Candidates lay out plans for revitalizing state economy
By MITCH LIES
It's been more than 20 years since Oregon had a Republican governor. With GOP gubernatorial candidate Chris Dudley polling well against former Democratic Gov. John Kitzhaber and winning the money race, many believe this could be the year a Republican reclaims Oregon's top political seat.
The Capital Press asked Dudley and Kitzhaber seven questions to obtain a better understanding of how their administrations would treat Oregon's natural resources industries.
Following are their responses.
Q Water is a limiting factor to growing high-value crops in many areas of Oregon. What would your administration do to assist farmers in accessing irrigation water?
Dudley: Oregon is facing critical water levels across the state (not just in the Klamath and Umatilla basins) and has never had a strategic vision for water management.
I will work to remove unnecessary barriers and allocate funding to water projects that focus on conservation, reuse and storage.
Investments in these projects will assist struggling communities, enhance environmental stewardship, provide needed resources to grow our agricultural sector and create jobs. Water infrastructure investment is an economic development strategy that Oregon's leaders have neglected for far too long.
Kitzhaber: Agriculture is a central part of Oregon's economy and we need to ensure that the land we protect for agricultural use remains productive for farming. To help farmers, we need to complete our integrated water resources planning process and then we need to act on the plan to realize water supplies necessary for agriculture in all regions of Oregon.
In the end this will involve two central areas of work. The first is to make sure conservation programs for incentives and financing are available and farmer-friendly. The second is to ensure that technical assistance, expertise and planning is driven toward supporting local partnerships and expertise.
Certainly, this will involve working to develop water storage strategies that are sound. While this work will be initiated across the state, one of the first areas I want to facilitate action upon is the Umatilla Basin.
Q Natural Resource agencies along with the Oregon State University statewide programs have been disproportionately cut by the Legislature. What would you do to ensure adequate services are still available to farmers and ranchers?
Dudley: I understand the unique relationship between OSU's statewide services and our natural resource sector. OSU's extension service, experiment stations and forest research lab embody the intersection of commerce, natural resource management and research. I will work to prioritize and restore funding in order to provide economic development opportunities for our natural resource employers.
Kitzhaber: OSU services are vital to agriculture and they are linked to my plans to drive management of our resources toward regional and local processes and solutions. While we are in a very challenging fiscal environment, and we must view any program in that context, I want farmers to understand that working together toward maintaining these services is important to me.
Q Do you support a state cap and trade or carbon tax program?
Dudley: Climate change is probably caused by a variety of factors, but that debate is beside the point. What is important is that Oregon continues to move to a cleaner energy future to reduce greenhouse gas emissions, and that we help, not hurt our economy in the process. I believe that access to affordable, reliable energy is essential to creating a positive environment for job growth. I also believe that innovation in energy production can and should be a source of future jobs and economic growth in our state.
As governor, I will support a long-term energy policy that balances the need for more energy production and infrastructure with conservation and efficiency programs. I will defend the region's hydroelectric power system that is an abundant source of reliable, 100 percent carbon-free energy. I will oppose state or regional cap-tax-trade systems, which would increase the cost of energy for consumers, make Oregon less economically competitive and do damage to the economy and job creation. I will maintain a strong commitment to the development of renewable energy sources such as wind, solar, geothermal and wave.
Kitzhaber: No. Carbon management is a critical issue and although I do support working with our regional partners and Congress to develop a management system, I would not advocate for Oregon instituting such a program on its own. However, I think it is very important that Oregon positions itself so that it is ready to take advantage of a world in which carbon is regulated.
I also support our renewable energy goals and believe we need to chart out a 10-year strategy to meet such goals, while keeping energy in Oregon affordable for businesses and families. Much of this effort is very important to rural Oregon, as much of the renewable energy is produced there and transmitted to consumers elsewhere. As we look for job creation opportunities in this industry for rural Oregon, we must have a sensible process in place to site such energy sources and the necessary transmission infrastructure.
Q Many of Oregon's rural areas are facing close to 20 percent unemployment. What would you do to spur employment in rural areas?
Dudley: I will re-focus state policies to support, not stand in the way of, sustainable natural resource industries in agriculture and ranching, timber and forest products, fishing and seafood. I will be a champion for federal policies that properly balance jobs and conservation. To better spur employment in rural areas the governor must first, listen to resource communities; second, better utilize our state forest lands; third, create a statewide water infrastructure plan; and, finally, support the OSU statewide services.
I have also proposed that we empower cities and counties with an incentive to recruit new businesses to Oregon by providing them half the additional state income tax revenues generated from the employees and businesses they recruit.
Currently, Oregon's recruitment strategy is based on property tax abatements under the state's Strategic Investment Program. Forfeiting property tax revenues can act as a disincentive to local governments that depend on them to fund vital services. The remittance would be for the duration of the property tax abatement.
Kitzhaber: For immediate job creation, I have proposed to: First, invest in large-scale energy efficiency projects to immediately create thousands of jobs throughout the state, reduce energy costs and keep more of our money in Oregon.
Second, specific to rural Oregon, support environmentally sensitive thinning on federal forests to create jobs; maintain mill capacity; improve forest health; and produce woody biomass for energy generation.
Third, train and match Oregonians with high-demand jobs.
Fourth, leverage public dollars to unlock credit markets to get small businesses the capital they need to grow and reach their job-creating potential.
Fifth, attract direct foreign investment from overseas to create jobs in Oregon.
I am also committed to the idea of working with local communities by building upon what are now called Economic Revitalization Teams by creating regional Community Solutions Centers that focus on how best to pursue mutual needs. Through these centers, we can create stronger communities for our citizens through a collaborative problem solving process.
As governor, I brought the first large-scale wind energy project to Oregon and subsequently hundreds of megawatts of wind energy were approved for installation in rural Oregon. Over several years, my administration also provided hundreds of millions of dollars for rural infrastructure improvements, helping lay the groundwork for economic development. I am proud of the work I did as governor in rural Oregon to solve difficult issues, and I really look forward to doing that again.
Q What specific proposals do you offer to change the strong perception that Oregon's tax and regulatory structures discourage business investment and location in the state, including agricultural enterprises?
Dudley: Recently, the passage of the Ballot Measures 66 and 67 tax increases have added to Oregon's reputation as a state that is hostile to business and investment. Economic development officers, mayors, legislators and governors from other states have begun recruiting Oregon businesses to come to their states, and Oregon business owners talk of leaving the state. It's clear that our economic development reputation is tarnished and that too many job creators have lost confidence in Oregon as a place to invest and grow.
As governor, my top priority will be restoring private sector job growth to our economy. I've outlined a specific package of tax relief designed to restore confidence in Oregon as a place to do business, capital formation and competitiveness with other states.
In addition, I've outlined an education plan designed to better prepare Oregon for our economic future. Every industry and entrepreneur, regardless of their industry, will benefit from changes in our tax system and strengthening our education system. I will support targeted tax incentives for specific industries and companies with the following criteria: incentives are performance-based and not just not a blank check; incentives are limited in duration and awarded transparently; and incentives are made on the basis of job creation and economic returns and that local communities be allowed to share in new revenues created.
Kitzhaber: I want people to believe that Oregon is a great place to do business and that our doors are wide open for investment. In my previous administration, we developed the successful community solutions model, and I hope to have the opportunity again to do even more to support business activity.
Oregon's business taxes are low compared to other states, but we do have a high individual income tax rate and we lack a diversified tax system. I believe this detracts from our economic success, and it is why I want to first stabilize our tax system and then have a serious discussion about diversifying it.
One specific tax issue we must immediately address is how the new gross receipts tax applies to agricultural co-ops and members.
We have a backlog of Oregon firms that want to expand and invest today but lack the capital to do so; I am looking at ways to utilize state resources to help leverage private lending.
Q What is something the current administration has done to promote or discourage a healthy agricultural sector in Oregon, and what would your administration emulate or change about the current approach to agriculture?
Dudley: Oregon's natural resource economy is the foundation of our state's employment, and my administration will treat it as such. Our fishers, farmers, ranchers and foresters provide stability to an otherwise volatile economy.
I have been discouraged by disinvestment Oregon has made in assisting and promoting our natural resource employers, especially in the recent cuts to the Oregon University System's statewide services. I will support these programs as economic development tools and work to restore funding for these programs.
Kitzhaber: One thing I will do, as I did in the past, is to have an open door to Oregon's agricultural leaders and make certain my office is accessible to farmers and industry leaders. When I faced tough issues with the industry, or when I worked with the industry to market Oregon products overseas and across America, I always found that getting agricultural leaders in the room was vital.
I don't believe enough has been done to integrate the work of state natural resource agencies at both the regional and local level. I have always found that results are reached faster when people are on the ground and acting in the communities they know -- and not leave it to remote and technical answers from Salem. The most important thing I want and will need from agriculture is constant lines of communication.
Q Many in the natural resources sector believe Oregon's state forests are being underutilized. Assuming the housing market recovers and demand for lumber increases, what would you do, if anything, to increase timber harvest in our state forests?
Dudley: I believe in a balanced approached to using, conserving and managing our state's natural resources. Too often, the scales have been tipped in favor of regulation and preservation at the expense of the jobs and tax revenues that can be created, often in rural communities with the highest unemployment and most fragile tax bases.
As governor, I will listen to and work with leaders in agriculture, forest products, ranching, fishing, food processing to identify state and federal government policies and/or regulatory barriers that may exist -- and advocate for their reform.
This could mean working to ease trade barriers that limit access to new markets for Oregon agriculture products or reforming regulatory barriers that prevent access to water resources or grazing lands. It could mean helping broker agreements to allow biomass energy production from waste generated from state, federal and private forest lands.
Also, when it comes to appointing the agency leaders and citizen commissions that help shape and implement state natural resource policies, my goal will be people who are qualified, from diverse backgrounds, who understand the important role that sustainable resource industries can and should play in Oregon's economic future.
Oregon's six large state forests are an underutilized state asset that should be a greater source of jobs and revenue for the state.
With sound science as our guide, there is no reason why Oregon cannot better manage -- in a sustainable manner -- its public lands for public benefit.
Kitzhaber: Between managing for a sustainable harvest and the utilization of biomass from choked forests, we can once again have a vibrant industry here in Oregon.
The challenge is to gain economic return from how we grow and manage our forests and how we add value to our forest products. I strongly believe that we must change policies to allow thinning of overstocked forest thereby protecting them from fire and disease. I will work to ensure we utilize forest biomass to support energy production. With smart changes in forest policies and energy regulation policy, we can make our forests healthier and keep our energy dollars here in Oregon.
I will also work to create what I call LEED "O" certification and branding that supports utilization of Oregon wood in Oregon construction. I want to see Oregon forest products utilized in Oregon and sold as a high-value product elsewhere, instead of only relying on certifications that do not account for the cost of transportation of imported wood to job sites.