Taft s message highlights tax reform, job creation

In his State of the State speech yesterday, Gov. Bob Taft urges raising investment aimed at high-tech employment.

COLUMBUS - Ohio must overhaul its tax structure, crack down on frivolous lawsuits, and invest more in high-tech jobs if the state s economy is going to recover and then thrive, Gov. Bob Taft told lawmakers.

For his sixth State of the State address, the Republican governor mined prior speeches for proposals that have yet to be fully enacted and said he recognized some will be tough during a legislative election year.

“From truck drivers to teachers, from steelworkers to auto workers, from managers to researchers, I ll put Ohio workers up against any in the world,” he said yesterday in a 31-minute speech. “But that world is changing. We must continually strive to train a work force that is state of the art, flexible, innovative - in short, world class.”

The governor will visit GM Powertrain s Toledo plant today at 11:30 a.m. to drum up support for his proposals. The transmission producer employs more than 3,900 people.

Ohio s unemployment rate climbed to 6 percent in December as the national average dropped to 5.7 percent.

House Minority Leader Chris Redfern (D., Catawba Island) characterized the speech as “peanut butter and jelly sandwiches and bumper-sticker solutions,” referring to free sandwiches the J.M. Smucker Co., of Orrville, had waiting on legislators desks.

There was no mention of what many lawmakers consider the most immediate threat, a citizens petition seeking to have lawmakers repeal a temporary penny-on-the-dollar surcharge on the state sales tax as much as a year earlier than the current expiration date of June 30, 2005. That could leave a budget hole as big as $1.3 billion.

In December, anti-tax activists submitted 157,482 signatures in support of the repeal. Ohioans for Fiscal Responsibility, a coalition of public employee unions, has challenged the petitions in 55 counties, a move that, if it goes on long enough, could prevent repeal supporters from garnering another round of signatures to put the issue on the November ballot.

Secretary of State J. Kenneth Blackwell, Republican leader of the petition drive, accused Mr. Taft of being in “cahoots with big public employee labor unions to frustrate democracy at the county level.”

Coalition spokesman Mark Hatch disputed Mr. Blackwell s contention that Mr. Taft is linked to the court challenges.

The only policy proposal from Mr. Taft to draw a standing ovation was his renewed call for tax reform, a broadening of the state s tax base, and a lowering of rates so that the flow of revenue to the Ohio Treasury could better weather economic downturns. The standing ovation began with a single Democrat and spread to the Republican side of the aisle.

“We all know that tax reform is hard to do, hard in a budget year, and hard in an election year,” the governor said. “Let s roll up our sleeves and get it done this year.”

His yet-to-be-unveiled “jobs bill” would guarantee that the state would recruit, screen, and train employees for any business creating 100 new jobs. He proposed directing more borrowed dollars from the state capital budget toward high-tech projects to help compensate for the defeat of his $500 million Third Frontier bond issue on last year s ballot.

House Speaker Larry Householder (R., Glenford) characterized the jobs proposals as “tweaking.”

“I think 75 percent of the [legislative] work has already been done,” he said. “He s out there advocating finishing up the 25 percent ... ”

The governor called for a moratorium on new mandates for health-insurance policies, a move that would block proposals requiring insurers to cover diabetes-testing supplies and mental-health treatment. He then proposed extending existing tax credits for job creation to the insurance industry, which employs 100,000 Ohioans.

“The governor s been wrong before on this issue, and I guess he s entitled to be wrong a second time,” said state Rep. Lynn Olman (R., Maumee), sponsor of the bill to require insurers to cover seven severe mental illnesses much as they would any other medical condition.

“I met with the speaker [Tuesday] afternoon,” he said. “He knows the governor s position on mental-health parity, and he said to me in no uncertain terms, Your bill will go to floor next week, and I will support it. ”

But Mr. Householder said yesterday he has not made a decision.

State Rep. John Willamowski (R., Lima) applauded Mr. Taft s proposals to fight federal threats to 38,000 military-base jobs in Cleveland, Columbus, Dayton, Lima, Springfield, and Youngstown. But he said the governor exhibited “inconsistency,” given his continuing fight to close Lima Correctional Institution to save money.

Despite this, he said he believes this was Mr. Taft s best State of the State address.

“I think he s catching up to where a lot of the legislature was a couple of years ago,” he said. “It s about jobs. If he s really serious about job creation and retention, I m happy to work with him. “

Rep. Jeanine Perry (D., Toledo) said, with the exception of Lima, the governor made no references to northwest Ohio. When he talked about biomedical research in Cincinnati, Columbus, and Cleveland, there was no mention of efforts at the University of Toledo to create high-tech jobs through fuel cells and biofuels.

“It s all the three C s,” said Ms. Perry. “I circled every reference he made. The Other Ohio still exists.”