Ohio Voters Reject $500M Tech Bond Issue

By a narrow margin, Ohio voters on Tuesday rejected a constitutional amendment that would have permitted the state to issue up to $500 million in bonds over 10 years to fund technology-based economic development projects. Defeated 51 percent to 49 percent, Issue 1 would have made up the final component of Gov. Bob Taft's proposed 10-year, $1.6 billion Third Frontier project. The remaining $1.1 billion is unaffected by Tuesday's vote.

Bond proceeds could have been used for research and development purposes, new product development and commercialization, capital formation, operating costs, and support for public and private institutions of higher education, research organizations and private companies. It would have permitted direct investment in companies by state government.

In a state that has rejected only three bond issues in the last 26 years, Governor Taft speculated that the weak economy did the measure in. Political analysts cite other reasons why the measure was rejected, some of which may be helpful to others pursuing public votes for similar projects:

• The perception the measure was corporate welfare because of provisions that would have permitted funds to go not only to universities, but also to companies. Proponents never effectively responded to the charges.
• Lifting a ban that had been in effect since 1851 to direct investment in companies by the state, and the provision authorizing the investment seemed to receive little notice until the last weeks of the campaign.
• The use of the governor as the primary spokesperson for the initiative despite an approval rating in the mid-40s. Analysts speculate that TV commercials emphasizing editorial support of six of the state's eight major newspapers and bipartisan spokespeople may have been more effective.
• Appearing on the ballot in an election when turnout was not anticipated to be very high and reached only 36 percent. With contested mayoral elections in only one of Ohio's major cities, turnout was lower than the statewide average in the areas that would have been most likely to support Issue 1.
• Failure to obtain support from influential constituency groups that were not directly going to benefit from the bond proceeds, such as the state Farm Bureau. The issue failed in 73 of Ohio's 88 counties, doing best in Northeast Ohio — an area where the Cleveland Plain Dealer had run a year-long series of articles on the economic restructuring occurring there.

More information on the parts of the Third Frontier that will continue can be found at http://www.ohio3rdfrontier.org/ or under Ohio in the State and Local Story Index of the SSTI Weekly Digest at http://www.ssti.org/Digest/Indices/indexstate.htm