The Governor’s Audition
Four powerful women have a few questions for the four men vying to be Oregon’s next governor. Number One:
The Panel: Judy Peppler, Orcilia Forbes, Karla Chambers & Maria Wulff
The Futurist: Bill Bradbury, Democrat
The Remodeler: John Kitzhaber, Democrat
The Captain: Chris Dudley, Republican
The Simplifier: Allen Alley, Republican
Video by PonceDesign
The Futurist: Bill Bradbury, Democrat
A Chicago native and a lifelong environmentalist, Bill Bradbury, 61, served as Oregon’s Secretary of State from 1999 to 2009 and in the Oregon legislature from 1980 to 1995.
Peppler: Obviously, what’s on Oregonian’s minds are jobs. What’s your plan to create more of them?
Priority number one has to be jobs, jobs, jobs. At the center of my eight-point jobs plan is the “Bank of Oregon,” which would basically make use of the incredible resources the people of Oregon have through the paying of their taxes. Right now the state treasury is paying out $1 billion a quarter, which goes to various banks, both community banks and some of the very large Wall Street banks that have caused so much controversy lately. That capital can be put to work to increase lending to small businesses.
Chambers: How are you going to keep businesses from leaving Oregon because of Measures 66 and 67? Some are already planning to.
We need to repeal 66 and 67. That’s a huge challenge given the fiscal situation. But frankly, I think 9 percent is a pretty high income tax. Let me be clear: I’m not proposing repeal. But I’d certainly look at it if we have serious impacts from the increase. I don’t think it’s sustainable.
Peppler: Where do you stand on kicker reform?
I’m a strong advocate of asking the voters whether the kicker should be used for a rainy day fund. I believe it should be.
Peppler: How do you avoid being a kickee?
By not having it on the ballot in 2010. The legislative leadership clearly decided it did not want to have kicker reform on the ballot at the same time it’s trying to maintain a Democratic majority. I get that. But that’s not to say it isn’t something that could be brought up very quickly after the election. It’s the first step to putting our fiscal house in order.
Peppler: The Oregon business community agreed to support Measures 66 and 67 as a temporary business tax and to help fund the campaign for kicker reform. Unfortunately, the legislature’s majority rejected the deal out of hand.
When you have the business community coming to the legislature saying, “We’re willing to pay our fair share,” my advice would be go for it: come out with a remarkable coalition. That’s the role of the governor.
Peppler: What’s the appropriate balance between energy and scenic values?
The Energy Facility Siting Council really weighs those kinds of things. The biggest issue with wind is siting [the turbines] in a migratory path for birds. I personally believe that seeing a wind farm is actually a piece of natural beauty. I like to watch them turn.
Wulff: Do you think there were missed opportunities in the Kulongoski administration?
I’m sure there were. But if you look at Kulongoski’s efforts in green building and renewable energy, he gets an A+. He very clearly worked with the legislature. The area no one has touched since Barbara Roberts is adequate funding for education. In 1977, the average tuition for community colleges was $387 a year. In 2007, it was $3,870 a year—10 times as high. Only about 8 percent of the entire higher-ed system’s budget is paid out of the state’s general fund. Is that a public university? Eight percent?
Peppler: The three big universities have floated ideas of changing their governance. What do you think?
I’ve seen the proposals for a kind of public/private university. I don’t really like it very much. I really believe in public education. We need to look at the tax code. With a 5 percent reduction in tax credits and deductions, you’d get almost $2 billion in funding for education.
Forbes: Would you support using the Obama administration’s “Race to the Top” as a model for education reform?
Those kinds of changes are great, but you’re not going to make the fundamental quality improvements in public education until we support it. We have a wonderful program called the Quality Education Model, and it’s updated every two years. It’s not a deluxe Cadillac, but it’s designed to provide students with the options they need to succeed in the modern world. We’re $2 billion short of implementing it. That’s the next governor’s challenge—to work with the legislature to adequately fund that program.
Peppler: We’re one of only 14 states whose employees don’t pay anything for health care. Just having them pay a small portion of what most private sector employees pay could save millions and millions of dollars.
I don’t think the way to solve the problem is to take away benefits from public employees. I think the way to do it is to lower the costs.
Peppler: How would the state look different after four years of Governor Bill Bradbury?
The state would be providing education from prekindergarten to grade 14. And we would be a very proud government that runs a public higher education system. And we would be developing a whole series of jobs, both farm jobs and food processing and energy production jobs. They would fit together to produce a sustainable vision for this state.
For Bill Bradbury’s views on the controversial Business Energy Tax Credit, public employee pensions, and Oregon’s red/blue, urban/rural divide, check out the full transcript including a downloadable audio recording.
The Remodeler: John Kitzhaber, Democrat
John Kitzhaber, 63, served as Oregon’s governor from 1995 to 2003 and in the Oregon Senate from 1979 to 1993. A trained physician, he is the director emeritus of the Center for Evidence-Based Policy at Oregon Health & Science University.
Chambers: What is the source of the fire in your belly to run again?
There’s a huge opportunity embedded in the recession. Oregon is heading toward California in [the sense of] being a state that can no longer operate in the public interest. When I was governor before, you couldn’t get people to agree on changing systems and structures because there was plenty of money. And now we have no money for what is a very, very profound fiscal challenge. There is a tremendous opportunity for transformational change in how we deliver public services. At age 63, there is no reason for me to do this unless I really believe that I can broker some significant structural changes.
Chambers: We’ve got businesses running for the border because of Measures 66 and 67. What will you do to keep them here?
It was very unfortunate the measures ended up on the ballot. I do not believe that they couldn’t have been brokered. I voted for them. But it was a stopgap, not thoughtful tax reform. There’s broad concern about the impact it will have on angel funding for new start-ups, on the philanthropic community, and on high volume/low margin businesses. The tax code needs to be aligned with our objectives for Oregon’s economy. We need a broad middle ground.
Forbes: The current governor has had limited success with the legislature, even though they are of the same party. How will you succeed?
We are going to face a $2.5 billion revenue shortfall in the next budget biennium. And there’s no pot of money that’s going to fall out of the sky. What I learned in my previous experience is the difficulty of managing the state budget with a two-year horizon. What business does that? We need a six- or eight-year budget frame, and then we need to have the very difficult conversations about what lies ahead in that context. I don’t need statutory authority to present a budget that’s framed completely differently.
Chambers: For every job we create that pays over $100,000, Oregon is going to take 11 percent. If those businesses move to Washington, they pay no income tax. How will you shore that up immediately?
One option is clearly a sales tax. I’ve been up that mountain a couple of times. We tried it under [Governor] Atiyeh in 1985 with a very well-crafted measure and only lost 4–1 as I recall! But there was never a context. Now you can argue with a very straight face that the reason for our volatile tax system—and why we can’t provide stable education funding—is due to our narrow tax base. Reliance on personal and corporate income tax for 90 percent of our revenue doesn’t make any sense.
Forbes: Some of Oregon’s university presidents have asked to change our universities to a public corporation model for governance. Would you encourage that?
I would like to put that in a wider context. No matter how good your post-secondary system is, if you can’t turn out qualified, highly motivated high school graduates, you haven’t met your workforce development needs. I have a bold higher-ed proposal: it starts with fixing the very broken, highly siloed model in which the Board of Higher Ed develops Oregon universities’ budget, the Board of Education develops the budgets for the community colleges, and state statute budgets K–12 by enrollment. I propose to abolish that scheme and replace it with the Oregon State Education Investment Board, a unified, transparent budget in which we stop funding institutions and start funding students by performance measures.
Chambers: When I was on Oregon State’s faculty in 1990, for every dollar I budgeted I allocated 19 cents for benefits and retirement. Today, it would be 52 cents. Now that I’m in the private sector, 59 percent of my earnings go to taxes. How are you going to control overhead costs?
The insurance premiums reflect the cost of delivering medical care. Congress has been arguing health insurance reform, not health care reform. I’ve made it very clear that I do not support fully paid health care benefits. I call my model “value-based cost sharing.” It creates incentives for employees to buy high-value health care. So, you might not have to pay anything for screening for diabetes or breast or cervical cancer. But let’s say you want surgery for lower back pain when there’s no medical evidence suggesting it’s most effective. In these cases, maybe there’s a 50 percent co-pay.
Peppler: What’s your position on the Business Energy Tax Credit (BETC) and the scenic concerns some environmentalists have over the energy development it has spurred?
We’ve decided that 20 percent of the utilities’ power must come from renewables by 2025. But we lack a holistic view. I support BETC, but it’s gotten way out of hand. You have to measure tax credits vs. jobs produced. On the environmental side, our commitment to wind energy is a commitment to natural gas because you have to have reliability in the transmission grid. So what role does gas play, and does LNG [liquefied natural gas] play a role? We haven’t asked any of those questions. We’re just having a knock-down, drag-out fight without a context. We need a real energy policy.
Peppler: What does Oregon look like after four years of your administration?
We’ll have agreed to fundamentally redesign the way we deliver and budget for public services. We’ll have decided what a tax system would look like that is equitable and aligned with our economic development strategy. We’ll be locked in a fight with the federal government to get the waivers to implement an Oregon solution to the health care crisis. And we will have articulated a 20-year strategy to increase the amount of renewable energy we produce in the state of Oregon.
For John Kitzhaber’s views on K–12 education reform, a state sales tax, public employee pensions, and other issues, check out the full transcript including a downloadable audio recording.
The Captain: Chris Dudley, Republican
Chris Dudley, 45, played NBA basketball for 16 years, 6 of them for the Portland Trail Blazers. After retiring in 2003, he served for roughly two years as a vice president at M Financial. In 1994, he founded the Chris Dudley Foundation, which is devoted to helping people with diabetes.
Peppler: What makes you want to run, and what makes you think you’re qualified to be the governor of Oregon?
I’m increasingly frustrated and concerned by the direction of the state. We’re among the national leaders in unemployment, second in the misery index, a national leader in homelessness and hunger. Higher education funding is 48th. New job creation, 47th. Go down the list: it’s not pretty. The role of governor is about leadership. You don’t have to spend 30 years in government to be a leader. If you look at our last two governors, they’ve had over 60 years of experience between them, and here we sit. Life experiences outside government are just as valuable. Playing in the NBA is a good example of working with people from different backgrounds toward a common goal. I talked with Governor Vic Atiyeh a few weeks ago about it. You need to be a strong leader. But you need accessibility and communication, and that’s something that has, frankly, been lacking.
Wulff: Did you consider starting out with a lower office—say, Mayor of Lake Oswego?
I considered everything. I looked at how you have the greatest impact for the greatest number of people.
Wulff: By your logic, why not run for president?
That’s not realistic. Governor is.
Chambers: Oregon’s costs are completely out of control, and our income has fallen off a cliff. You’ve got businesses running for the border. What do you do about that in the first six months?
You need to look at the tax structure and make it more favorable to business. But the most important thing is attitude: sitting on the same side of the table with business. Governor Atiyeh said it’s about walking the aisles and meeting with leaders of both sides once a week. I was just down in Roseburg, and I asked Senator [Jeff] Kruse, “When was the last time you sat down with the governor?” He said in eight years he never had. That tells you something.
Chambers: How will you control health care and pension costs?
Frankly, there are going to be some negotiations that aren’t going to be easy. But you have to ask what’s best for Oregon as a whole, not for one group. Teachers and firefighters, they’re great people. My whole family is educators. But the system is broken. We had some tough negotiations in the NBA, and it went to a lockout. But at the end of the day, we came out with something good for everyone.
Forbes: What do you think of Oregon’s universities moving to public corporation models of governance?
I’ve endorsed it. We should not have 6,300 line items for higher education. We should have one. The bottom line is to release the universities from legislative micromanagement.
Peppler: What’s your strategy for working in Salem, particularly if the Democrats retain control?
For one thing, I don’t think they’ll have a supermajority. People will at least have to talk. As governor, you have some power. I can be pretty persuasive.
Chambers: We’re in the fourth quarter, and Oregon is behind. The mind-set is that we’re going to keep taxing the business community for the income we need so that government doesn’t have to change. It’s going to take a tremendous shift in mind-set. What does leadership look like?
There’s a feeling out there that it’s a zero-sum game. Private and public are fighting over a static size of pie. I was just reading two books by Jack Kemp from the 1970s, and, other than the inflation, they could have been written today. The message is, we have to grow.
Peppler: What specific programs would you cut?
When I sit down with government workers, they say, come every June 30 we’re under tremendous pressure to spend every dollar we get, because if we don’t spend it, we don’t get it next year. That’s a false incentive. So it’s looking at zero-based budgeting. Let’s look at what’s working and what’s not.
Wulff: The Tea Party could make or break any Republican. What’s your relationship with that group and that philosophy?
When you say “Tea Party,” it’s not a defined thing. It’s basically, “We can do better.” The Tea Partiers are scared, and there’s a complete lack of trust in government. Last week, there was a poll that asked, “In the federal budget, how much is waste?” And the answer across the country was 53 percent. There’s a sense that the leaders in government are beholden to special interests. It resonates with me because I’m an outsider. I won’t owe anyone anything.
Chambers: There’s a perception in rural Oregon that whatever Portland wants, Portland gets. How would you try to bring rural and urban Oregon together?
You spend as much time outside of Salem as inside. You should have a town hall with representatives of every county every year. That’s not been done.
Peppler: What does Oregon look like after four years of a Dudley administration?
We have jobs. Our education has improved. We have stable funding for education. And we’re growing. I would like us for once to be below the national level of unemployment. And balance is restored. If we do that, our future is bright.
For Chris Dudley’s views on kicker reform, Measures 66 and 67, and K–12 education, check out the full transcript including a downloadable audio recording.
The Simplifier: Allen Alley, Republican
Allen Alley, 55, cofounded Pixelworks and has worked in the upper management of InFocus Corporation and as an engineer at Boeing Company and Ford Motor Company. From 2007 to 2008, he served under Governor Ted Kulongoski as the deputy chief of staff for energy, transportation, and economic development.
Peppler: You served a year in the Kulongoski administration, but otherwise you really don’t have a lot of government experience.
There was student council. It doesn’t show up on the résumé, but I want you to know about it.
Peppler: Tell us why you are running and why you think you’re qualified.
In my year in the Kulongoski administration, I saw that somebody with a little business background could have a profoundly positive effect, including somebody who is a Republican working in a Democratic administration. We can all feel it: the economy is having difficulty keeping up with the commitments we’ve made to our government. For the past 25 years, all I’ve done is identify markets, bring capital and people together, and build companies. On the economic side, that’s what we need. On the operating side, we need somebody to run government like a business.
Peppler: We’re one of 14 states where public employees pay nothing toward their health care costs. We’ve got a looming crisis around their retirement fund. What’s your plan?
In the retirement system, the actuarial analysis that’s been done is based on doubling the size of our payroll over the next 15 years. Why don’t we not double the payroll? I would invest in computer systems, software, and training so that public employees can be more productive.
Peppler: We have one of the highest unemployment rates in the country. What’s your economic development plan?
When I worked in the governor’s office, my observation was that economic development consisted of finding companies that typically weren’t here and then, to be blunt, stuffing money in their pockets until they showed up. I would focus on the people already here and ask, “What do we need to do to make our business environment better for you?” We have the perfect tax structure for Democrats and Republicans to work together because it’s all based on jobs. But we can’t figure it out.
Wulff: Do you have a fully articulated plan for K–12 education?
I haven’t rolled it out yet. I’m sure I’ve visited more schools than all the other candidates combined. My observation is, we’re pouring more and more money in the top, and it’s not getting into the classroom. I’m seeing great innovation at the local level that I would like to encourage.
Peppler: Where are you on kicker reform, sales tax, and rolling back Measures 66 and 67?
With kicker reform, the only thing I would do is take the 0 to 2 percent that is rolled forward into the budget and spent, and put it in a rainy day fund. If we didn’t have the kicker, we’d be $1.2 billion deeper in the hole than we already are, because we would have spent it. And we’d spend it in a capricious manner because the money comes in at the end of the biennium. A sales tax? That’s an intellectual discussion. I’ve lived in many states that have all taxes. They think their tax system is broken as well. We need stability in savings. I don’t think the citizens will sign up for tax reform. I think we can accomplish the same thing with stability funds.
Forbes: How would you reorganize the state government’s departments? Would you get rid of people?
There is a state comptroller. I called him one day and he said, “How did you find me?” I would move some of the comptroller functions out of the Department of Administrative Services and plug them in more directly to the governor’s office. You can’t revamp budgets and accountability and how we report them if the comptroller is buried in administrative services.
Wulff: You’ve said that the 12 states where the federal government owns more than 30 percent of the public land should examine their rights under contracts and treaties to increase extraction of natural resources. That, of course, strikes fear in the hearts of tree huggers. Should it?
What I mean is those 12 states [one of which is Oregon] have a duty to their citizens to check all those things. What are the terms and conditions? Do you know how much federal land there is in Texas or Indiana? Almost none. On 99 percent of the land in Indiana, the economic benefits accrue to the citizens of Indiana. Same thing in Texas. Here, 53 percent of the state is appropriated by the federal government. As a state, we’ll make better decisions about our land than the federal government will.
Peppler: What does Oregon look like after four years of an Allen Alley administration?
We have bottom-up, transparent budgets in each of our agencies. You have boards and commissions in place that are actually looking at the budget process. We’ve got an environment in place where small businesses are saying, “You know what? The needle moved.” You’ve got environmental groups and timber and miners working together to create economic opportunities that are in harmony with the ethos of the place. Because, guess what—those things we want, China and India want, too.
For Allen Alley’s views on the Business Energy Tax Credit, public employee unions, and helping small businesses, check out the full transcript including a downloadable audio recording.
Judy Peppler serves as the state president of Qwest. She has worked in the telecommunications industry for more than 22 years and serves on the boards of the Portland Business Alliance, New Leadership Oregon, the Oregon Women’s Forum, and the Portland Schools Foundation.
Orcilia Forbes began her career as a public school nurse and eventually became vice president for university advancement at Oregon Health & Science University. She retired in 2004, and is currently chairman of the board of trustees for the Meyer Memorial Trust.
Karla Chambers and her husband, Bill, founded Stahlbush Island Farms Inc in the 1980s. Today they grow spinach, broccoli, marionberries and blackberries, boysenberries, black raspberries, and corn—and they use a biodigester to generate twice the energy they use.
Maria Wulff is president of the World Affairs Council of Oregon and serves on the board of directors of the World Affairs Councils of America. For more than 20 years, she was the managing director of a Philippines-based company that produced goods for worldwide distribution.