The workforce is decreasing at a shockingly high rate, and young people in particular are leaving Ohio for greener pastures outside the state.
Studies show that this isn't because they don't like Ohio. In fact, they are quite proud of their state.
So, what's the problem?
An article in the Plain Dealer this spring nailed it.
So, after months of inaction, what is Governor Strickland's big plan to fix the problem?
The Ohio Housing Finance Agency announced the Grants for Grads program, it helps graduates pay for a new house.My reaction can only be properly communicated through this fun, little animation:
New borrowers will be given 2.5 percent of the house's purchase price to help pay for a down payment and closing costs.
Officials believe it will help reduce the number of students leaving Ohio after they get their degrees. Gov. Ted Strickland said keeping educated and qualified graduates will also help to attract new jobs.
In order to qualify, you need to be an Ohio high school graduate and must apply for the program within 18 months of getting a college degree.
This is it, Ted? This is the big idea we've been waiting for to solve the brain drain?
It's hard to figure out where to begin highlighting what an extremely poor policy initiative this is...
But we'll try anyway.
1. It ignores the main problem, there are no jobs.
2. It assumes 22-24 year old kids even want to buy homes.
3. Does Ted Strickland even remember what kickstarted the recession? No, it wasn't Lehman Brothers, you not-so-subtle political opportunist, it was the irresponsible financing of mortgages to those that couldn't afford them. Sound familiar?
4. What kid in his right mind would even want to use the credit? For a huge $500k home and a 30 year mortgage, that's only $12,500. In return, this kid will live in a state with a higher income tax burden than surrounding states and will end up losing money, unless the kid makes jack or squat. And of course, that kinda income will result in his home gets foreclosed upon.
5. And freezing the tax rate only encourages the perception that Ohio will be a perpetually high-tax state.
6. Aren't there other priorities where the money can be better spent? How about just cutting the budget?
7. It discriminates against those that actually pay for a house on their own. Screw the 25 year old who saved responsibly. And the kid who just moved in from Michigan.
8. And don't ya need a job before you can even buy a house?
This is just so mind-boggling stupid. It's the definition of the tail wagging the dog. The cart before the horse. It's backasswards.
The reality is this - we know two very important things about Ohio right now:
- Businesses aren't offering jobs to Ohio college graduates.
- Without jobs, young people are leaving the state.
Attempt (and most definitely fail) to increase the supply of young people looking for jobs.
Now I only took a few econ classes in college, but I know the basics of supply and demand. If demand for college graduates is static, increasing the supply of graduates will not help the situation.
Now don't get me wrong. For the most obvious of reasons the higher education of Ohio's youth is vital to the state's growth.
But, Strickland is missing a vital piece of the puzzle.
The business environment.
Rather than focusing solely on education, the state needs to make increasing the private sector's demand for college graduates a priority.
How do you do that? Well, that's easy, as we've been repeating on 3BP, Ohio absolutely must improve its business tax climate.
From the non-partisan Tax Foundation:
Ohio ranks 47th in the Tax Foundation's State Business Tax Climate Index. The Index compares the states in five areas of taxation that impact business: corporate taxes; individual income taxes; sales taxes; unemployment insurance taxes; and taxes on property, including residential and commercial property.47th.
Improve this ranking and more businesses will come to Ohio. More businesses yields more jobs. More jobs provide opportunity for college graduates. More employed graduates brings more tax revenue. More tax revenue balances this mess of a budget.
And this will never happen under Ted Strickland.