Wednesday, January 28, 2009

Ohio Pride

I've spent quite a bit of my time investigating the upside of Pittsburgh civic pride. The downside of regional or state jingoism is more obvious. Shifting my focus westward, Eastern Ohio struggles with the same legacy costs dragging down the economy in Western Pennsylvania. Like Pittsburgh, Cleveland has taken extraordinary measures to retain its professional sports franchises. Also like Pittsburgh, Cleveland's leadership is busy stuffing a convention center boondoggle down the throat of the voters. These expensive projects don't make economic sense, but they feed into a sense of importance and civic pride.

I've observed the same shortcomings concerning brain drain. Ohio is mulling over awarding tax credits to college graduates who remain in-state:

Two state legislators -- Jay Goyal and Josh Mandel are sponsoring a bill that would offer state income tax credits to any graduate who commits to staying in Ohio for at least five years.

I'm not surprised to discover that the proposal is popular among Ohio voters. It is a horrible idea preying upon state pride. The problem with brain drain initiatives is that they are understood as an issue of out-migration. But the data presented to sell the policy takes stock of net migration. Tens of thousands of college graduates already stay in Ohio and they would all receive the tax credit. In effect, Ohio would pay people to remain in-state who are already planning to do so. That's insane, particularly given the geographic context.

There is an attraction strategy on the table. However, that approach also suffers from the same fiscal waste. How many graduates already move to Ohio? I have a better recommendation. Add up the cost of "paying" talent that you expect to call Ohio home regardless of initiative. Then use that money for aggressively courting graduates in neighboring states. Might Michigan and Indiana "brain drain" address Ohio labor shortages?

Often overlooked it the talent churn between Rust Belt states. Indiana does lose a disproportional number of its college graduates. That migration fact doesn't seem to bother Indianapolis, one of the better performing Midwestern cities. I'd bet plenty of brains come from Illinois, Michigan, Ohio, and Kentucky. As for the Hoosiers leaving, how many of them go to Chicago? Global cities benefit from the education subsidies of other states. Ohio would be wise to follow suit and drop the losing game of holding onto homegrown talent.

No comments: