Kitzhaber looks long-term to rebuild state's economic foundation

PORTLAND, Ore. - Gov. John Kitzhaber is looking ahead, perhaps to a run for a historic fourth term as Oregon's governor, but he's also looking to secure the long-term health of the state's revenue system.

It's been his argument that the system and how it's financed needs to change, because when times are good and there's money available "it's hard to deal with deep underlying problems" with the system that cause it to "bust" in bad times.

But in an interview Sunday on "Your Voice, Your Vote," with KATU's Steve Dunn, Kitzhaber said the bad times can be used to not just fill in the cracks of a faulty foundation but to build a new one.

"It's clear we don't have the resources to buy our way out of our problems," he said. "So there's an opportunity to innovate our way (out of them)."

According to Kitzhaber, the recession has forced Oregonians to work together, especially in the state's Legislature.

"The remarkable civility of the legislative debate last session - we erased one of the largest per capita deficits in the nation with real integrity and a good level of discourse," he said. "I'm really proud of the state, and I think it's a much closer state than it was (when I was last governor)."

After two terms as governor from 1995 to 2003, Kitzhaber left office with a bad taste in his mouth for state politics, calling the state "ungovernable," but his return eight years later has shown him to be more optimistic about getting things done, and he's used that legislative "civility" as a catalyst to check off the list some of his major policy initiatives he says will help stabilize the economic foundation of the state.

These initiatives include health care: the creation of coordinated care organizations and health insurance exchanges. And education: An Education Investment Board, chief education officer and achievement compacts.

With reforms in health care, Kitzhaber hopes preventative care will save the system money and with his education reforms, he hopes to better target funding to student outcomes and ensure children are ready to learn even before they step foot into the system.

With his third year of his third term just months away, Kitzhaber said he's working on trying to come up with a solution to help stabilize the state's system of public finance, especially with how it relates to education funding. But he's not quite ready to say what his proposal will be; however, he hasn't taken a sales tax or developing a reserve fund - which will likely require reforming Oregon's "kicker" - off the table.

"If we'd been able to capture the revenue that came into the state during the 90s, because of the boom economy, we wouldn't be facing the kind of cuts we have right now," he said.

Kitzhaber said he's been in conversations with union and business leaders to "find common ground to build a coalition" around a solution. He said he hopes to have a "high-level discussion with Oregonians" within the next eight to 12 months about how the state stabilizes its revenue system.

But one idea he said he won't support as a revenue source to fund schools or other public services is legalizing marijuana. Voters may have an opportunity to do so if proposed initiatives make it to the ballot this November.

"Obviously, if they pass, they pass, but I won't be voting for them," he said.

As far as his personal long-term political goals, Kitzhaber, 65, strongly indicated during the interview with Dunn he'd run for a fourth term. He's already made Oregon history by winning three terms.

"If at the end of next year it appears that I can continue to make a contribution moving us forward, I would certainly consider another term," he said.

Kitzhaber also discussed some of his other goals for the 2013 legislative session and a proposed mileage tax to help finance transportation infrastructure. He also discussed the death penalty in the state.

View past KATU interviews with Kitzhaber:

Oct. 19, 2011

Candidate Kitzhaber Sept. 1, 2010