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For a more prosperous, equitable, sustainable and inclusive Ohio |
On September 22, 2010, Amy Hanauer and Joyce Goldstein accepted the CWRU Mandel Center’s Organization Innovation Award on behalf of Policy Matters Ohio. The event also honored Mario Tonti and featured Keynote Speaker Robert Egger. For more information about the awards, click here. To view a video of the awards ceremony, click here.
September 22 – In response to a request from Senator Sherrod Brown’s office, Policy Matters Ohio kicked off and coordinated initial planning for an event for investors on venture capital and new energy. Eventually Governor Strickland’s office took over planning of this even and we were key conveners in what became the Midwest Governor’s Association’s Clean Energy Investors Summit and launch of the Midwestern Clean Energy Investors Initiative. This event coincided with Governor Strickland’s lunch of the Gateway Fund, an innovative public venture capital fund that introduced the new formulation of limiting state risk while incenting investors by allowing earnings over the state’s guaranteed return of 8 percent to go to investors. Policy Matters Ohio remains a member of the ongoing investors planning group.
Charter school governing boards have a problem. They lack the necessary authority over charter school operators
The governing boards of 10 Ohio charter schools filed a lawsuit this spring, putting the spotlight on state laws regarding governance of the tax-funded schools. The boards contended that changes in state law in 2006 granted so much power to the company hired to manage the schools that the boards were ”virtually impotent” to provide the best education for students.
The suit reveals more than a simple a public rift between governing boards and their operators. Of much greater concern is evidence of a state still struggling to ensure an effective system of governance for a school option that now enrolls nearly 90,000 students in more than 300 schools.
A review of charter management practices released this week by Policy Matters Ohio concludes the current law ”allows the unchecked, largely unexamined transfer of public funds to private hands, particularly in the case of schools that are run by management organizations. . . . ” It is disturbing when the perception among such staunch advocates of charter schools as the National Association of Charter School Authorizers is that state law ”turns the concept of accountability on its head,” essentially opening Ohio to ”the most breathtaking abuse [by for-profit management companies] in the nation.”
The Thomas B. Fordham Institute, in its own recent review of the charter experience in Ohio, concluded that a key to a reliably good charter system is to ensure competent, independent leadership motivated to improve education. In short, Ohio must clarify the responsibilities and degrees of control relating to charter school sponsors and governing boards and their contractual arrangements with for-profit and not-for-profit operating companies.
The review by Policy Matters Ohio makes clear that management companies can exercise inordinate control in ways that undercut the autonomy of the governing boards responsible under law for the school, in some cases controlling the bulk of school revenues and writing contracts that make it nearly impossible to terminate an operator (as alleged in the lawsuit by the 10 charter schools). The Cleveland-based think tank found, among other things, instances of operators selecting or paying board members and allowing staff to serve on multiple boards.
The argument about Ohio’s charter schools, 13 years after they were launched, is not whether there is a place for them in public education. The critical issue is whether the state will provide the governance structure and degree of oversight that guarantees effective charter schools the environment and flexibility to thrive. The Policy Matters Ohio review provides a timely prod to fix the glaring flaws.
Policy Matters reviewed management agreements, audits, websites, board lists and other charter school documents, using criteria from the pro-charter National Association of Charter School Authorizers, to see whether the 150 or so Ohio charter schools that are run by management organizations are conforming to these basic criteria. Our report finds violations of the law, such as a management company owner’s relative serving on charter school boards. We also uncover widespread practices that undermine independence, accountability and good governance, such as board members who are also school staff, board members for an Ohio school who live in Colorado, overlapping boards, and more. If we don’t want Ohio’s charter system to continue to be seen nationally as an example of how NOT to do charters, we need better laws, more responsible sponsor behavior, and stronger enforcement of existing law.
Press Release Executive Summary Full Report_________________________________________________________________
Out of control – Akron Beacon Journal (editorial), September 22, 2010
Lack of oversight an issue for model charter school system – Dayton Daily News, June 12, 2011
Richard Allen Schools backers owe public more – Dayton Daily News (editorial), June 18, 2011
In May of 2008, on Governor Strickland’s initiative, the Ohio legislature passed Amended Substitute Senate Bill 221, a bill including aggressive clean energy standards that represent the foundation for our state’s energy evolution. Ohio law now requires Ohio’s electric utilities to generate 12.5% of electricity sales from renewable energy sources and to enact programs that will reduce energy consumption by 22%, all by 2025. In passing the bill, policy makers of both parties argued that it would have economic and job creation benefits for Ohio. This report assesses SB 221’s effects on economic growth, emissions reductions, energy independence and energy savings, and finds that as long as utilities are reaching annual benchmarks, Ohio will see jobs created, less pollution and, in the long run, money saved.
Higher Standards - In May 2008, on Governor Strickland’s initiative, the legislature passed aggressive clean energy standards that require Ohio utilities to generate 12.5% of electricity from renewable sources and to enact programs that reduce energy consumption by 22% over the next 15 years. Policy makers of both parties agreed the bill would have economic and job creation benefits for Ohio. This report assesses Senate Bill 221′s effects on economic growth, emissions reductions, energy independence and savings, and finds that the bill is already working, and that if utilities reach annual benchmarks, Ohio will see jobs created, less pollution and, in the long run, money saved.
Labor Day Grinch - Our findings in the State of Working Ohio 2010 earned author Amy Hanauer the label Labor Day Grinch in a column by Bill Hershey of the Dayton Daily News. Though we’ve always liked the Lorax better, we accept the label with pride. The report finds the highest long-term unemployment since record-keeping began more than 60 years ago, black employment levels that have sunk to about 50% of the working age population, and median wages today that are below levels from thirty years ago. Still, unemployment is not as high as it was in the early 1980s recession. More federal stimulus and a strong public jobs program are needed to restore the Labor Day spirit.
Modernize or Lose - Ohio now has less than one year to modernize its unemployment compensation program or it will forfeit $176.3 million in federal funds. The American Recovery and Reinvestment Act set aside $7 billion for states that take steps to bring their unemployment compensation systems into the 21st century. Early reforms that we’d put in place secured us the first $88.2 million, but further modernization is needed to ensure we get the full $265.5 million we have coming. To get the rest, we must do two of four updates, which include allowing seekers of part-time work to qualify and extending longer benefits to those in approved training programs. Learn more here.
Authorized Abuse - Policy Matters reviewed management agreements, audits, websites, board lists and other charter school documents, using criteria from the pro-charter National Association of Charter School Authorizers, to see whether the 150 or so Ohio charter schools that are run by management organizations are conforming to these basic criteria. Our report finds violations of the law, such as a management company owner’s relative serving on charter school boards. We also uncover widespread practices that undermine independence, accountability and good governance, such as board members who are also school staff, board members for an Ohio school who live in Colorado, overlapping boards, and more. If we don’t want Ohio’s charter system to continue to be seen nationally as an example of how NOT to do charters, we need better laws, more responsible sponsor behavior, and stronger enforcement of existing law. Read today’s Beacon Journal piece about our report here!
Tax Tussle - In a report to a legislative panel that is seeking solutions to Ohio’s looming budget problems, Policy Matters reviewed the 2005 changes to Ohio’s tax system and the $7 billion in annual tax revenue foregone because of the credits, exemptions and deductions known as “tax expenditures”. The 2005 tax cuts did not improve Ohio’s economic performance as promised, increased the share of taxes paid by middle- and low-income taxpayers, and deprived the state of needed resources for public services. We conclude that Ohio should revitalize the income tax, in particular for high earners, restore revenue from business taxes and vigorously attack exemptions, credits and deductions that riddle the tax code.
Stop Scams, Raise Standards - Our newest staffer, Policy Liaison Hannah Halbert, jumped into the fray, testifying before the Joint Committee on Agency Rule Review, urging higher standards for job creation and job retention tax credits. These better standards were one of many changes recommended in a legislatively mandated study on incentives and were consistent with the Department of Developments own guidelines and the legislative intent of the bill redefining these credits. Veteran Researcher David Rothstein also testified on scams being marketed to those who need loan modifications. Rothstein described this predatory marketing as similar to peddling of unaffordable and wealth-stripping sub-prime housing loans to Ohio families over the past decade. Although most such scams go unreported, Ohio Attorney General Richard Cordray has logged more than 400 complaints related to loan modification scams since 2009.
Saving, not Stripping Wealth - The IRS and U.S. Department of the Treasury are doing more to protect families and build wealth. The IRS eliminated the debt indicator, which had allowed paid preparers to know ahead of time whether a tax filer was certain to get his or her full refund. Knowing that made predatory marketing of tax refund anticipation loans a no-risk proposition for such lenders. Treasury will be piloting a new savings program that helps tax filers get refunds directly into a debit card and savings account, making it easier for families to start saving. Policy Matters and our allies at the National Consumer Law Center and the National Community Tax Coalition, have long made these common sense recommendations.
Bragging Rights - We mentioned it before, but we’ll say it again – we’re honored this week to accept the Organization Innovation Award from the Mandel Center for Nonprofit Organizations, doled out to a group that demonstrates creativity, teamwork, boundary-breaking and excellence. Join us today for tasty food, a great party and a terrific talk by Robert Egger, founder and president of DC Central Kitchens, a vocal advocate for a more innovative and effective non-profit sector.
Breakfast with Bubbleman - We’re holding a breakfast talk with Dean Baker, co-director of the Center for Economic and Policy Research and one of the nation’s top progressive economists. Among the first to warn about the housing bubble, Baker has developed a reputation for challenging conventional wisdom and doing so with foresight, passion and incredible knowledge. He’ll give a group of Policy Matters’ friends his thoughts about what’s wrong with our economy and how to fix it. Read more from Dean in his columns or in his latest book, False Profits: Recovering from the Bubble Economy, available here.
Refreshing challenge - Policy Matters and a team of other progressive organizations are competing to win big money in September’s Pepsi Refresh Everything online fundraising contest. Of the more than 1,000 groups competing, right now Policy Matters and several of its partners are positioned to win! But the competition gets toughest in the final weeks of the month (that’s now). Join the more than 24,000 people who get daily reminders to vote for the Progressive Slate.
That’s all!
The Policy Matters Team
Effective climate legislation would give America a safer, more secure, and more balanced portfolio of energy sources while fostering new markets for new products. Northwest Ohio could be a big beneficiary.
A measure sponsored by Sens. John Kerry (D., Mass.) and Joe Lieberman (I., Conn.) would set a market-based cap and price on carbon pollution. That would boost demand for clean energy and encourage greater energy efficiency in our homes, offices, stores, and factories, and on our roads.
The eight Ohio counties that surround Toledo host 464 manufacturing firms, with more than 66,000 employees, that could, with retooling, add advanced energy products to their portfolios. New demand for clean-energy products such as wind turbines, solar panels, biomass pumps, and coal sequestration technologies could offer new manufacturing opportunities to these firms, helping them keep and create jobs.
The Toledo area already is capitalizing on such opportunities. About 6,000 people work in the solar industry locally. Another 6,700 workers make products designed to enhance energy efficiency in buildings.
Still, these nascent sectors have the potential for far greater growth. Climate legislation can revive our sagging economy by creating jobs across the country.
Done wrong, however, these jobs could go to other countries. Seventy percent of America’s clean-energy parts and systems are manufactured abroad. The proposed climate legislation would make progress toward keeping these jobs at home, but not enough.
The measure would expand funding for two important investment initiatives that deal with advanced energy manufacturing and clean vehicles. But it does not include long-term support for domestic manufacture of clean technologies like that provided by China and Germany – America’s competitors in the race to lead the clean- energy economy.
That’s why we also need legislation sponsored by Sen. Sherrod Brown (D., Ohio). His bill would level the playing field for U.S. manufacturers by setting aside $30 billion to create state revolving-loan funds that would help small-and medium-sized companies retool their facilities for clean-energy production. Policy Matters Ohio estimates that Sen. Brown’s bill could create as many as 52,000 manufacturing jobs in Ohio over 10 years.
The climate and clean-energy bill passed by the House last year includes similar provisions, thanks to the hard work and perseverance of several members of Ohio’s congressional delegation. Those provisions belong in the Senate climate bill as well.
The Senate also must ensure that jobs created by the measure pay family-supporting wages and provide health and retirement benefits. The bill needs border adjustments to prevent American producers from being undercut by polluting nations. Products of nations that do not control pollution should not have a price advantage over nations that do.
Under proposed legislation in both houses of Congress, polluting nations would pay for carbon emissions generated in the production of their exports. But such provisions in the Senate bill would not take effect for a dozen years. Border adjustments need to take effect long before that, to decrease pollution and prevent more jobs from going to polluting countries.
Our debilitating dependence on dirty foreign oil is a major reason that America needs comprehensive clean-energy and climate policies. Our sputtering economy and jobless recovery are others.
It is the job of government to create and enforce economic policies and programs that promote prosperity, while setting safeguards to prevent calamities like the Gulf of Mexico oil spill and the disaster in West Virginia that claimed the lives of 29 coal miners. We have a once-in-a-generation opportunity to build 21st-century industries and create jobs that will put Americans back to work.
It is time to move toward a new-energy economy that creates good jobs for American workers and protects our communities and the environment.
Wendy Patton is senior associate at Policy Matters Ohio, a not-for-profit research organization in Columbus that examines the effect of economic issues on working families. Sara LeTourneau is Labor/Climate Project director of BlueGreen Alliance, a partnership of unions and environmental groups that seeks to expand the number and quality of clean-energy jobs. Shanelle Smith is Ohio coordinator of Apollo Alliance, a coalition of labor, business, environmental, and community leaders working to create American green-collar jobs.
The State of Ohio, you may have heard, has a budget problem. The state budget will be billions of dollars short in the two years that start next July 1.
It’s easy to attribute this problem to the economy, and that’s certainly part of it. But a big share of our shortfall is self-inflicted.
In 2005, the General Assembly eliminated the state tax on corporate profits, slashed the individual income tax, and phased out a major business property tax. At the same time, a new business tax was created and other taxes were raised.
The overhaul of Ohio’s tax system costs more than $2 billion a year, according to the state Department of Taxation. Business taxes overall were “substantially lowered,” the Ohio Business Roundtable says.
The idea was that tax cuts would help Ohio’s economy grow. It hasn’t happened. Since 2005, Ohio has continued to lose ground to other states.
We have lost relatively more jobs, and more manufacturing jobs, than the country as a whole. Our output and new investment have lagged, while personal income hasn’t kept up.
Supporters of the tax cuts blame the recession. But if taxes are so important to the economy, that wouldn’t be true just in good times. The two states with the lowest unemployment rates, South Dakota and North Dakota, have dramatically different tax rates and tax systems.
Nearly one dollar in every eight of Ohio’s income-tax cuts will be offset by higher federal taxes on Ohioans, who will have lower in-state tax deductions to itemize on their federal returns. Some of the increased income from the state tax cuts will be saved, or spent outside Ohio.
For these reasons, the income-tax cuts were never likely to generate more economic growth than the reduced spending they required. It’s no big surprise that Ohio’s economy didn’t improve because of them.
The tax cuts reinforced a system in which low and middle-income families pay more of their income in state and local taxes than affluent families do. More than 40 percent of the income-tax cuts, when they are fully implemented next year, will go to the 5 percent of families with income of $135,000 or more a year, according to the Institute on Taxation and Economic Policy. Meanwhile, the bottom three-fifths of Ohio families by income will get just 13 percent of the total tax cut.
Another key contributor to Ohio’s budget crunch is the huge amount of credits, exemptions, and deductions that reduce tax revenue. The Taxation Department estimates these “tax expenditures” are worth more than $7 billion a year.
Sales tax paid by wealthy buyers of shares in jet aircraft is capped. No sales tax is charged on lobbyists’ services. One tax break for banks and financial institutions is larger than the entire amount of tax that is collected.
Many exemptions and credits have continued for decades. They drain state revenue and provide special advantages for certain taxpayers, without an accounting of whether they still serve their original purpose – or any purpose at all.
The Ohio Manufacturers’ Association recently noted that the state sales tax “has become riddled with exemptions, carve-outs, and credits.” The group called for a comprehensive examination of the tax.
State support for early childhood education, mental health programs, libraries, and much more has come under the knife as revenues have fallen. Yet tax exemptions and credits that have every bit as much impact on the state budget have not gotten the same treatment.
They should be pared. The commission of state lawmakers that is meeting to devise budget solutions should hold hearings on these loopholes, determine whether they are serving a worthwhile purpose, and recommend eliminating those that aren’t.
States such as Kansas, Oklahoma, Colorado, and Iowa have reduced tax credits. Ohio should do the same.
The 2005 tax cuts did not improve Ohio’s economic performance as promised. They increased the share of taxes paid by middle and low-income taxpayers. And they have deprived the state of resources needed for public services.
We need to revitalize the income tax, in particular for high earners. We need to restore revenue from business taxes to levels that existed before the 2005 tax changes. Doing so would still leave the business share of state and local taxes well below where it was 30 years ago.
Ohio needs to invest in our people, education system, and infrastructure. We should overhaul our tax system to produce the revenue we need to do so.
Zach Schiller is research director of Policy Matters Ohio, a not-for-profit research organization in Cleveland that examines the effect of economic issues on working families.
The Apollo Alliance offers an excellent approach to building green pathways out of poverty. Its elements include: 1) Enacting policies and programs to drive investment in the clean energy economy to create a more energy efficient, sustainable Ohio and assist Ohio energy consumers; 2) Aligning these economic development strategies with workforce training programs and promoting on-the-job training opportunities when using public funds for clean energy projects, in order to build a training pipeline of highly-skilled workers trained in sustainable practices and fields; and 3) Preparing low-skilled workers for these opportunities, particularly women and minority workers, by helping to reduce existing barriers to attaining quality jobs.
Ohio has made progress on all three prongs of the Apollo Pathways Model, enacting a number of foundational polices and programs: adopting renewable energy and energy efficiency standards our electric utilities must comply with; creating the Green Pathways Advisory Council to bring together employers engaging in the clean energy economy, labor and community leaders, and agency officials to align clean energy economic development efforts with workforce training goals; and growing the network of apprenticeship prep programs. The report documents Ohio’s progress and makes recommendations for building on these policies and programs to ensure continued gains towards achieving the maximum benefits to our communities, our workforce and our environment.
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Ohio’s Clean Energy Strategy (to date) Appendix 1
Ohio’s Effort to Align Economic and Workforce Development Goals Appendix 2
Jobs that will build the green U.S. economy and fight global warming Appendix 3
Best Practices in Best-Value Contracting (across states) Appendix 4
Model Responsible Bidder Workforce Standards Appendix 5
Ohio’s Constructing Futures Initiative Appendix 6
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