The economic situation in Metro Columbus, controlled by Ohio’s “Inside the Beltway” crowd, is a lot rosier than it is in the rest of the Buckeye State.

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This post went up at Watchdog.org a short time ago.

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It’s easy to compare Columbus and Washington, D.C. Both are capital cities, and both are encircled by interstate beltways, inside of which the influence of government is easily seen.

Like their counterparts in the nation’s capital, those who live and work in and around state government inside the Columbus beltway all too often are at odds with the majority of the rest of the citizens they supposedly represent or serve, both philosophically and economically.

While the nation’s labor force has seen lackluster growth in the past few years, Ohio’s statewide labor force has shrunk. And, while the U.S has added jobs at a rate insufficient to achieve a full economic recovery, it has done so at a rate that exceeds that of the Buckeye State.

But Metro Columbus has avoided most of the pain. Digging into the not-seasonally adjusted data from the federal government’s household survey, one finds both the labor force and employment in Metro Columbus actually have grown in recent years while most of the rest of the state has seen a decline.

Ohio’s labor force has dropped by 209,000 in the past four years. More than three-quarters of that drop occurred in the state’s 16 largest metro areas. Both statewide and in its major metro areas, though, employment has increased during the past two years. But it isn’t back to where it was in March 2009, in the midst of the Great Recession.

However, Metro Columbus, has grown:

Columbus is the only major metro area in the state in which the workforce has grown during the past four years. Its nearly 25,000 jobs added during the past two years is more than double the roughly 11,000 jobs added in the rest of the state.

Why is Metro Columbus doing so much better than the rest of the state?

It would be easy to give credit to forward-minded municipal and suburban government and other city and county leaders. But the City of Columbus passed a growth-retarding income-tax increase in 2009, raising it to nearly the highest level in the state. The city’s schools are embroiled in an attendance fraud audit that is not going its way, unless one believes the state auditor’s seizure of records at 20 high schools is a good sign. Neither episode is characteristic of well-run institutions or evidence of civic vision.

While acknowledging there are several private-sector companies experiencing growth and adding jobs there, it very well may be that Metro Columbus is growing because of government, despite the presence of a Republican in the Governor’s Mansion. And it’s getting larger and more unwieldy.

Many observers have noticed that the elites in Washington don’t seem as concerned as they should be about the nation’s ongoing weak recovery and its chronic long-term joblessness. There seems to be a parallel disconnect going on in Ohio between Columbus and the rest of the Buckeye State. It’s likely the bigger Metro Columbus gets in relation to the rest of Ohio, the worse that situation will become.

Temporary student “residents” should not have a say in a community’s long-term direction.

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This item went up at Watchdog.org with minor editing earlier this afternoon.

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Ohio’s General Assembly is considering a measure which would grant in-state tuition to out-of-state college students if they so much as pretend to be interested in voting.

Specifically, the Columbus Dispatch reported on April 23 that under a Republican budget amendment approved the previous week, “an institution must charge in-state tuition if it provides an out-of-state student with a letter or utility bill that the student can use to show residency and vote in Ohio.”

You read that right. As described, this proposal would force a school to charge its in-state tuition rate to any out-of-state student who asks for documentation certifying his or her presence there. From all appearances, those student recipients don’t even need to bother registering to vote to get this break, let alone cast a ballot. Out-of-state students at Ohio State wouldn’t even have to get out of bed, as they “can input information online and have a utility bill emailed to them, which they can print and take to the polling site.”

Although the idea originated with Republicans, it really shouldn’t be characterized as coming from the left or the right. Outer space would be more like it.

At least one Democrat’s reaction is from space’s nether regions. Kathleen Clyde of Kent, a university town, acts as if the measure is an attempt to suppress out-of-state student votes and not a self-evident attempt to increase their number. She actually took to the floor of the House to incoherently accuse Republicans of “forcing universities to do your voter-suppression dirty work for you.”

Please. Bruce E. Johnson, president of the state’s Inter-University Council, as paraphrased by the Dispatch, described what would really happen:

… every out-of-state student will demand one (a letter or utility bill), and those who don’t get it will sue to force the university to provide it.

The move would all but end the difference between in-state and out-of-state tuition at Ohio’s public institutions of higher learning.

I have been unable to identify a good reason why this proposal shouldn’t be laughed out of Columbus. As for reasons to oppose it, everyone in Ohio should find something objectionable.

Most obviously, there’s the lost tuition. To cite just one example, out-of-state tuition at Miami University in Oxford, at $29,158 according to the latest annual survey done by U.S. News, is over $15,500 higher than its in-state charge of $13,595. Miami alone estimates that it could see its tuition income reduced by $60 million annually. The grand total reduction statewide is an estimated $370 million.

So who is going to absorb this difference? Students and their families are already stretched thin, something at least two of the state’s universities, Ohio State and the University of Toledo, have recognized by freezing tuition for the 2013-2014 academic year. Earlier this month, students at Ohio University in Athens protested trustees’ plans to raise tuition by 1.6 percent and room rates by 3.5 percent.

Buckeye State taxpayers certainly shouldn’t be asked to cough up any more money, especially for an idea as misguided as this one. The reason out-of-state tuition differentials exist is that the parents of students from other states aren’t Ohio taxpayers. Letting out-of-state students pay the same rate unfairly forces Ohio’s taxpayers to pay a large share of the cost of their college education.

The elephant in the room, pun intended, is voter fraud. It is already far too easy to vote in multiple states without getting caught. Now every out-of-state university student in Ohio would face that temptation.

Most fundamentally, the fact that an idea like this would even appear on the radar, let alone get proposed as legislation, demonstrates how so many people who should know better have completely lost touch with the basic concepts of responsible citizenship.

Let’s face the obvious. The vast majority of college students at residential universities have little if any personal stake in the long-term well-being of the cities and towns in which their schools happen to be located. They are mostly, like it or not, more like transients than residents. After they graduate, or in all too many cases drop out, most will only occasionally visit these towns. Regardless of whether they get a break for doing so, thirty-day residency laws which make voting easier for adults who have moved or relocated should not be unethically abused by students who should be paying attention to developments back home and voting there as absentees.

In the real world, the chances that out-of-state student voters will adequately educate themselves on state, county, and local issues are extremely low — and even if they do, they should not have the ability to influence issues which won’t affect them personally or financially. For example, there is no reason why student votes for a public school property tax levy, especially if they live on campus, should cancel out the votes of resident adult property owners who oppose it.

Hopefully, this idea will be quickly rejected once its negative impacts become more widely known.

This column went up at Watchdog.org with minor edits earlier this afternoon.

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A week ago, the federal government’s Bureau of Labor Statistics reported that Ohio lost 20,400 seasonally adjusted jobs in March, and that its unemployment rate remained at 7.1 percent.

The overused caution that we shouldn’t read too much into one month applies to an extent to this job-loss figure. At the state level, BLS’s initial estimates have been notoriously unreliable and subject to significant subsequent revision. That said, the size of the negative number virtually ensures that the Buckeye State will still show a March job loss after all is said and done.

It is also troubling that the state’s unemployment rate is up from 6.7 percent at the end of the year. With the nation’s economy seemingly headed into a fourth straight “spring and summer bummer,” that rate appears destined to remain stuck right where it is, or even get worse.

Is Ohio’s economy in the early stages of a major stall-out?

If so, the state may have plenty of company. Seasonally adjusted job losses abounded in neighboring and nearby states during March. Indiana’s employment fell by 12,600. Kentucky lost 8,400 jobs. Michigan shed 6,600. The drop in Illinois was 17,800. Pennsylvania saw 5,900 jobs disappear. West Virginia was the only Ohio neighbor which showed a paltry gain of 400.

But Ohio’s job loss, again pending revisions, was the largest of the bunch, not just absolutely but also as a percentage of its workforce. It also comes at the worst possible time, at the start of when actual job growth — i.e., before seasonal adjustments which smooth out monthly fluctuations — is supposed to be at its most robust, as seen in the following BLS table:

The table shows that March’s actual job gain before seasonal adjustments was far below the previous three years. With the exception of 2008 and 2009, when the national economy was tanking as Ohio under former Democratic Governor Ted Strickland was in the process of shedding over 400,000 jobs, the state’s 18,800 jobs actually added in March is by far the worst March result so far this century. It also represents a sharp U-turn from February, which, as seen above, was the century’s best total for that month to date.

If March was so bad, what should make us think that April and May, which as seen in the table are months when substantial actual employment increases should occur, won’t be similar?

As if we needed more evidence of trouble on the horizon, there’s this: More than half of Ohio’s reported pickup of 120,000 jobs since December 2010 — an already unimpressive result, given the extent of job recovery required — may be illusory.

Here’s why. BLS conducts two surveys to compile its monthly jobs and unemployment reports:

• In its Establishment Survey, the bureau asks employers how many people they have working at their locations. It is the basis for their official monthly estimates of employment and jobs added or lost. At the state level, it tells us how many employees work at employer locations in that state.
• Meanwhile, its Household Survey contacts households to identify the number of working-age household members who are and aren’t working. It results are used to estimate the various reported unemployment rates. At the state level, it also tells us how many residents are employed.
• The Household Survey’s total employment estimate is higher than the Establishment Survey’s, primarily because it includes the self-employed, and secondarily because it includes an undetermined number of illegal immigrants who say they are “employed” but are really not on anyone’s payroll.

Here’s the problem. Ohio’s Household Survey shows seasonally adjusted employment growth of less than 54,000 since December 2010. In the past 12 months, it shows almost 7,700 jobs lost.

What in the name of current Ohio Republican Governor John Kasich is going on here?

More illegal immigrants could possibly be sneaking their way into employment at Buckeye State companies, but it’s hard to imagine that this could be a major factor.

A more legitimate possibility is that there has been a negative sea change in self-employment heavily influenced by oppressive economic policies in Washington. The one remaining additional possible though unlikely significant factor is that more residents of other states are coming into Ohio to work, causing the Household Survey not to grow as quickly as the Establishment Survey.

On balance, it seems more likely that the Establishment Survey’s employment figures will come down or at least increase less quickly than the analogous values in the Household Survey.

Kasich deserved and received plaudits from yours truly and many others late last year for his administration’s fiscal stewardship and, especially relative to what we saw during Strickland’s tenure, spending restraint. But I have to take back something else I wrote in November: “One thing I don’t expect to see is complacency.”

The complacency concern I erroneously waved off was that Kasich would take his eye off the economic ball and venture into other matters which will either do nothing or harm employment growth. I’m afraid that he’s doing just that.

The Governor has spent the past several months wasting political capital on an ObamaCare-driven expansion of Medicaid which will have at best a neutral impact on job growth and further bankrupt the federal government. He has also been supremely stubborn in insisting on a 400 percent increase in the state’s oil and gas severance tax, while engaging in the kind of “Big Oil”-bashing rhetoric which is usually the province of the left. Industry officials accurately warn, given better competitive conditions in other states, that the tax hike “could” — I believe it’s “will” — “drive up costs for drilling companies to the point where they would delay investments in other Utica shale projects.”

Employers, entrepreneurs, and investors already demotivated by President Obama’s election victory in November didn’t need any more reasons to hold back on expansion and hiring plans in the Buckeye State. But Kasich, even if his Medicaid and tax-hike efforts are unsuccessful, as appears to be the case at this point, has given them plenty of additional ones. His fundamental governing philosophy appears to have changed, and not for the better. Other states are looking more attractive as business locales. As a result, Ohio’s economy may indeed be headed for a fall.

This column went up a short time ago at Watchdog.org.

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Ohio’s recently announced initiative to combat food stamp trafficking fraud, while important, only goes after the tip of the iceberg.

Earlier this month, the Dayton Daily News reported that the state will be working with the U.S. Department of Agriculture (USDA) “to identify suspicious patterns of benefit redemption that could indicate illegal activities.”

This passage from Cornelius Frolik’s Daily News report indicates that the initiative is going into an area where state and federal cooperation is long overdue:

USDA is in charge of investigating food stamp fraud perpetrated by retailers and vendors. The state and county agencies are in charge of investigating fraud among residents who receive food benefits.

This strict division of enforcement authority has likely allowed a great deal of trafficking fraud to go undetected. Food stamp  EBT (electronic benefits transfer) cards are street currency in many parts of the state and the U.S., as Frolik notes, with “people illegally selling or trading their benefit cards to friends, store clerks, drug dealers or others for cash, drugs or other non-food items” at a rate which is typically “50 cents for every $1 in benefits.” Unscrupulous retailers could and probably often do serve as facilitators for these illegal transactions, and then profit on the food purchased by people with EBT cards they should not have.

One annoying aspect of Frolik’s coverage,  unfortunately repeated in an Associated Press report based on his work, is how he turned this single aspect of food stamp fraud into an assertion about its full extent.

It started when he told readers the following:
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… and oil companies won’t come here if there’s enough to be had elsewhere.

This brings me to California, of all places, in a development noted in an Investor’s Business Daily editorial last night:

The former Golden State is floating in debt, even as it sits on two-thirds of America’s shale oil reserves locked in a formation four times the size of the one that sparked North Dakota’s economic boom.

North Dakota is now the largest oil producer in the country after Texas with a monthly oil output of about 20 million barrels. North Dakota’s oil boom accounts for 11% of U.S. oil production, and it is the impetus behind the state’s $3.8 billion surplus and an unemployment rate of just 3.2%, the lowest in the nation.

California is not running a surplus, but it is sitting on a lot more oil than is contained in the Bakken shale formation North Dakota straddles. Covering 1,750 square miles from southern to central California, the Monterey shale formation has untapped deposits estimated at 15.4 billion barrels, according to the United States Energy Information Administration.

Until recently, the complex geology of the formation has made exploration and extraction prohibitively expensive.

But as with oil from the Bakken shale in North Dakota and natural gas extracted from the Marcellus formation in the Northeast, technological advances have unleashed a bounty of riches, pushing proven reserves upward and smashing the myth of peak oil.

Whether the formerly Golden State led by Democrat Jerry “Governor Moonbeam” Brown is sane enough to take advantage of its newly available bounty is of course an open question. But I expect there will be similar discoveries in less-hostile political climates during the next several years. If so, oil companies will be able to get very selective about where they choose to do business.

They won’t do business in a state with a newly-enacted punitive severance tax combined with an already-existing Commercial Activities Tax on gross revenues when many other states don’t have either.

Drop the severance tax from your budget proposal, Governor Kasich. Ohio’s economic future depends on it.

Ohioans can give thanks this week for at least one thing: Former Democratic Governor Ted Strickland has announced that won’t be challenging incumbent John Kasich in 2014. During 2008 and 2009, Strickland’s second and third years in office, the Buckeye State lost 420,000 jobs and saw its unemployment rate zoom from 5.7 percent to 10.6 percent, performances which were worse than nearly every other state in the union. In his final two years, the state ran billions in deficits which the rest of America covered by providing at least $4.8 billion in “direct relief” stimulus fuding. As he left office, Ohio faced an estimated $8 billion budget deficit and credit agencies downgraded its credit rating.

None of these facts about Ted Strickland’s record got into Alexander Burns’s Tuesday coverage of Strickland’s decision at the Politico. Instead, readers were treated to a narrative which made Strickland’s fundamentally deceptive attempt to keep his job in the 2010 election seem almost heroic (bolds are mine):

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It’s here.

It will go up here at BizzyBlog on Saturday (link won’t work until then) after the blackout expires.

And they won’t learn from their mistakes.

This post went up in revised form at Watchdog.org earlier this evening.

The supposedly conservative and heavily Republican southwestern portion of Ohio had quite a run of big-government failures and failures in the making in 2012. While it would be easy to assign the blame for most of them to the once proudly conservative but now almost hopelessly liberal City of Cincinnati, the city’s suburbs and exurbs have also more than done their part.

To be sure, it’s was pretty bad inside Cincinnati’s city limits. In July, it reopened Washington Park, a now eight-acre land expanse north of downtown, after spending a mind–boggling $48 million for a 450-car underground parking garage, land acquisition, several new facilities and significant renovations. Admittedly, the park’s appearance and amenities represent an impressive improvement over its decrepit prior condition, and, to be fair, about 45% of the funding came from private sources. That said, it’s still hard to imagine how this so-called “investment” will ultimately be worth it. Supporters believe it “will serve as a catalyst for future development of at least 25 surrounding vacant properties.” Let’s see if they’re right in a few years. I doubt it.

Two decades ago, the city said that the heavily subsidized and now half-empty Tower Place shopping complex downtown would be a catalyst for a revival there. An Associated Press report covering the city’s late-November offer to buy the entire mess with $8.5 million it really doesn’t have described it as “a once-thriving downtown Cincinnati mall.” That’s sheer historical revisionism. My recollection is that the mall had high vacancy rates and disappointing shopper traffic virtually since its inception. Just two years after its 1991 opening with the help of $10 million in city “investment,” the now-defunct Cincinnati Post, normally a see-no-evil cheerleader for city commerce, wrote that it “hasn’t been able to meet expectations.” The mall’s situation never really improved, and it has been an economic millstone around the city’s neck for over two decades.

Of course, the city isn’t learning from its mistakes. It’s deciding to make new ones. In February, after two voter initiatives failed to stop it, it broke ground on a four-mile streetcar project with an estimated cost of $102 million before the predictable cost overruns occur.

The government of Hamilton County, where Cincinnati is located, is still paying dearly for its ill-advised decision to build two stadiums for the Reds and Bengals, the city’s professional baseball and football teams.

In 1996, the county’s commissioners convinced taxpayers to approve a sales-tax increase which would supposedly be enough to cover all costs involved while providing property tax relief for homeowners. Sales tax revenues, based on far too rosy projections, weren’t at all sufficient. Sixteen years later, the commissioners didn’t even attempt to force goodwill concessions from the heavily tax-favored teams. Instead, facing a $7 million deficit in the stadium fund, they reneged on half of the property tax rollback in early December by a 2-1 vote while claiming that the de facto tax increase will only be in place for two years. We’ve all heard that before about “temporary” tax increases, haven’t we? The lone vote against the tax increase came from a Democrat.

From Clermont County, Hamilton County’s eastern neighbor and supposedly a Republican and conservative stronghold, came news in November that for reported “financial reasons,” the Jungle Jim’s retail grocery store in the Eastgate area would be laying off 30-40 employees just two months after it opened.  An emailer who lives in the area informed me that this is yet another example of the government trying to pick winners and losers, and — as all too often happens — picking a loser:

Let’s recap: Union Township and Clermont County taxpayers paid $8.5 million for Jungle Jim’s to set up shop even though another merchant was reportedly going to come in on their own accord. … Then we “bailed them out” with $1 million more because they couldn’t make their first payment.

… The market is saturated with eight grocery stores in a two-mile radius. … But they called this “the greatest thing to ever happen to the county.”

… Self-described conservatives … think nothing of government starting businesses with our money, indicating their fundamentally flawed view of government’s proper and intended role.

Government was never designed to interject itself into — and thereby manipulate — the market in order to create jobs; rather it should stay out of the way so that the market can dictate which industries are sustainable.

Sadly, the idea that our local and county governments will learn from their 2012 mistakes and conduct themselves in accordance within a properly limited framework in 2013 is probably way too much to hope for.

Right to work’s time has come.

This column went up with some editing at Watchdog.org earlier this afternoon.

Michigan Governor Rick Snyder has put John Kasich, Ohio’s chief executive, on the spot by changing his mind about right-to-work legislation and signing it into law.

On Tuesday, in a move which just a few weeks ago seemed less likely than baseball’s Chicago Cubs winning the World Series again — something they haven’t done in over 100 years — the Wolverine State enacted a right-to-work law in the nation’s fifth-most heavily unionized state. As explained by the National Right to Work Legal Defense Foundation, this means Michigan workers cannot “be compelled, as a condition of employment, to join or not to join, nor to pay dues to a labor union.”

The move represents an about-face for Snyder, who had publicly resisted backing right to work when he campaigned for governor and during his first almost two years in office. As explained by Tom Walsh at the Detroit Free Press, Snyder felt forced to change his mind for two reasons:

Frustration with labor as an impediment rather than a partner in fixing Michigan.

And frustration with himself for his naïveté in not realizing it earlier.

Walsh went on to describe how organized labor has hamstrung efforts to rescue insolvent cities and school districts while stonewalling attempts at saving nearly bankrupt Detroit, which as of early this year had 65 people working full-time just handling payroll for its police department.

In a word, the state, already in peril after eight years of fiscal irresponsibility and drift under previous governor Jennifer Granholm, was rapidly approaching the point of becoming ungovernable, almost entirely because of organized labor’s intransigence. Right to work, though not the entire answer by a long shot, will go a long way towards preventing that by creating an environment for greater employment growth in a state where the seasonally adjusted unemployment rate is still over 9 percent.

Back in Ohio, Kasich must deal with the fact that the neighboring Indiana and now Michigan have now upped the ante this year in the contest for jobs, growth, and improved standards of living by enacting right to work — and by the fact that he has been publicly unreceptive to a related grass-roots ballot initiative. In February, he called it a “massive change” which would require “a couple years explaining to people what it even means and why it’s important to them.” The reluctance, while somewhat understandable, is still indefensible.

Despite a strong record of economic improvement in Ohio during his two years as governor and significant improvement in his approval rating, Kasich is still smarting from the November 2011 defeat of Issue 2, also known as SB5. In retrospect, it’s clear that Kasich and the legislature, in enacting a grab bag of public-sector reforms all at once, tried to accomplish too much. As a result, most Ohioans who are generally sympathetic to reform were able, thanks to the help of millions of Big Labor dollars and a disjointed campaign by the issue’s supporters, to find something they didn’t like in the law.

But as Ohio’s voters were rejecting Issue 2, they overwhelmingly passed the Ohio Healthcare Freedom Amendment, which added roughly 120 words to the state’s constitution prohibiting the enforcement of any federal or state laws requiring citizens to purchase health insurance. Why? Because it was easy to understand and is consistent with the freedom-loving instincts of most of the state’s residents.

So is right to work. Michigan’s new law takes up fewer than three pages. The constitutional amendment language submitted by Ohioans for Workplace Freedom, which has been certified as “fair and truthful” by Attorney General Mike DeWine, is less than one page, and the related ballot language the group hopes to get onto the November 2013 ballot is roughly 180 words.

Kasich, whose administration has been extremely good at everyday blocking and tackling, needs to stop licking his wounds and focus harder on Ohio’s long-term future, either by getting behind the right-to-work initiative effort or persuading the legislature to enact its own law. Otherwise, in a few years, the state he claims to love, which already has the most bloated public sector in the U.S. with among its most militant government unions, may itself become ungovernable despite his best efforts.

Makers vs. takers.

This post went up with slight revisions at Watchdog.org earlier this afternoon.

In a November 25 item at Forbes, William Baldwin warned readers that Ohio is a “death spiral state” which is “at high risk of a fiscal tailspin.”

Baldwin used two factors to identify what he describes as the nation’s “fiscal hellholes”:

The first is whether it has more takers than makers. A taker is someone who draws money from the government, as an employee, pensioner or welfare recipient. A maker is someone gainfully employed in the private sector.

… The second element … is a scorecard of state credit-worthiness done by Conning & Co., a money manager known for its measures of risk in insurance company portfolios.

The Buckeye State’s “taker-maker” ratio is 1.00, meaning that Baldwin determined that it has just as many takers as makers. Other states with worse ratios, indicating that they have more takers than makers, include Hawaii (1.02), Illinois (1.03), Kentucky (1.05), South Carolina (1.06), New York (1.07), Maine (1.07), Alabama (1.10), California (1.39), Mississippi (1.49), and New Mexico (1.53).

Ohioans should take little comfort in having the least objectionable situation of the eleven states Baldwin identified. The state is paying the price for years of entitlement expansion under its previous governor. Current governor John Kasich, despite all he has accomplished in the past two years, has failed to stem the tide of dependency.

Food stamp program participation in the Buckeye State is out of control. In August, despite a seasonally adjusted unemployment rate of 7.2 percent, 1.68 million individuals, over 14 percent of the state’s population, were on the food stamp rolls — an astonishing one-month increase of over 110,000. In October 2008, the last time the state’s unemployment rate was about that low, it had over 25 percent fewer participants.

What happened? For starters, state government, with federal blessing, loosened the program’s eligibility requirements to the point where, as shown in early 2009, a couple with $80,000 in the bank and a paid-off house in an upscale suburb was able to qualify. College students, even those with wealthy parents, can receive benefits if they claim that they are receiving no or little support from them. Beyond that, I suspect that many who have found work which would disqualify them from receiving benefits or cause them to be greatly reduced have been slow to report their improved situation — if they have reported it at all.

In September 2008 Ohio had almost 179,000 people receiving benefits under the Temporary Assistance for Needy Families (TANF, also known as “traditional welfare) program.  At the end of 2011, apparently the latest data available, it was over 193,000, a significant decline from a peak of over 240,000 the previous year. That’s fine, but Ohio’s 1.61 percent of the population on welfare was still 60 percent above the non-California national average of barely over one percent.

As to credit quality, the Conning scorecard to which Baldwin referred ranks Ohio 47th out of all 50 states. In their view, only New York, New Jersey, and Connecticut are worse off. The scorecard uses a variety of factors in its evaluation, many of which relate to a state’s economic vibrancy, an area where Ohio badly trails its peers.

Baldwin’s bottom line: Unless things change, his “death spiral states” are ones which “can look forward to a rising tax burden, deteriorating state finances and an exodus of employers.”

What should Kasich and Ohio’s state leaders do? Besides limiting programs for the needy to the truly needy, prosecuting those who are gaming the system, and maintaining what has for the most part been a fiscally conservative posture, they need to recognize that a longer-term solution is right beneath their feet in the form of retrievable oil and gas resources. Rather than heavily tax the companies in these industries, as Kasich has proposed, Ohio should be encouraging them to explore and drill. Rapid economic growth is what has the greatest potential for solving the “taker-maker” problem, and these industries have the greatest potential for such growth.

Best in the Rust Belt.

This post went up earlier this morning at Watchdog.org.

The Kasich administration’s mostly wise fiscal stewardship continues to pay dividends to Ohio workers, who prefer jobs over unemployment.

The Bureau of Labor Statistics reported Tuesday thatOhio‘s seasonally adjusted unemployment rate fell to 6.9 percent in October, marking the first time that figure has been below 7 percent since August 2008. BLS data also show that the Buckeye State added 13,900 seasonally adjusted jobs, bringing total job additions during calendar 2012 to 97,600, one of the best performances in the nation.

Ohio’s results are all the more impressive when one looks at how it measures up to its immediate neighbors and fellow Rust Belt member Illinois. The unemployment rates and jobs added this year in Ohio and the six other states, sorted from the lowest to highest unemployment rate, are:

• Ohio: 6.9 percent; 97,600 jobs; 1.9 percent workforce growth;
• West Virginia: 7.5 percent; 13,200 jobs lost; 1.7 percent workforce contraction;
  
• Indiana: 8 percent; 55,400 jobs; 1.9 percent workforce growth;
  
• Pennsylvania: 8.1 percent; 39,400 jobs; 0.7 percent workforce growth;
  
• Kentucky: 8.4 percent; 29,500 jobs; 1.6 percent workforce growth;
• Illinois: 8.8 percent; 36,600 jobs; 0.6 percent workforce growth;
  
• Michigan: 9.1 percent; 11,800 jobs; 0.3 percent workforce growth.

Every state listed, except Ohio and West Virginia, had an October unemployment rate that exceeded the national rate of 7.9 percent. Unfortunately, West Virginia has been losing jobs because of the Obama administration’s well-documented war on coal; sadly, that also has affected the Buckeye State, or its numbers would be even stronger.

Though Indiana’s unemployment rate is high, it has come down from 8.9 percent, a change that could be attributed to the Hoosier State joining the ranks of right-to-work states earlier this year.

Pennsylvania’s and Kentucky’s high unemployment rates can be blamed partially on the war on coal. The Keystone State‘s percentage workforce growth is especially anemic when one considers that its oil and gas industry has been doing quite well and hiring plenty of workers in the process. Meanwhile, the Bluegrass State‘s workforce growth appears acceptable at first glance, but should be much higher given its legions of unemployed.

That leaves the economic basket cases, Michigan and Illinois.

Michigan suffered mightily during the past decade under Democratic Gov. Jennifer Granholm. Its unemployment rate peaked at 14.2 percent in August 2009, and was still 11.2 percent when Republican Rick Snyder took office in January 2011. Snyder’s fiscally sensible policies took the state down to 8.3 percent this spring, but it has since spiked dangerously upward, possibly because Snyder has, like so many other Midwestern governors before him, become too receptive to raising taxes.

Though Illinois’ performance this year is slightly better than Michigan’s, its nearly two-year record since it passed massive income tax increases in January 2011 is far worse. The Illini State‘s unemployment rate is only 0.7 points lower than it was at the end of 2010, while the state has added only 68,000 jobs.

Why has Ohio outpaced these other states? First, Gov. John Kasich put the state’s fiscal house in order. Despite inheriting a potential $8 billion budget shortfall from predecessor Ted Strickland when he took office in January 2011, Kasich and the General Assembly balanced the state’s budget without raising taxes. He also hung out the “open for business” sign and made it a priority to keep employers in the state while encouraging out-of-state companies to expand or relocate.

There have been failures, most notably the attempt to rein in public-sector unions. There are also potential policy blunders he must avoid to keep the momentum going, particularly his ill-advised scheme to heavily tax the state’s growing energy industry. But on balance, Team Kasich has done well.

One thing I don’t expect to see is complacency. Kasich would be the first to say the state’s unemployment rate needs to drop by at least 2 points before he’ll be even remotely satisfied. Sadly, he’s largely at the mercy of the politicians in spending-addicted Washington, D.C., in improving things much further.

Singling out nonresidents and renters.

This post went up earlier today at OhioWatchdog.org.

Ohio’s quirky tax system already affords its cities, villages and school districts far too much leeway to tax nonresidents without their consent. Mason, Warren County’s largest city, has just shown them how to double down on that idea while also inventing a new target: resident renters.

According to the Tax Foundation, Ohio municipalities first began levying income taxes in 1946. School districts gained that ability under Democratic Governor Dick Celeste in 1989. As of 2011, the foundation says that “593 of Ohio’s 932 municipalities and 181 of Ohio’s 611 school districts impose an income tax.” According to About.com’s Tonya Moreno, “Ohio local income tax rates range from 0.40 percent in Indian Hill to 3 percent in Parma Heights.” Separate school district income tax rates range from 0.25 percent to 2.0 percent.

These taxes are especially pernicious because the tax jurisdictions involved levy them on both residents and nonresidents by primarily taxing gross earnings from employment. A majority of workers who pay these income taxes don’t live in the cities or school districts where they work. Many if not most of them only occasionally visit the jurisdictions which tax them during non-working hours. Nevertheless, they underwrite a large percentage of the cost of operating somebody else’s government and public schools without ever having had a chance to vote on whether or not such a tax was a good idea, and without any input as to how these entities operate.  This is the very kind of “taxation without representation” over which the American Revolution was fought.

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