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Voters May Boot Democrat Ohio Governor Trying to Retool Economy

Monday, 25 October 2010 07:26 AM

Governor Ted Strickland sees the future of Ohio reflected in 159,000 gleaming solar panels nestled between fields and factories outside Upper Sandusky.

The 84-acre solar farm is the product of months of negotiations between developers, utilities and state agencies. The panels were made by First Solar Inc. in its Perrysburg plant 60 miles away, and 80 people spent seven months building the facility. Now, it’s producing power for some 9,000 homes -- and employing three full-time maintenance people.

Democrat Strickland has sought to retool Ohio’s economy by focusing on renewable energy, biotechnology and aerospace. That future-oriented plan is colliding with the reality of this election season: a 10 percent state jobless rate that tops the national average. As a result, he’s struggling to fend off a challenge by Republican John Kasich to win a second term.

“The solar plant isn’t putting food on the table for the people that need it,” said Upper Sandusky Mayor Scott Washburn, who has watched a dozen companies including auto-parts makers dismiss almost 1,400 workers over the last six years in his town of about 6,700 people in north-central Ohio. “We’re still left with all these people without jobs.”

In surrounding Wyandot County, the number of those on food stamps grew by a third in 2009, according to Ohio’s Department of Job and Family Services. Washburn, 37, an independent, said his town collects about $1 million less in income taxes than five years ago.

“A job 10 years down the line doesn’t mean anything,” said Thomas Bennett, director of the county’s Department of Job and Family Services. “We have needs now.”

‘Got the Fix’

Economists say there’s little that Strickland, Kasich or other policy makers can do in the short term to stop the bleeding. What will help Ohio, they say, are investments in education to develop technology and attract scientific and business talent.

“Politicians arrive on the scene and say they’ve got the fix,” said Guhan Venkatu, an economist at the Federal Reserve Bank of Cleveland. “The problem is you have these longer-term trends that are overwhelming what policy makers can do.”

Manufacturing employment in the state has declined every year since 2000, with 400,000 jobs lost, according to data compiled by Bloomberg. Overall employment has fallen each year since 2005, the data shows. New building permits fell more than 45 percent from January 2007 to August of this year. And the extra cost Ohio pays over top-rated debt on general obligation bonds has almost doubled since the beginning of 2010, according to the data.

Paying the Price

While there are signs of recovery -- the unemployment rate has dropped for six straight months -- Strickland, 69, may pay the price for the economy’s weakness. Public opinion polls have consistently shown Kasich leading, though a poll commissioned by the Ohio Newspaper Organization shows his lead at just 2 percentage points, 49 percent to 47 percent. The poll, conducted Oct. 14-18, has a margin of error of 3.3 points.

“I didn’t cause the recession,” Strickland, who became the first Democrat elected governor of Ohio since 1986, told a crowd on Oct. 14 at a parts-manufacturing plant in Springfield. “The recession was caused by mismanagement in Washington and shenanigans on Wall Street.”

Strickland argues that he helped stem the bleeding by reducing business taxes, erasing many state regulations, and encouraging universities to develop new technologies in areas like alternative energy and biotechnology.

Referendum on Obama

The race has become as much a referendum on his four years in office as on Barack Obama’s presidency. On Oct. 17, Obama made his 11th trip to Ohio as president to campaign for Strickland in this battleground state, which has voted for every winning presidential candidate since 1964.

“We have gone through the worst economic crisis since the Great Depression, so when times are that difficult, elections are going to be difficult,” Obama told donors in Cleveland.

Strickland, the son of a steelworker who grew up in such hardship that he once said his family had to briefly stay in a chicken coop after a fire damaged their house, says his administration is laying the foundation for a new economy. He points to projects like the 500 wind turbines approved in the state and legislation that mandates 25 percent of energy sold in Ohio by 2025 be from alternative sources.

“There will come a day when Ohio will be the undisputed home of advanced energy,” the governor, who has served as a Methodist minister and a prison psychologist, said in his state- of-the-state address in January.

‘Heartbeat of Ohio’

Kasich, 58, is promising a return to past prosperity, pledging to restore the economy through industries such as coal and to put the state on a more fiscally sustainable path.

“Small-town Ohio, rural Ohio is the heartbeat of Ohio,” Kasich told an audience on Oct. 16 gathered in a barn in Gallipolis, a town of 4,000.

Kasich blames Strickland for the loss of 400,000 jobs since the start of his administration. He said his own plan to phase out Ohio’s income tax, which last year accounted for about 34 percent of state revenue, will attract companies and spur growth.

The former nine-term congressman says he would cut spending and replace the economic-promotion functions of the Ohio Department of Development with a not-for-profit corporation governed by business executives. As House Budget Committee chairman in 1997, Kasich helped shape the first balanced federal budget since, as he put it, “Man walked on the moon” in 1969.

He left the House, then became a Fox News commentator and managing director at Lehman Brothers Holdings Inc., whose 2008 collapse triggered the financial crisis.

‘Small Industry’

Kasich, the son of a mailman, takes a more critical view of renewable energy, raising concerns that it will increase costs for manufacturers and farmers.

“Alternative energy is important, but it’s a small industry right now,” he said in an interview. “We need to concentrate on the things we know how to do.”

Supporters of renewable energy projects like the one near Upper Sandusky built by Tempe, Arizona-based First Solar, the world’s biggest solar-power company, say that while few jobs are being created now, employment will eventually be generated up and down the supply chain.

Curt Judy, who manages the site for a subsidiary of Public Service Enterprise Group Inc., a New Jersey company that owns the site, said the farm also helps draw attention to the area that may prompt other companies to invest.

That can’t come soon enough for some people in Wyandot County, where the jobless rate was 11 percent in August, state figures show. The national average is 9.6 percent.

Big Tax Bill

Bryan Pino, 28, opened Shotzy’s Bar and Grill in Upper Sandusky last year using space that once housed a restaurant and paint store. When he started, he employed 53 people. Now, he’s down to about 20, which he blames on the roughly $28,000 he paid in taxes in the last quarter and on a struggling customer base.

“There’s no way that you can get something out of nothing,” he said.

In the nine years that Bennett of the Department of Job and Family Services has lived in the town, he’s seen two carpet stores, an appliance shop, a shoe store, a lumber company, a restaurant and a grocery shut down.

In nearby Marion Centre shopping mall, half the 35 stores are shuttered, filled with empty display cases and dust-bunnies.

“These places go,” he said, “and nothing replaces them.”

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Governor Ted Strickland sees the future of Ohio reflected in 159,000 gleaming solar panels nestled between fields and factories outside Upper Sandusky.The 84-acre solar farm is the product of months of negotiations between developers, utilities and state agencies. The...
Monday, 25 October 2010 07:26 AM
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