Representative Richardson: Restoring Oregon Prosperity

by Rep. Dennis Richardson (R-Central Point)

Yesterday’s 2011-13 Revenue Forecast marks the ninth reduction in revenue out of the previous twelve Quarterly Forecasts.

Oregon’s September 2011 Quarterly Revenue Forecast was released yesterday and Oregon’s expected revenue for the 2011-13 biennium has been reduced by $193 million.

A $193 million decrease in anticipated revenue for 2011-13 is certainly unfortunate, but for me, not surprising news.  I have repeatedly stated that Oregon remains immersed in a Great Recession.  With yesterday’s Forecast, clearly, Oregon predicted recovery has not materialized.  Notwithstanding my rather pessimistic view of Oregon’s economy, the Office of the State Economist reassures us that they continue to expect a “weak economic recovery.”

So how will yesterday’s reduction of $193 million in expected General Fund revenues affect Oregon’s agencies and programs?  The three Co-Chairs of the Ways & Means Committee (we’re responsible for Oregon’s State Budget) anticipated the likelihood of a reduction in the revenue forecast by maintaining a $460 million Ending Balance.  The Ending Balance is a cushion that provides for fluctuations in revenue forecasts without immediately requiring disruptive cuts in agency and program budgets.  The existence of the $460 million Ending Balance enables yesterday’s $193 million downward adjustment in revenue to reduce the Ending Balance and not require cuts from agency and program budgets.  During the legislative session, some felt a $460 million Ending Balance was too much.  With yesterday’s Forecast, those voices are now silent.  In fact, when yesterday’s forecast is considered along with other dismal economic indicators, we may yet see that a $460 million Ending Balance was too little, not too much.

Only three months ago, when the May 2011 Forecast was released, the State Economist, having actual data for 23 of the 24 months of the 2009-11 budget, reduced the 2009-11 forecast by $49 million from the February 2011 Forecast. Yet, at the same time he reduced the 2009-11 forecast, the State Economist projected the revenue for the 2011-13 biennium (which was to begin on July 1, 2011), was even more positive than the Forecast given only three months earlier.

In short, the May Forecast increased the anticipated State revenue amount for 2011-13 by $127 million over the February Forecast for 2011-13, while adjusting downward by $49 million the forecast amount for 2009-11.

Regarding the accuracy of the increased 2011-13 revenue forecast, I stated the following in the May 12, 2011 newsletter:

Notwithstanding the reduction of $1.2 billion in forecast revenue in the past two years and $49 million in just the past three months, yesterday’s revenue forecast for the near future (2011-13 biennium), is much more optimistic. For 2011-13, we are told we can anticipate a strong economic recovery that will reverse the downward trend.

Yesterday’s forecast predicts a $127 million increase in tax revenue over what was forecast only three months ago. In sum, the 2009-11 forecast has decreased to $12.38 billion, while the 2011-13 forecast has increased to $13.90 billion. Thus, although the State has lost $1.2 billion of expected revenue in the past two years, it expects to gain new revenues of $1.5 billion in the next two years. Happy days…? Don’t bet the farm just yet. (Click here.)

Right Track, Wrong Track

The first lesson for a ditch digger working in the wrong place is: Stop digging. Economically, Oregon is in the wrong place.

Oregon’s ability to compete with more business-friendly states is steadily declining. [Oregon’s place in the 50-state “business friendly” rankings has dropped from a dismal 38th to an appalling 43rd .]

In my opinion, precious little has been accomplished this session that will result in greater prosperity, self-reliance and success for unemployed Oregonians across the state. Consider the power and potential for transforming Oregon’s economy if a committed coalition of Oregon’s legislators were to unite in a common cause, without consideration of party or politics, and join forces to remove existing barriers to economic growth and prosperity.

We were elected by promising to do something to create JOBS, JOBS, JOBS. Yet, what have we done to help make Oregon a more “Jobs-Friendly” state?

One strategy is to promote the prosperity and expansion of Oregon’s small businesses—those already here and operating. We members of Oregon’s legislature can help develop and implement a new plan for prosperity based on non-partisan principles focused on creating a business friendly environment.

Please consider the following proposal:

Oregon Prosperity Plan

Principles:

1. Private enterprise creates prosperity, not the government;
2. Prosperity and an expanding economy create jobs, not the government;
3. When businesses grow and expand, new jobs are created;
4. Planning for prosperity requires clearing away the barriers blocking business expansion.
5. Partisan politics have no place in times of economic crisis.
6. Now is not the time to blame for past mistakes.  Now is the time for creating a brighter future for Oregon.

Action Plan:

1. Assess 
a. Each legislator will identify 6 businesses in his/her district that may be ripe for expansion.
b. Each legislator personally interviews and builds a relationship of trust with the owners/CEOs.
c. Working with owners/CEOs, identify specific barriers to business expansion and benchmarks to gauge success.

2. Act.
a. Each legislator crafts legislation that removes specific barriers to business expansion and job growth in his/her district.
b. Each legislator commits to working to build coalitions around key pieces of legislation that demonstrate the greatest urgency for job growth and business expansion, and have the broadest, statewide impact.
c. Submit legislation that removes barriers to business expansion and job growth.

This proposal is an attempt to set a new direction. “More of the same” cannot be Oregon’s motto for prosperity.  Either we legislators join together, evaluate what has and has not worked for Oregon in the past, and develop a strategy for action to improve our economic advantage, or we are cursed by our own intransigence.

If not now, when? If not us, then who will do it?

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Posted by at 06:39 | Posted in State Budget | 29 Comments |Email This Post Email This Post |Print This Post Print This Post
  • HBguy

    First, I do respect Rep. Richardson. BUt, as a moderate independent! I’d like to point out that the first three items in the Principles are republican sound bites, then number four is to avoid partisanship. I think these need to be reworked. On the action items, to ask Legislators to befriend certain CEO’s, and a self selected limited number at that, and basically make them a braintrusr is how we got in this mess in the first place. We need a broader circle of input. Seek advice from all constituents. You do need to talk to labor .(union and non union)as well as socia service and environmental sectors. For instance, a paper mill manager may talk about how DEQ regulations are killing them. Well, it seems like you may want input from the downstream Marina operator, the Local city that takes their water from nearby wells, the DEQ scientists, etc.

    Republicans are ALWAYS sying we need to get government off the backs of businesses. I assume they have a lot of specific stories about that. So why do we even need Further consultations in any event is beyond me. just give me five specific regulations that should be changed to help. Specific. Then do it. Otherwise When I hear “less regulation” and “just get government off our backs” as pure partisan pablum.

    • Rob DeHarpport

       Just ask any business owner- the regulations and fees continue to increase. Do you know that in Lane County you must pay LRAPA $5000.00 for a “dust permit” whenever a rock crusher is set up at a new location. (generally these locations are on remote logging roads) That’s regulation #1. Now the EPA wants to require a permit for rainwater run-off on these same logging roads. Example #2. I’m sure folks will soon chime in with many more examples.
         Of course there are the abuses of the ESA that everyone must deal with. Lawsuits constantly related to the Endangered Species Act are never ending. Any resource based industry really has a battle on there hands every day just to abide by all the regs. No one wants to trash the environment- the rules and regs have gotten out of hand.
        I’m curious to hear ideas on how to get the economy going from a moderate Independant….

      • the real valley person

        So people who crush rocks should not have to account for the pollution they spread off site. That is your example?  News flash. A lot of rock crushers are not in remote sites, and even those that are have nearby streams that don’t need more sediment, which is what dust is when it settles. Not to mention that some dust gets up into the air and travels long distances, ending in other people’s lungs, for which they are not usually compensated by the owner of the rock crusher.

        The EPA is not the problem on the storm runnoff. The problem is that the Clean Water Act says industrial activities can’t discharge into streams without a permit. Commercial logging is clearly an industrial activity even though it takes place in rural areas. The court case was about whether timber companies (and state foresters) needed a permit to discharge their runnoff, which collects along roads and runs through pipes, into stream untreated. The court case was not brought by the EPA, it was brought by private citizens who like their streams clean and full of fish.

        Lawsuits are what libertarians say is the way these issues should be settled. So I don’t get your argument.  

        • Rob DeHarpport

          Do you really consider “dust” as a pollutant? If that is true how can we find a way to tax the wind? If muddy run-off is pollution- how can we find a way to tax the rain? Sure both are bad in certain locations and if excessive. These regulations are often punitive without a need to punish- just used as a way to create revenue to perpetuate the agencies that create them. My argument evidently sailed right over your regulation filled head. My argument is based on common sense.
            You cite the problem as being the Clean Water Act- that my friend is the entire gist of this article –one method is to eliminate asinine non-nonsensical regulations as a way to increase prosperity. There is a place for regulations- but many are have and continue to exceed any sort of common sense.

      • HBguy

        I’d start with tax reform. There was a blue ribbon commission bout three years ago that came up with four different tax structures. Some weighted more, or less, between growth, employment, progressively in taxation. I’d pick one, or let voters select one of the four, and implement it. I would make sure that whatever System we had was competitive with our nearby states.

        Next, I’d set up a board of legislators, Governor office staff, business people, large and small, and consumer advocates to act as a fast track regulation relief omsbudsmn board with the ability to quickly bring proposed changes directly to a vote by the legislature, or to rule making authorities.

        On spending, we do need to look at duplicate services and consolidate. And total state employee compensation ness to be competitive with the market. But I also think that what has made America strong is the middle class ability to accumulate some assets. And the state needs to pay a wage that reflects that core amereican value. I do not agree with the conservatives who would prefer to strip mine the middle class wealth rather than Increase taxes on very high income earners.

    • Rob DeHarpport

       Just ask any business owner- the regulations and fees continue to increase. Do you know that in Lane County you must pay LRAPA $5000.00 for a “dust permit” whenever a rock crusher is set up at a new location. (generally these locations are on remote logging roads) That’s regulation #1. Now the EPA wants to require a permit for rainwater run-off on these same logging roads. Example #2. I’m sure folks will soon chime in with many more examples.
         Of course there are the abuses of the ESA that everyone must deal with. Lawsuits constantly related to the Endangered Species Act are never ending. Any resource based industry really has a battle on there hands every day just to abide by all the regs. No one wants to trash the environment- the rules and regs have gotten out of hand.
        I’m curious to hear ideas on how to get the economy going from a moderate Independant….

  • Anonymous

    This is largely the result of trying to run the state with  Cadillac amenities when in fact it should be more like Chevrolet…or even Yugo. For too long,Oregon government has run around with its nose in the air pretending that we are something special when the reality is we are barely getting by.

    Oregon must reduce the size of government by cutting staff and programs. A few years back I saw a study that showed massive duplication of effort in state government. In one case, 13 state agencies had people doing the same part time job. That is, they were all doing duplicate work that a couple of them could have accomplished.

    It’s this kind of ridiculous bull crap that is running Oregon deeper down the drain. We have a too big state work force and it needs to shrink. Many of the jobs the state has taken for itself could be better accomplished by the private sector.

    Unfortunately, Oregon;’s government work force is growing while its private work force shrinks. Under the current “leadership”…which has been in place for nearly 30 years…more government is what we’re going to get.

    • Rob DeHarpport

      I agree, look at the Oregon Water Enhancement Board (if you have known we have or need one). We have the EPA, DEQ, LRAPA (in Lane County), etc. etc. We also now have all of these “Watershed Councils” that are funded by….. EPA, NOAA etc. Way too much duplication- of course it will take another agency to unwind all of this–perhaps we could call it the “Department of Elimination.”
        The best alternative is for them to be defunded from the Federal level on down.

      • acclaimed

        I looked at purchasing a business building in Hillsboro yesterday and found that the city has a “traffic impact” fee of $12/square foot = $50,000 right out of pocket.  And the building is an old building that has been occupied and so, presumably, had an equivalent (already paid for) impact on traffic.

      • the real valley person

        Watershed councils are funded primarily by grants, donations, and the state through dedicated lottery funds the citizens just overwhelmingly locked into the constitution.  Timber companies and local farmers normally sit on watershed councils. They are not regulatory. They promote voluntary activities. I would think conservatives would be supportive of this.

        • Founding Fathers

          RVP, there in the last sentence, the third word, there is your problem. “Think”. It’s an ability that so-called “conservatives” (there aren’t many actual conservatives left) seem not to have.

          • valley person

            Agreed. But I said “I would think,” not they THEY would think. To clarify, I would think they would instinctively support volunteer-based, non regulatory watershed councils.  

          • Rob DeHarpport

            Not only do we think- we do a little research as well. There is a distinction between volunteering and excessive layers of publicly funded agencies operating as all “volunteers”- I can assure you that these watershed councils have paid staff who duplicate the work of these agencies and receive tremendous amounts of public money to do so. Governing by consensus/committee- following the socialists model.

        • Rob DeHarpport

          You need to do a little more research on how these watershed councils are funded “real valley person.” You will find an amazing amount of duplication between the DEQ, EPA, Oregon Water Enhancement Board and these “Watershed councils.”You are 100% wrong.

  • OregonDreamer

    How do you “restore” something we never had? Oregon has not been prosperous in the past 6 decades at least.
    Only government can get us going again. Right?
    More light rail would be the answer I would think.
    Plenty of high-paying jobs to make one of those.

  • Nothug

    Nothing will happen. Nothing will change.
    Union thugs who money launder for the Dems run this state.
    They are firmly at the helm of our sinking ship.

  • Gordon

    Today (August 28, 2011) my small famiy business no longer is a registered commercial contractor.  Effective July 1, 2010, the legislature required ALL commercial contractors to carry workers compensation insurance.  I tried working within the system but found that workers comp only covers witnessed accidents for business owners.  Since I work by myself 90% of the time, that means the money spent on workers comp is flushed down the toilet.Additionally, the commercial CCB license is the only place in Oregon where small family businesses without employees must carry workers comp.  Since commercial contractor work historically comprises about 10 to 15 % of my total workload, the requirement to carry workers comp puts my business at a competitive disadvantage for the bulk of my work because workers comp must be applied to ALL work that is performed, regardless of whether it is on a commercial building or not.

    I worked with Association of General Contractors to get House Bill 3612 passed, which would give an optional way out for the workers comp requirement.  http://gov.oregonlive.com/bill/2011/HB3612/  Representative Mike Schlaufer killed the bill in committee, even though it had 14 bipartisan co-sponsors.  Mike told me to my face that as long as he is in power, ALL workers on commercial buildings will be required to carry workers comp.  Actions like this frustrate business.  Even more frustrating is the fact that these laws are not enforced, so only law abiding businesses suffer and businesses acting illegally for decades continue unabated.Gordon Fiddes, President   Image Restoration, Inc.  CCB # 108383

  • Gordon

    Today (August 28, 2011) my small famiy business no longer is a registered commercial contractor.  Effective July 1, 2010, the legislature required ALL commercial contractors to carry workers compensation insurance.  I tried working within the system but found that workers comp only covers witnessed accidents for business owners.  Since I work by myself 90% of the time, that means the money spent on workers comp is flushed down the toilet.Additionally, the commercial CCB license is the only place in Oregon where small family businesses without employees must carry workers comp.  Since commercial contractor work historically comprises about 10 to 15 % of my total workload, the requirement to carry workers comp puts my business at a competitive disadvantage for the bulk of my work because workers comp must be applied to ALL work that is performed, regardless of whether it is on a commercial building or not.

    I worked with Association of General Contractors to get House Bill 3612 passed, which would give an optional way out for the workers comp requirement.  http://gov.oregonlive.com/bill/2011/HB3612/  Representative Mike Schlaufer killed the bill in committee, even though it had 14 bipartisan co-sponsors.  Mike told me to my face that as long as he is in power, ALL workers on commercial buildings will be required to carry workers comp.  Actions like this frustrate business.  Even more frustrating is the fact that these laws are not enforced, so only law abiding businesses suffer and businesses acting illegally for decades continue unabated.Gordon Fiddes, President   Image Restoration, Inc.  CCB # 108383

    • the real valley person

      Your situation is bad for your business, but may be good for others that can’t get the exceptions you were seeking. In other words, exempting you could put others at a disadvantage. 

      • Gordon

        The proposed law HB 3612 did not address my business solely, it addressed ALL small family owned businesses across Oregon.  Instead of requiring workers comp to get a CCB Commercial Licnese, it allowed small family businesses to alternately provide health insurance for the family member working at the commercial construction site.  This is coverage that works whether or not a witness is present to observe an incident requiring medical attention, and health insurance is already being purchased by most responsible small family businesses.

      • Gordon

        The proposed law HB 3612 did not address my business solely, it addressed ALL small family owned businesses across Oregon.  Instead of requiring workers comp to get a CCB Commercial Licnese, it allowed small family businesses to alternately provide health insurance for the family member working at the commercial construction site.  This is coverage that works whether or not a witness is present to observe an incident requiring medical attention, and health insurance is already being purchased by most responsible small family businesses.

        • the real valley person

          Right, but if larger businesses have to pay workman’s comp, and smaller ones don’t, that gives the smaller ones a competative advantage no?  Workman’s comp is different than health insurance. its like substituting an apple for an orange.

          • HBguy

            I gotta go with Gordon on this one. The proposed exemption would only apply to owners/officers of a small contractor. Not those who have employee. And, workers comp only covers on the job injuries, just like private health insurance would do. So, I don’t see the harm in HB 3612. T

            he point of workers comp is to make sure that employees who are injured on the job have some coverage for medical and lost wages. We don’t want those unscrupulous employers to endanger workers. BUT, if the owners themselves want to allocate a bit more risk by getting health insurance instead of full workers comp coverage, just like they take a risk in running a business, Idon’t see anything wrong with it. 

            If it gives small business people an advantage over large businesses, I guess I don’t see that as unfair. Big business can get better rates on workers comp coverage. Big businesses don’t require their owners/directors to pound  nails and tape sheetrock. Big businesses have many many advantages that small business people don’t have. if this is a very very small cost advantage small contractors can acquire, I’m fine with that. But if you think large commercial contractors will be taken advantage of by Gordon, his toolbelt and his F-250, then by all means, defend Rep. Schaufler

            Two other things. The original bill that caused this problem was introduced at the request of the AGC. Don’t know why, maybe they didn’t see the burden on owner operator contractors. And, Rep. Schaudler is a former union guy. So I do think this is an issue between larger contractors and small owner/operator contractors who are vying for the same business. I go for the little guy, because there is no harm here.

          • Gordon

            Yes, it is like comparing apples to oranges.  Employees have coverage 100 % of the time on the worksite with workers comp.  Business owners only have coverage with workers comp if there is a witness to the incident/accident.  Business owners only have coverage 100% of the time with health insurance.  Granted, it is a different kind of coverage, but at least it is coverage.THIS IS THE FIRST TIME SOLE PROPRIETORS OR SMALL FAMILY BUSINESSES WITHOUT EMPLOYEES HAVE BEEN REQUIRED TO CARRY WORKERS COMP IN THE HISTORY OF OREGON.  The worker’s comp rates for small businesses are exorbitant, especially if only a portion of the work is actually performed under the CCB general contractor’s license.  Most small businesses depend on different sources for their business.  This is the only way to provide stability to a small business.  Working in Commercial buildings is only one part of my business, but it has contributed to our ability to stay in business for 28 years, until yesterday.  The legislature has regulated one less place small family businesses can work in this poor economy.  And it is not just about my business.  It is about the industry, too.  Large contractors bring me in to perform punch list repairs that require the high specialization only a master craftsman can perform before they can turn the building over to the owner.  Nobody could make a living in my trade solely by working in commercial buildings because the trade is so specialized.  This means panels, doors, and woodwork will have to be entirely replaced or removed from the building so I can work on them off-site under different lighting conditions.  The costs and delays to large contractors increase exponentially as their options diminish.

            Let me give you an example:  The Oregon Convention Center lobby has hundreds of bookmatched panels.  If one gets damaged beyond repair, they all have to be replaced because they are all bookmatched.  Well, they all got damaged and I fixed every one of them before the building construction was completed.  Not one panel had to be replaced, because if one needed to be replaced, they all needed to be replaced.  Thankfully, the laws were different then.  Under the current laws, I could not have set my foot in the building because I no longer have a Commercial CCB license.  If the contractor had to order an entire set of replacement panels, what are the odds they all would be perfect?  Zero.  It is an impossible situation if a highly qualified repair specialist is not available.  The commercial construction industry’s options are now limited, thanks to Mike Schaufler.

          • the real valley person

            I’m convinced. You make good arguments, as did HB guy. I agree that this is a problem that needed fixing. Initially I wasn’t reading this as applying to solo operations. I was reading it as smaller contractors getting out of workers comp, which is a slippery slope. Best of luck in getting this fixed in the future. 

          • HBguy

            I’d add…..the fact that the original bill requiring workers comp was proposed by AGC shows that the AGC doesn’t really think (or care?) that much about the TRULY small businessperson. 

            And The fact that the common sense fix was opposed by Union Democrat Rep. Schaufler shows that parts of the democratic party likewise don’t care about the small businessperson or common sense if the unions it is perceived to cut into Unions. (Small business contractors are obviously non union, so if they can be kept out of commercial building trade, there is more chance those jobs go to union shops. I’m certain that is Rep. Schauflers reasoning)

          • HBguy

            Really bad grammar. Sorry. 

    • just doing the math

      I know this may not make you feel any better, in that it
      is WW assessment of this representatives qualifications,
      but this is the type of representative you may be dealing
      with. He is listed in the AWFUL rank. To bad he is a Dem.

      Rep. Mike SchauflerD-Happy ValleyOverall rating: 5.54Integrity: 4.57Brains: 5.41Effectiveness: 6.64
      Schaufler, 51, is a raging bull in a Capitol that skews toward quiet and polite. 
      As WW reported, the former contractor now lives off his legislative pay and campaign funds. He excels at spending contributors’ money on bar tabs,
      cable bills and numerous other expenses as allowed by Oregon’s lax campaign-finance laws. Schaufler co-chaired the House Business and Labor Committee
      with an iron gavel. He won a big victory over the enviros he despises by
      ramming through legislation that would make siting gas pipelines easier. 
      “A bully on his committee. Not OK to intimidate the public with diatribes
      and stifle testimony,” says a lobbyist. “Get a job please…leave,” says
      another. “Your schtick is tired, old, used up and we are sick of it.
      We all know: ‘keep the beer cold and you are happy’—ridiculous.”

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