Are we economically distressed?

Published 10:28 am Wednesday, July 28, 2010

In March, the U.S. Department of Treasury announced a $600 million expansion of the federal Housing Finance Agency Hardest-Hit Fund (HHF), a program launched by the Obama Administration to provide financial assistance to states where a combination of high unemployment and reduced home values has led to spikes in foreclosures and left high numbers of people living in economic distress.

Ohio was awarded $172 million.

The Ohio Housing Finance Agency (OHFA), which is responsible for allocating these funds, has classified 51 Ohio counties as areas of concentrated economic distress.

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OHFA estimates that 85 percent of the HHF dollars will be distributed to these targeted counties, and eligible homeowners in these areas will receive up to $15,000 in mortgage assistance compared to $12,000 for homeowners in non-target counties.

What counties do you think were included? How about Vinton County, which is an economically distressed area according to the Appalachian Regional Commission, or Pickaway County, which has lost much of its manufacturing base? Or, Athens County, which was recently highlighted in a report by Dateline NBC about poverty in America? Or, maybe Scioto County, which last summer became the first county in Ohio to be placed in fiscal emergency by state officials? If you guessed any of those places, you are wrong.

In the 17th Senate District, Pickaway, Ross, Vinton, Jackson, Gallia and Lawrence counties all did not qualify as economically distressed areas under the OHFA guidelines. However, Delaware County, which is one of the fastest growing regions in the nation, did.

Last week, OHFA came before the Controlling Board to request approval of a $1,020,222 increase in their appropriation authority to hire 25 new employees to administer the HHF program. I asked agency officials why unemployment was not used as a primary factor in determining areas of concentrated economic distress.

I was told that the jobless rate in each county was not given as much weight because some urban areas would not have qualified for HHF funds.

Based on this answer, it appears that in order to get the results they wanted, OHFA chose data that favored urban counties and excluded many rural areas.

This decision follows an unsettling pattern by the Strickland Administration that has emphasized investment in urban areas over our state’s rural communities. We saw this last year when the Governor introduced an education budget that would have created large disparities in funding between high-wealth and low-wealth schools.

It was also evident with many of the policy proposals in the Governor’s State of the State address in February and with a number of the decisions made by the Department of Development over the past few years.

In addition, the Governor voiced support for a report called Restoring Prosperity: Transforming Ohio’s Communities for the Next Economy, which was compiled by the Greater Ohio Policy Center and the Brookings Institution Metropolitan Policy Program and unveiled during a panel discussion at the Statehouse in February.

The main thrust of the report is that for Ohio to achieve economic success in the future, we must invest in our metropolitan areas. My belief is that state leaders should be pursuing economic opportunities wherever they might be instead of working with a bias toward urban development.

Similarly, I would have preferred that OHFA officials target the whole state with HFF funds instead of manipulating the data in favor of Ohio’s urban counties. For this reason, I voted no on OHFA’s Controlling Board request.

I could not explain to someone in the 17th District why Delaware County and other wealthier counties in Ohio were determined to be in economic distress, while many of the counties in our region were not. I asked OHFA if they would consider distributing the money another way, such as by Census tracts, and they refused.

On a very basic level, I find OHFA’s actions insulting to our part of the state. If your neighbor throws a party and invites everyone in the neighborhood except you, you are being excluded.

OHFA has chosen to target HFF funds to the majority of the counties in Ohio while excluding a number of our state’s economically distressed rural counties.

If you live in Pickaway, Ross, Vinton, Jackson, Gallia or Lawrence County, OHFA officials will say you are eligible to participate in the HFF program, but we know these areas will receive the leftovers after the agency chooses its priorities.

John A. Carey is a member of the Ohio Senate and represents the 17th District. He can be reached at Ohio Senate, Statehouse, Columbus, Ohio 43215 or by phone at (614) 466-8156.