OSU Architecture Students Tackle Ohio Economy

Greater Ohio recently collaborated with a class of Architecture students at Ohio State (we wrote about this in our May newsletter).  The students examined the evolution of Ohio’s economy and considered how restructuring the economy to be more export-driven would impact Ohio’s built environment.  A few weeks ago, the students presented their final work to Greater Ohio and several faculty members.  Below are a few of our favorite examples of their work. The following image depicts the evolution of Toledo’s manufacturing base from light bulbs to solar panels over the last 130 years and illustrates how modern economies often have their roots in our industrial past.

As shown in the following image, the students also recommend that in looking toward the future, we should not completely turn our backs on the past.  They identified the enormous potential that the vestiges of the industrial economy offer and suggest that old warehouses, for example, could be used as resources in our transition to modern economy.  We like the idea that what are often perceived as eyesores could, with some tweaking, become the venue for a return to economic prosperity.

There are still a lot of remaining questions about what a transition to a new economy means for places in Ohio, but we enjoyed tackling this interesting and important question with the OSU students and look forward to continued collaboration.

Moving towards Regionalism: Greater Ohio visits the Dayton region

Earlier this month Greater Ohio went to Montgomery County to participate in a day-long program: Developing the Miami Valley Region Together.  Sitting on the “The Current and Future State of Regionalism” panel, Greater Ohio discussed the recent history of Ohio’s governance and taxation structures and how these systems have given rise to fragmented and—at times—duplicative, costly governments.  As we pointed out in the discussion, excessive government layers often encourage urban sprawl, by seemingly making the edges of the metro cheaper.  Looking at a region—like the Dayton metro—as a whole, however, shows that sprawling infrastructure and governments weaken the overall economic power of the core and its suburbs.  Regional approaches, such as sharing service responsibilities between jurisdictions (such as using one parks and rec supervisor for two villages instead of each hiring their own), or even consolidations (as might happen among the city, county, and township fire departments) can reduce costs, maintain the same level of service, and encourage jurisdictions to more thoughtfully consider the addition of any new government layer on the edge of the region.

Greater Ohio was pleased to be invited to this public forum, as all of the day’s discussions sought to explain the different ways government cooperation can work, and what the benefits and disadvantages are to moving to more regionalistic structures.  As we recommended in our April Budget Analysis, budget cuts at the state and local levels must be accompanied by legislation and administrative policies that help smooth the belt-tightening transition by enabling and making permissive regional solutions.  The discussion underway in Montgomery County signals to us that local leaders have a real desire for governance reforms that will help them build strong metros in the future.

Greater Ohio, Buckeye Institute, Center for Community Solutions Call for Tax Reform

A recent collaboration between Greater Ohio and two other high-profile research organizations, the Buckeye Institute and Center for Community Solutions, reaffirmed the old adage about “strength in numbers.” By joining forces to help spread our message about the critical need for tax reform in the state, we attracted the attention of numerous state and national media. They reported on our efforts, which included sending a proposal to and meeting with state administrative and legislative leaders. We called on them to create a bipartisan State and Local Tax Study Commission to analyze the current tax structure and initiate efforts to make much-needed state and local taxation reform in Ohio a reality.

Our group message – and a recommendation of Greater Ohio for some time – is that without change, the prospects for positioning Ohio for regrowth in the future are greatly diminished.

Coverage included articles and editorials in The Columbus Dispatch, The Cincinnati Enquirer, The Dayton Daily News, The Akron Beacon Journal, The Toledo Blade, and USA Today.

To read what the press had to say about our recent initiative, click on any of the links below:

USA Today

The Columbus Dispatch - Editorial

The Akron Beacon Journal - Editorial

Dayton Daily News - Editorial

The Columbus Dispatch

The Cincinnati Enquirer

Dayton Daily News

Toledo Blade

The Examiner

My Month with Greater Ohio Policy Center

By Gina Volpe, Greater Ohio Intern. When I walked into a brick office building off Main Street on a sunny Tuesday, I had no idea what to expect.  I waited outside only to be greeted by a man about two times my size, as I introduced myself while he opened the door. After learning the history of the mattress factory Greater Ohio is housed in, I walked into the world that is Greater Ohio.

From the very first day, I was immersed into public policy. As an outsider looking in, it was a little difficult (and still is) to keep up with a conversation filled with acronyms like TID and CDAT. I had to Google “anchor institution” a few times in order to fully understand what it is. Slowly, but surely, I began to realize some of the major issues our state is facing, whether it be land use, transportation, or the budget crisis. I learned the processes of our government and how both branches of our legislation coincide to produce intricate bills that affect our lives in thousands of ways.

What surprised me the most was how the rest of society not living within a block of the statehouse is oblivious to how much effort and time goes into changing even the smallest portion of the law. And what is even more surprising is how the media barely covers what is actually happening. It’s almost like the statehouse is inside a snow globe, and as hard as you shake it, you will never be able to grab the information on the other side of the glass. Unless you’re fully enveloped in the culture of the statehouse, it’s hard to be acquainted with everything that is going on.

My question is "Why?". Why is there not more coverage on the state budget in the media? Why don’t citizens know the name of their district representative? Why was I, an almost graduate of high school, overwhelmed as I just scratched the surface of our entangled and complicated government? I feel like there are so many topics to discuss, but there is so much more to discover. I can’t thank Greater Ohio enough for showing me the innerworkings of our government, and I wish more people would have the opportunity to not just see the effects of our government, but to witness the causes of change and why they are important. Who knew an old mattress factory could teach me all that?

Horse and Buggy Tax Structure Holding Ohio Back

Do you shop where you live? It turns out that most Ohioans do a fair amount of shopping away from their home county.  A recent study completed by Greater Ohio, shows that 70 percent of counties did not capture the amount of sales tax revenue that that would be expected if the residents of the county did all their shopping in that same county.

Why does this matter?  It demonstrates that shopping patterns are regional, but our county-based sales tax structure is not.  This system rewards a minority of counties while hamstringing the majority, which creates unbalanced service provision and tax rates across the region, contributes to sprawl by incenting the development of new retail centers on greenfields, and priorities individual counties over capitalizing on regional strengths.

Take the Columbus area as an example.  The graph below shows how sales tax revenue capture changed in Franklin and Delaware counties with the introduction of Polaris.

A closer look at the broader region shows that despite the increase in spending in Delaware County between 1992 and 2009, the total change in spending for the region changed only slightly from $129 to $138 per capita, especially relative to increases in household income for the region during that time.

This arrangement creates a situation where counties with big, new malls thrive while most other places struggle.  All the while, however, the amount of retail spending within the broader region itself remains virtually the same.  In other words, this dynamic of shopping destinations moving around the region does not increase the state’s prosperity. Instead it just redistributes spending from one place to another and leaves places without major retail destinations without many options other than to raise taxes or cut services.

To modernize the taxation system to reflect the regional way we live and shop today, Greater Ohio is currently advocating for:

• Legislation that makes regional revenue pooling permissive
• Legislation that makes permissive mergers, consolidation, shared services, and alternative governance structures and eliminates legal and constitutional barriers to new structures of government.
• Creation of a Governance Reform Commission to oversee and provide technical assistance to Ohio’s local governments as they adapt to the 21^st century

The complete study can be found here.

Sharing Services and Governance Reform in Ohio

By Gene Krebs. Senate Bill 125 would allow all local governments to share services through a Council of Government.  This is a good idea, but should be viewed as only a start to deal with our larger problems.  Sharing services requires willpower at the local level, which is like my diet; it works until I see chocolate cake.  I am testifying in support of SB 125 today.

We no longer live where we shop, live where we work, or work where we shop, but our whole system of governance and taxation is predicated on you conducting all your economic activity within five miles of where you live.  Our local governments expect you to conduct a mixed balance of your activities within their governmental entity.  However, this is no longer the reality in which we live; we live in a regional economy and our governance structures need to adjust to this change.

Ohio ranks 33^rd highest in state tax obligation and 6^th highest in local tax obligation.  SB 125 could result in lower local taxes. Furthermore, Ohio has 41.3 local governments per county, and the national average is only 27.9.  Becoming average would be an improvement.  Our excessive amount of local governments drives up our cost of doing business.  Sharing services would reduce these costs.

The only silos Ohio should have are located on our farms, yet unfortunately every governmental entity has their own funding silo, often from a different economic activity, and often with a local ballot funding mechanism.  This leads to ballot exhaustion for the citizens and a fracturing of tax transparency and accountability.  This separation of economic activity from our domicile is why school funding does not work in much of Ohio, for example.

For more information on this topic, please see our Sales Tax Analysis.  I urge you to examine it closely.

Gene Krebs Testimony for House Bill 153

Every two years the state of Ohio develops a new budget to fund all state activities and many local activities through a variety of subsidies.  In fact the state only keeps 15% of the tax money that flows through their treasury and sends the remaining 85% back to the local governments.  For seventy years the state has been distributing money to local governments without sufficient consideration for cost efficiencies. Greater Ohio has recently testified in the House Finance Committee that Ohio needs better data to understand how to achieve these cost efficiencies .  Better data will be the key in transforming Ohio's communities to become more competitive in the global economy.  Currently Ohio's fractured and duplicative layers of government undercut Ohio's economic competitiveness, and the most important tool to reversing these damaging trends is the accumulation and distribution of better data.  In order for each taxpayer to get the best best bang for their buck, better data is needed to know where and how cut, merge, consolidate or share.

For more information on this topic, read Gene Krebs' complete testimony.  If you're not interested already, here's a direct quote from Gene's testimony, "I can give more data about Kate Middleton’s dress than I can about most Ohio government, state and local."

Building the Ohio Innovation Economy and the National Academy of Sciences

On Monday, April 26^th, Greater Ohio attended a symposium on Building the Ohio Innovation Economy.  Co-sponsored by the National Academy of Sciences, University of Akron, Case Western Reserve University, Morganthaler—a venture capital firm—and Nortech—a northeast Ohio technology economic development group—the symposium was held in Cleveland and brought together regional, state, and federal leaders to discuss innovation.  Panelists from federal agencies, private sector companies, think tanks, universities, and philanthropic foundations offered a range of ideas of how to capture, support, and encourage the innovative work being done throughout Ohio, and especially in northeast Ohio. Lavea Brachman, Greater Ohio Policy Center's executive director, provided a state-policy perspective and made the case that the private sector will have to lead the state in innovation—especially in supporting industry clusters as a regional economic development strategy—but that state and local governments must provide the right conditions for the private sector.  In urging for governance reform and strategic investments that can help Ohio lead the next economy, Brachman argued that state policy could be pivotal in clearing the way for growth in interconnected businesses, and that the state should join with local and regional players to create a climate for innovative growth.

From L to R: John Fernandez, assistant secretary of the Economic Development Administration, a sub-agency of the US Department of Commerce; Lester Lefton, president of Kent State University; Lavea Brachman, executive director of Greater Ohio; Ronn Richard, President and CEO of the Cleveland Foundation.

Brachman’s co-panelists pointed to the role the federal government and philanthropy in encouraging cluster development.  As they, and speakers on other panels affirmed, building an innovation economy requires a multi-pronged strategy that knits together and syncs federal, state, local, private and public programs and officials.   Jim Leftwich, the new director of Ohio Department of Development, publicly committed the state to developing and supporting Ohio’s innovation economy.

Greater Ohio is heartened by the idea streams brought together by the symposium and the number of stakeholders who are deeply invested in building Ohio’s innovation economy. We look forward to reform and creation of state policies that can further support this work.

Greater Ohio Executive Director attends American Assembly

Lavea Brachman, Greater Ohio's Executive Director, recently participated in a four day national conversation about cities in transition and the policy and practitioner strategies that can help revitalize and strengthen these places.  “Defining a Future for America’s Cities Experiencing Severe Population Loss”  was convened by The American Assembly, a nonpartisan public policy forum , and co-sponsored by The Center for Community Progress (CCP) and The Center for Sustainable Urban Development (CSUD) at the Earth Institute at Columbia University. Brachman, who served on the leadership team, joined roughly 80 leading U.S. thinkers to begin producing a set of well-defined policy approaches; approaches that will assist cities in stabilizing, “right sizing,” and finding new ways to rebuild their economies and engage local stakeholders.  The outcomes of these discussions will be released in the coming weeks.  For local coverage of the event, see this write up of the Assembly.

In developing federal and state policies that can support cities in transition, Ohio—as a state with many cities in transition—has much to gain from this summit.  Previously, the American Assembly has successfully moved federal and state policy on a variety of issues, such as ways to develop economically competitive metros.  As Greater Ohio has advocated before, federal policy and state policy must reinforce each other if our cities are to compete and thrive in the new economy.  We look forward to learning about the American Assembly’s final recommendations and will be posting them on our website when they become available.

Greater Ohio Releases State Budget Response & Local Government Restructuring Toolkit

Greater Ohio applauds the proposed 2012-13 budget for taking a bold first step in challenging local governments to modernize, but cautions that Ohio needs more tools to realize the vision of more efficient local government and to ensure a return to prosperity for Ohio. Recently the 2012-13 State Operating Budget was released in which bold proposals set into motion the streamlining and cost reduction of government operations, especially among local governments.   In a response released by Greater Ohio– The 2012-13 State Budget Response and Local Government Restructuring Toolkit– we agreed that the status quo is not a winning strategy and to move Ohio’s economy into the 21^st century, increased efficiency and savings among local governments are needed.

However, to return Ohio to prosperity, budget cuts MUST be combined with strategic and targeted investments; cuts alone will not bring about a climate of prosperity.  Our response recommends legislative adjustments, new pieces of legislation, and the creation of some new state programs and policies to smooth the transition from the existing, antiquated structure of local governance to a modernized one.

We strongly recommend that the 2012-13 budget bill and subsequent legislation incorporate the following tools:

1. Create a Governance Reform Commission to oversee the modernization of Ohio’s local governments by providing innovative leadership on governance reform, collecting data on local governments to help set efficiency standards, and offering technical assistance for local governments that are merging or initiating other new governance structures
2. Create a framework for pooling resources regionally to pave the way for robust regional economic development by creating a regional revolving loan fund for needed infrastructure funding and economic development projects.
3. Make permissive mergers, consolidation, shared services, and alternative governance structures and eliminate any legal and constitutional barriers. This could provide for a merger of city and county jurisdictions that results in consolidated service districts and governance, increased value for the taxpayer and a better business climate.
4. Develop a protocol for collecting data on local governments’ costs and level of services, like the Cupp report for education, so that the Governance Reform Commission can create efficiency standards, evaluate the performance of local governments, and develop other indicators of performance.

In research conducted by GO and the Brookings Institution, we found:

• 86 percent of states have fewer governments per square mile than Ohio
• Ohio has 41.3 local governments per county and the national average is 27.9 local governments per county
• Ohio has moved from 9^th highest in local tax burden to 6^th highest among the fifty states, while the state burden has stayed stable at 33^rd
• Ohio ranks 22^nd nationally in instructional payroll spending, but its non-instructional payroll is 8^th highest nationally (as a percentage of personal income)

It is clear that dramatic measures are needed to make Ohio average.  Reducing and eliminating duplication in services will save money and free up resources Ohio can use to make strategic investments in assets to grow our economy.  Fixing congested freeway interchanges, seeding venture capital investments or supporting anchor institutions have significant multiplier effects that will allow Ohio to realize the Governor’s vision of competing anywhere in the world.  The underlying structure of local government in Ohio must change, and the State should drive this change.

To see our full analysis and a longer menu of policy tools that can be used to foster the necessary restructuring of local government, please see our 2012-13 State Budget Analysis and Local Government Restructuring Toolkit.