A talk at the City Club, May 28, 2004

"Oregon has no effective leaders today, in large part, because Oregonians have no consensus on where they want to be led. There is no consensus because political extremists ridicule the idea of talking to those who disagree with you -- a prerequisite for consensus. The painful truth is that we have spawned a generation that refuses to learn the fundamental skills of democratic self-government."

That is why is was such a joy to vote in Eugene's mayor's race. For the first time in a long time I was not faced with a choice between the lesser of two evils. The choice was between two competent candidates, either of whom would make a competent mayor. The real issue was whether either candidate control her supporters if she got elected. Would she be allowed to lead and make an effort to represent the whole city or forced to follow a narrow partisan agenda expected by supporters.

The central issue in the race became Kitty Piercy's plan to talk and Nancy Nathanson's plan of action. In fact both are needed.

Piercy knows the reason Eugene's city government is paralyzed is because the consensus that has governed us for the last 30 years has broken down or been pushed out of the way by a minority that no longer finds it acceptable. Kitty knows that there is no point in action without rebuilding that consensus first.

Nathanson knows that the lack of a consensus is used as an excuse for inaction and failure to rebuild a consensus in Eugene is effectively used by those who want time to stand still when things are changing all around us -- often not for the better.

The question is whether the supporters of these two politicians will let them govern.

If Nancy's action plan was to simply keep trying to ram the Chamber of Commerce agenda down the community's throat, the paralysis would simply continue. There is nothing inherently "wrong" with the Chamber's agenda. It is simply too narrow to serve the entire community.

Will Piercy's supporters allow her to hammer out a new consensus -- with the good fair bargaining and spirit of compromise that requires or will they demand further stalling in the vain hope that time will stand still?

And how will the rest of the community react? Critics often dismiss Eugene as a homogenized, white bread bastion of liberalism. In fact Eugene is a very diverse town -- a genuine community of competing ideologists and interests that uses compromise and bargaining to maintain a consensus so it can be governed. No one faction has the horsepower to bulldoze another.

Perhaps as much as a third to a half of the Eugene community sits on the sidelines watching the chamber and the traditional liberals play politics. These are the people who must be consulted and sold if we are to end our paralysis and move on toward shaping our future. The bystanders support of any consensus is essential.

Any effort to forge a new consensus for Eugene's future must acknowledge some realities.

Time does NOT stand still.

Corvallis today resembles Eugene of the 1960s more than Eugene today. The Eugene of 2030 will not resemble Eugene today. The issue his what can we do to preserve what we regard as our best qualities and move on.

The population of the Willamette Valley doubled in the last 30 years. It is expected to double again during the next 30 years. Eugene/Springfield is expected to remain Oregon's second largest metropolitan area. As a practical matter, we will have to live with that, like it or not, because the U.S. Constitution prevents Oregon from imposing immigration controls at the borders.

So accommodating a larger population is a good place to start forging our new consensus.

In Eugene we often confuse growth with sprawl. To prosper, Eugene must have economic growth. It is not inevitable that we spread out. That is a choice. We do not use our present land base efficiently.

Sprawl -- pushing out the urban growth boundary to prepare for big box stores and industrial "campuses" -- is again being urged on us by some because they own land outside the growth boundary and sprawl is lucrative for them. The first conversion of land from agricultural to urban uses is the most profitable, but only because society subsidizes the conversion. Open land is only worth what crops it will grow or livestock it will pasture until society invests in streets, roads, utilities, sewer and water systems, schools, parks, playgrounds, police and fire protection. Try selling land without the promise of that infrastructure.

Our present conflict is driven by people interested in perpetuating the post-World War II development model of urban sprawl. But our experience shows this model is now obsolete, wasteful, inefficient and unsustainable in view of emerging 21st century realities to the degree we can know them.

Fundamental questions of energy use, the amount of taxes people are willing to pay, economic development and changing public attitudes suggest the urban sprawl model has seen its day.

Just north of us, Portland rejected this model in the 1970s with its decision to abandon the Mt Hood Freeway. Portland protected its perfectly functional, close in neighborhoods and replaced outmoded warehouse districts and rail yards with a mixture of housing and commercial development that brought home and work closer together. That policy intensified the use of land in the urban core and is the catalyst for a new lifestyle embraced by many.

Portland built a controversial but bold light rail system while Seattle laughed and continued to try and build freeways to end its congestion. Not surprisingly, Seattle strangled on its traffic, while in Portland housing and commercial development along Portland's light rail lines make mass transit a practical reality for thousands.

Dozens of my former students at SOU have moved to Portland, live along the light rail lines and commute to work on the. They rent a car on weekends when they want to go out of town. Without the car, they save thousands of dollars a year which they use to pay off their student loans fast. They do not see this lifestyle as a personal virtue or sacrifice. They have options that allow them to choose different priorities. Portland is one of the few urban areas in the country to accommodate more population and more jobs even as its suburbs grow.

Seattle has just started its rail transportation network -- probably 30 years later than it should have -- only now recognizing you DO NOT build your way out of traffic congestion -- more roads simply beget more traffic until we live in a sea of concrete.

There is no reason eugene's new consensus cannot embrace policies similar to Portland where we desire them.

Any new consensus about Eugene's future requires a reevaluation of our economic development strategies.

We continue the high technology version of the smokestack chasing of the late Industrial Age. We give away the store to locate the brand name plant, not realizing the high technology industry is as volatile as the timber industry or aircraft production.

We fail to realize that the incubation and expansion of local companies like Lantz Cabinets in West Eugene injects more money into the economy and are more stable employers than flashy acquisitions like Hyundai or Hynix or whatever they are named this month.

The growth of businesses like WinCo and Bi Mart produce more dollars for our economy than Target or Wal-Mart. The decision of Bi Mart employees to buy their company insuring that the company's warehousing and distribution jobs would stay in Eugene is probably on of the biggest economic developments this year -- and it did not get the recognition it deserves.

We are being asked to flirt with the sprawl model yet again by the usual suspects. Eugene allowed itself to be bullied out of its deliberative process by the self-anointed Gang of Nine, triggering an expensive and unproductive game of musical hospitals that has not yet ended and will artificially inflate the costs of medical care in this community for a generation.

There is no question Eugene's decision-making process can be glacial. I still get a laugh all over the state when I tell my Eugene joke: "It doesn't matter what you decide in Eugene as long as you talk about it first and feel good about it afterwards." But attempts to short-circuit that deliberative process have invariably led to expensive mistakes -- and the musical hospital relocation is only an example.

A more mature attitude toward consensus-building and compromise that will solve the problem of glacial decision-making.

We also need to take a more mature attitude toward our relationship with Springfield. Springfield is as much a part of our economy as Clark County, Washington is a part of the Portland metropolitan area economy. Portlander's used to complain jobs and businesses were moving out of state when they crossed the Columbia River just as some Eugene business people complain jobs are moving to Springfield.

It was precisely because Portlanders treated Clark County, Washington like a poor relation that Clark County had the last developable land in that region.

Precisely because Eugene has treated Springfield as a poor relation, Springfield has some of the last developable land in our region if we decide not to sprawl beyond the urban growth boundaries. It is just Springfield's turn to develop.

The question is whether this generation of elected officials has the skills required to meet the challenge of more maturity.

I am often asked when the next leader like Tom McCall will come along.

I must tell you, I'm not sure Tom McCall could have been an effective leader in the present climate.

McCall was governor at a time when the post-World War II consensus of keeping Oregon a special place was forged. He struck a deep chord in Oregonians when he declared the Willamette River an open sewer and promised to clean it up in his 1966 campaign for governor. But McCall had both the money and the consensus to deliver on that promise.

Once elected McCall appointed himself the head of the State Sanitary Authority and proceeded to persuade the Legislature to deal with the two most obvious sources of the Willamette pollution -- municipal sewage and pulp liquor.

The Legislature helped cities finance municipal sewage treatment plants and enacted tax credits to finance pulp plant pollution control. Plans were drawn up. The effort got underway in the late 60s.

When Congress passed the Clean Water Act in 1972 with its matching grants of $75 federal dollars for every $25 state and local dollars, Oregon had plans on the drawing board and promptly applied for grants. Oregon built tertiary sewage treatment systems designed to accommodate a doubled population largely with federal dollars.

The secret to McCall's leadership was the money as well as the political will to make it happen.

Things have changed. There is no money. The ideologues who dominate our public discussion chant their mantra of "no new taxes" even when it is obvious we aren't paying our bills.

The most frustrating thing about this rhetoric is its utter dishonesty. Many Oregon conservatives who are responsible for the present budget crisis denied their responsibility in creating the problem.

State Republican Party Chairman Kevin Mannix and the Republican legislative leadership pose as antigovernment protectors of the taxpayer although they have been in control of government fiscal policy for the last decade. They have produced the largest unsecured debt in Oregon's history -- more than $1.3 billion and climbing.

The Republican legislative leadership has mortgaged Oregon's future and Oregon taxpayers and their grandchildren will pay an additional $500 million in interest over the next 10 to 30 years.

It is a fact that Oregon's General Fund budget has grown faster than inflation. But the loudest voices in the so-called anti-tax movement refuse to admit their role in the increase. Two initiatives, sponsored by conservatives and approved by voters with conservative support, account for nearly all of it.

Ballot Measure 5, the property tax limitation sponsored by conservative activist-turned-lobbyist Don McIntire and approved by voters in 1990, shifted more than a billion dollars in school costs from locally-raised property taxes to state-raised income taxes without any new revenue to pay for the shift.

Ballot Measure 11, the mandatory minimum sentence law sponsored by Kevin Mannix and approved by voters in 1994, triggered the construction of more than $500 million in new prisons and added hundreds of million of dollars of state spending each budget period to operate them. Again, it provided no additional revenue.

The Republican-controlled Legislature juggled most of this new spending by borrowing money to pay for stuff lawmakers have traditionally paid for in cash in the past.

In the 1990s, the State of Oregon sold about $856 million in "Certificates of Participation," a form of bonded debt that pledges future income tax receipts to pay off the bonds. Two-thirds of the $856 million was spent to buy land and build prisons for Measure 11 felons -- if you build it, they will come. The remaining money was spent on things like a crime lab for the State Police, computer systems for state agencies and an underground parking garage at the State Capitol. Kevin Mannix was part of the legislative leadership during this period.

This fiscal house of cards fell apart when the recession struck and income tax revenues plunged in 2001. Lawmakers could no longer juggle the competing and conflicting demands voters created with budget-busting initiatives like Measures 5 and 11. When voters rejected Measure 28, another budget-balancing surtax, in January, 2003, the legislative leadership plugged the hole by borrowing another $450 million to keep Oregon's ship of state afloat.

Oregon Republican legislative leadership borrowed about $1.3 billion so it could pretend it did not have outstanding financial obligations. That allowed Republicans to justify nonexistent "budget surpluses" and issue "kicker" income tax refunds. During the time Oregon Republicans controlled the Legislature they have "refunded" $1.3 billion dollars in personal and corporate income tax revenue while borrowing about $1.3 billion to make up the difference at an estimated interest cost of $500 million over the next 10 to 30 years. Ironically, those interest charges might have been avoided if Republicans had been honest about the state's financial liabilities and allowed the state to keep what it collected in taxes to pay for them instead of issuing phony "rebates."

There is no new revenue to pay for the interest charges either. Half a billion dollars in interest payments will compete for available income tax revenue with other public priorities for the foreseeable future. It is irresponsible to mortgage Oregon's future like this. But do not take my word for it.

Bond rating agencies -- Moody's, Standard & Poor's and Fitch's -- all lowered Oregon's credit rating in the last few months. State Treasurer Randall Edwards says the bond rating agencies cite Oregon's unbalanced budgets, increased short-term borrowing to pay operating costs, volatile revenue sources and their fears of future initiatives that increase state spending while other initiatives limit revenue that might pay off bondholders.

The markets have spoken and their judgment is the people who run Oregon's fiscal policy are no longer responsible enough to justify a higher credit rating. Who is guilty for this Enron-like accounting deception? Mannix and the Republican legislative leadership will be long gone when your grandchildren finish paying the bill for these fiscal follies.

Arbitrary spending limits will simply make the situation worse. Locked into recession era spending limits, the rising interest coast on all this borrowing will compete with the needs of a growing population that will double in the next 30 years and create a fiscal train wreck. I know some cynics of believe this is just what the ideologues want. It is probably time to tell the ideologues to go sit in the corner and let the adults clean up their mess.

It will be harder for us to clean up this fiscal wreckage than it was for Tom McCall to clean up the Willamette. The requirements of leadership are also changing. I am indebted to fellow City Club member Don Kahle for the following insight.

The Republican leadership's borrow and spend policies have determined Oregon fiscal situation for a generation -- for better or worse. We must adapt too the new realities. The nature of leadership has changed.

Since the end of World War II public leadership has been deciding how to spend public money wisely.

Today leadership requires persuading others -- private and public -- to spend THEIR money where those chosen to represent us want it spent.

Perhaps this explains some of the strange maneuvering about the federal courthouse and the game of musical hospitals.

Our first priority must be to persuade the thousands of citizens who have abandoned the political process to return and participate. There can be no convincing consensus with half the potential voters standing on the sidelines in disgust as the adolescence behavior of the present participants.

Eugene's last election made me hopeful again. Examination of precinct returns show the return of a substantial number of voters who have not voted in some time.

And there is another hopeful sign.

The City Club just reached a new membership record -- 453 members.

Not bad for an organization that was founded as a last bastion of rational discussion in an Ideological Age.