Ohio Issue 1, Third Frontier Program Economic Development Bond Amendment (May 2010)

Ohio Issue 1
Election date May 4, 2010
Topic Bond issues and Public economic investment policy
Status Approved
Type Legislatively referred constitutional amendment	Origin State legislature

Ohio Issue 1 was on the ballot as a legislatively referred constitutional amendment in Ohio on May 4, 2010. It was approved.

The measure authorized the state to spend $700 million in bonds over five years on the Ohio Third Frontier program, which promoted growth in the technology industry.

Election results

Ohio Issue 1
Result		Votes	Percentage
Yes		1,050,278	61.73%
No		651,001	38.27%

Results are officially certified.

Source

Election results via: Ohio Secretary of State

Text of measure

See also: Ohio Constitution, Article VIII, Section 2p

The language appeared on the ballot as:

“

PROPOSED CONSTITUTIONAL AMENDMENT TO EXTEND THE OHIO THIRD FRONTIER PROGRAM BY AUTHORIZING THE ISSUANCE OF ADDITIONAL GENERAL OBLIGATION BONDS TO PROMOTE ECONOMIC GROWTH Proposed By Joint Resolution of the General Assembly To amend Section 2p of Article VIII Constitution of the State of Ohio. This proposed amendment would: Continue funding for research and development purposes by authorizing the state to issue $700 million of general obligation bonds to renew and continue programs for research and development in support of Ohio industry, commerce, and business. Limit the amount of all state general obligations that may be issued for, and the amounts of proceeds from those state general obligations that may be committed to, those research and development purposes, to no more than $450 million total for the period including state fiscal years 2006 through 2011, no more than $225 million in fiscal year 2012 and no more than $175 million in any fiscal year thereafter, plus any amounts that in any prior fiscal year could have been but were not issued or committed. Require state agencies awarding funding from those state general obligations to obtain independent reviews of and recommendations as to the merits of proposed research and development projects. The Governor, the President and Minority Leader of the Senate, and the Speaker and Minority Leader of the House of Representatives must be provided information regarding the independent reviewer prior to any award, and the state agency proposing the award must also notify those officials if the recommendations of an independent reviewer are not adopted by that state agency for the proposed project and the reasons for not adopting those recommendations. If adopted, this amendment shall take effect immediately. A“YES” vote means approval of the amendment. A“NO” vote means disapproval of the amendment. A majority YES vote is required for the amendment to be adopted. Shall the proposed amendment be approved? Shall the proposed amendment be approved?

”

Background

The $1.6 billion "Third Frontier" program was started in 2002 under former Gov. Bob Taft and was designed to extend until 2012, however, according to officials, in light of low state revenue the program is scheduled to end early. According to the Ohio Department of Development, the program has created approximately 500 companies and 8,000 jobs since 2002. The "Third Frontier" program awards industries and technologies with state funds in an effort to commercialize products and create jobs. Awards are granted by a nine-member Third Frontier Commission through a grant process. Additionally, there is a 16-member Third Frontier Advisory Board. The board is composed of industry, academia and government leaders.

The Plain Dealer has put together a list of Third Frontier grants to date, they can be found here.

Path to the ballot

See also: Ohio legislatively referred state statute laws

Both the House and the Senate approved the proposed measure on February 3, 2010 following a compromise the night prior. The Senate passed the revised plan 30-2 and the House 83-14. According to reports the resolution was filed with the Ohio Secretary of State on February 3rd; meeting the deadline for the May ballot.

Support

Amendment 1 was primarily supported by United for Jobs Ohio. A complete list of supporters can be found here. Gov. Ted Strickland supported Issue 1. The governor said, "This is a significant investment in Ohio’s economy and cornerstone of Ohio’s economic growth strategy." In addition to several cities and counties across the state, the board directors from the Piqua, Troy and Tripp Chambers of Commerce passed resolutions in support of Issue 1.

The official argument in support, submitted by Rep. Sandra Williams, Jay Goyal, and Ron Amstutz, and Sen. Kirk Schuring, David Goodman, and Dale Miller can be found here.

Yes on Issue 1 ad, 4-20-10

Arguments

• Ray Leach, chief executive of JumpStart Inc., who received funding from Third Frontier, said, "With national economists forecasting that a significant percentage of net new job growth in the U.S. must come from companies that are five years old or younger, providing entrepreneurs and young companies with the resources they need to grow is one of the best ways to create jobs for Ohioans."

• Bob Schmidt, chairman of Cleveland Medical Devices, which had received Third Frontier grants, said, "Having $175 million a year available for new business opportunities is a good thing to do in these tight economic times."

• Lake County Mayors and City Managers Association voted unanimously to endorse the proposed bond renewal. "I think the feeling about it being passed on the ballot is that there’s been good evidence that it’s created 40,000 jobs in the state,” said New association President and Eastlake mayor Ted Andrzejewski.

• Congressman Tim Ryan said, "The investments we get locally from the Third Frontier are in conjunction with the federal money we're bringing home...We're all partnering to make sure we're not wasting money. We're both getting involved in the same kind of programs, and I think that's why we've had some success especially with the techonology companies."

• Timken Co. chairman W.J. "Tim" Timken Jr. said the approval of the Third Frontier Bond Renewal was "critical to the economic future of Ohio" and argues that the state of Ohio "needs this program now more than ever."

• Gordon Gee, the Ohio State University president, was involved in the public relations in support of the renewal. In March 2010, he traveled the state to promote the program and promote research relationships between universities and industries.

• James W. Garrett, CEO of Vadxx Energy, supported Issue 1. In a letter to The Plain Dealer he wrote,"Today, the Third Frontier is helping companies like Vadxx and others regain that crown once again for the Buckeye State. That means good jobs, and we all know that's the only real answer to our challenges. Please continue the momentum we are building and vote for the Third Frontier on May 4."

• The University of Akron announced their support for Issue 1 in early April 2010, according to reports. The Ohio State University Senate approved a resolution on April 15, 2010 to endorse Issue 1.

• WebCore Technologies chairman Dan Hutcheson describes the Third Frontier program as, "It is one of the most, if not the most, important economic development initiatives in the state of Ohio." WebCore received financial aid from the Third Frontier Program.

Campaign contributions

See also: Campaign finance requirements for Ohio ballot measures

According to the Ohio Campaign Disclosure database no filings were made for either "Yes on Issue 1" or "United for Jobs Ohio" as of May 4, 2010.

Tactics and strategies

According to supporters, they expected to spend $3 million on tactics and strategies. Primarily, supporters planned to focus on job creation. The state had lost a reported half-million jobs in the last decade. Additionally, supporters planned to stress that the new bonds would not result in higher taxes. According to supporters, the 2005 $500 million bond would be paid back by 2014 without the use of tax increases.

Rallies

A rally was scheduled for April 7, 2010 at the Taft Center at Fountain Square downtown. More than 100 people were expected to attend the event in support of Issue 1. Scheduled speakers included Mayor Mark Mallory, Bob Castellini, president and CEO, The Castellini Company, UC President Greg Williams and Cincinnati Children's Hospital president Michael Fisher.

Video campaign

On April 14, 2010 United for Jobs Ohio kicked off the "Yes on Issue 1" campaign with a video campaign - "Your Story." As of April 20, the campaign posted a total three videos: Gary Conley, CEO of TechSolve sings the praises of the Third Frontier program; Wayne Poll, CEO of MID Surgical endorses Issue 1; and Tony Dennis provides staggering numbers.

Opposition

There was no organized opposition to Amendment 1. No submission was made to the Ohio Ballot Board in opposition. Opponents argued that the Third Frontier program was "corporate welfare" by investing in companies and technologies, a job they said should be left to the private sector. Others said they worried that more borrowing would severely affect the state budget in the next few years. The state was facing a budget shortfall for 2011 of up to $8 billion. Rep. David Daniels said, "We have got to consider when we are going to stop borrowing and spending. It has shown its share of successes over the years, but to me it goes back to budgetary concerns now."

The official argument in opposition, prepared by the Ohio Ballot Board can be found here.

Arguments

• Rep. Matt Huffman was one of 13 House members that voted against placing the proposed Third Frontier Bond renewal on the ballot. Huffman argued that the market, not government, should decide which technologies would be in demand. Huffman said, "When ethanol was the big thing, a private company got a bunch of subsidies to build a plant outside Lima; but now all we have is an empty plant. We could take $700 million and do a lot more by way of tax cuts to stimulate our economy than this will ever do."

• Sen. Bill Seitz was one of two senators opposed to the proposed measure, however, Seitz said he still supported the program. According to reports Seitz "wanted more highway and infrastructure funding included in the proposal - much as it was in 2005 when Third Frontier passed."

• Rep. Lynn Wachtman argued that the state was giving companies an unfair advantage. "At best, these programs are neutral, if not harmful, by taking money away from someone who may invest it or give it to a cause," said Wachtmann.

• David Johnson, CEO of Summitville Tiles Inc. and former chairman of the Ohio Manufacturers Association and Columbiana County Republican Party, was opposed to Issue 1. In an editorial that appeared on CantonRep.com he said, "There is a $500 million ticking time bomb of debt that may well balloon by an additional $700 million if the voters of Ohio are duped into approving state Issue 1 on the May 4 primary ballot."

Campaign contributions

See also: Campaign finance requirements for Ohio ballot measures

According to the Ohio Campaign Disclosure database no filings were made for "No on Issue 1" as of May 4, 2010. There was no organized opposition to Amendment 1.

Media editorial positions

Main article: Endorsements of Ohio ballot measures, 2010

Newspapers in favor

• The Columbus Dispatch supported Amendment 1. In an editorial the board said, "Voters' approval of Issue 1 will send a strong signal to potential investors in these projects that Ohio is a place that welcomes and nourishes innovation...Voters can do their part by continuing Ohio's investment in entrepreneurship in the businesses and industries that are filling the gaps created by the erosion of the state's old manufacturing base. A yes vote on Issue 1 in the May 4 primary is a vote for the workers in these new endeavors and a vote for Ohio's future."

• The Enquirer supported Amendment 1. The editorial board said,"This isn't about the old model of luring firms from other states with incentives and merely shifting jobs around. It's about developing new technologies, industries and opportunities. As we noted in a January editorial about the Third Frontier, this is about making the economic pie bigger. While it has had some growing pains, the concept is sound, and the program's continuation is absolutely vital to Ohio's future. We urge voters to support Issue 1 on May 4."

• The Plain Dealer said voters should vote for Amendment 1. In an editorial the newspaper's editorial board said,"Even in its short existence, the Third Frontier has helped nurture important biotech and energy clusters around Cleveland's university and medical research centers...A 'yes' vote for Issue 1 will allow the state to raise $700 million for investment beginning in 2012. It won't raise your taxes. It will help secure our state's future."

• The Vindicator supported Amendment 1. "An objective evaluation of Third Frontier will lead to the conclusion that this is an initiative voters can - and should - easily support. The Vindicator urges a yes vote on State Issue 1 in the May 4 primary," they said.

• The Toledo Blade supported Amendment 1. In an editorial the board said, "Issue 1 will not raise taxes. It builds on the success of Third Frontier by allowing the state to sell bonds, raising $700 million for investments beginning in 2012. A YES vote on Issue 1 is a vote for Ohio's future."

• The Morning Journal supported Amendment 1. "When it comes to creating jobs and expanding high-tech industries, Ohio’s Third Frontier program has shown amazing success since it began in 2003...Success breeds success and Ohio’s Third Frontier program is well worth continuing. Vote “yes” for State Issue 1," said the editorial board.

Newspapers opposed

No major Ohio newspapers were opposed to Amendment 1.

See also

Suggest a link

• Ohio 2010 ballot measures
• 2010 ballot measures
• List of Ohio ballot measures
• History of Initiative & Referendum in Ohio
• Ohio Issue 1, Economic Growth Act (2005)

Articles

• Ohio voters overwhelmingly renew Third Frontier and relocate Columbus Casino
• Ohio voters to head to polls Tuesday
• Ohio voters to decide on bond renewal and Columbus casino next week
• Ohio Third Frontier bond issue headed for May ballot

External links

• Ohio Secretary of State
• May 4, 2010 State Ballot Issue Information
• Ohio Third Frontier Program
• The Plain Dealer - Third Frontier grants
• Third Frontier Joint Resolution - HJR 12 - full text
• Issue 1 ballot language
• Issue 1 explanation
• Official argument in support
• Official argument in opposition
• United for Jobs Ohio (supporters)
• Ohio 2010 ballot measure voter's guide

Additional reading

• ABN: Ohio's Voice for Agriculture, "Third Frontier Assists Appalachia Ohio Businesses Through TechGrowth Ohio," accessed May 4, 2010
• Archbold Buckeye, "Two Statewide Issues On Primary Ballot," accessed April 29, 2010
• BG Views Network, "Third Frontier helps students acquire scholarships, co-ops," April 22, 2010
• University of Dayton, "Supporting Ohio Third Frontier Means Jobs," April 21, 2010
• City Beat, "Fighting Over Future Frontiers," April 20, 2010
• The Independent Collegian, "Restoring the ‘third frontier'," April 15, 2010
• Dayton Daily News, "Ohio jobs will go elsewhere without Third Frontier money, backers say," April 10, 2010
• Dayton Daily News, "Third Frontier gave ex-NCR exec fresh start," April 7, 2010
• The Cincinnati Enquirer, "Third Frontier goal: Funding the future," April 4, 2010
• Huffington Post, "Ohio's Issue One: A Jobs Program America Should Notice," April 2, 2010
• Associated Press, "Ohio jobs program up for renewal vote in May," March 29, 2010
• Akron Beacon Journal, "Ohio ballot initiative concentrates on jobs," February 24, 2010 (dead link)
• Crain's Cleveland Business, "Campaign effort for Ohio's Third Frontier bond issue to emphasize jobs," February 23, 2010
• The Columbus Dispatch, "Ballot board acts on state Issues 1, 2," February 17, 2010
• The Daily Sentinel, "Ohio voters to decide fate of Third Frontier," February 11, 2010