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Kulongoski -- Long-term vision hits first-term obstacles

Ted Kulongoski's successes in his first year as governor are tempered by Oregon's fiscal crisis, but his goals remain intact.

If Gov. Ted Kulongoski had a honeymoon, it ended halfway through his first year when aides handed him a stunningly bad fiscal report.

State revenues had plummeted $1 billion below expectations. The Democratic governor summoned legislative leaders and laid out the options: Start hacking budgets, or find some new money.

No one in the room, Republican or Democrat, wanted to make the cuts. Instead, they later approved tax increases to make up the difference -- the very thing Kulongoski had vowed he wouldn't do as governor.

The tax increase is now the subject of an emotion-packed referendum. And Kulongoski, who considers government credibility the cornerstone of his administration, has joined the campaign to pass a policy he said he never wanted.

Despite the budget crisis that dogged Kulongoski's first year in office, the new governor achieved many of the goals he set, from a dramatic boost in spending on transportation and tourism to a successful push for savings in public pensions and a freeze in state salaries.

But the way he's gone about it has angered his allies, particularly the teachers and other union members who put him in office. And the clash between his long-term vision for Oregon and the immediate reality of its battered economy could color the rest of his term -- and the legacy he hopes to leave.

He enters his second year emboldened by a string of mission-accomplished victories but sobered by the job's complexities.

"It's one thing after another," Kulongoski says during an end-of-the-year interview a day after the resignation of Saif Corp.'s two top executives. The departures came amid reports the state-owned workers' compensation insurer had spent more than $1 million on lobbying -- the kind of news that deepens public cynicism about government efficiency.

"That's the nature of the job," Kulongoski says. "I can't dictate what the day-to-day issues are."

Instead, Kulongoski has locked his sights on a forward-looking strategy of energizing the state's dormant economy, remaking the image of Oregon government as lean and accountable, and, eventually, plowing more resources into its colleges and universities as a way to attract more high-tech industry.

Issues such as the $800 million tax vote coming up in February are short-term "distractions," he says.

"There are serious repercussions if this measure fails, no question about it," Kulongoski says. But if it goes down, as polls suggest, "the sky won't fall."

The fundamental issues that trouble the state will be there whether the measure wins or loses, he says.

His outlook has won Kulongoski strong backing from the Republican-hued business community. Business leaders say the 63-year-old governor has set the stage for better times in Oregon. They cite his staunch support for curtailing the Public Employees Retirement System's costs, his commitment to modernizing the state's aging bridges and highways, and his overhaul of the state's higher education board.

They also see a leader who has given more than lip service to bipartisan cooperation, someone who has reached well beyond his initial support base, giving plum jobs to Republicans and working closely with conservative-minded corporate CEOs.

Business backing at a price Kulongoski's embrace of the business sector has come at a price. Some of his harshest critics are Democrats who think he's moved too far to the right. Some call him a charismatic guy with good intentions but only vague solutions. Others say he's a turncoat who courted them as a candidate, then turned his back after he won.

And, in what could become his biggest hurdle, he has yet to satisfy Oregonians who want bird-in-the-hand evidence that the state has shaken off its economic and political funk, and has regained a sense of pride and ambition.

"So far, I just see it as a continuation of the same old thing," says Charlie Chapman, 60, a Baker City building supply salesman. "He's listening to our problems. He just has to put some of it into action."

The job won't get any easier. Public school financing is as shaky as ever. No one's sure how to patch the $800 million budget hole if Measure 30 goes down. Despite better employment numbers, coveted manufacturing jobs continue to leak out of Oregon.

Lunchtime at Roseburg High School. The cafeteria buzzes. Kulongoski, flanked by dark-coated aides and state police bodyguards, strides in, grinning broadly. If there's one part of the job he loves most, it's this: traveling the state and meeting people, whether they're students, shopkeepers or hard hats on a construction site.

The difference between Kulongoski the candidate and Kulongoski the governor is striking. On the campaign trail, former aides say, he was often uncomfortable, tense and, as it wore on, cold and irritable. He beat Republican Kevin Mannix with 49 percent of the vote in a closer-than-expected race.

A warming trend

Kulongoski now exudes not only a new self-assurance but also a genuine eagerness to mingle with the people who elected him. It's the difference, say people who have worked with him, between striving to be accepted and drawing energy from that acceptance.

In the school's new theater, a student performs a skit written just for Kulongoski. "I'm trying to decide whether to fall in love or become governor," she begins. "I've got it," the actress says. "Fall in love with the governor."

Kulongoski beams.

The governor's warmth, observers say, comes in part from a deep-seated desire to be liked by nearly everyone he comes across. That also contributes to his troubles, they say.

"He's been a great cheerleader, which is what we needed in the governor's office," says Chuck Sheketoff, of Silverton, who leads a think tank on poverty issues. "His shortcoming is he likes to be everything to everybody."

Supporters say this tendency makes him an engaging, personable politician, capable of forging the kind of relationships critical to moving the state forward.

"You have to give him a high grade for maintaining a sense of civility," says University of Oregon President David Frohnmayer, who has known Kulongoski for decades. "On issues that can otherwise become personally abrasive, he seems to be able to keep lines of communication open."

But Steve Novick, a Democratic insider who worked on Kulongoski's campaign, says the governor has painted himself into some unnecessary political corners by trying to please too many people.

"Ted has two tremendous attributes: He's charming, and he's courageous," Novick says. "He can do a lot with that. The concern I have is, I don't think he's been consistent or always coherent."

Giving critics a "club"

The clearest case in point was Kulongoski's early statements on taxes. In his inaugural address and many subsequent speeches, the new governor pledged that state government would "live within our means," which was widely interpreted to mean Kulongoski would not support sizable tax increases.

Then came the news of the $1 billion drop in state revenue.

"If I made a mistake, it was in my belief that we had bottomed out," Kulongoski says. He now says his "live within our means" statement wasn't about taxes, but about his opposition to borrowing and using financial trickery to balance the state budget.

That wasn't his only revision. He began the 2003 legislative session by saying $5.05 billion would be sufficient for the state K-12 schools budget. A few months later, with little explanation, he changed that to $5.3 billion, which added to the need for a tax increase.

And he has yet to revisit his campaign pledge to find $80 million in administrative waste in public schools.

"He gave Randy Miller a club to beat him with," Novick says of the West Linn Republican, a frequent critic who was the House co-chairman of the main legislative budget committee. Mannix, now chairman of the state Republican Party, also has used Kulongoski's tax turnaround to bash him at every opportunity.

Kulongoski, a former labor lawyer, angered public employees and teachers by demanding a freeze on their salaries. He then muddied the issue by agreeing to a one-time payment of $350 to all state workers in lieu of raises, which cost the state millions.

He further infuriated union members with his aggressive support for trimming PERS payments.

"And this is the man who came to us and asked us for help to get elected and said, 'I wrote your collective-bargaining law,' " says Ann Nice, president of the Portland Public Schools teachers union.

"I don't know if he was telling us one thing to get our support, and he had these plans in the back of his mind, if he was disingenuous," Nice says. "Or, he may have been looking ahead, thinking he needs support of the business community to get re-elected.

"I don't know. But if that's how he treats his friends, I hope I don't become his enemy."

What some call betrayal, others see as political moxie. Duncan Wyse, president of the Oregon Business Council, says Kulongoski has taken on issues, such as PERS, that others have feared to touch.

"He has a clear picture of what needs to happen for the state," Wyse says. "He's directing his efforts to that, regardless of any political consequences."

Drawing on deep roots

One of Kulongoski's boldest moves was his appointment of former Gov. Neil Goldschmidt to lead a shake-up of the state higher education board.

But Goldschmidt, a key figure in Kulongoski's campaign and one of the state's top power brokers, didn't come easy. He rejected Kulongoski's initial pleas for help. Kulongoski kept trying.

"I wanted to do something major," Kulongoski says. After all, Goldschmidt had once tapped him to lead an overhaul of the state workers' compensation system. So Kulongoski drove to Goldschmidt's house in Portland, knocked on the door and made one last pitch.

They sat in Goldschmidt's living room. They ate cheese and drank wine from Goldschmidt's vineyard. But this was no soften-him-up social call.

"It was more crass than that," Kulongoski says. "I said, 'Neil, I did you a favor on workers' comp. I need you to do me one now.' "

Finally, Goldschmidt agreed.

It was a clear coup for Kulongoski, illustrating the depth and strength of his roots in Oregon politics. This may be his rookie year as governor, but it's the culmination of 30 years of public life in which he has held office in every branch of government.

As governor, Kulongoski appears hyper-aware of the foundation he is building for what will be his eventual legacy. He doles out news interviews sparingly. He has reined in the idea-spinning he indulged in early in his term. He takes the longer view of Oregon's problems, worrying less about what happens tomorrow or next year, and more about positioning the state for its future 25 to 30 years down the road.

He envisions an arc of progress that begins with re-establishing political credibility in Salem and performing economic triage across the state. Then comes a series of reforms in schools, higher education, land use and taxes. That, he hopes, would lead to a period of stability, investment and, ideally, prosperity reminiscent of the 1990s.

To explain his approach, Kulongoski has come up with what he calls the Oregon Equation, "where Oregon's future equals a sum of its children, its economy and its environment."

The equation, which hasn't exactly caught fire with the public, represents Kulongoski's summation of his priorities. Children come first, and the state's livability is its chief asset. But nothing good happens until the economy improves, he says.

Balancing now and later

Timing, always critical in politics, has worked both ways for the governor. The state's economy, after falling to one of the lowest points in the nation, appears to be on the upswing as Kulongoski enters his second year on the job.

On the other hand, Kulongoski's methodical pace has been overtaken by events, such as a steeper-than-expected decline in state revenues, and by a public impatient for immediate change.

His critics say he needs to take stronger stands on the crisis of the moment, whether it's schools, public health programs or the departure of another factory.

"I'm looking for something different," says state Sen. Avel Gordly, a Democrat who represents some of Portland's poorer neighborhoods. "I was hoping for a more forceful statement from him, much more aggressive about what's at stake for these people."

Supporters hope he sticks to his game plan.

"His emphasis on economic development is going to bear fruit," says Jack Roberts, a former state labor commissioner who ran in the Republican primary for governor. "To be perfectly honest, I thought Ted had the opportunity to move in these directions, but I didn't think he would do it."

Kulongoski enjoys the flattery, even if it comes from the other party. And he understands the vitriol from Democrats who think he has compromised too much. He says he has been in politics long enough to not take any of it personally.

And he says he's not about to change course.

"I think you get one shot at it, and you do the best you can," he says. "That does mean, sometimes, I step on the toes of the people who helped me get here."

Harry Esteve: 503-221-8226;  harryesteve@news.oregonian.com
stop it 05.Jan.2004 13:32


Alright, this needs to stop. The oregonian has their own free website, and anyone can walk into a coffee shop & read it for free. Please, lets not have any more oregonain articles on this website.

It is necessary to follow state news 05.Jan.2004 15:38

George Bender

It is obvious from many of the uninformed comments on this website that people are not reading the Oregonian or any other newspaper, and therefore don't know what is going on with state politics -- which involves issues critical to the survival of many of us. If we could come up with our own reporters who are capable of covering state government that would be great, but I don't see it happening so far. Until then, we will just have to use newspaper articles to keep you informed, whether you like it or not. Ignorance is too dangerous.

We should think about some way of finding and funding reporters for state and local news. If all the people who use this website -- how many? -- were willing to cough up $20 a year, I bet we could do it. I would pay that, and I'm poor. If we want an alternative to corporate news we have to create it. We haven't done that yet.

What I object to is the dominance on this website of news about Iraq and Bush. Enough is enough. There are other issues that matter. Economic politics is what affects our lives, even determines whether we live or die. We need living wages. We need to preserve and extend the safety net. We need guarranteed jobs or some other form of support. This is what working-class people care about. I'm for peace and getting rid of Bush too, but it's pretty much all been said. I'm not reading anything new.