Category Archives: Ohio

Ohio Banking; Federal Reserve Beige Book of Economic Conditions

Posted on January 21, 2011 by | Leave a comment

This is the last day of the Beige Book reports. During the past four days, the retail, manufacturing, transportation, energy, and construction sectors have been covered. Today, the banking sector report of the Cleveland Federal Reserve Bank folows.

In general, bankers reported that commercial loan demand was stable or showed modest growth since our last survey. A few bankers commented that although loan originations are up, outstanding balances have declined. We also heard reports from some large banks that lending to small businesses is increasing. On the consumer side, conventional loan demand remains soft, although several of our contacts told us that they are beginning to see early signs of growth. Direct and indirect auto lending continues to show strength, while some weakening was observed in the use of home equity lines of credit. Interest rates for business and consumer credit were stable. Many of our contacts said that demand for residential mortgage refinancing has slowed due to the rise in interest rates. New-purchase mortgage originations remain weak. Core deposits continue to grow, with most of the growth occurring in non-maturing products. Credit quality was characterized as either stable or showing a slight improvement, especially for business applicants. Delinquency rates are stable or trending down. Staffing levels have shown little change during the past few weeks; however, several bankers reported that they are considering hiring during 2011.

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Ohio Construction; Federal Reserve Beige Book of Economic Conditions

Posted on January 20, 2011 by | Leave a comment

During the past three days, four sectors–retail, manufacturing, transportation, and energy–of the Federal Reserve Beige Book Report have been posted. The Beige Book report covers economic conditions of each banking district. In this post, the construction industry is covered as it was reported by the Cleveland Federal Reserve Bank.

New home construction was generally flat at a low level during the past six weeks and on a year-over-year basis, with most sales occurring in the move-up buyer categories. Contractors expect construction to remain sluggish through the winter months. List prices of new homes and discounting have shown little change, while some upward pressure on the cost of building materials was reported. Land purchases and construction of spec homes are constrained by the availability of credit. Subcontractor pricing remains very competitive. General contractors continue to work with lean crews, and no hiring is expected in the near term.

Discussions with nonresidential builders drew mixed responses, with a small majority of our contacts reporting stronger activity than a year ago. There is growing concern over the continuing slowdown in inquiries and tightening margins. However, most builders said they had a sufficient backlog to keep them busy in the upcoming months. New projects generally fall into the health-care category, with some industrial and infrastructure work. Our contacts are uncertain about business conditions through 2011. A few builders mentioned that their customers have the ability to fund projects, but they are hesitant to commit. Builders expect construction material suppliers to begin raising prices early in 2011, but they are uncertain as to the amount or whether the increases will stick. General contractors reported no change in employment levels and wages. Subcontractors continue to cope with very difficult industry conditions.

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Ohio Transportation and Energy ; Federal Reserve Beige Book of Economic Conditions

Posted on January 19, 2011 by | Leave a comment

The Federal Reserve published its recent Beige Book Report covering economic conditions of each banking district. During the past two days, the retail and manufacturing sectors of Cleveland Federal Reserve report were posted. Today, the following post covers economic conditions of Ohio freight transportation and energy industries.

Freight transport executives reported that shipping volume was stable during the past six weeks. Looking ahead to 2011, most carriers expect growth to be somewhat stronger than they experienced in 2010. They also expect that activity will be more in line with normal seasonal patterns. Almost all of our contacts reported rising prices for diesel fuel, some of which are being passed through to customers via a surcharge. Capital outlays remain at relatively low levels. Spending in 2011 is expected to rise modestly as freight carriers are forced to replace aging equipment. However, some carriers are considering leasing new equipment versus buying, as rising prices for new tractors constrain purchases. Hiring is for replacement only. Two of our contacts noted that they would like to begin hiring additional drivers, but it is difficult to find qualified applicants. Wage pressures are beginning to emerge due to a growing problem with driver turnover and a tightening of the driver pool.

Although energy production is more in-line with manufacturing process, energy is consists of modes of transportation and distribution, which utilizes the Ohio trucking sector. That is why the report on energy continues below.

Reports indicate that oil and gas output from conventional wells was fairly steady during the past six weeks. A small increase in gas production is expected if very cold weather persists. Production from Marcellus shale was somewhat higher and is expected to continue to increase. Spot prices for natural gas have increased slightly with the onset of winter, while wellhead prices paid to independent oil producers were fairly stable. Coal production has been steady since our last report, with little change anticipated in the near term. Spot and contract prices for coal were generally stable; however, the price of metallurgical coal increased slightly. Other than a rise in diesel fuel prices, equipment and material costs have been flat. Staffing has not changed, and it is expected to remain at current levels for the near term.

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Ohio Manufacturing; Federal Reserve Beige Book of Economic Conditions

Posted on January 18, 2011 by | Leave a comment

The Federal Reserve published its recent Beige Book Report covering economic conditions of each banking district. Yesterday, the retail sector report of the Cleveland Federal Reserve was posted. Today, the following post covers economic conditions of Ohio manufacturing.

Reports from District factories indicate that demand was stable or rising during the past six weeks. Compared to year-ago levels, production was higher, with many contacts experiencing low double-digit increases. Several manufacturers noted that while their production levels declined recently–following seasonal trends–orders were above expectations. In general, manufacturers are fairly optimistic and expect at least modest growth during 2011. A few noted that lead times for the delivery of raw materials were getting longer, which they attributed to rising demand across industry sectors. Steel producers and service centers all reported that shipping volume had increased since our last survey, with shipments being driven by energy-related, transportation, and heavy equipment industries. Steel executives we spoke with have heightened expectations for business growth during 2011. District auto production showed a slight decline during November on a month-over-month basis. Compared to a year ago, domestic auto makers showed a substantial rise in production, while foreign nameplates posted a modest decline.

Capacity utilization continues to trend higher, approaching what many of our respondents consider to be more normal rates. Inventories are close to targeted levels. Capital spending plans are conservative, with only a few of our contacts expecting to increase capital budgets for 2011. Outlays are aimed primarily at maintenance, equipment upgrades, and increasing production efficiencies. Prices for agricultural and metal commodities, steel, and scrap remain elevated, while the prices of most other raw materials have been stable. Several producers announced selective product price increases to reflect a rise in the cost of steel and agricultural commodities. Most contacts told us that they have expanded their permanent, full-time payrolls slightly since our last survey, and they will continue hiring at the same pace during 2011. Permanent new hires were largely salaried. To meet rising demand, employers are extending production hours or bringing in temporary hourly workers. Wage pressures are contained. Companies are continuing to restore merit increases and payments to 401K plans.

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Ohio Retail Business; Federal Reserve Beige Book of Economic Conditions

Posted on January 17, 2011 by | Leave a comment

The Federal Reserve published its recent Beige Book Report covering economic conditions of each banking district. Each day this week, one sector of the Cleveland Federal Reserve report will be posted. Today, the following covers economic activity of Ohio’s retail sector.

Reports from retailers on the holiday shopping season were generally positive. General merchandise stores had the strongest results, while activity at small specialty outlets was mixed. Almost all of our contacts said that sales increased in the low to mid-single digits when compared to year-ago levels. Some retailers noted that consumers are becoming more confident, and it is beginning to show in their buying patterns. Nonetheless, we still heard mixed reports on purchases of discretionary items. Looking forward to the first quarter of 2011, retailers generally expect transactions to rise in the low to mid-single digits on a year-over-year basis, and they believe that rising sales will include more discretionary items. Vendor pricing was generally stable. Most retailers plan a modest increase in capital spending during 2011 for remodeling, expansion, and e-business. Hiring was limited to temporary holiday workers and no pickup is expected in the new year.

Auto dealers reported new vehicle sales during November were steady to up slightly on a month-over-month basis. When compared to year-ago levels, sales were generally higher. A few of our contacts also noted an increase in leasing activity. Looking forward, dealers expect sales to follow seasonal trends through the winter months. However, they anticipate that sales will be slightly higher than the prior year’s level. New car inventories are in line with demand. Reports on used vehicle purchases were mixed. Little change was seen in credit availability. Buyers with high credit scores can readily obtain financing. Dealers’ spending on showroom upgrades to comply with factory mandates remains modest. More aggressive capital outlays are dependent on sustainable demand.

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Buckeye Institute Announces Pretigious New Fellowship Program For Ohio College Students

Posted on December 9, 2010 by | Leave a comment

In honor of William A. Diehl, former President of Defiance Milk Products/Diehl Inc., the Diehl Family Foundation has partnered with the Buckeye Institute for Public Policy Solutions to create a year-long fellowship program designed to expose college students to the leaders and readings that can provide insight into making Ohio prosperous again. The Buckeye Institute will use a competitive process to identify up to 25 of Ohio’s best students annually for this program.

The application period for the 2011 class runs from December 2, 2010, to January 31, 2011. The first class will occur in March 2011. Each class will begin at 6:00pm on a Thursday with an informal dinner and the viewing of a thematic movie. On Friday, the fellows will discuss the assigned readings and their relevance to Ohio, listen to an Ohio business leader share his or her experience, and tour a company to get a hands-on appreciation for how business works. The Buckeye Institute will provide all reading materials and will cover all hotel and food costs.

The topics include American exceptionalism, freedom & the rule of law, basic economics, the power of government, transparency & corruption, economic freedom & competitiveness, entrepreneurship, building a business, the regulatory world, the power of innovation, understanding politics, and overcoming big obstacles.

To graduate, each fellow must write a report on an economic issue facing Ohio and a proposed solution. A panel of experts will judge the reports, and the top three will receive cash awards of $3,000, $2,000, and $1,000.

Matt A. Mayer, President of the Buckeye Institute, stated, “If we want tomorrow’s leaders to carry the heavy weight of rebuilding our great state, they will need a practical and conceptual understanding of our nation’s founding, its economic system, and the relationship between business and government. William Diehl fundamentally understood the critical link between a vibrant and prosperous private sector and limited, but effective government.”

Details about the Diehl Fellows Program and the Application can be viewed at www.buckeyeinstitute.org/diehl or obtained by calling 614-224-4422.

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Ohio Liberty Film Festival

Posted on November 11, 2010 by | Leave a comment

Dayton is the site of a film festival with themes of liberty, courage and achievement, that began on November 11. Veterans Day was selected to kick off the event in order to celebrate the service of military veterans, and pay tribute to their historic role in preserving freedom in America and in the world. The festival will continue through November 14 with showings at The Neon Theater, the Dayton Engineer’s Club and the Dublin Pub. This will be the second year for this film festival in Dayton and it is the only one currently presented in America with the theme of Liberty.

The underlying idea is that man’s great achievements, whether artistic, scientific or intellectual, have come about through the exercise of freedom and opportunity. The intent will be to showcase films that show the positive use of freedom, and also the negative outcomes and conditions related to the suppression of freedom.

Efforts to gain and protect freedom have been a vital part of the American experience. Our earliest settlers, the pilgrims, braved death and made a heroic voyage to escape religious persecution. Their bravery was followed by the American War of Independence to withdraw from an oppressive system and create a new experience in self-government with a classless republic. A few years later a Civil War was fought to eliminate slavery. In the last century America was involved in two World Wars to fend off oppressors with designs on world dominance. America also fought and won a Cold War against a totalitarian system that sought to destroy the freedoms of many in our world. Throughout history there have been continuing threats against freedom that demand vigilance and continuing respect for the blessings and opportunities achieved through liberty.

The keynote film this year will be the documentary film, “Rockin’ the Wall”. This is very significant and a very special opportunity for the Dayton community because the film is essentially a Dayton product. The documentary conveys the message of a chapter in the book “Seven Events that Made America America” by Dr. Larry Schweikart, a professor of history at the University of Dayton. The chapter is entitled “ A Steel Guitar rocks the Iron Curtain”, and it tells the story of how rock music helped to bring down the communist empire and, with it, The Berlin Wall. There is much commentary by people who were part of the musical revolution on both sides of the Wall. The movie contains a number of musical clips. And there are some very emotional and inspiring scenes of people celebrating and overjoyed with their new freedom.

The Veteran’s Day program at the Neon commenced with a matinee showing of “Rescue Dawn” at 2:30PM. This is a compelling and true story of a German born U.S. Navy pilot, Dieter Dengler, who had an obsession to fly. The story is a tribute to the courage and perseverance of POWs in Vietnam. Following the movie there will be a reception at the Dublin Pub to honor ex POWs. The Neon hosted a major Veteran’s Day event at 7:30PM with the “The Best Years of our Lives”. This is a great Academy Award winning film about serviceman returning from WWII. The film is considered the best depiction of life in America and the challenges to veterans in those years.

The program on Friday November 12, will be presented at the Dayton Engineer’s Club. There will be 4PM showing of “Rockin’ the Wall ”, providing for participation by students of local high schools. Dr. Schweikart will introduce the film. Following a reception at the Club, the film “Places in the Heart” will be shown at 7:30PM. This is an inspirational story of the spirit and tenacity of a widow striving to save her farm in the South during the years of the Great Depression.

On Saturday November 13, the Engineer’s Club will also host a 2 PM showing of the movie “Empire of the Sun”, This movie is Steven Spielberg’s inspiring story, loosely based on actual events, of a young boy’s courage, spirit and leadership while imprisoned in a Japanese concentration camp during WWII. The boy’s love of aviation is a key part of the story. On Saturday evening there will be another major event, a showing of the keynote film “Rockin’ the Wall” at 7”30 PM. The film will be preceded by a reception at the Club with an appearance by Dr. Schweikart.

The final Liberty Festival offering will be an afternoon showing of “One Flew over the Cuckoo’s Nest”. This is an outstanding film, the winner of all major Academy Awards in 1976. It is the story of a feisty misfit who resists the institutional authority and raises the spirits of fellow inmates. There are great performances by the cast. This film will take place at 2:30 PM on Sunday, November 14, at the Neon, followed by a festival concluding reception.

Admission to all Liberty Film Festival events will be free, with voluntary donations accepted. The festival website is www.ohiolibertyfilmfestival.com. Other information is available by calling 429-3793 or 224-7822, and festival schedules are available at the Dublin Pub.

Locations:
The Neon Theater Dayton Engineer’s Club The Dublin Pub
180 E. Fifth St. 110 E. Monument Ave. 300 Wayne Ave.
Dayton, OH 45402 Dayton, OH 45402 Dayton, OH 45410

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Ohio, 46th Worst Business Tax Climate : The Tax Foundation’s 2011 State Index

Posted on November 1, 2010 by | Leave a comment

The Tax Foundation released the newest edition of the State Business Tax Climate Index, which ranks from 1 (best) to 50 (worst) the tax systems of the 50 states. South Dakota’s tax system is most welcoming to economic activity while New York’s tax code ranks 50th as the least hospitable. Ohio almost caught up with New York being ranked as 46th least tax friendly state.

The goal of the index is to focus lawmakers’ attention on the importance of good tax fundamentals: enacting low tax rates and granting as few deductions, exemptions and credits as possible. This “broad base, low rate” approach is the antithesis of most efforts by state economic development departments who specialize in designing “packages” of short-term tax abatements, exemptions, and other give-aways for prospective employers who have announced that they would consider relocating. Those packages routinely include such large state and local exemptions that resident businesses must pay higher taxes to make up for the lost revenue. As a result, businesses often move to other regions or states to remain competitive.

States with the best tax systems will be the most competitive in attracting new businesses and most effective at generating economic and employment growth. As we will see, Ohio need more than government generated jobs. Ohio needs a serious tax code revision.

The index ranked states based on five component tax indexes:

• The Corporate Tax Index
• The Individual Income Tax Index
• The Sales Tax Index
• The Unemployment Tax Index
• The Property Tax Index

The Corporate Tax Index assesses both corporate income taxes and/or gross receipts taxes. Ohio taxes business on the latter gross receipts.

The Individual Income Tax Index measures the effect on small businesses and entrepreneurs, on labor costs, and, depending on the type of business, on consumer spending. One reason Ohio ranks among the worst states is it arranges the top income brackets in the middle range of income. Ohio is among the states with the highest marriage tax penalties. Ohio’s local income tax rates also are the third highest in the nation.

Sales Tax Index measures the rates and effects of taxes both on business. A form of double taxation exists when a business pays sales tax that increases the cost of goods and services and when the consumer pays sales tax on the same goods or services. The two components of the index consist of the tax rate and tax base, which is the range and types of goods and services taxed.

The Unemployment Insurance Tax Index measures the effects state and federal rate structures and related policies and how potentially damaging to business they may be. Ohio was ranked as among the states with the best unemployment insurance structures.

Finally, the Property Tax Index is comprised of taxes levied on the wealth of individuals and businesses. These include taxes on real and personal property, net worth, and the transfer of assets. Some studies property taxes are a significant factor of business location decisions.

So how did Ohio rank on each of these indexes?

Tax Indexes 2011 2010 2009 2008 2007 2006
Corporate Tax 39 38 33 33 39 47
Income Tax 44 46 47 47 49 50
Sales Tax 35 37 39 39 38 43
Unemployment Tax 11 10 15 15 11 48
Property Tax 39 38 33 33 39 13
Overall Rank 46 47 48 48 47 47

 

Anyone for lower sales, income and property taxes? If you are, you must also be for more efficient government operations and fewer unnecessary government programs.

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Ohio Voter Rights

Posted on October 30, 2010 by | Leave a comment

On Election Day, you have the legal right to:

Vote a regular ballot if you are a valid registered voter.
     A valid registered voter means a United States citizen who is a resident of Ohio,      who is at least 18 years of age and not in prison or on parole for conviction of a      felony, and who is registered to vote at his or her current residence address.

Request a replacement ballot.
     If you tear, soil, deface or erroneously mark a ballot, you may return it to a poll      worker. The poll worker must issue a second ballot. You may also request a      third ballot for the same reasons, but no more than three ballots may be issued      to one person.

Ask for assistance.
     If you have a disability, physical limitations, trouble reading or writing or need      language assistance, you may have the person of your choice (except a      candidate, employer or union rep) assist you in voting. As an alternative, two poll      workers from two different political parties may also assist you. You may also      vote with a curbside ballot if you cannot physically enter the polling location.

Vote a secret ballot.
     You have the right to cast a secret ballot free from intimidation. Representatives      from the media and election observers are permitted inside the polling location,      but they may not interfere with or compromise the secrecy of your ballot.

Use a paper ballot instead of a machine.
     You can choose to use a paper ballot to vote instead of a machine, regardless of      whether it is direct recording electronic or optical scan voting machines.

Vote a provisional ballot if your name is not listed in the voting poll book.
     You can vote a provisional ballot on Election Day if your name and current      address does not appear in the registration book in your precinct or if you do not      have acceptable identification with you. See the Secretary of State web site on      provisional ballots.

Vote a regular ballot if you moved within the same precinct.
     If you moved within the same precinct but did not update your registration record,      you can vote with a regular ballot – at your precinct polling place or the Board of      Elections (or their designated site) – as long as you have been previously      registered in Ohio.

Vote a provisional ballot if you moved to a different precinct.
     If you have moved to a different precinct or county within Ohio without updating      your registration record, you can vote a provisional ballot. Your provisional ballot      will count as long as you complete a change of address and affirmation. You      may vote at either your new precinct polling place or at the Board of Elections (or their designated site).

Request a list of write-in candidates.
     You can request a list of names of candidates and offices that are officially      eligible as write-in candidates.

Vote if you are an ex-felon.
     If you have been convicted of a felony, you may vote if you are not in prison or on      parole.

Vote after the polls close if you are in line.
     If you are in line when the polls close, you have the right to stay and vote a      regular ballot. If time for voting is extended by court order and you arrive after the      regular voting time, you may vote a provisional ballot.

Vote provisionally if you are challenged.
     Only a poll worker can challenge your right to vote on Election Day. You may only      be challenged for your age (must be 18) or your residency (must be a U.S. citizen      and resident of the county). If challenged, you still have the right to vote a      provisional ballot after swearing truthfully to the facts of your eligibility.

To learn more about your voter rights, go to Ohio Secy. of State Voter Information website.

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The Perils of Using “Budget Deficit” Numbers

Posted on October 27, 2010 by | Leave a comment

by Joseph Henchman

The Center on Budget and Policy Priorities (CBPP) has released an updated report on the impact of the recession on state budgets, concluding that more federal aid is needed. The report relies heavily on CBPP’s own calculation of state budget deficits, drawn from state government documents. Adding them all up, CBPP estimates somewhere around $425 billion in state budget shortfalls for FY 2009-11, with more for FY 2012 and FY 2013.

The number is probably accurate from their methodology, but is ultimately meaningless. Here’s why:

* A state “budget deficit” is the revenue projected (usually by the Governor’s office) minus hoped-for spending according to some formula, in the initial budget plan. For instance, say a state raised and spent $10 billion this year, but wants to spend $20 billion next year, projecting $11 billion in revenues. Ultimately they settle on spending $11 billion. That state has “closed a $9 billion budget deficit” even though revenues and spending are up from the previous year.

* The exact method of estimating next year’s spending varies by state, with some starting with last year’s budget while others throw in additional wish list programs. Adding up all the states’ numbers is adding apples and oranges.

* States must balance their budgets so there really is no cumulative state budget deficit in the end, at least on paper.

* It’s routine for states to want to spend more than they actually can, at least at first, and having a deficit in the initial plan happens even in flush times. Thus, CBPP’s numbers overestimate the scope of actual state budget deficits.

* CBPP also presents the deficits as a percent of each state’s general fund. While the general fund is usually the largest and most important part of a state’s budget, in many states it can represent less than half of the total budget. This number thus exaggerates the seriousness of a budget deficit.

* A budget deficit could exist because of overly ambitious spending plans that are whittled down to reality, overly optimistic revenue projections, fiscal irresponsibility, or structural imbalance. CBPP’s tale of the recession causing everything and federal aid being the only salvation doesn’t fit the facts. For instance, California’s deficit this year includes unpaid bills kicked over from last year, so it’s the same money being double-counted. This irresponsibility is glossed over in CBPP’s report.

News organizations and others like to cite a number for total state budget shortfalls, and CBPP gets a lot of media attention for its numbers, so they’re probably not changing how they do things. But I’d urge folks to look more to NCSL and NASBO, two quasi-governmental organizations, that track state budget actions with more specificity. However, a common comparison model across the states is still needed.

In addition to Henchman’s analysis, readers should remember that local government budgeting works in essentially the same way. Therefore, it is important for taxpayers and voters to see their financial audited reports in order to prove that real financial need exist as is usually sold during efforts to pass tax levies.

Source: Tax Foundation’s Tax Policy Blog, October 7, 2010

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