The following article was published in the Wall Street Journal, September 6, 2008. The article was authored by Mr. Strickland , the current Democratic Governor of Ohio. Mr Fisher is the Democratic Lieutenant Governor of that same state.
The authors are correct – we should not believe all the gloom and doom about Ohio – Ohio has adopted progressive policies that are working and provide a brighter future for the people of that state. The gloom and doom recently described by the Obama/Biden ticket on their way accross Ohio is false.
A dark cloud on the horizon – the proposed tax policy of the Obama/Biden ticket, which would double taxes on dividends and capital gains and increase marginal tax rates to 60%, could undo all of the ground work put in place in Ohio.
You’ll note a stark contrast between the competitive tax policies adopted in Ohio and the policy proposed by the Obama/Biden ticket. If, after you read this article, you are interested in another real life comparison – take a glance at my post “Why Obama is wrong on economics – Look to Michigan”.
The policies proposed by Obama/Biden will cause business contraction and job loss.
Don’t Believe the Doomsayers – Ohio’s Economy is doing Fine.
September 6, 2008; Page A9
Ohio is going to be a hard fought-over state in this presidential election. And consequently, the economy of this bellwether state has become highly scrutinized.
But much of this scrutiny has focused only on the admittedly tragic loss of manufacturing jobs, while overlooking major investments in tax reform, technology and higher education. Things in Ohio are not as the news coverage has made them appear.
|Dana Corporation’s automotive parts manufacturing plant in Lima, Ohio.|
There’s no question we face serious economic challenges, and that the national economy’s decline has hit citizens hard in the wallet.
But the state has too many strengths, too many successes, and too noble a history to be portrayed as a poster child for the country’s economic woes. Look under Ohio’s hood. Its engine is being redesigned and retooled in ways that offer important lesson on how to make an economy more competitive in a global marketplace.
The biggest shift is in taxes. Ohio business leaders told us that our tax structure was outdated and made the state uncompetitive. So, in a bipartisan manner, we restructured our tax laws to lower the burden for business.
By 2010, Ohio will be one of only two states without a general tax on corporation profits or a property tax on business machinery, equipment and inventories. This year is the last for Ohio’s business property tax; next year is the last for the corporation profits tax. And Ohio’s personal income tax rates are falling by 21% across the board.
Between 2005 and 2007, Ohio’s per capita state tax burden has already fallen to 38th in the nation, from 27th, according to the Federation for Tax Administrators. When the new tax cuts are phased in, Ohio’s business taxes will be the lowest in the Midwest.
Exports, meanwhile, are booming. In 2007, Buckeye State exports totaled more than $42 billion, up 11.1% from 2006, making Ohio the only state in which exports have increased each year since 1998.
The labor force has experienced a dramatic shift in recent decades. There has been a loss of 254,000 manufacturing jobs over the decade ending in 2007. But there has also been an increase of 262,700 professional, health and education jobs over the same period.
Consider just one example. The Ohio State University Medical Center created 3,742 new jobs between 2001 and 2007 by targeting research grants related to cancer studies. Industry models show that $100 in research expenditures creates $222 in wealth in the local economy.
Research-generated jobs, however, require different skills than many in our manufacturing workforce have to offer. So we are investing the money needed to help workers gain the skills they need.
We’ve combined higher education and economic development funds to create a $150 million Ohio Research Scholars program, which will bring 26 world-class scholars to state campuses, individuals whose research specialties align with our economic development priorities. This investment builds on many others. The state has created a $1.6 billion Ohio Third Frontier program that invests in high-tech, advanced materials, bioscience, advanced energy and aerospace industries. The state is spending $250 million in a higher education internship program, and freezing tuition for two years for undergraduates so that more students can afford to stay in college. We’re also spending $100 million in scholarships for students studying science, technology, engineering and math.
Ohio recently passed a bipartisan $1.57 billion jobs stimulus plan that will invest strategically in our infrastructure, future work force and growth industries such as biosciences and renewable energy. Our new Advanced Energy Portfolio Standard requires at least 25% of electricity sold in Ohio to be generated from new and advanced technologies by 2025. This will create vast new opportunities for green energy businesses in Ohio.
Already, Ohio has more alternative energy-related projects under way than any other state. The state’s extensive manufacturing supply chain provides thousands of products to the alternative energy industry. And Ohio is home to the largest fuel cell supply chain in the country. Our welders, machinists, electricians, iron and steel workers are retooling and transferring their skills to retrofitting buildings, building mass transit, installing wind and solar power, and manufacturing energy-efficient cars and trucks.
Ohio now leads the Midwest in the growth of venture capital investments in the biosciences; we rank first nationally in per capita clinical trials and operate the largest center for stem cell and regenerative medicine between the coasts. In the U.S. News & World Report rankings, Ohio leads the nation with four of the country’s top 15 children’s hospitals. The Cleveland Clinic meanwhile has spun off two dozen start-up companies in the past decade, and averages 200 inventions each year.
Companies are responding to our business-friendly environment. Ohio ranked number one in both 2006 and 2007 in major new and existing business facilities expansion, according to Site Selection magazine.
Despite the portrait some paint of Ohio, we believe our greatest opportunities for economic growth still lie before us. And in our future, from tires to polymers, from auto glass to solar panels, from steel bars to wind turbines, Ohio will show that it reinvented itself.
Mr. Strickland, a Democrat, is governor of Ohio. Mr. Fisher, a Democrat, is lieutenant governor of Ohio.