Getting down to business
Oregon Business asked
the two leading gubernatorial candidates for their positions on
topics important to business such as economic development,
health care costs, education and spending limits. While many of
their goals are similar — a skilled workforce, better
schools, a diversified economy, an improved business climate
— their road maps are very different. Where they
will get the money to deliver on their visions remains to be
seen.
Gov. Ted Kulongoski, 65, is a Democrat who has
served as an Oregon state representative, state
senator, insurance commissioner, attorney general and
Supreme Court justice.
What’s your
plan to improve the economy and help business?
“It’s important to diversity the
economic base. If you look at Oregon in 1970 vs.
2005, you will see the change in the economy,”
says Kulongoski. He has three initiatives in that
area:
The first is to establish a bio-based signature
research center, modeled after the Oregon Nanoscience
and Microtechnologies Institute (ONAMI), which is a
partnership of industry, academic and government
groups. The bio center would be a partnership between
private industry and the state’s universities
“to create new value-added products from
forests and agricultural land as well as
manufacturing jobs.” It would be focused on
R&D in clean energy, green building and bio-based
products, and be funded with up to $7 million in
state investment.
The second is putting $1 million to $2 million into
an Oregon Translational Research and Drug Discovery
Institute. It would bring together the state’s
universities and biotech companies to “bridge
the gaps between research, development and
commercialization in the area of infectious
disease” and provide drug development
resources.
The third is to emphasize trade missions. He plans
to lead missions to China, Korea, Japan and Europe in
the next two years. He also plans to strengthen
Oregon’s relationship with Washington State.
“Portland/Vancouver is a single economy. I want
former Gov. Gary Locke to lead a trade mission with
Gov. Chris Gregoire and me to China. I want to get
businesses to expand here.”
He adds that he is “talking to Gregoire about
a common venture capital pool from both our pension
funds. We need to find the startup capital. Oregon
has the potential to be a national leader in
renewable energy.” He plans to invest in the
development of the nation’s first
commercial-scale wave energy park. The investment
will range from $4.6 million to $6.6 million with the
goal of attracting two or three major manufacturers
of wave energy devices to Oregon by 2012.
He says he will continue to focus on transportation
infrastructure because of its importance in
attracting new companies to the state. “I
created Connect Oregon, a $100 million program to
build the infrastructure in rural communities.
I’ll come back with Connect Oregon II. It will
focus on seaports, railroads, regional
airports.” He plans to commit another $100
million for the second phase.
He says that one of Oregon’s strengths is its
potential to be the leading West Coast distribution
center. He plans to build on that with Connect Oregon
II, making strategic investments in roads and bridges
to speed up freight corridors, and expanding the
state’s industrial land inventory. He plans to
put another $100 million in his next budget for
industrial land infrastructure improvements and
create an Industrial Land Development Unit to help
find land for companies to expand and to ensure
adequate infrastructure.
How would you
improve the business climate?
Kulongoski plans to introduce a package of more than
two dozen initiatives that he says will streamline
business regulations and the time and money
businesses spend in the process. They include a
central development permit application and processing
center, a streamlined review process for wetland
delineation and environmental regulations, and a
clearinghouse for questions about state and local
permitting.
What’s your
plan to help education?
“The message in high school is that
there’s no opportunity if you don’t go to
college. One thing we need to do is restructure
community colleges and K-12 to show students there
are alternatives to going to college.” He has
two proposals aimed at education. First is the
Education Enterprise program. It sets a floor of $6
billion for K-12 funding, an increase of 16% over
current levels, and sets a 10% increase in school
funding every biennium. The program would increase
resources for preschool (including fully funding
Oregon Head Start), K-12, community colleges,
universities and job-skills training. Kulongoski
wants to increase the corporate minimum tax to help
pay for this plan. The second is an overhaul of the
workforce training program. He plans to commit $25
million more toward expanding the state’s
skills training programs, and bring together trade
unions, employers and government to jointly decide
how to target resources.
How will you help
Oregon thrive in the global economy?
Kulongoski says he plans to put $3.7 million into
creating a Northwest Food Visioning, Innovation, and
Productivity Center (VIP Center) that would work with
the industry and the Food Innovation Center to share
ideas and technologies. The proposal also includes
putting $900,000 into a Community Seafood Initiative,
which will focus on new product and market
development. He projects the VIP center to generate
between $6 million and $15 million in “industry
productivity enhancements” in 2007-09.
He plans to put $10 million more into ONAMI,
and $3.3 million in job-training and research and
development resources in “value-added
manufacturing processes.” The proposal includes
three new senior faculty positions at Portland State
University, new lab equipment and expansion of the
matching applied research grant program Oregon Metals
Initiative.
What’s the
biggest barrier for business in Oregon?
“Business sometimes is its own worst enemy.
They project that they believe taxes are killing
them. But we’re one of the lowest in the
country in tax burden. I think because of the
instability of the revenue system, governments rely
more and more on fees and assessments, which has an
indirect impact on businesses. The instability
creates a situation where we don’t provide the
necessary investments in education and health care
and the overall revenue structure relies on
fees.”
Revenue instability
is the biggest barrier to business?
“Yes.”
How do you fix
it?
”There is no magic solution. I believe
citizens will support [changing the revenue
structure] if you tell them how it will be spent. For
instance, spending on education is important. I
can’t afford to lose 25% of the state general
funds like I did in 2001-2003. No other state fell
further than Oregon did. You have to talk to the
public about fairness, stability, give them something
to invest in.”
What is your tax
reform plan?
“I want to put the corporate kicker into a
rainy-day fund. That’s a great investment for
Oregon, and I’ll propose it in my budget. I
want to figure out how middle-income taxpayers can
pay less. If you’re asking me if there’s
a need for tax reform, the answer is yes.” But
he would not say if he supports a sales tax, although
in April during a debate with two Democratic
challengers, he said a tax stability plan would
include “a substantial reduction in income tax,
and looking at a consumption tax of some
kind.” He says he currently does not
support changing the individual kicker. He advocates
increasing the corporate minimum tax to help fund
education initiatives, but would not say by how much.
(Any change to the kicker tax would take voter
approval.)
How would you
address the growing number of uninsured Oregonians
and the rising cost of health insurance?
A priority is his Healthy Kids Plan, which aims to
provide every child in Oregon with access to health
care, targeting the 117,00 children who currently do
not have health insurance. He would use $110 million
in state funding and $182 million in federal matching
funds each biennium to back the plan.
“We’re also trying to expand the waiver
system of the Oregon Health plan to address
prevention, and cover more people.”
What will you do if
Measure 48, the spending limit cap,
passes?
“I’ve done enough budget cutting for one
lifetime and I am going to work to avoid ever having
to go back to the days of when I first took
office.” He says his proposals and initiatives
are all dependent on Measures 41 and 48 being
defeated. And, if they do pass, “I’m well
aware there’s going to be a chilling effect on
doing anything about the corporate kicker.”
It’s estimated that the state will send back
$1.3 billion in taxes to individuals and businesses
next year, and that if both Measures 41 and 48 pass,
it would take about $3 billion out of the state
coffers.
What will your $3
billion cut look like?
“Easy. Look at what happened when I got
elected. I lost $3 billion in ’01-’03
[from the downturn in the economy]. Legislators
didn’t help cut the budget, and voters killed
Measure 30. Eventually the economy did turn around.
In 2005-07, the state had more resources, so we put
more money into K-12. There is no gentle way to say
it: You learn to live with whatever revenue you have.
Right now we are putting together three budget
options: if nothing happens, if one of the measures
passes, and then if they both pass.”
What will be your
priorities if the measures pass?
“Education. I refuse to walk away from that.
We will fully fund Head Start.” He says he also
wants to reverse the “25-year
disinvestment” in higher education. Since
funding education will take about 61% of the budget,
what comes after that? “There are
constitutional requirements, like corrections. And
I’m committed to the state police.” He
says he is looking for dedicated funding for the
state police and at increasing the number; one of his
options for funding is a surcharge to car insurance.
“But kids always come to the top.”
He reiterated his Healthy Kids Plan would be a
priority.
What would success
look like if you have four more years as
governor?
“The most important thing is an investment in
education and skills training. Diversifying the
economy will bring better jobs and better pay. We
need a fair trade policy, and a commitment to
manufacturing. There has to be a national health care
system. Everyone knows that.”
|
Republican Ron Saxton, 52,
is co-founder of the law firm
Ater Wynne, former chair of the Portland Public
Schools Board and founding president of the
Portland Schools Foundation.
What’s your
plan to improve the economy and help business?
“Business isn’t a special interest. It
is the engine that drives the whole system,”
says Saxton. He says his two biggest issues are what
he sees as a hostile business climate and a workforce
that is woefully untrained, in particular in the
skilled labor area.
“The workforce issue is just bizarre:
There’s high unemployment, but companies
can’t find people to fill the jobs they have.
We have a huge range of occupational opportunities
that are going unfilled at the same time we have high
unemployment and an education system that isn’t
preparing them for the workforce. Businesses are
unwilling to expand here because they don’t
think they will be able to get the workforce they
need. The education system is not connected to the
economy. Education is my passion. But it needs to be
connected to the economy. How are we training and
preparing our youth for career opportunities that are
here? We are leaving our kids untrained for 21st
century careers, and leaving our businesses with no
one to hire.”
Saxton thinks the hostile business climate
isn’t about a specific rule or regulation,
it’s about the attitude of those in state
government. He says he constantly hears from
businesses about Oregon’s high “hassle
tax” and that it chases away companies. He
wants to infuse everyone who works in a state job
with the need to help businesses, not punish them, if
they run afoul of a rule or regulation.
“It’s an attitude, but it starts at the
top.”
How do you make
that happen?
“It’s the people. You don’t need
new rules or laws. I will ask for resignation of
every agency head, commission member and board head.
We need a different team. You can’t be a leader
if you’ve got the wrong people on the
bus.”
After you get a new team, what’s the strategy
for business?
“Education and knowledge is the key for
economic growth. Which means we have to have a great
education system, which includes K-12, higher ed and
vocational education. You can’t have an
education system like ours and expect to have a
knowledge-based economy. It’s the No. 1 thing
businesses are concerned about. Where would I spend
money in Oregon? There are public safety issues we
need to improve. The next thing is to focus on
education.”
Saxton says he will work to link business and
education, to match the workforce needs to education
funding, in partnership with the business community.
How? “You need to make it your priority for
budgeting. Workforce training broadly defined must
align with the budget.”
How will you
recruit more companies to Oregon?
“The governor needs to be personally involved.
I can’t think of a better way to spend my day
than either helping existing business to expand or
calling on new businesses. I’m going to be the
governor who goes and makes the sale.”
How else will you
improve the economy?
“We have to preserve the diversity that we
have. For instances: food processing and timber
products. We used to be a fabulous state for food
processing. I want to make a priority out of growing
Oregon national resource-based industry. I
don’t have some plan that says we’ll be
the state that does ‘X.’ When you see
opportunities, you have to deal with them.”
What are some of
those missed opportunities?
“There’s a whole missing piece in the
alternative-energy sector. You have to have a
critical mass and the clusters that work. You need to
attract the manufacturing of it. Companies are
looking for industrial lands, speed of government. We
haven’t had a commitment to developing those
industries. I don’t have some plan that says,
‘Here’s the billion dollar tax
credit.’ I don’t think that’s what
does it. It’s the package of things. A climate
that isn’t a hassle, a good place to live with
good schools.”
What will you do to
help create jobs?
“I represent a lot of Oregon businesses in my
law practice. They aren’t sitting there waiting
for the governor to help them. They’re looking
for a climate where they can do business. They
don’t need incentives to create jobs. They
already want to create the jobs, but they can’t
fill them. You have to have a commitment from the
governor to be a partner. I’m not a big fan of
a big program of government giveaways.”
How will you be a
partner with business?
“Oregon is being a barrier to economic growth.
It’s not that Oregon has a neutral government;
it’s a negative and most of that is attitude. I
approach every problem with, ‘Where are we
trying to get?’ In the steps to get from here
to there, the fewer involving government, the
better.”
Where are you
trying to get?
“The economy needs to be diverse. The last
several governments have put all their eggs in high
tech, and turned their backs on natural resources,
manufacturing and agriculture. My No. 1 goal is to
make sure we are diverse enough. Goal No. 2 is to
emphasize the creation of jobs with higher pay.
Oregonians have dropped to the bottom in wages. When
we talk about jobs created lately, they’ve been
low-wage. That brings us back to expanding the
knowledge-based jobs. It’s not my job as
governor to pick the industry to help, but to create
the climate where creative, innovative people can
invest and expand. Investments are happening in
places that have a good climate, not the lowest taxes
or the easiest laws.”
How will you invest
more in education?
Saxton says he does not believe that more money is
the answer to the state’s education woes.
“The money will come from state government
being run more cost effectively.” Saxton
also says he will encourage more freedom in school
options, such as charter schools, home schooling and
magnet schools; trim health care and administrative
costs; push performance-based pay; and support
teacher mentoring. He also wants to see greater
control at the school level for hiring, budgeting and
professional development.
What is your tax
reform plan?
“Get rid of the capital gains and estate
taxes. They are both negative taxes for businesses.
They encourage businesses to leave the state. The
income tax is volatile, but that doesn’t mean
spending has to be volatile. Oregon spends every red
cent. If you spent on a trend line, you’d have
stability, you’d have a rainy-day fund. The
state behaves in an irresponsible way when it comes
to spending.” Saxton says he would consider an
“alternative use” for the corporate
kicker refund if there was a tradeoff in reducing
other taxes, such as capital gains and estate. He did
not have specifics about amounts, saying that still
needs to be ironed out. He says he would not touch
the personal kicker, and does not support a sales
tax.
What will you do if
Measure 48, the spending limit cap,
passes?
“It will force government to spend less money,
and put more of a premium on controlling government
costs. It still gives you an increase over previous
budgets. You have to make sure you get value, and
prioritize.”
What are your
priorities?
“Public safety, education and the social
safety net. The human services department is the most
bureaucratic. It’s inefficient. It’s a
target-rich environment for improvements. There are
fewer people getting help and services have been
reduced while the costs of the system have gone up. I
reject the idea that we have to pick among the
programs. It’s the model that doesn’t
work. I’m not looking to cut services. I want
to do it without raising taxes by redirecting money
that’s in the program now. Oregon has one of
the most expensive delivery systems in the country.
The costs of the bureaucracy are completely out of
line. But at some point you do run out of money and
there are things you don’t do.”
How would you
address the growing number of uninsured Oregonians
and the rising cost of health insurance?
“Oregon leaves employers with
only two choices: the fully loaded insurance policy
or nothing. That’s completely wrong. Our goal
ought to be to maximize the number of people with
insurance. I want to get the most people possible
insurance with employer-provided private insurance.
Let employers provide a basic package. Let’s
strip out some of the government mandates, which
create the costs. How do you help consumers? Make
sure there’s more of a competitive marketplace,
make sure they have information. I do not favor
government providing any kind of universal health
care.”
Saxton said that uninsured children should be helped
by the state, though he does not have a specific plan
for that yet. Saxton also wants to expand the Oregon
Medical Insurance Pool, “so small businesses
and high-risk individuals can get the insurance they
need at a cost they can afford.” He also
supports tort reform, greater transparency of the
cost of medications and medical procedures, and
expanding Medicaid for Oregonians.
How would you help
employers offer basic health care?
Saxton says he would work to eliminate state
mandates, but he would not require businesses to
offer insurance, even a basic plan. He said he was
“intrigued” by the recent Massachusetts
health care plan, but needed to further study it. (It
requires that everyone in Massachusetts have health
insurance. Those who can afford insurance will be
penalized if they don’t purchase it, and
government subsidies to private insurance plans will
help the working poor and uninsured children.
Businesses with more than 10 workers that do not
provide insurance will be assessed up to $295 per
employee per year.)
What would success
look like after four years with you as
governor?
“That Oregon figured out how to deliver a
great education to all its residents. Education is
the most important thing we do for business
development, in fighting crime, in giving kids a
chance. It’s a great payoff.”
|
|
More...
Have an opinion?
E-mail
feedback@oregonbusiness.com
|
|
