D.C. Tax Follies? An Ohio Town Shrugs

By Andrew Goldstein

Washington is all agog over the idea of tax cuts, but working families in Chillicothe, Ohio--prime targets of the Democratic and Republican propaganda offensives--aren't tuning in. They're too busy coping with the economic slowdown to pay much attention to the politicians. And though people in Chillicothe would welcome a tax cut, even if its benefits tilt to the wealthy--and agree with George W. Bush that it could help nudge the economy back on track--they don't expect his plan to have much effect on their paychecks.

Chillicothe's fortunes typically mirror those of the rest of the country. When a busload of TIME journalists traveling across the country on Route 50 visited the town four years ago, its economy was booming (even though residents were wary about trusting their good fortune). Paint Street, once a wasteland of decaying brick buildings, was dotted with antique shops and boutiques. Real estate prices were soaring. Shoppers scooped up 12,000 BTU air conditioners and top-of-the-line wrought-iron patio furniture.

Fortunes changed last fall, when Kenworth Truck Co., the second largest employer in town, cut production by a third, eliminating 500 high-wage jobs. The Piketon uranium-enrichment plant announced it would cease operations; and Mead Paper, which employs 2,200, told its unions to prepare for hundreds of layoffs.

The anxiety that swept through Chillicothe after that hit the housing market first: end-of-the-year sales dropped 40%. "It was as though somebody had shut the world down and didn't let us know," says Diane Carnes, president of Scioto Valley Association of Realtors. The fear spread to the mayor's office, which, in the face of declining tax receipts, put all capital construction on hold. The potholes on Water Street won't be paved this year, and the swimming pool won't get new plumbing. It even rattled charities. For just the third time in 17 years, the local chapter of the United Way failed to meet its fund-raising goal. "The economy has basically come to a stop," says Jeff Streitenberger, owner of Personnel Solutions, the town's largest employment agency. Six months ago, 30 people a week would come into his office looking for jobs; now 70 do.

Would a tax cut help? The local businessmen say yes--extra cash would inspire folks to start buying again. But the views of their employees are more complex. Fresh off the 11 p.m.-to-7 a.m. shift at Mead, Joey Depew, 25, devours a ham-and-cheese omelet at a local luncheonette. He and his wife Christie, who delivers for Pizza Hut, have two small children and are in the process of buying their first home. "A tax cut could help pay the mortgage," says Joey, who goes on to recite by heart most of the numbers from his W-2 form. But he stresses that he doesn't want a tax cut so large that it will threaten Social Security or inflate the national debt. And he isn't concerned that wealthy taxpayers will get back much more than he will. "It just makes mathematical sense," he says. "Those who make more save more."

Less sanguine is Janet Williams, 47, a reporter for the Chillicothe Gazette. Divorced, with a son in high school and a daughter in college, Williams is struggling to stay afloat amid staggering credit-card debt. "Anything will help," she says, "but I'm afraid the people who will benefit will not be people like myself, who need it most."

Such skepticism is common in Chillicothe, but it doesn't keep people from supporting Bush's plan. Jo Ann Stauffer, an administrative assistant for the local sheriff, and her husband William, an engineer at Kenworth, would stand to save about $800 from Bush's tax cut. "I trust Bush when he says it's meant for working families," says Jo Ann. The couple has put off a trip to Cocoa Beach, Fla.--their first vacation without the kids--because of economic worries. If the tax cut comes through, Jo Ann says, "we might be able to take that trip"--as long as William keeps his job. Two weeks ago, Kenworth announced 135 more layoffs.

--By Andrew Goldstein