The Ohio House of Representatives voted 85-13 to place a $950 million bond issue before voters on May 4 that would renew the state’s largest economic development project for five years, according to a release from Ohio House Speaker Armond Budish. The bond issue initially proposed was for $1 billion.
Next stop: the Ohio Senate.
Started in 2002 by Gov. Bob Taft, Third Frontier is the 10-year, $1.6 billion project to redevelop Ohio’s economy by investing in research, commercialization and entrepreneurship in technologies in five industry clusters, including biomedical. So far, the project due to end in mid-2012 has produced a $10 return for every $1 invested by the state, according to an independent study.
In late November, Rep. Sandra Williams, a Democrat from Cleveland, and Rep. Jay Goyal, a Mansfield Democrat, said they would co-sponsor a joint resolution to place a renewal and expansion of Third Frontier on the May 4, 2010 primary election ballot. The resolution would ask voters to approve the issue of $1 billion in general obligation bonds over five years to fund an extension of the program.
House Democrats reduced the bond funding by $50 million through negotiations with Republicans, whose votes were needed to approve the resolution, the Dispatch said. The debt financing for issuing $950 million in bonds would cost the state about $300 million from 2013 to 2026, according to the Columbus newspaper.
The resolution limits spending to $200 million annually, plus any surplus, the Dispatch said. It also requires ongoing independent review of grant proposals. During the project’s first eight years, this independent review has been supplied mostly by the National Academies — the nation’s top science, engineering and medical minds – on the technology side, and technology consultancies like BizlogX in Columbus, on the business side.
The Ohio Department Development, which administers the project, has long struggled with measuring its impacts. So this summer, the department hired SRI International, an independent research and development organization in Menlo Park, Calif., to do an economic impact study.
SRI’s conclusion: In its first seven years, Third Frontier created $6.6 billion in economic impact and 41,300 jobs (pdf) by making grants of $681 million to research, development and commercialization projects at academic, research and development institutions and companies, entrepreneur-development organizations and venture capital funds.
In a separate study by business people who sit on the Third Frontier Commission and its board of advisers, and published by the Ohio Business Roundtable, the program has attracted $3.2 billion in grants and investments with $473 million in funded grants, created $440 million a year in product sales by funded companies and will have created 56,000 mostly high-technology jobs by the end of 2009.
One of the conclusions of the business case study: Third Frontier is likely to pay for itself by 2014 with income and sales taxes generated by organizations receiving its grants.
Third Frontier backers have mounted a campaign to market the economic development program to voters. Still in its formative stages, the campaign includes a bi-weekly electronic magazine called HiVelocity, which partly aims to demystify Third Frontier by telling its success stories through people and businesses.
It also includes a glossy annual report that focuses on job creation, the economic impact studies and word-of-mouth testimonials aimed at elected officials who are key to meeting a series of legislative deadlines to get the program on the May 4 ballot. A campaign committee is being formed.
“Our vote today assures that we can capitalize on the positive economic momentum created by the program,” Rep. Budish, a Beachwood Democrat, said in his release. “We must continue our efforts to modernize our economy by providing support to the technology-intensive industries of tomorrow.”
Williams, Goyal and other Third Frontier proponents had hoped to hold public hearings on the renewal in December and January, pass joint legislative resolutions by Jan. 31 and file the resolution with the Ohio Secretary of State by Feb. 3, to get the renewal on the May 4 ballot, according to a time line connected to the legislator’s release (pdf).