Economic Analysis of Oregon’s Gubernatorial Election: Oregon Voted for the Wrong Candidate

As everybody knows, election day was this month. This day was a chance for Oregon to move forward in the right direction. Below is a picture of how the gubernatorial election went in Oregon. Even though the majority of the state, in terms of counties, voted for Dennis Richardson, John Kitzhaber won the higher populated areas of Portland and Eugene. In the form of an economic analysis, complete with what we can expect, here’s why Oregon chose poorly.

Oregon is always called a blue state, but results always say otherwise.

Oregon is always called a blue state, but county results usually say otherwise. (Click to Enlarge)

What Oregon Had at Stake

Oregon had a lot riding on this election. More jobs, better education, and less waste of money. These were desperately wanted in Oregon. Now that John Kitzhaber is serving a fourth term, the issues Oregonians really care about will most likely not be addressed. At least, not for the next four years. It was very clear: Under Kitzhaber, we had higher unemployment than the national average and our high school graduation rates were pretty low compared to the rest of America. Under Richardson, we would have someone doing their best to see that all of these things were improved. In order to economically survive as a state, the state needs to ensure that jobs are available to those seeking employment, education is nothing less than top quality, and that state money is carefully monitored.

Unemployment

During Kitzhaber’s first term as governor (1995 – 2003), the unemployment rate of Oregon was 4.7 percent (Jan. 1995). By January, 2004, the unemployment rate of Oregon was 7.7 percent. The highest point during that run was 8.6 percent in June, 2003. Because the 2008 financial crisis was hard on the entire United States, it would not be accurate to give Kitzhaber the credit for the drop in the unemployment rate. In January, 2011, the unemployment rate of Oregon was 10 percent. This was already dropping from a peak of 11.6 percent in May and June of 2009. Today, Oregon’s unemployment rate is around 7.2 percent and on an upward trend.

Click here to see an interactive chart of Oregon’s unemployment (seasonally adjusted) between 2008 and today. Oregon is compared to all of the neighboring states of Washington, Idaho, California, and Nevada. California and Washington have plateaued rates while Idaho and Nevada are on a downward trend. Oregon is the only one of these states with an upward trend. If you feel that this is unacceptable, you know a change was desperately needed.

According to the Oregon Office of Economic Analysis, the labor force has increased since the 2008 financial crisis started. The bad news is that the labor force declined since the end of that recession. The participation rate has also rapidly declined since the end of the 2008 recession. Was this all Kitzhaber’s doing? Probably not. But what did he do to try to fix it? By increasing the labor force, as Richardson had suggested, the state would gain more tax revenue. These data shown on the chart would suggest that Kitzhaber did not do much to help the situation.

Since the 2008 recession, people have become discouraged and quit looking for work (Source: Oregon Office of Economic Analysis; 2013)

Education

Oregon’s high school graduation rate has been very low for a while. According to the Oregonian, 2011 was the first time that the U.S. Department of Education compiled accurate and comparable state-by-state graduation rates. During this first year, Oregon was tied with Alaska for having the fourth lowest high school graduation rate. In 2012, Oregon had the second lowest rate at 68 percent. Last year in 2013, the rate was 69 percent. However, this is still not much of an improvement. Oregon still has the second lowest graduation rate in the nation.

Where was Kitzhaber during those three years? PolitiFact Oregon shows that Kitzhaber has established an early childhood coordinating council, eliminated redundant standardized tests, guaranteed transfer credit between higher education institutions, and created energy saving bonds to invest in public schools and colleges. But what good will any of this do for our high school students that don’t complete high school? In the works is Kitzhabers “New Oregon Diploma,” which will guarantee access to two years of community college or Oregon university education as well as a budget to combine all of the public education funds in Oregon. But, what good will it do to have a new diploma that guarantees access to college if many Oregon high school students drop out before earning it?

What did Richardson want to do? The Oregonian reports that he wanted to:

  • Get rid of the common core standards and create higher standards for the state
  • Expose children to careers by creating a mentor program of volunteers from local chambers of commerce and service organizations
  • Increase technical and career courses in Oregon high schools by 40% so kids could learn a trade
  • Give state tax deductions to college graduates of Oregon colleges and universities paying off loans, that is, if they stay in Oregon
  • Separate the education budget from the rest of the state’s general budget so schools aren’t stuck with what’s left after all other allocations are made

Even if most Oregonians support the common core, Oregonians should give ample consideration to the major benefits from this plan. The common core standards may be higher than what standards already set in Oregon, but Richardson wants the bar set higher. Is that really a bad thing? Is it not a huge benefit to students to have the means necessary to learn a trade or two of their choosing? Is it not beneficial to Oregon that the students that pay in-state tuition actually stay in Oregon?

Kitzhaber and the Oregon legislature set a goal, in 2011, to see 100 percent graduation by 2025. Oregon shouldn’t have to wait 11 years to see such results. Dennis Richardson would have fought tooth and nail for this kind of improvement in his tenure. Kitzhaber has already had an accumulated 12 years as governor to do so and he has already proved that he won’t.

Waste of Money and Lack of Leadership

The Columbia River Crossing (CRC) was supposed to be a second bridge that connected Oregon and Washington that would alleviate congestion along the I-5 bridge. Millions of dollars were poured into this project and that was only for planning. Part of what failed was that Washington decided to back out and told Oregon to pay for the entire project itself. Where was Kitzhaber in all of this? Had Dennis Richardson been governor during this time, he would not only get on Washington for backing out, he probably would have used Oregon’s state attorney general to keep the project going fairly. Even if he was unsuccessful, at least he would have tried.

Cover Oregon was a national embarrassment in the realm of healthcare. $250 million (Oregon and federal dollars) were graciously put into this project and then we saw it fail. It was no surprise to the consultants Kitzhaber hired to oversee the progress of Cover Oregon. Reports had said time after time that the site would not be ready by its launch date. These reports were allegedly ignored by Kitzhaber.

When asked about these reports in a news interview, Kitzhaber denied any knowledge of issues Cover Oregon had prior to its launch month. He also admitted that an email warning him about these issues was in his office, but he hadn’t looked at it. If that wasn’t enough, he actually exited the interview early when his spokesman said they only had two minutes left. This is odd because they usually give a good amount of scheduled time to interviews like this. I don’t know about you, but I have a hard time believing that a total of six minutes (four minutes before the time concern) would throw off the governor’s schedule.

For some reason, these things were all looked over. Katu 2 News, Portland’s ABC channel, looked into Cover Oregon’s collapse and found many concerning facts. ABC is not a conservative news source by any means. If there’s a bias, it’s left leaning. If that’s not good enough for you, consider the fact that Portland is a very liberal city. This issue was not about Republicans vs. Democrats. It was about whether or not Kitzhaber lied to the people. There is much considerable evidence that suggests he did lie. Just watch the videos I’ve provided in the previous two links if you don’t believe it.

Lieutenant Governor and International Trade

Dennis Richardson said that if he were elected governor, he would appoint a lieutenant governor whose primary role was to focus on international trade. Some in Oregon sided with Kitzhaber’s comment about how foreign nations want to see a state’s governor, not their assistant. However, Dennis Richardson has been on several trade missions to China, not Kitzhaber. According to the International Trade Administration, Oregon’s exports were $18,640,277,657.  Of the $219 billion, Oregon’s 2013 GDP, it accounts for 8.51 percent. Richardson wanted to expand international trade in Oregon by increasing the number of trade partners.

With a lieutenant governor specializing in international trade, I believe Oregon could have increased exports by 150 to 200 percent. Maybe this would have taken eight years instead of four, but Oregon could definitely benefit from it. Some may have thought that this wouldn’t be a good idea because, of course, the lieutenant governor would need to be paid. According to Richardson’s website, this position would have come from his own office budget. In other words, Richardson would have taken a pay cut from the Oregon governor’s salary of $93,600 to fund a separate position. The real question here is, “Why wasn’t Kitzhaber willing to do so?”

What We Can Expect

If Oregonians wanted to see an economic recovery and improvements in the education of their children, Oregon chose the wrong candidate. Jobs, education, and transparency were sacrificed earlier this month for a continuation of party politics in Oregon. Kitzhaber did a lot of shady things. Of course, I didn’t mention everything that happened.

John Kitzhaber was the wrong candidate to vote for partially because Dennis Richardson was the only candidate of the two who actually gave details to plans to improve Oregon. Kitzhaber was only defending himself and things he had already passed or started. He never talked about anything new to improve Oregon’s economy or what he would do for the next four years.

If nothing changes, we can expect the economic situation in Oregon to get worse. Unemployment will continue to rise and money will aimlessly be wasted in projects that may not even exist beyond writing on paper. Kitzhaber will probably do nothing to improve the graduation rates of high school, let alone actually care about the quality of education. Hold on to your hats, folks. This is going to be one bumpy ride because jobs have not been available, education has been very far from top quality, state money has been carelessly neglected, and history does tend to repeat itself.

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