Dudley Unveils 26 Point Plan For Reforming State Budget; Says State Cannot Afford New Measures On Crime and Parks
Dudley says Kitzhaber’s status quo record and policies set the stage for Oregon’s current economic mess
By Chris Dudley for Oregon Governor Campaign
View Entire Chris Dudley Oregon’s Comeback Report Here
Lake Oswego – Chris Dudley today unveiled Oregon’s Comeback: A 26 Point Plan to Control Spending and Reform Government. To get Oregon’s economy back on track, Chris’ plan aims to reform the way Oregon budgets and prioritizes government services by focusing on five key areas:
• The Foundation for Reinvention
• Total Compensation Approach for State Employees
• Accountability and Transparency
• Prioritized Government Services
• Outcomes and Innovation
As outlined in the plan, former Governor John Kitzhaber failed to effectively budget for Oregon’s future. And as a consequence, we face what the Reset Report described as “a decade of deficits.” In short, John Kitzhaber failed to limit state spending, reform government to make it more effective and cost-efficient, or rein in public employee compensation.
In Dudley’s address to the Hermiston Chamber of Commerce on Wednesday, he will also express his opposition for Measures 73 and 76, citing the need for the financial flexibility to deal with our fiscal challenges. The crime measure is estimated to cost as much as $92 million over the next 10 years, while the parks measure could be as high as $174 million each biennium.
Attached you will find Oregon’s Comeback: A 26 Point Plan to Control Spending and Reform Government.
Read Remarks As Prepared For Delivery Below.
Oregon’s Comeback: A 26 Point Plan to Control Spending and Reform Government
Remarks by Chris Dudley to the Hermiston Chamber of Commerce
August 18, 2010
Thank you. It’s great to be in Hermiston this morning. I look forward to coming back to Umatilla County in a few weeks for The Round Up. And as Governor, I look forward to coming back to Umatilla County each year, along with every other county, something I have pledged to do if elected.
Since I began this campaign, I’ve learned a few things. And one of them is that folks in Eastern Oregon like straight talk. Just tell it like it is. I hope to live up to that expectation today by outlining my thoughts on Oregon’s current budget situation, how we got here and my ideas for solving it and saving our quality of life.
Today, I am releasing the first of several policy documents – adding more details to plans I released earlier this year – that will shed light on how we can set Oregon on a new direction – a better direction – for our future.
I call it Oregon’s Comeback because I believe that the problems we face today are neither insurmountable or ungovernable – they just require a willingness to try new ideas, and courage to bring long overdue to changes our state government. Oregon has overcome hardships before and I am confident – working as a team – that we are up to the challenge.
It’s no secret that we’re in tough times. We’ve all heard the statistics and too many of us know people who are facing the personal hardships that come with tough economic times. Specifically, when it comes to Oregon’s budget in the next 2 years – the forecasters say we are looking at a $2.7 billion dollar shortfall.
They use the term shortfall instead of deficit because $2.7 billion is actually the difference between what the government expects to collect in taxes and lottery revenues over the next two years and what the bureaucrats in Salem would like to spend the next two years.
But the problem doesn’t stop there. Governor Kulongoski recently issued a bipartisan report – which I would encourage everyone here to read – that says Oregon is facing a “decade of deficits”.
But despite what you may hear, make no mistake, our current economic and budget mess didn’t begin just two years ago with the national recession. The seeds of today’s problems were planted 16 or even 20 years ago by previous Governors and legislatures who spent too much, failed to reform and modernize state government. Worst of all they took private sector job creation for granted at best, and punished it at worst.
And, as we all know, it’s private sector job creation that serves as the very foundation of our quality of life – allowing families to thrive and generating the tax revenues for our schools, prisons and health care. To state the obvious: jobs equals quality of life.
My opponent was Governor for 8 of the past 16 years – and served in leadership positions inside the legislature for 14 years before that. As President of the Oregon Senate and as Governor, he negotiated, wrote, voted for and signed the budgets that have shaped state government. We’re living in the future John Kitzhaber created during his 22 years inside Salem. If he wants to take credit for his successes as Governor, he also must accept responsibility for his failures as Governor.
During his eight years, state spending went up 57% and unemployment rose 65%. Even worse, just a few months after he was elected, Oregon’s unemployment rate went above the national average – and it’s been stuck there ever since. For the past 14 straight years Oregon has had higher unemployment than the rest of the nation.
And how did John Kitzhaber try to stimulate the economy? By supporting a sales tax, a gross receipts tax and vetoing a tax cut that would create jobs and investment. His complaint during his time in office was that the government needed more taxes – not that Oregonians needed more jobs.
This is the table John Kitzhaber set for us during his eight years as Governor.
In February, I released an economic plan called Jobs First. I identified four specific strategies for our economic recovery:
• One, promote private sector job creation… because private sector jobs create more taxpayers – and the need for less taxes.
• Two, control state spending and reform government…because for too long our government has grown faster than taxpayers can afford.
• Three, educate for our economic future…because quality schools and access to college are the keys to future prosperity.
• And four, rebuild public trust in government…because until people trust their leaders again, real change and real reform will be real difficult.
Today I want to focus specifically on controlling state spending and reforming government. I am releasing a detailed document that is available on my website; I will share some of the highlights with you now.
Arguably, the most important job of the Governor is to propose a state budget. If I am elected in November, the day after the election I will begin the process of building a two-year state budget designed to achieve the following 5 things:
One, slow the overall growth of the state budget (something my opponent failed to do when he had the chance); two, hold the line on new taxes (something my opponent has not ruled out); three, strengthen savings for a rainy day (something my opponent again failed to do as Governor and has criticized me for proposing now); four, reform outdated programs (a topic my opponent has had little to say about); and five, create tax incentives for people to create jobs and invest in Oregon again (something my opponent vetoed when he had the chance to do as Governor).
So, how does all this get done?
You start with the basic budget assumptions. My first, two-year, general fund budget will total approximately $15.6 billion – this amount could change – and will likely change – based on our economy and revenue projections. But unlike the past, my budget will be based on projected revenues – not the desired spending levels from inside the state bureaucracy or new taxes coming from hard-working Oregonians. The policy term in Salem for this concept is called zero based budgeting. Most people call it common sense.
A budget of $15.6 billion represents an increase of $1.8 billion in real dollars over the past two years – an increase of 13.2%. And, while this is a lot of money, when you account for inflation and the growing demand for services during tough economic times, it essentially means we will be buying in services about the same the next two years as we did the two years before.
For those programs that will have to do with less, there will certainly be loud complaints. But I see the current budget crisis as both a challenge – and an opportunity. For example, it’s an opportunity to move the state budget director out of the bureaucracy and into my office – just down the hall. This will increase accountability. It’s an opportunity to make saving for a rainy day the first priority of state government – not the last.
I’ve proposed 3% rainy day fund and I will work with the legislature on the details of a plan so we can save now…and save more. It’s an opportunity to eliminate outdated programs. Like getting the state out of the liquor store business – something the private sector can do just as well or even better at less cost to taxpayers.
It’s an opportunity to give the Governor greater authority to make specific, targeted budget reductions – vs. across the board cuts – when the legislature is out of session and revenues come in less than projected.
Other changes won’t be so easy – because they are far more significant in their impact on the state budget. The most significant challenge is our approach to compensating public sector workers. Let me first say, that I value state workers, teachers and those who serve the public.
And while I am committed to fundamental change in this area, I will not make individual state employees and teachers scapegoats for the failure of past policy-makers to fix a broken system – a public employee compensation system that is fiscally unsustainable.
Specifically, here is what I will propose. First, I will ask state employees to share in paying the cost of their health care premiums – to a level similar to what most public school teachers’ pay for their health care.
Second, I will negotiate an end to the state’s 6 percent pick-up of new state employees contribution to their retirement accounts. Governor Kulongoski estimates that simply reducing this contribution from 6 to 3 percent could save $132 million over two years.
Third, I will explore converting the state’s health, dental, vision and other benefits to a cafeteria plan model; which as major private companies have shown, can save money while providing good benefits.
Right now, total compensation for state employees is slated to increase by 13% over the next two years. This is simply too expensive. Therefore, as Governor, I will do everything in my power to be as strong an advocate for taxpayers in controlling costs and pursuing reforms as the public employee union leaders have been in defending an unsustainable status quo.
Which leads me to another challenging topic – two ballot measures facing voters this fall. As Oregonians we love our initiative system – and as Governor I will defend it. Even when it results in measures I disagree with or results I do not support. Sometimes, measures that are very attractive – also cost a lot of money.
And every time a new measure passes dedicating funds to a certain cause or program – it takes away dollars that could be spent on existing programs like education or enforcing laws currently on the books.
This year, two measures – one that increases penalties for terrible crimes and one that locks up lottery funds for state parks – are both on the ballot and will take away money from other existing services. The crime measure will cost much as $92 million over the next 5 years; the parks measure as much as $174 million every two years.
I realize that as Governor, I will need to make unpopular decisions; that I will need to sometimes tell people I agree with – things they don’t want to hear. This is one of those times.
While the goals of these measures are laudable, their cost is simply too high. I will be voting no. With our budget facing historic economic challenges, we simply can’t afford to begin new programs that will take money away from existing programs and limit our financial flexibility.
This election presents each of you with a very clear choice. Policies and a record from John Kitzhaber that have proven – over the course of the past 16 years – to have failed to adequately prepare Oregon for its economic future and have contributed to our current economic troubles.
Or, with me, the promise of a new direction, new leadership and fresh ideas; ideas that value private sector job creation.
Ideas that confront our budget challenges – not avoid them for a latter day; ideas that can begin to restore people’s trust in government; change from the outside instead of another four years of the failed status quo.
Indeed, we face some very tough choices ahead, but as governor I will make them.
John Kitzhaber had his chance, now it’s time for a new direction. And with your support, Oregon won’t be ungovernable – it will be unstoppable.