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Published: Thursday, 11/10/2005

Ohio remains low, Michigan rises on business-friendly scale

BY HOMER BRICKEY
BLADE SENIOR BUSINESS WRITER
Matthew Lewandowski, above, says he gets work from both states. Matthew Lewandowski, above, says he gets work from both states.
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Ohio fares poorly and Michigan fares well in a small business group's latest national index of business friendliness.

Local entrepreneurs and business owners say they're not surprised, given high utility costs, high taxes, and lots of other things wrong in Ohio. Still, they say they are expanding, making money, and coping.

"We're somewhat fortunate in that we do business in both states," said Matthew Lewandowski, principal in the Toledo firm of Lewandowski Engineers. "I can tell you the industrial work in Michigan is just skyrocketing."

Michigan has been more aggressive in attracting business, but his firm has more work in Toledo, too, he said.

In the latest rankings in the Small Business Survival Index published by the Small Business & Entrepreneurial Council, in Washington, Ohio was unchanged at 40th among the states and Michigan moved up a notch to fifth from sixth most "business-friendly" state.

Randy Auslander has bolstered his income with Internet sales. Randy Auslander has bolstered his income with Internet sales.
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The index, compiled for 10 years, has 26 components, including taxes on income, sales, and property, as well as utility costs, crime rate, health-care regulations, and even the number of bureaucrats per 100 population (both Ohio and Michigan have about 5).

Many of Ohio's taxes are higher than Michigan's, a factor that contributed to the rankings. Raymond Keating, chief economist for the small business council, said Ohio has been in the bottom half of the "business-friendly" rankings for the entire decade, but Michigan has moved up.

The index, he explained, is to help state governments determine if they help or hinder small businesses, which collectively make up 99 percent of all businesses, employ about half of private-sector workers, and annually provide 60 to 80 percent of job growth.

"I'm having an off year, putting it nicely," said Randy Auslander, owner of Phil's TV on Sylvania Avenue in Toledo, "but this was the best October in 19 years. I don't know why, but I'm hoping it will continue."

His biggest gripe about Ohio's policies is "the state is not proceeding with collecting tax on Internet sales, and this is a huge problem for me. It essentially shuts down sales of small items [like] cameras, camcorders, etc. I can compete on price but not on sales tax."

So, he decided to sell merchandise on eBay, and now Internet sales top $14,000 monthly. He praised the state for improving its computer system, making reporting taxes easier and saving him time.

Karen Garner, president of Muir Graphics in Sylvania, said her firm recovered from the recession and now has nearly as much business as in the peak years of the late 1990s. The demise of many printing businesses in recent years helped her because it made skilled workers available, she said. But, she added, "Utilities are a large cost, especially electricity."

Seconding that notion is Romilio "Rome" Marinelli, owner of Rome Marinelli & Associates, a finance firm, and Rome Marinelli Motor Cars on Reynolds Road. "I paid an $805 electric bill last month for 4,000 square feet," he said.

But, in all, he's happy he went into business for himself nearly 20 years ago. "If I had listened to all the negatives, I would have packed my bags and gone back to Philadelphia," he said. "Somehow or other, you make it work."

Ohio's low ranking in such indexes, he said, hurts recruitment of businesses and jobs.

Bud Willson, Jr., chairman and chief executive of Willson Builders Inc. in Toledo, said Toledo's transportation system, at the nation's "crossroads," more than makes up for taxes and red tape.

"We're always busy and keep growing," he said

However, the state's workers' compensation is expensive and can punish a business for a single accident, he said.

Mr. Keating, of the small business council, said small businesses should realize that, given their numbers, they have more clout than they realize.

"They employ people, and when they make their voices heard, it's louder than most folks'," he said. "The key is to pick up the phone or e-mail elected officials."

Contact Homer Brickey at:

homerbrickey@theblade.com

or 419-724-6129.



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