Editorial: No future in state stimulus

Editorial, The Bend Bulletin
March 16, 2010

State officials branded the Oregon Legislature’s Go Oregon stimulus a resounding success. They say the 2009 program “created or retained” 7,500 jobs when the state economy needed it.

But what did Oregon get $93 million later? On Saturday, The Oregonian took a closer look. Here’s how that newspaper summarized its key findings:

– Average length of a Go Oregon job was about two weeks.
– Everyone working on a Go Oregon project was counted as a job, even those who were already employed and in no danger of being laid off.
– One out of four Go Oregon workers was from out of state.
– Counties with high unemployment got a smaller share of the money.”
How are Oregonians supposed to trust politicians that count to 7,500 like that? The Oregonian’s analysis also highlighted some eyebrow-raisers among the Go Oregon projects. Our favorite has to be spending $47,000 on a new roof for a vacant state transportation building in Clackamas County.

That’s really going to propel Oregon’s economy forward.

Of course, there are arguments to be made in favor of state stimulus spending. Recessions are caused in part by a decline in demand. Go Oregon played a role in stimulating demand. It did put paychecks in people’s pockets, however briefly. Remember, Oregon was nearly tops in national unemployment in 2009. Nobody would expect the Legislature to try nothing.

The question is: Was the Go Oregon stimulus the best something?

The Legislature could have chosen to spend the money in ways much more likely to stimulate the economy over the long term. It could have stimulated investment through an investment tax credit on new machinery and equipment. Business investment has been crippled in this recession. Revenues are bad enough and most credit dried up. The amount of the credits could have been capped at the same $176 million the Legislature planned for stimulus spending.

It’s common sense that stimulus based on investment is better for Oregon’s economy than stimulus based on consumption. State government picking which government building gets a new roof or a new coat of paint gets us as far as it did. It doesn’t build for Oregon’s future.