Sunday, February 8, 2004

Gay-lifestyle laws could backfire

Business groups say appearance of intolerance hurts economically

By John Byczkowski
The Cincinnati Enquirer

The debate over government policy on gay lifestyles in Ohio already has had a dollars-and-cents impact on Greater Cincinnati, and some business and community leaders fear the effect will be felt for years to come.

A few months ago, the head of the Greater Cincinnati Convention and Visitors Bureau visited associations based in Washington to tell them about the $160 million expansion of the city's convention center, and to urge them to bring their annual meetings here.

Lisa Haller, president of the bureau, said she dropped in to see one old friend.

"He looked me straight in the eye and said, 'Lisa, you've got a great city, but it's not a city we'll bring our members to because of the social issues in your city,' " she said. The social issues, she said, included racial tension and the Article XII amendment to the city charter.

Article XII, which prevents the city from barring discrimination against gays, won approval of voters in 1993.

And on Friday, Gov. Bob Taft signed into law the Defense of Marriage Act, which says the state will not recognize same-sex marriage.

Ohio became the nation's 38th state with such a law, and further complicated the existing Article XII issue.

The presidents of Miami University and Ohio State University had said a ban on state-funded domestic-partner benefits would put them at a disadvantage when competing against other universities and companies to hire faculty, and they urged the governor to veto the bill. Taft said in a statement issued when he signed the bill that it doesn't prohibit colleges and universities from offering same-sex partner benefits.

Still, NCR Corp. of Dayton and Limited Brands of Columbus told the Legislature the bill would hurt their efforts to promote a diverse work force.

One high-tech company looking to expand took Ohio off its list when the state Senate passed the Defense of Marriage Act last month.

"We're not going to go to any place that discriminates," said Mary Mason of Missing Lynx Systems of San Ramon, Calif.

And a corporate law client of the Cincinnati firm Taft, Stettinius & Hollister pulled its business from the firm because partner Rep. Bill Seitz, R-Green Township, was the chief sponsor of the bill.

Undercutting business?

Are these effects small and isolated, or evidence of a larger shift of money away from Ohio? Less than 1 percent of Ohio's 4.45 million households are same-sex couples. Yet the treatment of gays affects issues from the state's battle to attract and retain young, creative-class professionals, to the return on Cincinnati's multimillion-dollar convention center investment.

It appears the fight will get louder.

Mayor Charlie Luken called last week for the repeal of Article XII. At least one community group, Citizens to Restore Fairness, has already raised $162,000 for its pro-repeal campaign. Groups that fought for passage of Article XII in 1993 - including Citizens for Community Values and church groups - aren't expected to coalesce until petitions are submitted to formally put repeal on the ballot.

Some businesspeople worry that the Defense of Marriage Act undercuts the state's $1.1 billion Third Frontier program to create high-tech jobs. Taft has said the Third Frontier Project is as much about people as it is about technology.

"Job creation, business innovation, keeping our best and brightest close to home and improving the lives of our citizens are goals of the Third Frontier Project," the governor said last year.

And part of the $500 million bond issue voters defeated in November would have been spent "to recruit world-class researchers for our universities," Taft said.

Ohio has been losing young professionals, according to the Census Bureau. From 1995 to 2000, the state lost 18,409 college-educated people age 25-39. No major metropolitan area in Ohio had a net in-migration of such people. Toledo lost 3,000, Dayton lost 2,600 and Cincinnati lost 1,800.

The key to retaining young people is creating high-paying jobs, said Ross DeVol, regional economic analyst at the Milken Institute in Santa Monica, Calif.

But Ohio has seen its median household income fall behind national averages, and many of its young college-educated people leave the state. The state's income will continue to fall if it can't reverse that outmigration, DeVol said.

Air of intolerance

A number of businesses say the Defense of Marriage Act and Article XII create an air of intolerance that's a turn-off to many of the creative young people they're trying to hire. One of those companies is Procter & Gamble.

P&G has given $10,000 to Citizens to Restore Fairness, and the co-leader of the campaign is P&G demographer Gary Wright.

The company has received assurances that the Defense of Marriage Act won't affect its ability to offer domestic-partner benefits to employees, so it hasn't taken a formal position on the bill, said Louise Hughes, P&G's director of Ohio government relations.

"We are concerned that some of our employees and recruits would be reluctant to come to Ohio because of the law," she said.

Blaine Clark, president of the Circuit, an association of local high-tech companies, said young people - straight or gay - are put off by such laws.

"Study after study after study has said this creative class that's really creating all of this technology for us is a more tolerant and open class," he said.

The perception that Cincinnati is less than open has cost at least one potential new business. John Fonner, director of technology adoption at CincyTechUSA, the Greater Cincinnati Chamber of Commerce's technology promotion arm, said a company he was trying to recruit chose Atlanta instead, concerned that it wouldn't be able to recruit young workers to Cincinnati.

That's just one business, he said, but "my instinct would tell me that it's a factor" for more businesses.

Fostering acceptance

To build a high-tech business, "you literally need people who think a little funny," said Mason of Missing Lynx Systems. This kind of creative person has simple rules, she said: If it works, it's good, and if it doesn't, it's bad.

"And what they have learned is what works is to be very tolerant of all kinds of behaviors. It doesn't matter what people do out of the office. If you can't foster a community that has that kind of acceptance, the engineers are going to be uncomfortable."

That's the issue that concerned NCR, which lobbied the Ohio General Assembly against the Defense of Marriage Act.

In December, the company sent a letter to state Rep. Mike Gilb, chairman of the House Committee on Juvenile and Family Law, urging a "no" vote. "Workplace diversity will help us build the high-performance, growth-oriented company we need to be successful long term," NCR said. "If passed, DOMA will hinder the ability of both NCR and our employees to reach their full potential."

Seitz said NCR dropped its opposition to the bill once a change was made to make it clear the bill would not affect private companies' ability to offer domestic-partner benefits.

No effect on business

Proponents say the economic effects are anecdotal and not widespread.

Seitz said business shouldn't worry about the Defense of Marriage Act because it doesn't affect them.

"The simple answer is it doesn't affect business at all because private employer-employee relationships are not subject to this bill," he said. He argues that it will not hurt job creation in Ohio.

Indeed, some employers in Greater Cincinnati say gay rights just isn't an issue.

Ed Carl, president of CH Mack, a Blue Ash software company, said he doesn't believe the bill will have any effect on his ability to attract employees. "The best place (workers) can deploy their skills and earn a wage, that's the defining criteria for me," he said.

David Millhorn heads the University of Cincinnati's Genome Research Institute, which last year received $9 million from Ohio's Third Frontier program. He said GRI has been able to recruit nearly everyone they've sought. And far from the city's low-tolerance image discouraging people, "we see just the opposite. People come here because they think it's a great place to raise kids," Millhorn said.

Whether the treatment of gays in Ohio is an issue that's important to a large number of people or an important group of people - and thus something with an economic impact - won't be settled easily.

But it's clearly an issue important to some people. After Article XII was passed in 1993, the convention bureau said it received letters from eight groups - science groups, art groups and one religious organization - that said they would not consider bringing their meetings to Cincinnati.

Julie Calvert, communications director at the convention bureau, said the bureau worries about the "bypass" problem, where groups avoid Cincinnati but don't tell the bureau - groups like the one in Washington that told Lisa Haller it wouldn't come to Cincinnati.

"We would never have known we were off that list unless Lisa had sat with him," Calvert said. "So we know it's a real issue."


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