By Corey Paul
Fiscal calamity or a decade of budget austerity loom for Oregon as the recession leaves thousands of Oregonians jobless and the demand for government money outpaces its ability to pay for services, business and political leaders agreed on Monday.
"Oregon is literally in a death spiral, an unsustainable path into the future," Gov.-elect John Kitzhaber said to the crowd at the annual Oregon Business Plan Leadership Summit.
Pacific Power President Pat Reiten agreed: "We need to recognize honestly that Oregon isn't such a special place anymore." Oregon, he said, is falling behind the nation in several areas. Per capita income in Portland trails the national average at 91%. For rural Oregonians, the figure is 75%.
Amid all the dark forecasts at the summit, an Oregon Business Plan circulated through the Convention Center that outlined a hopeful vision of the state's future and suggested a series of governmental transformations. Kitzhaber said he agreed with many points and promised to meet before Jan. 15 with businesspeople and regional representatives to discuss implementing the findings from various breakout sessions throughout the day.
Major themes dominating the event were the need to create jobs by drawing new businesses and promoting trade, to cut government spending, especially on corrections, and to invest in sustainable energy production, especially of biomass.
Speakers called for outcomes-based budgeting for the long term (ten years instead of two) and for providing the most important and cost effective services first, then trimming those the state can't afford and redesigning government agencies in the process.
This is the seventh summit since 2002. Last year the event was cancelled amid political turmoil over taxes and abysmal economic indicators for Oregon.
Organizers made a point to discuss each section of Oregon. Regional leaders divided into eight groups and met to talk about their communities and rotating state and federal officials. Those groupings align with Kitzhaber's regional development strategy teams. The teams will consist of officials from the state, private sector and civic organizations, Kitzhaber said, and they will report regional needs to the governor, who will also communicate those needs to Washington D.C.
Speakers emphasized the interconnectedness of Oregon businesses and public services, and many attending called for a unified approach to healing the state that does not ignore rural Oregon. Creating 15 jobs in Coos Bay, Kitzhaber said, can be as important as creating 500 jobs in Portland.
Highlighting what a headache cutting spending might become were the discussions about cuts to corrections. On a legislative panel, House Republican Leader Bruce Hanna argued the state should cut staffing and employment costs and focus on rehabilitation instead of punishment.
Senate President Peter Courtney responded that Department of Corrections reform would require help from voters who set much of the current policy. "Otherwise you are never going to get control of this monster that is eating us financially."
Yet for all the talk about cutting corrections, only six businesspeople attended a session about ways to do that. Department of Corrections Director Max Williams discussed greater community supervision programs that aren't allowed by current sentencing structure, and he lamented participation.
"If businesses care about K-12 and higher education, they need to care about these issues because they compete for the same resources," Williams said. "I think it's evidenced that we have a room four times as big as we need, and we can fit everybody in the first three rows."
Meanwhile, attendees packed into an education meet-up and gasped at Kitzhaber's assertion that there would be about $300 million less in funding next year. Then they discussed strategies with each other at their tables.
Among the few bright spots mentioned were innovative industries in advanced manufacturing, a potential for job creation in biomass production and a successful high tech cluster. Kitzhaber pointed to opportunities of high speed rail in the Willamette Valley and wave energy on the coast, and he said he supported a suggestion made during on of the sessions to guide philanthropic organizations to give based on specific needs found by the regional groups.
A rare moment of levity came when Courtney took the dais, presenting himself (in jest, presumably) as a crass old man and razzing Reiten for his use of a teleprompter. But Courtney turned serious when he invoked Oregon's history as pioneer country, telling how neighbors used to work together to raise a barn. "We must now work together to raise our economy."
But it was David Osborne, a speaker from Massachusetts who is an author and consultant to governments, who synthesized the challenge ahead most directly. "Your government is going to be cutting, cutting, cutting," he said "and it's hard to innovate when there's blood on the floor. You're going to have to make some tough choices. If you don't, Oregon will get poorer. It's that simple."
Corey Paul is an associate writer for Oregon Business.