Ohio State Revenues Down, Job Losses Up

Strickland Waits for Washington, Jobless Workers Push Benefits Fund to Brink of Bankruptcy

OhioNewsBureau

with John Michael Spinelli

Columbus, Ohio: The unwanted combination of falling state revenues and rising job losses is the ghost that's been stalking Gov. Ted Strickland, who appeared Tuesday in Wilmington in southwest Ohio to stand tall if not glum and grim with local officials who were told by German-based shipping giant DHL that it will eliminate the jobs of about seventy-five percent of the town's 10 thousand population by year's end, another demonstration to Ohioans that their future will likely be gray and gloomy for months and maybe years to come.

Strickland was elected governor in 2006 when the first wave of Democrats-replacing-Republicans swept through the state after nearly 16 years of Ohio by the GOP. The governor born into poverty in Appalachia Ohio strode into the governor's mansion as Ohio's economy really started bucking under the strain of the loss of hundreds of thousands of middle class jobs that started with NAFTA but which accelerated over the years of the Bush presidency, made possible by companies relocating from Ohio and other living-wage states to low-wage countries like Mexico and China.

The monthly budget report that looks back one month on state economic performance while simultaneously making forward-looking statements was not a pretty site in November. Even with revised numbers, J. Pari Sabety, Director of the Office of Budget and Management, told Strickland and Lt. Gov. Lee Fisher that general revenue fund tax receipts, with special focus on personal income and non-auto sales taxes were off by $96 million (6.0%). The report said these two taxes are the "two best 'real time' indicators of the health of Ohio's economy, and this performance is of concern." Year to date, the report said, "Ohio is approximately $61 million below the revised revenue estimates (1.0%).

The highlights of the economic performance report painted a dark picture going forward, one Strickland and state leaders have little ability to change, which is why Strickland, who supported President-elect Barack Obama in the general election, says the kind of help Ohio really needs can only come from a change in policy from Washington. Through the primary election, when Strickland campaigned with Sen. Hillary Clinton, laid his dilemma at the feet of the Bush administration, who he said was to blame for much of the economic miasma that's settled across the state.

With the US unemployment rate (6.5%) the highest its been since early 1994, the report forecasted that "mounting job losses and the rising rate of unemployment are expected to combine with tight credit to restrain spending through at least the winter despite the sharp decrease in the price of gasoline and other energy products." It said that personal consumption expenditures decreased (3.1%) in the 3Q of CY 2008, the fastest pace since credit controls caused a serious retrenchment in the second quarter of 1980. Sustained by manufacturing, it's no surprise that Ohio is sensitive to the ups and downs of this important industry sector.

Over the many months and years of job losses, Strickland and his predecessor, former two-term Republican governor Bob Taft, always had exports to trumpet. But while exports increased (5.9%) in 3Q, the report downgraded future performance, saying it is "not likely to be a source of strength going forward, as foreign economies have begun to weaken."

With this dour news in hand, Strickland's appearance today to dedicate a new veterans memorial in Wilmington, the small town where DHL intends to shed upwards of 10 thousand direct and associated jobs, carried the same seriousness and sadness for a town on its death bed as it did for past and present soldiers who fought and died for America and its freedoms. Covered closely by the Dayton Daily News because of Wilmington's proximity to Dayton, Strickland, a prison psychologist and Methodist minister, again showed his empathy, saying "Our hearts go out to the community and the families.' He added, "We recognize this is going to cause great hardship" and said "this community is strong and resilient," a statement that will surely be put to the test soon. "It's a community with great pride, and salt of the earth people. We will get through this, and we will do it together."

The DDN reported that Deutsche Post World Net, the German parent company of DHL, said yesterday it eliminate DHL package deliveries between U.S. cities after Jan. 30, resulting in DHL closing its ground freight operations, as well as its air cargo hub in Wilmington, where Mayor David Raizk said DHL employs between 7,400 and 7,800 people.

Strickland said Ohio is pursuing a $3.8 million Department of Labor grant to help pay for new job training for dislocated workers. Separately to the DHL announcement, Whirlpool corporation said it will "temporarily" eliminate 1,00 jobs at its Ohio plants. Other disquieting job loss news came from Ohio payday lenders, who after losing an expensive campaign to keep its high-rate short-term loan practices started to shutter dozens of payday lender retail stores and send scores of full-time workers to Ohio's unemployment insurance fund, which economic watchers say will go bankruptcy early next year. With a fund whose levels should be about $2 billion but which are now at about $300 million, Ohio would turn to Washington for a loan to keep jobless workers afloat until they can find other work.

Doing what little it can to stanch the heartache of pending job losses, Lt. Gov. Fisher announced the opening of the Wilmington Business Resource Center in a media release. The center will provide services from state agencies that include the International Trade Assistance Center, the Manufacturing and Technology Small Business Development Center and the Ohio Procurement Technical Assistance Center. Services will include one-on-one entrepreneurial assistance, business training events, e-counseling, quality-based assessments, loan packaging guidance and information on government regulations and programs. “In difficult and uncertain times, our priority is to provide assistance to anyone who may be seeking support,” Fischer said, as reported by the Business Courier.