By Spencer Hunt
Enquirer Columbus Bureau

COLUMBUS - Minutes after he publicly acknowledged the voters' rejection of his $500 million jobs initiative, Gov. Bob Taft vowed to move ahead with plans for more high-tech businesses in Ohio.

Issue 1 was to be the final - but not the only piece - of his Third Frontier initiative, which already has spent more than $200 million on university research projects and high-tech startups.

Though 51 percent of the voters turned their backs on Issue 1, Taft said he still has $1.1 billion from other sources, and he's going to spend it.

"We'll continue to invest the balance of our Third Frontier funding toward our goals," Taft said.

Nancy Zimpher, president of the University of Cincinnati, said the lack of Issue 1 money will make it harder for the university to get federal funds for cutting-edge research, like work going on now at the Genome Research Institute.

"That leverage is so important," Zimpher said. "This reduces our leverage."

The Third Frontier is the governor's answer to the more than 100,000 manufacturing jobs the recession has cost Ohio. It's intended to provide the seed money necessary to encourage the growth of new high-tech and biotech businesses and jobs.

Without the $500 million, the Third Frontier will still spend hundreds of millions over the next 10 years from money already set aside in the state's capital budget, its tobacco settlement fund and a loan fund fueled by state liquor profits.

Some estimates show a fully funded Third Frontier would have created 97,000 new jobs. Issue 1 would have accounted for 30,000 of those jobs, a little less than a third of that total.

Critics of the Third Frontier and Issue 1 questioned the accuracy of those estimates. Conservative lawmakers and their allies say government officials lack the experience needed to look at a stack of business proposals and ferret out the winners from the losers.

"Essentially, this comes down to who is better equipped to make investment decisions," said Joshua Hall, a researcher with the conservative-leaning Buckeye Institute. "There are going to be successes with the Third Frontier but, on average, private markets do better."

Hall said Ohio would attract more business if the governor and lawmakers reformed taxes, limited lawsuit awards and made more employer-friendly changes to state worker compensation laws.

Jon Allison, Taft's chief of staff, said the governor has supported and continues to support those changes. He said the Third Frontier also is a vital part of the state's economic plans.

"The Third Frontier is a well devised, well thought-out, and complete economic development program," Allison said. "To turn our back on that would not make sense."

Mark Collar, a Procter & Gamble executive and chairman of Taft's Third Frontier Advisory Board, agrees. He points out that other states, including Michigan and North Carolina, are already moving ahead with similar business investment plans.

"Other states look at this as good business," said Collar, president of global pharmaceuticals for Procter and Gamble.

Doehrel said Ohio needs to do the same to stay competitive.

"These businesses are going to go where there are investments to foster their growth," Doehrel said.

Collar said Issue 1 would have helped fund projects that take technological discoveries and turn them into new, money-making products.

Looking at the narrow margin of defeat, Collar would not rule out asking voters to approve Issue 1 a second time. Doug Moormann, a lobbyist with the Greater Cincinnati Chamber of Commerce, also held out another issue campaign as an option.

"We've got a primary (election) in the spring," Moormann said. "That's a possibility."

Taft, however, seemed to dismiss the idea. Another option may be to ask lawmakers to look for another source of money for the Third Frontier.

"I think there is a strong commitment on the part of the legislature," Taft said. "I believe they will be even more committed now than ever."

Email shunt@enquirer.com