Monday, October 24, 2005
Bond Issue: ‘Corporate Welfare’ or
Jim Siegel and Mark Niquette
Through Friday, The Dispatch will publish stories about the five proposed constitutional amendments facing Ohio voters on Nov. 8.
Today, the focus is on Issue 1, a $2 billion
bond package that supporters say will bring hightech jobs to Ohio.
Talk to Issue 1 supporters, and they’ll
quickly tell you the $2 billion proposal boils down to one word — jobs.
Ohio’s stuck-in-the-mud economy isn’t creating nearly enough of them. No longer able to rely on highpaying manufacturing jobs to boost the standard of living, state leaders say government must do more to develop hightech employment.
And though some conservatives term it
corporate welfare, supporters
The program is designed to develop high-tech
research, and eventually high-tech jobs, by assisting companies and
fostering partnerships with universities and businesses.
"There is a gap between our outstanding,
Issue 1, which increases state borrowing but does not raise taxes, is a three-part, $2 billion issue that also includes:
By itself, the issue passed by wide margins
in 1987 and 1995. It is
"For us, it’s essential," said John Mahoney, deputy director of the Ohio Municipal League. "That has been the most successful state program we’ve had as far as infrastructure investment."
Much of the discussion of Issue 1 has
focused on the Third Frontier
Introduced by Gov. Bob Taft in 2002, his
initial plan called for
The final portion of the plan — a $500
million bond issue to be approved by voters — went down to a stunning
defeat in November
The issue is back because, state leaders
say, $1.1 billion is not enough.
Johnson said the demand is 10 times what the
state currently is spending — and other states, such as California, are
spending significantly more.
"We’re significantly over-invested in
capital because of the nature of
The state has awarded $325 million since
Nearly $89 million has gone to projects at
the Ohio State University,
"If we did not carry these innovations
forward, they undoubtedly would be developed in other states or the world
market," said Robert
Ohio State, with help from $17 million in
Third Frontier funds, partnered with Phillips Medical in Cleveland to
develop a magnetic imaging system that can take pictures of the brain far
more enhanced than current equipment.
The machines are being built in Cleveland,
where 80 jobs have been
"That’s the kind of spillover we’d like to
have," McGrath said. "We
But Third Frontier critics argue the state
should not be increasing state borrowing for what they term "corporate
welfare" with no guarantee of new jobs.
There are moral concerns as well. Some
conservative groups say Issue 1 funds could be used for embryonic
Rep. Tom Brinkman Jr., R-Cincinnati, argues
that government just isn’t very good at investing in private companies —
and that taxpayers often end up subsidizing projects that private
investors won’t touch.
"Government is a sap, a sucker," Brinkman
Kurt Kauffman, the state’s debt manager at
the Office of Budget and
In all, Issue 1 would require the state to
pay $2 billion in principal on
Although voters might support Issue 1
because of the state’s declining economy, they need to do so with their
eyes open, said Jon Honeck, a research analyst for Policy Matters Ohio, a
nonprofit public policy group in Cleveland.
Issue 1, he said, would change the
relationship between the public and private sectors by allowing government
to become stockholders in private companies, reversing a longstanding
Policy Matters said Issue 1 is an
improvement over the 2003 ballot
Success of the program, Honeck said, "will
depend on the vigilance of
Columbus Dispatch 10/24/2005
Policy Matters Ohio 2912 Euclid Avenue Cleveland, OH 44115
ph: 216/931-9922 fax: 216/931-9924
Policy Matters Ohio is a non-profit policy research organization founded in January 2000 to broaden the debate about economic policy in Ohio. Our mission is to conduct high-quality research promoting decisions which benefit our whole community. Given the challenges of a rapidly-changing economic system, rising wage inequality, new issues in education and changes in the way work is organized, it is imperative that Ohio workers have a voice in the economic debate.
Policy Matters provides real-world analysis focused on issues that matter to low- and middle-income workers in Ohio. Our findings are accessible to the public, the media, and policy makers. We hope to strengthen democracy by providing Ohio's citizens with the essential tools to participate in the public discussion on the economy. We believe this will result in economic policies that better reflect the public interest.