State must rein in employee costs, become more business-friendly

Published 5:00 am Tuesday, October 26, 2010

Hi, I’m Mike Kozak and I am an independent candidate for House District 54.

This is a very heated race between the Republicans, Democrats and me. Both political parties are using the typical rhetoric and name-calling. And both parties are so into the war between each other that they are not addressing the real structural issue that threatens Oregon’s fiscal future. Neither has come up with a plan for change.

How is Oregon doing?

We are getting poorer. Our per capita income is about 90 percent of the national average.

In the good times, Oregon’s problems are still there, but politicians have had enough money to cover it up. In the bad times, these problems are magnified and we have tremendous budget shortfalls and program cutting.

Since 2006, state spending has increased 46 percent while state government has hired over 4,000 new state employees. In the same period, Oregon’s private sector has lost 150,000 jobs.

There have been many small taxes in the last two years to balance the budget. Now Measure 75, which I am against, asks us to change the constitution to allow a non-tribal casino in Portland by promising dedicated income to the state and local governments. Unless the foundation of the state’s financial structure is sound, these will be nothing but Band-Aid fixes until the next recession.

What can we do?

At our first forum, I stated that state government must be run with a more businesslike attitude, that all programs, commissions and boards should be reviewed and cut, and that government must learn to do “more with less” just like we the citizens have in this recession.

One example, the Oregon Liquor Control Commission, should be trimmed back or eliminated. Many programs should receive this scrutiny. When the government is operating in a lean mode, there will be enough money for economic development and for schools, both K-12 and our state university system.

Citizens of Bend and District 54, much like the Titanic, if we do not change course, Oregon will crash. We will become a second-class state locked up by opposing political philosophies that cannot get a budget in order. We will begin to look like California and Illinois, which are very close to being bankrupt.

There are several changes I would seek to stabilize our financial foundation:

First, the increasing number of state employees must be examined. All boards, commissions and programs have to be given a zero-based budgeting model. They must justify their existence every year. They should be told to offer the same services at a 10 to 20 percent budget cut. The cream will rise to the top and efficiency will be rewarded.

Second, the Public Employees Retirement System must be fixed. The 6 percent employer contribution must end and be handed back to the employees. They can have a choice, contribute or not, just like private 401(k)s.

Third, state employees must pick up some of their health insurance premiums, if not all of it. PERS and health insurance alone are such great expenses that they are not sustainable as they are without bankrupting the state.

Fourth, the ever-popular kicker law must be revamped. The limit of 2 percent must be changed to 5 percent and then graduated up to 8 percent. Anything over this may be returned to the taxpayers. The 5 percent to 8 percent should be used to fund a fiscal operating reserve.

Fifth, a new attitude must be developed about Oregon’s business friendliness. Measures 66 and 67 must be revoked, and the capital gains tax must be reduced. Roger Lee of Economic Development for Central Oregonsaid two businesses that were considering relocating in Central Oregon chose other states after 66 and 67 were passed.

Sixth, Oregon’s treasured land use planning system needs to be changed so that there is more local control, and perhaps regional review. We shouldn’t be looked at with the same principles that control Portland and cities located in the prime farmland of the Willamette Valley. The cities east of the Cascades are not the same. The state is holding a noose around every city’s neck when it comes to urban growth boundary expansion. Cities are prime areas for economic expansion and should be allowed to follow their own dreams.

When the state government practices fiscal restraint and operates in the black, businesses will flourish because of the state’s economic stability. There will be more money for schools, both K-12 and the university system.

Oregon’s greatest economic promise lies in the creativity and innovations of its entrepreneurs. Our future lies in creating jobs we haven’t dreamed of yet. The green business sector, social media sector, clean energy sector and software development sector all depend on investors in order to grow. We must make Oregon a safe place in which this growth can happen.