James Newton on The Third Frontier
From The Dispatch today:
According to the Ohio Department of Development, more than $1 billion in Third Frontier state funds have been awarded so far, including nearly $250 million in central Ohio – second-most behind $342.9 million for the Cleveland area.
The state says that through Dec. 31, the program generated nearly 55,000 jobs at an average salary of $65,815 a year; created, attracted or funded 637 companies; and generated nearly $4.8 billion in private investment.
But of the 54,983 jobs touted through the Third Frontier, fewer than one-fifth – 9,519 – are jobs directly created or retained. The remaining are estimates of indirect jobs, calculated with an economic-modeling tool from SRI International.
James E. Newton, chief economic adviser for Commerce National Bank, questions the reliability of the modeling tool and says taxpayers deserve a more precise accounting.
“If you really believed that the state of Ohio, through this Third Frontier program, was generating a times-10 return, then every one of us ought to empty our pockets out, hand the money over to them and watch the magic happen,” he said.
YES! If investors could get that sort of return, then there would be no problem getting the financing they need!
But perhaps that return the state is talking about is the ROI for convicted criminal and lobbyist Brian Hicks or the return a politically connected firm gets from donating to the Issue 1 campaign.
And for companies which receive Third Frontier dollars, I wonder how tough the pressure is on companies to overestimate the number of jobs created. If the real answer was “0,” how pleased would the Department of Development be?
The state does not invest money… It “awards” it through grants and loans.
And regardless of how useful the Third Frontier is or isn’t, it violates Ohio’s constitutional limitation on debt.
Honest liberals know this is the type of corporate welfare that they rightfully attack the Republican Party for supporting. And conservative Republican legislators who voted for the Third Frontier are simply concerned about closing off access to campaign contributions from the business community.
So it’s left to voters to understand why the Third Frontier should be opposed. But don’t worry… if it fails, there’s plenty of time for it to be put back on the ballot, unconstitutionally tied to another infrastructure bond issue.
Please vote NO on Issue 1.