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Economic Leadership Summit 2008
Monday, December 3, 2007
Salem, Oregon
Thank you Bill for your very generous introduction.
After those two great performances, let me just add my own brief comment about art and the Oregon economy. There’s no doubt that artists like Storm and Reece, and great artistic venues like Portland Center Stage, move the spirit, but as Chris Colman pointed out, they also move our economy.
This year I proposed and the Legislature approved a major reinvestment in culture, history, art, movies and preservation. CHAMP for short.
We did this because the creative economy is a winner for Oregon. It’s sustainable. It creates jobs. And it earns money.
And as we all know from another Cabaret song – money makes the world go round!
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It is a great privilege to join Senators Wyden and Smith, Representatives DeFazio and Blumenauer, President Courtney, and Speaker Merkley to talk about the Oregon Business Plan – and where we need to go next to keep our economy moving forward.
I also want to recognize and thank Randy Pape and Stuart Foster for their hard work and many contributions to the Oregon Transportation Commission.
And, today, I’m very pleased to announce that I’ve appointed Gail Achterman to serve as the new Chair of the Commission. Gail is an outstanding lawyer and an expert on transportation and land use issues.
I’ve also appointed Mike Nelson, from Baker City, to the position of Vice-chair.
I’ll have a lot more to say about transportation shortly because it is literally an economic driver for the state.
Even before I became Governor – when my life wasn’t scheduled for me – there were very few things that I did for six years in a row.
I know what you’re thinking: “Yes, Governor – and that includes holding down a job.”
But this is the sixth annual Oregon Leadership Summit, and I’ve made a point of attending and speaking at each one.
And for good reason. Since 2002, the Oregon Business Plan has been – to use an old Marine Corps expression – the tip of the spear.
In the race to Oregon’s economic future – you’ve consistently arrived first with the greatest energy, the clearest vision, and the most collaberative strategy.
And you’ve done so without running under a Republican or Democratic banner, because the Oregon Business Plan is not about taking sides.
It is about uniting around a common goal of building an economy that is sustainable; creates family wage jobs; preserves our quality of life; supports education from pre-school to grad school; and keeps Oregon businesses competitive and profitable.
Would we have done as well without the Oregon Business Plan? Absolutely not.
Lewis Carroll once said, “If you don’t know where you’re going, any road will take you there.” Well the corollary to that is: If you know where you want to go, NOT just any road will take you there.
That’s why the Oregon Business Plan has been so important. It’s been the road – or at least the roadmap – that has taken this state from where it was in 2002, to where it is today.
When I spoke at the first Leadership Summit, I wasted no time telling you where we were in the closing days of 2002.
I started my remarks by saying: "This region’s economy has not recovered. People are hurting. Businesses are struggling every day to remain profitable. Our children are looking beyond our borders for work and hope."
These were not the words of someone prone to doom and gloom. I am by nature and experience an optimistic, forward-looking, and upbeat person.
I have never lost confidence in the ability of Oregonians – and Oregon’s business community – to face hard times with courage, and come out stronger and more prosperous.
But when we began meeting at these summits, there was no way to gloss over the economic hole we were in. We had one challenge – and that was to find our way out.
And that’s what we did. By January of this year I was able to tell you: "For the first time in years, we have the ability to do more to make Oregon a better place to live, learn, and raise a family."
Many of my priorities for the 2007 session came from the Oregon Business plan – which set the table for what we wanted to accomplish together.
In January I said we must redirect the corporate kicker to a rainy day fund. We did. Today, with support from the business community, Oregon has banked hundreds of millions of dollars as a hedge against another economic downturn.
In January I pledged to make government more efficient by creating one health insurance plan for K through 12.
For four years the Legislature had said no. But this year, with your help, lawmakers ended the insanity of 198 school districts negotiating 198 separate insurance contracts.
In January I said we must make our community colleges and universities affordable for all Oregonians who have the interest and ability to pursue a post-secondary education.
This goal aligned with the Oregon Business Plan. We both understood that Oregon cannot compete in the global marketplace without a first rate system of higher education.
But aspiring to educational greatness is not enough. We have to put our money where our vision is.
And we did: By increasing funding for Head Start; investing a record 6-billion, 245-million dollars in K through 12; and making 6,000 more students eligible for Oregon Opportunity Grants.
Giving thousands of young men and women from working families the opportunity to attend an Oregon community college or university is a critical step toward making sure Oregon has the best trained, best skilled, best educated workforce in America.
That’s why Oregon Opportunity Grants are not just about helping students. They are an investment in the human capital you need to succeed in the global marketplace.
The theme of this year’s summit is Sustainability and Momentum.
The sustainability agenda I talked about last January – more renewable energy, reducing dependence on foreign oil, and cutting greenhouse gases – was all about creating momentum. . . momentum that is now carrying Oregon to the same leadership position in renewable energy that Silicon Valley achieved in computers.
We are already the largest producer of photovoltaic solar cells in the nation. And the word is out: If you want to manufacture the tools of clean energy; and you need an infrastructure of laboratories, skilled workers, and public investment – come to Oregon.
One day we will look back on 2007 as the most important year for Oregon’s environment and quality of life since we passed the Beach Bill and Senate Bill 100 three decades ago.
We defined for a new generation – and a new century – who we are as a people: Guardians of our natural resources. Believers that we do not have to choose between a strong economy and a healthy environment. And international leaders in building a sustainable future.
* * *
There is one problem I talked with you about last January that remains unsolved: The cost and availability of health care.
My proposal – which ultimately became Measure 50 – was to cover Oregon’s 600,000 uninsured – starting with the 116,000 children who go to bed every night in this state without health insurance.
I supported Measure 50 as a way to insure these children. I don’t want to dwell on the past. But we all woke up the morning after the election and the problem of the uninsured was still with us.
That includes the financial burden that the health care crisis imposes on the private sector.
Business is getting squeezed – and everyone in this room knows it. Plain and simple – the high cost of premiums and cost-shifting is robbing your bottom line.
But I am here to tell you: Measure 50 was only the first round of a long fight.
I have no intention of walking away from Oregon families and businesses that are burdened by a health care system that costs too much – and covers too few.
This year the Legislature and I created the Oregon Health Fund Board, chaired by Bill Thorndike, whose mission is to design a health care system that leaves no Oregonian uninsured.
I want to thank Bill – and the Oregon Business Council – for your years of leadership on the issue of health care.
That leadership helped set the stage for the Health Fund Board, which will make its recommendations by October 2008 – in time for your next summit.
In 2009, health care will again be one of my top priorities – because if we control health care costs, we will have the resources we need to invest in people – and the economic future of this state.
In the meantime, I intend to go back to the Legislature in 2009 and propose increased funding for post-secondary education, workforce training, and high tech research.
I will also ask the Legislature to step up to one of the most important environmental challenges we will face in the next decade – a shortage of water.
Climate change means less snowpack – which means less water for summer irrigation. We need to start preparing now – or the economic consequences for business and agriculture are going to be devastating.
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I mentioned that the word is out: Come to Oregon if you want to relocate to the leading state for
renewable energy and sustainable development.
I’ll lead the charge inviting sustainable industries to move to Oregon, but I worry that the leaders of those industries will answer:
"Governor we’d love to do that, but how do we get there? On your old bridges? Your congested highways? Your undredged channels? Your overcrowded ports? Or your aging rail system?"
I haven’t heard these questions yet. But Oregon’s transportation system is in trouble – and that trouble threatens to derail our economy.
I know there is nothing glamorous about roads, bridges, seaports, and railroads – short-line or Class 1. Certainly not when compared to computer chips and wave energy. But transportation infrastructure is the lifeblood of Oregon’s economy.
That’s why since 2001, we’ve made our largest investments in transportation – focusing on roads and bridges – since the Interstate highway system was completed in Oregon.
Legislative leadership provided by Senators Rick Metzger and Bruce Starr, and Representative Terry Beyer, helped make these investments possible – more than 3-billion dollars in 10 years.
In addition, I proposed and the Legislature approved ConnectOregon I and ConnectOregon II to improve marine, aviation, transit, and rail facilities: An additional investment of 200-million dollars.
These are important investments. But we have a long way to go.
To begin with, Oregon is a traded sector economy. That means we have to move freight efficiently and inexpensively. But congestion on our roads and highways is making that increasingly difficult.
Businesses are already changing their shipping schedules to avoid peak traffic times. At the same time, they are being forced to hire more drivers, maintain larger inventories, decentralize operations, and bear the cost of reduced productivity.
Here are a few examples cited in The Cost of Congestion Study commissioned in 2005 by the Oregon Department of Transportation, the Port of Portland, the Portland Business Alliance, and Metro.
Intel was forced to move up its last shipment departure-time by two hours. Sysco Food Services opened a regional distribution center in Spokane because service from Portland was taking too long. And OrePac increased inventories up to 8-percent in response to congestion delays.
This same study argues that if we fail to adequately invest in transportation, we’re looking at economic losses of over 800-million annually by 2025.
Here are a few more numbers to consider. Over the next quarter of a century, the population of Oregon is expected to grow by 40-percent, and freight traffic is expected to increase by 80-percent.
If the system in place now doesn’t change, by 2025 the number of vehicle hours trucks spend on the road is projected to increase 54-percent.
We saw what happened in Minneapolis. The I-35 bridge was 40 years old. The average age of bridges in Oregon is 50 years old.
And for me, what is the most important statistic of all: 20-percent of all jobs in Oregon – that’s 400,000 – are tied to transportation.
So the clock is ticking. We’re heading toward a future where moving goods in and out of Oregon means passing through one transportation bottleneck after another – after ANOTHER.
If we don’t get our arms around the problem of congestion and crumbling infrastructure, we have nothing to look forward to except slow growth, an exodus of jobs, reduced state revenue, and diminished expectations.
This is absolutely unacceptable to me. And the 2009 session is absolutely the right time to pass – and start implementing – a long-term fix for the shortcomings in our transportation network.
But if anyone thinks we will achieve this goal without leadership, commitment and follow-through from both government and business – come see me after the summit: I have a bridge I’d like to sell you.
Today I’m issuing a call to arms to Oregon’s business community: Put transportation at the top of your agenda for 2009, make your voices heard in Salem, work across party lines and regions, and don’t lose sight of the big picture.
What is that big picture? Transportation is linked to other challenges – and other opportunities: Everything from the need to cut greenhouse gases – to the thousands of family wage jobs that will be created as part of a major investment in our transportation infrastructure.
I cannot tell you today the details of the transportation package that I will propose to the Legislature – because those details are still being worked out. But I can talk briefly about process, principles – and one specific project.
The most important thing I can say about process is that it has been ongoing.
ODOT and the Oregon Transportation Commission, working with representatives from industry, government, and advocacy groups, drafted an update to the Oregon Transportation Plan that looks 25 years ahead – assessing where we are and where we need to go to build a balanced, efficient and sustainable transportation system.
I’m also personally involved in this issue. A transportation package has been part of every budget I’ve submitted to the Legislature. And in 2009, you are going to see another package – larger, greener, and more strategic.
I’m already talking with legislators from both parties. And in late November, I sat down with all the major transportation stakeholders. This group, which included OBC President, Duncan Wyse, will form three subcommittees: Vision, Governance and Public Communication.
The Vision subcommittee, chaired by Pat Reiten of Pacific Power, will make recommendations for how the 2009 package should be structured – and alternative ways of funding transportation projects.
I don’t, for example, believe that a gas tax is the only way to go. There are other choices. But I do believe that everything – including a gas tax – must be on the table.
The Governance subcommittee, chaired by Steve Clark of Oregon Community Newspapers, will look at how transportation funds are invested.
And the Public Communications subcommittee, led by Chip Terhune, my Chief of Staff, will focus on raising public awareness about the need to invest in transportation – and why this is an issue that affects all Oregonians.
As for core principles – these are the five that I believe must guide our drafting and implementation of a transportation package in the 09-11 session.
First - Transportation is indispensible to – and not severable from – economic development.
This goes back to what I said earlier about Oregon being a traded sector economy that needs quick, low cost, access to markets across the state and nation, and around the world. Today, businesses are coming to Oregon because of our quality of life, high tech industries, educated workforce, and gateway ports.
But there’s no law of nature or economics that says this favorable pattern will continue. And it won’t unless we reverse the current trend toward more congestion, more broken roads and bridges, and more productivity lost to an aging transportation system
Second - Local governments and advocacy groups for businesses – and the environment – must be at the table, and they must be part of any solution to our transportation problem. To make sure this happens, ODOT and the Oregon Transportation Commission will work with local governing bodies and stakeholders to identify where transportation investments should be made.
Third - Sustainability. When it comes to talking about sustainability from this podium, I know I’m preaching to the choir. We must develop an investment strategy that not only preserves the current system, but invests in sustainable transportation that achieves my goals for reducing greenhouse gases.
Fourth - Transparency and Oversight. If we are going to invest billions of public dollars in public infrastructure – then the public must have a voice. That means open discussions – and openly arrived at decisions – about cost, location and modes of transportation.
Fifth - Statewide Distribution. When we talk about jammed roadways and cracked bridges, we think of the I-5 corridor. But every part of Oregon’s transportation network is linked to every other part.
And fixing PART of the system is NO fix at all. From maintenance to preservation to expansion – our transportation blueprint must cover the needs of every region, and benefit every Oregonian.
* * *
I said that I wanted to talk about one project. That is the Columbia River Crossing.
If I-5 from Seattle to San Diego were an hourglass – everyone here knows the location of the narrow hole through which the sand must pass: The Interstate Bridge that connects Vancouver and Portland.
Or to use a different comparison – if Oregon’s other transportation problems are potholes, the antiquated bridge linking Oregon and Washington is a sinkhole
We only have two choices. Do nothing and watch our economy sink. Or take steps to invest in a multi-modal solution, which strengthens our nation’s economy and enhances Oregon’s quality of life
The Columbia River Crossing Taskforce has been studying this issue since 2005. The staff last week provided information on various options including a replacement of the existing bridge with a new one that could cost up to 4.2-billion dollars.
Right now there are more questions than answers. Cost, size, location, light rail, federal participation, public support – and financing – are all up in the air.
But this much I can tell you: Ignoring the problem will only make it worse. For example, if we stick with the status quo, the hours of congestion northbound will double to more than 13 hours a day by 2030.
That’s why I am on the record favoring a new bridge across the Columbia River. I’ve talked to Governor Gregoire in Washington about this. I’ve talked to our Congressional delegation. And I’ve talked to Metro and Portland officials.
Both Oregon and Washington must provide funding for this critical project.
But the Interstate Bridge is not just a regional problem. It is not even just a west coast problem. It is a national problem that is a drag on the entire American economy.
As such, replacing the Interstate Bridge requires a national solution. Remember the bridge to nowhere? This is just the opposite.
The federal government must step up and help us build a bridge across the Columbia that will inspire, fit with the beauty and richness of the landscape, and move people and commerce everywhere they need to go.
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I started my remarks by talking about how much has changed since I first addressed this summit in 2002. Let me close by telling you what has not changed.
My commitment to turning Oregon into an economic powerhouse by giving every child the opportunity for a great post-secondary education has not changed.
My commitment to investing in basic infrastructure so that we attract sustainable industries that pay family wage jobs has not changed.
My commitment to protecting our environment so that we pass on to our children the same beautiful and blessed state that was passed to us has not changed.
My commitment to making sure that every Oregon family has access to affordable health care has not changed.
My commitment to Oregon’s quality of life – from preserving our open spaces to preserving our cultural heritage – has not changed.
And my commitment to the Oregon Business Plan – and working with Oregon’s business community to create opportunity, prosperity, and a better future for you and all our citizens – has not, . . .and I promise you, will not, change.
Thank you.
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