City Club of Portland

I want to thank the members of the City Club for giving me this opportunity – before public discourse gets reduced to sound bites and snappy ads – to talk about some issues that are important to all of us.

T.S. Eliot famously wrote that “time future is contained in time past.” I agree.

Oregon’s future is bright and getting brighter by the day.

We are building that future on the solid foundation of fiscal honesty, responsibility and stability we’ve put in place the last three years.

If I may, I call this “intelligent re-design.”

When I took office, state government in Oregon was in the midst of its worst revenue loss since the Great Depression – and very much in need of a newly designed plan for our economy. That’s why I’ve said since the start of my administration that growing our economy and creating family wage jobs is my top priority.

This often leads to an almost Greek Chorus response: . . .

Governor – what about education? Governor – what about the environment? Governor – what about health care and human services?

I understand why these questions are asked. Nobody wants to expand health care coverage more than I do. Nobody wants to give our schools an adequate and reliable source of funding more than I do. Nobody wants to protect our environment from pollution and a reckless federal government more than I do.

But here’s my answer. Only a rapidly expanding economy will give us the resources we need to support the vital services every Oregonian is entitled to, especially education.

When I say education – I don’t just mean K through 12. I mean an education enterprise that begins with pre-school and is a lifelong learning experience. I’ll have more to say about my vision for an education enterprise shortly. But first I want to go back to February 2003.

At that time, I’d been in office a little over a month and was invited to give my first major speech since being inaugurated. This is how I ended that speech:

Most of what we are hearing these days is about what we cannot do. My message is different. My message is about what we will do. I’m absolutely convinced that Oregon’s best days are still ahead of us.

Some of you may remember these words because I delivered them to the City Club of Portland.

My message hasn’t changed. I am not here to tell you what we cannot do – I am here, again, to tell you what we will do.

But before I do that – I want to tell you what is at the root of my governing philosophy.

What’s behind the policy choices I’ve made over the last three years – and still motivate me today.

My core belief is that if Oregonians have the economic ability to take care of themselves and their families. . . if they have a family wage job, access to health care, and enough money for a comfortable retirement, most of our problems will be relatively easy to resolve.

Crime will go down. Demands on our social safety net will go down. And all of the indicators of economic health will go up.

This is why, as your Governor, I see my job as growing Oregon’s economy and creating more high quality jobs for the citizens of this state.

Yes, figuring out how to more fairly slice the pie is a big responsibility of mine – especially during tough economic times. But my biggest responsibility is growing the pie. And that’s what I’ve been focused on.

How? First by streamlining government.

Businesses like to say that time is of the essence – and every day they wait for a permit is one less day they’re investing in our future and hiring new workers. But it is not just the private sector. People have busy lives – and time is short for them too.

So from building permits to DMV lines, we’re cutting red tape, discarding redundant or pointless administrative rules, by making time in the process as important to government as it is to the individual – and most important – lowering the cost of government.

All for one simple reason – to free up resources for education and other vital government services.

The second way I’ve been growing Oregon’s economic pie is by investing in public works projects. I admit – roads, bridges and sewer systems: Not sexy!

And few, if any, voters think: “I’m punching my ballot for Kulongoski because I like the new curbs on my street.”

But the fact remains, when we invest in infrastructure – three very good things happen.

One – we improve our public infrastructure and make it attractive for businesses to relocate here, or stay here.

Two – we improve the economy.

And three – we provide living wage jobs.

That’s the theory – and over the last three years, I’ve spent a lot time proving that the theory works.

In 2003, we passed a 2.5-billion dollar transportation package to repair Oregon’s roads and bridges. This is the largest public works project in the state since we built Oregon’s share of I-5.

It will create or sustain almost 9,000 jobs.

This year we passed ConnectOregon – which is an additional 100-million dollar investment in our rail, port and aviation infrastructure.

Also this year, we passed bills that will lead to 500-million dollars in new capital investment in our community colleges and universities.

All of this is in addition to the funding Oregon will receive from the Federal Highway Authorization Fund.

Add it up and by the end of this decade, Oregon will invest over 5-billion dollars in infrastructure improvements and create many thousands of living wage jobs that will – as I said at the beginning – give families the opportunity to educate their children, buy health insurance, and put something away for a rainy day or retirement.

Rebuilding Oregon’s infrastructure is literally the foundation on which three years of economic, social and educational progress has been made.

Let me give you a few examples.

Since I talked to you almost three years ago – we’ve increased our investment in Head Start. Today we serve 60-percent of four-year olds.

We raised funding for K through 12 education by 8-percent in this biennium.

And let me speak for a moment about how we’re changing the debate about higher education.

Although Oregon has a growing population – attendance at our post-secondary institutions is actually declining. This is a self-inflicted wound that can only hurt our economy. Declining enrollment is a direct result of the large tuition increases we’ve seen over the last few years.

So the problem isn’t that our students aren’t smart enough. The problem is – they’re being priced out of the educational marketplace. To get a handle on this crisis – this year, we capped tuition increases at 3-percent.

Just as important, every – let me repeat that – every graduate from an Oregon high school who qualifies on the basis of need and wants to go to an Oregon community college or university will now get financial help from the state. And starting next year – this help will be extended to all eligible part-time students.

There’s more.

We’re not just talking about cleaning up the Willamette River – we are cleaning up the Willamette River.

I’ve gone to battle with the federal government over protecting salmon and keeping the 2001 roadless rule – and I’ll do the same over tailpipe emissions and greenhouse gasses if I believe it is in Oregon’s best interest.

Global warming is real. It is the moral and legal responsibility of elected leaders to recognize and work to curb the effects that global warming has on citizens in our communities.

The best news for Oregon is our rebounding economy and rapid job growth.

Our unemployment rate is 6.1-percent – the lowest it has been since 2001. Today, Oregon has the sixth fastest growing economy in the country. In the relatively short time since I first addressed the City Club as Governor, Oregon’s non-farm payroll has increased by 81,000 jobs.

This sharp upturn in Oregon’s employment picture has not been confined to the Portland metropolitan area. Almost every region of the state has shown job growth between 2003 and 2005. If you look at job growth by sector – there has been dramatic improvement in construction, which is up almost 20-percent.

Business services, health services, and the hospitality industry have all increased by at least 7-percent.
Behind these numbers are the everyday lives of Oregonians who now have the promise of economic opportunity because dozens of companies are moving to Oregon – or deciding to stay in Oregon.

Google, which is building a new facility in The Dalles, is only the most recent example of a major company – with proven growth potential – discovering the unique potential of Oregon.

Amy’s Kitchen, Lowe’s, Freightliner, Intel, Sun Microsystems, Wachovia, Royal Caribbean Cruise Line and many other businesses have put thousands of Oregonians on the payroll in the last three years.

As I’ve already suggested, a job is not the solution to every problem – but a job brings every problem closer to a solution. That’s why I created the Employer Workforce Training Fund in 2003. Since then, 11,000 current workers have been trained – or are being trained – for Oregon jobs.

More jobs – and better paying jobs – are also why I have stood firm against any assault on Oregon’s minimum wage.

More jobs – and better paying jobs – are why I will travel anywhere in the world to sell Oregon – as I did last Sunday when I attended the CoreNet Global Summit whose members manage $1.2 trillion in real estate assets.

In Hollywood you only get about 30 seconds to make a pitch. When I pitch Oregon to company executives – this is what I say:

Oregon is open for business. Companies already in Oregon are confident enough in our future that they are investing billions in new facilities. We have industrial-zoned land ready for development.

One of the great – but often ignored – truths about Oregon is our favorable business climate. National survey after national survey says we have one of the best. And – most important – there is a consensus in Oregon – from the Governor, to the state’s business leadership, to members of the City Club of Portland – that we must invest in education.

Do you want to know the first thing executives ask about when they’re considering a move to Oregon?

They don’t ask about taxes. They don’t ask about regulatory burdens. They say, “Governor – how good is your workforce?” “What skills do they have?” “Will they be competitive in the 21st century?”

These are people who pay attention to the bottom line. They know that they cannot compete in the global marketplace unless they’re able to hire highly skilled workers.

And it doesn’t matter whether the sign says: “Help Wanted – Electrician” or “Help Wanted – Electrical Engineer” – the same fundamental rule applies: Businesses want the best. And if they can’t find the best in Oregon – they’ll go someplace else.

I have a very deep and personal understanding of the importance of education. The three biggest influences in my life were the nuns who raised me. The Marines who taught me discipline and love of country. And the G.I. Bill, which allowed me to continue my education.

I used to work in a steel mill. It was honorable work – the kind of work that puts food on the table for thousands of Oregon families. We do a disservice to young people by giving them the message that they will only have value if they have a four-year college degree.

That’s not true. We can have all the engineers and architects in the world – to design whatever we want. But without skilled people to pick up the tools to build the roads and buildings that those people design – it doesn’t matter.

We lose.

On the other hand, no Oregonian should be held back from achieving his or her full potential. I certainly wanted to achieve mine. Yes, believing in yourself is important. Being hopeful and optimistic – which I’ve always been – is important too. But so is a helping hand.

The G.I Bill was my helping hand, and without it I wouldn’t have made it through college and law school. And without college and law school – I wouldn’t have made it to this podium.

There isn’t a city, town or village in this state where you won’t find young Oregonians in pretty much the same situation I was in – and probably most of you were in at one time too.

They have talent. They have drive. They have a passion for Oregon.

And they have the right – the right – to expect that those of us who benefited from the post-World War II consensus that higher education should be an opportunity for the many – not a privilege for the few – will pass that same benefit on to them.

I mentioned my vision for building an education enterprise in Oregon.

Let me read you something Bill Gates said in describing American high schools.

He called them obsolete, and added: “By obsolete, I mean that our schools – even when they are working exactly as designed – cannot teach our kids what they need to know.”

I was there when Bill Gates made this statement. He was trying to tell us that there is more to education reform than simply increasing the number of credits to graduate.

It is what we teach them to earn those credits that’s important. In short – is the subject matter relevant to today’s world.

I think we should listen to what Bill Gates has to say. He runs a company that provides thousands of good paying jobs – for people with the right skills.

Here’s the choice we face: We can add a new coat of paint to a flawed education system – or we can follow the advice of America’s leading industrialist and change the system.

I want you to know – and I want every citizen of Oregon to know – that when it comes to education in Oregon, I’m only about one thing: change that will give our children the educational and economic opportunities they need to achieve their dreams.

But that won’t happen unless we also change from an education system where K through 12, community colleges and universities each go their own way – competing for limited dollars, protecting their turf, and selling short the long term needs of both students and the Oregon economy.

So if you’re happy with the status quo – I’m sure I can find you some paint in the basement of Mahonia Hall.

But if you believe we can do better. If you believe we must do better.

If you believe that ignoring the need for stable funding and efficient management in our schools does a terrible disservice to this state’s children, . . .then I invite you to embrace the future that I envision for education in Oregon.

That future is an education enterprise – and it comes with two promises for children, parents and education employees.

The first promise is to increase opportunity for every Oregonian by creating one coordinated and seamless system for pre-K through 20 education.

The second promise is a guaranteed floor for funding the entire education enterprise. That means Oregon pre-K/Head Start through graduate school and workforce training.

Let me start with promise number one. My bottom line is: Education must not be a zero-sum game, where one part of our education system wins at the expense of the others. Instead, I intend to raise the bar for the entire system.

We’ve already made significant progress toward managing education as one enterprise.

We’re finding new ways for our Educational Service Districts to provide core services to students in local districts – while at the same time, streamlining central office business functions.

We’re setting up an integrated data transfer system for K through 20 so that student transcripts will now be easily available through one electronic database available to high schools, community colleges and the Oregon University System.

The joint K through 14 and higher education boards are meeting on a regular basis, fostering cooperation and hard work between the two sides – instead of competition.

Many high school juniors and seniors are simultaneously enrolled in an Oregon community college while they complete their high school graduation requirements. We’re actively expanding this program to make sure that it is available to high school students across the state.

Similarly, any student attending an Oregon community college that has a dual enrollment agreement with a four-year institution is entitled to earn credits at either institution – and have those credits recognized as valid by both the community college and the university.

For students attending a community college that does not have a dual enrollment agreement – there are general education classes – totaling 45 credits – that can be taken at any community college and transferred to any institution in the Oregon University System.

We are creating a seamless system of education in our high schools, community colleges, and four-year institutions.

We’re heading in the right direction.

But there are more actions that need to be taken before Oregon’s children have the education enterprise they’re entitled to – for the prosperous future they deserve. Our 198 school districts should not be negotiating separate health insurance plans, but should be part of a statewide insurance pool to reduce health care costs. This year, for the second time, the Legislature failed in its responsibility to set up one health insurance program for all school employees across the system.

I promise you – this issue is not going away. I’m going to keep pushing until the Legislature stops listening to a handful of lobbyists – and starts listening to the voices of parents and students who want responsible cost-savings in our schools wherever possible – and want savings put back into the classroom.

A second and even more important step we have to take to build an education enterprise is stable, predictable and adequate funding for all parts of our education system.

All of us tend to view education from our own mind’s eye – our own experience. But believe me – a five year-old entering school today is coming from a very different world than you and I came from. . .and the job his or her teachers are being asked to perform – at all grade levels – is a very different job than our teachers were asked to perform.

Many of these children are entering school with a lifetime of experiences most of us never had. I’m talking about drugs, alcohol, divorce, domestic abuse, no books in the house, and a media-dominated culture that promotes consumption and celebrates sex and violence. That’s what’s going on outside the classroom.

Inside the classroom the changes have been equally dramatic: a great influx of children without health insurance, without proper nutrition, and for who English is a second language.

Government has a moral and legal responsibility to stand up for these at-risk children. We cannot throw up our hands and say the problems are too difficult – or the cost is too great.

That’s why in 2003, I announced my Children’s Charter for Oregon, which focuses on prevention, childcare, school readiness, keeping children safe, and moving toward the day when every child in Oregon has access to health care.

Today, I can report that SMART – a reading program for kindergarten through third grade – is reaching many more children because I am the first Governor to support it with public funding.

The number of counties with school-based health clinics has increased from 14 to 19. We’re taking steps to make sure that every child that is eligible for the Children’s Health Insurance Program gets enrolled. And through better administration and higher reimbursements – we’re providing more disadvantaged kids a nutritious lunch.

But the fact remains: The economic, social and health-related problems faced by at-risk children have not gone away – and are rarely left outside the schoolhouse door.
Instead, they come into the classroom and are dumped in the laps of teachers, teacher aides, and school administrators.

To compound these challenges faced by educators – we now provide full educational opportunities to all children. This is sometimes called mainstreaming.

I was in the forefront of opening the schoolhouse door for special needs children as far back as the 1970s. But if you graduated from high school before 1975 – mainstreaming was not part of your school experience.

Today, children with special needs learn right along side other children. This is as it should be. But we can’t ignore the strain that providing full educational opportunities to all children – as well as the social and cultural changes I mentioned – has put on Oregon’s hardworking teachers.

They deserve our profound thanks and appreciation. But they also deserve the resources they need to perform the critically difficult responsibilities we’ve asked them to assume.

If we want our schools to not only teach the “three R’s” – but to be the place where special needs children are taught; primary health care is provided; and the social problems that often accompany poverty and abuse are dealt with . . .that is a choice we make.

But we can’t make that choice and then say we can do it cheaply!

Which brings me to promise number two: a guaranteed minimum level of funding for all elements of the education enterprise.

Every biennium, the boards, staff, and stakeholders of each part of our education system fight to get a larger share of the budget – at the expense of the other parts of the system. These budget battles have had serious negative consequences. The most serious is the two-decade long disinvestment in higher education.

As Governor, I’ve said enough is enough! We must have stable, predictable and adequate funding for all elements of our education system. This is the only way that the people we count on to give our children the skills they need to succeed – will be able to do long-term planning instead of short-term crisis management.

Here is what I have proposed: All parts of the education enterprise will be guaranteed a 10-percent increase in funding each biennium. That means under my plan, in the 07-09 biennium, the entire enterprise will receive a minimum – let me say that again – a minimum – of 10-percent more than was legislatively appropriated this year.

I have also proposed that 61-percent of the General Fund be dedicated to the education enterprise each biennium. In addition to earmarking 61-percent of the General Fund – and guaranteeing a minimum growth rate of 10-percent – I will make sure that education in Oregon has a meaningful stability fund.

We will not let our children fall through the trapdoor like they did from 2001 to 2003.

I started today talking about the economy and employment – and moved on to education. Since Portland is Bridge Town, let me grab an easy metaphor and say a few words about the bridge that links my two principal topics.

That link is workforce training.

We’ve already invested millions of dollars in workforce training grants. We’re working to better identify the training needs of not just local – but regional – economies, especially the Portland metropolitan area. We’re helping to fund the Portland Workforce Alliance, which connects businesses with schools to better prepare students for today’s jobs.

We’re expanding what we call “Career Pathways” in our community colleges – to give more focused training opportunities to adult workers, to get them the training they need for the jobs they want, in a shorter period of time. And we’re providing more technical and professional training in high school – using industry standards as the benchmark for determining what a student needs to know.

But more important than what I’m doing about workforce training is why I’m doing it.

This state and nation already has too many divides: Urban and rural. Red and blue. Rich and poor. Pro-globalization and anti-globalization. We also face a digital-divide. And for me the most dangerous divide of all is the skills divide.

I want to heal these divides. That’s who I am – and who I’ve always been.

That’s why on the first day of this legislative session I said both sides should pledge, “to put conciliation ahead of confrontation.” That’s why I’ve spent much of my time as Governor visiting rural Oregon so those communities know that they’re not just part of our heritage – they’re part of our economic future.

That’s why for more than thirty years I have worked to build a just and diverse Oregon – which means creating political, social and economic opportunity for all of our citizens.

And that’s why I’ve made the case that free trade must be fair trade – but that there is no way to put the globalization genie back in the bottle.

How do we make sure every Oregonian is a winner in the international marketplace?

First, by introducing the use of technology in all sectors of our economy. And, second, by closing the skills divide.

I refuse to govern this state as if it were an overcrowded lifeboat where we save some by jettisoning others. I want Oregon to be a place where children from low-income families have the same health care and school-readiness skills as children from middle class families.

Where all high school graduates have achieved real competency in math and reading, so no matter what they do next – they’re prepared.

Where an education system that trains PhD’s to design engineering marvels – also trains technicians to build them.

Where skills acquired long ago are not retired – but are brought up to date.

In other words, I want Oregon to be a place where hope is never out of sight – and opportunity is never out of reach.

Thank you.