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Economic Summit Remarks
Thank you, Dick, for your introduction. And I think we should all thank Duncan Wyse for his very hard work pulling this Summit together.
I also want to thank my co-host, Senator Ron Wyden, who - along with Senator Smith - are carrying a bipartisan message to our nation´s capital: 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.
Yes, terrorism is a major threat. But so is a faltering economy.
If an outside power tried to impose the high unemployment, business failures, and radically shortened school year that we now face - we would not tolerate it.
Senators Wyden and Smith are determined not to tolerate home-grown economic decline either - and I join them in that determination.
So this is not about party. And it´s not about finding political advantage. We are in a global economy where our real competition is outside our borders, from other states and nations. Business gets it. I get it. We need a state government that gets it, so that we all wake up each day fighting to compete and win in the global economy. This is about saving the state we love and its economic future.
Let me also acknowledge the work of Dick Reiten and the Oregon Business Plan Steering Committee, as well as all of the leaders who contributed to the White Papers that were presented to today.
Senator Wyden and I may be the hosts of this Summit, but today really belongs to you. Your hard work has given me and the economic team I´m putting together - and the new legislature - a big head start in the race to get Oregon´s economy back on track.
I thank all of you for coming up with a comprehensive plan that is detailed, sensible and points us in the right direction. Many of your proposals are consistent with the economic initiatives my transition team is developing.
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When I say we´re in a race to turn Oregon´s economy around - I´m not exaggerating. We literally do not have a minute to spare.
This economic downturn is one of the most dangerous we´ve ever confronted. Like an out of control forest fire, it´s unpredictable: Everyone - and everything - in its path is in danger: Large businesses and small. Workers and retirees. Parents and children. Our cultural past and our educational future.
We don´t face a gathering storm. It´s already here - and its not going away on its own. An upturn in the national economy will help. But our fate lies not in the nation´s economic stars, it lies in ourselves.
We have to find the solutions to Oregon´s economic problems.
We have to promote entrepreneurship and cut out-of-date, burdensome and redundant regulations.
We have to close the urban-rural divide, and bring economic prosperity to all of Oregon.
We have to make sure Oregon doesn´t lose businesses and skilled workers to our neighbors because we can´t compete in a global economy.
We have to -- and we will.
I was certain of that before this Economic Summit began -- and I´m even more certain of it now.
Your working groups leave no doubt that we have the energy and creativity - right here in Oregon - to attract new businesses, create new jobs and compete in the global marketplace.
But we also have to be realistic. We face an additional $500 million deficit in the current budget, and a larger deficit in the 2003 - 2005 budget.
Even if the referral passes in January, and I hope it does, we will not be out of the woods. And if it doesn´t pass, there is simply no getting around the fact that there will be painful cuts in the core functions of government.
Schools, prisons, the State Police, health care, child protection services - will likely see their budgets reduced.
We are going to live within our means and focus on making government more accountable to taxpayers. We will set achievable goals and come up with solutions that have a real impact.
The days of business as usual in state government are over. That means - among other things - there will be no more Current Service Level budgets, where we simply look at last year´s costs and add more.
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Good times nurture complacency. But hard times nurture change. I believe we should take advantage of the recession and budget shortfall to change the way government does business.
For example, instead of government telling you how to run your businesses, I want you to tell government how we can better run our business. How we can be more of a partner, and less of a roadblock.
I´m not going to sacrifice Oregon´s quality of life - because it is the most important economic asset we have. But neither am I going to let protecting the way we live be an excuse for protecting the status quo.
We´ll be guided by words like timeliness, efficiency, and creativity - and judged by how well we recruit and retain businesses, create new jobs, and perform as the pit crew for Oregon businesses.
You´re driving this economy. It´s going to be our job to keep it tuned, change what needs to be changed - and do so in a very big hurry.
We´re already working on a package of proposals that I will submit to the Legislature early in my administration.
But our short-term plan has to be about more than helping Oregon businesses compete. It also has to be about helping Oregon families get back to work.
That´s why I´ll be calling for bonding authority to repair roads and bridges - so that we can quickly stimulate business activity and create new living wage jobs. I´ll be talking with leaders of both parties - and urging quick passage.
And that´s why we must make a greater investment in tourism and the arts. Tourism showcases our state and has two great benefits: Oregon gains a considerable return on every dollar spent -- and it´s one economic strategy that we Oregonians can control and implement immediately. There is a connection between the arts and our economy. The arts are not just a cultural event, they´re an economic event and the arts provide the cultural infrastructure we need to attract a 21st century workforce.
I´m already talking to both parties about PERS. PERS has grown out of control and is probably the biggest threat to our state financial stability. I think the best place to start is with the ideas that I sent to Governor Kitzhaber last summer.
But whether we start there or someplace else - this much I can say for certain: The Legislature will not go home this year until we reach an agreement about PERS.
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In my Administration, no one will doubt the role of the Governor in aggressively pursuing economic opportunity for the people of Oregon.
As Oregon´s Governor, I will use my office and powers of persuasion to market and sell Oregon. Businesses here and elsewhere need to know that Oregon is business-friendly and ready to deal.
For example, I will court this region´s top venture capitalists - Alloy Ventures, OVP, and Frazier and Company - to do more investing in Oregon, and to bring a partner here - the sooner the better.
We have a highly skilled and productive workforce, top-rate local suppliers, a transportation system with a global reach, and existing and blossoming industry clusters fueled by our pioneering spirit.
This is a state where the public sector and private sector are on the same team working toward the same goals.
Major companies and venture capitalists are going to hear that message from me. Not in a year or six months. But now. Even before taking my oath of office, I´ll be taking this message to Seattle, Boise and the Silicon Valley.
I also intend to retool the Oregon Economic and Community Development Department for the needs of a high tech, high wage and sustainable economy. After a remarkable period of growth in the 1990s, in which we outpaced the nation, Oregon has lost its economic and competitive edge - and ECD must do more and do it better to help us recapture that edge.
Today, the Department has many hard working and well-meaning employees. But its mission is muddled - and its performance hit and miss.
A few weeks ago, I asked Marty Brantley to begin a top to bottom review of the Department for me. Marty will also run the Department so he can implement the recommendations his team develops.
I agree with your White Paper on Refocusing Economic Development. Your conclusions match what I have been hearing from Oregonians over the past year. The Department needs to go back to the future - and once again focus on business retention, expansion and recruitment.
I´m talking to my three transition team representatives for high tech - Jack Isselmann, Debi Coleman, and Scott Gibson - about the specific needs of the state´s high tech industries.
This industry represents 26-percent of the Gross State Product!
We are also discussing what the Department can do to improve the quality and quantity of our research - and to facilitate the commercial use of that research.
But we cannot do any of this on the cheap. The Department needs funds to make deals that will enable existing businesses to expand - and attract new businesses to Oregon.
As you know better than anyone, businesses can pick and choose where they want to locate. We need to give them the incentive to expand here, which includes having "shovel ready" space available.
That is why my transition team is taking a hard look hard at the issue of industrial lands. We will have an industrial lands policy that makes sense for Oregon.
Here in the metropolitan area, our regional government has taken an important step by making the Shute Road site available. This is a decision that I strongly support.
Finally, I´m going to direct the reformed Economic Development Department to pay more attention to business competitiveness, encouraging investment, organizing around our existing and targeted industry clusters, and creating good jobs for Oregonians.
I don´t see these changes as turning our back on small towns and rural communities. My goal is to bring economic prosperity to every corner of this state.
The resource-based economies of Oregon - especially agriculture and forestry -are critical to our future, just as they have been critical to our past. But revitalizing our urban centers - and supporting young entrepreneurs with cutting-edge ideas - is the best way to generate the revenues we need to invest in all of Oregon.
A strong economy that creates high-paying jobs - and attracts taxpaying businesses - helps everyone - everywhere.
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A strong economy will also help our schools regain their footing.
As you point out in your White Paper on education, Oregon´s public schools have a long record of being among the best in the nation - and reforms implemented in the 1990s have further improved school performance.
I continue to support the Quality Education Model - and agree with your recommendation that we communicate a clear and consistent message in favor of school reform.
A strong economy helps our schools. But the reverse is also true: Strong schools help our economy.
K-12 education is the engine for creating a skilled workforce. Partnerships with community colleges, the private sector, and governments at all levels are the key to maintaining a skilled workforce. The owners of businesses looking to relocate want a highly skilled workforce and their employees are looking for a quality education for their children.
So good schools help with recruitment.
They also help assure that our students are able to compete for places in the best universities - and when they finish their education, that they´ll be able to find good paying jobs right here in Oregon.
Today our public schools are on the educational equivalent of the Endangered Species List. Millions of dollars have been cut from their budgets - and there will be more cuts if the referral doesn´t pass next month.
Classes are overcrowded. Teachers are overworked. Art, music and extra curricular activities have been reduced or eliminated. And a school system that already has the fewest number of days in the nation - may have to cut 15 more.
A weak and under-funded K-12 school system threatens to keep Oregon´s economy in a perpetual state of crisis. That means we must find a solution to this problem.
There are some short-term steps we can take. I said throughout the campaign that I thought we could save money by reducing administrative costs. As you know, two recent school audits showed that while Oregon spends more per pupil than the national average, we spend a little less per pupil on classroom instruction.
So with tighter accountability, and re-arranging priorities, we should be able to put more money into the classroom.
But the only long-term solution to the school financing problem is to come up with a stable and reliable source of funding.
Ballot Measure 1, passed last year, requires the Governor and Legislature to provide the education funding we need to meet our educational goals - or explain why we´re not doing so.
So the state faces both an economic imperative and a legal mandate.
But fulfilling that mandate will not be easy. If we simply turn to the voters and ask them to sign off on a sales tax or other tax measure, they will in all likelihood respond with a resounding "no!"
We have to find a different approach. Oregon voters have made it very clear over the years that they are not about to buy a solution crafted in Salem and sold to them with a big-bucks advertising campaign.
To reach a new, lasting and workable compact with the citizens of Oregon about how to fund schools and public services, we must put them at the forefront and engage them in a real and meaningful dialogue.
They will, after all, have the final say.
The way to make sure Oregon´s tradition of citizen initiative is up to this task is through a combination of old-fashioned grassroots organizing and modern communication.
Given the right tools, the people of Oregon will understand the rewards we reap from supporting education - and come to the right decisions about how to fund education.
This is not something we can do overnight. It´s going to take patience. And it´s going to take money. That´s why I´m pleased to tell you that there are serious discussions going on within - and among - Oregon´s non-profit foundations about spearheading the kind of grassroots campaign I´m talking about.
But we will need the business community to step forward, too. You make major investments in marketing your products to skeptical consumers. Now I´m asking you to invest your time and money in talking to Oregonians about securing our economy - and our future - by securing a stable source of funding for schools.
They´re all linked. It is difficult to run a business without predictability, and it is even harder to run a high-quality system of K-12 education.
If we can make the case for predictability, we´ll be able to build the critical mass of support we need to find that stable source of funding for our schools.
We can´t talk about education and the economy without also talking about higher education. Our universities are already a major source of research and discovery. This is necessary - but not sufficient.
What we have to do now is turn those discoveries into marketable products.
The Oregon Council of Knowledge and Economic Development is laying the groundwork to do just that. They´ve produced some terrific proposals for growing the economy and creating jobs using the intellectual property of our universities.
My thanks to Allen Alley and his team, for the work they´re doing, and the progress they´ve made.
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I have already mentioned the industrial lands issue. But let me comment further about land use planning and forest management.
Oregon is literally the national leader in land use planning. I truly believe that this should be a source of great pride for everyone in Oregon. As I´ve suggested, a healthy environment and high quality of life not only make this state a great place to live, they are economic assets that we can´t do without.
But that doesn´t mean that changes cannot - or should not - be made.
Oregon´s land use planning system is now almost 30 years old. It was originally set up to preserve agriculture and forestry land. Those goals are as important today as they were three decades ago.
But we cannot expect to keep land in agricultural production if agriculture is not a viable industry. That is why we must develop markets for Oregon-branded products.
As for better management of our forests, there´s a great deal I could say about this too. For example, although I want to build a strong federal-state partnership, I consider this an issue that cries out for state´s rights.
The Oregon Department of Forestry is one of the nation´s leaders in applying principles of sustainability to resource-based economies.
In other words, we know what we´re doing. We understand how to reduce the chances of catastrophic fire, and manage our natural resources in ways that protect Oregon´s rural economies.
Tomorrow I will be in Southern Oregon to review the impact of last summer´s forest fires.
Because of the Board of Forestry - led by Howard Sohn, who is on my transition team - Oregon is a national leader in healthy forest practices.
We will take this model to Washington, DC and demand that the federal government improve its management practices, allowing responsible harvesting of timber in a manner that reduces susceptability to costly forest fires.
I stand firm for the principle that there is real economic vitality in rural Oregon.
There are 16,000 jobs in rural Oregon that are tied to sustainable forestry and watershed protection. And these jobs are growing at a rate of 25-percent a year. We should take advantage of this growth by retraining workers for high-skilled jobs that sustain and protect our natural resources.
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As I´ve already said, I believe that in order to create a strong and job-producing economy, government must be a partner with business.
So this is a two-way street. We can - and will - ease regulations on small business, help market your products, rebuild Oregon´s infrastructure, find stable funding for our schools, and recruit new businesses.
But not without your help.
There is no substitute for talent. And there is plenty of it right in this room. That´s the other way you can partner with me. Your roots are here. Your families are here. Your economic future is here.
I hope you´ll recognize that and donate your time and expertise
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I have a lot of boards and commissions to fill. How well these boards function, and the quality of the oversight and decision-making they provide, will directly influence our ability to turn Oregon´s economy around.
This is quite literally the time to come to the aid of your state.
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Throughout my campaign for Governor, I told the people of Oregon that I was a born optimist, and that I was absolutely convinced that we, as Oregonians, can solve whatever challenge we face.
A lot has changed in my life in the last three weeks. But I´m still an optimist. And I´m still convinced that we have the strength and grace to solve our economic problems.
All we have to do is roll up our sleeves and get to work.
So join me. And together we will turn Oregon´s economy into the job-creating and business-building engine that the citizens of this state need and deserve.
Thank you very much.
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