Mandel Listens to Concerns of Local Business Executives
YOUNGSTOWN, Ohio – State Treasurer Josh Mandel said he came to Youngstown primarily to listen rather than talk. And listen he largely did, as area business executives shared their concerns and vented their frustrations Thursday morning during a roundtable discussion at the offices of the Youngstown/Warren Regional Chamber.
Topics addressed during the 50-minute discussion ranged from Gov. John Kasich's proposed tax changes to the federal Patient Protection and Affordable Care Act to the challenges in finding qualified workers who can pass a drug test.
“Ohio has done some good things,” said David Paull, vice president human resources, operations and labor relations at RTI International Metals Inc., Niles. Paull pointed to the elimination of the personal property tax as providing “a real advantage” to RTI but cited the workers’ compensation system as “a real detriment to doing business here.”
Andreas Foerster, president of Starr Manufacturing, Vienna, agreed that the state workers’ compensation systems is a “total mess” that is “totally unfriendly to any employer.”
Foerster noted that he has to pay more taxes every year. “It doesn’t matter if I make more money or not,” he remarked. He is encouraged by signs of the improving local economy but is concerned how the “federal mess will hit Ohio.” He also said he would prefer having lower taxes to state programs such as Star Plus, a cash management for local government subdivisions instituted by Mandel’s office.
The “best form of economic development” is a friendly tax and regulatory environment with lower tax rates and a broader base, Mandel agreed. He pointed to Texas as “one of the best models in America” for such an environment.
“In Texas they have no income tax, they had aggressive tort reform, they’re a right-to-work state and they’ve embraced energy resources and job creators – not a very complicated formula,” he remarked. “People vote with their feet and as everyone here knows in this room capital flows to the path of least resistance.”
“Andreas and I like lower taxes because we can reinvest,” said Claudia Kovach, vice president of City Machine Technologies Inc., Youngstown. However, one of the problems not just in Ohio but across the country is finding candidates for jobs who are able to pass a drug test. “You’re not going to have a lot more taxpayers if they can’t pass a drug test,” she said.
Foerster expressed particular annoyance at individuals who come in to apply for work because they are required to so they can continue to collect unemployment “and you know they’re drunk.”
In Florida as well as Ohio there has been discussion over whether to require drug testing for public benefits, a discussion that is going to be heard “more and more throughout the country,” Mandel said. The “compelling argument” is that law-abiding citizens’ tax dollars “should not be spent on propping up someone else’s drug habit,” he said.
Drug abuse, said Tom Humphries, president/CEO of the Regional Chamber, is a recurring topic in meetings he has, he said. “All of us have to talk about this because it’s not going away. ... All of us are dealing with this problem,” he said. “If we tackle the drug issue, fix it, all these other things are less of a problem. Everything we could talk about after that is less of a problem.”
While good things are happening at the state level in Ohio, those “are being offset by the kinds of burdens that we’re having to absorb from a federal standpoint,” Paull said. Among those is the Affordable Care Act, or Obamacare as it is often called. He said he just sat through another webinar on health care and people walked out of the room “shaking their heads.”
Starr’s Foerster said he supports provisions such as coverage for preexisting conditions but opposes having to pay for treatment of conditions that are caused by lifestyle choices.
“Germany has this kind of system. I came over here to get away from it,” he said.
Mandel, who said the health-care law is “bad law” and “bad for our country,” said one of the debates going on in Columbus is over whether to expand Medicare using federal funds available under the Affordable Care Act, as Kasich has called for. The debate revolves around whether the state is going to be “holding the bag” after those funds are gone and whether that is fiscally responsible, Mandel said.
The expansion would fill “a gap in coverage,” said Michael Wellendorf, government relations liaison for Akron Children’s Hospital, which has offices in the Mahoning Valley including a campus in Boardman.
“If you surveyed those in health care you would find a lot of people who don’t like Obamacare,” he acknowledged. He also noted that hospitals shoulder “a significant burden” providing services required under the act.
Attorney Matthew Blair voices his objections to Kasich’s proposed broadening of the sales tax to include legal services. The tax, which attorneys will simply pass along to their clients, is a “terrible idea” that will be a “nightmare to implement,” he said.
“All it’s going to do is increase prices to the consumer,” he said. “You can’t lower the income tax [as Kasich has also proposed] and increase sales taxes because ultimately the same people are paying it,” a process he characterized as a “shell game.”
Gary Soukenik, president/CEO of Seven Seventeen Credit Union, Warren, added he is concerned the sales tax could potentially be expanded to tax some of the services credit unions provide to their members.
“This is the issue where the temperature is most hot,” Mandel said. Though he did not express an opinion on the tax itself, he said his office is “closely monitoring” the debate in the state legislature.
On another tax issue, Kasich’s proposed severance tax on oil and gas companies extracting from the shale plays, Mandel was more forthcoming with his opposition. The industry in Ohio is “in its infancy” and just beginning to create jobs. “We need to do everything we can to encourage more job creation within the oil and gas industry and I have a concern that the new tax will harm job creation,” he said.
Copyright 2013 The Business Journal, Youngstown, Ohio.