Local Government Innovation Fund

By Gene Krebs While Ohio's tax obligation as a percentage of income is ranked 33^rd highest of the 50 states, we are ranked a stunning 6^th highest for local tax obligation.  This could be blamed on many things by many people, but there is another fact that also stands out.  Nationally, there are 27.9 local governments per county.  Ohio has 41.3 local governments per county.  This is driven not just by cost, but also a fractured governmental structure, leading to a cacophony of voices raised in economic development efforts. 

It is not that we have too little economic development in Ohio; we have too much economic development bureaucracy. Not only does this lead to churning and poaching of one business from a community to one just down the road (leading to no or little economic benefit to the community as a whole), the myriad rules and local regulations inhibit businesses from locating in those small box counties.

One of the solutions to this lack of coordinated economic development is something that Greater Ohio has been pushing for several years- a fund to encourage collaboration, sharing services and consolidation of back office operations. 

The Local Government Innovation Fund (LGIF) was created in the last budget to foster that change.  Many of our earlier language suggestions were adopted directly by the General Assembly, and for that we are grateful. The LGIF was established to provide financial assistance to Ohio political subdivisions for planning and implementing projects that are designed to create more efficient and effective service delivery within a specific discipline of government services for one or more entities. Projects are also expected to facilitate improved business environments and promote community attraction.

The LGIF program will award up to $100,000 in grant funds per feasibility study, up to $100,000 in loan assistance per entity for demonstration projects, and up to $500,000 in loan assistance for multi-entity projects to be used for demonstration projects. 

There are five scheduled five LGIF information sessions to explain the upcoming Innovation Grant & Loan Application and Program.  Please click here for additional information about the program and regional informational sessions; click here for more information on the application.   

The LGIF is managed by the Local Government Innovation Council; Governor Kasich graciously appointed me to serve on the council in the position as an advocate for the citizens of Ohio (I serve without pay, in case you were wondering).  I am looking forward to working with the rest of the council and the able staff of the Ohio Department of Development.

Fix It First Policy by Kasich Administration

By Gene Krebs Fix-it-first is a goal many advocates of smart growth or "smart spending" have sought. Fix-it-first is a policy where governments concentrate scarce resources for maintaining and fixing infrastructure in which we have already invested taxpayer dollars. 

In a very quiet manner, and without much fanfare, the Kasich Administration committed to such a policy.  Recently, Office of Budget and Management Director Tim Keen reaffirmed that requests for new road and building construction will have to achieve “an extremely high standard” to gain approval. 

Greater Ohio commends the Kasich Administration for staying true to their earlier policy of fix-it-first, and urge them to continue.  Not only does this strategy limit the number of new roads, it is vital strategy for the economic health of Ohio, as a recent study of Ohio’s transportation infrastructure by Smart Growth America suggests.  “Thirty eight percent of Ohio's roads have fallen out of good condition, and it would take approximately $1,133,665,917 per year over the next twenty years to bring all of the state's roads into good repair and keep them that way. Between 2004 and 2008, Ohio spent 24% of its highway capital funds on road expansion - $451,772,850 - and 36% on road repair and maintenance - $684,820,545.”  With price tags like these (not to mention declining gasoline tax revenues and tight bonding capacity) fix-it-first makes good fiscal sense.

Media Respond Positively to Greater Ohio, Buckeye Institute, Center for Community Solutions Conference

A recent collaboration between Greater Ohio and two other high-profile research organizations, the Buckeye Institute and Center for Community Solutions, partnered again to host an influential conference, “Across the Spectrum: The Future of Ohio and the Path to Prosperity.”  Building on previous collaborative work around tax expenditure reform, the three think tanks brought together over 20 experts and 300 attendees for a day long discussion that explored differences and common ground on key substantive policy issues central to the future prosperity of Ohioans.  The groups successfully raised the level of public discourse by facilitating thoughtful discussions that avoided partisan platitudes and instead explored the range of policy solutions available to the state and nation. Coverage of the event has included a segment on Colleen Marshall’s The Spectrum, a weekly political and current events television show, a news story on Ohio Public Radio, and articles in the Cincinnati Enquirer about the “smart government, smart growth” panel and lunchtime debate between Dr. Alice Rivlin and Dr. Arthur Laffer.  The Columbus Government Enquirer also covered the lunch panel.  The subscription-based Statehouse reporting services, Hannah News Service and Gongwer News Service, also carried stories on the lunchtime panel, the health care panel, the public pension panel.

Across the Spectrum: A Rousing Success

On December 8^th, 2011, Greater Ohio Policy Center, The Buckeye Institute and The Center for Community Solutions co-hosted a powerful conference that successfully raised the level of public discourse beyond the current partisan posturing that is so prevalent in our nation and state. “Across the Spectrum: The Future of Ohio and the Path to Prosperity” brought together 20 state and national experts to propose and debate a variety of solutions to some of the most urgent policy challenges facing Ohio and the nation: government consolidation, health care, government pensions, federal, state, and local taxes, the modernization of Ohio’s constitution and the culture shift underway in American society.

Lively and collegial discussion between panelists, and between panelists and over 300 audience members, demonstrated to all attendees that there is much common ground from which we can develop new policies and programs that aren’t “right-wing” or “left-wing” but an innovative “third way.”

Perhaps best modeling the ability to forge agreement on lightening-rod issues was the lunchtime discussion between Dr. Arthur Laffer, Founder and Chairman of Laffer Associates and The Laffer Center for Supply-Side Economics and Dr. Alice Rivlin, member of the National Commission on Fiscal Responsibility and Reform and former director of the Congressional Budget Office.  During their friendly debate on “National Debt, Deficits and the Future of Fiscal Federalism” they agreed that the country’s national debt had to be addressed immediately and that “flexibility”—though perhaps not compromise—by both parties would be one important way out of the morass.

At dinner, Professor Walter Russell Mead, Professor of Foreign Affairs and Humanities at Bard College and Editor-at-Large of The American Interest, gave the dinner keynote address, “Where is America headed?” and offered a vision of America’s future where community—defined by place, as well as by interests and/or workplace training—will remain the bedrock of American society.  Identifying the democratization of information through the internet and higher levels of education attained by Americans, Mead argued that the future will hold a range of opportunities (and options for getting there) that is markedly more varied that our 19^th and 20^th century past and that this complexity will be our greatest competitive advantage.

Throughout the day, numerous audience and panelist members commented that as a result of the sincere conversations prompted by the panels, they felt extremely hopeful for Ohio’s future and the political discussions that will get us there.

We anticipate “Across the Spectrum” will have long-lasting impacts on the political dialogue in Ohio—please leave your thoughts on the conference in the comments section below to let us know what you think and to keep this important conversation going.

Investing in Over-The-Rhine: Highlights from 3CDC

Greater Ohio's partners continue to create innovative programs and models that are building prosperity across Ohio. This month we spotlight the Cincinnati Center City Development Corporation (3CDC) as an innovative private-public partnership that is providing catalytic leadership in revitalizing Cincinnati’s urban core.  This month’s guest blog post comes from Anastasia Mileham, Vice President of Communications at 3CDC.

3cdcphoto1

The Cincinnati Center City Development Corporation (3CDC) is a non -profit, full-service, real estate development company formed in 2004 by Cincinnati’s corporate and civic leaders. Its mission is to strengthen the core assets of downtown by revitalizing the Central Business District (CBD) and Over-The-Rhine (OTR).

Over-the-Rhine is one of the most economically distressed areas in the country with a poverty rate of 58%, unem­ployment rate of over 25%, and median household income of $9,895. Geographically situated just north of the center city, the troubles in OTR have contributed to a destabilization of the CBD. This unstable environment has prevented growth and investment in the city’s core, which has in turn impacted the health of the entire region. In the absence of a major turnaround, the region was in danger of losing some of its largest employers, further exacer­bating the persistent distress in Cincinnati’s center city.

 3CDC's efforts to revitalize low-income communities are funded by five separate revolving loan funds, totally over $195 million.  3CDC has also been awarded three New Market Tax Credit (NMTC) allocations to date, totaling $103 million. (The NMTC Program provides a credit against federal income taxes to privately managed institutions investing in distressed areas.)  Since its formation 3CDC and its partners have invested more than $324 million in the CBD and OTR by making below market-rate loans to commercial, residential and community real estate projects. Without access to the funds’ low-cost capital, such efforts would not be financially feasible.

 3CDC’s redevelopment efforts in OTR have resulted in 186 condominiums, 68 rental units, and more than 91,000 SF of commercial space, mostly created in historic, vacant and vandalized buildings. More than 85% of the condominiums are sold, the rental units are 100% filled, and a vibrant shopping and dining district has replaced empty storefronts with over 80% of the completed commercial space now leased. Since 2004, crime has dropped more than 51% and continues to decrease.

3cdcphoto2

 The first NMTC allocation of $50 million is used as a revolv­ing loan fund, which has enabled 3CDC to invest $69.6 million in real estate projects throughout Cincinnati’s urban core. The second allocation of $35 million is invested into three critical developments: (1) Washington Park, an 8-acre public park with a 450-space underground parking garage, (2) 21c Cincinnati, a 160-room boutique hotel with public art museum, and (3) Saengerhalle, a 32,000 SF mixed-use office and retail complex. The third allocation of $18 million is invested into a vacant building (Maisonette) being renovated into a restaurant/entertainment complex in the CBD, and an historic building in OTR (Paint Building) being developed into 10,000 SF of commercial space.

 3CDC has set high standards with its investments using proceeds from the previ­ous $103 million NMTC allocation. Its successful track record would not have been possible without the Federal New Market Tax Credit program. All of these projects, endorsed by the community, were catalytic in nature and resulted in significant commu­nity and economic impact felt throughout the region.