Push to Alter Economic Course


Business Plan Leaders Gather Local Feedback

Business chiefs visited Central Oregon recently to gather input on the challenges faced locally, as part of a fact-finding mission leading towards collaborative ideas for stimulating the state’s economy to be incorporated in an economic policy blueprint.

Since it was launched in 2002, the Oregon Business Plan has provided a strategic framework for  business and elected leaders, working together in a concerted effort to build a stronger, more competitive state economy – primarily regarding what Oregon needs to support thriving businesses that create more quality jobs.

And as part of that ongoing effort, the current chair of the initiative’s Steering Committee, Pacific Power President Pat Reiten, along with a delegation including Oregon Business Council President Duncan Wyse, toured our region to meet with industry representatives and hear feedback on both challenges and potential opportunities.

Wyse said: “We had a great meeting, chaired by Mike Hollern of Brooks Resources Corporation, and had a lot of meaningful feedback regarding the conditions in Central Oregon.

“We also received commitment from organizations such as the relevant business chambers and Economic Development for Central Oregon (EDCO) regarding help with a deeper analysis prior to fuller recommendations in the fall.

“We encountered a very impressive group and these preliminary meetings help determine the scope of problems and challenges, which is a necessary precursor to coming up with creative ideas for addressing change.”

Reiten added: “The Oregon Business Plan is designed to present an economic policy agenda with buy-in from business organizations across the state.

“While the first step is identifying key challenges and opportunities, the next step is defining clear actions to address them.

“Through our outreach within industries and across regions, we collect feedback on our existing initiatives, gather ideas and momentum for new ones, and identify business and elected leaders to help champion them. “

The Oregon Business Plan envisions the growth and success of leading-edge, traded sector industries – clusters of allied businesses that ring up sales outside Oregon and create well paying jobs that buoy local communities. And while the destiny of these industries is in their own hands, on a macro-level the Plan’s proponents believe it is critical that Oregon’s leaders pursue initiatives to create the environment that helps such homegrown traded sector clusters succeed.

The recommended and supported state policies aim to “improve the culture of innovation, the work skills of our people, the quality of life that makes Oregon attractive to talented people, and the infrastructure that businesses need to be productive and competitive.”

But concerns regarding the direction of the state’s tax policy – including the passage of Measures 66 and 67 – impacting personal incomes, together with rising public expenditure and falling investment in education have the business community worried about Oregon’s prospects for future progress.

Wyse said: “From a previously strong diversified economy with a natural resource base 20 years ago, per capita income has been falling in the last decade.

“At the same time, public expenditure in areas such as corrections and health care costs has been rising while investment in education has suffered. If you want to aim for higher per capita income you actually really need more education capacity.

“The final piece we have seen is that as revenues have declined during the recession, policy decisions have been made to raise taxes, to the point that Oregon’s personal income taxes are the highest in the country. These are worrying long term trends that could accelerate a ‘circling down the drain’ effect.

“There is something of a broken model and there has been a struggle regarding long-term budgetary plans – we believe there should be a rolling 10-year plan versus a two-year horizon, which would never work or be contemplated in the private sector.”

Referencing “structural problems in the state” Wyse said the focus needs to be switched to a “virtuous cycle” of growing the economy – and consequently revenue – tackling public expenditure, investing in infrastructure, including transportation, and promoting higher education, as well as addressing the taxation issue.

Roger Lee, executive director of EDCO, concurred, adding: “Economic development issues created by the state impact us to a large degree – to the point that we risk losing more companies than we are able to recruit.

“High net worth individuals and companies have gone to places like Vancouver and Reno, where the business atmosphere is perceived as different.

“The takeaway is that there needs to be education with policy makers as to what drives the economy.

“There has been some schizophrenia in the state regarding jobs and growth and a lot of places would not even have a conversation on that issue. Prosperity is based on a solid job base and diversified economy and until we understand that, measures like 66 and 67 will be passed that further impact our ability to develop our economy.

“If you create an economy top heavy on government jobs that can be a spiral downwards and the wealth producing sector can take flight. Declining incomes and fewer industries is not a good recipe.”
Lee also pointed to other potential hurdles in the state including the power of Oregon Department of Transportation to effectively block projects if they deem contributions to infrastructure insufficient, and the land use process, including state bodies such as the Land Conservation and Development Commission (LCDC).

He added: “For example, you have a city such as Bend that has been growing rapidly but has never had a major Urban Growth Boundary (UGB) expansion, yet you have another agency potentially frustrating that process. And that – impacted by the requirement to develop within city limits – could be construed as one of the reasons we have had relatively expensive land.

“Policy decisions have been made, influenced by major population centers, that are out of our control and it’s worth pointing out that the Bend Metropolitan Statistical Area (MSA) is less than five per cent of the state’s population, yet has created 17 per cent of the growth in the last nine years, as well as more net new jobs.”

Oregon Business Plan representatives have been holding off on endorsing any political candidates but are working draft on a fresh draft to present to candidates for Governor, Congress and the Oregon legislature.

Reiten added: “We will ask candidates to review and reflect on the proposed Oregon Business Plan and we will host and co-host candidate forums on economic policy. This will provide opportunity to hear feedback from our public leaders. Our intent is that the draft Plan will influence their thinking and that their feedback on the Plan will influence ours.”

OBP leaders can cite many initiatives and dozens of action items introduced since the first Leadership Summit in 2002 (held each December), including promoting key investments in innovative micro and nanotechnology research, needed road and bridge improvement, a federal forest health bill, expansion of development-ready industrial lands, the creation of a state rainy day fund, new goals for education attainment, and a coordinated state branding campaign.

A major plank of its initiative is the “four Ps” for prosperity – people, place, productivity, and pioneering innovation, serving as a way to think about Oregon’s economic assets and liabilities, and potential strategies for its economic future. A fifth P, public finance, is also seen as vital to long-term success in finding a way to fund public services that enable Oregon’s industries to thrive.

Current work includes a fresh overview of the Oregon Business Plan, including analysis of how Oregon’s economy is performing during these difficult times,  a section devoted to Oregon’s  traded-sector industry clusters, and policy analysis and recommendations in each of the key initiative areas:  education/workforce, public finance, health care, transportation, economic innovation, energy and water.


Grass Roots Effort to Boost Business

A grassroots effort organized by a diverse group of local, private-sector business and community leaders is working to compile “an objective, coherent vision for the economic future of Deschutes County” building on regional strengths and seeking greater economic stability for sustainable growth.
The Deschutes Economic Alliance is the brainchild of Lawnae Hunter, owner of Bend-based Hunter Properties, who is also an organizer of the annual Central Oregon Economic Outlook program.

She said: “During the forecast event, our keynote speaker, economist Bill Watkins, correctly predicted a continuing decline in the local economy.

“I am in a business where I see a lot of hardship and I wanted to do whatever I could to be part of the solution, so over the last few months I have been helping bring together this initiative to supplement efforts to diversify our economy and bring in living wage jobs.”

As part of that effort, Hunter is looking to raise $70,000 from the business community to facilitate the hiring of Watkins and consultant specialists from Praxis Strategy Group to come up with creative ideas to kick-start the economy.

Hunter says the Alliance “recognizes the extraordinary efforts of existing public/private organizations dedicated to diversifying our local economy through recruitment and expansion, supporting existing businesses through training and educational opportunities, and otherwise enhancing the economic vitality of our community.”

She added that the new movement aims to collaborate with those existing organizations to create and implement “a thoughtful strategy for our economic future with the independent guidance of internationally renowned economic development experts—a strategy driven by empirical data, with discrete actions for implementation and objective measures of success.”

With the help of a 12-person advisory board, the group intends to collaborate throughout the community to meet goals including:
• To provide a common vision and collaborative framework for the economic future of Deschutes County;
• To aid in the diversification of the
local economy;
• To attract and develop environmentally and economically sustainable jobs;
•To encourage innovation and entrepreneurship;
• To improve the stability and quality of life for community members through the availability of attractive, well-paying jobs; and
•To promote and improve the image and visibility of Deschutes County as a business and family-friendly region.

Praxis Strategy Group is known for its work in regional economic development, including in Wenatchee, Washington, where its efforts helped lure a Yahoo data center to relocate.

Presuming funding is secured, Praxis’s process for developing an action plan will be to visit our region on a regular basis, to meet with community members and assess our region’s economic strengths
Hunter added: “Developing a strong and well-tailored development plan is a critical start on our road to recovery. However, it is clear that a plan alone will do little to improve the well-being of our community. We must, therefore, be committed to a strong follow-through for the long term.”

During a press conference to formally launch the initiative, Watkins added: “You have a lot to offer here and have a strong undercurrent of entrepreneurs.

“Economies need to be nimble and aggressive nowadays and we will look to develop innovation-based activity, including focusing on growth of companies already here, and develop a coalition of business, educational and government entities.

“Companies and individuals are often most successful when they have a strong, vibrant partnering network.”

Economic Development of Central Oregon, which leads the economic development and diversification of Central Oregon through marketing, targeted recruitment, business expansion and the formation of effective public/private partnerships, declined to comment on the Deschutes Economic Alliance efforts and what role the organization might play in the plan.



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