Speech: Local Economic Snapshot

Remarks delivered to the Board of Directors,
Economic Development for Central Oregon
meeting in Prineville by
Crook County Judge Scott R. Cooper
October 12, 2006

In Crook County, All Economic Signals Point To 'Go'

The unemployment rate in Crook County in August 2006 fell to 5.0 percent. That rate was slightly higher than Deschutes County’s statewide low of 3.9 percent rate and slightly lower than the State of Oregon rate of 5.2 percent and the Jefferson County rate of 5.1 percent. This is the lowest rate the county has seen since the late 1960s and the first time in the last 20 years that the country rate has fallen below the state rate of unemployment.

A quick look at the components of employment in Crook versus Deschutes County reveals both similarities and differences.

Trade, transportation and utilities was the top employment sector in both counties, accounting for 20.5 percent of employment in Crook County and 17.6 percent in Deschutes County. The chief difference between the two is that the primary subsector in Crook County was wholesale trade, which you can read to mean “Les Schwab” while the primary subsector in Deschutes County was retail trade. Also of note within this sector, was the difference in average salary, as reported in 2005. Crook County employees laboring in the Trade sector were paid on average $9,500 per year more than their counterparts in Deschutes County.

Leisure and hospitality was the second largest sector of employment in Deschutes County, accounting for 13.4 percent of employment. It was the fourth largest sector in Crook County, accounting for 6.7 percent. As with trade, there was a substantial difference in salaries paid in this sector between the two counties, with Deschutes County employees being compensated an average $5,000 per year more than Crook County employees. I expect the gap in this sector to close in years to come with the maturation of the destination resort industry in Crook County. At present, there are three resorts under active considerations, one approved and in construction and two pending before the county planning commission. In total, these three resorts, assuming they are approved, will add 4200 units of housing—50 percent of which will be in the form of overnight accommodations—to Crook County.

Crook County’s second-largest sector of employment and Deschutes County’s fourth largest sector was government. At 13.8 percent of the workforce, Crook County’s governmental presence is now more economically significant than its manufacturing segment, which has slipped to third-ranked among sectors at 12.9 percent. Average pay in this sector was $35,000 in Crook County, which compares favorably with the average pay of $37,500 paid in Deschutes County. Although smaller in numbers than their state or local government counterparts, federal employees are a particularly significant component of government employment in Crook County. Average wages for federal employees were more than twice those of state employees and not quite double those of local government employees. At $17 million, the federal payroll for 334 employees in Crook County was only slightly less than the local government payroll of $21 million for 733 employees.

Behind government in Crook County was the manufacturing sector, accounting for 12.9 percent of employment. 87 percent of manufacturing employment—or 1,040 out of 1,200 employees--was centered on the wood products industry. Average wages in this sector were $5,000 less than the better diversified manufacturing sector of Deschutes County. This sector remains a major concern of the county’s because of heavy concentration of employment in a few companies. As we have seen in the past, the loss of just one company in this sector could dramatically alter the overall employment picture.

The fifth most important sector in Crook County often comes as a surprise, even to local citizens. Here’s hint: despite the hoopla surrounding Prineville’s new reputation as “Growth Central,” it is not the construction industry. It is the education and health services cluster. Employment in this sector would be concentrated primarily in the local hospital and three medical and three chiropractic clinics, the Federal Quality Healthcare Center based in Prineville and the community’s two private schools, Mt. Bachelor Academy and the Prineville Christian School. At 6.5 percent of total employment, this sector equals the employment of the leisure and hospitality industry in terms of numbers of employees, but that widely understates its impact. In terms of payroll, this segment has an impact equivalent to that of state government and more than three times that of leisure and hospitality. On the radar screen of regional recruitment, this sector is definitely an overlooked “sleeper,” and I would encourage this board to pay attention to additional recruitment opportunities in this area.

As mentioned, construction does not rank among Crook County’s five most significant employment sectors. This sets Crook County apart from Deschutes County where the construction sector ranks third among the county’s industries. Notwithstanding the characterization of Prineville by media and real estate publications shows a mere 327 people employed in the construction industry in 2005, which doesn’t begin to compare to the 1700 people employed in Trade or the 1200 people employed in the Government or Manufacturing sectors. Three years of building permit data lend further support to the idea that uncontrolled growth is threatening the future of Prineville is actually a myth.
We are currently issuing about 1,500 building permits per year, which includes construction, mobile home placements and remodel permits. The breakdown between city and county is about 40 percent city and 60 percent county. Like the rest of the region, we appear to be on a track this year to slow down a little, and will likely end the year with a handful less permits issued than were issued in 2005 or 2004. This slowdown should reverse in 2007 as destination resort construction and the start of construction at Brooks Resources begins to drive numbers upward again.

Overall, I think we are in about the best economic shape we have been in a long time. At the moment, the community’s best features are:

Plentiful industrial land being offered at relatively inexpensive prices and held in diverse ownership.

A recently expanded urban growth boundary.

Recently updated infrastructure plans and transportation plans at both city and county, which are helping us keep pace, if not stay ahead, of the growth curve.

Plentiful housing which is still highly affordable by regional standards.

A workforce which is definitely shrinking but which is still more plentiful than what can be found in Deschutes County.

Reasonable development costs--most notably the complete absence of SDCs—and business-friendly planning and building departments at both city and county.

A local tax and fee structure which puts little burden on the business community.

With the introduction of destination resorts, additional opportunities for leisure, recreation, culture and executive housing which should help bring the area to the attention of the business community.

A downtown undergoing relatively dramatic urban renewal, putting a positive face on the community.

We are also blessed with strong relationships and very supportive partners at the federal, state and regional level and the working relationship between County, City and Chamber is one which invites dialogue and encourages cooperation and communication.

In short, all systems are “Go” in Crook County, and that’s exactly what we plan to do in days, months and years to come.

Election 2006: Tough Choices

By Scott R. Cooper, Crook County Judge
Originally published October 2006 in the Central Oregonian, Prineville, Oregon

Ballot Questions Boil Down To Choice of Values

Election Day is coming up soon, and voters will have to decide what to do with 10 state ballot measures and two local measures. Unlike past elections, the issues presented here aren’t hugely complex. Rather, voters are being asked to pick and choose between competing values. Their responses will dictate state choices and direction in years to come. Here’s a brief look at what’s on the ballot. This summary doesn’t advocate for or against any measure but offers you, the voter, a concise way to consider what message your vote for or against the measures will mean.

Measure 39: Eminent domain. This measure prohibits government from taking private property for the purpose of reconveying it to other private interests. Such conveyances occur, on occasion, when a government is trying to promote economic development by converting blighted neighborhoods and blighted properties into attractive and thriving commercial, residential or industrial areas. Nobody even thought this was legal until a year ago when the U.S. Supreme Court decided it was. Bottom line: If your highest value is support of private property rights and protection of civil liberties, you should vote for this measure. You should vote against this measure if you support government-backed efforts to improve communities, both economically and aesthetically.

Measure 40: Regional judges. This measure mandates that judges of the Oregon Supreme Court and Oregon Court of Appeals will be elected on a regional basis. This measure was previously defeated by voters. It is a response to the correct perception that the majority of judges on the state’s highest courts tend to be from Portland. Backers argue that a more regional court will make choices which reflect the regional diversity of the state. Opponents respond that judges apply the law, which isn’t supposed to change based on where you live. Bottom line: You should support this measure if you feel that where judges live affects how they rule. You should vote against it if you believe that voters ought to have a free hand to place and retain judges on the bench, based on qualifications without regard for address.

Measure 41: Lower taxes. This measure allows voters to increase their personal deduction on their state incomes taxes. It reduces taxes and in doing so it reduces income to the state government. Top-end taxpayers benefit disproportionately to low-end taxpayers. Bottom line: Vote for this measure to see your state income taxes cut. Vote against this measure if you don’t want to see state funding reduced for programs such as education, senior and disabled service and assistance to the poor.

Measure 42: Insurance rates. Most insurance companies now tie your property and auto insurance rates to your credit score. The justification is the statistical fact that people with better credit tend to have less claims. Initially, if passed, the measure would probably raise premiums for the best credit risks. A counterargument is that over time credit scoring forces poor risks to go without insurance, which raises costs for all ratepayers by putting more uninsured motorists on the road. Bottom line: vote for this measure if you believe that insurance is about sharing the risk broadly and keeping down costs for everyone. Vote against it if you favor premiums based on statistical risk and you are willing to accept the potential costs associated with having more uninsured motorists on the road.

Measure 43: Abortion and minors. This measure requires 48-hours advance notice to parents before a medical provider can provide an abortion to a minor. An exception to circumvent parental notification can be made by petitioning an administrative law judge. Proponents argue that abortions carry physical and psychological risks that minors are generally incapable of fully evaluating without parental involvement. Opponents argue that parents are not always involved, and that parents sometimes substitute their values for the best interests of the child. They think the idea that children will be able to take advantage of the administrative law judge system is naïve, and they point out that there is no exception for pregnancy resulting from rape or incest. Bottom line: vote for this measure if you favor parental involvement when teenage girls must confront the difficult decision of what to do about an unwanted pregnancy. Vote against this measure, if you believe it unfairly burdens young girls who have uninvolved or abusive parents.

Measure 44: Prescription drug access. Currently, the state negotiates discounts with drug companies which allow qualified Oregonians to purchase prescriptions at a discount. Eligibility is limited to income-qualified residents over 54 who haven’t had insurance coverage for at least 6 months. This measure expands the program to cover all Oregonians without health care coverage (other than Medicare Part D.) There is no additional cost to Oregon. Alone among the ballot measures, this one has no statements of opposition in the voters pamphlet. Bottom line: Vote for this measure unless you are philosophically opposed to less costly prescription drugs and expanded access to health care by the uninsured.

Measure 45: Term limits. This measure limits the terms legislators can serve in the Oregon House and Oregon Senate. The measure passed once before, but was thrown on by the Courts on a technicality. You either believe long-term experience is helpful and essential to constituents and the political system as a whole or you don’t. When term limits were in effect, there is little question that the departure of long-term legislators lead to confusion and lack of historical perspective by legislators. There is equally no question that the measure paved the way for new voices in the legislature. Bottom line: Vote for this measure if you think new ideas are more valuable than experience in managing the complex bureaucracy of state government. Vote against it if you believe that lack of experience on the part of newcomers puts the special interests and lobbyists (who aren’t subject to term limits) in control.

Measures 46 and 47: Campaign contributions. Measure 46 is simple. It changes the Constitution to explicitly authorize limits on campaign spending. It prohibits the legislature to change any voter-approved limitations except by a three quarters vote of both chambers. Measure 47, in contrast, is complex. It severely limits the size of campaign contributions to candidates for statewide office by individuals and political action committees, and it bans contributions by unions and corporations outright. Measure 47 becomes law only if Measure 46, passes, so if you favor 47, be sure to vote for both. Bottom line: If you believe that money in politics is generally a bad idea which has a corrupting influence on the political process, vote for these measures. If you believe that money is a necessary evil that helps otherwise unknown candidates gain recognition and if you believe that corporations and unions, which are affected by state law, ought to have the right to support candidates who support their positions, vote against these measures.

Measure 48: State spending cap. This measure is about limiting the growth of state spending to a formula tied to a combination of population growth and inflation. Supporters argue the measure is necessary to restrain out-of-control state spending. Opponents say that spending is a reflection of the services people demand and has little to do with inflation or population. Both sides agree on some points: the measure will not affect your income or property taxes. At best, it might prevent new taxes (like income tax surcharges or cigarette taxes) from being introduced in the future. In addition, if passed, the measure will reduce state spending, meaning there will be less for the biggest portion of the state budget—education, prisons and assistance to distressed segments of the population such as seniors, the sick, the disabled, the poor and others. Bottom line: Vote for this measure if you want the state to reduce expenditures and avoid future tax hikes. Vote against it to preserve smaller class sizes, prison beds and assistance to the elderly, the sick, the disabled and the poor.

In addition to the state measure, there are two local measures on the ballot as well.

Bowman Museum: The first is the renewal of the 6 cent per thousand Bowman Museum operating levy. This is a continuation of an existing levy. It costs the owner of a house with a taxable valuation of $200,000 $12 per year. Passing it will not raise taxes. Bottom line: vote for this if you want the museum to continue business as usual. Vote against it if you want to minimally reduce your taxes and force the museum to cut back programs, hours and operations.

Pool Levy: Both a construction levy and an operating levy are on the ballot, placed there by the Parks and Recreation District. Only district voters get this question. If passed, the measures would allow the District to replace its 50+ year-old outdoor swimming pool in downtown Prineville with a newer, larger swim facility with modern controls which can operate year-round. Backers say that if the measure is passed, out-of-district voters will pay more to use the facility. The combined request to voters is for $1.25 per thousand. For the owner of home with a market value of $200,000 (taxable value of $140,000), that’s $175 per year. Bottom line: If you want a modern, pool that operates year round, vote for this measure. If you’re opposed to the pricetag and/or you’re willing to risk the shutdown of the existing pool before a new one can be built vote against it.

Boiled down, the questions on this year’s ballot are not complicated. But they are hard. They require significant choices about values and voter preferences. Your statements at the polls will influence the decisions of lawmakers in the 2007 session. This is a synopsis only. For more in-depth understanding, spend some time with the voters pamphlet before you mark your ballot. However you vote, be sure to return your ballot before polls close on Nov. 7.