Fiscal Conservatism in Practice

Since becoming Speaker of the Ohio House, I have tried to put Ohio on a path toward lower spending. In 2005, we passed the most fiscally conservative budget in 40 years, and when we passed the budget out of the House in 2007, we cut spending below the level that Governor Strickland’s budget set.

With this approach to governing in mind, I was pleasantly surprised to learn that a recent analysis by the National Conference of State Legislatures concluded that of all 50 states, the Ohio Legislature is the most fiscally conservative (in terms of what we spend on ourselves). Ohio ranks 50th in what it costs to operate the Legislature on both a per capita basis, and as a share of the overall state budget.

With reductions in state spending, we have been able to cut Ohio income taxes by 21 percent and eliminate taxes on new business investment in Ohio.

While the federal government has run up a $9.3 trillion debt, we have cut taxes and balanced the budget.

Advanced Energy and the Drilling Debate

As a state whose economy remains heavily dependent on manufacturing, Ohio is a big energy user. To make steel or cars takes a lot of electricity. Farmers, food prices and commuters are also heavily affected by sustained, high fuel prices. These are strains on people and our economy.

Earlier this year we passed an energy bill in the Ohio House that would require utilities to begin providing a portion of their energy from advanced and renewable sources starting in 2009. Why? There are many reasons.

First, the policy increases the overall supply (fuel cells, wind, solar and clean-coal) – adding new generation that will help control energy prices. Secondly, it is cleaner, greener energy that also reduces our reliance on foreign energy sources. And last but not least, manufacturing of these new sources of energy can create jobs in Ohio.

With the passage of this bill, we put Ohio ahead of the curve. However, as a nation, more has to be done. One of the topics of national debate is more drilling offshore to increase the domestic supply of oil, and reduce our reliance on foreign oil.

Ohio has moved to increase the supply of energy; a change in national policy must come next.

What do you think about a change in federal policy to allow for more offshore drilling?

Small Business Perspective

Below please find an example of a letter I received from a CEO in the Dayton Region regarding the positive impact of our tax reforms and economic development efforts. I look forward to hearing about your experience and answering your questions about our accomplishments and our priorities for the future revitalization of our state and local economy.

 

Dear Speaker Husted: 

Mound Laser & Photonics Center, Inc. (MLPC) is a small business in Miamisburg, Ohio that specializes in laser-based micro and nanofabrication. The company is based on a unique business model that combines R&D via SBIR and STTR programs and commercial contract manufacturing in approximately equal proportions. The model is designed to keep MLPC on the leading edge of new advances in laser systems and manufacturing and since 2002 the company has grown from 3.5 to 21 persons. This growth was significantly aided by the tax reform you initiated.

The advanced manufacturing we pursue in the commercial and government marketplaces is very capital intensive. Laser systems run anywhere from $70K to $500K depending on the type of system. For example, before the tax reform was in place we purchased a laser welding system for ~$185K and had the pleasure of paying the State of Ohio and additional $7K in property tax the first year! And that is only one laser system. We are installing system number 8 this month and are already planning for numbers 9 and 10 later this year. Thanks to your efforts, we no longer pay an exorbitant property tax on this investment. The financial savings to MLPC is significant, but more importantly it leads directly to job creation.

Approximately one-third of MLPC’s workforce of 21 persons is students from area universities (UD, WSU, Sinclair, and OSU). By taking the $7K saved in taxes in the example above and combining it with $3K received from the Third Frontier Internship Program, MLPC can hire another student. These students are trained in laser materials processing and many are hired into permanent positions in MLPC upon graduation. They have degrees that range from B.S to Ph.D. in Mechanical Engineering, Electrical Engineering, Physics, Computer Science, and Material Science. The program has been so successful in keeping young persons in Ohio that we refer to it as “Train to Retain”.

The type of personnel MLPC requires in both our commercial and R&D business elements come directly from the STEM disciplines. It is for this reason that I am actively participating in the STEM initiatives in the Dayton region. I believe that Dayton is leading the way in advanced manufacturing in Ohio and it is critical for MLPC, and other high tech companies, that we have a supply of talented young persons that can take us into the 21st century.

Dayton has a distinct advantage with the presence of the Air Force Research Laboratory (AFRL). This is a tremendous resource for this region, and in my opinion offers high tech companies such as MLPC a distinct competitive advantage. If we are to grow this region, it will require resources and collaboration from many sources. The savings you brought to the small business community through tax reform plus the work in STEM are two such sources. In addition, the work of the Dayton Development Coalition and the Dayton Area Chamber of Commerce as well the collaboration with AFRL will be critical. By working together we will make the Dayton Region a leader in advanced manufacturing.

In closing I would like to once again thank you for the work you are doing for Ohio. The leadership you have exhibited in tax reform and STEM have helped MLPC grow and will continue to make an impact on advanced manufacturing in the Dayton Region. Please let me know if I can be of further assistance to support your efforts in Columbus.

Sincerely,
Dr. Larry R. Dosser
President & CEO