Ohio Gov. Bob Taft brought his tax-reform message to Demag Plastics Group on April 22, as officials of the injection press maker thanked him for the $650,000 worth of state incentives the company will use for renovations and training.
Taft stood in front of a two-platen Titan press and said ending Ohio's tangible personal property tax on machinery would help equipment manufacturers and their customers in Ohio. The Buckeye State ranks second only to California in plastics employment, with 112,000 workers in 2002, according to the Society of the Plastics Industry Inc.
``We want to keep our manufacturing base. These are the best jobs we have. These are higher-paying jobs,'' Taft told Demag Plastics Group employees on the plant floor in Strongsville. His proposal has passed the Ohio House and is being debated in the Senate. ``If everything goes well, when a company invests after July 1 in a new piece of machinery and equipment in Ohio, there won't be a tax on that investment.'' For existing equipment, the tax would be phased out over two years. The tax on inventory would be gone in 2010.
The governor's reform plan also would cut personal income tax rates by 21 percent over five years. Taft said that would help small business owners.
Demag Plastics Group is scheduled to ship the Titan press, with 2,200 tons of clamping force, to Pilot Plastics Inc., a custom molder in nearby Cuyahoga Falls, Ohio.
President Ted Jendrisak said his company will serve as a beta test site for the Strongsville-assembled Titan, which will replace other large two-platen presses. He said he plans to buy the machine - and tax reform will make it easier to justify those types of investments.
``Anything that the state can do to help manufacturers in the state of Ohio is beneficial,'' Jendrisak said after talking to Taft. ``Ohio is at a disadvantage to a lot of other states.''
Taft said surrounding states either do not have the tangible personal property tax, or levy the tax at a much lower rate.
Before touring the factory, Taft met with Brian Bishop, interim president and chief executive officer of Demag Plastics Group's North American operations, other DPG executives and local government officials. Bishop said the company supports tax reform.
Last year, amid reports Demag Plastics Group might move to South Carolina, the Ohio Department of Development awarded a $500,000 matching capital-improvements grant. Construction crews are building a second-floor training area and conference rooms above the main entrance, plus an 8,000-square-foot machine-demonstration center on the assembly floor.
Bishop said the second-floor renovations will add plenty of large windows overlooking the factory. The total construction project will cost about $2 million.
The state also kicked in a $150,000 grant for training. Also, the Cleveland Port Authority last year designated the machinery maker a foreign trade zone, which will save DPG about $600,000 in inventory taxes a year.
In addition to its position as one of the largest states for plastics processing, Ohio is a center for U.S. injection molding press manufacturing. About 1,800 people work at the Ohio operations of Demag Plastics Group, Milacron Inc. in Cincinnati and HPM in Mount Gilead.
Milacron's Chairman, President and CEO Ronald Brown said removing the machinery tax would stimulate economic growth. ``It provides a nice balance because it shifts some of the burden away from those who invest in the state, which is positive,'' he said.
In related news, Taft announced April 25 that he will try again to get voter approval of the Third Frontier Project, a bond ballot issue that would provide $500 million over seven years to support research leading to jobs. The issue will appear on the Nov. 8 ballot. Ohio voters rejected a similar bond issue in 2003. This time, state leaders have included Third Frontier in a broader, ``job creation'' initiative that also will include $1.35 billion for roads, bridges and water projects and $150 million to help prepare sites for industrial development.