Gov. Ted Kulongoski

[February 3rd, 2010]

The successful campaign for Measures 66 and 67 had barely ended last week before Gov. Ted Kulongoski began arguing that Oregon should reform the state’s “kicker” law.

Kulongoski hopes this month’s legislative session will move to change the state constitution so government can keep some money in a “rainy day fund” instead of “kicking” it back to taxpayers when tax revenues exceed projections.

That would be a large legacy for Kulongoski, who will otherwise be remembered most for ticking off his union base in 2003 with much-needed reforms to the Public Employees Retirement System.

While Kulongoski hopes to achieve kicker reform in what is likely to be his last legislative session, his goal will be hard to achieve even though his fellow Democrats enjoy big majorities in the House and Senate.

Business and labor are in no mood to collaborate after the bitter campaign over 66 and 67. And Senate President Peter Courtney and House Speaker Dave Hunt are unenthusiastic about kicker reform in a truncated legislative session that also falls in an election year.

So how is a lame-duck governor going to make kicker reform happen? And what does he think about a field of wannabe successors, which includes Democrats like ex-Gov. John Kitzhaber and former Secretary of State Bill Bradbury as well as Republicans like Allen Alley, who worked 14 months in Kulongoski’s cabinet, and ex-Trail Blazer Chris Dudley? In a Jan. 28 interview, Kulongoski answered all those questions.

WW: How are you going to bring business and unions together after 66 and 67?

Kulongoski: The rhetoric got very raw on both sides. And people feel very strongly on the side that lost about some of the things that were said. I can assure you that, on the other side, the attack on public employees also creates the same type of tension. I know how difficult it will be for people to put all that aside. It is in both of their interests to actually spend a week and then come back and say, look, there are much more serious problems facing the state. I think we need both of them, and I think they will come here.

Why should kicker reform come right after 66 and 67 when some people say voters feel like they’ve just given the state a big chunk of money?

It’s the one inhibitor to the state being able to actually have some control over its fiscal future. You have to deal with that issue just on the basis of some fiscal sanity over the long term.

But Courtney and Hunt aren’t interested.

When we opened up in January ’09, they said they were going to put up kicker reform. Then they said in May we’re going to wait until February. Now they’re stuck with it, and they keep pushing it [back]. I would suggest you can’t push this any further.

If legislative leadership isn’t interested, what leverage do you have?

I think they’re interested very much. They’re just trying to figure it out politically. I want to drive this issue toward debate. I want all the candidates out there running on it.

How much have you talked to Kitzhaber about his race?

First time yesterday.

You haven’t talked to him since he announced he was going to run last summer?

We have our differences.

Can you elaborate?

No. It has nothing to do with policy.

How about Bradbury?

He came down to see me and I told him I was going to [inject kicker reform into the discussion].

Ever sorry you hired Allen Alley?

Never. He’s a bright guy, he’s a friend. I like him a great deal.

What’s your take on Dudley?

I’ve met him a couple of times. He survived [16 years] in the NBA, and you know why? In the vernacular of the industry, he’s a grinder. He’s a guy that gets in and gets the elbows flying and he gets the rebound, plays defense. I think this guy is one tough cookie.

Do you regret the action you took on PERS in 2003?

When you look down the throat of the dragon, you’re going to get burned. I believed that it was the right decision in 2003 to take. And I’ll tell you that if anybody is objective enough to look at the situation of the retirement fund today, if you would have compounded the loss of investment and structural problems, this thing would have been underwater. This would have been the Titanic and we would have gone down.

From a policy perspective, what’s your greatest disappointment?

I think we have done more in seven years than any other governors have done in many years on a multitude of issues. The piece that I find most difficult: I do not like having to tell people I care deeply about, the state employees, in the bargaining process, “No.” I don’t relish taking on PERS reform. My friends are on the other side. It’s where I come from. These people, I’ve worked for them, I’ve been their lawyer, they’ve been my supporters. One should never take lightly offending your friends, and that’s what bothers me more than anything. That’s what I now know you have to do if you’re going to be successful.

Do public employees in Oregon have too much power?

No. I don’t think that’s the issue. I know that’s what the business community says. My answer is that the business community needs to be a more effective counterbalance. I do not think there’s anything wrong with people advocating in this process for things they believe in. You know, my belief about this election and about all this stuff, about public employees and the unions, it’s more of an excuse than a reason for something occurring. And by that I mean, I think the business community is concerned about its effectiveness in the political process, in the governmental process in influencing decisions in policy.