Complete Story


Big Changes in Effect After 2008 Elections

Dramtic Election Results Could Change Policy Directions for ASCs on a National and State Level

State Attorney General
Ballot Issues
State Legislature


When Bill Clinton ran for President in 1992, a simple phrase tacked onto the wall at his campaign headquarters served as a constant reminder of what the campaign was all about: "It's the economy, stupid!"  It was the economy again in 2008, and Democratic candidate Barack Obama had an even simpler slogan, "Change", to carry his campaign to victory. With RealClearPolitics poll average showing 85% of Americans viewing the country as on the "wrong track", this was clearly the year for change, and Senator Obama's strategy paid dividends throughout many races in Ohio.


While deeper analysis continues, it appears Senator Obama was helped by two groups campaigns have unsuccessfully sought to tap into for years: the youth vote, and new voters. Although conflicting reports show the youth vote (those voters age 18-29) may have only been 1 or 2 percentage points higher than in 2004, other analyses give it more meaningful impact. New voters (those who had not previously voted, regardless of age) also turned out tremendously, with over 70% of these voters pulling the lever for Senator Obama.


In Ohio and elsewhere, all Democratic races, not just the Obama campaign, saw the benefits of Democratic National Committee Chairman Howard Dean's "50-state strategy." No longer content to only campaign on the coasts and in urban areas, when Dean took over the day-to-day operations of the Democratic Party in 2005 he sought to make Democratic candidates competitive across the country, beginning with local races and a strong grassroots push. In Ohio this has seen every major city being represented by a Democratic Mayor, over a dozen state legislative seats going to the Democrats, a near sweep of statewide elected officials in 2006 and now having Ohio vote for Senator Obama for President with nearly 52% of the vote.


The first "down-ticket" race to reap the benefit of this Democratic tide was the lone statewide race on the ballot: Attorney General. With Marc Dann resigning early in his first term, Democratic State Treasurer Richard Cordray faced former US Attorney D. Michael Crites. The race was never close, as Crites lagged Cordray in fundraising and campaign resources. With Cordray being sworn in at his new post in early January, Governor Ted Strickland will appoint his replacement. Early media speculation has centered on Cincinnati Mayor Mark Mallory or Columbus City Councilman Kevin Boyce as possible picks. That is not to say he will pick one of those two: when Strickland faced the decision to replace Attorney General Dann on very short notice, Ohio State law school Dean Nancy Rogers was a dark horse candidate, not appearing on any of the media "short lists." Whomever Strickland chooses, you can rest assured it will be someone he trusts, sees as capable of filling the role, and will be able to provide balance to the statewide Democratic ticket Strickland will lead in two years. With two other statewide Democratic officials being central Ohioans, Strickland may see a need and an opportunity to add geographic and cultural balance to the statewide ticket with this pick.


There were no surprises when it came to the statewide ballot issues this year. Polls suggested Issues 1, 2, 3 and 5 would pass, with Issue 6 failing; that is precisely what result the voters gave on Tuesday. Issue 1 changes the deadline for filing ballot initiatives. Passage of this initiative should bring about two major benefits. The first, with issues having to qualify for the ballot earlier (125 days before an election, rather than the current 90-day requirement), Ohioans will see less confusing ballots in the future. No longer will there be situations where issues are printed on a ballot but ultimately do not qualify.


Issue 2 continues the successful CleanOhio program, allowing the state to issue bonds to cover the expense of cleaning up brownfields and other waste sites, allowing them to be used for economic redevelopment in blighted areas of Ohio. This issue passed overwhelmingly by 69%.


Issue 3 holds more meaning for those of you in northern Ohio. A key component of the Great Lakes Compact - designed to insure a major source of Ohioans water supply is not diverted to the American Southwest or other arid parts of the country - became a sticking point in the Senate, where several members raised concerns it may trump the water rights of homeowners in Ohio. Issue 3 was designed to clarify that a property owner in the Great Lakes watershed continues to have a right to reasonably use the groundwater found underneath their property, and no interstate compact can subvert that right. This issue also passed overwhelmingly by over 71%.


Issues 5 and 6 did not suffer for lack of organized opposition as Issues 1, 2, and 3, but their outcomes were just as overwhelming. Issue 5, a referendum on recent interest rate caps "payday lenders" can charge, was drafted in such a way that voting "no" meant the law is overturned and the caps are lifted. A "yes" vote would have kept the cap on interest rates at 28%. Despite this confusion and the lion's share of paid media being spent on the "no" side, this issue was passed by 63% of the voters, with only one county voting against it.


Issue 6 would have brought a single casino to the Wilmington area in Clinton County, and backers promoted the jobs it would bring with the proceeds to be spread amongst all 88 counties. In addition to the traditional anti-gambling opponents, the corporate parent of a casino located in southeast Indiana, just over the Ohio border and not far from the proposed site, spent millions of dollars to defeat the issue, which ultimately was rejected by nearly 63% of the electorate. Proponents immediately pledged to come back next year with a revised proposal containing more casinos in more areas of the state. Opponents read the results as yet another rejection proving that "Ohioans don't want gambling."  We note this because the idea of gambling is not going away. Ohio faces a real budget crunch. The state operating budget next year will be roughly the size of the budget from seven years ago. At this point we are not discussing slow growth budgets or even no-growth budgets. We are discussing budgets smaller in actual dollars than the year before. Given elected officials reluctance to pass any tax increases when they have to face re-election, gambling will constantly return as a potential revenue source for the state until the budget situation improves, and it cannot be dismissed out of hand.


Changes in Washington may bring the most far-reaching impact on you and your business operations. Democrats increased their majorities in both the House and Senate, picking up 18 seats in the House and six in the Senate. Eight House races and three Senate races remain undecided as of this writing. Despite the Democratic tide and the huge gains Democrats made in Congress, if Republicans had to point to a bright spot this election, this is where they would point. Privately, Democratic leaders assessed they would gain 25 seats or more in the House, and stood a very real chance of reaching 60 seats in the Senate. As it stands, they will have 254 Democrats and 173 Republicans in the House, with 57 Democrats and 40 Republicans in the Senate. Without gaining the 60-vote majority they sought in the Senate, Republicans can still serve as a check on the new Administration, thanks to obscure Senate rules allowing very little business to get done without 60 votes rather than a simple majority of 50. Although they do not have a blanket "filibuster-proof" majority, Democrats will be able to reach this 60-vote threshold on an issue-by-issue basis as moderate Republicans will cross the aisle to vote with the Democrats on certain issues.


In many ways 2006 finally caught up to Ohio this year. Two years ago the nation saw control of both Houses of Congress switch to the Democrats, but this swing state only saw one seat switch from Red to Blue. This year Ohio will send two and possibly three more Democrats than before to Washington.


The upset of the election was in the Cincinnati-based 1st Congressional District, where Democratic State Representative Steve Driehaus defeated 14-year incumbent Steve Chabot. Ohio's 1st district held the distinction of having more African-American voters than any other Republican-held seat in the nation, and was a key prize eyed by the Democrats. With 71% of eligible voters in Hamilton County casting a ballot, this reliably Republican county voted for Obama by 52%. Congressman-elect Driehaus' success can be directly attributed to Obama's.


In central Ohio, State Senator Steve Stivers lost a narrow lead over Franklin County Commissioner Mary Jo Kilroy in their contest to replace retiring Rep. Deborah Pryce for the 15th Congressional District.


Congressional power is acquired through seniority. The longer you have been in office, the better your committee assignments, the more money you are able to return to your state, and the more effective a legislator you can become. Ohio faces an unprecedented loss of seniority in our state delegation. Just a few short years ago, Ohio's delegation was ranked second or third in terms of Congressional power. Included among our members were several appropriations subcommittee chairmen, two members of the Congressional leadership team, several committee chairmen and subcommittee chairmen. Since 2005, 12 of the 20 members of Ohio's delegation are new to their office. Generally only one or two seats switch in a cycle. Such turnover normally would take a decade or more. While Ohio retains several members in a position to wield influence, notably northwest Ohio's Marcy Kaptur - the dean of the Ohio delegation - our loss of clout in our nation's capital cannot be understated.


Turning to the Statehouse, the largest change is in the House of Representatives. After 14 years in the minority, the Democratic caucus will once again control the reins in the people's chamber. After gaining a net seven new seats two years ago, Democrats repeated that accomplishment this year, winning five to seven new seats in 2008. (Two races are still undecided and a third may also be headed for a recount). While the balance of power in the Senate remains unchanged - with Republicans outnumbering Democrats by a 21-12 margin, the House has flipped entirely. Entering the elections, Republicans held a 53-46 majority in the House. Depending on the outcome of the remaining races, Democrats could enter the 128th General Assembly by the same majority as the Republicans had: 53 seats to 46 seats.


In addition to the "50-state strategy" and the coattails of a popular candidate in President-Elect Obama, credit for the House of Representatives races also must go to Governor Ted Strickland. Governor Strickland made retaking the House of Representatives the Democrats highest statewide priority this year, and he delivered. It began when he successfully persuaded backers of a statewide sick-leave issue to pull their petitions (and their campaign funds) from the ballot. Within weeks of this happening, campaign money that had been earmarked for a ballot issue became available to support Democratic candidates in close races. Strickland's next move was to peel away two Republican candidates. In the Cincinnati area, three-term Representative Jim Raussen withdrew from the race and resigned his seat to take a job with the administration. Although Virgil Lovitt, his replacement on the ballot, ran a valiant campaign, Democrat Connie Pillich prevailed in this race. In the second race, Cleveland-area Senator Bob Spada withdrew from a State House race and subsequently took an appointment from the Governor to the State Employment Relations Board. Spada was replaced on the ballot by State School Board member Colleen Grady, but as in Cincinnati, the Democratic candidate, Matt Patten, scored a narrow victory.


In addition to Raussen and Spada, other notable members not returning to the General Assembly next year include former Senate President Pro Tempore Jeff Jacobson of Vandalia, Senator Steve Austria who is moving on to Congress, long-time Assignment of Benefits champion Senator Larry Mumper, Jon Peterson of Delaware, former Health Committee Chair John White, former Minority Leader Chris Redfern, Health Committee Vice Chairman Dr. Shawn Webster and Finance Committee member and House Majority Whip Michelle Schneider.


The remainder of the year may bring the lamest of "lame-duck" sessions. With party control of the House changing, members leaving early for other jobs, and a lack of pressing issues, the fall session could be short and sweet. Earlier speculation was that majority Republicans would want to push through an elections-reform bill, prevailing wage law changes, and other more partisan agenda items, particularly if the House would not be in Republican hands next year. Reality seems to have trumped this speculation, as it often does, with the realization that any legislation passed in the lame-duck session must still be signed by Governor Strickland, who knows he will have one chamber on his side beginning in January.


The 128th General Assembly will not be an easy one, and the new Democratic leadership team will need to hit the ground running. Ohio faces a budget deficit that by some estimates could rise as high as several billion dollars. Dealing with this in the House will be a new leadership team, a whole new slate of committee chairmen, and up to 1/3 of the members being new. This budget, even more than the previous one, will influence Governor Strickland's list of accomplishments as he stands for re-election in 2010. In many respects, you can consider his re-election campaign to have begun last Wednesday (unfortunately, politics doesn't stop). Expect the Governor to introduce a lean, even scaled-back budget without an across-the-board tax increase. Instead, the bill may include other "revenue enhancements" like fee hikes, licensing revenue, and other more target revenue streams. When all is said and done, despite their assurances now, the Governor and the Legislature may see a need for some sort of tax increase. This would not be a huge percentage, and most likely would not be in the sales or income tax where voters would feel the immediate impact. More likely categories are the commercial activities tax or other business taxes paid by you and other business owners in this state. While no one likes a tax increase, and by no means are we suggesting it is a foregone conclusion, the fact of the matter remains Ohio faces a very real budget deficit, with actual dollars appropriated returning to levels of six or seven years ago. Our elected leaders may be unwilling to cut services to the level necessary to balance a budget that lean.


One other legislative wrinkle to keep in mind: the Joint Committee on Agency Rule review. Counting on JCARR as a final backstop to onerous agency regulations just got a little more difficult. This committee, made up of 10 members, will now be evenly split among Democrats and Republicans, with a Democratic House member chairing for 2009 and a Republican Senator chairing for 2010. Particularly during 2009, Democrats will be less willing to buck their party's Governor than Republicans, meaning it will be even more important to make changes to rules at the agency level.


Although every new Senator has experience in the House, and some new House members have experience in the Senate, there will 40 new people in their legislative seats in January. Grassroots advocacy will be important; establishing and maintaining relationships with businesses in their communities is the only way legislators will know how their policies are affecting Ohioans. That process starts with you, and it cannot wait until members are sworn in to begin.  Attached to this document is an up-to-date listing of members for the 128th General Assembly.  Please let us know if Strategic Health Care can help you set up a meeting with your new legislator.


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