Recently, an Ohio liberty group member sent an email to governor Kasich asking him about supporting a right-to-work law for Ohio. In 2012, border-states Indiana and Michigan passed workplace freedom laws allowing most individuals in those states the freedom to decide whether or not to join a union. Since 2009, workplace freedom states have added jobs at four times the pace of forced union states. This competitive advantage in favor of neighboring states puts Ohio at an extreme disadvantage.
Below is the reply our friend got from the governor. We asked Matt Mayer from conservative think-tank Opportunity Ohio to evaluate the governor’s response. Matt’s comments are shown in italics below.
Governor Kasich’s reply:
Dear (John Doe):
Thank you for your letter regarding proposed right-to-work policies. I appreciate hearing from you.
Ohio has come a long way in two years. When I came into office, we faced an $8 billion dollar budget shortfall and had lost nearly 400,000 jobs. My administration, along with the state legislature, created a structurally balanced budget, all while cutting taxes by more than $800 million.
The good news? It’s working. Today, Ohio’s unemployment rate has plummeted from 9% to 6.8%, a full point below the national rate. Additionally, we’ve gone from 48th in job creation to 5th in the nation, and we’ve been the number one job creator in the Midwest since January 2011, adding more than 132,000 jobs in the past two years.
But Ohio still has a very long way to go. Our convoluted tax system needs significant reform, and until we find a way to significantly reduce income tax and taxes on small business, Ohio will struggle to continue outpacing the national economy. Additionally, we are charged with the development of a new school funding model that places a significant focus on transforming our education system into one that empowers local school districts and finally puts the focus where it needs to be – on the kids. We also face a major challenge in transforming how we manage the infrastructure projects that are so important to our state’s economy. And it means continuing to find ways to make our state budget more efficient and cutting waste wherever possible.
And that’s just the beginning.
Make no mistake, my focus is on creating a better Ohio, and that means prioritizing the significant reforms our state needs to become an economic powerhouse. I appreciate your taking the time to write and I am encouraged by your enthusiasm for issues that will advance Ohio’s competitiveness in the national and international economy. I will keep your thoughts in mind as we move forward.
If my office can be of any assistance in the future, please don’t hesitate to contact me.
Here is Matt Mayer’s response:
Here is what Governor Kasich’s letter misses:
(1) On his claim to have cut taxes by $800 million, it is a bit disingenuous to claim that allowing the last year of Governor Bob Taft’s income tax cut to go through (versus delaying it like Governor Ted Strickland did) is something he “did.” Similarly, as you recall, his 2012-2013 Proposed Budget did NOT include the estate tax cut. That tax cut only made it in because grassroots Ohioans who had worked hard to make it happen got the legislature to add it to the final budget in lieu of a ballot initiative.
(2) Yes, Ohio’s unemployment rate according to the Bureau of Labor Statistics (BLS) has dropped to 6.8%, but that drop fails to account for Ohio’s enormous drop in labor force participation (people who don’t claim benefits or have given up looking for a job). Specifically, from January 2011 to the most recent BLS data, Ohio’s labor force drop has been the WORST in America–losing more than 50,000 workers. The drop is the 10th worst as a percentage of workers. After accounting for the drop in labor force participation, Ohio’s real unemployment rate is likely above 9.0%. See this report for more explanation: http://www.opportunityohio.org/wp-content/uploads/2012/06/Ohio%E2%80%99s-Real-Unemployment-Rate-August-Revised.pdf.
(3) Governor Kasich’s claim that Ohio went from 48th to 5th in job creation and #1 in Midwest is intentionally misleading, as it fails to account for population differences; meaning, as the 7th largest state, Ohio will create more jobs than smaller states in raw numbers. For example, adding 100,000 jobs in a state of 11.5 million is not as great a jump as adding 50,000 jobs in a state of 4 million. Frankly, I can’t figure out where he gets the 48th ranking from (i.e., what period he is measuring to get that figure). On the 5th place ranking, the intellectually honest way to compare apples-to-apples is to account for population differences. When doing that, Ohio is not 5th best. It is 17th best and Kentucky is higher at 8th best. Also, there is a good chance that Indiana will jump ahead of Ohio soon.
(4) As a point of comparison, keep in mind that Ohio started to recover private sector jobs in January 2010 when Governor Strickland was still in office. From January 2010 to January 2011 (his last year), Ohio ranked as the 19th best, or just two spots lower than Governor Kasich’s time in office. The “Ohio Miracle” is not so miraculous when you look at the facts.
(5) Another important item to note, ignored by the JINOs in the mainstream media, is that Ohio’s private sector is in a stall. According to the BLS, Ohio’s private sector has lost 5,300 jobs since July 2012 (4,429,700 jobs) based on the preliminary December 2012 figures (4,424,400 jobs). Let’s hope that trend ends soon. If it doesn’t, Ohio will drop from 17th best to the mid-20s when the latest numbers come out of the BLS. More pointedly, Ohio’s private sector under Governor Kasich actually could drop BELOW Governor Strickland’s last year (obviously, Governor Strickland’s four year figure is horrendous as three out of four of his years in office occurred during the national recession).
(6) The Punchline: If Ohio wants to accelerate private sector job growth, the single biggest factor–bigger than cutting income taxes–is workplace freedom. See Principle #2 in this report and the chart on page 10:
Hope this helps Ohioans see things more clearly.
Thanks Matt, we hope so too.