By Phillip Collins

Times Community Newspapers

pcollins@tcnewsnet.com

After calling for an investigation into the use of federal stimulus dollars to subsidize the relocation of NCR from Dayton to Georgia, Congressman Michael Turner (R-Ohio-3) received an official response from Vice President Joseph Biden last Wednesday.

According to Turner, Biden stated that stimulus funds “would not be granted” to relocate already existing jobs from one state to another.

Turner voiced his satisfaction with Biden’s response.

”This is a victory,” Turner said. “Biden was responsibility in the administration of overseeing stimulus dollars and when we had Office of Management and Budget (OMB) Deputy Director Rob Nabors in front of our oversight, I told him that I had sent a letter to Obama and had not received an answer. He said he would try to get with the administration and the appropriate responder is the vice president.”

In a letter dated July 14, Biden stated, “…the use of federal recovery funds for the potential relocation of jobs from one state to another is not an approved use of Recovery funds.”

According to Turner, this statement provides a legal precedent that can be cited should other states attempt to use stimulus funds to entice companies to leave their respective regions.

“I think this a precedent for all communities,” Turner said. “If this comes up again, then this is an advisory for all of the states. If it’s learned that they’re trying to do what Georgia was doing, then they’ll be stopped.”

National Cash Register (NCR) abruptly announced plans to relocate to Georgia on June 2. Starting in July, NCR’s worldwide headquarters began moving to Duluth, Ga. Meanwhile, the company started transplanting its manufacturing operation in Columbus, Ga. By the time it’s over, the move will cost Dayton more than 2,100 jobs.

NCR’s decision to relocate came as a shock to the Dayton community, which had had very little discourse with the company in the months preceding the announcement.

That shock was compounded by the revelation that Georgia used money from the American Recovery and Reinvestment Act (ARRA) to facilitate the NCR deal. The city of Columbus, GA., was planning to use $5 million in federal stimulus funds to pay for the purchase of a former Panasonic building to accommodate NCR’s coming manufacturing operation. In turn, NCR would lease the building back to Columbus. Had Georgia been allowed to use stimulus dollars in such a manner, it would have meant that Ohio taxpayers would be subsidizing the relocation of NCR.

But, according to Turner, statements in Biden’s July 14 letter could provide a legal bulwark against such usage of stimulus funds.

Elaborating on the prohibition on using federal recovery money to subsidize corporate relocation, Biden wrote, “If the City of Columbus applied for Recovery Act funds to purchase a facility to house NCR to facilitate the relocation of jobs from Ohio to Georgia, the request would not be granted.”

Turner said, “Biden’s response gives communities a tool to stop monies from being used in those kind of projects.”

The NCR controversy is the latest in a series of stimulus missteps that have occurred in Ohio. Other include:

• The use of $1.2 million to “save” the jobs of Columbus police recruits who will probably be laid off anyway in 2010.

• The allocation of $1.1 million to treat groundwater at the Cold War-era RMI Extrusion Plant, which was already ruled safe in 2007.

• The creation of a $57 million slush-fund to finance the study of projects that may never be constructed.

Turner believes that such missteps stem from intrinsic flaws within the stimulus bill.

“I think this (the NCR case) touches on the inherent problem of the stimulus package,” Turner said. “This is one of the reasons I voted against it. It is undefined as to how the monies can be used. It gives broad discretion to states. With the size of the stimulus, you can’t have the vice president playing traffic cop over every expenditure. But, there are not sufficient rules and regulations and restrictions to stop the abuses.”

The NCR controversy also arose concurrently with the unfolding debate over a second stimulus package. Proponents of such a plan have included prominent investor Warren Buffet and economic advisor Laura Tyson. Yet, given the recent series of stimulus missteps in Ohio, Turner contends that a second stimulus package would be far from desirable.

“I would hope that proponents of a second stimulus would realize that the out-of-control government is going to cripple our economy and they need to stop,” Turner said. “The thing that amazes about all of the federal borrowing is that the Obama Administration says that they are trying to encourage the capital markets to resume lending. But, they’re the big borrower and they go to the same sources of capital that business does. So, I think that the federal borrowing could be the giant sucking sound of opportunity for future business growth.”

As for Georgia, Turner stated that the state will have to tap other financial reservoirs to compensate for the $5 million in stimulus money that is no longer part of the NCR incentive package. However, according to Turner, there remains a danger of Georgia using other inappropriate sources of capital to facilitate the NCR deal.

“Georgia is free to seek other funding sources to accomplish their goal of, in effect, buying jobs from our community by funding NCR’s relocation,” Turner said. “The problem with the stimulus is that monies are fungible. So, even though Biden won’t let Georgia use stimulus funds, we do have to be concerned that there could be shell games going on, where they’re moving monies around in order to accomplish this project.”