Kitzhaber Emphasizes Education Investment

Governor Kitzhaber urged health care, corrections and PERS savings to boost investment in education and a more balanced, robust economic future for the entire state.Saying Oregon cannot settle for an "uneven, unequal and hesitant recovery," Governor Kitzhaber, wearing his trademark jeans, called for investment in education from pre-school through college by easing "serious fiscal constraints" that keep money from classrooms.

Entering his 11th year as governor, Kitzhaber's State of the State address centered on "difficult choices" that include "reducing the cost of health care and corrections, reducing the cost drivers that are diverting resources from the classroom and undertaking serious review of Oregon tax expenditures."

The former emergency room physician said a new "high-quality, low-cost" care model developed by Coordinated Care Organizations could restrain Medicaid inflation to 3.4 percent in the second year of the coming biennium, saving the state's general fund $100 million. Kitzhaber said shifting public employees, including K-12 teachers, to a similar private health care model could result in a game-changing $5 billion savings over the next decade. 

Stemming the state's rising prison inmate population, the governor said, can avoid spending $30,000 per year per prisoner, compared to the $10,000 per year the state spends on K-12 students.

Kitzhaber repeated his call for changes in the Public Employees Retirement System, which he said is the cause of half of the projected  $1,000 per student increase in the K-12 budget.

Explaining his proposed changes, Kitzhaber said, "This is not about the value of our teachers. It is also not about a major overhaul of the retirement system that continues to be one of the best funded in the nation. It is simply about trying to have a conversation that allows us to strike a balance between the cost of our retirement system and our ability to put dollars in the classroom today to ensure that our students are successful tomorrow."

The governor expressed willingness to work with lawmakers to trim tax expenditures, including the senior medical deduction on federal income tax returns. He effectively conceded it will take more time to bring forward a politically palatable comprehensive tax reform measure.

Kitzhaber began his address with a moment of silence for victims of gun violence, including those at the Clackamas Town Center shooting last year. However, he didn't offer any specific gun legislation, which may have a tough time squeezing through the Oregon Senate.

"Oregon clearly is on the right track," Kitzhaber said, but added, "We cannot settle for an uneven, unequal and hesitant recovery. The word 'recovery' loses any useful meaning if it describes a state where the Portland metro area returns to pre-recession employment levels, while much of rural Oregon continues to suffer the economic and social consequences of double-digit unemployment, outdated infrastructure and an aging workforce. The word 'recovery' is warped if it is used at a time when the unemployment rate for white Oregonians is falling, but for African Americans and Latino Oregonians it continues to rise. The word 'recovery' is the wrong word to use for a state with a 24 percent child poverty rate."

He supported what he called the three pillars of the Oregon Business Plan, which include creating 25,000 new jobs per year through 2020, pushing up average personal income levels and reducing the state's poverty rate to 10 percent. He encouraged lawmakers to cooperate so "we create a society to match our scenery."

The State of the State speech followed the swearing in of the Oregon House and Senate and the election of new Speaker Tina Kotek, D-Portland, and Senate President Peter Courtney, D-Salem, to his historic sixth term. Courtney's wife administered his oath of office.

In her first speech as Speaker, Kotek launched a "book club," giving each House member a copy of "Toward One Oregon," a series of essays about bridging the urban-rural divide in Oregon. 

Courtney, who earlier said the governor's agenda will be a heavy lift this session, said the difficult legislative challenge will require having "the right person in the room" to deliberate and decide on the best course of action.

The festive day at the Capitol got off to a bad start when the phone system broke down, blocking incoming calls. Aides also hustled to put in folding chairs to handle the crowd that jammed into the House for the joint legislative session and listen to Kizthaber's address.

Former Oregon Governors Barbara Roberts and Vic Atiyeh attended the joint session. The state song, "Oregon, My Oregon," also earned a rare performance. And, Oregon Public Broadcasting's Chris Lehman noted that the Oregon House only has one Rep. Smith for the first time since 1999. Rep. Greg Smith has outlasted former Reps. Tootie, Patti and Jefferson Smith.

After all 60 House members and 16 senators were sworn in, the legislature reconvened in the afternoon for the first reading of more than 1,200 pre-session filed bills. There also was time for pictures and for new members to settle into their legislative offices. Lawmakers will remain in Salem for two more days, then recess until February 4 when the session will begin in earnest.