Ohio Debt Rating Decline Linked to Stimulus Bucks, Loss of Manufacturing Jobs

Ohio Debt Rating Decline Linked to Stimulus Bucks, Loss of Manufacturing Jobs

Buckeye State Leader in Loss of Manufacturing Jobs

Y-2-Y Revenues Off by 11%

by John Michael Spinelli

August 31, 2009

COLUMBUS, OHIO: The same effect experienced by a borrower whose credit card score is negatively affected by undisciplined borrowing and the borrowers diminished ability to pay off their balance in full in a reasonable time is having a similar affect on on Ohio.

Noting decisions to delay $736 million in debt payments by relying on one-time federal economic stimulus funding and on estimated revenue from expanding gambling, a controversial initiative that could further be compromised if legal challenges filed against it gain traction, Moody's Investor Services said its decision last week to reduce its rating of Ohio borrowing from the second-highest to the third-highest was a reflection of its concern that Ohio's budget could experience even rougher seas in the future when federal funds evaporate and gamblers don't lose as much as projected.

While Moody's is concerned about the future, its rating decision also reflected its concern for the past, as reflected in the tremendous number of manufacturing jobs lost in Ohio over time and in just the last twelve months.

For that story, data released by the US Bureau of Labor Statistics and published in the Atlanta Business Chronicle show Ohio led all other states in the loss of manufacturing jobs over a period of one year. For Ohio, its loss of 127,000 manufacturing jobs topped all other states. Its closest rivals in loss were California (123,400) and Michigan (108,900).

Ohio clearly has fewer resources at its disposal to maintain superior borrowing rates. Once an industrial titan of the Midwest whose once well-developed industrial might was the envy of other states and nations, Ohio has lost many battles over the years as its manufacturing base continues to tumble in size from its salad days of being a leader in labor-intensive industries like steel, rubber and glass that among other important industries made Ohio a good place to raise a family and locate a business.

Ohio communities could once count on manufacturing jobs as the bread and butter of their livelihood. Ohio's state budget was similarly blessed by revenue from these and other industries and the workers who pushed them forward that could be transformed into good roads, strong bridges, institutions of education and infrastructure that attracted families and businesses alike.

But with the state budget under attack from cliff-diving revenues exacerbated by business leaving the state and workers looking elsewhere for greener pastures, Ohio seems hard pressed to turn the tide by reclaiming a future that reflects its prosperous past. Even though its two-year state budget of $50.5 billion is still considerable when compared to budgets from other states, the across-the-board pain it delivered to individuals and agencies was considerable.

If the prospect of 30-40,000 more Ohioans losing their jobs due to state budget cuts becomes reality, the added grief that will be visited on Ohio families will be like rubbing salt into an already open wound of a bleeding budget waiting for a transfusion that may not arrive for years.

Response to such news by the Governor's office say the state's rating "continues to be solid despite the national economic downturn" and note as proof of that that "the latest outlook change did not affect the cost of issuing coal-development bonds recently."

"The long-running structural changes affecting Ohio's economy indicate that the state may have difficulty recovering jobs in tandem with national trends as the recession ends," the report said, according to the AP article.

According to the August 11th Monthly Report on Ohio's Economy and State Finances, "Ohio’s economy has begun to see signals of the beginning of a weak recovery from the deepest downturn experienced in the past 50 years." The report stated that as the national recession eases a bit, a weaker than average recovery is expected to begin as early as the end of this summer. "The pace of economic recovery in Ohio will depend heavily on the fate of the motor vehicle industry," a reference to the fates of General Motors and Chrysler, two Detroit-based firms with large numbers of workers in Ohio, who went into and emerged from federal bankruptcy court.

The unemployment rate in June for Ohio was 11.1 percent, the report noted, a figure it said would continue to "show a downward trend throughout July." Consumer confidence also decreased somewhat in July, but the trend still appears to be improving relative to the extreme lows registered in February, it said. Also, for the first time in nine months, Ohio’s total tax receipts exceeded estimates. However, the real news is that "year-over-year performance is still 11 percent below the July 2008 levels."

John Michael Spinelli is a Certified Economic Development Financing Professional, business and travel writer and former credentialed Ohio Statehouse political reporter. He is registered to lobby in Ohio and is the Director of Ohio Operations for Tubular Rail Inc. Spinelli on Assignment is syndicated by Newstex.com and is available for subscription (99 cents/month) to Kindle owners. His tweets on Twitter can be followed @OhioNewsBureau. To send a news tip or to make a comment, email him at: ohionewsbureau@gmail.com

Ohio Spending Panel OKs $200K More for Slow Train to the Past Project

Ohio Spending Panel OKs $200K More for Slow Train to the Past Project

Outsourced California Rail Study Firm Outsources Work to $300/hour Consultant

State Spending Priorities Called into Question as Initial 3C Rail Study Reaches $650,000

by John Michael Spinelli

August 27, 2009

COLUMBUS, OHIO: The split vote last Monday by a bi-partisan legislative spending panel, over whether Ohio rail chiefs should be given another $200,000 on top of the $450,000 they received in late March to fund a California firm's assessment of the capacity and capital costs associated with Gov. Ted Strickland's idea to start running passenger rail trains between Cincinnati and Cleveland, raises questions of whether this project has merit at a time when Ohio's budget is under terrible pressure and if the Controlling Board will become a back-door to increased agency funding reduced during the regular budget cycle?

The Controlling Board, housed in the Ohio Department of Budget and Management and controlled by the administration of Democratic Gov. Strickland, is an insider's agency that rarely gains coverage by the media other than when spending on hot topics like casino gambling, slot machines or special counsel for special projects comes before its bi-weekly schedule. Ohio news media did take note that state agencies whose funding was reduced in the recently completed budget cycle, that ended on July 17 when Strickland signed a budget some say will lead to thousands fewer state workers and job losses by agencies whose state funding was cut sharply, are using the sleepy spending panel as a back-door method to add to their budgets.

In the case of the request by the Ohio Department of Development (ODOT) and its captive rail agency, The Ohio Rail Development Commission (ORDC) that asked for and received another $200,000 for critical work its needs before it can apply for high-speed rail (HSR) funds from Washington on October 2, the Controlling Board may find itself in the news more often as it becomes a new battleground to tussle over projects that really do need more funding or whether projects like the 3C railroad project, that Republicans in general and Republicans on this panel in particular say is not only not in demand but will spend precious dollars that could be spent on more pressing priorities, like funding food banks, children's health programs, libraries, services for the elderly and the sick, should slow down and wait for better times or better train technology.

Public information submitted (#90) to the Controlling Board by ODOT/ORDC to add another $200,000 to the $450,000 the panel approved in late March, shows the small, four-person California firm, Woodside Consulting, that state officials said they had chosen to perform analysis of the "capacity and capital costs" associated with the re-establishment of passenger rail trains along a 250-mile route connecting Cincinnati with Cleveland with stops in Columbus and Dayton along the way because only they could do it, will now outsource the state's outsourced work to other consultants, one of whom will charge $300/hour, a rate that even high-priced lawyers doing special counsel work for the Ohio Attorney General would envy.

Calls for comments to the three Republicans who voted against the rail consulting funding request Monday, State Senators John Carey (17th Dist), Mark Wagoner (2nd District) and House Representative Jay Hottinger (71st District), were not returned to Spinelli on Assignment in time for this column. However, a staffer for Hottinger who said he was familiar with his boss's general thoughts on the issue of high speed rail, said his boss believes their is little real demand for this project and that a train system like the one that runs in the nation's capital would be better suited for Ohio, as it would help move people from suburbs to city centers, a decision that might actually lure some drivers to abandon their cars for a commuter train.

In ORDC's pre-application to the Federal Rail Administration (FRA) that asks for more than $5 billion of the $8 billion being offered nationally for such projects, Ohio said its 3C plan would conservatively cost $1.53 billion. This figure, some rail observes say, will rise much higher if and when real bids are ever received. Bids to build HSR in Florida -- recall that the International standard for HSR is 167-mph or more-- were nearly double what proponents said they would be when they convinced Floridians in 2000 to have the state make a commitment toward Euro-style trains. In 2004, when the jaw-dropping bids came in from foreign companies that control the fast train technology, Floridians reversed their commitment in another statewide vote. The lesson from Florida, and now from California, where a slim margin of voters last November authorized the sale of $10-billion in bonds to pay one-third the total cost of the state's $45 billion HSR package and where a lawsuit filed recently by opponents of one part of the plan to adjust the route has been upheld by a county judge, should not be lost on regular Ohioans or their leaders.

Amid the fanfare and fever surrounding the prospect of HSR coming to a state near you, a vision that has every township official thinking their location will be a HSR stop and the riches brought in from the talking point that economic development will occur from it, more and more national voices are making clear arguments that are popping the myth bubble expanding around HSR. It may rub some rail proponents the wrong way, but its a message more people need to hear before they are lead to far down the primrose path.

The lesson may play out in Cincinnati, one big C in the 3C rail route. Residents of the Queen City opposed to a trolley project, that has already escalated in estimated cost from $123 million to $185 million, are pushing a charter amendment that if passed this fall would prevent any rail projects going forward without a vote of the public. The hometown newspaper, Gannet's conservative Cincinnati Enquirer, wrote a no-holds editorial calling for a halt to the trolley project. Proponents of trolleys running in a mostly Downtown loop argue not doing it will show how opposed to progress Cincinnati will be. Advocates to stop the trolleys in their tracks say its another boondoggle waiting to happen. Their argument is mostly centered on the health of city finances. Until Cincinnati city finances are flush again, such that it doesn't have to lay off workers or reduce funding for important programs, only then should such a project be discussed.

The implication for ODOT/ORDC is that passage of the charter amendment will help derail their hell-bent push to start the 3C because voters will have to vote again to authorize the building or updating of rail lines into the city.

Critics of the 3C plan, which if it ever gets started -- rail officials say with great uncertainty that their "quick start" train may not run until the fall of 2010 or even 2011 and that the train won't be in full bloom until 2015 -- say the speed will be so slow -- averaging only 57-mph because this train, by necessity, will be forced to share freight rail tracks with freight rail trains. Ohio rail officials are caught on the horns of a dilemma -- they want to encourage support for the plan but at the same time they must tell some officials they won't be a stop on the route. By themselves, freight trains had over 100 accidents in one year in Ohio, according to the FRA. It follows that collisions between passengers and freight will happen.

One key question state rail chiefs or even lawmakers are not asking, is who will be liable for such crashes? Indemnification, the technical name for who pays for accidents when they happen, is an issue, that like the capacity and capital costs Woodside is to produce, state rail chiefs don't want to talk about. State supporters of the costly train to the past would rather oversell its benefits -- one favorite talking point is that rail nodes will foster economic development, but it's a talking point any mode of transportation can make, so its not unique to the 3C -- and undersell the cost to build it, the cost to operate it, the ridership numbers who will use it and how much Ohio will need to subsidize it because it won't be a money maker.

Another critical aspect of the 3C is who should really pay for it, as this article about the debate over the cost of transportation in Virginia demonstrates. Should everyone or just users be stuck with the bill? State rail proponents would like everyone to pay for it even though only a few will actually pay the ticket price to ride nearly seven hours from one corner of the state to another. They are having a hard time making their slow train appear competitive with traveling the same distance by car. Those in the know in Ohio know that even when a rider gets from point A to point B, the public transportation infrastructure that awaits them in any Ohio city has a lot to be desired. State lawmakers have reduced state funding for public transportation by more than 60 percent since 2000, so who's fooling who here?

One funding options state rail officials would rather not discuss is asking those cities who want to be a part of the route -- Cincinnati, Dayton, Columbus and Cleveland -- and those riders who want to ride it to pay for it. Most of Ohio will not be close to it and few Ohioans will not ride it. So why should they pay for it? Tolls and user fees are popular forms of paying for infrastructure, as those of us who follow infrastructure bills in Congress know. James Oberstar (D-Minnesota), the reigning wonk on transportation infrastructure, knows everything about how transportation modes can operate seamlessly but he falls short on how to pay for it all. With the nation all lathered up over growing deficits made real by spending on tax cuts, war and now maybe health insurance reform, the appetite to have Washington dole out trillions more for roads, bridges, airports or trains and train stations is surely souring. States like Ohio will be left to their own devices and political wills to fund their own infrastructure.

As the races for various public offices in 2010 come closer, the wisdom or folly of pushing the 3C slow train to the past will gain more speed. Gov. Strickland will have to defend it while his opponent, possibly John Kasich , a former Ohio Congressman know for his attention to balanced budgets, low-taxes and deficit hawk sentinel, could use it to show what a waste of funds it will be and ask where, exactly, Strickland expects to come up with Ohio's share of hundreds of millions, maybe billions, for a project that would necessarily have to usurp money from more important state priorities.

But until the un-electeds like the leaders of ODOT and ORDC are reigned in by their boss, they will continue to make unsubstantiated arguments for their slow train to the past and spend money as if it was delivered in a box car from CSX, all because they have control over it. Voters will be left at the train station (most communities don't have and can't afford to build) as they watch slow trains that won't go any faster than Civil War era trains chug away from them on routes to yesteryear.

John Michael Spinelli is a Certified Economic Development Financing Professional, business and travel writer and former credentialed Ohio Statehouse political reporter. He is registered to lobby in Ohio and is the Director of Ohio Operations for Tubular Rail Inc. Spinelli on Assignment is syndicated by Newstex.com and is available for subscription (99 cents/month) to Kindle owners. His tweets on Twitter can be followed @OhioNewsBureau. To send a news tip or to make a comment, email him at: ohionewsbureau@gmail.com

Amtrak Delays Rail Study Results Ohio Needs for Federal HSR Funding

Amtrak Delays Rail Study Results Ohio Needs for Federal HSR Funding

Ohio's 3C Rail Route Missing on Midwest High Speed Rail Association Midwest Hub Map

by John Michael Spinelli

August 15, 2009

COLUMBUS, OHIO: The highly awaited Amtrak study on ridership, revenue projections and station locations related to reestablishing passenger rail service between Cincinnati and Cleveland, Ohio that was supposed to be completed mid August has been delayed a month, according to a report by the Associated Press published Friday in Forbes.com. The delay will significantly compact the time Ohio officials backing this project on the eastern fringe of the Midwestern Rail Corridor have to apply for stimulus package funding for high speed rail from the Federal Railroad Administration under the administration of President Barack Obama.

The AP's Matt Leingang reported that Amtrak has put other studies of other rail lines in other states, for example the line between Billings and Missoula , Montana, ahead of the proposed $1.53 billion route Ohio transportation and rail backers say will reconnect after 42 years of no passenger train traffic Cincinnati and Cleveland via Dayton and Columbus. This approximately 250 mile route is known as the 3C passenger rail corridor. The long awaited study, as state rail officials know, is key to Ohio's application, due on October 2, for as much as $400 million in start-up funding to get passenger trains running diagonally across the state. The plan, justified with nothing but cost estimates so far, is merely a down payment on far more costly plan that has miles to travel and many obstacles to overcome before anyone can really take it seriously, despite claims of its many benefits.

Not surprisingly, state rail officials like Matt Dietrich, executive director of the Ohio Rail Development Commission, downplayed the reported delay. But when news like this is not good, downplaying it is the only option available to a state official who has been unable to say with confidence that the need for these passenger trains and therefore the ridership that will ride them is clear and obvious. "There's a lot to do and I'm very confident we're going to get it done," Dietrich told Leingang. The $400 million figure, now a $150 higher than the figure Ohio Gov. Ted Strickland and Dietrich had been telling the press and state legislators over many months without any challenges, is supposed to go to buy rail cars, build stations and make necessary upgrades on existing freight tracks so that passenger trains traveling up to 79 mph can start running in 2011.

One common reason state officials are pushing for an idea that many Ohioans think is a giant boondoggle that will tax all Ohioans for the benefit of a few by building a train system that will be slow, costly, environmentally unfriendly and will do very little to reduce road congestion is that Ohio is home to one of the most densely populated corridors without rail service in the Midwest. But that's nothing new. So what's different today than decades ago is still unclear.

One of the many big problems with the passenger rail project being pushed by Gov. Strickland and Dietrich is that it is not high speed at all. The fact is that carbon-emitting diesel locomotives will only average 57-mph because by necessity it will have to share freight rail tracks owned by CSX and Norfolk Norther, who need more freight tracks to keep up with freight rail demands and sharing existing freight tracks with passenger trains will be problematic and lead to collisions between the different purposed trains. True high speed trains, like the ones Americans see running in Europe, Japan or China, have specially built and dedicated tracks. The faster a train goes, the straighter the route must be and the more it must be obstacle free, which means crossing traffic must either go over or below these purpose-driven tracks. All these special considerations add to the high cost of real high speed trains. Costs per mile often exceed $100 million per mile, not including on-going maintenance and operational costs.

Ohio rail rooters also say that passenger rail stations or stops will become nodes for economic development. That argument can be used with any transportation node. But if that is true, then why do they refuse to ask those businesses to be part of the funding solution?

As Ohio battles its budget shortfalls, which this cycle were $3.2 billion, and as revenue projects continue to fall short, as they came in recently with respect to gaming dollars from Keno, the funds for the state's share of the 3C just are there, no matter how many stones officials say they are looking under. State officials have been wrong on a number of revenue projections, so it's reasonable to think they could be "downplaying" the public subsidy their system would need on going, which today they say is a mere $10 million a year. And the source of those funds? Dietrich and others are looking to usurp fees that restaurants, hotels and gas stations pay to advertise on blue highway exit signs. Strickland did something similar when he tried to take hundreds of millions of tobacco settlement money earmarked for programs to stop children from smoking to help plug the hole in this year's budget.

As Leingang pointed out, Ohio has studied the idea of restoring passenger service over the past 30 years, a factor that should beg even one reporter to ask why so much time has passed and why so many funds have been spent with nothing to show for it all. The AP article quotes Ken Prendergast , executive director of All Aboard Ohio, a nonprofit group promoting passenger rail, saying that all this lost time and squandered money on studies that have produced nothing helps Ohio in its application. "We know a lot about this route already,"Prendergast said in the article, implying Ohio "is more than capable of pre-writing the application and filling in the blanks once they get new data."

But another article authored by Elana Schor of DC.Streetsblog.org about the Midwest High-Speed Rail Association's work pushing for a high-speed rail network that would use Chicago as a hub and ultimately extend through eight states, shows that the 3C route doesn't even show up on the MHSRA's rail map. One has to wonder why Ohio officials are so gungho when their prized route isn't even on the map.

But as other voices rise to raise questions rail boosters can't answer in detail or in general, about the exorbitant cost of true high speed rail, who's going to pay for it and where those funds will come from, its clear that taxpayers and others concerned about the environment, road congestion and carbon emissions are not ready to roll over for a pig in a poke.

Photo of Midwestern High Speed Rail Hub courtesy of TrainWeb.org

John Michael Spinelli is a Certified Economic Development Financing Professional, business and travel writer and former credentialed Ohio Statehouse political reporter. He is registered to lobby in Ohio and is the Director of Ohio Operations for Tubular Rail Inc. Spinelli on Assignment is syndicated by Newstex.com and is available for subscription (99 cents/month) to Kindle owners. His tweets on Twitter can be followed @OhioNewsBureau. To send a news tip or to make a comment, email him at: ohionewsbureau@gmail.com

Obama Rope-a-Dopes Republicans, Media on Health Care Reform Fight

Obama Rope-a-Dopes Republicans, Media on Health Care Reform Fight

Opponents to Health Care Are Punching Themselves Out

by John Michael Spinelli

August 12, 2009

Op-Editude

COLUMBUS, OHIO: As I watched the episode yesterday evening about Muhammad Ali from VH1's Lords of the Revolution, a five-part series that chronicles cultural game-changers from the 60s and 70s, I was transported back to the night in 1964 when, as a 16-year old living in Columbus, Ohio, I listened alone to the radio broadcast of the great fight in Miami, where a 22-year old Cassius Clay surprised the world by busting up the then-heavyweight boxing champion Sonny Liston to win the the fight despite nearly every one's predictions that the "Louisville Lip" would lose.

TAKING PUNCHES TO WIN

Ali, who had secretly become a Muslim two years prior to the big fight with Liston on February 25th, went on to become the greatest boxing champion of all time, a feat that required him to suffer the slings and arrows of outrageous fortunes as he fought his way to to the championship three times.

As a much older fighter fighting a much younger and much stronger George Foreman in Zaire in the fight nicknamed "The Rumble in the Jungle," Ali allowed Foreman to whale away at him, one round after another with little response. After eight rounds of delivering constant punches to Ali's body as he leaned against the ring ropes, Foreman, who said his goal on entering the ring against an opponent was to "kill him," had punched himself out. Although stronger at the start of the fight, the young foreman could no longer defend himself against a more experience boxer who recognized the fight was his to win.

Ali, using the energy he had husbanded while the younger and stronger Foreman expelled all his, came out of his guarded stance and delivered a series of punches that knocked Foreman to the canvass, where he lay exhausted, unable to get back up. Ali had once again proven wrong all the naysayers who predicted he would lose.

IS OBAMA ON THE ROPES BY CHANCE OR CHOICE?

The Rope-a-Dope, Ali's strategy of non-resistance that allowed his opponent to hit him without really hurting him, seems to be the national tactic President Barack Obama has adopted as so-called "Town Brawls" take place locally across the nation during August, a month when Congress returns home to hear from their constituents, many of whom have been pre-programmed by corporate organizers beholden to their funding masters who want the cash cow of American health care delivery to remain as it is to make fools of themselves as they flail away with round-house punches that don't connect.

The naysayers for Obama, of course, are the media and the Republicans. The media counted him out from the first day he announced his run for president in 2007. And they've been wrong about his ability to recover from body blows his opponents have delivered -- from Hillary Clinton and her campaign to the onslaught he took from John McCain, Sarah Palin and the right-wing Republican empire that threw every accusation at him they could last fall, only to realize that he became wiser and stronger the longer the contest went on.

I believe the same will happen with the debate on reforming health care. The media machine, from national outlets to local ones, have either pronounced Obama dead on arrival or unable to stay alive on a variety of issues, only to be proven wrong. While Obama learns and adapts, the media is stuck in its reflex to repeat the hollow, misleading and intentionally false talking points spewed out by Republicans, who each day are withering on their vines of sour grapes over losing the presidency. And as we all know by now, the GOP is slowly shrinking as witnessed by the loss of hundreds of state legislature seats over the past four years. Little more than a regional party, Republicans are now mostly older white guys, mostly from the south, who all want to date one female pitbull with lipstick from Alaska.

Obama, who was the President of the Harvard Law Review, a fact that has impressed me but seems to be of no value to any talking-head pundit who champions dunces with little experience over accomplished professionals who are agile and articulate, has taken one body blow after another over reforming health care insurance, an issue Republicans have done nothing over their decades in power to help with except to enable their big corporate donors to prey on and milk like cash cows everyone who can afford their ginned-up health care schemes.

Even New York Times columnists like Frank Rich and Maureen Dowd, normally dumped in the liberal category, have wondered allowed whether Obama is "punking" us (Rich) or whether it's too late for him to make a comeback (Dowd).

FLOAT LIKE A BUTTERFLY, STING LIKE A BEE

In addition to his proven ability to evade capture by the media and right-wing Republicans on one issue after another, Obama has another strong reserve going for him that will win the day for him as he comes off the ropes and turns the tide in his favor. He's got the American health insurance industry and their greedy, uncaring, profit-only business model to whale on.

As the so-called "Birthers" and "Deathers" gnash their teeth and cry to "have my country back," showing just how stupid they are now because they never dared utter such inanities during the eight years President George Bush and Vice President Dick Cheney gave money to their rich friends through tax breaks, set the world on fire by starting two wars of convenience and pushing the nation to the brink of a second Great Depression, Obama has remained cool, calm and collected in the face of Americans who think being gouged to death by insurance companies and denied a competitive system that will reduce cost and lead to greater coverage is what Americans should opt for.

Republicans have made the media think that because their loudness, obnoxious disregard for the truth and blatant misinformation campaign is being reported on as if it had merit they are winning and Obama is loosing the war of words on this issue.

Obama will do in Washington what Ali did in Zaire, win the health care contest even though it looks grim for him in the early rounds of a fight that isn't over till it's over. And it will be over when Republicans, aided and abetted by their right-wing media henchmen and those who think the truth is equal distance from any point of view no matter how silly or obscene, punch themselves out. Obama won't stand over them like Ali did with Liston, but he will knock them to the canvass now and again in 2010, when their ranks will thin even more as voters realize they have no power and can no longer punch their way to victory over a smarter and more agile opponent who like Ali did before him show them he can "float like a butterfly and sting like a bee."

Photos courtesy of Google Images

John Michael Spinelli is a Certified Economic Development Financing Professional, business and travel writer and former credentialed Ohio Statehouse political reporter. He is registered to lobby in Ohio and is the Director of Ohio Operations for Tubular Rail Inc. Spinelli on Assignment is syndicated by Newstex.com and is available for subscription (99 cents/month) to Kindle owners. His tweets on Twitter can be followed @OhioNewsBureau. To send a news tip or to make a comment, email him at: ohionewsbureau@gmail.com

Strickland's Folly

Strickland's Folly

Ohio Budget Short on Dollars for Slow Train to the Past

It's a Question of Priorities

by John Michael Spinelli

August 5, 2009

COLUMBUS, OHIO: Two weeks ago Ohio Gov. Ted Strickland and his Director of Transportation (DOT) were among the gaggle of governors attending the high-speed rail summit in Chicago, where a pack was entered into by eight Midwest governors to form a united front for purposes of garnering as much of President Barack Obama's $8 billion in high speed rail funding as possible. With his DOT Director Jolene Molitoris in tow, Strickland became a signatory to a Midwest agreement to promote regional passenger rail and Ohio’s 3C Corridor, an approximately 270-mile trip plan to re-establish passenger trains connecting Cincinnati to Cleveland via Dayton and Columbus that's conservatively estimated to cost a cool $1.53 billion.

The purpose of the rail summit's memorandum of understanding is to coordinate regional efforts to secure federal funding for development of the Chicago Hub High-Speed Rail Corridor, which includes as a peripheral route the 3C Passenger Rail Plan Strickland and Molitoris have been promoting, despite hard evidence that ridership for it is even minimally plausible and that it will not further decimate a state budget that limped its way with one-time federal dollars and a variety of account gimmicks and fee increases to a state of balance.

In 2010, when the next exercise in balancing a state budget takes place, Obama dollars may not be available like they were for this budget and expected declines in tax revenue will further exacerbate a meltdown of state finances, making it hard to justify spending any on a rail plan that would make little sense even if times were good, which they are definitely not.

"Ohio’s central location makes our state the connection between the Chicago Hub to the west and the Northeast Corridor to the east,” Strickland said in a media release touting why he and Molitoris are behind the push to snag some of the $8 billion dedicated to fund high speed rail.

Ohio junior Senator Sherrod Brown also offered his support of the collaborative effort later in the day. "You can’t have a nationwide passenger rail system without Ohio,” he said, adding, "This agreement, coupled with new federal funds through the economic recovery package, will make the 3C corridor one step closer to becoming a reality. High-speed rail is critical to the long-term economic competitiveness of our region. By connecting Ohio’s largest cities with others cities in the Midwest, we can bring jobs and economic development to our state.”

Strickland and state transportation officials have said without being challenged that "restoring passenger rail service at conventional speed is Ohio’s first step toward implementing a high speed rail network connecting Ohio to the Midwest and the rest of the country." While it sounds good that existing freight tracks can be upgraded to accommodate fast trains, the reality is that that cannot happen. Real high speed trains need specially designed "purpose driven" tracks to handle the speeds trains in Europe handle every day. These kind of special tracks are especially expensive, but numbers for high speed rail are rarely mentioned because they present a story of cost that states like Ohio simple cannot handle, given the state of most state budgets. Ohio officials have said that their slow passenger train to the past will only average 57 mph and only reach a top speed of 90 or 100 mph after billions of dollars of freight-rail upgrades and years to do it.

As for the governors who did sign the memorandum of understanding -- Illinois Governor Pat Quinn, Michigan Governor Jennifer Granholm, Iowa Governor Chet Culver, Wisconsin Governor Jim Doyle, Missouri Governor Jay Nixon, Minnesota Governor Tim Pawlenty, Indiana Governor Mitch Daniels and Chicago Mayor Richard M. Daley -- more voices are emerging that think they are the ones who will be taken for a ride.

Even though the media has performed as a dutiful lapdog for the hollow talking points of train advocates who overemphasize the benefits and downplay the costs to all taxpayers, some contrarian voices can be found that paint a far less rosy picture, one everyone should be aware of.

Steve Staneck, a research fellow at the Chicago Heartland Institute, recently wrote in the Alberta Lea Tribune that "If there truly were enough consumer support for high-speed rail, governments would not be involved. Private companies would provide the service and pocket the profits." Noting that the combined state deficits of the governors who signed the Midwest rail summit pack is over $28 million, Staneck chides the federal government for telling everyone not to worry about its $2 trillion budget deficit this year, and a national debt that has more than doubled to $11 trillion in the past eight years. "The government will print the money, or borrow it, or tax for it, future generations be damned," he shouts.

Another naysayer voice, that of Randal O'Toole from the CATO Institute, says of what happens when the dog catches the car: "Once we start building high-speed rail, you can expect local politicians to demand these gaps and others be filled at your expense. And don’t be surprised when the government asks you for another $1,000 or so in about 30 years to rebuild what will then be a worn-out system." O'Toole asks what all this money will produce. "Unless you live in California," he says, "don’t expect super-fast bullet trains. In Florida the FRA (Federal Railroad Administration) is considering trains with top speeds of 125 miles per hour. In most of the rest of the country, the FRA is merely proposing to boost top speeds of Amtrak trains from 79 to 110 m.p.h. A top speed of 125 m.p.h. means an average speed of only 75 to 85 m.p.h., which is hardly revolutionary. Many American railroads were running trains nearly that fast 70 years ago."

Even the Gray Lady is starting to discuss the realities of real high speed rail and what it means to all of us in a multi-part series that reveals the high cost of Euro-speed trains.

The ride Strickland and any other governor vying for a taste of federal high speed rail dollars cannot afford to take is the real cost of building Euro-style train systems. Ohio's rail plan says in clear language that it cannot happen if any contribution from the state would have a negative impact on the general fund budget of the state. In coming to terms with Republican leaders in the legislature, Strickland had to agree to a $3.2 billion budget patch that included $933 million in revenue from adding video slot machines to Ohio's seven racetracks that some critics say is an over estimate. Republican legislators criticized Strickland for using about $7 billion in one-time federal stimulus dollars, and said the next budget will be further out of whack and won't be able to rely on more federal funding.

With the specter of losing 30-40,000 more jobs, as agencies cut back staff because their state funding was cut back, the question of priorities needs to be raised. For every $1 Ohio would spend for its Harry Potter magic trick of a train system, its one less dollar that can be spent on social safety net services or any other service important to the state. Whether the 3C becomes a campaign issue in next year's race for governor is a matter of speculation. But the rising tide of dissatisfied voters who see high speed rail as a boondoggle that will only benefit consultant and lobbyists for status quo rail stems is a sign that the more voters learn about it the less they think it's a priority.

State transportation officials have already said the system will never break even and in fact will need a yearly public subsidy, an amount they say they are looking to find. Current sources for that subsidy, which is pegged on the low end at $10 million annually, may come from usurping revenue vendors pay ODOT to have their business name on highways signs and from charging exorbitant prices to riders for food and beverage sold on-board the train.

John Michael Spinelli is a Certified Economic Development Financing Professional, business and travel writer and former credentialed Ohio Statehouse political reporter. He is registered to lobby in Ohio and is the Director of Ohio Operations for Tubular Rail Inc. Spinelli on Assignment is syndicated by Newstex.com, can be followed on Twitter @OhioNewsBureau and available for subscription to Kindle owners. To send a news tip or make comment, email ohionewsbureau@gmail.com

The Heartache of it All

The Heartache of it All

New Ohio Budget May Bring Faster Meltdown

by John Michael Spinelli

July 15, 2009

COLUMBUS, OHIO: Down by nearly $20 million in uncollected state revenue after ten days of political fighting between Democratic Gov. Ted Strickland and Senate Republicans, the new $50.5 billion two-year state budget seems likely to create an economic debris field in its wake if tens of thousands of jobs are cut and service reductions for those least able to fend for themselves become reality as some have said will happen. The state of the State of Ohio is a sad one indeed.

The state that once thought itself the "Heart of it All" seems better described as the "Heartache of it All," if revenues continue to decline and one-time dollars from Washington evaporate and projected revenues from slot machines don't materialize as advocates said they would. For those in the business of sewing together and supporting the social safety-net more people will need to weather the so-called Great Recession, the worst since the Great Depression of the 1930s, the good news is that they will only have to cut off their hand in stead of their arm, as they figure out how to make due with less. Doing more with less was the management mantra of former Republican Governor George V. Voinovich, now Ohio's Sr. Senator. Sayings like this may sound good in MBA classes or business school, but actually doing more with less for those who actually need more is harder to do than say.

With the spiraling of Ohio's economy downward, a situation long in the making that has accelerated and exacerbated in direct response to the sour economy afflicting virtually every state, the projected loss of possibly another 3,000 state jobs and upwards of 40,000 non-government jobs due to serious reductions in state aid to areas like libraries, food banks, early childhood learning initiatives, elderly in-home assistance, mental health and drug and alcohol addiction services and libraries, is news only the most unsympathetic and selfish would see as the kind of tough-love medicine needed to make Lazarus rise from the dead, find a job and get back to work.

Strickland can boast that his public school funding reform plan remained in the budget, an effort that if continued by future legislatures for the next decade is supposed to make Ohio's school funding plan constitutional again.

The Methodist minister who was against the sinful revenue that can only begot by slot machines before he reluctantly endorsed them as a revenue escape hatch for an economy worsening by the day due to shortfalls in revenue, is now just another gambler, hoping it hit it big. But his wager, that winnings from loosing players, many of whom will be from Ohio, will come close to the projected $933 million slots, is expected, not guaranteed. Of course, before the first dollar is lost, critics of the slot machine gambit vow to file lawsuits claiming the Governor is acting in contravention to the state constitution.

But gambling advocates who have long waited for this day to come say the approximately 17,500 slots that will be distributed to Ohio's seven horse racing tracks will fill a partial revenue hole in the $3.2 budget shortfall Strickland and lawmakers had to work out this cycle.

Ohio's take from allowing these digital bandits to set up shop like never before, made possible by the deal worked out between Strickland and Harris to legally immunize them from lossing lawsuits opponents said they will file to challenge the their constitutionality, may also disappoint as did Keno revenues. This shortfall would force Strickland to add insult to injury by reducing government workers by thousands more.

Republicans are hoping Strickland will take political flack from voters who are less forgiving about how he has handled the already declining finances and economy of the state, and more willing to pin the tail of this Democratic donkey. To help this happen, the budget hammered out between the House and Senate and sent to Strickland was opposed by 59 or the 65 Republicans in the General Assembly.

It would be a dark game to play of how bad things could be if Strickland had taken the advice of Republicans, who said he was making things worse by accepting about $7 billion in non-repeating federal stimulus dollars Ohio took from President Barack Obama and a Congress now controlled by Democrats. Budget-hole hunters found funds elsewhere, too, like the state's rainy day fund, its tobacco settlement monies and by a loan from a state program that helps local school districts finance buildings. But Republicans, nationally and locally, have come to see spending as bad, when they didn't see it as bad when the purpose of the funding was for the War in Iraq or Afghanistan or for subsidizing already well endowed stakeholders in the American system of health care, among other party goals.

And while Ohio's budget is balanced on paper, loosing lawsuits and not bringing in as much money from various sources as had been projected, all eyes on gambling specifically, are situations Strickland and Harris should not bet against but be prepared to fix when they blow a gasket.

The heartache of it all is that Ohio is undergoing a giant meltdown with very little it can do to turn the tide anytime soon. The human toll this budget has wrought has yet to be tallied. But as yet more jobs are lost even though macro statistics may show things are getting better by being less worse, a brighter future for Ohio will only arrive when we start having a heart for all.

John Michael Spinelli is a Certified Economic Development Financing Professional, business and travel writer and former credentialed Ohio Statehouse political reporter. He is registered to lobby in Ohio and is the Director of Ohio Operations for Tubular Rail Inc. Spinelli on Assignment is syndicated by Newstex.com, can be followed on Twitter @OhioNewsBureau and available for subscription to Kindle owners. To send a news tip or make comment, email ohionewsbureau@gmail.com

Time Right to Make Ohio General Assembly Part-Timers

Time Right to Make Ohio General Assembly Part-Timers

Elected Officials Should Help Bear Brunt of Balancing Budget

by John Michael Spinelli

July 7, 2009

COLUMBUS, OHIO: While Ohio Gov. Ted Strickland arm-wrestles with Senate Republicans over what combination of hurtful spending cuts or wild-card revenue generators can deliver a two-year balanced budget, one big, blatant expenditure category that could produce real savings is the sacred cow of converting the Ohio General Assembly from one of the longest sessions in the nation to a part-time avocation that could net tens of millions in cost avoidance.

As each day goes by without an agreed-upon two-year budget after July 1, the start of the new fiscal year as required by the Ohio Constitution , the meltdown in cooperation between the executive and legislative branch over what cuts in spending or proposals for new revenue will win the day will only exacerbate the already fiery contest of political wills and agendas Democrats and Republicans are now engaged in.

Current solutions to patch the projected $3.2 billion budget hole include a combination of harmful measures that either weaken the social safety net millions of Ohioans who have lost jobs of late now depend on or undercut the state's investment in education or rely upon the wishful thinking wild-card that bringing new gambling devices and operations to a state that has said no to them four times previously will be a partial revenue White Knight.

Reflecting on the menu of statewide constitutional reform issues brought to a statewide vote in 2005 by progressive groups and labor unions who thought Ohioans would approve them in response to a string of government scandals tied to Republican officeholders and their loyalists, many of whom were judged guilty by a court of law of unethical or corrupt activities, one reform item that should have been included but wasn't should have been to limit the term of the Ohio General Assembly.

While the five reform amendments went down in flames, some by staggering proportions, giving Ohio voters a chance to change how long politicians stay in Columbus, site of the Statehouse, may have been the one that could have passed had it been included. Playing on the general right-of-center gut belief that the longer elected officials are allowed to be professional politicians, the more special interest lobbyists will be able to buy laws that favor their agendas even though the public at large may be the victim of that legislation, it seems the time is right to revisit the issue of converting the virtual year long session of the legislature into a shorter, defined term that will force elected officials to prioritize and address the key issues of the day. If other states can do it, so can Ohio.

But the will of the people must be brought to bear for this to happen. That will, it seems, is no where in site despite the constant carping, bickering about government and taxes and the general contempt Ohio voters have for public officials other than the ones they vote for.

Where are the TeaBaggers and the fiscal conservatives , who generally wave their American flags and spout platitudes about the benefits of small government but who have been asleep at the switch of limiting the time their legislators can boost their pay and pension contributions, the two reasons why professional politicians will fight to stay in office.

It should come as no surprise, therefore, that Ohio legislators who are term limited to eight years in one chamber or the other are always looking for a chance to extend their terms to maybe a dozen or even more years. Their argument has been that voters can term limit any candidate by unseating them in the voting booth and that so-called "institutional knowledge," the intangible wisdom that comes from being in office for decades as was the case before term limits were approved in the early 1990s, would deliver good government because the experience accumulated over time would accrue to a legislator's understanding of various issues, giving them the perspective and wisdom to make good decisions.

Of the nation's 50 states, Ohio has long ranked as one of the top states with full-time legislatures. The cost to Ohio taxpayers, vis a vis the General Revenue Fund, for running the General Assembly, both the Ohio House and Senate, is not insignificant.

According to most recent FY 2010-2011 Redbook analysis of the executive budget proposal for each agency prepared by the Legislative Service Commission, total funding for the Ohio House of Representatives, comprised of its 99 members, 165 full-time staff and 40 pages, is $20.6 million a year or $41.2 for the biennium.

For the Ohio Senate, with its 33 members, 125 full-time staff and 40 part-time pages, total funding amounts to $12.6 million or $25.2 for the biennium.

Therefore, the combined total of our full-time professional legislature for two years is $66.4 million.

For a state whose residents historically have decried government at all levels as being too big, too costly, too intrusive in personal affairs or an obstacle to business development, it is curiously ironic that those who complain the loudest are suddenly silent to clipping the wings of the very people they charge with either playing politics or for partisan advantage or working in opposition to the what's best for the public interest.

Amid the the flame throwing over whether taxes should be increased or more cuts to government should be made, one cut that could achieve the dual goals of reducing the cost of government and forcing lawmakers to address the key issues of the day would be to send elected officials to Columbus for a limited period, to do the public's business on the key issues of the day. Afterward, they can go back home, where they can work on family or personal business without tax payers footing the bill.

But such a sane, common sense proposition seems a bridge to far for Ohioans, who will suffer the slings and arrows of outrageous politicians acting outrageously at a time when outrageous behavior is not their calling.

John Michael Spinelli is a Certified Economic Development Financing Professional, business and travel writer and former credentialed Ohio Statehouse political reporter. He is registered to lobby in Ohio and is the Director of Ohio Operations for Tubular Rail Inc. Spinelli on Assignment is syndicated by Newstex.com, can be followed on Twitter @OhioNewsBureau and available for subscription to Kindle owners. To send a news tip or make comment, email ohionewsbureau@gmail.com

Ding Ding Ding Go the VLTs

Ding Ding Ding Go the VLTs

Can Ohio Walk Away a Winner?

Casinos Betting Race Tracks Finish Last

by John Michael Spinelli

July 6, 2009

Charles Town, West Virginia: To get a glimpse of a possible future for Ohio should Gov. Ted Strickland, with or without the help of the Ohio General Assembly, authorize video slot terminal (VLT) machines at the Buckeye State's seven horse racing venues, one need only drive to Wild and Wonderful West Virginia, as my wife and I did over the July 4th Independence Day weekend, to see the combination of live thoroughbred horse racing and spinning wheels whose "ding, ding, ding" lures many a gambler hoping to win by not loosing.

Charles Town Races & Slots, owned by Penn National Gaming (PNG), which owns and operates casino gaming, horse racing and off-track wagering facilities in many states that generate more than $2 billion in revenues and who spent tens of millions last year to defeat a statewide ballot issue in Ohio to authorize a first of its kind casino-style operation in Ohio, offers visitors 5,000 cash-less VLTs to sit and stare at, hoping to hit it the jackpot even if it is only on a penny machine.

Even though $5-a-pull VLTs stand in silent readiness close by, sometimes it makes sense to play for cents depending on your budget and tolerance for pain.

The owner of Toledo's Raceway Park horse track, PNG, which has gaming venues in Indiana, Pennsylvania and West Virginia, is a major backer of the Ohio Jobs and Growth Plan, which if approved by Ohio voters in November, would authorize casinos in Cincinnati, Cleveland, Columbus and Toledo. According to a media release in March, Ohio would stand to benefit as the various venues are estimated to bring in $1 billion in new private investment and create 20,000 new jobs and $600 million in new annual tax revenue that would be distributed to Ohio's 88 counties and 614 school districts.

But as we know, Gov. Strickland and Senate Republicans are engaged in a contest of political wills over whether about 12,000 VLTs will be divided among Ohio's seven race tracks through either executive or legislative action. Republicans are daring Strickland to make the call himself through the Ohio Lottery Commission, while the chief executive say he needs them to approve it so as to guarantee the move water tight against expected legal challenges.

Part of the big gamble is whether the VLTs will bring to dried up state coffers the $933 million Strickland's advisers say is possible, or whether that amount will ultimately turn up far fewer dollars, as was the case with revenue generated from Keno, a game Strickland put in place in much the same way Senate Republicans say he should do with VLTs.

Walking through the maze of VLTs scattered through PNG's gaming operation in Charles Town, where players only need be 18 compared to 21 in Las Vegas, the flashing, garish neon lights that inundate the space as thoroughly as fog in San Francisco might likewise light up Ohio's future budget picture. But the odds of that happening seem unlikely in the tussle between a Governor who opposed them but who has now embraced them, and Republican legislators who want to see Strickland roll craps so they can get a leg up on him in 2010 when he runs for a second term.

Further complicating the future is whether Ohioans, who have turned gambling issues down four times in two decades, will show they have had a change of heart this year, when PNG's casino issue is placed before them.

If it wins, PNG and its partners win, turning race tracks, whose clientele is shrinking, into losers. Will Ohio, now surrounded by states with gambling, be able to catch up by keeping its gamblers in-state or will all this sound and fury over VLTs amount to nothing as the state's economic fortunes worsen and the white knight of gambling some say can save the day doesn't ride to the rescue?

Ask not for whom the VLT dings, it dings for thee.

John Michael Spinelli is a Certified Economic Development Financing Professional, business and travel writer and former credentialed Ohio Statehouse political reporter. He is registered to lobby in Ohio and is the Director of Ohio Operations for Tubular Rail Inc. Spinelli on Assignment is syndicated by Newstex.com, can be followed on Twitter @OhioNewsBureau and available for subscription to Kindle owners. To send a news tip or make comment, email ohionewsbureau@gmail.com

Status of Ohio Health Care Profiled in HHS Report

Status of Ohio Health Care Profiled in HHS Report

Average Family Health Premiums up 92% Since 2000

Top 2 Private Insurers Corner 58% of Health Care Market

by John Michael Spinelli

June 26, 2009

COLUMBUS, OHIO: In a report released Friday by the U.S. Department of Health and Human Resources profiling the status of health care for each state, a laundry list of why Ohio needs reform from the status quo was presented as another front in the now explosive, partisan debate taking place in Washington about whether private insurance companies remain at the center of health care delivery or whether a so-called public option, where government is in charge and can use its size and clout to negotiate better deals for its members, is allowed to compete, giving Americans another choice as they decide what's best and most affordable for them.

The HHS report, released under the stewardship of its leader, Kathleen Sebelius, former Governor of Kansas and daughter of former Democratic Ohio Gov. John Gilligan, reflects the public policy stance of President Obama, who says he is committed to working with Congress to pass comprehensive health reform this year in order to control rising health care costs, guarantee choice of doctor, and assure high-quality, affordable health care for all Americans.

"We know that we need health reform to ensure Americans get the high-quality, affordable care they need and deserve. Under the status quo, too many Americans can’t get the affordable care they need when they fall ill. But health reform must make health care more than just sick care," Sebelius said on the Web site HealthReform.gov.

Sebelius, who was chosen to lead HHS after former Sen. Tom Daschle, Obama's first choice, withdrew his name from consideration, says President Obama wants to work with Congress to "enact health care reform legislation that protects what works about health care and fixes what is broken." Ohioans know that inaction is not an option, it said, noting that "sky-rocketing health care costs are hurting families, forcing businesses to cut or drop health benefits, and straining state budgets." It's stark case for change is based on its belief that "millions are paying more for less...and families and businesses in Ohio deserve better."

So what's the profile HHS laid out for Ohio? Here it is in detail:

OHIOANS CAN’T AFFORD THE STATUS QUO

• Roughly 7.4 million people in Ohio get health insurance on the job, where family premiums average $12,689 about the annual earning of a full-time minimum wage job.
• Since 2000 alone, average family premiums have increased by 92 percent in Ohio.
• Household budgets are strained by high costs: 20 percent of middle-income Ohio families spend more than 10 percent of their income on health care.
• High costs block access to care: 12 percent of people in Ohio report not visiting a doctor due to high costs.
• Ohio businesses and families shoulder a hidden health tax of roughly $1,000 per year on premiums as a direct result of subsidizing the costs of the uninsured.6
  

AFFORDABLE HEALTH COVERAGE IS INCREASINGLY OUT OF REACH IN OHIO

• 11 percent of people in Ohio are uninsured, and 64 percent of them are in families with at least one full-time worker.
• The percent of Ohioans with employer coverage is declining: from 71 to 65 percent between 2000 and 2007.
• Much of the decline is among workers in small businesses. While small businesses make up 72 percent of Ohio businesses,9 only 47 percent of them offered health coverage benefits in 2006 -- down 5 percent since 2000.
• Choice of health insurance is limited in Ohio. WellPoint Inc. (BCBS) alone constitutes 41 percent of the health insurance market share in Ohio, with the top two insurance providers accounting for 58 percent.
• Choice is even more limited for people with pre-existing conditions. In Ohio, premiums can vary based on demographic factors and health status, and coverage can exclude pre-existing conditions or even be denied completely.
  

OHIOANS NEED HIGHER QUALITY, GREATER VALUE, AND MORE PREVENTATIVE CARE

The overall quality of care in Ohio is rated as “Average.”

Preventative measures that could keep Ohioans healthier and out of the hospital are deficient, leading to problems across the age spectrum:

• 19 percent of children in Ohio are obese.
• 21 percent of women over the age of 50 in Ohio have not received a mammogram in the past two years.
• 39 percent of men over the age of 50 in Ohio have never had a colorectal cancer screening.
• 72 percent of adults over the age of 65 in Ohio have received a flu vaccine in the past year.
  

For those of us over age 60, having access to affordable, quality health care is a top priority. With Ohio under the gun as Democrats and Republicans try to reach accommodation on a budget that is way out of balance, and that can only be brought back by either more harsh cuts, many of which will affect the poorest and least able to fend for themselves, or by raising taxes, a voodoo dance no elected political official wants to engage in. It's one thing to have a sick budget, it's another to have a sick population that seems boxed in by the rules of the road private insurance companies have put in place. Reform at the state and federal level is long overdue. But the final form of reform will be a prescription some will eagerly swallow while others will find unappetizing at best.

John Michael Spinelli is a Certified Economic Development Financing Professional, business and travel writer and former credentialed Ohio Statehouse political reporter. He is registered to lobby in Ohio and is the Director of Ohio Operations for Tubular Rail Inc. Spinelli on Assignment is syndicated by Newstex.com. SOA can be followed on Twitter @OhioNewsBureau and available for subscription to Kindle owners. To send a news tip or make comment, email ohionewsbureau@gmail.com

Brown's IMPACT Act Included in Climate Change Bill Passed by US House

Brown's IMPACT Act Included in Climate Change Bill Passed by US House

Loan Fund for Transition to Clean Energy R&D

by John Michael Spinelli

June 26, 2009

COLUMBUS, OHIO: Ohio's junior Sen. Sherrod Brown had something to crow about Friday, when the US House of Representatives included his bill to establish a $30 billion loan fund to help manufacturers transition to a clean energy economy in a climate change bill that squeaked to passage with only 7 votes.

Even though the battle to address issues related to global warming claimed 44 Democratic defectors, Brown rallied around the work of two Ohio congressmen, who he said fought to include his bill designed to help small and medium-sized manufacturers across the nation adapt to the clean energy economy by providing them with much-needed access to credit.

But another Ohio congressman, John Boehner, the Minority Leader, used his privilege as a party leader to stall the vote, according to one published report that said he consumed just over an hour by reading from a 300-page amendment added in the early hours of Friday.

Boehner and other Republicans have framed the bill as a "tax" that would lead to more job losses and to problems in the voting booth for those members who voted for it. Only eight Republicans crossed over to vote for it.

The goal of this bill is to reduce greenhouse gases in the United States to 17 percent below 2005 levels by 2020, and 83 percent by midcentury.

All Ohio's Democratic Congressmen, with the exception of Dennis Kucinich of Cleveland and Charlie Wilson from the southeast, voted for it, while Ohio Republicans voted against it as a block. Ohio currently has 18 Congressional districts, although speculation has it that the next Census will reduce this number by 2 seats.

"Our nation's traditional manufacturing industry, which helped build our nation's middle class and is critical to national security, currently faces significant challenges," Brown said in a prepared statement.

Elected in 2006 when Democrats reclaimed many offices formerly long-held by Republicans, Brown, whose gravely voice and perennially musted-up hair contribute to his trademark style, applauded Ohio Congressmen John A. Boccieri (OH-16) and Zack Space (OH-18), both Democrats, for working to include his IMPACT Act [Investments for Manufacturing Progress and Clean Technology] in the American Clean Energy and Security Act of 2009.

The bill, the heart of which is about a "cap-and-trade" system some say will lead to big changes, both positive and negative, in sectors like election power generation, agriculture, manufacturing and construction. legislation, offers opportunities to use energy better or retool for a new era of jobs realted to clean energy.

Motivated in great measure by the loss of hundreds of thousands of manufacturing jobs in Ohio, where the demise of the US auto industry as tracked by Chrysler and General Motors going in and out of bankruptcy court where they will be reshaped and reformed, Brown hopes his loan fund will help domestic manufacturers recover from the 30 percent slide since 1987 their sector has had on the nation's gross domestic product or GDP.

The manufacturing sector, which according to Brown is responsible for America's great middle class and that accounts for 12 percent or $1.6 trillion of GDP and nearly three-fourths of the nation's research and development, needs access to credit so they can become a part of and not a victim to the rise of clean energy jobs. The National Association of Manufacturers opposed the bill.

He noted that passage of the climate change bill confirms that clean energy legislation is an opportunity for Ohio manufacturing. "By creating a funding source to help Ohio manufacturers retool, we can revive Ohio manufacturing through investments in clean energy," a move he said will "go a long way toward making Ohio the Silicon Valley of clean energy manufacturing.”

Boccieri, a veteran of the war in Iraq who was elected last year, said, “This legislation represents the next step toward freeing our nation from its dependence on foreign resources and it will help fuel our economic recovery.” He said the bill is about "creating jobs right here at home that cannot be outsourced, protecting our national security, and helping our manufacturers retool to thrive in a new green economy."

The impact of IMPACT is that it will allow small and medium-sized manufacturers to improve energy efficiency, retool for the clean energy industry, and expand the nation’s clean energy manufacturing operations.

In his release today, Brown said the current economic crisis has exacerbated existing problems within the U.S. manufacturing industry, and taht manufacturers continue to face a reduction in demand and a lack of capital.

He cited a survey done in May that found that more than 70 percent of manufacturers anticipate difficulties securing credit to purchase raw material and rehire workers as business conditions improve. For the past 16 consecutive months, U.S. manufacturing has contracted. Moreover, Brown noted, according to the Federal Reserve Board, manufacturing output fell 2.7 percent in January 2009 to a level 13.1 percent below that of only 12 months earlier. And just last month, nearly half of the nation’s job losses were tied to manufacturing.

John Michael Spinelli is a Certified Economic Development Financing Professional, business and travel writer and former credentialed Ohio Statehouse political reporter. He is registered to lobby in Ohio and is the Director of Ohio Operations for Tubular Rail Inc. Spinelli on Assignment is syndicated by Newstex.com, can be followed on Twitter @OhioNewsBureau and available for subscription to Kindle owners. To send a news tip or make comment, email ohionewsbureau@gmail.com