Editorials from around Oregon

Selected editorials from Oregon newspapers.

The Oregonian, Nov. 24, on challenges facing Oregon’s manufacturing sector

Esco Corp.’s announcement this month that it plans to close a production plant in Northwest Portland and lay off almost 250 people is merely the latest example of weakness in Oregon’s manufacturing sector.

Manufacturing layoffs are hardly unique to Oregon. But because of the state’s traditional reliance on manufacturing to power the economy and its emphasis on “clean” jobs for the future, Oregon faces particularly high obstacles as it searches for ways to create opportunities for blue-collar workers.

Let’s review setbacks this year:

-Last month, Newberg’s SP Fiber Technologies announced plans to indefinitely close a pulp and paper plant recently acquired by WestRock Co. of Richmond, Virginia. The move could result in about 200 layoffs. The decisions in Newberg have to concern employees of other manufacturers that have been sold recently. The list includes Precision Castparts, Planar Systems and NexPlanar.

-Portland Mayor Charlie Hales, after originally applauding Pembina Corp.’s choice of Portland as a site for a propane export terminal, revoked his support and asked the company to pull its application. Since then, he has been working tirelessly to send the message that fossil fuels companies should stay away - culminating in a City Council vote to oppose any new infrastructure for the storage or transportation of fossil fuels.

-The Port of Portland lost its two largest container shipping lines as a labor dispute that started in 2012 continued to make it difficult for companies to get ships loaded and unloaded in a timely manner. The loss of service affects a wide range of businesses, including manufacturers who export products.

Some of the factors contributing to the manufacturing slump are beyond the control of local decision-makers.

“It’s a reflection of the markets that we’re in and the weakness of where we’re at in a market cycle,” Esco Chief Executive Cal Collins told Allan Brettman of The Oregonian/OregonLive. Esco makes mining, drilling and excavation equipment, one of the less attractive markets to be in these days. But even manufacturers of in-demand product face challenges - from low-price competitors to unfavorable exchange rates - that are putting pressure on bottom lines.

On paper, Oregon’s manufacturing economy still looks stronger than that of most states. Manufacturing accounts for 10.4 percent of state jobs, above the 8.8 percent national average and highest among Western states, according to the Economic Policy Institute. Also, Oregon manufacturing workers earn more than 30 percent above the state average, according to the Oregon Office of Economic Analysis. However, the Office of Economic Analysis points out, the manufacturing wage premium “is entirely driven by strong wage gains in computer and electronic(s)” employment. The transition into that industry, and especially into the best-paying jobs, is difficult for many employees of heavy manufacturers such as Esco.

Oregon faces challenges in holding on to manufacturing jobs outside the computer and electronics industry, much less creating new ones. It has limited land in the Portland area suitable for heavy manufacturing, and neighbors aren’t eager to see heavy industry on the land that is available. Keep an eye on Esco’s land in Northwest Portland if you want to observe those tensions.

Companies have to navigate more regulations to operate in Oregon, especially in Portland, than they do to conduct the same business in some parts of the country, particularly the South. It’s worth noting that some of the Esco production in Portland will be shifted to a plant in Mississippi, as well as overseas locations. A substantial increase in the minimum wage and higher business taxes, issues that will be addressed by the Legislature and/or ballot measures next year would only add to the cost of operating in Oregon.

When companies can shift production to the South or overseas while still finding qualified workers and meeting customers’ needs, Oregon is at a disadvantage. Realistically, the state is not positioned to be a lowest-cost provider of labor and facilities - and that’s not the best model for building an economy anyway.

But if Oregon wants to have a blue-collar middle class, it does have to find a balance that allows companies to be competitive. That means improving schools, and especially vocational education, so that the workforce here is clearly superior to that available in lower-cost states.

And, at the very least, the city and state need to make sure that sites like the one Esco is abandoning remain designated for industrial use.

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The (Corvallis) Gazette-Times, Nov. 25 on fifth-year programs for students

State Sen. Sara Gelser has a plan to preserve some semblance of these innovative fifth-year college programs that mid-valley school districts have pioneered, and she’ll be presenting the plan to her colleagues in the Legislature when it convenes in February.

Reading between the lines, our hunch is that Gelser’s plan - although it’s not perfect - represents the best shot to save these programs, especially in the face of opposition from Portland-area legislators.

It all serves as a case study in the difficulty of creating (and properly funding) the sort of education innovations that we need to improve our schools.

Most mid-valley school districts have a fifth-year program, in which students put off graduation for a year and take community college classes paid for by their districts. State school funds cover their books and tuition because they’re still considered part of their home schools. The program also gives these students access to counselors, a particular benefit to first-generation college students.

Portland legislators had argued that the college partnerships unfairly siphoned away K-12 dollars and couldn’t be accessed by large districts without breaking the bank. That argument almost carried the day in this year’s legislative session, which seemed poised to kill the programs. Instead, Gelser got the OK to form a group to study the programs and return to the Legislature’s short session next year.

Gelser last week revealed the outlines of her proposal. The plan includes a new designation for the students in the program - they’ll be called “post-graduate scholars.” Crucially, her plan also limits who can qualify for the program: The “post-graduate scholar” label will apply only to students who have earned a diploma; have filled out the federal financial aid form that’s best-known by its acronym, FAFSA; have applied for and accepted all the grant-based aid for which they are eligible; and have applied for the new community college grant program known as Oregon Promise, which is open to recent Oregon graduates with at least a 2.5 grade-point average.

If the Oregon Promise program accepts the student, the tuition problem is solved. If not (and assuming that all the other factors apply), the district then can tap into state school funds for the student.

Gelser said the requirements should make more money available because they slim down the number of students vying for the cash. Although nothing is a sure thing in the Legislature, these restrictions also should ease some of the concerns that other legislators had about the cost of the programs.

Our guess also is that these restrictions almost certainly will leave some students behind, which is a shame.

However, it would be more of a shame to gut these programs entirely, especially considering the promise they’re showing in helping students take the first steps to college. Gelser’s plan would prevent that evisceration.

But all this shows how hard it is to develop (and properly fund) this kind of education innovation. The good news here is that Gelser’s plan gives these programs a shot at surviving in some form. The bad news is that this case doesn’t offer much encouragement for the next big education innovation - and we need many more of those.

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The (Bend) Bulletin, Nov. 24, on an increase in business taxes

Oregon voters might be asked to approve a major increase in business taxes next year. Yet the measure itself is written to tug at heartstrings and hide the fact that it would be bad for Oregon.

The measure would increase the corporate minimum tax on companies with sales of more than $25 million. The change is complicated, but it would include a tax of 2.5 percent on sales of that $25 million and elimination of the tax cap. Moreover, it would send the proceeds, which supporters say will be in the neighborhood of $2.6 billion annually, to schools, health care and senior citizens.

What’s not to like? Plenty.

First, the $2.6 billion doesn’t rain down like manna from heaven. That would be $2.6 billion out of businesses that wouldn’t have that money to pay workers or invest in improving and expanding their companies.

Sales and profits are also two different things. Automobile dealers, for example, make relatively little on each vehicle they sell, and the tax proposed could effectively wipe out most of whatever profit they currently make.

Moreover, their ability to increase their profits is limited - it takes more people than you might think to run a car dealership, for example, and other overhead costs are often not within a local dealer’s control.

Then there’s this: While Oregon generally rates well where business tax burdens are concerned, it’s not because our direct corporate taxes are low. In fact, according to measurements from the nonpartisan Tax Foundation, our corporate tax rate actually is pretty high by comparison with other states.

Our saving grace, the foundation notes, is our lack of sales tax and low property-tax rates. Oregonians have shown little interest in imposing the former, and the property-tax relief movement of the 1990s and subsequent legislation gave us the latter.

Taxes aside, Oregon has other things that make the state unattractive for some businesses, among them a relatively poorly educated workforce (think a pathetic high school graduation rate) and a regulatory structure that can be enough to make a grown executive weep.

Add it all together, and the only conclusion to draw is simple. This state has work to do to make it a great place to do business, and it wouldn’t take much to send some businesses elsewhere. The largest ever corporate tax increase could only make that task far more difficult.

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(Pendleton) East Oregonian, Nov. 27, on water projects for the Umatilla Basin

Winter in northeastern Oregon is a time when our rivers swell and water is abundant. It’s also a time when the growing and harvest seasons are far from top of mind.

But this winter is unique. Years and years of hard work have brought the Umatilla Basin to the precipice of major investment in the future of our region.

It took decades for the stars to align in Salem and in the farmlands. Gallons of sweat and a steady trickle of dollars have been expended on engineering plans and political lobbying and molding together disparate factions into a sometimes shaky and sometimes sturdy coalition. Right now, the coalition holds. But there is still work to be done. Pick your own cliché to explain it: This is a big winter for the Northeast Oregon Water Association and their plan to bring more water to the Umatilla Basin.

NOWA’s proposal is a complex, multi-phase puzzle of engineering, water rights and environmental mitigation spread over three distinct areas from Boardman to east of Hermiston. Farmers, cities, counties and ports have all bought into the idea of more irrigation water from the Columbia River to bolster the region’s high-value agricultural economy. J.R. Cook, founder and director of NOWA, has discussed a potential benefit of billions of dollars for the region.

Funding for water projects finally came through in the 2015 Legislature, including $11 million earmarked specifically for the Umatilla Basin. But all the money in the world doesn’t mean much without a deal for the necessary water rights, certified by the state Water Resources Department.

To that end, Cook and company have racked up the miles driving into Salem and pitching their vision across the negotiating table. Any water drawn out of the Columbia must include mitigation for fish and river flows, which is where environmental groups - namely Food & Water Watch - have a keen interest. While they will never be on-the-masthead supporters of the project, NOWA believes they have crafted the plan so environmental groups will not outright oppose it.

Yet everyone - even NOWA - is walking on eggshells right now. The delicate balance could tip with a change in political will, a change in the climate, or a far-away rumble in the financial market.

Cook is optimistic everyone will be shaking hands soon, and one of three project areas could break ground next year. Until then, Cook said it’s imperative for growers to remain patient. If farms and politicians get antsy and begin to withdraw their support now, the whole effort could come tumbling down. Cook said that would be a travesty, and the star-aligning moment would be lost - possibly forever.

Our advice: Hold steady. Stay patient but work quickly. Let’s get what has been promised on paper onto the land as quickly as possible. Once that is done, we will reap the benefits in countless future harvests.

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The (Albany) Democrat-Herald, Nov. 28, on ethics issues and public records requests

A recent ranking suggests Oregon has plenty of work ahead of it to ensure that government officials are accountable to the public.

A report released earlier this month by the Center for Public Integrity ranked Oregon 44th out of the 50 states in terms of its ethics and public records laws. The overall grade Oregon earned in the report: F. (The state received a C-minus grade in the center’s last report, in 2012, although the center says the grades are not directly comparable.)

The report says Oregon lawmakers have done little to address weaknesses in how the state can deal with ethical issues such as the ones that forced Gov. John Kitzhaber to resign in February.

To quote the report: “The scandal that ensnared the former governor highlighted a wobbly legal framework in Oregon’s government, where good behavior is taken for granted rather than enforced.”

We’ve written recently about the sorry state of Oregon’s public records laws, so we won’t spend much time now rehashing those - other than to note again that the willingness of Gov. Kate Brown to push for real reforms to those through a task force will offer a test of her leadership skills.

But the report, written by Lee van der Voo, a freelancer for The New York Times who covered Kitzhaber’s resignation, covers other bases as well. For instance, it rips into how the Oregon Government Ethics Commission dealt with allegations that Kitzhaber and his fiancee, Cylvia Hayes, might have used their public roles to benefit Hayes’ private consulting business.

You might recall some of the details of how the commission foundered in its investigation of Hayes: It struggled for months, for example, with legal wrangling to determine even if Hayes qualified as a public official who would be covered by state ethics laws. (A change in the law pushed through the Legislature by Brown makes it clear, as it should have been all along, that the governor’s spouse is a public official.)

Another of the Brown-sponsored reforms changed the way that the members of the commission are appointed to the panel; before the change, the governor either appointed the directors or gave names to the Legislature for nomination by party leaders. (The report suggests that this might be one of the reasons why the commission was sluggish about investigating Kitzhaber, a Democrat.)

Despite the changes, the report still is skeptical about the commission’s ability to do its work: The report says the commission “still lacks budget protections and the staffing and technical support to see its mission through.”

The report also found that the commission never audits the asset-disclosure forms it collects. “Enforcement has been so lax that political leaders have been able to fudge on specifics in their disclosure forms or simply fail to provide significant information,” the report says, adding that the forms aren’t available online for examination.

As the report notes, Oregon politics has been relatively free of scandal. But it’s clear that the credit for that goes to the state’s overall culture - and a good dose of luck. We need to take luck out of the equation, and enforce ethical safeguards that will help to support that culture.