The governor showed approval for Toledo Mayor Mike Bell's effort to sell The Docks entertainment complex and at least some of the 125-acre Marina District to Chinese investors. The proposal, which would help the mayor address the city's own budget deficit for 2011, has stirred controversy among some members of City Council. The deals are subject to council approval.
"You cannot let the naysayers win," Mr. Kasich told an audience of more than 300 people during a joint session of the Toledo Regional Chamber of Commerce and the local Rotary Club in the ballroom of at downtown Park Inn.
"If you can get significant foreign investment in Toledo … you've got to be kidding me if we pass that opportunity up — that would be sinful," the Republican governor said. "So my recommendation would be to not let them stand in your way, sir, and tell the mayor to keep on keeping on."
Speaking of another local controversy, Mr. Kasich voiced dismay about the Federal Trade Commission's attempt to stop the merger of financially struggling St. Luke's Hospital into the ProMedica Health System. Federal officials contend that the merger would increase health-care costs for employers and patients. But St. Luke's says it would have to shut down without the merger.
Mr. Kasich suggested that the deal's importance to the local economy should outweigh the federal concerns: "We are on a mission to save our communities."
The lunch-hour speech marked Toledo's turn in the governor's traveling presentation to business groups of his visions for economic revival. Mr. Kasich spoke without a script or detailed notes, occasionally glancing down at an iPad that rested on the lectern. His remarks centered on the theme "Restoring Ohio's Competitiveness," and he received multiple rounds of applause and standing ovations.
Mr. Kasich laid out a prescription for Ohio that includes lower taxes for businesses and individuals, reduced regulations, lower pay for some construction workers, a vibrant charter school movement, privatization of the Ohio Turnpike, and replacement of the Ohio Department of Development with a private, nonprofit corporation called JobsOhio.
Ohio faces a projected $8 billion budget deficit. To address this gap, Mr. Kasich said there will be spending cuts and that his staff is examining nearly every other option but one: raising taxes.
If Ohio were to raise taxes, it could lose more businesses and residents to states like Indiana and Tennessee that are keeping taxes low, he said.
"The reason why we can't raise taxes is I am not going to put this state in a worse competitive situation," said Mr. Kasich, who said he is "more worried about Indiana than … India."
Mr. Kasich said he would like to see lower taxes on capital gains, which are profits on the sale of securities, real estate, and other investments. The current federal tax rate on most long-term capital gains income is 15 percent. At present Ohio taxes the gains at 5.9 percent. Mr. Kasich said that by lowering Ohio's rate, the state would become more attractive to wealthier individuals who might otherwise move to lower-tax states such as Florida.
"So what we're [currently] doing is we're driving our best and brightest and our pioneers out because we're punishing their success," Mr. Kasich said of the capital gains tax.
The governor laid out his monetary goals for privatization of the state turnpike. He said he would like to "lease" the turnpike to a private entity for a $3 billion lump sum. He would then use $600 million to pay down debt and spend the rest on projects that could attract business to the state, such as investments in infrastructure, rail, highway, and harbors.
"We can begin to start putting some arrows in the quiver that will help us be enormously successful," he said.
But he said he doesn't want to pay prevailing wage rates to the laborers who would build the infrastructure.
"It would be great if we didn't have prevailing wage," he said. The governor went on to present a hypothetical example about the benefits to taxpayers of paying lower wages to workers, speculating that someday University of Toledo President Lloyd Jacobs — who attended the speech — might want to build a new residence hall.
"Lloyd Jacobs needs to build a new dorm. Why does he need to pay prevailing wage? He can build two dorms with the money he'll save," Mr. Kasich said.
The comments caught the ear of audience member Pete Gerken, a Democrat and president of the Lucas County board of commissioners, and a longtime proponent of "living-wage" stipulations in government contracts.
"I'm curious how he wants to create wealth and good jobs in Ohio but continue with the race to the bottom on wages," Mr. Gerken said after the speech. "Prevailing wage helps protect good jobs in Ohio. Those people who work under prevailing wage in the skilled trades industry usually spend as much time getting educated and prepared for those jobs as anybody who goes to college."
The chairman of the Lucas County Republican Party, Jon Stainbrook, defended Mr. Kasich's proposals. He said the governor has a positive and energizing vision for the state that requires new ideas.
"John Kasich is thinking outside the box," Mr. Stainbrook said. "This is what we need here in Ohio."
There was an awkward moment near the end of the governor's speech, when he called out in vain for Mayor Bell.
"Is the mayor here?" he asked.
Unbeknownst to the governor, Mr. Bell remained out of town yesterday on personal business. A spokesman later refused to reveal his whereabouts to The Blade.
Steve Herwat, deputy mayor of operations, announced later to the ballroom audience that Mr. Bell was unable to attend the luncheon but sent his regrets.
"Mayor Bell wants to partner with you to make this part of the state better," Mr. Herwat told the governor.
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