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Entries in Oregon economy (3)


Steady Recovery Shadowed by Steady Decline

Oregon's economy continues its steady improvement, but rural economic fortunes reveal a steady, continuing decline as young workers head to the city to find good-paying jobs.The latest quarterly Oregon economic report didn't contain any splashy news, but it does reconfirm that many Oregonians, especially in rural areas, continue to slip on the U.S. economic treadmill.

The main message is that overall economic recovery — and the tax revenue it generates — is proceeding at a steady, if slower-than-hoped-for, rate.

The report also showed a steady downward spiral in the economic fortunes of poorer Oregonians and of Oregonians that may be tumbling out of the middle class s a result of the aftershocks of the last recession.

Nowhere is the steady decline more apparent than in rural parts of Oregon, according to state economists Mark McMullen and Josh Lehner. They say younger rural residents who are entering their prime earning years are choosing to move to urban areas to chase their fortunes. That, in turn, the economists explain, could lead to a death spiral for the areas they leave.

Rep. Cliff Bentz, R-Ontario, said the exodus is already underway. He blamed federal and state natural resources policies for squeezing the life out of rural economies and leaving rural wage-earners with "nothing to do."

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Bits and Pieces from the Policy Trail

Here are some worthy tidbits — from a prediction of a recessionary echo to a call for merit-based appointments of judges, with thoughts about international trade, the Greek debt crisis and Occupy Portland thrown in for good measure.

  • Tim Duy on Oregon's Economy: The Oregonian cites Duy's report on a small improvement in Oregon's economy in September, but not enough to allay fears of an echo recession. The way Duy, from the University of Oregon, put it: "...I become very cautious that, in fact, a recession is brewing beneath the surface." He said the European financial crisis could push Oregon and the United States over the recessionary cliff.

    That's not good news for legislators as they head to Salem for "legislative committee days" later this month, including a report to the Joint House and Senate Revenuye Committee on the next state revenue forecast. Duy's comments portend more bad news and that could mean cuts in K-12 education, higher education, cops and prisons and human services, including health care. The further downturn also could put a dent in Governor Kitzhaber's plans for health care and education reform, both of which will be up for consideration in the February 2012 legislative session and both of which rest, at least in part, on decisions about the state budget.
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That R Word is Back

The R word — recession — is back on the lips of economists again, both nationally and in Oregon. The prospect of a double-dip recession prompted Governor Kitzhaber to direct state agencies to look for another 10 percent to trim from their budgets.

Unless the economy suddenly turns on a dime, that means the 2012 legislative session may be staring at more spending cuts — not exactly what legislators want to focus on right before their re-election campaigns. It opens the door to political challengers who can criticize failed efforts by the state to stimulate job creation. The cuts also will evince political squeals.

First, the health care reform measure, House Bill 3650, passed in the 2011 session, calls for saving $240 million in low-income health care under Medicaid. Many observers believe this "savings" will amount to a just another cut.

Second, several state agency budgets passed by the 2011 session will be good essentially only for the first year of the biennium. In the case of the budget for to serve senior citizens and persons with disabilities, for instance, there is already not enough money to continue current services for 2012-13. Legislators could face the uncomfortable reality of having to cut programs for those who are the most dependent on state services.

There is a substantial disagreement in Salem over whether a state such as Oregon can pull itself out of the depths of a stubborn recession. No less a figure than Senate Minority Leader Ted Ferrioli, R-John Day, believes in the prospects of a "jobs agenda." There are always differing political views on what the agenda should look like, but with split control in the House and possibly in the Senate next February, there may be a greater willingness to take ideas from both sides of the aisle.

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