Dive Brief:
- The U.S. Department of Commerce has abruptly paused Ohio’s Manufacturing Extension Partnership program funds, pending the results of a yearslong audit, officials said.
- Federal and state dollars for all six MEP centers were suspended before they received the U.S. Office of Inspector General’s review or “had any opportunity to understand or respond to any issues,” according to a news release from the Manufacturing Advocacy and Growth Network, one of Ohio’s affected centers.
- The move pulls $5.9 million in funding for MAGNET and puts more than 100 jobs across the state at risk, the center said. It is exploring legal and policy options while the review continues.
Dive Insight:
Established in 1988, the Hollings Manufacturing Extension Partnership is a public-private partnership that provides industry expertise, workforce training, technology assistance and other services to help small and medium-sized manufacturers grow. It is overseen and managed by the Commerce Department’s National Institute of Standards and Technology. There are MEP centers in all 50 states and Puerto Rico.
A NIST spokesperson said the decision to pause Ohio’s funding was made “after careful consideration of serious issues that were brought to our attention.” They declined to share specifics at this time, but said their justifications were communicated to Ohio’s MEP.
The Trump administration attempted to cut MEP funding for 10 states earlier this year, but reversed its action following pressure from more than 80 House Democrats who signed a letter in support of the program April 9. This happened after Congress appropriated $175 million to the MEP program in March, maintaining levels enacted under the Biden administration.
Rep. Shontel Brown, D-Ohio, on Thursday criticized the Commerce Department for its action that threatens MEP centers across the state. In general, federal appropriations pay for half of the funds, while state or local governments and private entities pay for the remainder.
“We need to know why this drastic decision was made on such an abrupt timeline, what alternatives were considered, how the Trump Administration will support the workers who will lose their jobs because of this, and what is being done with the frozen funds that should have gone to our state,” Brown said in a statement.
MAGNET and its partners are urging federal and state leaders to “restore or bridge” funding while the review continues, to ensure a fair and transparent process and to recognize the ripple effects of disrupting Ohio’s MEP. The affected centers support nearly 14,000 manufacturers across the state, according to MAGNET.
Independent evaluations show the program delivers $17 in sales growth and cost savings for every $1 of public investment, according to MAGNET. Ohio is considered the nation’s third-largest manufacturing state in terms of jobs, driven by its aerospace and defense sectors.
Federal auditors have been examining Ohio’s MEP system for two years with a focus on “administrative disagreements” between the federal and state programs, Ethan Karp, MAGNET’s president and CEO, said in a statement. Then, without warning, the funding was pulled.
“That’s not fairness or due process,” Karp said. “It’s an unprecedented decision that punishes Ohio’s manufacturers first and asks questions later.”
