January 16, 2013
January 16, 2013
2013 – Five Pillars of Prosperity for Oregon Legislature
The 2013 Oregon legislature will come to Salem next week to organize and prepare for a long, five month legislative session that begins February 4th.We believe the Oregon legislature will advance the prosperity of our state – our entire state – if it focuses on four key issues this year. Back in Washington, DC, Oregon’s congressional delegation is already back to work. We believe Oregon’s economy is best served if our delegation plays a constructive role in getting a grip on our nation’s most vexing problem.
Together, it’s the five pillars of prosperity for our state. These are the issues we’ll be paying attention to, talking about, and holding our elected officials accountable to this year. Oregon’s challenges are well documented: high unemployment, stagnant incomes, and disturbing trends in government spending top the list. But solutions are attainable that will move us forward.
Pillar #1 – Grow Jobs and Incomes. Fifteen years ago, the average income of Oregonians came close to the national average. Today, the average income level in Oregon has plummeted to 9% below the national average.
We believe this is the defining issue in our state.
We believe that quality of life in Oregon starts with having a good job. Bringing Oregon’s average income up to the national average would help Oregon families to get ahead and plan for their own economic future.
Instead of raising taxes on anyone, the 2013 Oregon legislature should find ways to improve the business climate and make it easier for people to start and expand their own business. This means reducing barriers and making it easier to hire employees. This will increase the number of people who are working, increase wages, and create more tax revenues for the state to fund services.
Oregon does not benefit from ever-higher taxes or ever-shifting and more stringent regulation or new barriers to hiring. In order to accommodate these things, business are forced to cut jobs or not hire new employees, ultimately raising our unemployment rate and lowering the tax revenue the state collects to fund important public services.
The Oregon Prosperity Project has its own ideas about proposals that will grow the Oregon economy, but we will be vigilant in supporting legislative proposals that will result in job creation and equally vocal in our opposition to proposals that will diminish job opportunities in our state.
Pillar #2 – Fix PERS. Oregon’s public employee retirement system is exacting a heavy toll on our education system, our public safety, and our public services. In fact, the Oregon PERS Board recently determined that Oregon’s state agencies must pay a 45% rate increase – totaling $2 billion over the next two years – to address PERS’ $16 billion unfunded liability. This is $2 billion that will not go to hire any new teachers, increase our number of school days, or reduce class sizes. The added PERS burden may even spur talk of tax increases to cover the skyrocketing costs.
Oregon’s ongoing problems with its pension system are rooted in complex, poorly understood plan designs, successive increases in benefits beyond what was originally intended or needed for adequate retirement, and inherently volatile capital markets. The Oregon Prosperity Project will be discussing and promoting several options to reduce the cost of PERS while promoting a sustainable government employee retirement system that is fair to both retirees and taxpayers.
Pillar #3 – Build the Bridge. Over 500,000 Oregon jobs are dependent on our transportation system. One in five Oregon jobs is dependent on trade. Oregon’s I-5 Bridge across the Columbia River is both outdated and the only economic bottleneck along the entire I-5 corridor from Canada to Mexico. A compromised I-5 Bridge threatens Oregon’s economy.
It’s time to build a new I-5 bridge to ease the flow of goods and people in and out of Oregon as well as withstand natural disasters. Oregon should commit to its $450 million share of the I-5 Bridge to secure federal investment in the project for a 2013-14 construction start date.
Pillar #4 – Invest Wisely in Education. To put it simply, education pays. Education and workforce preparation are critical for Oregon’s economic success. To grow companies that successfully compete as global leaders in innovative products and services, Oregon needs to develop the well-educated, talented employees that fuel such businesses. From the research department to the executive office to the factory floor, businesses are paying a premium for education and talent. They should find that talent here in Oregon.
To raise Oregon’s standard of living, we need to raise our level of education. Yes, investment in education requires more money into classrooms, teachers, training, and facilities (fixing PERS costs would go a long way toward helping here, see Pillar #2), but it also means we need to build a seamless, engaging education system built around clear standards for proficiency rather than traditional seat time in courses. It should also mean redesigning the way the state budgets its education investments to focus on students and their outcomes rather than on the funding of institutions.
Pillar #5 – Lower the Debt. We consider our national debt to be the most pressing issue in our country today.
Today, our national debt exceeds $16 trillion. It represents more than 70 percent of the total US economy, and is set to continue to rise even after the economy recovers from the recent downturn. The debt is on track to exceed 100 percent of our national economy next decade and exceed 200 percent by the 2040s.
Rising national debt will slow our economic growth, and a slower economy will reduce our standard of living. Ultimately, we will face an economic crisis if we don’t change course – perhaps along the lines of what several European countries are currently experiencing.
Higher debt means leaving future generations saddled with it, reducing their budget flexibility and the ability of the United States to respond to crises in the future – including economic, natural, and security emergencies.
Oregon’s congressional delegation needs to be constructive participants in a plan that stabilizes debt as a share of our economy and then puts it on a clear downward path this decade. Credible and gradual debt reduction can reverse all of the negative economic consequences of elevated and rising debt by improving business confidence and reducing uncertainty.
The Oregon Prosperity Project will engage you on this issue in 2013 with resources and ways to get involved in support of meaningful national debt reduction.