A Three-Part Series: Part I
In September, Oregon Business Magazine hosted an 18-day, 2000-mile road tour around Oregon designed to promote business innovation and share best practices. Included in the tour were elected officials, civic leaders, directors of government agencies, small business owners, corporate executives and, just to make it interesting, the Cascade Policy Institute management team.
Tour stops included Astoria, Salem, Corvallis, Springfield, Eugene, Reedsport, Medford, Lakeview, Prineville, Bend, Hines, Burns, Baker City, Joseph, Pendleton, The Dalles, Hood River, Troutdale, Gresham and Portland. Tina Pisenti, Cascade’s Vice President, went on the entire trip — the only guest to do so. I joined the tour in Medford and traveled through central and eastern Oregon.
At various stops we toured ranches, farms, factories and classrooms. We met with researchers, entrepreneurs and politicians and had opportunities to question hundreds of hard-working Oregonians about important local issues, frequently over fabulous dinners served up with great Oregon wines and beers.
The tour was a vivid reminder that Oregon is a very diverse state. Policies that might seem attractive in one part of the state are frequently inappropriate in other areas. And therein lie the policy lessons of the tour. On important issues ranging from land-use regulation, transportation, education and public lands management, local wealth creation is being stifled by top-down regulatory regimes that need to be changed or repealed.
Out of hundreds of individual conversations that we had, a certain number of themes emerged:
Federal and state land-use regulations are a huge barrier to economic opportunity.
More than 55% of Oregon is owned by the federal government. Of the remaining lands, more than 90% are zoned for rural farm and forest use, to the exclusion of most other uses. This means that most of the state cannot be leveraged for its highest and best use. To the contrary, Oregon resembles a gigantic museum, where we can look but not touch anything.
One conversation that took place near Pendleton is revealing on this point. After spending the morning in Pendleton hearing how the town wants to attract light industry and living wage jobs, we then traveled east to look at a new business park being built by the Umatilla tribe. After a very impressive walk-through, we were driving back on the bus when a woman from the Pendleton Chamber of Commerce remarked that such a business park could have been built in Pendleton except that the city has a shortage of land within the urban growth boundary. As she said this, we looked out the window, and noticed that there was nothing but vacant land as far as the eye could see — land that was obviously trapped in an Exclusive Farm Use zone under state planning law, but which would be much more valuable if converted to another use. Since that conversion is not possible under current land-use regulation, it sits under-utilized while economic opportunity is found miles further from the city on the Umatilla Reservation where zoning advantages lead to job creation.
On federal lands, it is clear that forestland planning has been a disaster. Timber harvests have slowed to a trickle, timber losses due to insect infestations are far higher than on private lands, and the century-long policy of natural fire suppression has turned many federal forests into tinderboxes. Nowhere was this dysfunction more apparent than on the day we toured Contact Industries, a wood products manufacturing facility in Deschutes County.
This particular facility had gone from a money-losing venture after the cutback on federal logging to a profitable operation through a complete reinvention of its business. However, when asked where the raw logs come from, the manager told us that most logs come from New Zealand and parts of South America, even though in nearby Deschutes National Forest, millions of trees stand that cannot be harvested, including many that have been affected by a forest fire. If burned-over trees cannot be salvaged for logging within a short period of time, they will cease to have any commercial value. But that is likely to be the fate of those trees under a federal planning system that usually reverts to the “do-nothing” option after environmental activists get through filing comments and appeals.
The irony is that Oregon politicians are tripping over themselves to brand the state as a world leader in “sustainability,” yet the state’s most renewable resource — trees — is so over-regulated that we have to import them from halfway around the globe. We outsource the visual trauma of logging so we can look at trees in Oregon, while establishing the preconditions for the next round of catastrophic forest fires.
Tune in next Monday for Part II: Most entrepreneurs don’t want help from the government; they just want to be left alone….