taxpayers will get their money back?

On Wednesday, watchdog group Policy Matters Ohio released a statement critiquing an agreement governing $600 million in “onshoring” incentives that was signed on June 21. Among the group’s issues is that the agreement doesn’t cover another $700 million in taxpayer-financed incentives.

“Most importantly, the agreement doesn’t cover about $400 million Ohio is spending on roads and other infrastructure to support Intel, so if the company doesn’t follow through on its plans, there will be no way for the state to recoup those funds,” the report said. “Nor does it cover another $300 million the state is spending to build a water reclamation facility for the company.”

It added, however, that the Ohio Department of Development said it plans to cover those incentives in a separate agreement.

In addition, the agreement gives Intel what Policy Matters believes is too long a period to show that it’s meeting its promises to create a certain number of jobs. The company says it could be making chips at the new factory by 2025, but it doesn’t have to show that it’s meeting its promises until 2028. Only at that point can Ohio start trying to claw back taxpayer money. 

“The state money will go to Intel next year, within two years of when it began construction,” the Policy Matters report noted.

Also, Intel has committed to filing annual performance reports beginning in March 2024 that will include the number of employees it has and list the counties in which they live. Policy Matters said the company should also provide information on race and gender — and it said the penalty for not reporting is grossly inadequate.

“Laughably, the agreement would fine Intel just $500 a month if it doesn’t file the report, a pittance for a company investing $20 billion,” the report said.



Our stories may be republished online or in print under Creative Commons license CC BY-NC-ND 4.0. We ask that you edit only for style or to shorten, provide proper attribution and link to our web site. Please see our republishing guidelines for use of photos and graphics.

Marty Schladen
Marty Schladen

Marty Schladen has been a reporter for decades, working in Indiana, Texas and other places before returning to his native Ohio to work at The Columbus Dispatch in 2017. He's won state and national journalism awards for investigations into utility regulation, public corruption, the environment, prescription drug spending and other matters.