COLUMBUS — The Ohio Tax Credit Authority has approved about $1 million in potential tax subsidies for two projects over the next eight years. The subsidies are performance-based tax credits, which means that the companies will receive the full credit only if they meet job creation and tax generation requirements.

The companies that received the approval were Charles River Laboratories Ashland in Ashland, Ohio, which can receive up to $586,000, and Satco, in a location that has yet to be determined, which can receive up to $371,000.

Charles River provides laboratory services for pharmaceutical companies, biotechnology industries and the medical device industry. The company expects to create 140 new full-time jobs, which will have an annual collective payroll of about $5.6 million.

Satco, which designs, engineers, manufactures and maintains unit load devices for commercial aircraft, expects to create 75 full-time positions that will have an annual collective payroll of about $3.8 million.

Although the government often hails such deals as a plus for Ohio job creation, tax subsidies have received criticism from many free-market groups that argue they are an ineffective strategy to create jobs.

Andrew Kidd, an economist for The Buckeye Institute, told The Center Square via email that the credits distort the market. The Buckeye Institute is a free-market think tank based in Ohio.

“The Buckeye Institute has long called for the elimination of these types of distortions,” Kidd said. “Large businesses with the resources to lobby for these credits receive them, but smaller businesses and startups, who must learn and navigate the complex state and local tax systems, pay the cost of these credits.”

“Although the promise of these credits will benefit these companies and could lead them to hire more workers, it also costs all other taxpayers more who have to pay for these credits,” Kidd continued. “If policymakers instead lowered tax burdens across the board, there would not be a need for specialized subsidies and everyone could benefit.”

Kidd said that governments should seek to create jobs through policies that benefit everyone rather than policies that only help a select few. This includes lowering taxes and simplifying the tax code.