Article: THE OHIO ECONOMY: State of rust
As Gov. Bob Taft prepares to deliver his final State of the State address Wednesday and the campaign to replace him shifts into high gear, the Ohio economy remains stuck in reverse, a Dispatch analysis of key indicators shows.
Although the state has improved by some measures that economists use to gauge the health of a state economy, Ohio has fallen further toward the bottom nationwide in others.
Take job growth, which arguably is the best measuring stick. After ranking 46 th in the nation from 2003-04, Ohio slipped to 47 th last year based on the most-recent data available for all states.
Ohio employment numbers released Friday show that the state added only 10,600 jobs during 2005.
The only states with worse job-creation performances during 2005 were Michigan and hurricane-battered Mississippi and Louisiana.
The numbers are equally grim for other economic indicators such as bankruptcy filings and population change, including the number of young people leaving the state, federal data show.
"Sometimes you could say there is some quirk or reason that an indicator doesn’t give an adequate portrayal, but, I’m sorry, those indicators do give an accurate portrayal of what’s going on," said Ken Mayland, president of ClearView Economics near Cleveland.
"They show that Ohio, on a number of scores, is sadly and vastly lagging national growth trends," he said.
Experts say Ohio’s economy suffers from some factors it can’t control, such as a concentration of jobs in the shrinking manufacturing sector.
For example, Ohio relies heavily on the struggling automotive industry and doesn’t have a vibrant, growing industry to offset it, said Ned Hill, a professor of economic development at Cleveland State University.
Experts said there was little good news in Ohio’s economy during the past year compared with other states, and little reason to be optimistic about 2006.
The statistics "tell a very consistent and, unfortunately, very depressing story," said Jim Newton, chief economist of Commerce National Bank in Columbus.
Taft has acknowledged that improving the economy remains Ohio’s greatest challenge, but he says the state is making its climate more attractive for investment and job creation.
For example, the governor pushed for sweeping changes to the tax code last year to encourage business investment, and he continues to sell the state to companies nationwide and overseas.
"We can’t assure success in a competitive world economy, but we can do everything within our power . . . to create the conditions and build the foundation for Ohio’s competitive success," Taft said in an interview.
This year, the final year of Taft’s second term, the governor said one of his initiatives will be integrating Ohio’s education system and better preparing students for college or work.
Taft said he will discuss details in his State of the State speech this week but that it coincides with the Partnership for Continued Learning he created last year with representatives from education and business.
The idea is to better align high-school graduation requirements with college and work standards, encourage more students to take rigorous classes and create incentives for colleges to boost graduation rates.
Taft also said he plans to talk about efforts to stop predatory lending, and legislative leaders expect he will mention ethics reforms and changes in how the state buys goods and services in the wake of scandals last year.
After a year in which Taft was convicted on ethics charges and problems swirled around the Ohio Bureau of Workers’ Compensation, Taft also plans to use the speech to highlight what he thinks are the accomplishments of his administration.
Despite the problems of 2005, Taft argues that implementing the tax changes and other policy victories made it his mostproductive year since he took office in 1999.
Critics say Taft is an ineffective leader who, as a lame-duck governor with low approval ratings, will have difficulty accomplishing much this year.
Taft disagrees, noting that he has a strong working relationship with House Speaker Jon A. Husted and Senate President Bill M. Harris, who helped Taft get most everything he wanted in the budget bill last year.
On a personal level, he admitted it will be "difficult" delivering his last State of the State address and leaving a job he loves but said, "I’m looking forward to making the most of it.
"I’m confident that we can still accomplish a great deal of progress in this coming year that will position Ohio for even greater prosperity in the years to come," Taft said.
Even so, critics say that Ohio’s economy continues to suffer because changes in state policies are too little or too late.
Trying to improve education standards is fine, for example, but it will not reverse the decline in Ohio’s economy, said Richard Vedder, an Ohio University economics professor and a member of the U.S. Commission on the Future of Higher Education.
"It’s like rearranging the deck chairs on the Titanic," Vedder said.
"We’re reaping a bitter harvest of the failures of past policies and past indecision, past complacency," Mayland said.
posted by Kathie Bracy at 10:04 PM
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