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Ellen Belcher is the Dayton Daily News opinion pages editor. She writes about state government, education, the environment, higher education and all things Dayton.
Martin Gottlieb is an editorial writer and columnist for the Dayton Daily News opinion pages. He focuses on the political process itself and does such national issues as war, the economy, taxes and Social Security, as well as a hodge-podge of local and state issues.Home > Blogs > A Matter of Opinion > Archives > 2009 > June > 07 > Entry
Editorial: Rap on Ohio and Dayton costs jobs
Losing NCR’s world headquarters is not just heartbreaking for Dayton. It’s also a kick in the teeth for Ohio.
People from NCR’s Bill Nuti to Republican gubernatorial candidate John Kasich are using the occasion to trash the state on taxes — a symptom of a bigger problem.
Here’s an exchange with Mr. Nuti from the Atlanta Journal Constitution’s Web site:
“Q: How did you settle on Georgia, Duluth in particular?
“A: We did a complete analysis of the lower 48 states, measuring a state’s political environment, demographics, tax incentives, foreign direct investment, skilled labor, infrastructure, supply chain, airports and, of course, we looked very, very hard at the cost of living.
“Georgia scored among the highest-ranked states for the high availability of a skilled work force and (training). Georgia has a thriving economy, the No. 8 lowest corporate tax rate, No. 16 in the United States for foreign direct investment, great logistics, particularly for supply chain and infrastructure. It’s home to many research centers and many Fortune 500 companies, including many of our customers in town.”
Now, admittedly taxes are just one item on Mr. Nuti’s list. But he happens to be wrong if he’s referring to a state corporate income tax.
Ohio doesn’t have one. So, as a frustrated state tax official asked, how can Georgia’s rate be lower than zero?
Ohio’s primary business tax is the commercial activity tax, which is effectively a tax on sales. NCR will pay that tax on anything it sells in the state regardless of where its headquarters is, and, had it stayed, it would not pay taxes on its profits.
When he bemoaned NCR’s decision, former Republican Congressman Kasich, who is running against Gov. Ted Strickland next year, complained that “Ohio has the seventh highest state and local tax burden in the country.”
Both Mr. Nuti’s tax statistic and Mr. Kasich’s are from a conservative outfit called the Tax Foundation. Researchers and tax commissioners across the country — no matter how their state stacks up — say the Tax Foundation’s methodology is squirrely. If you were doing a bona fide site analysis, you would never get your information from the Tax Foundation.
The real truth is that Ohio’s tax rates — state and local together — are not low, but neither are they outrageous as compared to other states.
According to 2006 Census data, Ohioans’ state and local tax burden, as a percentage of their personal income, ranked 18th. On a per capita basis, Ohio did better, coming in at 24th. (That number is also somewhat misleading because a bunch of states are clustered together, separated by piddling differences.)
The “high tax” rap is maybe not central to, but a big part, of Ohio’s “brand” problem. We’re just miserable — no, make that inept — at telling a rich, but complicated, story:
For instance, yes, Ohio stacks up poorly in its number of college graduates. But the Dayton region is home to a cluster of engineers and researchers — because of the presence of Wright-Patterson Air Force Base and its universities — that is the envy of other communities. (This is a fact; Massachusetts tried to rip off many of them during the BRAC process.)
The numbers of scholars and scientists in Columbus because of Ohio State, and in Cleveland because of the Cleveland Clinic, are phenomenal.
Yes, Ohio once had high labor costs, but the industries where unions dominated — automotive, for instance — have been decimated. The manufacturing Ohio is excelling at today is precision manufacturing. Those jobs still pay well because they require high skill levels.
Yes, the state is exporting too many of its young people. But it’s also crawling with universities and community colleges that are swelling with students who might consider staying if they were offered jobs here.
As for the cost of living, in Dayton and any corner of the state, you can have a palace for what it costs to buy a guest house on the coasts and in large cities. (The notion that the Atlanta area has it over Dayton on this metric is laughable.)
Dayton and Ohio have to look at NCR’s departure as a failure if not in a specific sense, at least in an overall way. Mr. Nuti, who was hell-bent on leaving Dayton, convinced his board that the move was in the company’s interests by parroting information that’s widely believed. Ohio and Dayton have only themselves to blame for not countering that.
The sales job this region and the state have is, indeed, formidable. Perceptions definitely die hard. But there’s something wrong when important truths are on our side and no one’s buying.
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By Davidss2
June 7, 2009 8:42 AM | Link to this