Report: Competition holding back growth of Ohio’s major cities

Business First of Columbus - by Matt Burns

Competition might be a big part of the American dream, but that same spirit in communities around the state could be a major factor holding back Ohio’s economic development, according to a study released this week.

The Columbus nonprofit Greater Ohio, along with the Washington, D.C.-based Brookings Institution, unveiled “Restoring Prosperity: The State Role in Revitalizing Ohio’s Core Communities.” The study takes a look at the state’s growth history, its policies and how those all tie in to 32 so-called core communities, those with at least 15,000 residents in 1950.

Those communities now account for a little more than 2 percent of Ohio’s land area, but for more than a quarter of its population and more than a third of its jobs.

Outlining economic troubles in Ohio that are more pronounced on average than the rest of the nation, the study recommends building on what the cities currently have and adjusting what it considers misguided strategies at state and local levels.

The study praised several recent moves by Gov. Ted Strickland’s administration, including a new economic development plan from the state Department of Development and a 10-year plan for higher education. Moves made during former Gov. Robert Taft’s administration, such as a tax-reform package that is phasing in a commercial activity tax and the state’s $1.6 billion Third Frontier program, also got nods as “smart initiatives with solid results.”

But problems remain that are affecting growth.

According to the study, the state funnels funding through specific agencies without a clear overall goal, and its development policies favor suburban growth and new communities over inner-city growth and ailing older areas.

The study also questioned incentive programs that look at specific businesses but not the larger development picture.

Looking at the effects growth can have, the study also examines how communities use tax breaks and incentives to lure companies within their borders. The report points to a level of competition for those businesses among Ohio communities, of which there are nearly 3,800 local government jurisdictions, or about one for every 10 square miles.

Competition can sometimes have spillover effects, however, for neighboring communities that must deal with the growth without reaping its benefits, according to the study.

Revitalizing the core areas around the state, according to the study, will require a shift in the state’s focus toward encouraging regional development that builds on assets in individual areas.

Such work has already begun in Columbus, Cleveland, Akron and Cincinnati through the growth of universities and medical centers, so-called “anchor institutions.”

Strickland spokesman Keith Dailey said the governor is taking a look at the recommendations, but believes the Development Department’s recent strategic plan represents a step in the right direction. Strickland on Wednesday attended and spoke at a summit centered around the study.

“There are multiple components to the strategic plan, but a core strategy is moving forward to ensure we’re recognizing the state’s strengths and, in particular, its regional strengths, and working to collaborate with local government,” Daily said.

The study notes that changes must involve more than just state officials. That means partnerships among city and suburban leaders in the state, along with a federal partner to help drive innovation.

To download the full report, click here.