Category Archives: Ohio

Why the Stimulus has Failed Ohio

By Mary McCleary

It is a generally accepted fact that the stimulus did not work and the supposed “Summer of Recovery” was anything but that. Since the original stimulus package was passed under President George W. Bush, national unemployment has doubled from 4.8 percent to 9.6 percent while Ohio unemployment has risen from 5.6 percent to 10.1 percent. When Congress passed the American Recovery & Reinvestment Act (ARRA) of 2009, President Barack Obama promised unemployment would stay below eight percent, yet unemployment continued to rise.

Both the original stimulus and the ARRA have miserably failed, and the big question is why. Why isn’t all this spending leading to a revitalized economy?

Stimulus spending does nothing to create wealth. It is merely a redistribution of already existing wealth. Sound confusing? Frederic Bastiat, a nineteenth century political economist, illustrates this concept well through his Broken Window Fallacy.

In Bastiat’s example, a child carelessly breaks a store window. The shopkeeper, in turn, must spend money to replace the broken window. Therefore, the shopkeeper stimulates the economy through purchasing a new window, right? Not so fast.

While the window company benefits from the broken window, other people and industries are hurt by the destruction of capital. Due to the broken window, the shopkeeper has less disposable income to spend on other goods and services. He has to purchase a new window instead of spending his money on new business equipment or whatever he chooses. Thus, the shopkeeper is poorer than he previously was, and other industries do not benefit from the shopkeeper’s dollars. No real wealth is created.

How does this tie into all the stimulus spending? Pretend you are the shopkeeper and the government is the child that forces you to spend money. To “stimulate” the economy, the government forces you to give $500 to subsidize a window company. You lose $500 of disposable income, as do the establishments where you would have spent that money. No wealth is created – it is merely redistributed.

When the government stimulates the economy, it doesn’t create wealth. Instead, it merely picks the winners and the losers.

Since March 2000, Ohio has lost 588,600 private sector jobs (second only to Michigan). Of these job losses, 137,000 occurred after ARRA went into effect (Ohio has lost 386,800 jobs since Governor Ted Strickland took over). If “stimulus” spending isn’t helping Ohio reach better days, what will?

* Broad-base tax reform. Ohio has the seventh highest state and local tax burden. High taxes hurt economic growth and give companies an incentive to locate to lower tax states.

* Regulatory reform. Regulations increase the cost of doing business. Just recently, Continental Plastics moved to Indiana to avoid an Ohio regulation costing Toledo over 200 jobs. According to the Toledo Blade, since 2000, about 140 factories have closed in northwest Ohio with a majority relocating to the southern United States. In fact, 20 companies over the last ten years have left Ohio for just Atlanta, Georgia.

* Right-to-work reform. Ohio does not protect a worker’s freedom to choose whether or not to join a union to obtain employment. Over the last 20 years, right-to-work states have added and sustained jobs twice as fast as forced unionization states like Ohio – even after large housing-related job losses in Arizona, Florida, and Nevada. The 15 worst states for job growth since January 1990 are all forced unionization states, while 11 of the 15 top states are right-to-work states.

* Budget reform. Ohio currently faces an estimated $8.4 billion budget deficit. In a state already struggling, raising taxes is not a viable option for recovery. The budget must be realigned to fit the economic conditions of the time. To minimize the effect on our vulnerable populations, the compensation of government workers cannot be taken off the table. If state government worker compensation is realigned to match the private sector, the state could save over $2 billion dollars in the next budget.

As Bastiat and the stimulus have proven, redistributive spending is no way to dig out of an economic hole. While Ohioans have relatively little sway over federal government spending, Ohioans do have an important say in how this state is run. It is time for our leaders to make the tough choices and for the people to hold them accountable when they don’t.

Mary McCleary is a policy analyst at the Buckeye Institute.

Ohio Townships look to Unconstitutionally Tax Homeowners

On September 9, the 1851 Center asked the Supreme Court of Ohio to review, and stop, Hamilton Township’s implementation of a tax on new homes.

Ohio’s townships cannot levy taxes. This has made them a popular destination for Ohioans who wish to flee the high costs of city living. However, Hamilton Township (in southwest Ohio) has imposed a charge that, if allowed to stand, would change this. The township has simply labeled its $6,000 tax on new homeowners and developers an “impact fee.”

“This case is about whether Ohio townships may tax citizens, simply by labeling those taxes ‘fees,’ even though Ohio law denies townships this privilege,” 1851 Center Executive Director Maurice Thompson wrote in the brief. “Accordingly, this case raises several issues of great importance: (1) where the line is drawn, in Ohio, between what constitutes a ‘tax’ and what constitutes a ‘fee;’ and (2) whether Ohio townships have some form of inherent police powers beyond those specified in the Ohio Revised Code, or instead, are creatures of limited and defined powers.”

1851 Center, September 29, 2010

Ohio Counties Can’t Avoid Public Meetings Law; Hold Secret Meetings on Million-Dollar Contracts

In an effort against public corruption in Cincinnati, the 1851 Center filed an amicus brief in the First District Court of Appeals to stop secret meetings amongst Hamilton County Commissioners.

To prevent sweetheart deals and ensure open and objective debate, Ohio’s county commissioners must discuss important public business in public meetings. Cincinnati residents were alarmed to discover Hamilton County Commissioners met behind closed doors to discuss a multi-million dollar contract associated with Cincinnati’s government-planned riverfront development.

The commissioners, which include David Pepper, who is running for Ohio Auditor, claimed they were entitled to meet in secret because Mr. Pepper and Commissioner Todd Portune are attorneys, and were giving legal advice to the remaining commissioner at the meeting.

“A fundamental right underlying our government in Ohio is that Ohioans have a right to know and understand the actions taken by elected officials. This principle is reflected in the Ohio Constitution and Revised Code,” according to the 1851 Center’s brief.

The case awaits oral arguments and the court’s decision.

Source: 1851 Center, September 29, 2010

Early Voting, Politics Without Debate?

By Daniel Downs

Am I the only voter in the world receiving umpteen million calls about early voting? I have never had both parties telling me how crucial it is to my precious liberty to send in a early registration card as soon as it is received. Until this year, I have had no calls about it.

Is it really about freedom to vote? I don’t think so!

Just think, if voting occurs now, much candidate literature, televised or town hall debates will have been missed. Granted, most brochures and debates consist of little deep substance any way. And, apart from stated party agendas, know one ever knows what politicians will do. Nonetheless, multiple debates and literature at least give a voter something to consider before voting.

An informed, not a duped, citizenry stimulates functional democracy in our federal republic of liberty .

I don’t know; maybe I already missed most of the debates. I do know if I voted now, I would miss debates between Rob Portman and Lee Fischer (Oct. 4 & 12 PM) as well as Gov. Strickland and John Kaisch (Oct. 7). I imagine other meet the candidates nights and townhall debates are in the works as well.

This being the case, I have to conclude that the great drive for early voting is not to ensure that everyone will practice their voting right. Rather, the purpose is to get as many voters to support all the party ticket. Early voting thus seems to be politics without meaningful debate.

P.S. Who would be stupid enough to send the registration card in anyway. People willing to making their driver’s license number or security number available to any rip off artist? Or, maybe just die-hard party numbskulls?

Senator Brown Calls on Navistar CEO to Keep Jobs in Springfield

U.S. Sen. Sherrod Brown (D-OH) sent a letter this week to Dan Ustian, CEO of Navistar International Corporation, urging him to maintain operations at the company’s plant in Springfield. In early August, nearly 400 workers received notice that layoffs may begin as early as October 4.

“The workers in Springfield are second to none in work ethic, dedication, and productivity,” Brown wrote to Ustian. “As Navistar continues with its military and commercial sales and further progresses with the development of cutting edge technology, I urge you to consider the Ohio workforce that has played a critical role in the company’s success.”

Navistar International Corp. produces commercial trucks and diesel engines. The company recently made a commitment to expand operations in Illinois. Brown urged Navistar to make a similar commitment to the Springfield community. In his letter, Brown urged Navistar to continue working with local, state, and federal officials to keep employees working.

School Building Projects – Rewarding Special Interests at the Expense of Students, Teachers, and Taxpayers

By Mary McCleary, Policy Analyst

Hiring union labor in school construction projects increases the costs period. You will be hard pressed to find an example in modern-day Ohio where hiring a labor union has led to cost savings that otherwise would have gone unrealized. By their very nature, labor unions drive up costs through paying workers higher wages than the market dictates.

Due to Senate Bill 102 passed in 1997, school districts are exempt from Ohio’s little Davis-Bacon law, which requires the government to compensate laborers at the prevailing wage rate. Essentially, this law forces workers to join unions to work on government-funded building projects. More often than not, school districts choose independent companies because they can bid projects at lower, more competitive rates than their union counterparts.

The fact that using union labor drives up school construction costs can be illustrated by three recent examples. Earlier this summer the Executive Director of the Ohio School Facilities Commission (OSFC) Richard Murray chose to use a project labor agreement for the construction of the new deaf and blind schools in Columbus. At each of the four stages of the design process, the OSFC signed off on the cost estimates. When Murray decided to use a project labor agreement, bids for the project came back $11.4 million over the $28 million budget – a 41 percent increase in estimated costs.

Only the kitchen equipment portion of the deaf and blind schools was exempt from a project labor agreement. Ironically, the kitchen equipment bids were the only bids that came back within the allotted budget, and there were twice as many bids for kitchen equipment than there were for any other part of the project.

Second, the Washington-Niles Local School District near Portsmouth planned to use a project labor agreement at the advice of the OSFC. However, when the bids came back 22 percent over budget, the district backed out. Washington-Niles is the eighth poorest of the 612 Ohio school districts and simply could not afford such significant cost overruns.

Third, the New Boston School District, also near Portsmouth and among the poorest Ohio school districts, has accused the OSCF of increasing costs and delaying the project because the district refused to accept a project labor agreement. When the district ran into a few problems during the planning phase, Richard Murray told school board members that he would make their problems disappear if they used union labor.

Because the OSCF has added extra costs to the schools estimate to account for a project labor agreement, the project is over budget by $400,000. To reduce costs, the OSCF has demanded the removal of the proposed facility’s front area and the reduction of cafeteria size. The OSCF has put construction on hold until the district concedes and is charging the district fees for delaying the project.

Unfortunately, when a project goes over budget due to a labor agreement, the OSFC recommends reducing building size and cutting other amenities instead of finding savings through nixing the project labor agreement. Sadly it has become more important to enhance the wallets of special interest groups rather than to act in the best interest of the students, their teachers, and the taxpayers.

With Ohio’s economy in shambles, this is no time to be pushing for the use of unions in school construction projects. Between January 1990 and July 2010, job creation in states that forced workers to join unions to obtain jobs only grew by 17 percent. On the other hand, job creation in states that protected a worker’s freedom to choose whether or not to join a union to obtain employment grew by 37 percent, or more than double the rate of forced unionization states.

Ohio’s road to economic recovery will not be paved with higher taxes and will not be found through paying homage to unions. Robbing Peter to pay Paul does nothing to promote job growth or prosperity in Ohio. Try explaining to the taxpayers that they are better off by paying more for less. The logic simply does not add up.

Source: Buckeye Institute, September 6, 2010.

Columbus MHA Housing Fund Fiasco

Four Columbus-area newspapers have been paid over $100,000 dollars by the Columbus Metropolitan Housing Authority (CMHA) to advertise classifieds and legal ads, but one newspaper’s records shows more money being paid out than recorded.

Starting on February 17, 2009, money from one Department of House and Urban Development grant, to be used to improve already existing housing units in the area, has provided “advertisement services for nine (9) projects, funded thru the ARRA funds.”

The four newspapers the CMHA advertises in are the Cleveland Call and Post, the Columbus Communicator, the Minority Communicator and the Columbus Dispatch.

Charles Hillman, head of the CMHA, says the advertising costs correlates to the requirement by federal law that there be public and open solicitation to perform a service for these types of projects. He did not cite the law. Hillman replaced Dennis Guest earlier this summer, after serving for 24 years.

In an e-mail to the Buckeye Institute, Hillman says, “CMHA Policy in selecting contractors based on Public Bidding Process. All construction projects above $25,000 are Publicly Bid out, and advertised in the local news paper. The LOWEST AND BEST BIDDER “CONTRACTOR’ IS AWARDED THE CONTRACT.”

Hillman says, “According to CMHA Purchasing Policy, ads are placed in the local paper (The Columbus Dispatch, The Call & Post, an MBE [Minority Business Enterprise] paper, and the Community Communicator, an MBE paper). Ads are placed for two weeks. We usually advertise for five ads in the Dispatch, on Sundays and Wednesdays, and the first Sunday of the third week. The ads in the other two papers are on Thursdays only. For the Stimulus Package projects we added one more weeks of the ads to insure contractor’s participation. Thus advertising seven ads in three weeks.”

The three other grants in the Columbus area were awarded to the City of Columbus, not CMHA.

Jack Harris, president and publisher of The Communicator News, says they’ve been running classified ads for CMHA for years. He says they “don’t keep a record,” but “if the [CMHA] say[s] they did it, then they did.” The Communicator News includes both the Columbus Communicator and the Minority Communicator newspapers. The CMHA has reported paying the two Communicator newspapers $7,800 collectively for advertising services between February 17, 2009 and June 30, 2010.

The Cleveland Call and Post is the only newspaper to show records of what kind of advertising CMHA does and, even though they were incomplete, they revealed a number of financial discrepancies.

The first quarter, for example, technically started on February 17, 2009 and ended on September 30, 2009. Two payments of $370.48 were made, however, on January 22 and 28, 2009, and a third on February 11, 2009 for $268.28. None had descriptions.

In the official report, the CMHA claimed to pay the Call and Post $1,396 for the first quarter. The records provided to the Buckeye Institute starting on February 18, 2009 to August 26, 2009 show payments totaling $6,187.38 for CMHA classifieds and legal ads.

Victoria Mockabee, the Call and Post’s current Department Coordinator, says the dates and amounts provided “is all I can find from 2009 from the previous person who handled this position.”

The Columbus Dispatch would not discuss specifics of the CMHA advertising, but the CMHA public reports show payments totaling over $80,000.

The fifth quarter report is scheduled to be released on September 30, 2010. Hillman says the report “will show all projects 100% completed.” The sixth report, to come out on December 31, 2010, “will show all Stimulus Funds 100% expended and drawn.”

The Department of Housing and Urban Development awarded Akron 11 grants, Cincinnati 35 grants, Cleveland 7 grants, Columbus 4 grants, Dayton 10 and Toledo 11 grants and 5 contracts. Ohio has received 920 contracts, 6850 awards and 39 loans in total, amounting to over $7.82 billion dollars.

Ohioans Are Now Free to Support the Constitution…

In a case that made it all of the way to the desk of Rush Limbaugh, the Andover Tea Party in Ashtabula County has prevailed in its efforts to hold a Constitution Day rally on Andover Public Square. Previously, township officials had informed the residents that a rally in support of the Constitution was too political for the public square.

On September 16, U.S. District Court Judge Donald C. Nugent granted the 1851 Center a temporary injunction against Andover Township. The ruling cleared the way for the rally, and upheld the residents’ First Amendment rights. If the judge sided with Andover Township, local governments across the state would be emboldened to trample on First Amendment rights.

The Framers of the Constitution ratified the First Amendment to protect the right to debate the proper role of government without fear of retaliation.

The case in Andover demonstrates how the political class overlooks such basic constitutional rights. But it also demonstrates the need for Ohioans to vigilantly police their local governments, and when necessary, stand up to them. Courage is usually the first step in protecting one’s rights, and our clients in Andover should be applauded for theirs. We encourage other Ohioans to follow suit.

To learn more about the 1851 Center, visit http://www.ohioconstitution.org

Lee Fisher Strategizes with Planned Parenthood

Lee Fisher, U.S. Senate candidate, has been a loud, steady voice for abortion throughout his years in the public eye. On Friday, September 17th, Mr. Fisher is scheduled to join Cecile Richards, President of the Planned Parenthood Federation of America, for a conference call open to the public. Ms. Richards will be in Ohio for the day, with the call scheduled for 1:30 p.m.

During the conference call, Fisher’s campaign plans to talk about “Lee’s progressive vision for Ohio and the country, the path to victory, and how voters sustained energy and involvement will put Lee Fisher across the finish line on November 2nd.”

Pro-lifers, however, would like to ask Mr. Fisher and Ms. Richards to discuss the increasing number of abortions performed in Fisher’s home county, Cuyahoga, and what they have been doing to decrease those numbers.

Sadly, Cuyahoga County consistently boasts the state’s highest numbers of abortions performed annually. In 2008, there were 10,038 abortions performed in Cuyahoga County-more than double the numbers in Franklin County (Columbus) and Hamilton County (Cincinnati).

It seems that Mr. Fisher believes that good healthcare means partnering with Planned Parenthood, the leading abortion provider in the country. What do Ms. Richards and Planned Parenthood have to say about the alarming numbers of abortions performed in Mr. Fisher’s home Cuyahoga County?

Join the call to ask Mr. Fisher and Ms. Richards what they are doing to end the alarming number of abortions happening right here in Cuyahoga county. To RSVP, click on the following link: http://action.fisherforohio.com/signup_page/cecilerichards

Source: Ohio Right to Life, September 16, 2010

Ohio Township Blocks Rally to Commemorate Constitution Day; Event Deemed Too Political

The 1851 Center for Constitutional Law today filed a complaint and temporary restraining order against Andover Township (Ashtabula County) in U.S. District Court in Cleveland. The complaint charges that township trustees’ actions blocking a Constitution Day (Sept. 17) rally on Andover Public Square, by local residents, violated the First Amendment. The 1851 Center, a non-partisan public interest law firm, is representing residents Margaret L. Slingluff, Emily Kobialko and Scott Bankson, organizers of the “Andover Tea Party,” in the action.

Township officials informed the residents that speech at the Constitution Day rally could be of a “political nature,” and thus inappropriate for the public square.

The decision to deny access to the park was made in accordance with a township resolution allowing officials to determine public space usage “on a case by case basis,” and to ban speech that they deem too “political.” However, the park in question is a common gathering point for public events that often have far more political overtones. Officials made no inquiry as to the size of the rally, or other pertinent logistical concerns.

“The First Amendment clearly protects the right to gather on the public square, speak out in support of limited constitutional government, and critique the current state of affairs,” said 1851 Center Executive Director Maurice Thompson. “The government’s action in this case, ironically, demonstrates the need for greater public understanding of Constitutional rights. One way to do that is through commemoration of Constitution Day.”

“The townships’ self-aggrandizing authority to pick and choose who may speak, based upon whether they approve of the speaker’s message, is entirely unconstitutional,” added Thompson.

Ushering in a New Era in Ohio Manufacturing

By Senator Sherrod Brown

Today, when the sun rises in Youngstown, a third-shift worker driving home may well be sitting in a seat built in Warren. There is a pretty good chance that the brake system was manufactured in Findlay. An added safety feature – the folding air bag – may have been made in Dayton. The car engine and windshield glass were also probably manufactured in the Buckeye State. Ohio is ushering in a new era of auto manufacturing.

The first Chevy Cruze rolled off the assembly line in Northeast Ohio this past week. To build this new, fuel-efficient car, the GM plant in Lordstown added a third shift which created hundreds of new jobs in Ohio –a far cry from a year and a half ago when the company’s future was in doubt.

Ohio is home to more parts suppliers, materials industries, and technology companies that support America’s auto manufacturing base than almost any other state. More than 440,000 Ohio jobs directly or indirectly depend on the auto industry. It is the engine that drives American manufacturing and provides an entrance to the middle class.

A year and a half ago, the Obama Administration made the tough – and yes, unpopular – decision to save the auto industry from collapse. In the process, it helped prevent Ohio workers from losing their livelihood and helped maintain manufacturing jobs that keep our economy strong. While we still have a long way to go, the U.S. auto industry today enjoys the most job growth in a decade.

There were some naysayers who thought we should do nothing and let the U.S. auto industry crash and burn. If they had their way, we’d be looking at padlocked plant gates instead of watching new cars come off the line this week. Instead, it is a new day for the industry in Ohio.

Ohio workers – in small towns, rural areas, and big cities in 78 out of 88 counties – contribute to the U.S. automotive industry. The U.S. auto industry is one of four manufacturing industries that make up 56 percent of private sector research and development.

But as we continue to work our way toward economic recovery, one thing is clear: we’re not going back to business as usual. The Cruze – with its assembly in Lordstown and its components coming from across our state – shows that clean energy and fuel efficiency represent the future of our state’s manufacturing base.

Ohio is at the forefront of some impressive changes, quickly becoming a national hub for clean energy manufacturing. But this won’t happen without the right federal policies in place. I have been working to pass my Investment for Manufacturing Progress and Clean Technology Act – legislation that would create a revolving loan fund to help auto suppliers and other small- and mid-sized manufacturers retool their operations so they can participate in the clean energy supply chain. The IMPACT Act could create more than 52,000 jobs in our state while helping to revitalize Ohio’s manufacturing base.

We also need to ensure that our state’s most important asset – our skilled workforce – is prepared for the clean energy jobs of the 21st century. That’s why I am fighting for the Strengthening Employment Clusters to Organize Regional Success (SECTORS) Act. The SECTORS Act provides grants for sector partnerships among institutions of higher education, industry, organized labor, and workforce boards to stop the shortage of skilled workers for many emerging industries that can open doors in Ohio.

And to keep moving forward, we need to make the business climate more fertile for development by creating policies that encourage research and development. When President Obama visited the Cleveland area, he called for a permanent extension of the research and development (R&D) tax credit. R&D tax credits incentivize investment in emerging manufacturing industries like clean energy development.

The R&D tax credit promotes innovation by encouraging the domestic production of new clean energy technologies. Many important clean energy projects are under development in our state. At Hocking College Energy Institute in Logan, students are learning about automotive hybrids and advanced energy fuel cells that will continue to reshape the automotive industry. CODA Automotive – an electric vehicle manufacturer – recently announced plans to build a battery manufacturing plant in Franklin County. Building a lithium-ion battery to fuel electric cars creates clean energy jobs right here in Ohio, staves off an unhealthy addiction to foreign oil, strengthens America’s economic stability, and enhances our national security. This progress means that the late shift worker does not have to pay gas prices that fluctuate at the whim of a foreign government.

President Obama made a decision that saved the U.S. auto industry from collapse. Ohio’s steelworkers, plastics producers, and stamping plant workers were able to keep their jobs. Ohio auto parts suppliers were able to hire more people and build capacity. We owe it to our children and we owe it to Ohio workers who come home from the late shift to create a climate that fosters Ohio innovation and creates Ohio jobs.