- Associated Press - Tuesday, September 8, 2015

The Bend Bulletin, Sept. 6, on regulating Oregon’s economy:

About 14 years ago, business interests in Oregon got a divorce. The Associated Oregon Industries split off from the Oregon Business Association.

The split had some local roots. Former Oregon House Speaker Lynn Lundquist of Powell Butte helped launch the OBA. But there have been discussions again that they should join forces. That could be good for Oregon.

As The Willamette Week reported, the two groups have lost many of the recent arguments about regulating Oregon’s economy to Our Oregon, a union-funded advocacy group. A July 30 letter from 13 of the state’s largest employers urges a merger.

“The need for a unified business voice has never been clearer or more timely,” the letter says. “Invalidation of the 2013 PERS reforms, the failure of our Legislature to pass a transportation package, and the potential for high-stakes ballot measures in 2016 have heightened our concern for the future of business in Oregon.”



There is not one right answer to restless debate over regulating and shaping Oregon’s economy. Our Oregon doesn’t have it. AOI and the OBA don’t have it. But a lopsided battle with an effective group representing union interests and struggling groups representing business helps lead to lopsided results. If there is going to be a serious debate about the state’s economy, strong arguments are needed from opposing perspectives.

Everyone moans about the state’s low per-capita income compared with other states. And then there’s Oregon’s unsatisfactory performance in education. What is the best way to turn those things around?

Of course, a merger of AOI and OBA guarantees nothing. It doesn’t matter if Oregon businesses have a unified voice, two voices or 50. They must wage their debate with sophistication, polling, social media, grassroots mobilization and money or they will continue to be specialists in failure. And Our Oregon will continue to dominate. Oregon’s economic policies will look like they all came from the same narrow place.

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The (Albany) Democrat-Herald, Sept. 7, on full-day kindergarten:

The biggest change this school year in Oregon education may be occurring in the youngest grades, as full-day kindergarten classes are being offered this year throughout the state, including Albany.

It’s a change that’s long been in the works, as educators and state officials search for ways to increase the percentage of students who can read at grade level by the time they reach the third grade. This year, the Legislature made it official, calling for full-day kindergarten classes across the state and agreeing to cover the estimated $110 million annual cost.

Of course, that money doesn’t cover all the associated costs: For example, Albany school officials had to hustle to make sure they had the necessary facilities to accommodate full-day kindergarten.

Is it worth the investment? State educators have long been advocating for full-day kindergarten, arguing that the full-day lessons come at a critical time for developing brains and the additional classroom time adds more structure and teaching opportunities to the day. Perhaps just as important, the full-day lessons give students an additional opportunity to learn self-management skills, and as research at Oregon State University has shown, those skills greatly improve students’ prospects in school.

The idea is that the additional class time in kindergarten will give students a boost as they hit the first grade - a boost that eventually should pay off in improvements in that third-grade reading number. (Just 66 percent of Oregon third graders were able to read at grade level in 2014.)

If we’re able to move the dial on that third-grade reading number, the argument goes, in due course that could help drive the state’s high school graduation percentage, among the nation’s lowest. Studies strongly suggest that students who can’t read at grade level by the third grade are more likely to fall by the wayside before high school graduation.

The argument makes sense on paper. And whether the state’s third-grade reading numbers and high school graduation rates improve will become apparent in due course.

It’s worth noting, however, that some studies suggest that, although full-day kindergarten does provide an initial boost to students, many of those gains fade by that crucial third grade. In a story that ran over the weekend, The Oregonian’s Betsy Hammond pointed to a study by a Duke University professor who compared how students enrolled in full-day kindergarten fared over the long term against students who had half-day kindergarten. There was no statistical difference.

Oregon educators are counting on the state’s continuing efforts to improve coordination between grade levels (from preschool through high school) to help buck that statistical trend. Again, that makes sense on paper: If first-grade teachers can take full advantage of their students fresh off a year of full-day kindergarten, and if second-grade teachers can follow suit, the results may well pay off by third grade - and so on up the line.

Full-day kindergarten strikes us as a worthy experiment (As a bonus, it comes with a substantial payoff for parents who save on day-care costs). But, like any experiment, it also requires close monitoring - and a willingness to look dispassionately at the results and to act accordingly.

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The (Eugene) Register-Guard, Sept. 7, on Oregon’s income inequality:

Here’s a Labor Day question to chew on: What’s an acceptable level of income inequality in Oregon?

The question is particularly germane as the Oregon Legislature prepares to consider raising the state’s minimum wage in its 2016 session. Proponents say pay has long declined or stagnated for most Oregon workers, with low-wage employees hardest hit. Some argue that Oregon should follow the lead of Seattle, San Francisco, Los Angeles and other cities that have enacted minimum wages of $15 an hour. House Speaker Tina Kotek, D-Portland, is pushing proposal to gradually raise Oregon’s statewide minimum to $13 an hour by 2018 and give local governments the right to go higher if they choose.

Low pay restrains growth, worsens inequality and requires taxpayers to foot the bill for public assistance - a form of subsidy for low-wage employers. While the ideal wage level is widely disputed, it’s clear that a struggling middle class and a dysfunctional underclass are socially and economically undesirable.

Against that backdrop comes a new report on income distribution by the left-leaning Oregon Center for Public Policy. Some of its key findings:

-The annual income of the average Oregonian has sharply eroded in recent decades. In 2013 (the most recent year with available data), the median income was $32,537, about $141 less than in the inflation-adjusted figure for 1980. During the same period, the income of the wealthiest 1 percent of Oregonians has risen sharply. The average income of the state’s top 1 percent in 2013 was $770,000, more than double the inflation-adjusted average of $322,000 in 1980.

-If income distribution ratios had remained unchanged since 1980, the median income for Oregonians would be $78,125.

-Between 1980 and 2013, the lowest-earning bracket of Oregon workers has lost 30 percent of its share of statewide income. Meanwhile, those among the top 1 percent have seen an 88 percent rise in their share.

-To be among the roughly 1,600 households that comprise Oregon’s top 0.1 percent, an Oregon taxpayer had to make $1.3 million in 2013. The average income of this group was $3.1 million that year.

These figures paint a picture of an increasingly divided Oregon, with steeply rising prosperity for a few and stagnation or decline for the rest. What exactly the Legislature should do to address income equality is a debate for another day - but the goal should be a growing economy whose fruits are widely shared.

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The (Corvallis) Gazette-Times, Sept. 7, on Gov. Brown calling for a review of how the state’s energy tax credit program is managed:

Gov. Kate Brown’s decision to take a hard look at how the Oregon Department of Energy is managing the state’s energy tax credit program is welcome, but overdue, considering the program’s troubled history.

The results of the review will be fascinating - and the governor needs to emphasize transparency at every step in the process.

Brown’s call came in the wake of an audit from the Secretary of State’s office that concluded, among other findings, that the Energy Department appeared to be violating its own administrative rules (and the Legislature’s intent) by allowing recipients of energy tax credits to sell them to third parties at steep discounts.

In a statement, Brown said it has become clear that the program, “while developed with the best interests of the state in mind, was not managed to the standard that Oregonians demand and deserve.”

That’s an understatement.

But it could speak as well for the entire history of the state’s well-meaning Business Energy Tax Credit program.

That program (perhaps better-known by its acronym, BETC, pronounced “Betsy”) essentially allowed renewable energy companies to receive credits on their Oregon taxes worth half the cost of building a new facility, up to a $10 million limit. (The limit was $20 million for solar manufacturers.)

The program has been embroiled in controversy since the Legislature decided in 2007 to expand it to encourage green-energy projects. A 2009 investigation by The Oregonian newspaper found that state officials deliberately underestimated the cost of the program, resulting in a price tag 40 times more than legislators originally were told. The program also gave millions of dollars to failed companies, the newspaper found.

But the program still managed to stagger forward until June 2014, when the Legislature finally pulled the plug.

Nevertheless, some of the program’s issues have continued under its trimmed-back predecessor, the Energy Incentive Program, the Secretary of State’s audit found. The audit concluded that the Energy Department was breaking its own rules by allowing sales of tax credits at lower prices than called for by state regulations. In addition, the audit also found widespread confusion among department staffers about how to interpret the rules, a finding that didn’t come as much of a surprise given the complexity of the rules.

You don’t need to read between the lines of Brown’s statement last week to sense her irritation with the program’s continuing problems, although her statement was tightly focused on the Business Energy Tax Credit program and not so much on the Energy Incentive Program.

“My administration will engage with the Legislature to develop a process and devote the resources needed to finally finish the work to put the BETC program behind us so we can focus on other important energy and climate change policies in the future,” the statement said.

And that’s fine; this is certainly a matter that requires attention from both the administration and legislators. But as the governor pursues those other “energy and climate change policies,” it will be interesting to see how (or if) her administration applies the lessons that can be learned from a thorough public assessment of everything that went wrong here.

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The Oregonian, Sept. 7, on the sale of recreational marijuana:

At this time last year, Oregonians were talking about the possibility of legalizing recreational pot. These days, they’re looking at marijuana milestones.

In less than a month, adults will be able to buy small amounts of recreational weed at medical dispensaries, a stopgap measure that will help meet demand until the retail system is fully up and running. In November, legalization supporters will celebrate the one-year anniversary of the passage of Measure 91. And while the implementation of the measure has had its rough patches, a third milestone validates the 847,865 Oregonians who voted “yes” last year.

That milestone actually belongs to Washington, where voters backed legalization in 2012. Still, it’s a useful reminder of what Oregonians would be doing in coming years if Measure 91 hadn’t passed: They’d be buying a lot of recreational marijuana at retailers on the Washington side of the Columbia River and driving it home. This phenomenon is no surprise and was, in fact, a compelling argument for supporting Measure 91. Still, the numbers are both instructive and reassuring.

The milestone is the release of the inaugural report on the implementation of I-502. In addition to legalizing pot, the initiative directed the Washington State Institute for Public Policy to conduct a progress report every two years, beginning in 2015. The first report, released this month, is more than 50 pages long, but one particular section is likely to be of significant interest to Oregonians. It details recreational marijuana sales by county from July 2014 through June 2015. And if we didn’t know better, we’d conclude that people in Klickitat County spend most of their time stoned.

At $65.80, per-capita marijuana sales were higher in Klickitat County during this period than in any other county, and by a large margin. We suppose it’s possible that Klickitat residents smoke a whole lot of pot, but it’s more likely that much of it was bought by people from Cascade Locks, Hood River, The Dalles and those passing through Goldendale on their way back to Oregon on Highway 97. Klickitat County is conveniently located on the northern bank of the Columbia River.

Location, surely, is also responsible for the gaudy numbers posted by retailers in Clark County, where per-capita sales, at $56.93, were second only those in Klickitat County. Clark County’s seven retailers also serve the Portland market, which seems to be quite healthy. The average Clark County retailer posted sales of $3.5 million during this period, which is 24 percent higher than the average retailer tally in runner-up Benton County. Only King County, dominated by Seattle, generated total sales in excess of Clark County’s $24.6 million.

Washington’s sales statistics point to strong demand for recreational marijuana in Oregon and underscore how easy it is for Oregonians to buy it at legally sanctioned retailers … in Washington. In retrospect, legalization in Oregon was inevitable. The alternative merely created hassles for Oregonians and prohibited them from spending their marijuana money in Oregon - at least without registering for a medical marijuana card or buying from a dealer. Arguments for maintaining a ban in Oregon would have weakened as the state of Washington failed, year after year, to slip into a drug-induced stupor.

For similar reasons, the mini-rebellion staged by a number of Oregon cities and counties, mostly rural, is likely to be relatively short-lived. In order to pass legislation implementing Measure 91, lawmakers this year approved a compromise that grants officials in certain counties greater leeway to ban marijuana businesses, though all such bans can be overturned by local voters. A relative handful of cities and counties have exercised their ban prerogative. Eventually, however, residents of no-pot areas are bound to recognize that local prohibitions create hassles and displace spending without preventing access. When this happens, local bans imposed in a panic will end, one milestone at a time.

In the meantime, pot businesses near “dry” cities and counties should prepare to enjoy their good fortune. Their ban is your boon.

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