It's all about the numbers

John Kitzhaber targets prisons and human services to reinvest in education, while Chris Dudley focuses on reducing labor costs, including public pensions.

No one runs for governor on a platform of painful cuts to schools and other services. But the first significant act of Oregon's next chief executive must be a budget that subtracts billions of dollars from state spending.

Voters need to know then: How would Republican Chris Dudley and Democrat John Kitzhaber go about closing the budget shortfall?

In extended interviews with The Oregonian editorial board, both were reluctant to get specific about budget cuts. But the full interviews reveal important distinctions in governing philosophies and emphasis.

Dudley says the next governor must "say no," enforce a new budget discipline and push as hard as necessary to slash labor costs. "I'm not going to scapegoat teachers, firefighters or police officers," he said. "That's not the point. But we must get our state back on a sustainable path."

Kitzhaber also vowed to pursue savings on labor costs, even though public unions are among his strongest supporters. But he argued that labor savings would close only about a third of the deficit. He'd look for the rest in public safety and human services while pushing to reinvest in education — the front-end spending aimed at ultimately reducing future prison and welfare spending. "We've got to realign public expenditures and public programs," he said. "There's a way to do it. There's a huge opportunity here."

Kitzhaber was more specific than Dudley about program areas where he'd find savings. He promised to seek waivers to allow the state to use federal funds more effectively. For example, he noted that more than half the children in foster care have one or both of parents with untreated substance abuse problems, but federal rules require money to be spent on foster care, not substance abuse treatment. "It costs $16,000 a year to keep a kid in foster care; it costs $3,000 to $4,000 to treat the parent," Kitzhaber said. "We need to reduce the number of foster kids, not increase the number of foster homes."

Dudley spoke at greater length about reducing labor costs. He'll seek to require state workers to contribute to their health care plans at the same average level of Oregon teachers, a step that could save the state several hundred million dollars. He also pledged to push to change the law requiring public employees to contribute 6 percent to their retirement accounts — a cost now picked up by many public employers.

A key question in the campaign is which candidate would be more effective negotiating with public employee unions. Dudley cited his experience as a union representative during his long career in the National Basketball Association and his outsider status, adding, "I don't bring in 30 years of baggage of partisan wounds and scars."

Kitzhaber promised to be plenty tough in negotiations, noting that state employees went on strike during his first term in office. But he said only he has the necessary trust of union leaders to lead successful cost-saving negotiations next year.

"I believe I'm the only one in the race who can actually do that," Kitzhaber said. "I don't think this is a Republican issue or a Democratic issue. I think it is an issue of trust. If public employee unions are demonized, if they are not respected, if the important work they do does not appear to be valued, they are going to be resistant."

Dudley scoffed at the idea that only Kitzhaber can successfully bring down labor costs. "That's like saying we should have the arsonist put out the fire," he said. "I think it's ridiculous to say that we have got to have someone who got us into this place now get us out of it. It doesn't make sense."

One of the editorial board's highest priorities is building a reserve fund large enough to shield the state through future economic downturns. Twice in the past eight years, recessions have crippled the state budget and forced Oregonians to choose between cuts to schools and ill-timed tax increases.

Dudley supports a Republican plan to require savings of 3 percent of the general fund during good economic times. Kitzhaber and other Democrats call for changing the "kicker," which requires the state to rebate tax money even when it lacks an adequate reserve. We strongly believe both steps are needed.

However, Dudley argues that lawmakers must build more public trust before seeking kicker reform. "The kicker is flawed public policy. But what the kicker represents to people is the last restraint on government spending. We need to restore trust in government first, showing they can save some dollars for bad times, and then later down the line we can talk about revenue, about the kicker."

Each candidate panned the other's government spending proposals, saying their campaign plans don't add up to a balanced state budget.

Dudley said, "He's talked about making cuts, but I haven't seen one dollar on the other side."

Kitzhaber countered, "If you don't want to look at the correction system, if you're going to take 3 percent off the top for a rainy day fund, if you're going to revisit (measures) 66 and 67 and do something to the capital gains tax, you know, what size budget do you have left?" he asked. "I don't think you can create the kind of Oregon that we say we want without making some of these tough decisions."

No governor can deal with a $3 billion dollar deficit without leaving considerable blood on the floor. But Oregon needs a governor who can both get the state through the next two years, and position it for the future, who can tighten Oregon up in the recession and also ready the state to take off when the recession ends. The other side of every decision to cut is a decision on what is still vital to support.

Oregon may never have seen a campaign where it's more important that a candidate's numbers add up. But every set of numbers is also a message — one that voters need to listen to as Election Day draws nearer.

Share This Story