The
Columbus Comeback
Ohio’s
Capital moved beyond partisanship to become a model for economic growth
Time Magazine October 8, 2012 ~Rana Foroohar
If
you ever wonder what kind of economic development might be accomplished in this
country with more bipartisan cooperation, consider Columbus, Ohio. This low-key, Middle American metropolis of
about 800,000 is becoming something of a celebrity city, talked up in a recent
New York Times Magazine piece on the success of Ohio and visited more than a
dozen times by presidential and vice-presidential candidates. No wonder.
After taking a dive during the recession, Columbus has roared back, with
the metro creating more new jobs than any other city in Ohio over the past two
years. In many ways, it’s a model for
what an economy can do when you admit that growth isn’t about tax cuts and
austerity but about both streamlining government and investing public money in
the right things.
Some of Columbus’ success is based
on its diversified economy. As the state
capital and home to institutions like Ohio State University, it has a large
government and public education sector, though not dramatically so—12.4% of the
local economy vs. 11.5% for Ohio as a whole.
Its relatively low cost of living, central location (its inland port
makes it a logistical hub) and steady supply of talent from 18 nearby colleges,
including many community colleges, helps too.
The city has a robust manufacturing sector including Honda and
Worthington Industries but also big retail and financial sectors: JP Morgan Chase actually employs more people
there than in New York City.
For all these reasons, Columbus
didn’t fall quite as far off a cliff as the rest of the state did after the
financial crisis. But what really sets
it apart are the steps it has taken since.
In 2009, Mayor Michael Coleman, a Democrat who has since been re-elected
to a fourth term, was faced with chopping roughly $100 million in municipal
spending—more than 15% of the total operating budget to balance it as required
by city statute. The mayor started with
back-office cuts and moved on to mandatory furloughs, reduced trash pickup and
the closure of 12 recreation centers. He
persuaded thousands of public servants to forgo raises. He trimmed pensions.
It wasn’t enough. By mid-2009, “things were getting worse, not
better,” says Coleman. “We were at a
crossroads. If I cut more, we were going
to have to lay off 1,100 public workers, including firefighters and police, and
really compromise city safety. I’d also
be contributing to unemployment.” It was
time, says the mayor, to “ask ourselves, What kind of city did we want to be?”
Coleman went to the city’s business
leaders—a mostly conservative group including major Republican donor Leslie
Wexner, founder of Limited Brands—and asked them to support an income tax
increase, the first in 27 years. They
agreed and helped finance a successful protax ballot campaign, in large part
because they believed the mayor had already proved his austerity chops and
because he vowed to put a third of the tax hike into development. The plan:
give businesses money to retain workers, pour money into new
infrastructure, improve the housing stock and redevelop the city’s downtown and
riverfront to attract more knowledge workers.
“Communities are either moving forward or backward right now, with very
little in between,” says Wexner. “We
chose to strategically invest in our future at a very critical time, and the
results are paying off.”
Indeed, there’s plenty in Columbus
that comes straight out of the Brookings or McKinsey Global playbook. There’s the Edison Welding Institute, for
instance: a state-initiated, privately funded enterprise that does cutting-edge
manufacturing research resembling the German Faunhofer institutes. The goal is to keep wages up by maintaining
an advantage in making super-high-end exports.
(Columbus’ population was at one point a third German emigres, and the
city has the Teutonic nose-to-the-grindstone, thrifty ethos that marks
successful Midwestern towns.) Rather
than sending generic delegations to China, as other American cities hunting for
investment do, the economic-development team has smartly targeted a relatively
untapped group of midsize western Chinese entrepreneurs looking to get their
money out of the Middle Kingdom.
They’d be wise to invest. Columbus has gone beyond partisan politics
and supply-side nonsense to create real growth.
Once the election is over, I suspect many people will start paying more
attention to this city—and the many others around the country that are quietly
moving ahead while Washington remains gridlocked.
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