Kasich: Year in Review

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When Governor John R. Kasich and Lieutenant Governor Mary Taylor took office one year ago, Ohio faced historic challenges. Over 400,000 jobs were lost in the previous four years, unemployment peaked and remained at 10.6 percent between August 2009 and February 2010, and the state faced an $8 billion budget shortfall going into Fiscal Year 2012. For Gov. Kasich, job creation has been priority number one from day one. With his vision, Ohio has begun making the necessary government reforms to cultivate a jobs-friendly environment so Ohioans can get back to work, and our state can start moving in the right direction.

PUTTING OHIO’S FISCAL HOUSE IN ORDER

· Commonsense Budgeting: The centerpiece of Gov. Kasich’s agenda has been the state’s FY2012-13 budget. Based on the twin priorities of fiscal stability and job creation, the budget helped get Ohio’s fiscal health in order and achieved major, needed policy changes, including:

o Closing an $8 billion shortfall without raising taxes while preserving the $400 million annual income tax cut and cutting taxes $300 million by eliminating the Estate Tax;

o Reforming Ohio’s Medicaid program—the largest expense in the state budget;

o Accomplishing one of the most comprehensive education reform agendas in the country;

o Providing training vouchers for incumbent workers to help prevent them from becoming unemployed;

o Providing important new tools for schools and local governments to share services and reduce costs;

o Reforming construction rules and the prevailing wage law;

o Providing for the sale of up to five prisons (one was ultimately sold for $72 million, two were converted to private management, and one privately-managed prison was converted to state management);

o Creating InvestOhio to help Ohio’s small businesses to retain and create jobs, and;

o Creating a process for studying ways to possibly use Ohio’s Turnpike to help meet future highway funding needs.

· Restoring the Rainy Day Fund: When Gov. Kasich took office in January, Ohio’s Rainy Day Fund – Ohio’s savings account for tough times – had dwindled to just 89 cents. Even with the need to close an $8 billion dollar gap, Gov. Kasich and the General Assembly were able to deposit nearly $250 million in the fund for the next rainy day.

· Upgrading Ohio’s Credit Outlook: In July, Standard & Poor’s upgraded Ohio’s AA-plus credit-rating outlook from “negative” to “stable.”

CREATING A JOBS-FRIENDLY ENVIRONMENT TO GET OHIOANS BACK TO WORK

· A New Way of Doing Business: Gov. Kasich made job creation his top priority when he came into office. By establishing JobsOhio, the Common Sense Initiative, cutting taxes, and other reforms that made state government more efficient and business friendly, he is helping to create a better environment for job growth.

· Producing Results: In 2011, the Kasich Administration and JobsOhio worked with businesses of all sizes to secure 251 new investments, expansions, and relocations to create 21,099 new jobs and keep 61,686 existing ones. Overall, that means nearly $4.8 billion in new or saved payroll for Ohio. According to the U.S. Bureau of Labor Statistics, Ohio is 8th in the nation in job creation and tops in the Midwest [Jan. – Oct. 2011].

· A Return on Investment in Economic Growth Incentives: For the first time, Ohio is measuring the return on investment (ROI) for each and every jobs project that receives taxpayer-based incentives. This year, approximately 91 percent of state-approved projects began earning a return on taxpayers’ funds in just the first or second year.

· Encouraging Entrepreneurs: Historically, small businesses have created two out of every three new jobs, so Ohio created a program that would spur economic development by directly helping these entrepreneurs. InvestOhio is designed to encourage risk taking by making investments of up to $10 million eligible for an income tax credit worth 10 percent of the total investment. In just two weeks, InvestOhio has received 1,119 applications committing more than $246 million in investments.

BRINGING COMMON SENSE TO GOVERNMENT

· Common Sense Initiative (CSI): Ohio has too many duplicative and overly burdensome regulations. On his first day in office, Gov. Kasich signed his first Executive Order creating the “Common Sense Initiative” (CSI) and putting Lt. Gov. Mary Taylor in charge of leading the effort to bring common sense to Ohio’s regulations and reduce burdens on business.

· Eliminating Barriers to Efficiency—Highlights:

o The Ohio Department of Public Safety’s Bureau of Motor Vehicles (BMV) and representatives from the auto dealers associations worked together to improve the auto dealers licensing procedure. As a result, the Dealers Licensing section of the BMV will reduce the processing time to obtain a first time dealer’s license by as much as 83 percent. Since dealers are ready to begin operations when they apply for a license, this will result in their ability to begin selling cars sooner and therefore increase their bottom line.

o The Ohio Department of Agriculture recently completed a consolidation project which reduced the number of private license categories for pesticide and fertilizer applicators from 13 to seven. This will cut down the number of exams required of the applicators, saving small businesses time and money while maintaining the same standards for certification.

o Ohio Environmental Protection Agency (EPA) is emphasizing the need to create innovative common sense permitting solutions that streamline the process while protecting Ohio’s natural resources. Since many business operations are similar, Ohio EPA’s general permit provides consistent standards and a “speed-of-business” approach to permitting. Business should be able to get this permit in as little as two weeks.

· Reducing Violence in Prisons: Since 2010, a violent incident involving four or more inmates occurred every seven days in Ohio’s prisons; a 400 percent increase since 2007. To address this disturbing trend, the Department of Rehabilitation and Corrections has implemented a multi-layered violence reduction strategy, and since June, inmate-on-inmate assaults are down by 54 percent and inmate-on-staff assaults are down by 52 percent.

· Construction Reform: For over 100 years, Ohio law required public institutions to adhere to antiquated policies that led to increased construction costs for government projects. Included in the FY2012-13 budget were reforms to give public authorities more flexibility and cost savings.

· Prevailing Wage Reform: Over the years, prevailing wage rules have driven up taxpayers’ costs without guaranteeing a better product, and have made it difficult for small contractors to win government bids. The FY2012-13 budget increased the threshold of public projects impacted by prevailing wage, saving school districts money by prohibiting prevailing wage requirements from applying to them, and ensuring that taxpayers are getting their money’s worth by increasing competition in the bid process. Importantly, prevailing wage rules are eliminated for many new private-sector construction projects supported by state economic development programs, thus making Ohio more job friendly to businesses seeking to expand or relocate to the state.

· Shared Services: The FY2012-13 budget tears down barriers which have prevented local governments from working together and creates initiatives aimed at reducing costs and expediting the implementation of shared services. It is now easier for schools or governments to share staff, equipment or facilities through simple agreements, as well as work together to purchase supplies without unnecessary hurdles.

· Harmonizing Ohio’s Gaming Policies: In the past, Ohio’s approach to gaming had been disjointed and driven by political expediency. Gov. Kasich initiated a comprehensive review of all gaming in Ohio to ensure that the state’s laws for horse racing, the Ohio Lottery and casino gaming are consistent and uniform, and provide the maximum benefit to Ohioans. The result is an agreement between the Office of the Governor, Rock Ohio Caesars, LLC (ROC), and Penn National Gaming that will provide $220 million in additional funds for Ohioans, and increased certainty for the industry.

IMPROVING CARE FOR OHIO’S MOST VULNERABLE

· Re-Tooling the Medicaid System: In Ohio, four percent of Medicaid patients account for 51 percent of the cost of the program. In the budget, Gov. Kasich introduced proposals to re-tool the Medicaid system by prioritizing the types of services that people prefer, requiring the system to better coordinate the care it provides to individuals and paying for quality rather than volume. These changes put the needs of taxpayers and Medicaid beneficiaries first and will challenge providers and administrators to make more efficient use of valuable resources. Medicaid modernization proposals included in the budget will save the state $1.5 billion and lead to better health, better care and cost savings through improvement.

· Treating the Whole Person by Integrating Physical and Behavioral Health Services: Adults with serious mental illness represent about 10 percent of Ohio‘s Medicaid population, yet they account for 26 percent of total Ohio Medicaid expenditures. The lack of coordination between service providers often fails these individuals. New reforms place an emphasis on treating the whole person.

· Empowering Seniors and People with Disabilities, Increasing Value for Taxpayers: An additional 12,890 Ohioans will receive Medicaid home- and community-based services instead of having to go into an institution. The budget makes a significant investment in home- and community-based services for seniors and people with physical disabilities (PASSPORT/Choices, Assisted Living, Home Care and Aging Transitions waivers) and people with a developmental disability (Level One, Individual Options, DD Transitions and the new SELF waivers). The FY2012-13 budget provides $532 million more for waivers for home- and community-based services over the biennium (above SFY 2011 levels), including $55.6 million more for PASSPORT.

FIGHTING DRUG ADDICTION AND DRIVING PREVENTION

· Shutting Down “Pill Mills”: In 2010, 9.7 million doses of prescription painkillers were dispensed in Scioto County Ohio alone. This equates to 123 doses for every man, woman and child in a county with a population of 79,000. To address this scourge, Gov. Kasich created a new Cabinet-level Opiate Task Force and signed legislation to strengthen the state’s ability to shut down “pill mill” operations led by corrupt doctors who dispense lethal doses of pain medications to anyone with a few hundred dollars. Gov. Kasich also signed an Executive Order authorizing the State Medical Board of Ohio to establish standards and procedures for pain management clinics in Ohio in order to help fight prescription drug abuse by preventing clinics from operating as “pill mills.” On December 14, 2011, Ohio achieved a key victory when the State Medical Board permanently revoked the license of Dr. James Lundeen, a pill mill doctor who was known to treat 90 patients in one day, on average. In addition, joint efforts by various state agencies and the Ohio Attorney General resulted in the closing of 12 illicit pain clinics, and overall drug seizures are up 500 percent from 2010 levels.

· Improving Treatment for Injured Workers: In September, the Bureau of Workers’ Compensation (BWC) established its first-ever formulary of medications for the treatment of injured workers. This will improve the efficiency and effectiveness of treatment, limit the inappropriate use of medications, and lower BWC’s prescription costs by an estimated $15 million in its first 18 months. Additionally, BWC will only cover drugs related to the specific injury and now prohibits decertified providers from prescribing drugs for injured workers.

EDUCATION AND JOB TRAINING: A COMPREHENSIVE STRATEGY TO PREPARE OHIOANS

· Giving Parents a Choice: When it comes to their child’s education, parents deserve a choice. By incorporating increased competition into the system, schools are incentivized to enhance the quality of education in order to attract students. To help make this a reality, EdChoice scholarships have been quadrupled, the cap on community schools has been removed, and Ohio has implemented enhanced community school access to facilities.

· Ranking Schools, Informing Parents: Since 2003, Ohio schools have received a Performance Index (PI) score. The index, validated by school districts across the state since its inception, places a priority on student achievement. For the first time, PI scores are being compared statewide and shared publicly to better inform parents of where their school stands relative to the rest of the state. By providing increased transparency, Ohio is giving parents the information they need as they prepare their child for success.

· A Fair and Functional Teacher Evaluation Process: Thanks in part to the input of over 1,400 teachers, the Ohio Department of Education approved a new teacher evaluation system that provides the flexibility and accountability our teachers and students deserve. The implementation of this system will help create the climate, conditions and incentives that promote alignment toward a common goal – improving student achievement.

· Improving College Graduation Rates at a Lower Cost: Ohio’s universities are taking too long to graduate students, if they graduate at all. By encouraging the development of three-year baccalaureate degrees at Ohio’s public universities, students will have the opportunity to save money and enter Ohio’s workforce ahead of schedule.

· Creating a Demand-Driven Workforce Development Model: Ohio currently has 77 workforce development programs scattered across 13 different agencies, many of which operate largely independent from one another. Making matters worse, the current model is supply driven and trains workers for jobs that may not exist. In September, Gov. Kasich assigned a member of his staff to focus completely on workforce development, and Ohio is now working to implement significant reforms that will ensure our workforce development programs are working in concert with one another and are training workers based on the jobs that need filled by employers in our state.

Kasich Signs and Vetoes Some Bills

Release:

COLUMBUS – Today, Gov. John R. Kasich signed the following pieces of legislation into law:

House Bill 64 (Ruhl and Burke) adds synthetic cannabinoids commonly known as K2 or Spice to the list of Schedule I controlled substances and prohibits the possession and trafficking of Spice;

House Bill 277 (Blessing, Gerberry) permits a horse-track racing permit holder that is eligible to become a video lottery sales agent to apply to the State Racing Commission to move its track to another location;

House Bill 229 (Buchy) revises the laws governing agriculture; and

House Bill 188 (Batchelder) establishes the Ohio Constitutional Modernization Commission and makes an appropriation.

Release 2:

COLUMBUS—Today Governor John R. Kasich vetoed HB 231, legislation related to Ohio’s participation in the Great Lakes Compact, an agreement between the eight Great Lakes states and two Canadian provinces to provide for management of Great Lakes water. In vetoing the bill Kasich issued the following statement:

“Lake Erie is an incredible resource that demands our vigilant stewardship to maximize its environmental, recreational and commercial potential for Ohioans. The Great Lakes Compact ensures that Great Lakes states and provinces work together to protect the lakes and the water resources in the basin, and Ohio’s legislation is intended to further Ohio’s compliance with the compact. While most of HB 231 fulfills Ohio’s obligations without concern and helps meet the needs of Ohio’s industrial, energy and agricultural water users, portions of it must be improved. Namely, Ohio’s legislation lacks clear standards for conservation and withdrawals and does not allow for sufficient evaluation and monitoring of withdrawals or usage. I look forward to working with the General Assembly to make the necessary improvements to the legislation.”

Wachtmann Blasts Distortions about Great Lakes Compact, Water Withdrawal Regulatory Program Bill

Release:

COLUMBUS—State Representative Lynn Wachtmann (R-Napoleon) today denounced the outright misinformation and falsities surrounding House Bill 231, which will implement Ohio’s first-ever water withdrawal regulatory program as required by the Great Lakes Compact in an effort to promote business growth.

 

In a statement released on Friday, former Governor and U.S. Senator George Voinovich attacked the job-creation potential of House Bill 231 and falsely accused it of undermining the resource protections established in the Great Lakes Compact. This was preceded by testimony by former Governor Bob Taft to the Senate Agriculture, Environment and Natural Resources Committee. Representative Wachtmann responded in length today in a letter to all members of the Ohio Senate, in which he responded to each of the inaccurate claims made about the bill.

 

“I feel compelled to respond to testimony you recently heard from Gov. Taft and a letter from Gov. Voinovich regarding House Bill 231, the implementation of the Great Lakes Compact,” Wachtmann said in response to the grossly exaggerated claims by the former governors, whose claims mirror the attacks by state environmentalist groups. “Unfortunately, they received inaccurate information about what is actually in the bill. Certain groups feel compelled to continue to spread misinformation and I have taken the liberty of responding to the testimony and letter.”

 

House Bill 231 allows Ohioans to utilize and invest in fresh-water resources without jeopardizing Ohio’s lakes and rivers. It will work in accordance with the Great Lakes Compact, which has been adopted in all eight Great Lakes border states and specifically in Ohio in 2008 as a way to prevent diversions of water to areas outside of the Great Lakes Basin. Access to affordable, abundant and reliable water supplies from the Lake Erie Basin is a cornerstone in retaining and attracting businesses to northern Ohio. In order for Ohio to remain economically competitive Ohioans need to encourage ongoing investment by utilizing the abundant water resources we have available.

 

“House Bill 231 is just one of the ways that we have worked to create jobs and attract more investment in Ohio,” Wachtmann added. “No one is disputing the fact that Lake Erie is one of our most precious resources, from tourist activity to recreation. For Senator Voinovich to insinuate through his letter that my House colleagues and I, in any way, are attempting to soil the integrity of our Great Lake and its viability for future generations is simply untrue. We cannot pass up the opportunity for business growth and economic investment, which is an infinite possibility through this legislation.”

 

House Agriculture and Natural Resources Committee process on H.B. 231 was open and transparent, providing plenty of opportunity for the public to testify. There were five hearings in the committee and 12 witnesses who spoke to the bill.

Legislation to Permit Water Withdrawal Regulatory Program Passes Ohio House

Release:

COLUMBUS—State Representative Lynn Wachtmann (R-Napoleon) today announced the Ohio House’s passage of House Bill 231, which will implement Ohio’s first-ever water withdrawal regulatory program as required by the Great Lakes Compact.

 

House Bill 231 allows Ohioans to utilize and invest in fresh-water resources without jeopardizing Ohio’s lakes and rivers. It will work in accordance with the Great Lakes Compact, which has been adopted in all eight Great Lakes border states and specifically in Ohio in 2008 as a way to prevent diversions of water to areas outside of the Great Lakes Basin.

 

“House Bill 231 recognizes Ohio’s fresh water as a job-creating economic asset while meeting Ohio’s obligations under the Compact with respect to the management of the waters of the Great Lakes-St. Lawrence River Basin,” said Wachtmann. “Ohio is required to implement a regulatory program according to the Compact, and House Bill 231 does so in a manner that promotes good stewardship of the water resource, protects existing private property rights, and promotes economic development and job creation in Ohio’s hard-hit industrial corridor.”

 

House Bill 231 focuses particularly on the decrease in percent of runoff from Ohio to the Lake Erie Watershed. If a withdrawal from Lake Erie does not exceed 1.5 percent of the annual runoff to the watershed, it is presumed that the withdrawal does not cause a significant adverse impact. Similarly, if a withdrawal from groundwater or a river or stream does not exceed .75 percent of the annual runoff to the Lake Erie Watershed, it is presumed that this withdrawal does not have a substantial effect.

 

“By using the long-term mean annual runoff as a measurement, House Bill 231 ensures that businesses in the steel, utility, pulp and paper, automobile, agriculture, horticulture aggregate, chemical, and petroleum industries are not prevented from developing in the lake region,” Wachtmann said.

 

House Bill 231 also sets the threshold levels that facilities must meet before they are pulled into the regulatory program. Additionally, though it is not required under the Compact, the legislation provides protection to a number of small, high-quality streams by lowering the threshold and establishes more restrictive rules regulating those withdrawals. It also requires facilities that obtain permits to adopt best management practices that are environmentally and economically sound, among other provisions.

 

The legislation passed by with a bipartisan vote and will now move to the Ohio Senate for further consideration.

Oil and Natural Gas in the Great Lakes

Ohio should take the lead in pushing for off-shore drilling of oil and natural gas. Why? Because the northern end of our great state may be sitting on something of a mother lode. Our friends in Canada have extracted over 414 billion cubic feet of natural gas and over 85 million barrels of oil already from the Great Lakes Basin. (Source) Why do we not take advantage of our own natural resources? The environmental lobby has shamed our politicians into making sure that we keep our dependence on foreign sources of energy.

You may have noticed this counter on WMD and other sites...



...that is the countdown until the federal ban on off-shore drilling expires. And it will expire if Congress allows it to do so. What happens after that may effect who benefits from the Great Lakes Basin.

Michigan has a permanent ban in place. New York and Wisconsin may also have bans in place by now. Ohio's ban was put in place in 2006, but a permanent ban was also introduced. Ohio ought to rescind whatever ban they put in place and bring those jobs to our great state. We have an opportunity to be leaders in the energy industry and we really shouldn't pass it up.

Environmental Concerns and Safety

Let's talk environmental safety concerns. This is some rather old information from the US Army Corps of Engineers, but I have been unable to find anything that refutes any of these findings.

Since 1959, there have been three oil spill incidents on the Canadian side of Lake Erie, of which only one was directly attributed to a drilling operation. There have been no reported oil releases from subsurface formations into overlying waters during any Canadian drilling or production operations. Approximately 2,200 vertical gas extraction wells have been drilled in Canada under Lake Erie since 1913, approximately 550 of which are currently active. Canadian regulations stipulate that wells drilled directly into the lake bottom may only extract gas. Wells that produce both oil and gas must be plugged and abandoned.

Technology has improved. We have the ability to get these resources safely and cleanly. Canada is already doing it.

Another argument I hear a lot is that we don't know how much oil and natural gas is in these reserves. An industry friend of mine put it this way: "I wonder whether you'd tell a corn farmer the same thing? Obviously, no single corn field – or oil field – will meet demand on its own. But each one makes an important contribution to the total supply." It doesn't matter how much is there; only that it is there and we should go get it.

I'm still looking for updated information on the latest estimates on how much oil and natural gas may be in the Great Lakes Basin so if any of our readers stumbles across this information, please leave a comment or drop me a line.