May ballot in state's plans to renew Third Frontier - Business First of Columbus:

May ballot in state's plans to renew Third Frontier - Business First of Columbus:

In the midst of a recession that has drained money from the state’s primary technology development program faster than expected, Ohio officials intend to ask voters next spring to extend and perhaps expand an effort they say is key to the state’s economy.

The Third Frontier initiative, a $1.6 billion program that state Department of Development officials have credited with spawning more than 500 companies and nearly 8,000 jobs since it began in 2002, is running out of money. Designed to last until 2012, the program is set to close a year early because of reduced state revenue.

Third Frontier uses money raised from two $500 million voter-approved bond issues, with the remainder coming from the state’s general revenue fund. But the recession’s crushing effect on government finances has forced the state to reduce what it will send to Third Frontier over the next two years.

Each year the state has disbursed $160 million to $200 million to Third Frontier, but the outlay will be cut to $133.5 million in fiscal 2010 and about $135 million in 2011, said John Griffin, director of the Department of Development’s technology and innovation division. In order to supplement the reduced funding in 2010 and 2011, officials are sacrificing Third Frontier money for 2012.

Since recognizing the shortfall, the Development Department and the program’s advisory board and commission have been working on plans to keep the program going, Griffin said. Chief among those plans is renewing the program, but the state would need to sell more bonds to finance an extension beyond 2011. And that requires voter approval.

The Strickland administration originally wanted Ohioans to vote on a Third Frontier extension in November, but Ohio legislative leaders didn’t agree. Now the administration thinks May is the time to ask, though the amount in bonds the state will seek hasn’t been determined, Griffin said.

“We’re looking at what all the funding opportunities are for Third Frontier and we’re looking at the program content,” Griffin said.

A May vote also appears to have more support elsewhere in the Statehouse.

“Senator (Bill) Harris is in strong favor of the Third Frontier and wants to work on continuing and possibly expanding the program,” said Maggie Ostrowski, a spokeswoman for the Senate president. “He wants to make sure we get it right.”

Harris, R-Ashland, thinks a May ballot issue is appropriate, she said.

Persuading voters

But Harris isn’t the only one backing that date. Four private business development groups wrote to Gov. Ted Strickland, Harris and House Speaker Armond Budish, D-Beachwood, on July 31 asking officials to put the issue on the May 2010 ballot, Ostrowski said.

“Our organizations have analyzed Third Frontier’s merits, future opportunities and its optimum time for a renewal campaign,” said the letter from the Cincinnati USA Regional Chamber, Greater Cleveland Partnership, Columbus Partnership, and Ohio Business Roundtable.

The letter goes on to argue that by pushing for a May ballot, stakeholders examining the program may be able to reach a consensus and present a unified front to voters.

If that is indeed what happens, then a bond issue would stand a chance at passing, said Herbert Asher, political science professor emeritus at Ohio State University. “If it’s going to get on the ballot, it’s going to have bipartisan support,” Asher said. “The key will be to connect it to Ohioans’ aspirations.”

But it is unclear whether the Ohio economy and employment pictures will improve by May, so framing the vote as a way to create technology jobs and build the state tech economy will be essential, Asher said.

A failure in a May vote also would give officials time to ask for voters’ approval again later in the year as well as in 2011 before Third Frontier’s coffers run dry.

In northwest Ohio, Greg Knudson has already begun building support around Third Frontier. He is director of Rocket Ventures LLC, an economic development group created two years ago to disburse Third Frontier money in the Toledo region, an area he said has benefitted from the program.

“Northwest Ohio had no venture capital or anything like it operating” before Rocket Ventures started two years ago, Knudson said. “We have met over 5,000 people in presentations, have had well over 400 companies come see us and we’ve helped start 56 companies in just the last year and a half. (Third Frontier) has been so vital to this region.”

614-220-5460 | kkemper@bizjournals.com