Solid Recovery with No Momentum

State revenues were up slightly, but the latest quarterly economic forecast released today in Salem shows Oregon's economy is headed upward at a frustratingly slow pace. The state economist said Oregon's recovery is on solid footing, but lacks momentum.

Increased revenues of $116 million were welcome news to nervous legislators meeting at the Capitol, but most of the increase came from a legal settlement, not economic growth. Personal income tax collections were actually down $22 million, while corporate tax receipts grew a slim $.2 million from the previous quarterly forecast. Lottery proceeds also registered a gain.

Those meager results were framed by news that the Kitzhaber administration is lopping off 190 positions in various state agencies. Many of the eliminated positions are vacant, but there will be some layoffs. In their February session, lawmakers directed the governor to identify $28 million in savings by reducing the number of managers, consultants and public relations positions.

While no one is happy with the rate of growth, the state's economy at least isn't going in reverse. Oregon's unemployment stands at 8.6 percent, higher than the national average of 8.2 percent, but a significant drop from the 9.6 percent rate a year ago. Portland's jobless rate has continued to inch down to 7.9 percent.

One bright spot in the economic forecast was the continued rise in exports from Oregon, but even that good news cast a shadow. Exports grew in 2011 by 3.5 percent, just a fraction of the 18.6 percent growth rate seen in 2010.

The not-much-changed revenue forecast probably means lawmakers are off the hook, at least for now, to make deeper spending cuts. However, legislative budget-writers are bracing for more cuts down the line as costs continue to rise while revenues remain stagnant. Rep. Dennis Richardson, R-Central Point, said the forecast is another reminder state spending needs to be reduced to fit within anticipated revenues.

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Recycled Good Old Idea

There has been some publicity lately about the role Michael Jordan is playing in state government. Not the Michael Jordan who can dunk a basketball. The Michael Jordan who is director of the Oregon Department of Administrative Services, but functions like the chief operating officer (COO) of state government.

News about Jordan suggests he is the first person in Oregon's history to function as the COO.  He may function with that authority, but he is not the first manager to do so.

In former Governor Neil Goldschmidt's administration, Fred Miller held the position of director of what was then called the State Executive Department. He functioned exactly like a COO.

Here are some aspects of the role Miller played:

       *  State agency heads reported on a daily basis to Miller, even though — then as now — state statutes specify that an agency director is named by and reports to the governor.

       *  Miller held twice-weekly cabinet meetings for the heads of major agencies and monthly cabinet meetings for smaller agencies.

       *  In addition to the functions of the Executive Department (overall budget, auditing and personnel management — including labor relations), Miller also met on a routine basis with agency heads to check on their progress.

       *  For his part, the governor would attend cabinet meetings on occasion, but left the daily management function up to Miller.

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