Re-Employing Cincinnati: Transforming our Economy

By John F. Schlagetter

By 2020, 150,000 jobs will be created in our region; my goal is to attract as many of these to Cincinnati as possible.

Ohio is the third largest state for manufacturing. Department of Commerce data shows that by 2010, 25 percent of manufacturers account for almost 50 percent of GDP growth for manufacturing. Why shouldn't Cincinnati attract her share of this wealth creation?

Our city is one day's drive from 60 percent of the nation's population. Our location is ideal for manufacturing and distribution, but we underutilize this competitive advantage. In fact, this attribute is cited in the Greater Cincinnati Chamber of Commerce's 2001-2002 Business Retention and Expansion Outreach Survey Results as the greatest strength as a place to do business

Many of the industries most responsible for projected growth already have firm and storied roots in Cincinnati and others hold great promise for our future:

• Transportation Equipment
• Communications
• Chemicals & Plastics
• Electronics & Electric Equipment
• Industrial Machinery & Equipment
• Food & Kindred Products

• Material Sciences

Ceramics, Organoclays & Biopolymers

• Life Sciences

including Genome Research

• Alternative Fuels

Ethanol, BioDiesel, Hydrogen, Gas-to-Liquids,
Coal Gasification

As our economy continues to define & refine itself, non-core activities outsourced from these industries create additional opportunities as described by the Ohio Department of Jobs & Family Services' Job Outlook 2010 in these areas:

• Business & Personnel Services
• Construction
• Retail & Wholesale Trade
• Finance, Insurance & Real Estate

Like our many "plans," studies & reports, Cincinnati is overlaid with many and varied programs intended to facilitate investment:

• Brownfields Commission utilizing Clean Ohio funds
• Enterprise Zones for tax abatement
• Community Reinvestment Areas for tax abatement
• Tax Increment Financing districts for localized tax reinvestment
• Special Improvement Districts for localized taxation
• The Empowerment Zone for targeted economic investment
• The Greater Cincinnati Foreign Trade Zone exempting inventories from the state Tangible Personal Property Tax and belaying imports/exports from duties

Why Manufacturing?

According to the Department of Commerce, each job in manufacturing has a multiplier effect of 3.22. Other job types and their multipliers include:

• Transportation: 3.2
• Construction: 2.31
• Services: 2.31
• Wholesale Trade:1.63

Simply stated, if the City attracts 30,000 jobs in manufacturing and distribution (not warehousing: here I speak of material transfer zones), market demand alone will drive the creation of more than 90,000 additional jobs, realizing the gain of over 120,000 new jobs in Cincinnati by 2020.

While Industry Week reports this being the fourth worst manufacturing recession since 1948, it too shall pass.

Neighborhood Business Districts: the Heart of our Neighborhoods

While manufacturing & distribution may focus themselves along the defined industrial district along Spring Grove Avenue in the Mill Creek Valley, our neighborhoods with Business Districts must be strengthened. 37 distinct NBDs are recognized; investments in them must be baselined to help each neighborhood become as economically self-sufficient as possible.

In planning terms, we can execute a Multi-Nodal development strategy within the framework of the Compact City. Defining our NBDs based upon their strengths & unique qualities will help "brand" our neighborhoods reinforcing their identities.

Why Cincinnati?

The Compact City requires Cincinnati to compete for jobs & workers. To do this, we must position ourselves favorably compared to our suburban competitors. Growing opposition to sprawl, continued focus upon environmental quality, worker mobility and increasing access to jobs for lower income workers, and a desire to reconnect to the city all create a climate in which City Council can execute this plan to save our city.

To date, City Council has seemed resigned to Cincinnati's fate. I reject this and believe a strategic approach to Economic Development, including aggressive reduction of Cincinnatians' tax burden must be undertaken.

How Do We Do It?

Fair question. Much work must be done to competitively position Cincinnati relative to our surrounding metropolitan area. While pushback to unchecked sprawl by impacted communities is encouraging, City Council must work to make Cincinnati the region's economic engine. We can do this in many ways:

• Work aggressively with the Ohio Legislature and Governor Taft to expedite phase-out of the onerous Tangible Personal Property Tax
• Work constructively with the Ohio Legislature and Governor Taft to support our Foreign Trade Zone (FTZ) for our growing import/export economy
• Phase out the unvoted Property Tax millage, currently 7.3 percent of the City's revenues
• Enact a local version of the proposed federal BRIDGE Act, allowing new companies to escrow earnings taxes for a period of time to collateralize private loans necessary for sustenance & expansion during their most critical time of business growth
• Adopt the recommendations of the Economic Development Task Force
• Facilitate cooperative distribution for urban entrepreneurs allowing them to cost-compete against larger companies

• Rationalize the SORTA subsidy, currently 14.3 percent of our Earnings Tax, so that all municipalities benefiting from Metro bus service pay into it (currently Cincinnati is the only local jurisdiction subsidizing Metro's operating budget)
• Eliminate the local taxation of 401(k) contributions, estimated to be 7 percent of Earnings Tax collections
• Create earnings tax deductions for the fair market value of contributions to local charities & non-profit agencies, especially contributions of computer equipment to bridge the digital divide and musical instruments to increase youth participation in the arts
• Promote health & wellness by creating and earnings tax deduction for membership in a Cincinnati health club or gym

The Genius of the "And"

Cincinnati's future shouldn't be a Hobson's choice between economic development and housing: it can, should and must be both jobs and housing.