State Should Follow GM/UAW’s Lead in Remaking Itself
Monday, February 11th, 2008 By ezanner
Ohio has come to the fork in the road and now is the time to follow the advice of the great philosopher Lawrence “Yogi” Berra and take it. Tax revenue appears to be falling short of projections thus putting into question many of the programs that Governor Strickland holds near and dear to his heart. What is a governor to do? The late Governor Rhodes said it best “…profit is not a dirty word in the State of Ohio.” So let’s get profitable now. How does one do that? Cut expenses and increase revenue.
First, to use an old business buzzword, lets “rightsize” the state as opposed to the “supersize” it is now with 60,000 workers. Like GM and Ford, perhaps it is time to shrink the payroll given the level of business we are not doing. Early retirement buyout packages are one way to go that could result in tremendous cost savings to the State. One of the rude awakenings that we have all experienced recently is that labor is now portable – just like manufacturing. As Robert S. “Steve” Miller, Chairman of Delphi Corp was quoted as saying “…the day of the highly paid, low skilled job was over.” Outsourcing calls centers to India may be a bit much for the average Ohio citizen to stomach but how about say Meigs County where the rent is cheaper or perhaps Youngstown? Keep it rightsized. Use technology to achieve scale. In other words become a more efficient operator and provider of services. Remember, to a large degree, this is a business – run it like one.
Second, sell more. How in the world does Ohio do that? Probably the third thing you learn in economics and the first thing you forget as a politician is that the more you tax something the less you get of that thing. Make Ohio a great place to do business in. Ohio gets more businesses, Ohio’s workers get more jobs Ohio’s budget gets more tax receipts. All of a sudden Ohio becomes a better place to live and work.
Two of the common challenges faced within the business community are taxes and healthcare. For now let’s leave healthcare for another discussion. Taxes however are within the scope of the Governor’s office. Make Ohio a tax efficient state, a state where businesses will want to locate. There is a reason why Mercedes Benz is in Alabama, BMW is in Spartanburg and Honda is in Marysville. Ask this question: could we attract Honda today? There answer is probably no as they decided to built their next plant in Indiana. But it is not always about big manufacturing facilities – they make great headlines, but they are not the end game. It is about creating a climate that encourages the growth of business, the location of business to this great State. Ohio has lost a large number of corporate headquarters – let’s not lose anymore.
Ohio has a unique opportunity right now. The Governor can “rightsize” the payroll with buyout packages where they make sense. Also, and of more consequence, instead of raising taxes to deal with this budgetary shortfall the State can do something different this time and cut taxes creating an environment that tells the world Ohio is open for business. Ohio will make it worth your while to locate here. We don’t need catchy slogans or a clever ad campaign – we need substantive change in the State tax code and then go pitch it to the business community.
If you change it they will come.
Tags: Economy
