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Monday, July 28, 2008

Wall Street Sees Ohio's Bond Rating As Stable: More 'Third Frontier' Paper Headed To Financial Markets

COLUMBUS (TDB) -- So far, the entire project has created less than 6,000 jobs in six years. There has not yet been a home run. Now the state plans to sell another $40 million worth of bonds in early August to finance Third Frontier projects that are supposed to push and shove Ohio's economy into a high-tech future. Fitch Ratings graded the bonds "AA+" today, which means they are going to market considered solid investments. And it praised Democratic Gov. Ted Strickland and the GOP-controlled legislature for steady financial management in a time when the state economy is tanking. The Third Frontier is former Gov. Bob Taft's $500 million brainchild -- since 2002 it has created about 5,600 jobs.

Meanwhile, Wall Street's take on Ohio's economy, as delivered by Fitch, is quite gloomy. It did note the state's top political leadership has so far remained "conservative in response to economic weakening" -- meaning Strickland & Co. have been penny pinching and prudent managers of Ohio's budget. Still, there are dark clouds and Ohio has not turned around:

"Ohio's economic performance remains weak, with persistent declines in manufacturing now joined by decelerating service sector employment and a continued deep housing market downturn. Since the last recession, employment growth has been limited, rising 0.5% from 2004 to 2007, compared to U.S. growth of 5.9% over the same period. Total employment in 2007 fell 0.2% year-over-year, compared to a 1.1% increase nationwide. June employment is down 0.3% year-over-year, dragged down by job losses in manufacturing and construction, while services growth remains weak. Personal income, though growing, continues to underperform comparable national figures: Personal income rose 4.7% in Ohio in 2007 vs. 6.2% nationally; first quarter 2008 personal income rose 3% vs. 4.8% nationally."

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