January 12th, 2010 5:33 pm | by NIGEL JAQUISS News | Posted In: CLEAN UP, Politics

John Kitzhaber Rolls Out Economic Strategy, Takes Aim at Oregon's Kicker

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Former Gov. John Kitzhaber rolled through Portland today on a statewide tour to introduce his economic development strategy, if he gets elected to his old job. In his two terms as governor from 1995 through 2003, Kitzhaber spent a lot of time on health care and the environment but not as much on job creation. He says he'll be more focused on the economy if elected this time around.

One of the enduring questions between now and election day will be what has Kitzhaber learned since leaving office that would make him a different and perhaps more effective governor than the man who threw his hands up and called Oregon "ungovernable" near the end of his second term?

In addition to outlining a five-point plan today, Kitzhaber said he'd come to believe that "diversification isn't enough." He says that as a lawmaker in the 1980s and 1990s under Govs. Vic Atiyeh and Neil Goldschmidt, he watched the state turn from a resource-focused economy to a more high-tech based state. But Kitzhaber says he observed that the current recession has shown Oregon remains overly dependent on other states and countries for its economic health; and, is too focused on the short-term.

"I accepted without question the diversificiation argument in the past," Kitzhaber told reporters after his speech at the International Brotherhood of Electrical Workers Local 48 headquarters in Northeast Portland.

"I've also learned you cannot operate with a two-year event horizon," Kitzhaber says. "You have to have an eight- to 10-year budget framework."

He'd also like to see Oregon do a better job of producing more of the $10 billion worth of energy we consume annually, by developing sustainable sources including "woody biomass," which he calls a "huge opportunity." And he wants the state to be effectively buying local on a larger scale, an approach he calls "Oregon to Oregon."

Kitzhaber was asked whether Oregon's tax structure, which the Legislative Revenue Office says is the most reliant on a single source of revenue (personal income tax) than any other state, is an impediment to economic growth. He responded by taking aim at the "kicker," the provision in the state constitution that returns tax payments to resident when state revenues exceed forecasts by more than 2 percent.

"If I had the ability to do so, the first thing I'd take on is stability," Kitzhaber says. "We'd bring everybody into a room and take on the kicker."

But kicker reform alone would not be enough, Kitzhaber says, adding that, "Then we'd need to ask how do we reduce our reliance on income taxes?"

He did not name the conventional prescription—a sales tax—which voters have repeatedly rejected in the past. But he noted past efforts to diversify revenue have been "spectacularly unsuccessful."

Kitzhaber will take his road show to Lane Community College in Eugene, where he will speak at 11:30 am Wednesday and later that day to Medford, where he'll speak at the RCC/SOU Higher Education Center at 3:30 pm.

(photo by Leah DiMatteo)
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