Third Frontier bond issue proposal halved by Ohio Senate

COLUMBUS, Ohio – A joint resolution to put a bond issue that renews the Ohio Third Frontier project on the May 4 ballot was adopted by the Ohio Senate Tuesday — at half its original size — and is on its way back to the Ohio House.

The resolution to renew Third Frontier — the state’s most ambitious economic development program — started out in late November as a proposal to issue $1 billion in general obligation bonds to keep the program going through fiscal 2017. The $1.6 billion, 10-year project will end in fiscal 2012 if it is not renewed.

Nearly two weeks ago, the House voted 85-13 to place a $950 million bond issue to renew the project before voters on May 4.

On Tuesday, the Senate voted 21-12 to halve the bond issue to $500 million (pdf) and added $100 million for the Public Works Commission over two years to support local roads, bridges and sewer systems.

Gov. Bob Taft started Third Frontier in 2002 to revitalize Ohio’s economy by investing in technology research and commercialization. Ohio voters turned down the first proposed bond issue to help pay for the project, but they approved a $500 million bond issue in 2005.

The program that invests in five industry clusters — advanced and alternative energy, biomedical, advanced materials, instruments-controls-electronics and advanced propulsion — is beginning to have its desired results.

This summer, a report by an independent research firm showed Third Frontier had a $6.6 billion economic impact, created 41,300 jobs and attracted $10 in outside investments for every $1 the state invested in its first seven years.

A December report spearheaded by business people on the Third Frontier Commission and Advisory Board showed the project attracted $3.2 billion in grant investments with its $473 million in funded grants. That’s a return on investment of nearly 7-to-1. The project also produced $440 million a year in product sales at funded companies and created 56,000 mostly high-tech jobs, according to the report.

How much bond money does Third Frontier need to keep making multimillion-dollar grants that create industries, supply chains and jobs?

Dorothy Baunach, special adviser on the Third Frontier to the Ohio Business Roundtable: $800 million in bonds would keep Third Frontier at its current practice of making at least $160 million in grants a year for five years.