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"Moving Oregon Forward" -- Remarks from Governor Kulongoski May 27, 2003 -- Leadership Summit Update Meeting Good afternoon. I’m very pleased to be here today at the Moving Oregon Forward Summit. I have been in office about 120 days. Sometimes it feels like I have been here 120 years. But first, some lessons learned, or in some cases, an additional learning experience from things already known. Since FDR, there’s been a near compulsion on the part of newly elected leaders to talk about what’s been accomplished in the first hundred days. One of my biggest accomplishments over the past 120 days is keeping my promise to set a new tone in Salem. With a Republican-led House, a divided Senate, and the worst budget crisis in at least two decades, you might expect that the story of this legislative session would be partisanship and gridlock. But that has not happened. I came into office with a determination to make Oregon a better place to do business, a better place to invest, a better place to create jobs, and ultimately, therefore, a better place to raise a family. Even in these challenging times, we have already made great -- in fact, unexpected – progress. Let me give you a quick rundown of some of our accomplishments. I said last December that the Legislature would not go home until we fixed PERS – and I meant it. Today, I can report that we’ve achieved significant government reform of the unsustainable PERS system. We also refocused our economic development efforts; found common ground to craft a transportation package that few thought possible; instituted regulatory reforms; promoted strong relationships between Oregon and major trading partners, and strengthened the state's partnership with the private sector. Most important, in the rough budgetary waters that we have all been swimming in, we have insisted on sound fiscal management so that we create an environment that is more predictable and responsive. For years the media in this state have focused on competition between urban and rural Oregon; between the Democrats and the Republicans; between the House and Senate; and between the Governor and the Legislature. But I haven’t focused on these differences. I’ve focused on our common interests. All of us in Oregon must be part of a joint mission to compete successfully with other states and nations in an increasingly competitive global economy – an economy where jobs and capital can move across borders with the push of a button. In these tough economic times, I believe we are coming together and increasingly recognizing where our true competition lies. Working together, as we have so many times already these past five months, is the best way for us to ensure that businesses in this state do not press that button. Our successes are also designed to send a signal to the rest of the world that when they make decisions about jobs and capital, Oregon is a good, reliable and responsive destination. When we met six months ago, we stated our agenda and we have been working to achieve every bit of it. You shared your agenda with me as well, and I was happy to have your ideas. First, we agreed that it is important to bring fiscal discipline to the state. Since January, I have worked to make government more accountable and efficient – to sweep out the old ideas about the way government is run and to bring in the fresh scent of responsibility. Leadership is building credibility with the public – by demonstrating that we can make difficult choices and stretch every dollar as far as it can be stretched. Not because it is easy. Not because there aren’t sound policy reasons for wanting more revenue. But because this is clearly the path that the public – at this time – wants us to take. Our accountability efforts started with the notion that we need to fix the public employee retirement system. PERS has consumed a great deal of my time over the last five months – and it will consume more before this legislative session is over. It was essential that we create a PERS system that protects retirees and affords current employees a comfortable retirement – without jeopardizing our economy and our children’s future. We capped the annual growth of individual accounts at 8 percent. And we adjusted the mortality tables so they fit with current life expectancy. We have shifted the 6 percent member contribution from the PERS account to a separate defined contribution account, like a 401k account. We have altered the mechanism for crediting interest to member accounts instituted a "pay as you go" earnings policy. And, yes, there is always the risk of litigation. But that risk pales in comparison to the risk of not doing anything. You also asked me to create a better environment for business expansion and retention in our state. Foremost among those responsibilities has been the need to streamline government regulations so that business can survive and thrive in Oregon. Our mission is to make time as important to the government as it is to the applicant and see that licenses and permits are approved in a timely manner. Our second objective was to ensure predictability in the administrative rule process. One month after taking office, I issued my first executive order. It is no coincidence that this order had to do with streamlining government regulations. And it is no coincidence that my excellent Director of the Department of Consumer and Business Services, Cory Streisinger, has systematically whacked away at regulations since that time. Let me give you a partial list of regulations that have been streamlined, some of which are mundane and some of which are extremely important to the functioning of our economy: Within our Building Codes Division, we created an advisory committee comprised of building code board members, technology companies and local governments. We modified the rules for granting of approval of investments in new technology equipment invested here in Oregon in fabrication facilities. We are developing a one-stop statewide electronic permitting system that allows customers to apply, pay and receive approval online about licensing and related projects. We are improving and expediting the approval system for construction projects, including allowing developers and owners to use rapid approval processes developed and administered by the state for essential economic projects. Within our division of finance and corporate securities, we are moving increasingly to on-line filing of tax forms and streamlined the complaints process. Within the Department of Agriculture, we are moving to eliminate duplication of inspection in food service and retail establishments. And within the Division of State Lands, we are eliminating duplicative state and federal permitting for removal or fill projects in wetlands and other waters in the state. I could go on and on with the list of regulations that we have streamlined, but we simply don’t have enough time here today to go through them. For almost two years now, we have been aware of the magnitude of the deficient bridge problem in our state. Last fall, I spoke about the need to double vehicle registration fees to address the infrastructure problems that will begin to affect thousands of jobs and Oregon’s economic competitiveness as one community after another gets cut off from freight service. With our continued economic decline and increased unemployment, it became clear to everyone that our economy needed help. What better way than to provide as many jobs as we can building and repairing bridges? I am pleased to say that a lot of hard work has taken place since then. Under the leadership of Senators Rick Metzger and Bruce Starr, and Representatives Alan Brown, Terry Beyer and John Mabry, who are here today – please stand up – and the many stakeholders in the transportation system, including AAA, the Oregon Trucking Association and the Oregon Associated General Contractors; have hammered out a transportation funding package that will provide $114 million in new revenue. Some of that revenue will be bonded so that ODOT can repair or replace some 480 bridges over the next ten years. That work will sustain 5,000 family wage jobs. Annually. For ten years. Some of the revenue will go to counties and cities to help with preservation and maintenance, and some revenue will go toward modernizing parts of our system. This will be the largest public works effort in Oregon in decades. I applaud the work of the legislators, stakeholders, ODOT staff and my staff in putting this package together. This bill will have a hearing before Representative Brown’s House Transportation Committee tomorrow morning. Congratulations to all for stepping up and getting the job done. You asked me to improve air access and work to build the trade infrastructure of the state. I listened and I took action. Mexicana Airlines is now flying non-stop to Portland from Mexico City and Guadalajara. And last month, I helped welcome Lufthansa, which has just launched direct passenger service from Frankfurt to Portland. We estimate that Lufthansa will stimulate more than $90 million in regional business activity and 1,500 jobs. I recently went to Japan, where I advocated for direct service between PDX and Narita. I see Oregon as a hub with spokes extending deep into Europe, Central America and Asia, bringing trade, tourists and ideas from literally around the world. These direct connections will mean millions of dollars – and countless new opportunities – for Oregon businesses. So, yes, we want foreign carriers to believe in – and invest in – Oregon. But we can’t leave it to others to build our transportation future. In March, I traveled to China to push for increased trade ties between our two nations. I’m happy to say that China purchases more grass seed from Oregon than from anywhere else in the world. And with the Olympic games coming to China in 2008, that means that the Chinese are going to need a LOT of grass. Marketing Oregon is a critical part of our economic development package. People everywhere associate the name “Oregon” with a clean environment. Our marketing strategy – which we’re calling Brand Oregon – will do the same for this state’s services, products, schools and workforce. Every imaginable movie location is here in Oregon. Some of the world’s best wines are here in Oregon. We were the first state to finance public art for every public building. And if we get the details right – we may end up with a Major League Baseball team. No marketing strategy for Oregon would be complete without focusing on tourism. Tourism is our third biggest industry. Yet the amount of money we devote to promoting tourism puts us in the bottom third of states. This makes no sense. As I recently told a tourism conference – Oregon should own the summer tourism industry. Blue skies every day – and no humidity. We also happen to have some of the most beautiful scenery in the world. For every dollar we invest in promoting Oregon’s scenic and artist treasures – we get three dollars back. This is a good business deal by anyone’s definition, which is why I’m working with the Legislature and the hospitality industry to come up with a 1-percent hotel-motel tax that will help us promote the state without hurting cities and counties. We needed to change the mission of the OECDD, so that it
is a partner with – not an obstacle to – strengthening the private sector,
which is the most powerful engine of job creation. It is absolutely
critical that we have a budget that allows us to keep the trained staff that
can market Oregon and Oregon products, locate land and services for companies
looking to move or expand here, and approve permits quickly. I already mentioned my February Executive Order for
speeding up permits. I signed another Executive Order that directs state
agencies to increase the availability of shovel-ready land, and we have a bill
in the Legislature that will also further this goal. This is absolutely
necessary. As I said in my State of the State speech, Oregon competes
against states where a company can pick from numerous 25-acre or larger
industrial sites and get the necessary permits very quickly. The number
of sites in Oregon that currently meet this market requirement is essentially zero.
This will not undercut our land use laws. We’re not going to sacrifice our land, water and air, or quality of life, for the sole purpose of economic growth. I’ve made that very clear. I’ve also made clear that I consider the environment one of Oregon’s most important economic assets. It is part of our brand. It is a magnet for tourist dollars. And it is a major reason why sustainable industries want to either come to Oregon or stay in Oregon. My Community Solutions Office has been working with OECDD to implement my shovel ready initiative. They are currently fanning out around the state, locating shovel-ready sites. The Industrial lands task force has held five community meetings around the state and I expect them to have a report to me by the end of next month. Very shortly, I will sign an abandoned mille site bill, which will improve this situation. Community Solutions is bridging the ties between rural and urban Oregon in a serious, significant way. As I said earlier, none of our state services works alone -- all work in concert. But the most important thing we must do for our economy and children is to provide our kids with a high quality education. Building a strong system of public education is of increasing importance for our economic viability as a state. Companies will not want to expand here if we do not have a full school year, with moderate-sized classes and excellent teachers. The state has done its part by controlling costs – including through pooling our educators in one health plan and through fixing PERS. If we do not have a school system that provides our
children with an outstanding education, there will be no hope of reaching your
goal – and my goal – of getting to Number One. I was not satisfied
with my January school fund budget of $5.05 billion, and I certainly don’t
want to go any lower. That’s why my revised budget holds K-12 at the January programmatic level. Again, $5.05 – which is about $100-million more than the Ways and Means budget – is not as high as I would like to go, or as high as the children of Oregon deserve. So I’m looking for ways to put more money back into the
classroom – including moving teachers to a different health care plan, and
coordinating purchasing. But these will only be short-term fixes.
What we really need is a long-term strategy to provide stable funding for our
public schools. This strategy must come from a grassroots consensus.
Not just educators and parents – but business leaders too. Every one
here has a huge stake in the outcome of our push for stable school funding.
I need you at the table. I need your ideas. I need your
credibility. And most of all – I need your powers of persuasion.
We will not get stable funding overnight. But if the business community steps up to this issue –
as many of you are already doing – we will find the funding we need to keep
our schools the best in the nation. Another thing I have done is to enhance forest resource benefits for the economy and the environment. I have been working to support and improve the Oregon Plan -- and I have been working with federal authorities to buy in to this plan as well. As this effort gets underway, we will consult with interest groups, Earlier, I announced that Oregon will develop a conservation plan that will provide a framework to will help untangle overlapping laws currently protecting agriculture and forest lands – which will lead to a policy discussion about landowner policies. And through the Western Governors Association, we will work with Congress to find a socially acceptable healthy forests initiative. I believe strongly that the glass is half full. I think it is extremely important during these tough economic times – when tens of thousands of Oregonians are really hurting – to remember how fortunate we are to live in Oregon, and how much we have going for us. We still have some of the best public schools – and public school teachers – in the country. And the performance of our students proves that. We still have a very high quality of life – with a beautiful environment that is a major economic asset. We still have a highly skilled workforce – that I’m determined to expand – and that is critical to attracting new businesses and retaining existing ones. That, after all, is one of the reasons companies like Intel came to Oregon in the first place. I want the quality of Oregon state government to match
our quality of life. I am working hard to do so, and I hope you will join me
in this fight. Back to Highlights from the May 27 Leadership Summit Update
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