The Deciding Factor
By Bridgete Lynch
Typically right around Labor Day, voters start turning their attention toward upcoming
elections. And candidates pour their money—shaping up to be the most ever—into nearly
constant television ads, while interest groups are out in full force. For most people
September is the month the governor’s race comes into focus.
But for months now, Oregon’s business leaders have been considering the election and
what it means for the state and their businesses. And although they come from different
industries, different backgrounds and different political leanings, a few issues seem to
percolate to the top. Here are the deciding factors for business leaders in their own words.
Education Reform
“When you are a business trying to attract and retain and grow talent in this community
or this state, school systems are one of the things employees look at to say, ‘Do I want to
live there? Are my kids going to get a good education if I go there?’ So that is a
fundamental baseline business issue for us. And, is the school system going to be such
that it will produce the workforce that I need from a business perspective going forward?
- Judy Peppler, President, Oregon Qwest, and Chairman of the Board, Portland Business
Alliance
“We can’t have people ask about education, and we were in a Doonesbury cartoon. We’re
sort of past that point now, but greater investment in pre-K through 12 is still critical.”
- Sho Dozono, President, Azumano Travel
“Our drop out rate is way too high. We don’t put enough people into college out of high
school. It’s becoming a disgrace. Everybody knows that if you have a kid that graduated
today at 18 years old, the chances of success in life without a college education fall to the
bottom of the scale. And not preparing kids to go to college, let alone get them out of
high school, is a criminal act of negligence. You can’t have 50 percent of your kids not
go to college, or whatever it is, and a 30 percent dropout rate and not have that be a huge
burden on themselves and on society. The long-term costs of that are huge, and yet we
want it all for nothing.”
- Michael Powell, President, Powell’s Books
“We’ve gone from a school system in which school districts used to collect and spend
their own money to now, basically, the state collects and the school district spends, and I
think that is an antiquated system.”
Steve Emery, President/CEO, Earth20
Tax Reform
“Many of our businesses operate in multiple states; certainly Qwest does. And when you
look at the economy in Oregon, roughly 20-25 percent is based in tourism. You really
have to ask the question, ‘Does it make sense not to have a consumption-type tax to help
fund your state operations?’
“We have one of the highest rates of marginal income tax in the nation. Is that a
good thing? It is a very volatile revenue source, especially when 70 percent of the
economy is reliant on that. You go into a recession, which is just the time when people
need more services and just the time when your revenue sources are diminishing.
Certainly the business community is looking at all that. Does it make more sense to cut
the income tax and cut the property tax and perhaps cut a capital gains tax and replace it
with some kind of a consumption tax? And is that even feasible to do politically?”
- Judy Peppler
“Part of our problem with state revenue is the cyclicality of having an income tax and
property tax being the predominant feeders. We are one of the only states in the country
that has such a poorly diversified revenue base.
“The corporate kicker could be invested in a state stability fund. Our business
leaders aren’t allowed to say that because it’s not their money, but those I have talked to
privately say, ‘Keep my kicker check but only if you put it into a rainy day fund or an
education scholarship fund or something to make kindergarten classes smaller’—
something that is a no-brainer.”
- Scott Gibson, President, Gibson Enterprises and Chairman, Radisys Corp.
“The tax system here needs to at least be competitive with other locales for companies
that compete internationally. This goes back to the business/transportation issues around
people moving. At least 40 percent of our revenues come from outside of the United
States, and 97 percent of our revenues come from outside of Oregon, so the tax system
has to at least be competitive with other locales where we could go and run a business
like that.”
- Tim Boyle, President, Columbia Sportswear
“When you compare our tax structure with the rest of the Northwest, it becomes obvious
that ours is unfavorable. We are taxing production rather than consumption, which
detracts from our economic growth.”
- Don Tykeson, President, Tykeson Associates
“Having been here my entire life, seeing us move to a sales tax just doesn’t seem to be in
the cards. But we’ve got to do something because this just isn’t working. I’m feeling the
pain on that. I’m the former president of Oregon Historical Society, and the lack of state
support in the whole non-profit area is appalling. OHS is mandated by the state to archive
important records and artifacts of the state. And they’ve been there for 106 years to do it.
The state funded them for 103 years and then decided, ‘Nope, we’re not going to do it
anymore because we don’t have any money.’ So here we are tin-cupping. It drives me crazy. Everyone I talk to in Salem says, ‘Yeah, it’s really important. We’ve got to do it,
but…
“It carves out a perception of a state that on the one hand people are intrigued by
because we’re different, and we are all very independent. But then that spills over into
we’re so different that we’re going to have a totally different tax system, we’re going to
have a totally different way to fund education, we’re going to do everything so differently
that it doesn’t work.”
- Bob Gregg, Executive Vice President and CFO, FEI Company
“Oregon is a marvelous place to move if you enjoy the outdoors, are retired or are not
working for a living and need public services. In other words, it’s a great place to be if
you can take from the system rather than be a contributor.”
- Bill Blount, Senior Vice President, UBS Financial Services
“Number one for our business and for the state is stabilized funding. Specifically, my
belief is that we’ve got a lot of tourism—we’re investing to drive tourism. Here in
Central Oregon, we live off tourism. A reduction in the income tax, a reduction in the
property tax and an implementation of a sales tax—somehow try to pull that into a
constitutional situation, which I know has been defeated a multitude of times. But I
believe that one of the biggest issues we face when it comes to education, when it comes
to public safety—everything that requires state funding—is a stabilized funding
platform.”
Steve Emery
Transportation Infrastructure
“It’s a problem for businesses to be able to move goods in a timely fashion. It forces up
costs because of delays, you have to put more trucks on the road to get the job done, you
can’t get your product to where it needs to be in a timely fashion. That means you are out
of inventory or it means you can’t supply goods, or they are late to the docks—and it is
getting worse. The projections are that we’ll have another million people in this
community, and if that happens without an investment in transportation infrastructure,
you get massive gridlock. We know what it looks like, but we don’t know what to do
about it because there are so few bucks in the pot.
“So I am looking to a governor who at least steps up and at least describes the
problem in a way I recognize, admits there is a problem and then says, ‘What can we do
about it?’ and exercises some leadership. Whether it is a gas tax increase or a bond
measure or whatever it is, something that says to business that these problems have to be
solved. We can’t pretend they don’t exist or launch a program that has 50 million bucks
in it and think that it is going to accomplish anything.
“The states around us, California and Washington, are making infrastructure
investments, and we’re not. Product will hit the Columbia River going south and start to
creep, and it will come north with the same problem, and Oregon is going to be the weak
link. Like education, transportation is woefully short of funds and short of attention. It’s
not very glamorous, but it’s critical. I said to someone at a meeting recently that it isn’t an accident that when people go to war, the first things they try to take out are the bridges
and the roads—that will bring a country to its knees. And if our transportation has
deteriorated to a level that heavy trucks can’t use large parts of it or drive times become
ridiculous, then jobs will go away, the investment goes away and slowly, or not so
slowly, the community atrophies.”
- Michael Powell
“I went to the Mariners/Red Sox game in July up in Seattle. It drives me crazy that I have
to drive to Seattle to see a baseball game, by the way. Anyway, a two hour and 45 minute
drive is what it should be on Friday afternoon, so I got out of here at 1 o’clock so I could
avoid the traffic. Four hours. It took me four hours. Everybody said, ‘Oh, of course, you
got up in that Seattle traffic.’
“No. It was the 45 minutes it took to get from the Fremont Bridge to the Interstate
Bridge at 1 o’clock in the afternoon on a Friday. I’d love to say it was a wreck or
something, but it wasn’t. It’s just the way it is, and it’s just maddening.”
- Bob Gregg
Environment
“I think environmental stewardship is a real asset and has some long-term value to
Oregon. Sustainability has been in our vocabulary for years, and it could really be core to
our competitiveness. We’re not doing it because of a fad, and it doesn’t seem to be a
strong suit for anyone else. States need to think carefully about their competitive
advantage, and it’s critical that our leaders include environmental stewardship in their
thought processes.”
- Karla Chambers, Owner, Stahlbush Island Farms
“Let’s make sure that the governor who is leading the state understands how important
great outdoor places are and how important it is to have the access to the outdoors and all
the kinds of issues that are around that. The governor needs to understand and provide
great places for outdoor activity, not only for use of our products but also when we are
trying to attract talent to the company. People want to come and work for an outdoor
company and live in a place where it is easy to access the outdoors.”
- Tim Boyle
Workforce
“Two years ago that didn’t even enter into what businesses were concerned about and
today it’s a huge issue. Here in Central Oregon we have a major labor shortage. How do
you start implementing a drug-free workplace when people are struggling to find
employees? Ninety percent of all incarcerations in Deschutes County are drug-related so
if we could eliminate that issue we could free up a lot of money for other services. We
are working to come up with a template for businesses to be able to implement a drug-
free work place as easily as possible. That’s a real issue.”
- Steve Emery
“The lack of a knowledgeable workforce that can pass a drug test is one of the biggest
issues we face. We have basic labor force problems. There are cherries going unharvested
in the Valley because there aren’t enough pickers. But the Oregon employment rate is
tracking relatively high. We need to understand and address that.
- Karla Chambers
Land Use
“We need shovel ready sites, with less bureaucracy. We’ve had some horror stories about
some incredible companies like Applied Materials who wanted to come here and thought
it would take them years, if ever, to find an appropriate site within the urban growth
boundary, so they built a much smaller presence. That is Oregon’s loss, and that happens
a lot.”
- Scott Gibson
Health Care
“This was the first year since 1999 that we’ve not faced a double digit increase in the cost
of our health care insurance. We try very hard to provide that for our employees, but we
are seeing more and more Oregonians drop out of having any sort of insurance, which is
basically a hidden tax put on all of us that do provide insurance—not so hidden any more.
And I don’t know a good solution. People are talking about the Massachusetts plans, and
I am adamantly opposed to the Massachusetts plans. I know some candidates are talking
about expansion of Medicare/Medicaid and the reality is with the baby boomers growing,
Medicare/Medicaid is going to run out of cash in the next 13 years or less. So I don’t
know the solution on that one, and I haven’t heard one yet.”
-Steve Emery
BrainstormNW - September 2006
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