Moving from Southern California to Oregon (Portland, Salem: relocation, estate, incomes)

[RodFarlee]

As a native Oregonian myself, I'm glad to see Steve's eloquent posting on sustainability. No discussion of growth in Oregon would be complete without it!

Originally Posted by Steve97415

...Countries like France and New Zealand have proved that relentless growth isn't necessary for a high standard of living, and that, in fact, economies can often improve during a time of population loss.

However, Oregon is a state, not a nation with immigration controls at its borders. Oregon has had periods of low population growth only during times of statewide economic depression. Whenever Oregon's economy is good, it's population grows about 2% a year.

The central problem is that Oregon's state budget and debt can only be sustained by economic growth. There can be no realistic plan to pay the state government's current liabilities (debts, pensions, education, prisons, health, etc) without economic growth. Oregon's state budget liabilities and debt load are not sustainable, so discussions of sustainable population are somewhat abstract - it would involve a prolonged if not permanent economic depression, which few Oregonians would find desirable.

[Steve97415]

Originally Posted by RodFarlee

The central problem is that Oregon's state budget and debt can only be sustained by economic growth. There can be no realistic plan to pay the state government's current liabilities (debts, pensions, education, prisons, health, etc) without economic growth.

True as far as it goes, Rod, but you've missed the critical link that keeps this from being a circular argument -- we need more people to generate the revenue needed to pay for the services needed to accommodate a growing population. Our government's current liabilities are largely the result of paying for the consequences of overpopulation. Very small towns benefit from increased population up to a point, because it takes a certain critical mass to fund the basic infrastructure of an organized population entity (city, county, state, whatever). Once the point of peak population is exceeded, the line on the graph dives down again. Each new person takes little bit more from society than he contributes, resulting in irresolvable debt. This is especially true in the tax-resistant climate that prevails at the moment.

A similar analog can be seen in the issue of the loss of productive capital that will ensure during the population downturn that we'll see beginning in another 15-20 years as a result of Baby Boomer retirement (of which Social Security solvency is only the tip of the iceberg). Some would propose opening the floodgates of immigration so that we will have enough new citizens to pay for maintaining all of us old farts...and in the process create yet another tidal wave of humanity that will have to be subsidized by the next generation with some other economic stunt a few decades later. We have to stop treating our economy and our natural resource base like some kind of vast pyramid scheme. As southern California has shown us, sooner or later growth has to end...then what?

[Des_Demona]

Excellent point Steve! I like putting it in the perspective of a Pyramid Scheme. The more we do this, the faster this civilization will come crashing down and be doomed...

[RodFarlee]

Well reasoned and eloquently stated, Steve. Yes, the state and national economies, and their unfunded liabilities, are founded on pyramid schemes. However, merely recognizing a problem with handwaving generalities is not the same as actually solving it.

The state is wedded to 5+% annual economic growth to avoid tax increases. About half of this comes from population growth. Realizing that Oregon cannot separate itself from the nation, what specific, concrete proposals exist to decouple Oregon's economic growth from its population growth? Is this even possible without changes in national policy or economic circumstance?

Sustainablity has been a mantra in Oregon politics for decades. However, when implemented in specific government policies, it has produced mixed results, and has sometimes been overturned by the voters. Perhaps I am placing an undue burden on you in asking for realism; if your intent is only to exhort Oregonians to change their personal priorities, nevermind.

(Apologies to all if this discussion is beyond the scope of a relocation forum.)

[Clear2land]

One of the biggest problems with state and federal governments is the unfunded pension liability. Legacy costs is what has our American Automakers in financial trouble. States and Federal pay as you go budgets carry these same risks to state employees. Both state and federal governments are counting on wage inflation to sustain their earmarks and oversized budgets. All states will be in really big trouble if their rosy revenue forecasts fail to materialize, which is all predicated on economic growth.

Oregon cities are in need of more revenue, not less. Lets not forget that it takes money to keep Oregon looking beautiful! This growth that we all despise is what gives the labor force a raise in pay.

Dan

[Steve97415]

Originally Posted by RodFarlee

The state is wedded to 5+% annual economic growth to avoid tax increases. About half of this comes from population growth. Realizing that Oregon cannot separate itself from the nation, what specific, concrete proposals exist to decouple Oregon's economic growth from its population growth? Is this even possible without changes in national policy or economic circumstance?

Probably not. The point is we shouldn't be shooting ourselves in the foot to avoid tax increases. When my Dad was a kid, they used to say "we won't tax you, we won't tax me, we'll tax that man behind a tree". We're still looking for that man behind the tree to foot the bill...that phantom source of revenue capture. People will gladly flush their money down the toilet at casinos or pay sky-high fees for the garbage of cable television, but rise up in moral indignation at the prospect of paying for their fair share of democratic community. And the wealthier they are, the greedier they get. The previous generation built thousands of schools, the Interstate highway system, countless bridges and other civil engineering wonders. Most of them had one car, one B&W television set per family, and anything over 1,000 sq. ft. was a "big house". A "vacation" was a few days at the nearest lake. Yet they paid for all this communal infrastructure. We can't even pay for the maintenance on that infrastructure today, yet people have money for second homes, huge RV's, jet-setting vacations, and every home appliance and entertainment gizmo imaginable. In a sustainable society, people wouldn't be so filthy rich. More income would go to the common good, less to building personal empire, and we'd all be the happier for it. The tax burden in our country keeps slipping down to a lower and lower eschelon of economic class. That has got to change.

[RodFarlee]

Originally Posted by Clear2land

One of the biggest problems with state and federal governments is the unfunded pension liability...

Oregon is in good fiscal shape, relative to most states. Oregon PERS (Public Employee Retirement System) did have a crisis five years ago, but this is now largely resolved. Oregon's unfunded liabilities and bond debt remain solidly below the nation median by all measures, and are clearly manageable.

In this regard, Oregon is less wedded to growth than are most states. However, Oregon has fallen way behind on infrastructure investment (colleges, highways, prisons), and is wedded to annual growth to avoid tax increases, which voters have clearly rejected. It is more a cash flow than a debt problem.

The bigger question, to me at least, is why Oregon, with all it's advantages of a relatively well-educated population and physical beauty, has produced below average salaries and job growth? Why can't Oregon provide better opportunities for its citizens? I posit much of the answer lies in its overly progressive tax system and many policies which actively discourage growth, in the name of sustainability. I don't know how to reconcile these goals. Oregon keeps trying to, though!

[Clear2land]

Rod, you make some very good points. For some reason, Oregon is not attracting its fair share of Fortune 500 companies. Natural resources, wood primarily, has attracted some major Wall Street names to the state. Intel and other technology names have a footprint in Oregon. How does Oregon stand when it comes to the high cost of Workers Compensation? Washington has one major city built around Seattle’s airport with two major employers Boeing and Microsoft. How are corporate tax rates? Is Oregon offering any incentives to attract new business? Oregon is made up of a lot of small cities primarily because they are hard to get to quickly by air. Roseburg, for example, will never be a large city because of the drive to Eugene’s airport. There has to be some underlying economic reasons why more industries are not taking advantage of Oregon’s highly skilled labor force.

Dan

[RodFarlee]

Again, Steve, my thanks for a well-argued (indeed, inspiring) reply, with which I can only agree. But...

Originally Posted by Steve97415

...The tax burden in our country keeps slipping down to a lower and lower eschelon of economic class. That has got to change.

On this one point, it is illustative to contrast Oregon's progressive tax system with Washington's regressive tax system. Low income residents of WA pay a much higher proportion of their income in local taxes (in the lowest income quartile, almost double).

Which system has provided more business investment, better job and wage growth, consistently, for the last three decades? Which has produced lower unemployment and is able to support higher minimum wages? Washington has. And it's not just these two states; nationwide, states with regressive taxes have done better for their residents.

Oregon voters have resoundingly rejected a sales tax nine times. But without it, state revenues are erratic from year to year, resulting in recurrent budget crises.

Does principal conflict with practicality in this case, too? (I don't know the answers, but gosh, Oregonians should be asking these questions! And I think they are... Oregon is becoming less progressive.)

[movin on up]

IH8CALI... you are a jerk. Simple as that! Your attitude is so hateful and rude and you are projecting such ignorant negativity it's really sad that you are representing such a beautiful state.

Now that I have moved here I have to say the people are WONDERFUL!! I have yet to meet anyone who shows any animosity toward me or my family. Everyone has been very helpful and nice.

I will also add that I am aware of the driving habits in Cali... we have to go 80+ mph because if we don't we get run down... so here I was welcoming the slower pace and have made a consious effort to drive slower that I would in California... funny though in a previous post you mentioned how cali drivers show road rage but you yourself are an road rager with your method of pinning drivers in the slow lane... shame on you!

So far I love Oregon... I hope to keep it that way.

Gina