Three stories making news across the Midwest today:

1. Factory orders rise. Demand for automobiles and motor vehicle parts surged in July. The U.S. Commerce Department said Wednesday orders rose 9.8 percent in July, the biggest recorded jump in more than eight years. Overall, factory orders climbed 2.4 percent in July on auto demand and a jump in commercial airplane orders. The increase follows a 0.4 percent decrease in June, which had worsened fears the country was falling into a double-dip recession.

2. Chicago school considers conversion. One local school in the Chicago Public Schools district is mulling an unusual strategy in improving its performance – it’s considering the possibility of shutting itself down. On Tuesday, the school council at Wendell Smith Elementary, seven times on probation, will likely vote on whether to shut down and reopen as a charter school, according to our partner station WBEZ. It’s believed to be the first time a CPS school has held a vote on whether to shut itself down.

3. JobsOhio heads to court. A lawsuit in Ohio is challenging whether Gov. John Kasich’s privatized development corporation is eligible for exemptions from corporate regulations. Two Democrats and a liberal policy group filed the suit Tuesday, also arguing the state cannot invest “public dollars in a private entity,” according to The Columbus Dispatch. Earlier, the Ohio Supreme Court said it did not have jurisdiction in the case until it had been heard in lower courts. Tuesday’s lawsuit was filed in Franklin County Common Court.


Could a compromise be coming on SB5?

Ohio governor John Kasich asked union leaders Wednesday to put aside past differences and seek a deal on the controversial collective bargaining legislation, one that would remove a referendum on the bill from November ballots. He asked to meet with union leaders Friday.

On the possibility of a compromise, Kasich wrote a letter to leaders of We Are Ohio, an organization formed to oppose SB5, saying, “We ask you to consider this option and join us in working with determination toward a compromise for the benefit of the taxpayers we all serve.”

We Are Ohio leaders responded shortly after the release of the letter Wednesday and Kasich’s ensuing press conference, saying that lawmakers can repeal the entire bill or let the referendum settle the bill’s fate in Nov. 8 elections.

“The time to negotiate was during the legislative process, not 197 days after Senate Bill 5 was first introduced in the Ohio Senate,” Senate Democratic leader Capri Cafaro told The Columbus Dispatch, which first reported the possibility of a deal Saturday. “Unfortunately, it has taken too long for the governor and GOP leaders to acknowledge they overreached.”

Senate Bill 5 seeks to limit the collective bargaining rights of public employees, outlaw seniority as a factor in layoffs and mandate that employees pay for higher portions of health-care benefits, among other provisions.

Aug. 30 is the final day that lawmakers could remove the issue from the November ballot.


Three stories making news around the Midwest today:

1. Obama revising economic plan. Seeking a boost for a flagging economy, President Obama will “give a major speech in early September to unveil new ideas for speeding up job growth,” according to a report Wednesday from the Associated Press. The plan will likely contain tax cuts, infrastructure ideas and steps to help the unemployed, according to the report, and will go beyond the “infrastructure bank” idea the President has pitched in recent weeks that would finance construction jobs.

2. Ohio loses public employees. The number of Ohio state employees dropped by more than 1,000 in the first half of Gov. John Kasich’s first year in office, according to our partner station Ideastream. The current count is just more than 57,000, although more trimming is expected because of spending cutbacks that took effect in July under the current fiscal budget.

3. EPA awards Great Lakes funds. Federal officials announced Wednesday a list of upcoming projects that will be funded under the ongoing Great Lakes Restoration Initiative. More than $700 million has been spent or committed under the initiative under President Obama, according to the Milwaukee Journal Sentinel. “For the regional economy to thrive, we need to accelerate our efforts to comprehensively attack problems such as habitat loss, invasive species and pollution,” said Cameron Davis, the EPA’s spokesperson for the program.

 


Three stories making news across the Midwest today:

1. Burst of the consumer bubble. David Leonhardt of The New York Times has heard every conceivable explanation for the nation’s prolonged recession. But he argues in a Sunday opinion piece that the underlying cause of the stalled economy is the end of a consumer bubble that had “been decades in the making.” He makes the case that it’s time for the nation to transition to an economy not as dependent on consumer spending.

2. Liquidation nears for Borders. A Sunday deadline has passed, and no new bids for Borders Group have emerged. The Ann Arbor, Mich.-based bookseller will likely continue take bids up until its bankruptcy auction scheduled for Tuesday. On Sunday, The Wall Street Journal reported that Books-A-Million Inc., a Birmingham, Ala.-based bookstore chain could be a potential suitor.

3. Ohio governor vetoes Great Lakes water bill. A state bill that would have allowed businesses to withdraw as much as 5 million gallons of water per day from Lake Erie without a permit has been vetoed by Ohio governor John Kasich, reports our partner station Ideastream. It is the first bill he has vetoed during his term. Environmentalists – and former Republican governors – argued the bill violated terms of the Great Lakes Compact, an agreement between seven states and two Canadian provinces that governs water usage from the Great Lakes.


Three stories makings news across the Midwest today:

1) Ohio governor proposes consolidation study: The state of Ohio contains more than 3,800 local government entities, including cities, townships and villages. Ohio governor John Kasich said today he wants to appoint a committee to study whether consolidating these entities would save taxpayer money.

“It’s not going to be a commission so we can navel-gaze,” Kasich told our partner station Ideastream. “It’s going to be a commission that’s going to look at what they do around the country, what the research has shown and they’ll do their own research.”

2) Fallout from Wisconsin Supreme Court ruling. After months of wrangling, the Wisconsin Supreme Court reinstated a controversial collective bargaining law Tuesday on a 4-3 vote. The implementation of the law, which restricts public employees collective-bargaining power and requires them to contribute to pension and health-care premiums, is the least of Wisconsin’s concerns, writes Forbes.

The magazine believes the ruling has created a new crisis, a contentious and unprecedented split among the jurists. “The minority opinion further alleged that the majority was driven by political motives rather than the desire to deliver a fair and judicious opinion. In the world of the law, this is beyond huge,” Rick Ungar writes.

3) Illinois trails neighbors in manufacturing ranking. “Illinois carries world-class danger for its manufacturing industry.” Those are the words of Michael Hicks, director of Ball State’s Center for Business and Economic Research. He believes the state’s unfunded pension liabilities and higher tax burden are alarming companies within the states borders.

Although Illinois’ improved its overall ranking to 11th in the center’s annual manufacturing and logistics report card, but the state fell behind five of its six neighbors. Crain’s Chicago Business has the rankings for all the Great Lakes states.

New faces are occupying the executive offices in Michigan, Wisconsin and Ohio. Beside their party affiliation, Republicans Rick Snyder, Scott Walker and John Kasich share big problems. All are struggling to deal with big budget deficits, high unemployment and keep businesses in their states.

That’s where the similarities end. Each governor has outlined different approaches for dealing with their dilemmas. In a special report for Changing Gears, Rick Pluta of the Michigan Public Radio Network and Karen Kasler of Ohio Public Radio’s Statehouse Bureau took a look for Changing Gears at how new governors. Walker, Snyder and Kasich are spending their first days on the job.


LISTEN TO THE STORIES:

Download audio file (CGGovernors.mp3)


Ohio

Kasich becomes Ohio’s new governor with a huge responsibility – fixing an $8 billion to $10 billion  hole in the state’s $52 billion dollar two-year budget. But the one state official who doesn’t seem worried about that is Kasich himself.

“We’re going to have a balanced budget, and we’re going to have a tax cut because we need it in Ohio,” he said.

Kasich is a former Congressman and was the House budget committee chair in the late 1990s, and he calls himself the architect of the 1997 balanced federal budget. Kasich says he’ll do that in Ohio too, but he also wants to shake up state government. He referenced that in his inaugural address, saying, “Our enemy is the status quo.”

Kasich, was a managing director at the now-defunctWall Street firm Lehman Brothers, wants to replace the state department of development with a 12 member board of executives lured from private business, which will answer to him. Leading that board will be Kasich’s friend and political contributor Mark Kvamme of California-based Sequoia Capital. It provided the financing for Google, YouTube and other high-tech companies.

Kasich wants to streamline regulations on businesses, and he’s joined other Republican governors in asking the federal government for the power to cut state enrollment in Medicaid without losing federal aid. Kasich has cancelled the project to bring back passenger train service to Ohio, forfeiting a $400 million federal grant. But what seems to be getting the most attention is his desire to curb the bargaining power of unions, but that’s only partly for economic reasons.

“My personal philosophy is, I don’t like public employees striking,” Kasich said. “They’ve got good jobs, they’ve got high pay, they’ve got good benefits, a great retirement – what are they striking for?”

Union leaders, see it another way. One of them is Joe Rugola, president of the Ohio AFL-CIO, which includes the union that represents Ohio’s state workers.

“People work for a living and we expect them to be paid only a fair, honest and decent wage for what they do, so we’re going to fight back very hard,” he said.

Kasich’s budget will likely get a warm reception, sinceRepublicans control both the Ohio House and Senate. His budget doesn’t have to be delivered to the legislature till mid-March, but lawmakers say they want to see it – especially Democrats such as Rep. Bob Hagan of Youngstown.

“If he is saying in a campaign speech, and he’s saying the same thing now, then we’re looking for big cuts. We’re looking for privatization of the turnpike, privatization of the prison system. I don’t know what else he wants to do,” Hagan said.

Kasich’s quite a departure from the last few Ohio governors – he’s younger, he’s much more conservative, and he speaks off the cuff – he doesn’t use a teleprompter, and seems to blurt out whatever’s on his mind. Even Kasich calls himself “brash”, but also says he’s an optimist. And he says that’s what it will take to pull Ohio out of this economic crisis.

Wisconsin

Wisconsin has a budget deficit of a little more than $3 billion. That’s smaller than Ohio’s shortfall, but larger than Michigan’s deficit that’s pegged at something approaching $2 billion.

Wisconsin’s Walker says new taxes are out of the question. In fact, he says Wisconsin has to cut taxes to make the state more competitive. Walker has declared Wisconsin in a state of economic emergency and called in the Legislature for a special session to enact a business-friendly plan to balance the budget and attract jobs.

He says that stands as a stark contrast to Illinois, where the Legislature and Democratic Governor Pat Quinn boosted the income tax rate to balance the budget. Walker has launched a rivalry with Illinois, and says Wisconsin stands ready to poach jobs from its southern neighbor.

At a recent press conference, Walker held up an old bumper sticker produced by Wisconsin’s tourism agency.

“We’ve had a little bit of fun,” he said. “We’ve dug up a slogan from the past, ‘Escape to Wisconsin,’ which was the tourist slogan back in the 80s, and we’ve adapted as the message we’re very clearly sending to employers in the state of Illinois.”

Walker says Wisconsin businesses can look forward to property tax cuts, incentives for medical savings accounts that could help control the costs of health coverage, and new limits on lawsuits. The November election that swept Walker into office also resulted in GOP majorities in the legislature.

Walker said their success should be measured against his campaign promise to create a quarter of a million new jobs during his first term.

Timothy Bartick of the W.E. Upjohn Institute for Employment Research says Walker may be able to keep that promise – but he’ll also have to get lucky.

“What he’s depending on is a vigorous national recovery over the next four years plus some rebound in manufacturing, if he does that, he can achieve that,” he said.

Bartick says there is a lot that Walker and other governors cannot control when it comes to their states’ economies.

“It may not be due to anything he does. It may be due to the national economy,” he said. “But, I’m sure like all governors, unfortunately you get blamed for the national economy knocking you down and you get credit for the national economy recovering.”

Michigan

A recovery would also be welcome in Michigan, where the unemployment rate is nearly 12 percent. Small-but-steady downticks in the jobless rate have more to do with people giving up and leaving the workforce than new hiring. Discouraged jobseekers and involuntary part-timers bring Michigan’s rate of unemployment and under-employment to 21-point-three percent.

Michigan’s new Republican governor is Rick Snyder. The retired venture capitalist and former Gateway computers C.E.O. has promised to “reinvent Michigan.” And he says that includes making the Midwest region more competitive.

“We’re in this together. This isn’t about creating winners and losers in the Midwest,” he said. “This about the Midwest hopefully standing up in a common way to say, ‘Hey, we are world-class. We are a huge part of the world economy and we are going to take our place in that with much more innovation and cooperation and results.’”

Snyder wants to eliminate Michigan’s complicated business tax and replace it with a flat-rate corporate income tax. Snyder says he also wants to focus on helping entrepreneurs regardless of the business they’re in, and create a climate that fosters growth in new industries, and not just the traditional automotive sector.

He can’t ignore manufacturing, either – it is still the dominant sector in his state’s economy.

Snyder has Republican majorities in the Legislature to work with, but many GOP lawmakers have their own ideas about how to restore Michigan’s economy. That means Snyder, like his counterparts in Wisconsin and Ohio, may not always get everything they want as they try to come up with their strategies to turn around the region’s economy.