Oregon economy

7/25/2010: A long, depressing post about the Oregon economy and the state budget, from Harry Esteve in the Oregonian:

… State expenses, including payroll, health and retirement benefits, and debt payments, are slated to rise by nearly $4 billion over the next two years — a 26 percent jump. During the same period, however, revenues to pay those expenses are expected to increase by a little less than $2 billion, or about 14 percent — and that assumes a return to a robust economy.

… Anyone remember 2007? Oregon unemployment was at a comfortable 4.5 percent and money from 2006 taxes poured into the state treasury. Lawmakers smacked their lips at pre-recession projections that showed long-term surpluses despite hints of a downturn.

They boosted spending on schools, increased state police ranks to ensure 24-hour road coverage, greatly increased state subsidies of green energy projects and borrowed heavily to pay for millions of dollars in modernization projects on college and university campuses.”It was a huge mistake,” says Rep. Dennis Richardson, R-Central Point, a consistent voice for fiscal conservatism in the Legislature. Overall, state spending increased by more than 23 percent over two years, Richardson points out. “Anyone could see we could not sustain that.”

… For decades, we put ourselves at the same status level as Washington, our wealthier sister to the north. Now, Tapogna says, “we are beginning to look a lot more like Idaho.”

… As the rest of the nation slowly drags itself out of the recession, Oregon may have trouble keeping up. That’s because the state’s economy has undergone a fundamental change over the past decade, analysts say. Since 1997, Oregon workers have seen a steady erosion in their earning power, from 97 percent of the national average down to 91 percent. 

Wages in Oregon will not go up until the state has better educated workers. The state is not going to be able to pay for that education.

Tagged . Bookmark the permalink.

Leave a Reply

Your email address will not be published.