The two Ohio gubernatorial candidates have very different views on what’s happening with their state’s economy.
First, there’s incumbent Democrat Gov. Ted Strickland:
“In 2009, the Small Business & Entrepreneurship Council ranked Ohio 11th in the nation and 1st in the Midwest for overall business climate,” the governor said in a July 17 news release. We decided to take a closer look.
Strickland, who made the statement in response to a Kasich ad that blamed the governor for Ohio’s jobs losses, was referring to a December 2009 study entitled “Small Business Survival Index 2009: Ranking the Policy Environment for Entrepreneurship Across the Nation.” The study was produced by the Small Business and Entrepreneurship Council, or SBE, a trade group that represents small businesses and advocates for less government regulation.
Then, there’s John Kasich:
“How did we get here? Sloppy, no knowledge, tired, worn out, no ideas. Politics as usual. What do you do? You take a businesslike attitude. You have to serve the customer,” Mr. Kasich said.
As before in this hard-hitting gubernatorial campaign, the governor’s campaign and office staff were quick to return Mr. Kasich’s broadside, saying Mr. Strickland has cut taxes, trimmed bureaucracy, and positioned the state for business investment, while Mr. Kasich was looking out for Wall Street.[...]
Mr. Kasich said too many entities are doing job training and that Ohio spends too much money on school buildings and administration and not enough in the classroom. He said raising taxes is not the solution to the state’s deficit, but resisted detailing how he would balance the budget, which he portrayed as an expertise of his from his four years in the state Senate and 18 years in Congress, where he chaired the House Budget Committee. “People want to know the details of my plan. I don’t have the revenues,” he said. “If anybody really wants to know what my philosophy is, there’s 13 budgets. You can read them.”
So what exactly is going on in the state? The question’s fairly complicated, given that there’s enough data to support either conclusion, and enough studies already doing so that both candidates have a sizable arsenal to use. Fortunately, the Politifact article that Strickland’s quote came from has some interesting analysis:
Ohio does rank 11th overall in the 2009 SBE index. But whether Ohio is No. 1 in the Midwest depends on how you define the Midwest.
Strickland relies on the Ohio Business Development Coalition, which supports the state’s economic development efforts. In a news release, it defines the Midwest as Ohio, Indiana, Kentucky, Michigan, Illinois, Wisconsin and Minnesota.
The U.S. Census Bureau defines the Midwest differently. It doesn’t include Kentucky, which lands in the South, but it adds Iowa, Kansas, Missouri, Nebraska, North Dakota, and South Dakota.
Ohio still beats them all — except South Dakota. While Ohio is more likely to compete with nearby states, the Mount Rushmore State’s ranking tops SBE’s entire survey. One reason: South Dakota is among a handful of states without a personal income tax. Small business operators find that attractive because, as the SBE and other groups often point out, about 90 percent of them file taxes as individuals — sole proprietorships, partnerships and S-Corps — and don’t pay corporate income taxes.
Strickland’s critics like to cite the personal income tax rate, which is high compared to about half of the other states. The conservative Tax Foundation, which Kasich frequently points to, and others say Ohio’s personal income tax, coupled with local taxes, makes the overall tax burden unattractive to business. The Federation of Tax Administrators’ tally of total state and local tax burden ranks 29 states better than Ohio.
The real question is whether the state will seem amply business-friendly to voters.