U.S. Rep. Ted Strickland, a Democratic candidate for governor, yesterday announced plans to jump-start Ohio's economy by annually diverting $250 million in bond revenues to companies that research alternative energy sources like ethanol and clean coal.
"Ohio could have, I believe, a significant part of its economic dilemma solved if we pursue this course of action," said Mr. Strickland (D., Lucasville), who figured the investment could add thousands of jobs to the state.
In October, the state's unemployment rate was 5.9 percent, almost one percentage point higher than the national average, according to the U.S. Bureau of Labor Statistics.
Projections released yesterday by the Ohio Department of Job and Family Services highlight the continued economic woes. The state agency calculated that the business tax used to pay benefits to the unemployed will be 2.7 percent, or $243 for each employee, a 17 percent increase over last year's rate.
Gene Pierce, a spokesman for Ohio Secretary of State and Republican gubernatorial candidate Ken Blackwell, said the proposed energy plan fails to address the needs of an economy still dependent on traditional energy sources.
"While alternative fuels are an essential element, they face problems of distribution and retail access which, in the short run, will prevent them from being solutions to the looming price increases Ohioans face," he said.
Under Mr. Strickland's proposal, a state committee would annually earmark 30 percent of $800 million in federal bonds for alternative energy programs.
Companies developing new biofuels or clean coal would receive the money and take on the tax-free bonds' debt, giving them access to large amounts of capital at a comparatively low interest rate.
Mr. Strickland said 50 percent of the federal bonds currently pay for housing, with the remainder helping to finance waste treatment facilities and small manufacturers.
"If he's taking this away from small manufacturers, he's getting rid of the incentives," Mr. Pierce said. "He's robbing Peter to pay Paul. There's no net gain."
Bob Paduchik, a spokesman of Ohio Attorney General Jim Petro, a Republican also running for governor next year, echoed those sentiments.
"This is a typical big-government, Democrat approach," Mr. Paduchik said. "The government doesn't create jobs. The private sector does."
Recent studies have predicted substantial job growth from alternative energy investments.
A 2004 study by Renewable Energy Policy Project estimated that a total statewide investment of $3.9 billion in wind turbines could add 11,688 manufacturing jobs.
The study listed Toledo-based Owens Corning as a possible supplier of rotor blades for the turbines.
According to the studies, the tab for each new job would be at least $160,000.
Mr. Strickland said the high price tag could be worthwhile if the program establishes "living wage" careers.
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