Saving Lives is Top Priority. Saving Jobs Comes Next.
Hicks Partners surveyed business leaders across Ohio regarding the impact of COVID-19 on their operations and what policy initiatives may help them overcome both near and long-term challenges resulting from the crisis. Preliminary results from more than 70 businesses show widespread disruptions among nearly 96% of respondents. While it is too soon to know the full impact of the crisis, respondents are clearly seeking flexible, low-interest loans for working capital, in addition to emergency grants.
The results of this survey should help inform Ohio policymakers as they consider economic responses to the crisis. Increasing amounts of data will begin to flood in and while there is no instant fix, there are a number of policy pitfalls, missteps and dead ends that will waste precious time in response to the crisis. While the initial health crisis may have been unavoidable, an ineffective policy response to the economic crisis is avoidable. The state is urged to direct relief to where it can be best used and is most needed, and it is urged to act expeditiously.
The immediate need for working capital support can be delivered through a variety of means including, flexible, low-interest loans, grants, changes in tax policy and forgiving current government loans on the books. Survey respondent expressed concern that incentives need to be accessible to businesses of all sizes, which means complex applications and delayed decisions will be a hindrance while employers try to weather this crisis.
As such, additional policy ideas have been included below to encourage a strong and immediate response from Ohio’s leaders.
Extend all personal and business tax deadlines; waive tax penalties and interest; enact “tax holidays” to spur demand; covert JCTC into JRTC for existing economic development projects; double BID limit for 2020-2021 to help liquidity and recovery.
All economic development organizations with available capital (i.e. JobsOhio, DSA, county and city ED agencies, Port Authorities, etc.) should consider creating emergency working capital loan funds for all companies; Ohio Third Frontier Commission should provide emergency loans to previous award recipients. To be most impactful, loans should be long-term (5-7 years) with low interest rate (1.5% recommended), interest-only for first 12 months, no pre-payment penalties, simplified no-fee application and fast review, approval and closing.
Provide automatic 12-month delay in all existing economic development incentives requirements; extend time period for permits; relax certain regulatory obligations for inspections, reporting, and testing so long as no harm is caused to human health or the environment.
Ohio should consider expanding a statewide emergency procurement process to help local health departments, hospitals and medical facilities find and procure personal protective equipment (PPE), medical supplies and needed services. In addition to the statewide call-to-action to urge businesses to immediately provide needed services or PPE, the state should identify manufacturing capability which can be retooled to help respond to the crisis. A streamlined procurement process could also allow expedited approval for companies that may not have traditionally done business with government entities. State financial support to help companies “scale” to meet demand should be considered.
Healthcare leaders and front-line healthcare professionals are doing a tremendous job all across Ohio. The state is fortunate to have experienced leadership guiding us through these troubled days, and we know that several of the recommendations contained in this memo are under consideration or implementation will be underway soon. Ohio’s immediate needs continue to be focused on the health of our fellow citizens, but focus will soon expand to protecting and rebuilding our economy.