Change brings new challenges, opportunities
Oregon is slogging through an economic paradox: we are experiencing near- record economic performance, but that performance is eclipsed by what could be a never-ending demand for more and more revenues.
What is causing this paradox? Very simply, PERS and Medicaid costs.
Current estimates show that unless structural changes are made in both of these programs, their costs will outstrip even moderate revenue growth for at least the next 25 years. Some estimates show that even with the state's economy generating over a billion dollars of additional, unforecasted revenue, PERS and Medicaid cost increases will require $1.5-$2.5 billion in additional revenues every year for the foreseeable future to meet program cost demands.
Clearly, that is a black hole Oregon's workers and businesses can never fill.
As the 2018 "short" legislative session convened in early February, the passage in January of Measure 101 gave legislators a hall pass. By voting to support what the legislature did in 2017, legislators are not facing an even worse fiscal crisis than we are in right now. As a result, the 35-day session will not be a mad dash dedicated to finding ways to address what might have been a $500 million or more hole in the budget. That can will be kicked into the 2019 legislative session.
Last week, Oregon Business and Industry (OBI) held its annual meeting in Salem. Governor Brown spoke to many of the state's business leaders and restated her commitment to address the PERS unfunded liability. The governor also stressed again her vision for building a strong future workforce. Those were welcomed words.
Surprisingly, the governor also indicated she was not especially supportive of a bill currently moving through the legislature that would disconnect Oregon's tax system from the federal tax system. This was good to hear, particularly since the bulk of the economic impact of that proposal would hit Oregon's small- and medium-sized businesses disproportionately hard. It is also good to hear because a "short" legislative session is not the time or place to pass significant tax increases.
The session also convened with the loss of many legislators as some moved due to new jobs outside the legislature including Senators Richard Devlin and Ted Ferrioli, and Representatives Mark Johnson and Jodi Hack. These individuals were experienced public servants who had long records of being effective problem-solvers.
It is easy to blame hyper-partisanship for many of our problems at both the federal and state levels of government. Make no mistake: that condition is real and it is destructive. It is also a shame that this environment has led many good elected officials to leave the legislature. While change can be good, having these experienced individuals replaced with brand new representatives and senators is a particular challenge right now.
But with this change also comes opportunity. We hope these new elected officials will work hard to learn the issues, bring a new sense of collegiality and energy with them, and avoid being swallowed by the political wars we have seen for the past 25 years. Perhaps a new perspective on the issues we continue to battle each session can be found, and our leaders will rededicate themselves to moving our state back to a functioning, consensus-based system we can all be proud of.
Oregon is a wondrous state populated by diverse, energetic people. And while it is easy to dwell on our differences, we can all agree that we want our education system to be strong for our children and future generations; for our students to thrive; for all Oregonians to live long, healthy, and happy lives; for businesses to feel welcome so they can create good jobs and grow; and for all Oregonians to live the outstanding quality of life we all expect to have here.
But continuing down the path of hyper-partisan politics will only ensure we stay exactly where we are: a divided state amidst a divided nation.
Former businessman and writer Max De Pree once said: "We cannot become what we want by remaining what we are."
This quote rings true now more than ever.
We can only hope Oregon's leaders are listening.