Informing voters about Ohio’s ‘Third Frontier’

Darren D’Altorio

General support, pockets of criticism meet state Issue 1 in next week’s election

In the eyes of many Ohio business owners, politicians, academics and citizens, the future of the state’s economy will be determined by voters May 4.?

Issue 1, which represents Ohio’s “Third Frontier” program — a state-funded initiative that grants money to high-tech business and research universities throughout Ohio, helping them develop and commercialize innovative products of tomorrow to bolster economic growth — is up for renewal.

?A yes vote for Issue 1 will amend the Ohio Constitution, extending the Third Frontier through 2015, three years longer than originally planned. The amendment will add another $700 million in funds to the program’s already allotted budget of $1.6 billion, further enabling the state to invest in high-tech business and education. The numerous supporters agree the program sparks economic growth in the state.

According to, by the beginning of 2010, the state awarded nearly $1 billion to companies and universities across Ohio. This created 54,983 direct and indirect jobs, attracted or created 637 new companies and leveraged $4.7 billion of private sector investment in the state.

Northeast Ohio has a heightened interest in the Third Frontier. Of the nearly $1 billion already awarded, $424 million has found its way to Northeast Ohio companies and universities. This put cities like Kent on the global map, said Dan Smith, Kent’s economic development director.

“We’re starting to build critical mass,” Smith said of Kent’s growing high-tech sector. “Firms in China know where Kent is moreso than Cleveland because of the liquid crystal display technology that happens here.”?

Since 2003, Kent State and Kent-based companies Alpha-Micron and Kent Displays Inc., which develop and commercialize liquid crystal displays, have collectively received $35,574,305 in grants from the Third Frontier.

Kevin Oswald, communications director of Kent Displays Inc., said the Third Frontier is focused on developing a tech-based industry for the entire state of Ohio. He compared the program to planting a seed and watching it grow, saying the vote to extend the Third Frontier guarantees the plants will fully blossom.

“We are on the road to rescuing Ohio’s economy,” Oswald said. “If it is stopped now, could we get the momentum back, could we recapture that? Tech industries can take up to 20 years to commercialize a product. We can’t cut this program off because we haven’t given it enough time yet.”?

Gov. Ted Strickland said the Third Frontier sets Ohio apart from other states, providing an atmosphere where jobs are being created in cutting edge fields.

“Third Frontier is helping Ohio encourage and support industry growth that will lead the way to future economic development,” Strickland said.

Strickland added that the program has support from every major player in state politics and economics, from the Senate and the House, to a multitude of labor unions and chambers of commerce.

Further, the Third Frontier recognizes the importance of creating competitive universities across the state, with faculty and students who are prepared to compete in the global economy.

Eric Fingerhut, chancellor of Ohio’s public universities and chairman of the commission that oversees the Third Frontier, said the Third Frontier has an obligation to increase research efforts at universities across the state.?

“It’s a benefit to students to directly participate in research,” Fingerhut said. “We are attracting top faculty and researchers to Ohio universities, which is a significant part of attracting talented students to universities and improving education in Ohio.”?

Bahman Taheri, CEO of Alpha-Micron, said his company’s ties to Kent State are strong.

“We hire within a few degrees of separation from Kent State University,” Taheri said. “The people we hire are educated at local universities. This is stopping the brain drain.”?

For Alpha-Micron, the Third Frontier has enabled the company to ramp its manufacturing operations, Taheri said, allowing the commercial products the company produces to be manufactured locally, aiding the local economy.?

Amidst all the praise, critical voices have emerged.

Some are saying the Third Frontier is a form of “corporate welfare” that interferes with free market forces. ?Also, concern has been expressed about how the program’s design favors certain industries over others, leaving a disparity between those who qualify for the grant awards and those who don’t. ?

The state’s fiscal health is also an issue. Critics say this spending is beyond the means of the state and will put Ohio finances in the hole, perhaps never to be recouped. ?Racial tension has also emerged.

According to a Plain Dealer report, some minority groups have claimed the companies who receive grant awards aren’t diverse workplaces and some discriminatory behavior exists in awarding the grants.?

“It’s more borrowing and more debt,” said Thomas Brinkman, a Republican and former Ohio House member who is running for county auditor in Hamilton County, in the Plain Dealer. “We just can’t afford it. The state has to start trimming back, and there’s no better way to start than to vote no on Issue 1.”?

Matt Huffman, Ohio’s 4th district state representative, also disagrees with the extension of Third Frontier. In a story published in The Lima News, Huffman said tax cuts to business in Ohio would aid the states economy better than the Third Frontier.?

“If the idea is to give Ohio business a jumpstart, my view is let’s not take money away from them in the first place to give other Ohio businesses a jumpstart,” Huffman said in The Lima News article. “If you gave business owners a choice, they’d step back from the program, take a tax cut and spend the money the way they’d want to.”?

Kathleen Clyde, who is running for the 68th district state representative seat, said these points are inaccurate because of where the Third Frontier invests its money.?

“The focus of investments is on areas of the economy that are emerging and positioned for growth,” Clyde said. “We want to have a nationwide hold on long term jobs.”?

Oswald agrees, citing Kent Display’s development of LCD electronic skins that would be used on mobile devices.

“There are billions of these devices in the world,” Oswald said. “The market for these products is absolutely huge.”?

Clyde said the way the Third Frontier will influence the tax base through a combination of revenue streams—income tax from increased jobs, sales taxes from increased buying power and business taxes paid by emerging business—will help to recoup any debts.?

Contact public affairs reporter Darren D’Altorio at [email protected].