Editors’ Introduction

A year ago, concerned about the vitality of the Oregon economy in this competitive age of globalization, BrainstormNW and The Oregon Community Foundation convened Oregon CEOs from public and private companies to discuss the future of Oregon’s economy. At the outset, project leaders posed some simple but important questions to a diverse group of leading Oregon CEOs.

1) Could Oregon CEOs agree on a common voice to help Oregon move forward in the increasing global economy?

2) If so, is there a need to communicate their vision for Oregon to the public, the media and to government leaders?

3) Is there a need for CEOs from Oregon’s high-tech community and from more traditional industries to build a forum to educate and communicate with one another?

4) Is the pace of the global economy changing Oregon’s economic future in a way that necessitates a coordinated message for positive future growth?

The document that emerged from meetings and informal sessions of these diverse CEOs expresses a common view of Oregon’s future. “A Declaration of Oregon’s Future: Surviving and Thriving in the Global Economy” completes the initial phase of the Oregon CEO network project.

Against the backdrop of challenging global economic times, this network of business leaders looks forward to strong leadership and a clear, common vision for Oregon’s economic health. BrainstormNW and The Oregon Community Foundation are pleased to facilitate this pathway for Oregon’s CEOs to articulate a brighter economic future. We encourage discussion and debate of the measures presented in this document.

Upgrading Oregon’s infrastructure will require significant leadership. As individual Oregon business owners and CEOs we are prepared to step up to that commitment and educate Oregonians on the critical issues and challenges facing our state.

Signatories to this document lead companies that make a significant portion of their income from business conducted outside of Oregon—some do less than 2 percent of their business in the state. Therefore, let us be clear that it is not out of a selfish or profit motive that we make these policy recommendations to the government leaders of our state but because we share a strong community feeling for Oregon and a deep concern that Oregon is quickly falling behind other states and countries (as measured by per capita income) in the creation of family-wage jobs. We live here, we raise families here, we want to grow and share the same economic stability that our companies have built with all Oregonians. We base this belief on our own unique experiences of running companies that compete every day in the world economy. We offer these future policy recommendations based on that experience.

Here are the measures that we believe Oregon must adopt to go forward in the world economy. We offer these suggestions not based on what is currently politically possible in Oregon but instead on the reality of the macroeconomic requirements for Oregon to compete successfully globally.

TAX REFORM
Problem: States and nations that are growing in the world economy use consumption taxes and broad-based tax systems. Oregon cannot be unique.

Solution: Oregon must move to a broader tax base, which should include a consumption tax tied to significantly reducing the state’s personal income tax, reducing the capital gains tax and the estate tax, and reducing dependence on fees. A consumption tax would also stabilize Oregon’s tax revenue swings. It is critical that Oregon tax reform be stimulative; adjustments should be revenue neutral in the short term with slow growth below trend in the long term.

PUBLIC PENSIONS REFORM
Problem: The commitment Oregon taxpayers face to pay for public benefit programs, most notably PERS, puts the state in an untenable financial position. As an example, upwards of 20 percent of the payroll of many Oregon school districts goes to cover PERS. Health benefits also run higher than national averages. World businesses will not locate here if the state faces such a dramatic financial liability.

Solution: Oregon must bring public pensions into line with private sector plans. Future negotiations should focus on total compensation and benefits and aim to shrink the difference between public and private plans, with strongly directed preference for defined contribution plans. The governor, legislators and judges should be moved to defined contribution plans.

HIGHER EDUCATION REFORM
Problem: Oregon is one of only four states in the U.S. where high-tech is the leading industry, but the industry is not supported by the highest quality higher education programs.

Solution: Oregon must take bold measures to grow nationally ranked, top-tier universities, departments and programs that generate 21st century jobs. Examples of these programs include OHSU Neurological Science, OSU Nuclear Engineering, U of O Green Chemistry/Nanoscience, PSU Food Service, OIT Alternative Energy Program, and Babson Business School. The creation of leading engineering programs will take a tremendous amount of resources, so it is important to eliminate duplication and create critical mass where possible in the state’s higher-ed system as these focused programs are built.

TRANSPORTATION INFRASTRUCTURE RENEWAL AND RETHINKING
Problem: To compete in the world economy, people, goods and services must move with speed. This must be accomplished while also shouldering responsibility regarding reduced CO2 emissions and helping reduce our dependence on foreign sources of energy. Oregon’s current transportation infrastructure is inadequate to the task.

Solution: Oregon must dramatically improve its roads and rail service and modernize its port capabilities. Critical thinking must also be applied to the future of Oregon’s public transportation to fit modern international business needs. Plans should be comprehensive, including roads, rail, waterways, bridges, and airports. Aggressive use of alternative fuels must be a key part of Oregon’s expansion strategy to speed commerce while balancing energy responsibility.

LAND USE REFORM
Problem: Oregon cannot compete in global business with unique, burdensome land use regulations not shared by any of our neighboring states.

Solution: Oregon should alter its land use laws to allow shovel-ready industrial sites in desirable areas and to permit development on non-agricultural land. Current laws requiring a 20-year supply of industrial land should also be enforced, and the permitting process should be improved.

WISE USE OF NATURAL RESOURCES
Problem: As of a result of not allowing even environmentally-friendly harvesting of our timber resources, in 2002 more than six million acres of U.S. forests burned—one million of those acres were in Oregon. Water resources and fisheries also continue to be areas of concern and conflict.

Solution: Oregon must rely on its comparative advantage in natural resources, including timber and agricultural products. As an example, using woody biomass for electric energy, bio-fuels and bio-products will improve forest health, support rural economies, provide new sources of renewable energy, and strengthen Oregon’s forest products industry. According to the Oregon Forest Resources Institute, the forest sector currently provides 85,000 direct family-wage jobs in Oregon and has created another 100,000 indirect jobs. Oregon’s governor, legislators and other elected officials must demand that federal and state government allow Oregon companies to responsibly harvest in Oregon’s state and national forests.

K-12 REFORM
Problem: Oregon spends nearly 50 percent of the state’s general fund on K-12 education—more than $5 billion—yet accountability, quality and stability in our education system are still major concerns statewide.

Solution: A major bipartisan effort, funded by some of our most respected non-profit foundations, has birthed the “Chalkboard Project,” which has delivered a 15-point action plan to begin to address our K-12 challenges (www.chalkboardproject.com). We strongly support this bipartisan effort and feel progress is vital to the continued retention of our workforce as well as growth through recruitment.

SUMMARY
Our aim is for Oregon and Oregonians to reach their full potential—to be full participants in the new world economy, not limited to service sector jobs.

We call on other Oregon business leaders to join us in our efforts to move Oregon’s infrastructure forward.

We call on our candidates and elected leaders in both parties to embrace these economic, nonpartisan reform goals for the benefit of all Oregonians.

We call for change, immediately where possible, more methodically when that is prudent. But for the economic health, security and stability of all Oregonians, we call on our candidates and leaders on both sides of the aisle to aggressively incorporate these reforms into their platforms, agendas and proposals.

We will encourage those leaders who share our vision for Oregon to be a success in the future global economy. We are committed to these goals and will continually track progress on them in government, business organizations and in the media.

SIGNATORIES AS OF SEPT. 1, 2006
To join the discussion, contact BrainstormNW of The Oregon Community Foundation.

Scott Andrews, Melvin Mark Properties
Ken and Joan Austin, A-dec
Domonic Biggi, Beaverton Foods
Bill Blount, UBS
Tim Boyle, Columbia Sportswear
Norm Brenden, Holiday Retirement
John Carter, Schnitzer Steel Industries
Karla Chambers, Stahlbush Island Farms
Scott Chambers, Chambers Communication
David Chen, Oregon Inc.
Bill Colson, Holiday Retirement
Mark Dodson, Northwest Natural
Dave Edson, Umpqua Bank
Dave Evans, David Evans and Assoc.
Mike Fahey, Columbia Helicopters
Rob Freres, Freres Lumber
Scott Gibson, Radisys
Frank Gill, Intel (retired)
Dan Giustina, Giustina Resources
Joe Gonyea III, Timber Products Company
Bob Gregg, FEI
Scott Grout, Radisys
Wes Lematta, Columbia Helicopters
Jim Mark, Melvin Mark Properties
Andrew Miller, Stimson Lumber
Peter Nickerson
Judy Peppler, Qwest
Steve Pratt, ESCO
Ralph Quinsey, TriQuint Semiconductor
Hank Swigert, ESCO (retired)
Bill Thorndike, Medford Fabrication
Don Tykeson, Tykeson Assoc.
Rod Wendt, JELD-WEN
Sam Wheeler, Wheeler Foundation
Donna Woolley, Eagles View Management
Steve Zika, Hampton Affiliates

BrainstormNW - September 2006