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State Senators Press Governor to Act on Outsourcing
By Dan O'BrienLIBERTY TOWNSHIP, Ohio -- Each year, Ohio hemorrages thousands of jobs due to companies outsourcing work to employees or contractors in foreign countries, say two state lawmakers who want to stop the bleeding.State Sens. Marc Dann, D-Liberty Twp., and Robert Hagan, D-Youngstown, are calling on Gov. Robert Taft to issue an executive order that would stem the tide of employee outsourcing and support legislation that prevents the state from awarding contracts to companies that engage in the practice."We've got to step up and use the tools we have," to ensure jobs for Ohioans, Dann declared. Dann and Hagan met with reporters yesterday afternoon to discuss the Ohio Job Protection Bill, legislation that was introduced in the Ohio Senate earlier in the day. The measure would prevent state agencies from outsourcing work to foreign countries, prohibit the state from awarding contracts to companies that outsource their services or supplies, and disqualify any company that shows a net loss of jobs due to outsourcing from receiving economic assistance from the state. Dann pointed to the debacle surrounding MCI Worldcom's decision to close its Niles telemarketing center last month, which employed 700 people. "At one point, the center employed close to 1,000," he said. Many of those jobs are now performed by telemarketers in the Philippines -- workers who were trained by employees at the Niles center, he added.The company received hefty tax incentives five years ago from Trumbull County and assistance from the state in the form of job creation tax credits, Dann said. "That is not acceptable. Ohio should not be giving these companies economic incentives to do that," he said.Adding to insult, Hagan elaborated MCI never exercised its job-creation credits because it never paid income taxes to the state, the result of tax shelters structured by the company that are perfectly legal in Ohio. "Our tax code is unfair to local companies, but that's the way our tax code works," he said.Dann elaborated on his intention to offer an amendment to Senate Bill 116, which extends job creation tax credits to insurance companies and other service-related operations. The amendment bars companies from removing any jobs from the country once these companies accept the tax credit.Both lawmakers pressed Taft to implement some of these measures through an executive order, patterned after similar actions taken by the governors of Missouri and Michigan. "We call upon the governor to issue an executive order preventing any money from going to these companies," that outsource, Hagan said.In a letter to Taft dated April 8, Hagan cited an executive order signed by Michigan Gov. Jennifer Granholm that prohibits state agencies from providing financial incentives to U.S. companies that want to locate operations out of the country if the move will result in job losses for U.S. workers.In the letter, Hagan also noted that Missouri Gov. Bob Holden recently signed an order mandating that vendors bidding on state contracts certify where the work will be performed and disclose if any work will be done offshore.Outsourcing, Dann interjected, is not only crippling Ohio's manufacturing base, it also threatens high-paying technology positions in the medical, banking and finance industries. He related the story of a man who called his office recently, noting the individual had once worked at a local steel plant but lost his job. The individual went back to school, within five years earned a masters in business administration, and landed a new job in a financial services company. Recently, his position was terminated because the company moved his operations to India, where workers are paid a fraction of what U.S. employees are. "What do tell that man about what the future holds?" Dann questioned.Hagan said he believes the initiative will gain bipartisan support in the General Assembly, and is banking on support from Taft as well considering 2004 is an election year.Hagan acknowledged that although Taft is ineligible to run for a third consecutive term as governor, he is a pivotal player in the effort to re-elect President Bush in November. "It's not a shot in the dark. Republicans see this as a hot-button issue," he said.Three weeks ago, Dann announced the creation of a bipartisan outsourcing study group to examine the impact the practice has had on Ohio's economy. According to Policy Matters Ohio, the state has lost more than 244,000 jobs over the last four years, including 191,000 in manufacturing. Policy Matters directly attributed 45,734 of these jobs to outsourcing to other countries.Contact Dan O'Brien: dobrien@business-journal.com"