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January 14th, 2009 HENRY STERN | News Stories
 

How Deep Is Your Guv?

The governor is almost on the shelf. Here’s how he’s done so far.

     
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IMAGE: brianleephoto.com

Rod Blagojevich or Eliot Spitzer he ain’t.

There’s little risk that Oregon Gov. Ted Kulongoski—whom even his foes consider a nice enough guy—would get caught hawking a U.S. Senate seat like an auctioneer or tangled up with a $1,000-an-hour hooker.

But with Kulongoski entering the final innings of a nearly four-decade career in Oregon politics, it’s also unclear exactly what kind of legacy the 68-year-old governor will leave.

In a recent interview with WW, Kulongoski himself professed in one breath that it’s premature to talk about his legacy. And in another, he stated that he thinks Oregon will be just fine when he leaves office two years from now.

“Oregon has always been stronger than any economic downturn,” he said Monday, Jan. 12, in his State of the State speech to the Legislature as it started its 2009 session. “So while this winter of economic discontent is an especially long and harsh one, spring will make its return.”

Many observers contacted in the past month say Kulongoski’s reign is best characterized as somewhat detached, somewhat meandering, yet peppered with occasional moments of boldness and courage.

Not a bad analysis of the state’s past six years, either.

Few, if any, have prepared to be governor of Oregon for as long as Theodore Ralph Kulongoski did. A Missouri-born orphan who became a Marine, lawyer, Oregon legislator, attorney general, and state Supreme Court justice, he got clobbered when he first ran in 1982 as a lefty’s lefty for governor, a job he wouldn’t get for another 20 years as a much more centrist Democrat.

With the end of the governor’s political career in sight, we asked lawmakers, former Kulongoski staffers, lobbyists and Capitol observers to review his record. We also interviewed Kulongoski himself.

There is always much a governor fails to tackle, and ours is no different. He can be criticized for failing to rethink the way we levy Oregon’s taxes, or to do much to eliminate the role of money in politics, or to reform the item that takes up half the budget—education. Then again, he never really promised he would do any of that.

So rather, we chose, starting on page 17, to see how well the governor has achieved what he promised over the past six years, and what he’s likely to achieve in his final two years.

Here’s our analysis, with a nod to the baseball-loving Kulongoski, that aims to determine where this “nice guy” is likely to finish.

Economic Development

In 2003, he said:

In 2004, he said:

WHAT’S HAPPENED:
Here’s one crude, but direct, way to look at Kulongoski’s success with our economy.

When he took office, this state’s unemployment rate was 1.8 percentage points higher than the nation’s. Today it is 0.9 percentage points higher, with Oregon mired in the top five states for unemployment.

Shifts in monthly unemployment numbers aren’t exactly a reliable barometer, especially when state economist Tom Potiowsky expects Oregon’s 8.1 percent rate for November perhaps to climb past 10 percent in 2009. But the most recent smaller difference between the national and state rates does mirror the fact Kulongoski has had some success.

The governor has lured businesses here. Among them: SolarWorld and its 250 jobs to Hillsboro, T-Mobile and its 850 jobs to Redmond, and Google with its 175 jobs to The Dalles.

Ryan Deckert, a former Democratic state senator and current head of the Oregon Business Association, says when he’s been in the room with the governor for a business-wooing meeting, his experience has been that Kulongoski is an effective salesman for Oregon.

The governor has used public dollars to create jobs, starting in 2003 with a $2.5 billion transportation package. He now wants to raise $1 billion-plus this session for work on roads, rail and bridges.

Here’s one measure of the transportation spending’s magnitude: the state has spent $1.3 billion since 1994 in the wake of Measure 11 to build and expand prisons.

Kulongoski has also gotten the Legislature to pass laws that encourage investment, no more so than in the area of business energy tax credits. Critics question the aggressive use of those tax breaks, but there is no denying they’ve proven popular. Potiowsky says, “We are the center for the green movement in the United States.”

Kulongoski has not had much success lowering unemployment rates in rural areas. The eight Oregon counties recording double-digit unemployment in November were all rural, topped by 12.4 percent for both Crook and Grant counties. Says Senate Republican Leader Ted Ferrioli, who lives in Grant County: “From the perspective of rural legislators, we’re in worse shape.”

ON THE SCORECARD: A solid single.

Taxes And Budgeting

In 2003, he said:

In 2005, he said:

WHAT’S HAPPENED:
Kulongoski’s approach on this has been incremental—and for the most part he has achieved his limited goals. In 2007, he finally persuaded the Legislature to create a rainy-day fund by suspending the “corporate kicker”—the tax refund businesses get when revenues exceed economic forecasts. That fund now totals $340.5 million, or less than 3 percent of his proposed budget.

Some observers think Kulongoski’s effort was limp. “We played grasshopper while the sun was shining,” said one former statewide Democratic official. “We’ll go through that rainy-day fund in an instant.”

Others, however, think Kulongoski’s approach was far more fiscally responsible than others.

“He’s not thrown deep. He’s used more of a West Coast offense of moving the ball down the field,” says Deckert. “Looking around the country, I don’t know any other states doing any better’’ in figuring out an effective mix of taxes and budgeting to deal with the global downturn. Republican lawmakers are blasting the governor’s 2009-11 budget for proposing an increased gas tax and higher fees.

ON THE SCORECARD: A single.

Pers

In 2003, he said:

WHAT’S HAPPENED:
Reform of the public employee retirement system probably needed a former labor lawyer like Kulongoski.

“A big part of Ted’s legacy is a major hit against public employees,” says Bill Lunch, chairman of the political science department at Oregon State University. “There is an element of Nixon to China there.”

The changes to reduce benefits will save public employers an estimated $9 billion over the long haul.

And it had its cost for Kulongoski. When he ran for re-election in 2006, the Service Employees International Union endorsed long-shot Jim Hill in the Democratic primary. And the Oregon Education Association didn’t endorse anyone in the primary. The OEA, however, helped Kulongoski win the general election with a $500,000 independent expenditure campaign (see Education, below).

“PERS took a lot out of him,’’ says a former Kulongoski staffer. “Being hated was hard for a man who needed to be accepted.”

There’s no small irony, either, that the man positioned to be the next political heavyweight in the Democratic Party is Attorney General John Kroger. Kroger, a former Lewis Clark law prof who had never been elected to anything, won the Democratic primary last year largely on the bankroll of union donations. His opponent, state Rep. Greg Macpherson, was Kulongoski’s point man on PERS reform.

ON THE SCORECARD: A triple.

Education

In 2003, he said:

In 2004, he said:

WHAT’S HAPPENED:
Two things have been true about education under Kulongoski.

1.) Kids have gone to the head of the line, as measured by the share of his budget spent on education—54 percent in the upcoming budget, from preschool to higher ed. (The figure right before Kulongoski took office was 56 percent, though direct comparisons are difficult because education costs grow less quickly than those for social services or public safety.)

2.) Every school-advocacy group regularly carps that the billions aren’t enough.

And at the K-12 level, a different group of critics says all the back-and-forth over money has masked the real issue—the need for fundamental reform in the state’s K-12 system—such as performance-based pay for teachers.

No surprise the K-12 system’s basic structure remains untouched, given that the OEA drove Kulongoski’s re-election in 2006 and that OEA lobbyist Chip Terhune became the governor’s chief of staff.

But if K-12’s problems aren’t much better than when Kulongoski started, at least they’re better than the biggest problem faced by community colleges and four-year schools—affordability.

The governor’s proposal in 2004, to consider buying up forest land and using investment returns on that land to create a trust fund students could use for Oregon grants, died for lack of support.

Oregon continues to flunk the college affordability test as measured by the National Center for Public Policy and Higher Education. Kulongoski’s “opportunity grant” program, providing financial aid to 38,500 college students, is helping 40 percent more students than it did in 2007. This time he’s proposing to increase the minimum $10 corporate income tax with a sliding scale and use the additional money for more opportunity grants. But even that may not match growing demand, given that the program is already tapped out in the current budget cycle.

And as for the governor’s proposed 3 percent cut to community colleges in the upcoming budget, House Speaker Dave Hunt (D-Clackamas) says, “His budget takes a couple steps back on community colleges.”

ON THE SCORECARD: A long fly out.

Environment

In 2004, he said:

In 2005, he said:

In 2007, he said:

WHAT’S HAPPENED:
Kulongoski certainly doesn’t have the environmental credentials of ex-Gov. John Kitzhaber. But in some ways, he has surpassed Kitzhaber in his green achievements.

Progress on the Willamette River has been a mixed bag. While much of the river’s environmental problems in Portland are both a federal matter and a city responsibility, Willamette Riverkeeper executive director Travis Williams credits the governor with funding restoration projects along the river and on starting the cleanup of mercury contamination from the Black Butte mine at its headwaters. “It’s a huge job, and it will take multiple terms,” Williams says of a Willamette cleanup. “I’d give him a solid B-plus.”

Larry Tuttle, director of the Center for Environmental Equity, is much less positive. Tuttle says no governor since Tom McCall or Bob Straub in the 1970s has made much actual headway in cleaning up the Willamette. He faults Kulongoski for not using the visibility of his office to make Willamette cleanup a higher priority. “Unless you’re willing to spend some political capital, it’s going to be a sewer,” Tuttle says. Kulongoski gets much better marks on the global-warming front. In 2007, Kulongoski and his party pushed successfully for a standard requiring that 25 percent of the state’s electricity come from renewable sources by the year 2025.

Environment Oregon program director Jeremiah Baumann says this places Oregon with California and Minnesota among the states with the most aggressive goals. He also says the governor has taken care in his transportation-spending proposals to ensure there’s money set aside for rail, bus, bikes and pedestrians.

Here’s one glaring contrast with Kitzhaber: In six previous State of the State speeches, Kulongoski barely mentioned trees or salmon, traditionally the touchstone environmental issues for this state.

ON THE SCORECARD: A double.

Health Care

In 2003, he said:

In 2006, he said:

WHAT’S HAPPENED:
Oregon voters in 2006 approved Measure 44, a referral Kulongoski backed to expand the pool of Oregonians for whom the state buys prescription drugs. And when Kulongoski had Democrats in full charge of the Legislature in 2007, lawmakers added unions and small businesses to the pool of bulk-purchasing beneficiaries.

The expansion of the prescription-drug pool was a key accomplishment for which the governor merits credit, says Rep. Mitch Greenlick, a Portland Democrat and past chairman of public health and preventive medicine at Oregon Health Science University.

But, Greenlick adds, “there’s no question” the governor’s biggest initiative has been “Healthy Kids.”

In 2007, Kulongoski wanted to raise cigarette taxes to insure more kids. He didn’t have the votes, so the Legislature instead proposed a constitutional amendment to voters to do so. Tobacco companies poured in millions and defeated the tax increase.

Kulongoski is back this session. This time he wants to increase taxes on hospitals and insurance companies; the higher tax would raise money to add 80,000 children and 75,000 adults to the insurance rolls. Kulongoski hasn’t forgotten the tobacco companies—he wants to increase taxes by 60 cents per pack to raise money for other health programs.

Greenlick, chairman of the House Health Care Committee, says funding details remain to be determined in the 2009 session, but there’s a “relatively high likelihood” the kids will get insured.

ON THE SCORECARD: Since much depends on what happens this session, we’ll score this as still fouling off pitches.

Civil Rights

In 2005, he said:

WHAT’S HAPPENED:
After state voters banned gay marriage by passing Measure 36 in 2004, Kulongoski signed two pieces of landmark gay-rights legislation he and other D’s pushed through the 2007 Legislature.

One bill gave gay and lesbian couples many of the same rights as married hetero couples. The other banned discrimination based on sexual orientation in employment, housing and public accommodation. Says Basic Rights Oregon executive director Jeana Frazzini: “He was an absolute champion.”

ON THE SCORECARD: A home run.

The Final Score:

A singles hitter who rarely swung for the fences on key issues such as tax reform or an education overhaul, but showed occasional power in green energy, gay rights and reforming public employee pensions.

The Interview

WW: Give readers a couple reasons to be optimistic about living in Oregon in 2009.
Gov. Ted Kulongoski: You have to be positive about the election of Barack Obama. This state doesn’t sit in isolation from the other states or other countries of the world. The effort his team is making on the stimulus plan gives us hope states are going to be part of the strategy. Oregon hasn’t experienced the shortfall of California and Washington. And I think the economy in this state is still diversifying. Whether it’s renewable energy or education, I think we are better positioned to address this economic situation than we have been in years and years. We’ve got a reserve fund. I have a public works program in this budget. Oregonians should have the belief that at the national and state level, we are going to get through this. It’s not going to be easy. But I think we’ve made the right choices.

What do you say to social services employees who really took it in the shorts in your budget?
The nature of our revenue streams off the income tax means if I cannot provide jobs for the people of this state—so they’re actually earning income and paying their fair share of taxes—I can’t generate the revenue to do all the other things I need to do around the social safety net. The No. 1 issue always is education and job training. Ultimately, that will be the strength for us of when we come out of the recession. I would be less than candid if I didn’t say I anticipated help from the federal government on the social service side. The answer to your question is, yes, they did absorb the largest cut. But I think there’s a pathway where we will be able to restore it.

What happens if the next revenue forecast shows another $1 billion or $2 billion hole?
Everybody knows that in March and May the forecasts will be down. But there are new revenue sources I’m trying to get the Legislature to consider, like the provider tax for healthy kids and some adults. As difficult as this is, I think this is also an opportunity. We have had a review going on for some time at DHS [Department of Human Services] about how we do things and how we can do them more efficiently. I’m not telling you there are not going to be cuts in the overall budget. That will happen. But let me suggest to you that what is different this time is, we have somewhere between $750 and $800 million in reserves built in the education-stability fund and the rainy-day fund. What I wanted [legislators] to do is not use that money at this time.

So, no chance those reserves get touched this year if and when the budget worsens?
I’m trying to stay away from that.

But there’s going to be tremendous pressure to tap that money.
We always want the easy way out. But I can tell you I know some people who were in this building in ’01 and ’03 when the dot-com bubble burst and revenue went down. They tried to keep the budget intact and utilize every revenue stream they could find. What happened is, each revenue forecast went down, and they were calling special sessions to deal with it. They don’t want to do that again. Most people recognize we’re gonna have to manage this budget on the revenue—not what we have in reserve.

Doesn’t the fact that we’re back where we were point to the need to have done comprehensive tax reform in your last six years?
There are other ways to address the stability of our revenue stream. What we always talk about is the sales tax. But I hope people would recognize that the states that have fallen the furthest in deficit is because of their sales tax when consumers stop spending. There is a way to stability other than a sales tax, and it’s that you have to build reserve funds.

What’s been your biggest screw-up?
I remember the first governor’s school I went to when I got elected. And they told most of us, “You’re going to be a governor for eight years….”

Governor’s school?
The NGA [National Governors Association]. It really isn’t a school. It is an indoctrination. And they told us, “In your eight years, you get one business cycle that will be down for you.” I’ve had four budget cycles as governor, and three of them have been bad. That isn’t a complaint, but that’s the cards you’re dealt. The hardest thing I’ve had to learn is that all things aren’t equal. [In the tough 2003 budget cycle,] I decided we would equalize losses among all the programs. I thought it was fair. In that regard, it was the right thing. But it was the wrong policy choice. What you have to do is what I’ve done ever since. I made a priority list and said, “We’re going to fund those.” I didn’t approach this budget as spreading the pain…. Making choices has been a hard lesson to learn.

How would you like to be remembered when you leave office in 2010?
I don’t think legacies are determined by journalists. They are not determined in the passion of the moment. I will let time and historians write whatever it is I did as governor. What I would like people to remember is—whether it’s in education, health care, providing a more diversified economy or green technology—that I did this with a vision not of where we are today but where I think we’re going to be in 20, 30 years. At my core, I’m a job Democrat. I can pass all the laws I want. But ultimately, I’ve got to give you the opportunity to have a family-wage job…. I’ll be the first to tell you that the guy who should get the credit—and he doesn’t get enough—is Vic Atiyeh. Vic was the first one of the governors who understood the movement to trade and more of a global economy. Oregon still is in this transition.

What do you want to do after you leave office?
I’m moving to Baker City. I’ve always wanted to teach. And I wouldn’t mind trying to figure out if the Hatfield School of Government wouldn’t mind having a school over at Eastern Oregon University. My wife went and enrolled at the welding school at Chemeketa [Community College in Salem]—ornamental stuff and yard stuff. But she also told me they need welders for those cattle guards over there. We have a Realtor looking for a place. It is a good time to be looking.


In the 2003 Oregon Legislature, Republicans had a 10-seat advantage over the Democrats in the House, and the two parties were tied in the Senate. In the 2009 Legislature, the Democrats have a 12-seat edge in the House and six-seat advantage in the Senate.

Kulongoski defeated Republican Kevin Mannix 49 percent to 46 percent to win his first gubernatorial term in 2002. And he won re-election in 2006, beating Republican Ron Saxton 51 percent to 43 percent.

When Kulongoski first ran statewide in 1980 for U.S. Senate at age 39, he only got 44 percent of the vote against Republican incumbent Bob Packwood. Two years later, Kulongoski ran for governor in 1982 against Republican Vic Atiyeh and received just 36 percent.

 
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