By John McCarthy
The Associated Press

Dr. William Noonan shows Ohio Governor Bob Taft a mouse aorta at the new University of Cincinnati Genome Research Institute in Reading last month. (GLENN HARTONG photo) | ZOOM |

COLUMBUS - Gov. Bob Taft's Third Frontier economic development program proposes thousands of jobs in the lucrative high-tech market, where Ohio lags states such as North Carolina and Michigan in helping new businesses survive.

The last piece of the plan is state Issue 1, the only statewide ballot issue on Tuesday. It would amend the Ohio Constitution to authorize the state to borrow $500 million over 10 years to foster high-tech research and workforce development.

Taft called a high-tech economy a key to Ohio's future. Ohio has lost more than 118,000 manufacturing jobs in the last two years, according to U.S. Labor Department statistics.

"We are not competing with some other states," Taft said. "We have got to invest in what will create more higher-paying jobs, more job opportunities for college graduates and our kids. For me, it's really a matter of Ohio's economic survival."

Since February 2002, the state has spent $215 million on Third Frontier projects that promise an estimated 16,279 jobs, Taft spokeswoman Ann Husted said.

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The estimates were provided by the organizations that applied for the money, although Taft said grant applications are reviewed by the National Academy of Sciences and other independent agencies. Backers of Issue 1 say that money alone will create 30,000 jobs.

Passage would allow the state, public colleges and local agencies to issue bonds to develop "science- and technology-based research and development purposes."

James Williams, the dean of Ohio State University's College of Engineering, said Third Frontier awards will be crucial to such projects at state universities.

"You use this capital to partner up with a big employer," Williams said after Taft announced a $10.8 million award for the school to establish the Ohio Center for Advanced Propulsion and Power. "It's priming the pump."

The return to the state comes through increased personal and corporate taxes generated by more jobs, Williams said.

Backers point out that Issue 1 does not increase taxes, but the opponents who prepared the legal argument against Issue 1 say debt service will increase by $63 million, to be paid by taxpayers.

Issue 1 has no organized opposition. Two farm groups feel agriculture is being left behind by the issue. Backers deny that. They say money will be available for new growing and food-processing technology.

"Agribusiness is important to the Ohio economy and there will be benefits to agribusiness. We've got a lot of food-processing jobs in Ohio," Taft said.

Questions about Issue 1

What is Issue 1?

Constitutional amendment that authorizes state and local governments to issue bonds and give other financial aid to support "science and technology-based research and development purposes."

What does that include?

It includes biomedical and other research, developing new products and bringing them to market, capital formation, operating costs, and support for public and private colleges, research organizations and private businesses.

How did it get on the ballot?

It was proposed by Gov. Bob Taft and placed on the ballot by the Ohio Legislature.

How much money is involved?

The total amount is limited to $500 million over 10 years.

Why $500 million over 10 years?

The amount was determined to be the most the state could afford without reducing other state programs or requiring a tax increase.

Does Issue 1 raise taxes?

No.

How would Issue 1 money be spent?

In the form of grants, loans, subsidies, contributions, advances, guarantees or direct investment. The state could also provide staffing or other support, such as computer or other technology, or equipment and facilities.

Do the bonds have to be paid back with interest?

Yes. The interest payments are estimated to be $63 million over 10 years.

Can't the state already use bonds to support economic development?

No. The Ohio Constitution does not usually allow so-called general obligation bonds to be used for non-building purposes. Issue 1 specifically gives the state the authority to sell bonds and use proceeds for non-building economic development programs.

Who will determine how Issue 1 money will be spent?

That will be done by the Third Frontier Commission. It was created by the Ohio Legislature and consists of the director of the Ohio Department of Development, chancellor of the Ohio Board of Regents, and the Governor's Science and Technology Adviser.

Will the public get a say in those decisions?

The Third Frontier Advisory Board, made up of leaders from business and higher education, will guide the three members of the Third Frontier Commission.