By Samuel P. Jacobs
CHILLICOTHE, Ohio (Reuters) - Last week, President Barack Obama launched his re-election campaign in the university town of Columbus, Ohio. His hopes for a second term, however, likely lie not with the student-heavy crowd but in places like this small city, an hour's drive south.
Anchored by a paper mill in the foothills of Appalachia, Chillicothe has a knack for picking presidents. It is the seat of Ross County, which has sided with the winning presidential candidate in all but four elections since 1908.
One of the exceptions was in 2008, when the county backed Republican John McCain. Chillicothe, however, went for Obama.
Both parties see politically divided Ohio as perhaps the decisive state in the presidential race between Obama and Republican Mitt Romney. So Chillicothe and neighboring towns will have an outsized say in determining the future occupant of the Oval Office.
In November, the Obama campaign chose this city of 20,000 as the site of his first campaign office in Ohio.
On a recent day the office was nearly empty. As the November 6 election nears, it will fill with workers tasked with persuading this outpost of Democratic voters, surrounded by conservative neighbors, to vote for Obama again.
How Chillicothe feels about the economy will go a long way toward determining Obama's fate in Ohio, where recent polls indicate Obama and Romney are virtually tied.
While Ohio's unemployment rate has dipped below the national average of 8.1 percent, Ross County's remains above it, ending March at 9.3 percent.
During 2009, Obama's first year in office, nearly 500 Chillicothe homeowners faced foreclosure, an all-time high.
But there are hints of recovery in Chillicothe.
"Time may be right to sell home," read a recent headline in the local newspaper, noting a jump in sale prices.
Home to manufacturing plants, a large local healthcare provider, two state prisons and long stretches of retail stores, the Chillicothe area has a broader employment base than many other Ohio communities that have been struck by the recession.
Even when jobs are hard to come by, Chillicothe knows when work is being done. The paper plant's smoke stack, which looms over town, sends a strong smell of sulfur into the air.
Locals call it "the smell of money."
'MAD AT OBAMA'
Far from Democratic strongholds such as Cleveland in northeast Ohio, this working-class, mostly white community is not particularly friendly terrain for Obama.
It has not been since well before he took office. In the 2008 primary, nearly three times as many Ross County voters turned out for Obama's Democratic rival, Hillary Clinton.
Susie Jones, 66, who voted for Obama in 2008 and plans to vote for him again this year, opened a gift shop on Main Street five years ago. She said Obama's 3 1/2 years in office have not improved his standing with Chillicothe residents.
"A lot of people are mad at Obama. They walk into the store and just say, ‘Oh, Obama,'" Jones said with mock disgust. "They blame everything on him. I am amazed at the extent of the dislike for him, so I just keep my mouth shut."
A grandmother who has lived in Chillicothe for 37 years, Jones's weather-vane voting record helps explain how her home has become a bellwether for presidential politics.
In the 1990s, Jones said she supported Democrat Bill Clinton. In the next decade, she said, she twice voted for Republican George W. Bush.
Now she calls herself an "Obama fan," having parted with the Republican Party over social issues and the environment.
OBAMA'S EARLY EDGE
As much as Obama needs to do well here, Romney does, too.
No Republican has won the White House without winning Ohio. With Obama poised to remain strong in urban areas, Romney will need to improve upon McCain's showing in places such as Ross County.
Judging from Ohio's March 6 Republican primary, Romney may have problems improving on McCain's result. Ross County looks little like the suburbs where Romney did well in his party's primary. After a visit here in March, conservative Republican Rick Santorum beat Romney handily.
Republicans acknowledge that Romney trails Obama when it comes to organizing voters throughout Ohio.
"There is no doubt their campaign is ahead of us," said Kirsten Kukowski, spokeswoman for the Republican National Committee.
The RNC hopes to benefit from Republican John Kasich's successful campaign for Ohio governor in 2010.
In a poll released by Quinnipiac University on Thursday, Obama's lead over Romney was 1 point, within the poll's margin of error.
That was before Obama announced his support this week for same-sex marriage, which Ipsos pollster Chris Jackson said could turn off some Democratic groups such as the working-class white voters in Chillicothe.
A REPUBLICAN MAYOR
In 2008, Obama beat McCain by 311 votes out of the 9,989 cast in Chillicothe, while losing Ross County by 2,200 votes.
Two years later, Ted Strickland, a Democrat, carried Ross County by 700 votes over Kasich, a Republican.
Notably, in 2010, Ross County voted in favor of a state proposal to "preserve the freedom of Ohioans to choose their health care," seen as a symbolic rebuke to the cornerstone of Obama's legislative agenda.
In November, Chillicothe elected a Republican mayor for the first time in 27 years - a good omen, local Republicans say.
The new mayor, Jack Everson, 57, a manufacturing consultant, is fluent in the arguments of Obama's harshest critics.
"I was hoping Obama would win just so America would get a taste of what America would look like as a socialist state," Everson said.
Armed with a pamphlet touting Obama's jobs record, Kathryn River has canvassed the city, trying to combat views such as her mayor's.
"We're far away from the big cities and big government money," said River, 25, who works at her parents' restaurant. "We need laws and people in place to make life easier for us."
NO ‘FUZZY FEELING'
Romney's most recent stop in Ohio included a visit to a factory in Cleveland. He has not visited Chillicothe.
Clinton came here twice during his presidency. Bush hosted a rally in 2004. Obama delivered a speech from the courthouse steps a few weeks before the 2008 election. McCain came, too.
In Chillicothe, the former Massachusetts governor is a distant figure.
"I don't know that much about Romney," said Jim Doersam, 70, a Republican who runs Petron Oil, a fuel provider in southern Ohio. "I don't have that fuzzy feeling about him at this point."
With the economy struggling, Democrats are working to prevent Romney from building up goodwill in the area.
Strickland, an Obama campaign co-chair who represented parts of Ross County while in Congress, said that Romney's personal fortune, which has included millions placed in tax-friendly foreign banks, put the former private equity executive a world apart from blue-collar Ohio.
"It's a long way from Chillicothe to the Cayman Islands," he said.
(Additional reporting by Deborah Charles; Editing by David Lindsey; Desking by Vicki Allen)