Led by high-tech, housing and professional services, Oregon has recovered many of the jobs lost during the pandemic, but the hospitality, education and health care sectors have not been able to replace all the workers who left those fields. (Quinton Smith/Yachts News)
Christine Drazan
Betsy Johnson
From Kotech
Oregon’s governor doesn’t have much control over the big economic forces that determine whether the state’s economy is booming — or booming.
“Mahonia Hall doesn’t make money policy,” said Betty Johnson, one of the candidates who could move into the governor’s official residence after the November election.
It’s true. But one governor’s policies could help Oregon and its 4.2 million people weather economic storms — or allow them to take advantage of the good times.
The governor will serve four years – eight if re-elected. A leading Oregon economic consultant thinks it may be time for the next governor to look beyond the highs and lows of business cycles and work to bring the state to long-term prosperity.
John Tapogna, senior policy adviser at ECONorthwest, a Portland-based independent economic consulting firm, said Oregon’s next governor will have to keep an eye on trends that could fundamentally change the state’s economy, for better or worse, for generations to come.
Fundamental change is nothing new to Oregon’s economy. Over the past three decades, the state has shifted from natural resources to manufacturing and marketing, focusing on high technology — especially in three urban counties in the Portland metro area.
But the state’s more rural counties — still tied tightly to agriculture and natural resources like timber — haven’t always had their share of economic growth.
Oregon’s economy is still closely tied to the global and US economies. Oregon is one of the states of the United States – both for the Pacific Rim countries and other states. That helps explain why Oregon can be especially vulnerable during a national or global recession.
“When we go down, we go down a lot,” Tapogna said. “As we climb, we grow faster.”
In the year In early 2019, it took Oregon 30 months to regain the number of jobs it had before the outbreak. The current national and Oregon unemployment rate is 3.7 percent, down from 13.3 percent at the time of the pandemic.
But the job recovery has been disproportionate — favoring high-tech, professional and technical services and anything related to housing and housing. The weakest returns are in healthcare, education and hospitality.
As usual, the job recovery rested on both sides of Oregon’s urban-rural divide. The fastest job growth last year was in the five-county Portland area, Central Oregon and the Willamette Valley, according to the Oregon Department of Employment. A delay was job growth along the coast and in southern and eastern Oregon.
And while the U.S. is dealing with inflation, state economists think it’s a 50-50 chance the U.S. could slip into a mild recession — and that would certainly affect Oregon.
New challenges
Tapogna is looking at other trends that signal big changes for Oregon’s economy.
One, he said, is that Oregon is experiencing more deaths than births, so if the state’s population is to grow, it will be through people choosing to move to Oregon.
The governor really needs to step back and ask, ‘What is helping or hurting the beauty of this state?’ It should be said.
At the top of Tapogna’s list is affordable housing, “and the accompanying homelessness crisis.” On more than two occasions, a governor said he could “do terrible things in terms of tone and policy” for housing.
The next governor could work to extend broadband Internet coverage throughout Oregon — especially to rural areas, Tapogna said. Services such as telemedicine can play an important role in allowing rural residents to age in place with confidence in access to adequate health care. And businesses in all parts of the state need fast and reliable Internet access.
Another factor in determining whether Oregon is able to attract newcomers is the quality of its schools. Tapogna said he believes the next governor should focus on students, schools and teachers, “like health care workers, who are on the front lines and dealing with a lot of stress.”
Another trend – Oregon has moved from the middle to the top quarter of US states in overall taxation. That doesn’t necessarily turn off newcomers, Tapogna says, especially if those taxes pay for popular and well-provided government services.
It sets the stage. How are Oregon’s leading candidates for governor? Here’s what they had to say:
Christine Drazan, Republican
(Editor’s note: Tina Kotek and Betty Johnson agreed to be interviewed separately by six journalists who contributed to this project. Christine Drazan declined. This section is based on her statement and records.)
GOP candidate Christine Drazan told The Oregonian/OregonLive that she would block future tax increases and that the state’s gas tax and new corporate activity tax would raise prices in the state.
In response to questions from the Oregon Capital Chronicle, Drazan said Oregon’s corporate activity tax “has made businesses big and small uncompetitive in global and regional markets, and forced consumers to pay higher prices for everyday goods and services.” She said she voted against the tax in the Legislature and vetoed the bill.
She wrote in a questionnaire she filled out for The Oregonian that she is “committed to avoiding new tax increases and unduly burdensome government regulations and mandates that raise additional costs for Oregonians.” My election as governor will eliminate the one-party control that has exacerbated our state’s capacity crisis over the past decade.
Drazan said her administration will “support natural resource-based industries like rural Oregon’s timber industry, making this economic engine not just a thing of the past, but a part of our state’s future.” This means realizing that many of the policies passed in Salem are directly related to the decline of rural Oregon. She said she rejected the law, citing a recent law that mandated overtime pay for some agricultural workers.
“Oregon’s anti-business reputation is earned,” Drazan said in a Capital Chronicle interview. Our taxes are very high[and]our regulatory environment is increasingly complex and difficult to navigate.
Tina Kotek, Democrat
In an interview, Kotek said she wants to address the workforce shortage that plagues employers around the state — and one way to do that is by working with community colleges on job training programs. Community colleges are often an “afterthought” when it comes to state funding, she said, but added, “I put them at the top of the list because we know what community colleges mean to Oregon communities, both rural, urban and suburban, and I want to support them 110%.” .
The lack of affordable housing for workers is also an economic issue, Kotek said: “When people have a place to live, it’s a drag on our ability to grow economically.” On her first day in office, she said she would issue an executive order at the state level to increase the pace and scale of housing development.
Legislators have earmarked savings that could help the state’s climate decline, she said. But she added that it is important for the state to have effective programs to help them make ends meet despite inflation and economic recession.
“Getting people to get rental assistance, getting people to get food assistance, getting people to get help with childcare. Those programs we have should work well.
She said it is important to expand child care. “I think this will help employers who want people back to work. It is very difficult if one cannot afford child care. “
Kotek said that the next governor should focus on all sectors of the region’s economy, both urban and rural. Expanding broadband Internet access to rural Oregon is key to economic growth, she said.
She pledged to work with the state’s natural resource industries, which are vital to rural Oregon. “The biggest issue there is the natural resources sector making sure we’re doing what we can to deal with climate change,” she said.
Betsy Johnson, Unrelated
In the interview, Johnson said she would be a “motivator” for economic development.
Johnson said she is working to make Business Oregon, the state of Oregon’s business-development agency, more responsive to the needs of businesses and local agencies working with economic development issues.
She said the state government has a reputation for being anti-business. “I’ve talked to a lot of companies that have fled the state of Oregon lately because they can’t stand how hard it is to do business here,” she said. “And I’ve seen firsthand the antagonism on business before the Legislature.”
She said her goal is to make state government a “welcoming place” for business. “It’s important for the state government and legislature to create a stable business environment because the one thing businesses need more than anything else is reliability and predictability,” she said.
Johnson said the next governor should work to make sure government agencies that work with businesses are “lean and responsive.” I don’t care if you make wood chips, silicone chips, potato chips or fish and chips. We have a diverse economy. And they all face unique challenges.”
In addition to being more welcoming to business, the state government should support emerging sectors of the economy such as craft brewing and distilling, she said. “I don’t think the state is responsive, welcoming and optimistic about both leisure and business recruitment.”
Johnson said her record speaks to her economic-development credentials: “I believe, I have a great record of economic development and job creation for the people I’ve had the opportunity to represent.”
Johnson advocated fiscal discipline for the state, especially if the national economy is in recession, and said lawmakers would be wise to set up a rainy day fund. She said she advocates increasing the state’s reserve funds, “especially with the low drumbeat of the looming recession.”
Editor’s Note: This story is part of a newsroom collaboration for the governor’s race, in which six newsrooms each squared off on a key topic with Republican Christine Drazan, unaffiliated candidate Betty Johnson and Democrat Tina Kotek. The Mail Tribune wrote about abortion, the Albany Herald-Democrat about wildfires and drought. Ashland News covers health care, including mental health. Oregon Capital Chronicle covers housing, Salem Reporter Education and Yachts News He wrote about the economy and the cost of living.
Voices on the economy
SB 139 (2021 regular session), passed
Eliminated tax breaks for businesses with annual profits of more than $5 million. Pass-through businesses do not pay corporate tax, but instead are subject to individual income tax
HB 3389 (2021 regular session), passed
Businesses affected by tax layoffs during the pandemic may be postponed or exempted from some taxes from 2021.
- Cotech – Yes (regular sponsor)
HB 2975 (2019 regular session), passed
Oregon’s kicker tax cut has been cut by $108 million. Kicker tax cuts occur when state tax revenue exceeds projections by more than 2% and the state must return the money to taxpayers.
Source: Alexis Weisen from the University of Oregon’s Catalyst Journalism Project
