Finish Line Plan to Improve the Econimy is Privatize

Wisconsin, on Wednesday, reached the finish line ahead of Ohio, when its legislature agreed to partially privatize the state's Commerce Department, a key part of Gov. Walker's plan to improve the economy.

In Wisconsin, as it will be in Ohio, privatization is heralded by Republicans as a new way to get government pushing business from behind instead of obstructing it from in front.

In a published report, Wisconsin Gov. Walker said the new agency "is needed to focus solely on creating jobs, instead of doing other things like regulating elevators and carnival rides." Those jobs, he said, would move to the Department of Regulation and Licensing. Walker, like Kasich, believes the private sector needs to be involved, so the state can be more responsive to the needs of business.

Commenting on the passage of his JobsOhio bill this week, Gov. Kasich called it a "huge step in the right direction for our state," adding that "The sooner we can breathe new life into Ohio’s development efforts and better focus on job-creation initiatives, the sooner we can begin reviving Ohio’s economy and creating jobs."

Doubters of privatizing state economic development agencies like Philip Mattera, Research Director for Good Jobs First, told the Ohio House State Government and Elections Committee that the examination conducted by his group of privatization initiatives in seven states shows the idea is not only not new, but that privatization is not an effective way of improving state economic development and business recruitment performance.

In the case of California, former Gov. Arnold Schwarzenegger did a U-turn by creating a Governor’s Office of Economic Development when a report reported that promised promises of job creation didn't pan out as advertised.

Mattera, whose nonprofit, nonpartisan research center in Washington, DC focuses on issues relating to economic development, said changes like Kasich and Walker want to make will actually result in increased costs, due in part to terms of executive pay.

Commenting on the formation of public-private partnerships, Mattera argued that "...what happens is that a state agency is replaced by a nonprofit entity that is neither fully private nor fully public in character. It exists in a gray area between those two realms and may end up including the worst - not the best - of those two worlds."

As was the case in Wisconsin when amendments offered by Democrats fell on deaf ears, the eight amendments offered by Ohio House Democrats - designed with transparency, accountability, public records, audits and conflicts of interest in mind - were defeated along party lines.