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Hood River Rotary

Hood River Rotary
December 8, 2011

When I took office I vowed to focus on three priorities from day one of my administration. First, I wanted to ensure that the state would be an effective partner getting the private sector economy going again for big companies and small entrepreneurs alike – and to set the stage for breaking the boom bust cycle that has plagued us for decades. Second, I wanted to transform our health care system to reduce the opportunity costs involved with spending an ever growing portion of our resources on this one sector alone.  Third, I wanted to transform our system of public education to create a skilled workforce capable of competing and excelling in the global economy of the 21st century.  

One year later, and a little grayer, I believe we have made significant progress. And while too many Oregonians still remain out of work and facing uncertainty, we will emerge from this recession stronger and better positioned for the future. 

So let me take a few moments and discuss the progress we have made. With legislative leadership and the involvement of Oregonians in communities around the state, I believe that we have been very successful in catalyzing a new approach in health care. The passage of  SB 99 (which established our state health care insurance exchange); and HB 3650 (which established a pathway to transform our health care delivery system for the 600,000 people on the Oregon Health Plan), has allowed us to take the first step to reduce cost and improve health outcomes for all Oregonians.

With help from local communities like Hood River, business leaders, strong leadership from the legislature, and from educators around the state we are also making progress on changes to our system of public education, which will deliver better results for students and more resources for teachers.  With only two-thirds of Oregon students graduating from high school, I feel a tremendous sense of urgency about this effort.  Indeed, our social, civic and economic objectives depend on meeting aggressive targets for all Oregon students to earn high school diplomas and at least 80 percent to earn an associates degree, a technical certificate, a baccalaureate degree or higher.

With the passage of SB 909 and SB 242 we are, for the first time, aligning funding and governance across the full continuum of education from early childhood services through K-12 and post-secondary education and training to achieve these goals. 

On the jobs front, we are making progress. We’ve changed the tone at the top, and our collaborative partnership with labor, business groups, chambers of commerce and the regional solutions advisory committee has been the key to our early successes.

Lost in the headlines about the European debt crisis and the failed Super Committee is the fact that we are creating jobs in Oregon. So far this year we have created 18,000 jobs – still 7,000 short of the Oregon Business Plan goal of 25,000 jobs a year, but progress, nonetheless. And believe it or not, unemployment is lower in Hood River, Boardman and Corvallis than in the Portland metropolitan area. Why? Because we have islands of innovation in both urban and rural communities that are tapping into Oregon’s natural assets and market advantages in new and creative ways.

From biomass energy entrepreneurs at the Port of Morrow creating jobs that pay 150 percent of local wage rates -- to craft brewers like Double Mountain and Full Sail -- an economy of innovation is emerging in Oregon. It is our best hope for the future because it is locally-driven and rooted in our strengths – from our solid base in agricultural, forest and advanced manufacturing industries; to promising technology research and development; to our strategic location on the Pacific Rim with access to burgeoning Asia markets.

State government can and must play the role of accelerator and barrier buster for this emerging economy of innovation.

That role is multi-faceted -- and begins with the basics – like our success passing a balanced budget, which in turn was cited by Standard and Poor’s as a prime reason to upgrade Oregon’s credit rating to AA+. And that budget includes reserves that are cushioning the blow to Oregonians in need of essential services in a time of ongoing economic uncertainty.

We’ve passed important policy to help reinvigorate our manufacturing sector -- like SB 766 which speeds up permitting for industrial property to help ensure that this backbone of our economy will continue to thrive.

We successfully launched Oregon’s National Career Readiness Certificate, and I’m proud to report that over 11,000 unemployed Oregonians have gained certification – one step toward ensuring our workforce can gain the right skills for new opportunities, with proficiencies aligned closely with the needs of our business community.

These steps are all key points in the Oregon Business Plan and we have been aggressively pursuing them with our partners in business and labor.  But clearly, we still have a long way to go.

I want to call out three areas that need additional attention.

First, for an economy of innovation to flourish we need to improve the economic development and business finance tools available to Oregon companies to help them access the capital they need to grow.  While the start up climate in Oregon is superior to that in other regions; we invest less per capita than in either Washington or California. This relative lack of investment capital puts us at a significant competitive disadvantage in creating and growing the kinds of companies we need to fuel a vibrant economy.

I have been working with Treasurer Ted Wheeler to develop the Invest Oregon Act, which we will bring to the 2012 legislative session.  This proposal will allow the state to leverage public resources to encourage a greater level of private investment in Oregon; and to unlock the private credit that is now sitting on the sidelines to help our businesses seeking access to the capital they need to grow.

Second, we must revamp our tax policy so that it is more rational and equitable; adequate to invest seriously in public education and workforce development; and aligned with our long-term economic development objectives.  The question is “how do we get there.”  Over the past two months I have been working with business and labor leaders to rebuild the coalition needed to move this important issue back to the top of our agenda. And that work will continue through 2012.

Finally, to truly move away from a boom/bust economic cycle that depletes our natural capital and leaves us highly vulnerable to fluctuations in the national and global economies we must continue to develop a more sustainable economy based on the following goals – which I would like to incorporate into the evolving framework of the Oregon Business Plan.

  1. Create and retain economic activity and family wage jobs while reducing our carbon footprint and restoring our natural environment.
  2. Expand our manufacturing sector to reduce our need to import goods and services.
  3. Minimize the export of our raw materials and maximize the export of value added products and advanced manufactured products.
  4. Minimize the need for imported energy.
  5. Keep capital circulating in our state through local sourcing and supply chains.

This economy has both a environmental restoration component and a resource conservation component and should initially include at least the following six elements.

First, support the scale-up of energy efficiency upgrades for our existing building stock. Our Cool Schools Initiative is proving to be a smart investment in job creation and energy savings with retrofits underway in districts from Corbett to Klamath Falls to Warrenton. But school facilities are just the beginning. Smart retrofits can be applied to all of Oregon’s public buildings, and we can put people back to work in every corner of Oregon.

Second, adopt a ten-year energy plan that will provide a context for developing renewable energy resources; balances them with other values; reduces the need to import energy; maximizes energy efficiency opportunities; and promotes distributed generation.

Third, support the emerging innovation in Oregon’s biomass industry as a key component of our rural economic development strategy. Innovation in our forest industry is just as necessary as innovation in our "Silicon Forest." Projects like Wallowa Resources new biomass energy campus will create jobs as well as improving forest health and developing a new home-grown, renewable energy source.

Fourth, develop strategies to reduce the export of raw logs and raw agricultural products while increasing the use of Oregon agricultural and wood products in Oregon.  This could include initiatives to create more robust and intentional farm-to-school and farm-to-chef connections; and creating a new ONAMI-like signature research center focused on innovation in the use of wood.

Finally, we must develop strategies to identify and replace imports from external suppliers with market-competitive, Oregon-made products – thus enhancing Oregon’s “cluster” strategy by connecting cluster supply chains to Oregon-based firms and innovations.  

One example is ZeaChem, which is using technology based on bacteria found in the stomach of termites to convert leftover plant materials into fuel. Their brand new biorefinery in Boardman is set to produce its first volumes of bio-based jet and diesel fuels in 2013, and they are working closely with their neighbor, Greenwood Resources, to provide up to 15 percent of their harvest as boiler fuel and cellulose material.

Or Turtle Island Foods, right here in Hood River, which is making alternatives to meat and poultry products with all organic and natural tofu and tempeh based products. Today, their Oregon innovation, “Tofurky,” has grown to become one of the most recognizable brands in meat alternatives in the United States. Building on 30 years of success, they are exploring expansion with a new food processing facility, which would hire up to an additional 32 employees in Hood River in the first three years of its operation.

These emerging Oregon companies are intersecting multiple sectors, from manufacturing to agriculture to the traded sector, and they’re doing it while supplying themselves with other Oregon products.  That is the economy of the future – an economy which can finally insulate our state from the boom/bust cycles of the past.

Let me close by saying I’m proud of the progress we’ve made, but we can, and must, do more.

While it won’t be easy – I am optimistic about Oregon’s future. With you help, we can weather this economic challenge, and we can do it without losing our sense of community, without losing our commitment to one another, and emerge stronger and more united that where we began.

Albert Einstein once said:  “You should not use an old map to explore a new world.”  And he was right, because each new generation faces a new world with new challenges – challenges that cannot be met by clinging to the past but only by imagining a different world and a different set of tools with which to build it.

Let’s build a new map for Oregon, and let’s build it together.


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