Ethics & Public Policy Center

Obama’s Plan for Ohio

Published in National Review Online on October 8, 2012



Suburbanites of Ohio, listen up. As swing voters in the ultimate swing state, you will have an outsized impact on this election. President Obama has pledged to govern in the interests of middle-class voters like you. With so much resting on your shoulders, that is a promise you should scrutinize with care. What exactly are Obama’s plans for Ohio’s suburban communities? The answer may shock you.

President Obama aims to help Ohio’s Democrats bail out your state’s struggling cities by forcibly transferring suburban tax money to urban treasuries. It’s a bold plan to redistribute the wealth of Ohio’s suburbs. It also calls for halting the sort of highway and commercial development that brings jobs and taxes to the suburbs. The shorthand for this is “regionalism.” Should Obama be reelected, a redistributive city-based regionalist agenda will likely be imposed on Ohio’s suburbs. The best way to envision the future of suburban Ohio in a second Obama term is to see how close this regionalist agenda came to enactment in Obama’s first four years.

Around 2006, Cleveland-area planners began floating proposals to grant the city access to taxes collected by surrounding suburbs. Their model was the Minneapolis-St. Paul region, where the Minnesota state legislature forces reluctant suburbanites to “share” their tax revenue with the cities. Cleveland’s regionalists also touted Portland, Ore., for its metropolitan planning agency. Portland’s planning commission has laid down an “urban growth boundary” that forbids highway or commercial development around the edges of the metropolitan area. Regionalists blame the plight of the cities on the loss of tax base to the suburbs.Blocking new highways that could ease commutes or serve as gateways to newly constructed suburbs is designed both to prevent further exodus and to press current suburbanites back toward the cities.This is what Obama was getting at in that recently released 2007 video where he said, “We don’t need to build more highways out in the suburbs.”

Redistributive tax sharing and urban-growth boundaries are rare and deeply controversial, in part because they are by design anti-suburban policies. They effectively permit big cities to gut the political and economic independence of their surrounding municipalities. The regionalist Left, President Obama included, wants to see these policies exported to every metropolitan area in America. And Cleveland was on board with the plan.

By 2007, the Cleveland Plain Dealer was touting Minnesota-style tax sharing, while suggesting that the humble “metropolitan planning organizations” (MPOs) that have long divvied out federal transportation funding might be converted into Portland-style regional planning commissions with the power to block suburban development. With these changes, Cleveland’s regionalists aimed either to prevent would-be suburbanites from moving out of the city or to capture a chunk of tax money from suburbanites who had already left.

In October 2007, Cleveland’s new regionalists sprang into action. The Northeast Ohio Areawide Coordinating Agency (NOACA), the five-county MPO that channels federal transportation funding to the region, took an unprecedented step. Using powers conferred by NOACA’s weighted voting system, members from Cleveland and its poorer, inner-ring suburbs threatened to veto the construction of a highway interchange in Avon, a fast-growing, affluent suburb in neighboring Lorain County, unless Avon agreed to “share” taxes from businesses that moved near the new road.

Outraged board members from outlying counties felt strong-armed by Cleveland and the inner-ring suburbs of Cuyahoga County. Avon mayor Jim Smith said his supposedly voluntary agreement to “share” the town’s taxes with Cleveland felt more like the action of a hostage with a gun at his head. Cleveland’s regionalists, on the other hand, were delighted. They saw the Avon deal as a first big step for their ambitious new agenda to seize effective political and economic control of area suburbs.

The Democratic electoral sweep of 2008 quickly gave Cleveland’s regionalists the opening they were looking for. As Obama and the national Democrats embarked on their own transformative agenda, Democrats captured the Ohio House of Representatives for the first time in 14 years. The new House speaker, Armond Budish, a Democrat–the first speaker from Northeast Ohio in more than 70 years–pledged to enact a bold regionalist agenda across the state. With Democrat Ted Strickland in the governor’s mansion, prospects looked good for Portland-style planning agencies and a state-imposed tax-sharing program. Echoing Obama’s then-chief of staff, Rahm Emanuel, Cleveland’s regionalists promised not to “waste” the financial crisis. They would seize on it instead to grant Cleveland access to the tax base of surrounding suburbs.

Mid-2009 saw the high tide of regionalism in Ohio. A group of mayors and city planners had established the Regional Prosperity Initiative (RPI) for 16 counties in Northeast Ohio. The RPI was floating proposals for regional tax-base sharing and consolidation of the four Northeast Ohio MPOs into a single regional planning agency. Consolidation would grant Cleveland and a few other urban areas the power to clamp down on development in suburbs across the region.

At this point, the anti-suburban agenda of Cleveland’s regionalists began to stir opposition. Alex Kelemen, a businessman and a soon-to-be member of Hudson’s city council, led the charge, often locked in debate with Hudson’s mayor, William Currin, a leader of the regionalist forces. Kelemen pointed out that under the RPI’s tax-sharing plan, a small municipality could be forced to divert local voter-approved education funding to a large city in a different county. Not only would that be undemocratic, it would make school levies nearly impossible to pass. Kelemen decried the RPI’s regionalist plans as the product of “a Cleveland-centered bureaucracy with contempt for growing suburbs and ignorance of business.”

In Democrat-dominated Columbus, objections by Kelemen and a growing number of suburban mayors across Northeast Ohio carried little weight. Yet by late 2010, the tide had turned. Overreach by Obama and congressional Democrats on health care and the stimulus package had stirred up the tea-party rebellion. Although Ohio’s Democrats held majorities capable of imposing regional tax-base sharing and urban-dominated planning councils, they held back, sensing the conservative tide in the upcoming midterm election.

A massive corruption scandal just then breaking in Cleveland-centric Cuyahoga County also stymied the regionalists’ plans. The idea of forcing suburban taxpayers to bail out a corrupt and mismanaged Cuyahoga County government in an election year was a nonstarter.

With President Obama’s help, however, that was far from the end of the line for Ohio’s regionalist agenda. Deeply committed to redistributive regionalism, in 2009 the Obama administration hailed Ohio’s RPI proposals as a national model. A year later, Northeast Ohio received a coveted “regional planning grant” under Obama’s little-known but potentially revolutionary Sustainable Communities Initiative. Despite a Republican resurgence in Ohio and victory for the Republican gubernatorial candidate, John Kasich, in 2010, the regionalists in Cleveland and Cuyahoga County would get a new shot at transforming the state.

The same crowd that ran NOACA and the RPI now took on leadership roles in the group created by Obama’s federal grant, the Northeast Ohio Sustainable Communities Consortium (NEOSCC). That gave Cleveland’s regionalists federal recognition, and potenti
ally the ability to place federal-aid leverage behind their policy preferences.

NEOSCC has seen factional struggles between its bolder leftists and its more cautious political hands. The more progressive faction floats proposals like Portland-style urban-growth boundaries. Savvier regionalists understand that a piecemeal approach may quietly achieve the same end. If NEOSCC manages to merge the four metropolitan planning organizations in the 16-county region, it can then create a de facto growth boundary without formally declaring one. With weighted voting for cities, the new planning commission could block suburban development projects on a case-by-case basis.

Either tactic would deprive Ohio of jobs. For example, the state was thrilled in 2009 when a large new Barbasol shaving-cream plant located in the Cleveland exurb of Ashland, Ohio, rather than Syracuse, N.Y. Ashland extended rail, sewer, and road infrastructure out to semi-rural land to service the plant site. Urban-based “smart growth” planners would have forbidden all that as “sprawl,” and Barbasol’s new plant would now be in New York instead of Ohio.

NEOSCC is due to issue its final report in 2013, and that could spell trouble for suburban Ohio. Leaders of NEOSCC, as well as spokesmen for the RPI (often the same individuals), can be expected to press their agenda on the Ohio state legislature in 2013, particularly if Obama and the Democrats do well in 2012. A safely reelected Obama could put considerable regulatory muscle behind the group’s findings. Back in 2009, Secretary of Housing and Urban Development Shaun Donovan floated the idea of doling out federal aid in such a way as to advance the goals of Northeast Ohio’s regionalists. All Obama would have to do is condition Ohio’s receipt of various federal-aid programs on the state’s adherence to NEOSCC’s recommendations. It’s a tactic he’s used on other issues.

That only begins to describe Obama’s efforts on behalf of the regionalist agenda in Ohio. A group called Building One America (BOA) has attempted to draw politicians from inner-ring suburbs across Ohio into an alliance with city-based legislators on regionalist issues. BOA’s goal is to create in Columbus a political coalition capable of forcing tax-base sharing and large-scale regional planning on Ohio’s suburbs. BOA is run by some of the same community organizers who trained and worked with Barack Obama in his early Chicago days. Those left-leaning activists see regional tax-base sharing as the antidote to what they characterize as the greed of America’s suburbanites.

President Obama has lent BOA’s anti-suburban efforts the full prestige and resources of his administration. The White House hosted a BOA-organized conference attended by numerous Ohio politicians, for example, in July 2011. The assembled Ohio politicos heard speakers tout the advantages of Portland’s planning system as well as those of regional tax-base sharing in Minnesota. Obama’s ties to the regionalist movement run deep (as I show in my book on the topic, Spreading the Wealth). Reelect Obama and he’s sure to push for regionalism in Ohio and beyond.

In short, if President Obama is still around to help them, Ohio’s regionalists will get another bite at the apple in 2013. Tax sharing and large-scale regional planning were close to passage in 2009. With Obama backing up NEOSCC by putting strings on federal aid, and the White House supporting BOA’s coalition-building efforts in Columbus, prospects for a regionalist triumph in Ohio would be good. If Obama was in the White House and a Democrat took Ohio’s governorship in 2014, a regionalist revolution in the state would have to be reckoned more likely than not.

Be assured that if Ohio’s legislature sets up a regional tax-base-sharing scheme, it would transform the state. Legislation enabling and incentivizing the practice would surely be seized on by interests well beyond Northeast Ohio. The regionalist agenda may have come out of Cleveland, but every suburbanite in Ohio would feel the effects of its ratification by the state government.

Ohio’s regionalists will tell you that their tax-base-sharing plan is strictly voluntary. Don’t believe it. Their goal is to have Washington and Columbus create incentives and disincentives that leave suburbanites little choice but to sign on. Tax-base sharing in Ohio would be no more “voluntary” than was the agreement by Avon’s Mayor Smith to tax sharing in 2009.

So listen up, suburban Ohioans. When it comes to protecting your middle-class communities, President Obama talks a good game. Unfortunately, his well-laid anti-suburban plans tell a different story. The president and his fellow Democrats are coming for your tax money. Redistribution is the goal, and suburban Ohio is target No. 1. More broadly, Obama’sregionalist agenda is an attack on the values and way of life of suburban America. How odd it would be were Ohio’s suburban taxpayers to hand Obama the key to their own undoing. Forewarned is forearmed. Suburban Ohioans, it’s up to you.

Stanley Kurtz is a senior fellow at the Ethics and Public Policy Center. This piece is adapted from his new book, Spreading the Wealth: How Obama Is Robbing the Suburbs to Pay for the Cities.

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