09 24 2016
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The Skanner News editorial staff this week interviewed Oregon gubernatorial candidate John Kitzhaber on race, policy and the state budget. Here is a complete transcript.

(Read our interview with challenger Chris Dudley here)

The Skanner News: What do you think the biggest issues are for minorities in Oregon right now?
Kitzhaber: Well I think the biggest issue is economic. Not only creating jobs for minority communities but also creating jobs that will pay at family wages, or have career paths that lead to those. And having said that I think it's clear there are a host of institutional barriers for communities of color in particular in accessing jobs. And I thought the State of Black Oregon Report and also the report that was commissioned by the Coalition of Communities of Color painting a shocking picture of disparities. I've got three or four areas in my proposed budget and policies that try to address that, I could go into those at whatever point you think is necessary.

TSN: What do you think the solutions are?
Kitzhaber: Well I think we have two major problems, one is that we know there is a set of risk factors that children and families are exposed to that disproportionately impact communities of color and they have to do with poverty and they have to do with stability and a whole host of those issues. And we also know that if you don't address those issues early there's almost a linear correlation between those kids, and achievement gap, school dropout, social dependency and involvement with the criminal justice system. And we know that education is the pathway to economic success today, but I think these kids are given a huge set of barriers on the front end. So part of the answer is a sustained, serious commitment to at risk kids and families on the front end. And that's a central part of my budget. If you don't start making that commitment, and do it for 10 years, you're never going to get ahead of this problem.
Secondly in our k-12 system I think it's very important to have some resources available to identify the kids who are struggling and bring additional resources and support to those kids. Right now it's sort of a one size fits all, and we know that there are certain kids because of their life circumstances are going to do pretty well even in a large class size and there are certain kids who are going to need additional support in order to get the education they need. So those are two specific areas and I think a lot of those problems – the socioeconomic problems, the overrepresentation of minority youths in the criminal justice system – all start from a lack on investment in the front end.


TSN: There is a sense in the African American community that you didn't do anything for communities of color while you were governor. If you are elected what will you do differently?
Kitzhaber: Well let me – I don't want to accept the premise first of all without saying a couple of things. In 1997 we were first I the nation in African American-appointed policy positions and I think we were in the top 10 in 1998. I did establish very early on the Annual Conference on Minority Overrepresentation in the Criminal Justice System, and tried to highlight that issue. We also passed in 2001 the Oregon Children's Plan, which provided on a voluntary basis screening for all firstborn kids in the state for those risk factors and I think we had $30 million in.
Having said that obviously this problem has gotten worse, the disparities are larger, and the demographics are changing dramatically so we've clearly got to do a lot more than that. On the policy standpoint we've talked about a couple of ways that I want my budgetary policies to intervene on the front end. Secondly I think we need to – I'm planning to ask for the resignation of all agency directors and program directors and then I will rehire them. And we will seek a large pool of people so that we can begin to have state government reflect the demographics of the population. So I guess then part of my challenge back is that I think it's very important to help feed the pool of individuals from which we can draw.

TSN: In fact that was one of our questions -- we have in this area one of the largest public works project in state history going right through our neighborhood, the Columbia River Crossing. We're concerned about the history of state agencies such as ODOT not awarding construction contracts to Black-owned businesses already existing in areas where construction takes place. So we're pleased to hear that you plan on shaking up the agency leadership.
Kitzhaber: Let me address that because I think it is very important and I've raised this a couple times at the Urban League meeting the other night. I think we need strong community workforce agreements particularly with projects that the state is funding, to make sure that we have a high percentage of minority and woman owned community businesses involved and also that historically disadvantaged and underrepresented populations are represented in that workforce and that these jobs be connected with education and training to create career paths. So an example of that would be one of the low-hanging fruit for economic development or job creation is large weatherization, energy-efficiency projects starting with our public schools. There are public schools in every community in Oregon. There's the opportunity by bonding against anticipated savings to put people back to work retrofitting those schools for energy efficiency, and there's an example where strong community workforce agreement is absolutely necessary to ensure that people within the community actually are part of that newly-created workforce.

TSN: I wanted to follow up on that because the Willamette Week is nagging about the weatherization plan, they're saying that it's not a tested funding method, and they want people to nag at you about it. Are you sure that it would actually be enacted, and is there any evidence that you could actually make it happen if you are elected?

Kitzhaber: Yes. The answer's yes. First of all this is something that goes on in the private sector right now. There are companies that are called Energy Service Companies, ESCO's. Johnson Control would be one example; Makinstry in Portland is another example. And they do what's called a performance bond. They basically are going to get paid by the energy efficiencies that are produced by the weatherization. So a real life example is Mt Hood Community College, where Johnson Controls came in, has retrofitted most of the campus, they've replaced the boilers, they've put solar arrays on the roof, and they are going to get paid by the projected reduction in cost for Mt Hood Community College.

What we're talking about is essentially taking – we have about 100 million square feet of school buildings in Oregon, and on average it costs about $1.10 square foot for energy, and about $8 per square foot for maintenance and operations. A 15 percent savings – which is a very conservative estimate of savings by retrofitting these buildings – is about $143 million a year. So it's not like a general obligation bond where the treasurer last week said we have to make sure we don't overextend our bonding capacity.  These are -- you can actually find certified energy efficiencies that are in the same biennium so you're going to actually reduce the cost of operating the school system by 15 percent.

And that's what pays off the bond – it's more like a revenue bond. Washington State passed something very similar to this last year. But they actually brought a little bit of new money in with a tax on bottled water. Montana has actually done it straight up – they have essentially passed a bill that has a certified energy savings set aside part of their general fund based on the energy savings so there's a revenue stream to funds this much like a revenue bond.

We've been working with David Chen, with Mark Edlund at Gerding Edlund and several others on this financing mechanism. It's not new technology. And by the way these are private sector jobs, these are good trades jobs and we do as I said have to have a community workforce agreement as a part of this, but to me this is a no brainer.

TSN: So we've just talked about your ideas on a school weatherization program – but what are your plans on school funding? Will you reverse Gov. Kulongoski's decision not to participate in President Obama's Race to the Top school funding initiative? Do you have a position on whether that's a useful thing to pursue?

Kitzhaber: Two questions: Number one, funding for schools. I think we have to recognize that we are not going to have as much money as we'd like in the next two years. Schools are essentially flat-funded for the next biennium, we have just a little more going forward than we had last time so the question is how we take those dollars and spend them in a way that creates a foundation in 2011 to begin to reinvest in our schools as the private sector economy comes back.

What I have proposed on the funding side is – instead of having early childhood programs out here, k-through-12, community colleges and higher ed as these silos, to create a single, transparent, zero through 20 education budget that allows us to shift our funding from paying for institutions or schools based on enrollment to funding our kids based on academic achievement, which allows us to as I said earlier identify those students who need additional help and make sure they don't slip back during these next two years. So I don't have a magic formula for finding two or three billion dollars for our schools, but I do think we could spend the dollars more effectively, more transparently, more accountably.

On the Race for the Top, I think the reason we scored low in the first application that we had, is that I don't think they addressed adequately how we're going to deal with poor performing schools. I've been working with the OEA as well as Chalkboard Project as well as Stand for Children, most of the proposals that were recommended by Stand are actually in my education proposal. I think in terms of Race for the Top we should not just go after the money just to get the money, if there are federal strings and requirements that get in our way of actually delivering the product.

So there are two issues – one is school reform, that is creating a way of providing a transparent, fair student and teacher assessment process, how do you increase accountability at the district and school level, then the extra question is the funding. And I don't think we should confuse the two. We all want more federal money; we want money from wherever we can get it. But I think we need to look at – there are some strings attached to that and I think we have to ask ourselves whether those strings make sense for what we're trying to do here in Oregon.

TSN: When you're talking about attaching the money, are you talking about attaching the money to each student, then instead of to the institution?

Kitzhaber: Ideally I think the money should follow the student. I mean right now the way we've done it in the past is we've funded schools based on enrollment. So the health, let's say, of the Portland school district or the Eugene school district depends to some extent on how many students are enrolled, not on how the students are served. And it seems to me what we really want is to serve the student. And so by – I call it a Performance Based Budget, which is sort of a buzz word, I have to be careful about that, it alarms a lot of people – but what I'm talking about is that right now the state is a passive participant in k-12, we write a big check, that's all we do. It seems to me we need to be an active and accountable partner.

So if we can identify, as we're putting the budget together, certain schools or school districts where they're really struggling, the first thing we do is go in and help diagnose what the problem is. Are there eight languages spoken there? Is it that kids are coming to school hungry and don't have homes? Is it that half the kids are learning English for the first time? Find out what the problem is and bring in resources to address the problem. You don't have to spend as much time on a district where the people are actually doing really well. So I do think you need to spend – we're talking about taking $20 million and making that as a big down payment on the early childhood investment, and another $20 million that we can use to help the districts that are really seeming to struggle. So at the end of the day what we want is, we want the students to get the skills they need to succeed.

TSN: What is your position on the Columbia River Crossing?

Kitzhaber: I do believe we need the bridge redone, the central span was built in 1917, I think there's a seismic issue. It is an extraordinarily important economic crossroads, both North-South, between Mexico and Canada, and going East. We need to make sure of a couple things though when we do it – we need to make sure that the values we're seeking are all included so one of those is obviously facilitating freight movement for the Port of Portland which is our portal into the world economy; we need to make sure we've provided ample opportunity for pedestrian, bike and light rail; we need to manage the bridge both in construction and in financing to make sure we don't have it plugged up with single occupancy vehicles before it's even built; we need to make sure this is viewed as a regional transportation project not just a bridge, so we don't' just move the congestion from one place to another place; and we need to be mindful that we minimize the impact on neighborhoods that are near the construction project; then finally as I said earlier we need a very strong community workforce agreement when we construct – this is a big construction project, there are going to be lot of jobs, and we need to be very intentional to make sure that local, minority and women-owned businesses and  historically under represented populations are going to be actively engaged in that workforce.

TSN: Can I just say the Oregon Department of Transportation has talked a good game on this but their record has always looked really bad.

Kitzhaber: I think the project management entity when we go forward – we need to get it out of the "DOTS." This is not really a highway project, and the Department of Transportation both in Oregon and Washington is really not a transportation department – it's a highway department. And where you put a highway has a huge impact on all sorts of other things. So I think we need an entity that is outside the Departments of Transportation that has the confidence of local governments that are going to be impacted by the project as it goes forward.

TSN: Obviously there is a ticking time bomb in the state budget, nothing good is going to happen financially very soon, so what are you going to prioritize and keep, and what do you feel you might be able to let go of?

Kitzhaber: Well I think we need first to remember that 93 percent of the general fund is in three areas: education, human services, and public safety. So we're not going to eliminate any one of those, but that's where the money is. So I think the way to look at this is not as a cutting exercise; in a sense the cuts have been made. We're essentially flat funded. So the question is, how we take the money we know we have, and invest it differently going forward to create a foundation. And the cost drivers in different parts of the budget are different, and I think it's important to reflect that.

So if you look at the 52 percent of the budget that is education, about 78 percent of that is in the state school fund, which is the k-12 system, and about 88 percent of the cost increases there are personnel costs – only about 6 percent are enrollment growth, only about 6 percent are inflation.

If you look at the Department of Human Services, about 90 percent of the budget in DHS goes to two areas: health care/mental health/chemical dependency issues, and the other side, services for seniors and others with disabilities and services to children and families/foster care.

In medical care, the personnel costs account for only half a percent; about 20 percent of it is medical inflation, about 20 percent is caseload increase. There's a different approach there. So in DHS for example we're going to have to set priorities and I would set them based on some criteria – first of all who is most vulnerable? Who has nowhere else to go if we don't provide those services?

Secondly if we take this service away are those people going to end up in a more expensive care setting? So if you cut in-home services for seniors and people with disabilities a lot of those folks just end up in a nursing home or an acute-care hospital. If you cut this service will people lose their jobs in the private sector? So employment-related daycare – if you cut that you basically have people who -- single moms who are out there who are no longer able to go to work. I think we need to also look at the amount of federal matching dollars we get. So I would have a very transparent prioritization process based on those kids of criteria.

In K-12 it's really going to be a matter of providing our school districts with an amount of money they can count on going forward. I think we need to give the Portland school district for example the amount of money they can count on every year until 2020, which is not going to be adequate by our current definition, but I would say that while the amount of money to schools is a huge issue, the inability to know from month to month how much you have makes management almost impossible, and you've been seeing that in the Portland school district, and that also gives us the opportunity to try to engage NGOs and the private sector and other community resources to help the schools for the next few years.

Public safety, which is the other big area, we've seen significant increase in the non-security workforce which I think needs to be flattened out and I think we need to review our sentencing policies, particularly for non violent offenders.

TSN: What's your take on Measure 76? Would you change the way Oregon Lottery money is spent?

Kitzhaber: Is 76 the parks? [Yeah.] I do support that. I think one could make the argument that we should take every loose dime and put it back into schools, but I do think our natural environment is something that's very important to Oregon overall, and I think ultimately it's a natural economic advantage. So I do support that measure.

TSN: There are some other proposals to change the way lottery money is spent. Would you do that?

Kitzhaber: Well I think Measure 76 -- which I think was Measure 88 a long time ago when it first came up—I wouldn't go any further than that. I think those are resources that are an important investment. The rest of the lottery is – I mean basically economic development and education which is sort of the same thing, and I think we need to be probably a little more intentional. We had -- and I don't know if they still have this – we had something called the Strategic Reserve Fund when I was governor which allowed us some flexibility to provide additional targeted resources to help impact where a business is located.

We do have something called the Strategic Investment Program that we created back in the 90s, it's one of the reasons Intel is here. That's a property tax abatement program that starts above $100 million. So one thing we want to do is lower that cap to see if we can get some smaller businesses that have a smaller footprint, that we could have more flexibility where those businesses would be located. I think there are some tools that are available in the lottery.

TSN: Can you give more details about your plan to diversify the tax base?

Kitzhaber: I think increasingly relying almost solely on the income tax doesn't make a lot of sense anymore. Back in the 80s, or 70s, when per capita income, at least on a statewide basis, was above the national average, you could generate quite a bit of revenue from that. But now our per capita income average is 10 percent below the national average. So obviously in communities of color it's a whole lot lower than that. And I don't think you can squeeze that turnip hard enough to get the resources you need for public education and other important services.

So I think the entry-level question is: should we broaden the tax base? To me the answer is yes, we need to obviously have a broader conversation about that. And then if we agree, then the next question is what do you do? And there's a series of ways you can do it, obviously a retail sales tax is one, a value added tax is another. I wouldn't want to start with which one we would use, but I do think the first question is the narrow tax base. And I think there's a relationship between our reliance on income tax and these huge revenue swings that happen in Oregon. And there's a relationship between that and the inability to invest in education and workforce.

TSN: So you don't want to name the ….

Kitzhaber: Everybody wants me to say it. Listen, I supported a sales tax in the past, I mean that's on the record and I don't apologize for that. We put one on [the ballot] when I was Senate president when Vic Atiyeh was governor, it was basically his proposal. I think Gov. Roberts put one on, so I'm not afraid of the term sales tax, but I think the important thing is not so much about a sales tax as it is about reducing our reliance on the income tax, and I think there are a number of ways to do that. And maybe Oregonians will embrace that and maybe they want to look at some other options. But I wouldn't want to preclude a broader discussion about ways to achieve the objective because the objective really is a more diverse, more stable revenue base for public finance.

TSN: While we're talking about taxes and spending, you mentioned a revue of sentencing nonviolent offenders. What other ways do you think you'll be able to reduce prison spending?

Kitzhaber: The long-term answer is to keep people from going into prison in the first place, and what we do right now is we don't invest in at-risk kids, we don't invest in at-risk families who we know are going to lead in some people getting involved in the criminal justice system, and then we lock them up on the back end. So unless we make that front-end investment for the next decade, I don't see how we get ahead of this. There are states, New York being one, that I think have reduced their prison population by 15 percent and still has excellent public safety statistics. Our violent crime rates are going down, I'm not saying that we should release violent offenders, but I do think that there are other options, community corrections options for nonviolent offenders. I also think we need to recognize that if we don't fund transition services for people who are coming out of prison, don't give them the ability to actually get a job, or deal with their untreated substance abuse problem when they come out, they're going to go right back in again. And I think Mr. Mannix and his friend have run their string just about as long as they can run it. We have been swallowing these unfunded mandates that pull money right out of education and social services and I think it's time to move in a different direction.

TSN: What is your position on giving universities independent status to raise more of their own funding, as the president of the University of Oregon has called for?

Kitzhaber: In general I do think the universities need more flexibility in their operations, they're managed today as if they were a state agency, which is a throwback to when 70 percent of the funding came from the state. So I do think they need more operational flexibility, I do think they need to be able to raise private resources, but I have a caveat: I still think it's a public university system, and they do need to be accountable to a state oversight commission that insures financial access isn't compromised and that Oregon students can still afford to go to these institutions, and that they're still producing the outcomes that the state wants. So I don't support a public corporation model where we just cut them loose, I think we still need state oversight, but I think they've got an archaic governance structure that doesn't make sense today.

TSN: What is your position on medical marijuana reform in Oregon?

Kitzhaber: I actually don't support the measure. I do support – I mean I voted for the very first medical marijuana bill. I do believe that marijuana does have a significant role to play in treating glaucoma and treating nausea from chemotherapy. But this seems to me to be opening the law wide open. It's not clear to me that there's an access problem that merits a response of that magnitude.

TSN: What kind of response do you think is merited? Because I do think there's an access problem.

Kitzhaber: If the issue is that we need more dispensaries then I think we should identify how many we need, and why, and where we're going to site them, and what are the criteria for the people who are going to be operating those ventures? So it's not the concept because obviously I've been on record supporting medical marijuana, I think it's a question of scope and management and this seems to me to be a pretty big step. I think we maybe need to revisit the problem, maybe through legislation, and definitely address it if there's an access problem

TSN: Do you support full legalization of marijuana?

Kitzhaber: I don't.

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