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Business sector cautious about privatization

April 6, 2011
By Brad Bauer (bbauer@mariettatimes.com) , The Marietta Times

Business and local economic development leaders say they're cautiously optimistic about efforts underway by newly elected Ohio Gov. John Kasich to privatize the Ohio Department of Development.

Terry Tamburini, executive director of the Southeastern Ohio Port Authority, said Ohio has become too complacent and lost too much industry and opportunity to neighboring states.

"You've got to be excited because it looks like a new opportunity for us," he said. "Certainly there's always a degree of uncertainty or apprehension with any new policy or direction, but we have to try something new. Right or wrong, we need to break out of the mold."

Ohio has lost 610,000 jobs during the past decade, a 10.9 percent decline, according to U.S. Bureau of Labor Statistics. Only Michigan had a deeper drop during the period, 17.8 percent.

Most details about the plan to privatize the state office are still being worked out, however, programs like H.E.A.P. (Home Energy Assistance Program) and Community Action's weatherization program, both operated though the Department of Development, aren't likely to be impacted by the changes, said David Brightbill, executive director of Washington-Morgan Community Action.

"From what I've seen in the proposed budget, H.E.A.P. and weatherization will stay together, but it looks like the economic development side of the office could see some changes," he said. "Exactly how everything ends up structured appears to be up in the air."

Fact Box

New, private sector economic development corporation

Gov. John Kasich is working to replace Ohio's government-run economic development functions with JobsOhio, a new not-for-profit corporation which will report to the governor and oversee the state's efforts to revive the state's economy and create jobs. A private-sector approach to economic development will be more responsive to the needs of business.

A board of directors comprised of CEOs will be an important asset for selling the state at the highest levels;

An expert staff focused solely on economic development will give businesses confidence that their needs will be met and help rebuild Ohio's reputation as a good place for business;

The increased accountability of a private corporation will produce better results.

Freeing Ohio's economic development efforts from their current bureaucratic mindset and shifting them to a new private sector corporation is expected to allow Ohio to more aggressively help existing businesses grow and expand and attract new businesses to Ohio as well.

Source: www.kasichforohio.com

No matter what happens, Brightbill said the office expects some budget cuts for the programs, mostly from the federal level.

Kasich has said he plans to use the $100 million in annual liquor sales taxes collected in Ohio to help recruit and retain businesses though an office called JobsOhio, a private, not-for-profit entity created last month to replace the Ohio Department of Development.

Tamburini, who worked in development for several years in West Virginia, said that state attempted to privatize development in the early 1990s, with moderate success.

"It lasted two or three years, and raised a lot of money and brought a Toyota plant to Buffalo, W.Va.," he said. "There were some structural problems, with the head making a lot of money and the people actually doing the work not seeing any benefits and a change in office ultimately led to the demise of the program."

Charlotte Keim, president of the Marietta Area Chamber of Commerce, said Ohio's business climate has been struggling for years.

"Ohio has so many rules and regulations that it becomes cumbersome for businesses to come here or for existing businesses to stay in compliance," Keim said. "By having a private sector development office, I would expect things to get streamlined."

Keim said past development efforts have focused on creating or retaining hundreds of jobs at a time.

"I'm hoping we'll see help for the small businesses who want to add five or six jobs," she said. "That type of growth is easier and more reliable."

Keim said it is too soon to know what impact Kasich's plan may have for the area.

"We just need to make sure we are talking with the people in Columbus and to let them know we are hear and that we need to have a voice," she said. "That may mean more trips to Columbus or just staying in contact with (our local representatives)."

 
 

 

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