Often overlooked in discussions about improving Ohio’s economy is the fact that actions taken by state and local governments are primary drivers of the cost of doing business. Their ability to levy taxes and impose costly regulations directly impact a company’s bottom line. When governments are inefficient, they need more revenue. When they take a command and control approach to regulations, they often become an obstacle to growth.
To ensure a strong, competitive economy, we need efficient governments that tax less and provide greater value. That’s why the Ohio Chamber of Commerce and our state’s eight metropolitan chambers undertook an important study issued in December 2010, called Redesigning Ohio. It offers a road map for transforming Ohio’s state and local governments into 21st century institutions.
Burdened with an unprecedented fiscal crisis and a projected $8 billion deficit, state government leaders were at an important crossroads. They could continue to accept the status quo or they could embrace reforms aimed at improving services and heightening productivity through greater flexibility and innovation.
The ideas advanced in Redesigning Ohio provided a framework for thinking boldly about ways Ohioans can receive more value for their state and local tax dollars.
Redesigning Ohio offers 10 specific areas for reform. The first proposes changes to the budgeting process itself by employing a unique approach called Budgeting for Outcomes. Two other innovations, Charter Agencies and Entrepreneurial Management, incentivize greater efficiency by providing more freedom to manage in exchange for less funding and by bringing market-based competition to government services.
Redesigning Ohio also proposes pension and civil service reforms that harmonize the public and private sectors and regulatory reforms that use incentives to boost voluntary compliance. In the health care arena, the report urges the government to leverage its buying power to foster greater competition, lower costs and better results. Redesigning Ohio also offers ways to reduce the cost of the criminal justice system and urges a more thorough and regular review of tax credits, exemptions and deductions.
Finally, Ohio has a costly and outdated system of 3,700 local governmental units that must be brought into the 21st century by enhancing productivity and promoting greater collaboration.
Now, two years after the release of Redesigning Ohio, the same nine Chambers of Commerce have issued a Redesigning Ohio Update. The new report details the progress that has been made and sets out the next steps in this critical transformational process.
As a result of bold actions taken by Gov. John Kasich and Ohio lawmakers, clear progress has been made in reforming our criminal justice system and Medicaid program. Most importantly, the reforms are not just reducing costs; they are also improving results.
One of Gov. Kasich’s first actions established the Common Sense Initiative, which focuses on creating a more jobs-friendly regulatory climate in Ohio. CSI has achieved a number of successes that are making Ohio’s regulatory process more transparent, efficient and less costly for businesses.
Also in 2012, the Ohio Legislature enacted public employee pension reforms that are an important first step in ensuring the long-term solvency of those funds and reducing the cost for taxpayers.
During the past two years, many local governments and school districts embraced greater innovation and collaboration, but additional work remains. The successes highlighted in the Redesigning Ohio Update can serve as excellent models for the additional work ahead.
Today, our economy is improving. Unemployment is at 6.9 percent and tax revenues are increasing. But, we cannot allow these improvements to justify a return to the status quo. With Redesigning Ohio as a guide, we must continue the work necessary to transform our state and local governments into 21st century institutions. ●
Linda Woggon is executive vice president of the Ohio Chamber of Commerce. As Ohio’s largest and most diverse statewide business advocacy group, the Ohio Chamber has been an effective voice for business since 1893. To contact the Ohio Chamber, call (614) 228-4201 or visit the website at www.ohiochamber.com.