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The Nine Bioregions of Oregon

Oregon can now be seen as nine distinct regions, each with its own values, economic approach and political outlook. These differences are at the heart of why the Legislature has been gridlocked, why there is little consensus on how to compete in the global economy and why Oregon's prospects don't seem as clear as they did 30 years ago when timber was king. While the Legislature was embroiled in its longest session ever, The Oregonian sent a team of reporters and photographers to survey the new Oregon. Increasingly, the nine bioregions of Oregon are fighting different global competitors while questioning whether their government in Salem understands what they're up against.

Although many economists, business groups and finance experts continue to push for a sales tax, voters statewide have rejected that nine times.Oregon also could consider changing the balance in taxes between businesses and individuals. Businesses enjoy many tax breaks that individuals do not. Corporations pay an income tax rate of 6.6 percent, compared with a top rate of 9 percent for individuals. IF CORPORATIONS WANT TO PRETEND THEY ARE PEOPLE, THEY SHOULD BE TAXED EQUALLY, JUST LIKE PEOPLE.
Oregon Watersheds and Distinct Cultural Areas
Oregon Watersheds and Distinct Cultural Areas
The Nine States of Oregon
A familiar landscape evolves into diverse regions that share one name but different futures

Sunday, November 2, 2003


Oregon is really two states, the conventional wisdom goes.

East-West. Rural-urban. Economically dominant Portland leaping ahead of a battered and besieged countryside.

But this logic no longer holds true.

While Portland's giddy rise and recent fall have made national news, the rest of the state is in the midst of a dramatic transformation that is redrawing the state map.

Oregon can now be seen as nine distinct regions, each with its own values, economic approach and political outlook.

Leaning left, Portlandia looks to right itself
Growing its own way: Southern Oregon
A region on the ropes: Cowboy Country
A deepening divide: Central Oregon
A way of life in flux: Columbia Corridor
Seeing beyond the trees: Timber Country
Plying an idle economy: The Coast
An area ripe for change: The Valley
Wise to its future: Edutopia

These differences are at the heart of why the Legislature has been gridlocked, why there is little consensus on how to compete in the global economy and why Oregon's prospects don't seem as clear as they did 30 years ago when timber was king.

While the Legislature was embroiled in its longest session ever, The Oregonian sent a team of reporters and photographers to survey the new Oregon.

Their findings are as varied as the landscape of Oregon, the nation's 10th-largest state. Some regions, such as Southern and Central Oregon, are successfully finding replacements for their old timber industries. But others, such as the high desert of Cowboy Country, remain trapped in a decline that shows few signs of abating.

Increasingly, the nine states of Oregon are fighting different global competitors while questioning whether their government in Salem understands what they're up against.

Bend is fighting Aspen, Sun Valley and Palm Springs for tourist dollars. A wheat farmer in Pendleton keeps close watch on Australian exports. And Portland has to worry whether it needs to be more like education-rich Silicon Valley or low-cost Nashville.

On the highways and byways of the new Oregon, the state's 3.4 million people are living and working in more diverse ways than ever.

You might find them stuck in traffic on the Sunset Highway, where many of the Portland area's 60,000 high-tech workers daily relearn the art of patience.

Or driving alone through Stinking Water Pass as vultures circle above U.S. 20 in Eastern Oregon.

They might be on a construction crew in Medford, working on a $120 million expansion of a hospital that draws patients from a two-state area the size of Wisconsin.

Or working near Boardman, where one of the West's largest dairies is being carved out of the scrub brush to produce enough milk to turn a regional favorite, Tillamook cheese, into a national brand.

"When people talk about this simplistic urban-rural divide, they really don't get it," said Gail Achterman, a state transportation commissioner who heads the Oregon Institute for Natural Resources at Oregon State University.

Instead, she said, "you're looking at a huge mixture" of economic successes and failures around the state.

Looking for common threads

Oregon was easier to understand when natural-resource industries drove the state's economy.

People lived close to the forests or the crops or the fisheries, and they sold what they produced. Cities processed, brokered, lawyered and distributed the wheat, lumber, fruit and other products.

Except for its greater population, Bend economically was not hugely dissimilar to Burns, 130 miles to the east. Or to Grants Pass in Southern Oregon, or even Coos Bay on the coast.

These communities were all hit hard when the timber economy began to slide in the 1980s as the result of industry changes and environmental restrictions. The idea of the "Two Oregons" began to take hold as the Portland area increasingly shifted to a high-tech economy that depended less on prosperity in the rest of the state.

But during the past decade, in the shadow of Portland's boom and then bust economy, signs of change are emerging through much of the state.

Sometimes it's easy to see. For example, one of Bend's last timber mills is now an upscale shopping complex. Perhaps fittingly, the old office of the mill's hydraulics supervisor now houses a Victoria's Secret.

President Bush received a warm [or was that hot] welcome when he visited Central Oregon this summer to promote his forest-thinning initiative, which locals hope will revive the wood-products industry. There may be some extra jobs in that, but it's clear to most business leaders that it is the increasingly luxurious destination resorts that now drive Central Oregon's economy.

Southern Oregon is also thriving on an influx of new arrivals. But it's a different mix of business -- retail and health care are among the big sectors there -- that are transforming that economy.

Just to the north, the anger over the loss of jobs in Timber Country remains palpable. And on the coast, there is an uneasy mixture of tourism wealth, an influx of retirees and high poverty among longtime residents.

"It's not a map, it's a tapestry," said Gov. Ted Kulongoski as he looked at a map showing the regions. "I'm trying to figure out what is the common thread that runs through these communities."

Lawmaking machine fractured

Kulongoski and others say this regional divergence makes it even more difficult to find agreement in Salem.

"There's not this reliance that we've had on each other," Kulongoski said, "to form this idea that we're all in this together. . . . What's happened is, it's been very easy to polarize the debate."

Rural politicians angrily blame Portland environmentalists for shutting down logging in the national forests. Voters in Portland complain that they're helping subsidize schools around the state but had to create the state's first local income tax to keep their own schools open all year.

Fighting over taxes and spending during the down economy kept the 2003 Legislature in its longest session.

In the end, the regional differences came into play in the biggest vote of the session -- on legislation to raise taxes by $800 million to balance the budget.

Much of the vote broke down on partisan lines, with all but one Democrat supporting it. But of the 15 Republican legislators who provided the votes necessary for passage, only one came from the two regions -- Cowboy Country and Timber Country -- that have endured the most painful economic transitions.

Three of those Republican lawmakers represent the Columbia Corridor, where voter attitudes appear to be changing as the area becomes more economically diverse. When voters in January rejected an income-tax increase, it had a nearly 48 percent yes vote in that region -- compared with less than 33 percent in the rest of Eastern Oregon.

State Rep. Max Williams, R-Tigard, said the regional differences [and gerrymandered one-party districts] make it harder for [corporate biased] legislators to craft economic development strategies that work for the whole state. "It makes it very difficult to govern," he said, arguing, for example, that the regions need different land-use rules -- but it's hard to get any statewide agreement to change the current system.

"In some ways, it makes the state appear less relevant," said Bill Wyatt, executive director of the Port of Portland.

Kulongoski said the globalization of the economy has created a statewide sense of unease.

"I think there are some general attitudes that something isn't right," he said. "This country is going through a tremendous transition in terms of our economy, trade, internationalism."

Even regions that are experiencing signs of success don't feel as secure as they once did by being close to a bountiful supply of wood or rich farmland. Whether they're pear growers eyeing South American imports or timber companies looking at a flood of two-by-fours from Canada, the key now is to make and market a better product.

That's why there's an opening for Tillamook cheese, or a high-tech laminated veneer from Roseburg Lumber Products -- and why business will simply find other sources of supply somewhere else in the world if those products don't turn out to be competitive.

The regional fractures in the state were obvious in last year's close governor's race, which Kulongoski won after besting his Republican rival in just three of the nine regions -- Portlandia, Edutopia and the Coast. Since then, he's tried to reach out to the rest of the state by making high-profile visits to the far corners of Oregon, and he made a point of vacationing in Eastern Oregon communities of less than a thousand people.

But Kulongoski, who also has a base of support among environmentalists, hasn't been willing to call for the wholesale easing of environmental restrictions that rural legislators routinely demand.

Former Gov. John Kitzhaber, who famously announced the state "ungovernable" as he approached the end of his eight years in office, said he thought many of the difficulties were cultural.

In much of Oregon, he argued, there was a "culture that really dates back to the 19th century" of feeling independent and able to guide one's destiny.

Now, Kitzhaber said, the state needs to figure out how to create a new compact among its urban, suburban, small-town and rural areas -- a tough task given the polarization and political differences.

Reasons for optimism

They may be harder to find, but the ties that bind Oregon are still there.

It's not just because winter wheat from Pendleton still flows through the Port of Portland or that lawyers in downtown offices still pore over lumber contracts.

In the new economy, said Portland economist Joe Cortright, the urban area is an important gateway for the rest of the state -- what he only half-jokingly calls the "Ellis Island for the rest of Oregon."

People in the Portland area spend tourist dollars in the state's recreational hot spots, buy second homes and sometimes retire there.

Stuart Foster, a Medford lawyer and chairman of the state Transportation Commission, said the state's manufacturers increasingly depend on swift highway links throughout Oregon.

"You have a bridge failure on Ladd Canyon in Union County on I-84," he said, "and it could have an adverse impact in Medford."

More importantly, the state has learned that it can't get much done without political support from legislators throughout the state, Foster said. While Oregon is becoming more urban, the 2000 Census showed that more than 20 percent of Oregonians still live in rural areas, a higher percentage than either Washington or California.

"To achieve what we need to do in the urban areas, you need the rural folks on board," Foster said. That's particularly the case since rural legislators have a big say in the Republican caucuses that have run the Legislature for much of the past decade.

The entire state also more than ever needs the Portland region to succeed economically because it is so reliant on the metropolitan region for tax dollars. The Portland region, which has higher wages, now pays more than half of the state's income taxes.

From 1979 to 2000, income taxes paid by residents of the Portland area went from 48 percent to nearly 54 percent of the total. When the recession started to bite in early 2001, two-thirds of the drop in income-tax collections came from the metro area.

In other words, most of the huge legislative struggle to balance the budget the past two years was caused by economic problems in the Portland area.

The region's contribution to services go beyond income taxes. The state also provides more aid to schools in the rest of Oregon because the Portland area has higher property values that produce more local property taxes.

"The rest of the state should care about what happens to the metropolitan area," Cortright said, "because (Portlanders) are paying for their schools."

Author Joel Garreau, whose book "The Nine Nations of North America" served as a model for The Oregonian's map of the state, said his research found plenty of frictions and cultural splits. But he said the diversity in Oregon today can also be good.

"One thing we learned from agriculture is you don't want to be dependent" on a single crop, he said. "So having many different cultures can be a source of strength."

Jeff Mapes: 503-221-8209;  jeffmapes@news.oregonian.com Alex Pulaski: 503-221-8516;  alexpulaski@news.oregonian.com Gail Kinsey Hill: 503-221-8590,  gailhill@news.oregonian.com

 link to www.oregonlive.com





The Oregon dream vanishes



A quarter-century of bust and boom has divided Oregon as never before, shattering the political consensus that once made the state a national model for innovative government.

A generation ago, Oregonians shared a common standard of living and similar political views, which were framed by moderates of both parties. But the collapse of the timber economy and flood of high-tech investment in metropolitan Portland carved a chasm between rural and urban Oregon.

Only New York -- with its divide between Wall Street millionaires and immigrant poverty -- has seen the gap grow faster between the richest fifth of families and the poorest fifth, a national study shows.

Amid the economic upheaval, Oregon's politics were turned upside down.

The moderate Republicans, who once held most state executive offices and commanded the political center of the state, were largely pushed aside. They were replaced by conservatives with a deep-rooted suspicion of government who focused on lower taxes and opposing abortion.

Without competition from moderate Republicans, Democrats held the governor's office. Rural voters tied Democrats to environmentalists and swept them from the Legislature, which was taken over by Republicans.

The result: Two parties with conflicting visions fought to a stalemate in Salem so stubborn that outgoing Gov. John Kitzhaber pronounced the state "ungovernable."

This week, a new governor and Legislature convene in Salem in search of consensus. The odds are formidable: They face a $1.5 billion budget shortfall driven by an economy that shows only tentative signs of recovery.

Many states are battling similar budget woes. But interviews with political leaders and people across the state show Oregon's problems are more fundamental.

The recession has laid bare Oregon's chronic inability to agree on how to provide a steady source of funding for schools and how to develop a more balanced tax system.

"We've lost our way in Oregon," says Sen. Lenn Hannon, a moderate Republican from Ashland with 29 years in the Legislature. "We've lost our can-do attitude in Oregon. And we replaced it with a cannot attitude."

Much of Oregon never recovered from the brutal recession of the early 1980s, which displaced thousands of workers, closed mills, stores and schools. Unemployment climbed to 12.4 percent, and Oregon's population dropped as workers went elsewhere for jobs.

The timber industry crashed, and the Portland area boomed with a dizzying $13 billion investment in high-tech microchip operations. Portland embraced the new economy, while rural Oregon struggled to hold on to the old.

They became separate states.

As economies diverged, so did wages. In 1978, workers in suburban Washington County and timber-rich Crook County earned about $12,000 a year. Today, a worker in Washington County takes home $42,200 on average, compared with $27,400 in Crook County. Average pay in metro Portland has outpaced inflation in the past two decades. In almost every other corner of the state, salaries fell behind inflation.

The growing economic divisions fostered political polarities.

As lawmakers became mired in conflict, special interest groups turned to initiatives to bypass legislators. Measures to limit gay rights, restrict cattle grazing and other proposals aggravated the divisions.

The rising resentment against property taxes, which were climbing swiftly because of rapid growth, propelled the 1990 passage of Measure 5, which limited property taxes for schools and local governments.

The measure forced schools to depend on the Legislature for money -- a Legislature controlled by rural counties.

Suddenly, students, educators and parents were at the mercy of Oregon's divided government. Measure 5 turned the Legislature into a statewide school board, redistributing money from richer districts, which tended to be urban, and giving it to poorer ones, most of them rural.

When the recession battered the state budget, the impact of Measure 5 on districts such as Portland snapped into focus. This spring, for example, more than 50 school districts plan to cut days -- as many as five weeks in Portland -- out of theschool year, which already is the shortest in the nation.

Other problems went unsolved.

Faced with declining state support, Oregon colleges raised tuition so high they now rank among the least affordable public universities in the nation.

The Legislature failed to fix the state's expensive retirement system for public employees, which is draining money from schools and government agencies.

As the decade ended, Oregon's economy crashed. It leads the nation in unemployment. Its per capita income has fallen to 31st in the country, the lowest it's been since 1929. One in 10 Oregonians collects food stamps. Bankruptcies, foreclosures and poverty are on the rise. Oregon's failures to solve these problems have become national news. The state dubbed a generation ago by Newsweek magazine as a place "where the future works" is now derided as "the worst mess of all," by The Economist weekly magazine.

Individuals cast aside Oregonians once boasted of a political landscape where one citizen could make a difference.

Now they complain of powerlessness.

"Money and special interests have moved in to fill the vacuum left by a disengaged and disenchanted electorate," Kitzhaber said last week. "The result is a state fragmented by ideology and partisanship, unable to take effective action on any front and without any sense of community or common purpose."

Loggers say environmental interests prevent them from cutting trees. Urban parents say rural legislators refuse to provide enough money for their schools. Moderates say both political parties have left them.

"I'm embarrassed being a Republican and can't imagine being a Democrat," said Doc Hatfield, a veterinarian who raises cattle on a ranch near Brothers in Central Oregon. "Why did the far right and the far left get such a hold on the politicians and leave the middle out?"

In Central Oregon, Craig Woodward built a thriving logging business over the years. But now, he said, he cannot take his crew out to cut wind-fallen, insect-damaged or burned trees, all of which fuel forest fires.

He said people in urban Oregon, even in Bend, don't understand how environmental restrictions undermine good forest management and cripple his livelihood.

"We have good lumber out there, and we're not allowed to cut it."

So the frustrated logger takes a crew to Bolivia and Belize six months a year to cut trees.

Across the Cascades, different worries weigh on John Whisler, 52, a retailer and father of an elementary school child in Portland. He's concerned about the deteriorating quality of local schools and wears a button that says, "Tax Me."

"I feel overwhelmed that the only battles that matter are too big for individuals or even school districts to fight," said Whisler, who helps raise money for his school. "You would have to be nuts to want to move here with kids."

Polls this fall showed that two-thirds of Oregonians think the state is on the wrong path. Business leaders became so alarmed that 1,300 gathered for a special leadership summit last month to talk about how to revitalize the state's economy.

Tale of two counties Oregon's differing paths can be seen in Crook and Washington counties.

In their own ways, residents in each enjoyed a high quality of life. Washington County, known for strong schools and affordable homes, was a short drive from both the country and downtown offices.

In Prineville, the only incorporated city in Crook County, five sawmills paid wages that allowed workers to support a family and also have a pickup and boat in the driveway. The noon whistle from the fire station let everybody know when it was time for the five-minute trip home for lunch.

Crook County was famous nationally as a bellwether that had voted for the winning presidential candidate in every election for nearly 100 years. Democratic-leaning millworkers were balanced by Republican farmers and businesspeople.

Today, about all the two counties share is a lot more traffic -- Washington County because it boomed, Crook County because so many people commute to service jobs in nearby Bend, where they cannot afford to live.

Economic changes brought political changes that ended Crook County's status as a bellwether. Crook voters rejected Bill Clinton and Al Gore, the other Democratic candidate, since 1992. It's easy to find people who resent environmental and government restrictions that limit their timber and ranch operations.

Lynn Breese, who with her husband, John Breese, owns a Crook County ranch established in the 1880s, said she used to be liberal but has changed her views.

"I don't like people who don't get out on the land making decisions for what I do on the land," she said.

Her husband added: "I think there are some people who would essentially like to depopulate the West."

Jennifer Beatty, 39, who lost work when the last Prineville mill closed more than a year ago, now works for the country road department and expresses a common lament.

"There is no future for Prineville," she said, taking a break from cutting juniper along a roadside. She hopes her young boy will get a college education and go elsewhere to work.

Maybe someplace like Washington County.

The new Oregonians Christine Barker, 35, and her husband, Ross, 37, moved from Southern California to Washington County in 1996 and bought a spacious home in a new development spreading over hillside pastures in northeast Beaverton. They live in the fastest-growing neighborhood in Oregon, the census reports.

They chose the Portland area because it seemed vibrant, interesting and planned, yet small enough to provide a sense of community. They considered it a better place to raise children.

They like being close to restaurants, bookstores, the zoo, the symphony and short drives to nearby farms and rolling vineyards. They both have college degrees and describe themselves as politically moderate. Christine stays home with their three children, while Ross works for a market research firm in downtown Portland.

They like the urban growth boundary, which runs near their house, and oppose its expansion. Ross can jog up the street, across the boundary and into the countryside.

They're aware of the state's divide but don't give much thought to rural Oregon. They worry most about school funding. Their oldest child, Annie, attends first grade in a class of 27 at Beaverton's crowded Jacob Wismer Elementary.

"I don't understand what the resistance is to having a sales tax," said Christine.

The Barkers found most of their neighbors have come from somewhere else, too.

Oregon grew by 580,000 people during the past decade, about 430,000 of whom came from other states and countries. Many of the new Oregonians are young and well-educated like the Barkers, said Barry Edmonston, director of the Oregon Population Research Center at Portland State University.

Growth brought new jobs and more congestion, more divisions, more winners and losers. Portland-area residents struggled with traffic and rising home prices. Resort communities in Central Oregon and on the coast saw contrasts sharpen between affluent retirees and vacationers and low-wage service workers.

1990: a pivotal year Economic and political changes shaping a new Oregon and leaving the old behind came to a head in 1990.

Not long into the new year, federal researchers released a bombshell report saying the spotted owl needed to be protected as an endangered species.

The limits on logging caused the huge federal timber harvest to plunge from more than 4 billion board-feet a year in the late 1980s to nearly zero today. Almost all of the 3.4 billion board-feet cut in Oregon last year fell on private lands.

About 10,000 angry timber workers and their supporters jammed Portland's Pioneer Courthouse Square to bring their message to urban Oregon. "Try paying your bills with an owl," said one sign.

"The Democratic Party became the party of the people shutting down the forests and the farms," said Deschutes County Commissioner Dennis Luke.

In 1990, for the first time in two decades, Republicans broke the Democratic grip on the Legislature, winning control of the House. Four years later, they took the Senate, too.

Democrats, shorn of serious statewide competition from moderate Republicans, won every governor's race and almost every other statewide office as well.

Both sides retreated to their support bases. Business interests concentrated their support on Republicans while public-employee unions became the major mainstay for Democrats.

"The centrist voices are harder to hear in both political parties," said Dave Frohnmayer, the last moderate Republican chosen by his party to run for governor. Frohnmayer, University of Oregon's president, lost after anti-abortion conservatives ran a third-party candidate.

The last big event of 1990: Measure 5.

It signaled the other tectonic shift in Oregon politics, from elected officials to the initiative. Voters themselves made the biggest budget decisions of the 1990s.

Government by initiative

The passage of the tax-limit measure -- combined with court rulings that threw out restrictions on paid signature-gathering -- triggered an increasing flurry of initiatives.

Each measure was aimed at satisfying voter discontent. But substituting an all-or-nothing initiative for the give-and-take of the legislative process created new problems.

Measures spawned court challenges and new divisions. A series of anti-gay rights measures exacerbated the culture wars. Pro-environmental measures in 1996 and 1998 angered rural residents who saw them as another tool of urban Oregon against them, even though the proposals were defeated.

"The initiative process keeps pulling scabs off attempts to find common ground," said Frohnmayer.

Battered by initiatives and partisans differences, legislators by the mid-1990s had largely given up on the large, innovative reforms that had once been the pride of the Oregon Legislature.

Instead, they retreated to their ideological and geographic corners.

As a result, Oregon in many ways squandered the nation's boom in the 1990s.

Many states invested in education and retooled their tax codes to attract economic development. Oregon leaders followed the path of least resistance. The strong urban economy produced big increases in income taxes that allowed the state to take over most funding for schools from the property tax.

Nearly every expert warned the boom couldn't continue. But attempts to establish a reserve account for a downturn faltered. Conservatives didn't want to give up any of the tax rebates the state handed out. School advocates didn't want to give up any dollars for programs to squirrel away for a downturn.

"We were not saving for a rainy day or managing our costs for a rainy day either," said Richard Reiten, the NW Natural Gas chairman who led the recent business conference on the state's economy.

Other problems festered. For example, questions about the high costs of the Public Employees Retirement System surfaced early in the '90s, to little avail.

The public employees unions successfully fought efforts to include PERS reform in a report by a task force on government efficiency established by Barbara Roberts after she became governor in 1991. And the unions successfully pressed the Legislature to water down a 1995 bill that created a slightly lower benefit level for new hires. A 1994 ballot measure to limit PERS won narrow approval by voters, but was struck down by the courts.

In 1999, the Republican-led Senate passed another PERS reform measure. The bill's sponsor, then-Sen. Neil Bryant, R-Bend, said the bill languished in the House for months because conservatives were angry at a gun-control bill he sponsored.

Bryant said more experienced lawmakers would not have let a dispute over a side issue derail such an important bill. But the House had novice leadership as a result of another voter initiative that limited legislative terms.

"They were only going to be there for six years, so the PERS system was the last thing they wanted to be involved with," said Marge Kafoury, the chief lobbyist for the city of Portland.

Gov.-elect Ted Kulongoski won a narrow victory that hinged on urban Democrats, and he faces a Legislature dominated by rural Republicans. He has made trips across the state to try to bridge the rural and urban divide.

In his budget proposal, he challenged some of his strongest political supporters -- the public employees unions -- by calling for a freeze on salaries and benefits that often outpaced inflation.

He wants to revamp the tax code to put schools on a stable footing, but he said he won't attempt that for the first two years of his term:

"I have to prove to (Oregonians) that this government is smart, it's productive and it's making its decisions wisely."

Bill Graves: 503-221-8549;  billgraves@news.oregonian.com Jeff Mapes: 503-221-8209;  jeffmapes@news.oregonian.com

 link to www.oregonlive.com


Rural schools reap urban cash



Nearly $400 million a year in school taxes paid by Portland-area residents are funneled to schools elsewhere in Oregon.

The massive shift in money has improved the fortunes of many rural schools while taking a serious toll in classrooms across Multnomah, Washington and Clackamas counties.

The Portland area has historically paid more in school taxes than it's received. But the shift -- enough to hire 6,400 teachers this year -- was increased as a result of the 1990 property-tax cut that was put over the top by voters in the Portland area, where schools face the biggest cuts.

An analysis by The Oregonian of statewide school-funding equalization shows that urban and suburban taxpayers provided the cash that kept many rural districts ahead of inflation during the 1990s, paying for more teachers and programs.

More than $395 million of the estimated $1.7 billion that residents in Multnomah, Washington and Clackamas counties pay in school taxes goes to schools elsewhere this school year, the analysis shows.

Put another way: Every $1 in schools taxes paid in the three Portland-area counties returns 77 cents to their schools.

"They are the ones that have subsidized rural education for the last 12 years, probably to the detriment of those areas," says Gary Peterson, superintendent of Central Oregon's Crook County School District, where per-student funding has grown at twice the rate of the state average.

"We've been a winner."

Winners are hard to find in metro Portland and other parts of the state where schools once enjoyed the benefit of large property-tax bases and generous voters willing to support them.

The Centennial School District is cutting teachers for English, math and music. In Beaverton, some classes at Westview High School have grown to 40 students.

Oregon schools already average the fewest instruction days in the nation, and calendars will get shorter this spring in many districts. Portland, the state's largest district with more than 50,000 students, may cut three to five weeks from the school year. More than 50 other districts plan to cut days to balance their budgets if voters reject the Jan. 28 vote to increase income taxes for three years.

The Oregonian's analysis compared the share of school taxes paid in each county. Those include local property taxes dedicated to schools and income taxes that go to the state's general fund. Forty-two percent of the general fund goes to schools. The newspaper then compared the share of school funding that goes to each county.

Oregon lawmakers wield more power over school funding than their counterparts in most other states.

Measure 5 capped the ability of voters to raise taxes for classroom spending and operating costs in their communities. But local voters can raise taxes to build schools and buy equipment.

Many states have some kind of system that redistributes tax money from wealthy districts to poorer ones to create more equity. Experts say the degree to which Oregon has taken money from richer schools to establish equity is rare.

"If you have a fourth of your districts looking at not being able to complete the school year, then you've got something fundamentally wrong going on, " said Mike Griffith, policy analyst for the Education Commission of the States, a Denver-based think tank that tracks schools.

It wasn't supposed to be this way.

During the raucous debate over Measure 5, the tax limit's supporters assured voters that they could cut their property taxes, turn over control of school funding to the state and lose nothing from their schools.

As soon as legislators had control over school funding, they moved to end the historic inequalities around the state. Many urban and suburban lawmakers hoped to do this and still protect their local schools.

The Oregonian's analysis shows why this was an uphill fight: Most schools that have seen their funding increase since Measure 5 are in rural communities, the power base of Republicans who controlled the Legislature during most of the 1990s.

"It's true that rural schools have dodged Measure 5 for about 10 years now," says former Senate Majority Leader David Nelson, R-Pendleton, who represents Umatilla County, which gets nearly $2 for schools for every $1 its residents pay in school taxes.

"I think the Legislature has been very fair minded. We're trying to make the best schools possible. It's not party politics."

Republicans acknowledge they have been in no hurry to solve a problem the Portland area created for itself by voting for the property-tax limit.

Sen. Ted Ferrioli, R-John Day, former chairman of the Senate's revenue committee, says the loss of timber and other jobs has meant that many rural counties pay less income taxes, and in turn contribute less to school funding, making their reliance on the Portland area even greater. Today, Grant County, where John Day is located, gets $1.46 for every $1 its residents pay in school taxes, the newspaper's analysis shows.

"Portland is having to cut programs my school districts have never had and could never ever dream of seeing," Ferrioli says.

For the first time since Measure 5's passage, the state's sinking economy is sending nearly all per-student funding in the same direction -- down.

And that trend puts pressure on rural Republicans to overhaul school funding when the 2003 Legislature opens today.

"Before this recent downturn, why would the (Republican) leadership want to stir up a good thing when all the complaining is coming from the Portland area?" asks Delna Jones, a former Republican lawmaker from Aloha who oversaw the House's school finance committee in the early 1990s.

"It's just logical: They run for office where they live."

Poor district prospers The Yamhill-Carlton School District used to be one of the worst-funded in Oregon. The district had a small tax base, and voters were often reluctant to approve school levies.

As a result, Yamhill-Carlton in 1991 received a combined $3,460 per student from local property taxes and the state's schools fund. In contrast, districts a few miles away, such as Sherwood and Tigard, operated with per-student funding about 50 percent higher.

Then Measure 5 kicked in. Yamhill-Carlton, a three-school district, now gets $5,399 per student, according to The Oregonian's analysis -- an increase that's kept the district ahead of inflation.

Dennis Hickey, superintendent of Yamhill-Carlton School District, says his district has been able to keep class sizes to under 20 students in the high school and maintain a healthy music program.

"Students get more individual attention. The teachers don't have as many behavior problems. And they can zero in on what they need to do, which is teach kids," Hickey says.

The same is true in Crook County.

The county gets $1.37 for every $1 residents pay in school taxes, the analysis shows. The results: Elementary schools have average class sizes in the low 20s.

Ontario is another "huge winner," says former Superintendent Michael Taylor. The per-student funding of the Eastern Oregon school district almost kept pace with inflation during the past 10 years -- better than average, the newspaper's analysis shows.

"We added music. We added electives. We added a middle school sports program," Taylor says.

Struggling schools Now visit the other side of the ledger.

The Parkrose School District once enjoyed a healthy tax base and voters willing to raise taxes for schools.

None of that matters anymore.

Parkrose saw its local funding capped by Measure 5 and watched as lawmakers siphoned money to districts such as Ontario, Yamhill-Carlton and Crook counties. Since 1991, Parkrose's per-student funding has increased 8 percent while inflation grew by 38 percent.

Watching it all happen is Parkrose's superintendent, Taylor, who came to the district in 1999 after seeing the other side of the Measure 5 score card in Ontario.

Taylor says Parkrose's average elementary class size has increased from 21 students to 28 during the past decade. Classes are bigger in middle school, where the largest class has 43 students.

"In the middle school, I think it's a crime," Taylor says of the class sizes. "The thing about middle school is kids change so fast, the need to know these kids is really high."

Sherwood is another loser.

"I think the biggest thing for us has been we were a district that was very well supported by the local community," says Rob Saxton, Sherwood superintendent. "They were almost always willing to pass an operating levy. They felt good about their schools."

Sherwood is one of Oregon's fastest-growing school districts. Although its overall budget has increased, Sherwood's per-student funding has been cut dramatically.

A middle school counselor who once had 400 students now looks after 700. Money for music programs, outdoor and sports have been cut.

Playing Robin Hood When voters passed Measure 5, few people understood that the tax limit would redistribute school funds so dramatically. The text of Measure 5 says nothing about lawmakers playing Robin Hood with schools.

The Legislature saw little choice but to do so. In some states, judges had ordered that the state end school-funding disparities. With the state controlling school finance, Oregon lawmakers worried they would face similar court challenges.

Measure 5 limits local school taxes to $5 per $1,000 of assessed property value. The measure requires the state to replace lost property taxes for schools. Lawmakers hand out more money to schools through a formula aimed at bringing all districts to the same per-student funding levels.

More than ever, school funding became part of the budget free-for-all in Salem, as schools competed with prisons, the Oregon Health Plan for low-income residents and services to senior citizens, children and the disabled.

Lawmakers could have made the school-funding pie large enough to protect richer districts while helping the poorer ones.

They didn't, and lawmakers played a zero-sum game: For one school district to gain, another has to lose.

"We equalized more to the middle," says Jim Markee, a lobbyist who represents rural districts that have tended to benefit from Measure 5. "For some outstanding districts, that meant a move toward mediocrity."

Most school districts increasingly saw their funding fail to keep pace with inflation. Some lived off reserve funds; others kept growing and collected more money under the state formula, which pays them based on how many students they have.

Under a little-known provision of the state school-funding formula, elementary schools more than eight miles from another school and high schools with fewer than 350 students get additional money. As a result, 50 rural school districts receive at least 30 percent more per-pupil than urban and suburban districts, according to a recent school-finance study commissioned by the Legislature.

But this year, falling enrollment in many rural schools is taking a toll.

The Wallowa School District, for example, has seen its per-student funding keep pace with inflation. Yet the Eastern Oregon district has also seen enrollment fall by 30 percent in the past three years as jobs disappeared when two mills closed.

Last year, the district went to a four-day week and will eliminate three positions from its 17-person staff next school year. One of the jobs the superintendent has chosen to cut is his own.

Superintendent Ed Jensen, who will continue to run the county's educational service district, says Wallowa's schools tried to stash away enough cash to tide them over.

"We could have weathered the storm if we hadn't lost these students," Jensen said.

After lawmakers held five special sessions last year to make statewide budget cuts, rural schools also are cutting. But urban and suburban schools are taking a double hit: deeper budget cuts on top of the price of equalization.

"I don't think people in Washington County, for example, fully understand how much money they are sending to rural schools. If they did, they'd be outraged," says Rep. Mark Hass, D-Raleigh Hills, a House Revenue Committee member who represents some of the schools hit hardest by Measure 5.

Hass says GOP leaders have not been under the same pressure from educators and parents as Democrats. "It's not as pressing an issue in a place like Nyssa, which has not seen class sizes go from 20 to 30 students," Hass says.

That may change. One Republican, Sen. Ferrioli of John Day, sees a conflict coming: He and his fellow Republicans who run on a platform of smaller government and lower taxes will soon face growing anger at home over school funding.

"We've had some people in our caucus who say, 'I hate government and I'm going to vote against every budget'," Ferrioli says. "Well, it's pretty easy to hide behind ideology when you're on the upside with revenues coming in, not going the other way."

Ferrioli says Republicans may be faced with voting for higher taxes once they are convinced "the sock has been turned inside out" and there are no more places to cut.

In turn, he says, the state's economy is so bad that Democrats and Republicans alike may have to make more cuts.

"I think when this session is over," he says, "a lot of lawmakers are going to have to enter the witness protection program."

To respond:  Education@news.oregonian.com

 link to www.oregonlive.com


Oregon's money woes can be fixed, but not with deadlock in Salem



The solutions to Oregon's tax and budget problems are no mystery.

Experts say the state must find a way to make the budget less tied to the ups and downs of the economy. This would give schools -- widely seen as a catalyst of economic growth -- a more reliable flow of money.

Until now, Oregonians have resisted any attempt to overhaul the state's tax system, which depends almost entirely on a personal income tax that is the nation's second highest.

With Oregon's shortened school year and economic woes making national news, Gov. Ted Kulongoski said Monday that he will push for tax reform later in his term. He and other political leaders acknowledge it will be a struggle.

Polls show that the average voter thinks state government wastes one in four tax dollars they send to Salem. And they already feel overtaxed because they see the impact of the nation's second-highest income tax on every pay slip.

"They need to see that we do the little stuff before we start talking about working on the cosmic solution," said former Gov. Neil Goldschmidt. "You have to take those steps because of the fear people have in big changes in the tax system."

Some other states have found answers. Maryland, for example, gives a set amount for each student statewide and also allows local voters to raise taxes to enhance their schools.

Although all states are vulnerable to recession, states such as Iowa have weathered the downturn better than Oregon because they saved money for bad times and rely on a broader mix of taxes.

Of course, no state overhauls how it raises and spends money without a fight.

In Oregon, any attempt to change the tax system has been the Bermuda Triangle of politics. Voters, who have the final say because of the initiative and referendum system, like living in one of five states without a sales tax.

Allowing voters to raise property taxes for their schools would collide with the limits set by Measure 5, the 1990 initiative capping property taxes. Few political leaders have been willing to take the political risk of pushing for a statewide vote to change Measure 5.

"Once Measure 5 passed, it pulled the rug out from under any future revamping of the tax system," said Tony Van Vliet, a former Republican legislator from Corvallis.

In his inaugural address, Kulongoski talked briefly about taxes, focusing instead on the importance of getting political leaders to work together.

Political observers say this will be difficult unless the state finds ways to return to its bipartisan tradition that made it a national model a generation ago.

Since then, lawmakers split by economic and philosophical divides have become tied to their party caucuses and special interests, which control the cash for some of the most expensive legislative campaigns in the country.

Paying for schools When it comes to taxes and schools, each state has its own system, built upon decades of tradition, compromise and the economy.

But some things are clear. Experts say every tax -- whether sales, property or income -- has its flaws. Property taxes create inequities, and sales and income taxes fluctuate with the economy.

Maryland has forged a model -- and more expensive -- system, said Mike Griffith, policy analyst for the Education Commission of the States, a Denver-based research group that tracks schools.

Maryland calculates how much a school must spend to bring every child up to academic standards and allows districts to go beyond that if their voters approve.

The system was a hard-fought compromise. The Maryland General Assembly initially gave more money to districts that educate a large number of poor students, such as Baltimore, at the expense of more affluent communities in suburban Washington, D.C.

Sen. Paul Pinsky, a Democrat who represents mostly poor and minority urban students, said opposing sides were prodded by the governor and education advocates. Rather than fight over how much money was shipped from suburban to urban schools, lawmakers added $1 billion to the statewide school fund to cover any disparities.

"People at first said it was a dream, that we couldn't afford it," Pinsky said.

Oregon has a similar distribution system, but the politics are different: Money from Salem flows to rural schools at the expense of urban and suburban districts.

Another key difference is Measure 5. To pay for operating expenses, Oregon districts cannot ask voters to go beyond the tax limit of $5 per $1,000 of market value of a home.

Experts say voters likely will spend more on schools if they can see the results firsthand.

"We ought to allow people some choice," said University of Southern California researcher Lawrence Picus.

Fordham University professor Bruce Cooper, another school finance expert, said he favors a regional approach because it would help reduce disparities among districts. For example, a regional tax could be levied within the boundaries of Metro, the Portland-area regional government, and distributed evenly among all districts inside.

Whatever path they take, Cooper said, Oregonians must do something to keep their schools from closing early and give local voters more control. Otherwise, people are going to turn to private schools or move to other states.

"You want to keep the middle class in the public schools," he said.

Balanced taxes Oregon relies more than any other state on a single revenue source: the income tax.

Because the income tax is so high -- the latest national rankings show that only New York has steeper income taxes -- it creates the impression of a high overall tax burden. Actually, Oregon ranks 46th in state and local taxes as a share of personal income.

The share of income Oregonians devote to government has changed little over the past decade, hovering around 10 percent. Some fees have gone up, such as tuition at state universities.

Other states have a more balanced tax system. Iowa, with a slightly smaller population than Oregon, gets high marks from Governing Magazine for its fiscal policies.

With a mix of income, sales and property taxes, Iowa is weathering hard times better than most states. Iowa faces a $200 million shortfall this year, compared with Oregon's $1.5 billion. Unlike Oregon, Iowa lawmakers saved $400 million during good times to draw on as a rainy-day fund.

Iowa's individual tax rate is 9 percent, the same as Oregon's. But it takes effect at a higher income which means that, on average, Iowa residents pay a third less in income taxes than Oregonians.

Oregon's high income tax also applies to capital gains, which business groups say discourages investment.

Although many economists, business groups and finance experts continue to push for a sales tax, voters statewide have rejected that nine times.

Oregon also could consider changing the balance in taxes between businesses and individuals. Businesses enjoy many tax breaks that individuals do not. Corporations pay an income tax rate of 6.6 percent, compared with a top rate of 9 percent for individuals.

Breaking the political logjam

When he was campaigning, Kulongoski often said there was no shortage of ideas for improving the tax system and putting schools on a stable footing.

He said the real challenge is: "How are you going to get it implemented?"

Kulongoski said he wants first to show voters he can streamline government before discussing taxes. As a key part of that, he vowed to reduce the costs of the public pension system.

House Speaker Karen Minnis, R-Wood Village, said she expects voters to reject the Measure 28 tax increase. The proposal would cost taxpayers earning between $40, 000 and $50,000 an average of $107 annually for three years.

"Voters are not willing to consider anything else until we get our finances in order," she said.

Eventually, Kulongoski hopes to build support for a citizens initiative that would revamp the tax system and help finance schools.

After last year's five bitter special sessions, the new governor and Legislature could slip back into division and gridlock. As former Secretary of State Phil Keisling said, it's not enough to hope that Oregon can simply return to political glory by pinning hopes on a commanding figure.

"It's the 'Tom McCall on a white horse' phenomenon," Keisling said.

He and others say leaders need to build a more responsive political culture. That means ending the hyper-partisanship that has dominated the Legislature in recent years and reforming the political system itself.

One trend has been the increasing use of closed-door party caucuses during the session to decide policy. Once used occasionally, the secret meetings have turned into an almost daily -- at times hourly -- event during the session.

Some critics say the closed meetings violate the state's constitutional requirement that the Legislature deliberate in public. They say opening them would curb the influence of the parties on individual lawmakers.

Over the past two decades, legislators have also divided themselves in other ways.

Legislative offices are now clustered by party, with Republicans and Democrats mostly on different floors. The two parties also are largely on different sides of the aisle in the House chamber.

While it may seem small, "All that stuff makes a huge difference," said Senate Democratic Leader Kate Brown of Portland, noting the importance of personal relationships in politics.

Keisling said office and desk space could be drawn out of a hat to prod legislators to build relationships across party lines. And he said he'd like to see other rules changes to open up the process.

For example, bills passed by one house should be given a hearing in the other chamber -- thus bringing more ideas into the open for debate instead of quietly dying because the majority caucus of one house doesn't like them.

Oregon legislators have also stuck more closely to party lines because of rising campaign costs.

Oregon is one of seven states with no restrictions on the size or source of contributions. As a result, the state has the fifth most expensive legislative races in the country on a per-vote basis, according to a national study.

From 1972 to 2000, the cost of the average legislative campaign increased from about $3,600 to $73,000, five times the rate of inflation. Much of the money flows to candidates through special interests closely tied to the party caucuses.

The courts in Oregon rejected a 1994 initiative putting a $100 limit on contributions to legislative candidates. But some campaign-finance activists predict the courts would accept higher limits.

Keisling argues that campaigns would also become more meaningful to voters if party primaries were eliminated.

These primaries attract a smaller share of the electorate and are often dominated by a small number of voters at the ideological poles.

Instead of a party primary, Keisling said he'd have a May election open to all candidates. If no one wins 50 percent of the vote, the top two finishers would advance to a runoff in November, he said.

Solutions outside Salem Change needs to come from outside the Capitol as well.

Kulongoski said business leaders who once played a big role in supporting a strong education system and economy became more focused on their own companies in the 1990s, particularly as many corporate headquarters moved out of state.

Citizens also are taking a bigger role, such as raising money to restore spring sports in Portland and working together on local watershed councils to restore salmon runs.

"I need to feel like I'm doing something," said John Whisler, 52, of Portland, who volunteers for a school foundation. "The worst is to sit around and moan 'poor me.' "

Dave Frohnmayer, the University of Oregon president, said residents need to remember their pioneer traditions of self-reliance.

"We need," he said, "the 21st century equivalent of barn raisings."

Brent Walth of The Oregonian staff contributed to this report. To respond:  Education@news.oregonian.com

 link to www.oregonlive.com


Leaning left, Portlandia looks to right itself

Leaning left, Portlandia looks to right itself
Job losses strain the state's economic engine, but an influx of new talent may give a boost felt across Oregon

Sunday, November 2, 2003

JEFF MAPES of The Oregonian

To many Oregonians who live far from Portland, the metropolitan area is a hopelessly liberal, tree-hugging welter of congested suburbs and big-city wickedness.

But love it or hate it, Portlandia drives the state's economy. Its taxes pay for most of the state budget. Without its left-leaning voters, Oregon would be a conservative, rural Western state.

The region is primarily responsible for electing Democrats to virtually all statewide offices. And the 1.4 million people of Portlandia -- the state's only major city -- provide the tourism, recreation and retirement dollars that boost communities throughout Oregon.

Now, Portlandia is at a crossroads, gripped by a crisis of confidence in the wake of some of the highest urban job losses of the national recession.

While business critics worry the region has lost its competitive edge, boosters say the region has developed a unique quality of life that is attracting the young, educated people who will be the stars of the next economic wave -- whatever that turns out to be.

Portlandia's size and wealth make it the most influential of the state's regions. Increasingly, it is obsessed more with what's happening in rival cities like Austin or Seattle than in the rest of Oregon.

At the same time, the debate over how to respond to the economic downturn has sharpened the political differences within Portlandia itself.

The urban core, dominated by the city of Portland, this year adopted the state's only local income tax to protect its schools and services.

That would be politically unthinkable in Washington and Clackamas counties, where middle-class suburbanites struggle to keep a small-town feel to their neighborhoods.

The local income tax could further heighten Portland's liberalism as tax-averse voters and businesses move to the suburbs or across the river to Washington state. And it means the region's legislators down in Salem will continue to have the sharp ideological differences that have often made it hard for them to work together.

In the end, the region's successes and failures will ripple through the state. Small-town Oregonians may dislike Portland, but it remains in their best interests to root for their big-city cousins.

"You can't take the dancer from the dance," said University of Oregon economist Ed Whitelaw. "If you take Portland out of it, the rest of the state would suffer."

A different urban livability

There once was little confusion about the metropolitan region's role in Oregon. Until two decades ago, Portland's banks, law firms and other businesses serviced the wealth that came from the vast reaches of Oregon's farms and forests.

"Everyone in the Portland Chamber of Commerce understood 100 percent why they were tied to Oregon," said Gail Achterman of the Institute for Natural Resources at Oregon State University. "Everyone could understand the connections."

Then came the deep recession of the early 1980s, when high interest rates caused housing and the lumber industry to crash, unleashing statewide economic misery.

Randy Miller, a Portland businessman with a long record of civic involvement, says the Portland area went through its own re-examination that in some ways mirrors what's happening today.

"The self-flagellation that is going on in the community is paralleled by what happened in the '80s," he said. "We were so awful to each other."

But, he said, the region eventually pulled itself together, clearing the way for a future based on high-tech. Most of the growth came on the suburban fringes of Washington County, where local officials worked to prepare land along the Sunset Highway for industrial development.

When the dot-com boom swept the country in the 1990s, Washington County's Silicon Forest was poised to take advantage.

Meanwhile, the city of Portland became the driving force in promoting the idea of a different kind of urban development that emphasized compactness over sprawl, livability over economic growth at any cost. Portland found itself celebrated in all sorts of national "best of" lists.

But when the economy turned down again, the landing here was disproportionately hard. During the past three years, the region lost nearly 58,000 jobs. In September, the metropolitan area had the dubious distinction of holding the highest unemployment rate -- 8 percent -- of the nation's 51 largest metropolitan areas. The Milken Institute, which has an annual economic ranking of "best performing cities," has dropped the Portland region from fourth in 2000 to 141st this year.

The second-guessing wasn't far behind.

"There's so much focus on land-use laws and managing our growth," said Betty Atteberry, who heads the business-oriented Westside Economic Alliance, "that we kind of forgot about making sure we could continue to grow jobs."

Atteberry and other business leaders are now pushing for a big expansion of the urban growth boundary in Washington County to gain more industrial land.

Metro Council President David Bragdon said the regional planning agency is moving to provide more industrial land. But there's also resistance, particularly among Portland officials, to simply opening the gates to suburban sprawl. Portland Mayor Vera Katz said she worries that pushing out the growth boundaries too far will weaken existing urban centers.

Despite the tension over land use, Katz said she's working with business and government leaders around the region on a strategic economic plan.

And the city has tried to streamline its own permitting process after Portland -- and Katz -- were flayed when Columbia Sportswear moved its headquarters from the city to Washington County in 2001.

"The economy suffers, people always look for scapegoats," Katz said. "Unfortunately, with the help of some business voices, the scapegoat was the city of Portland."

While Portland may be working with the rest of the region, the state's largest city is also going its own way politically. The local income tax approved by Multnomah County voters this year was also matched by an increase in city and county business taxes.

Even many business leaders who worried about the impact of new taxes supported that vote because it finally brought stability to the financially struggling Portland School District.

But it appeared to lead to a small exodus of companies and individuals from the county, something that over time could increase the differences between the electorate in Portland and much of the rest of the region.

Veteran pollster Tim Hibbitts said the city once would occasionally elect conservatives like former Mayor Frank Ivancie. But as an older, more blue-collar generation has been replaced by new arrivals, the city now seems to be dominated by "liberalism verging on leftism," he said.

Portland voters have shown they are also more willing than their suburban counterparts to raise other taxes. The city last year had a property tax rate of $21.21, nearly 40 percent above the state average.

In contrast, Washington County voters have turned down eight of ll countywide tax requests in the past six years. In Clackamas County, they've voted down 10 of 11. Although both counties have been willing to increase school property taxes, they still have property-tax rates similar to the state average.

Young people drawn to Portland

Like much of Oregon, the Portland area has long counted on lifestyle refugees. Just more than 40 percent of the region's residents were born outside the state -- nearly twice the national average.

And, despite the bad economy, population growth in the Portland area still exceeded the national average for the past three years. Experts say the continual in-migration is one reason the area's jobless rate is as high as it is.

For many unemployed Portlanders, "this would have been the perfect time to pack their bags," said Barry Edmonston, who heads the Population Research Center at Portland State University, "but these folks have been staying despite their employment prospects."

Rachel McMillen, the career center coordinator at Portland Community College, said most students she talks to have one thing in common: They want to figure out what their best job prospects are locally.

"They want to do whatever they need to do to stay," said McMillen. She understands the impulse, having moved to Tualatin with her husband a year ago after getting the job that allowed them to escape California for a more affordable and relaxed life in Oregon.

"I know for a fact I plan on staying in Oregon," said Ann Sorenson, 21, a PCC student who still lives in the Southeast Portland house she grew up in. "I plan on going into nursing."

Unlike most of Oregon, the metropolitan region is also drawing large numbers of young people. While the population of 25- to 34-year-olds dropped nationally from 1990 to 2000, their numbers increased in the Portland area.

Ethan Seltzer, dean of urban planning at Portland, argued that the city and the surrounding region are a magnet for many young people because of factors ranging from the access to outdoor recreation to a lower cost of living compared with other big West Coast cities.

"It's cheap and it's green, and at a fairly early stage, people can have an impact on the culture," Seltzer said.

Joe Cortright, a Portland economist working on a study of this age group, said the relative scarcity of people in this age range makes them a valuable commodity.

"Access to smart, talented young people is shaping which places grow and which places don't," he said. "I think we're extremely well-positioned to do well as a metropolitan economy."

When the recovery comes, it will undoubtedly reshape the economic landscape of the region -- just as the high-tech boom tilted growth to the west side.

Clackamas County for years has been divided into a series of distinct communities that often had little in common. While Washington County has "been dedicated to economic growth for a long time," said Bragdon, the Metro president, "none of those conditions are really true in Clackamas County."

But most of the additional land that Metro plans to add to the urban growth boundary is in Clackamas County. The county's chairman, Bill Kennemer, said he's been trying to steal every idea he can from Washington County to make Clackamas County a stronger jobs magnet.

The region's evolution continues to reshape the area's delegation in the Legislature. The eastern edges of Washington County are becoming more Democratic as the area grows more urban. The suburban fringes, meanwhile, are often electing more conservative Republicans. And Portland legislators, who now face virtually no opposition from Republicans, have to run further to the left to survive the only competition they have -- in Democratic Party primaries.

The result, said Kennemer, is that it is "harder for our urban delegation to get together" down in Salem because there are so many competing ideologies.

Despite the problems, businessman Randy Miller said he thinks the region will find a way to market itself to a new generation of seekers looking for something special at the end of the Oregon Trail.

"What we don't want to be is like everybody else," he said. "We do have distinctive qualities and values here that are not part of the mainstream. You know, people have called us quirky before."

Jeff Mapes: 503-221-8209;  jeffmapes@news.oregonian.com

Growing its own way: Southern Oregon

Growing its own way: Southern Oregon
Business drives the region's shift from timber to a more diverse economy

JEFF MAPES of The Oregonian

Monday, November 3, 2003

Michael Burrill, once one of Southern Oregon's biggest timber barons, expresses few regrets about closing his family-owned mill five years ago.

Instead, as the summer sun streams through the windows of his office behind a massive strip mall on the outskirts of Medford, Burrill folds his arms across his burly chest and describes how much fun he's having in his successful move into property development.

Now he's supplying land for the Rogue Valley's insatiable developers -- and he allows with a smile that he owns both of the local parcels identified by a governor's task force seeking to increase the supply of "shovel-ready" industrial land.

Yet Burrill, an avid long-distance motorcyclist, says he doesn't always see similar vigor as he tours the state's back roads through towns with abandoned mills and little economic activity.

In some communities, he growls, "There is a major part of their population that doesn't want to change."

Burrill is symbolic, not only of the change sweeping across Southern Oregon, but also of the willingness of this region's influential business community to embrace such a transformation.

Southern Oregon business leaders have shown a high degree of pragmatism, shifting their fortunes from a timber-based economy to one that is increasingly diverse.

Their fingerprints were all over Salem in the Legislature's latest session as they lobbied for transportation tax increases to improve their overloaded road network. And they're putting their muscle behind a huge expansion of the Rogue Valley's major hospital, which now has the region's biggest payroll.

In a sense, they're the spiritual heirs of Glenn Jackson, the legendary power broker who worked Oregon's political center to help run the state in the post-World War II era, and who not coincidentally happened to come from Southern Oregon.

It's also no coincidence that three of the region's legislators -- Republicans Rob Patridge and Lenn Hannon and Democrat Alan Bates -- played key moderating roles in this year's contentious session. In particular, Patridge was among a small group of GOP legislators who defied his party leadership and brokered passage of a bill that would increase income taxes to balance the state budget.

Southern Oregon has always had a penchant for setting its own course, a characteristic that has become more evident in recent years.

Many still refer to it as the State of Jefferson for its failed attempt to secede from Oregon more than 60 years ago. Perched almost midpoint on Interstate 5, it has always looked south to California as much as north to Portland.

Pragmatism may now be the best way to describe this region, which is economically -- and even politically and culturally -- about a lot of things and carries no simple identity.

The region has become part retirement haven, part retail center. Tourism is also a big draw, and health care in 2002 provided more than 15 percent of the local payroll, compared with a state average of 10 percent.

"We've been very, very lucky," Burrill says. "We actually have a fairly diversified economy now. We're weathering (the recession) in Southern Oregon quite well."

New businesses, low wages

In some ways, Southern Oregon -- where the population is largely concentrated along the I-5 corridor from Ashland to Grants Pass -- can serve as an object lesson for much of the state.
Local leaders seem to be reading from the same playbook:

* Recognize when you have to change, and figure out what you can do well in the new economy.

* Use tourism not just as an end in itself, but as a magnet to attract retirees and, most importantly, new companies.

* Focus on attracting the small businesses that often get overlooked in the competition among communities to attract big employers.

But the region still struggles with a central problem that afflicts much of the state: generally low wages that haven't produced the same standard of living many workers enjoyed when timber was king more than a decade ago.

"Just adding jobs is not a challenge for us," says Charlie Mitchell, the economic development specialist for Grants Pass. "The challenge is adding quality jobs."

Both Jackson and Josephine counties have been gaining jobs during the past year, and Josephine recently hit a historic high in employment. However, the average wage in 2002 was only 83 percent of the statewide average in Jackson County and 75 percent in Josephine County.

At the same time, retirees and other migrants attracted by the scenery, amenities and California-like sunshine have driven up the price of housing. The National Association of Home Builders last year said only 12 of the nation's 191 largest metropolitan areas had less affordable housing than the Medford-Ashland corridor.

Averages, of course, can be deceiving. California transplants driving Range Rovers and brandishing big piles of home equity marvel at the country acreage they've found at what they think of as bargain prices. Upscale merchants are popping up in such traditionally blue-collar bastions as Grants Pass.

And then there are people like William Barnett, 43, who has struggled since moving to Medford nearly two years ago. He never had trouble finding jobs driving a forklift when he lived in Portland, but about the best he's been able to do here is seasonal work at Bear Creek Corp.'s gift-fruit business.

"I really love it because of the weather here. I'm a hot-weather person," he says. "But it's just difficult."

"It's not so much opportunity for jobs that keeps you here," explains Gina Russo, 21, a college student. "It's that it is a place you want to live."

Russo, who works at a pizza parlor while taking classes at Southern Oregon University and Rogue Community College, hopes to someday own a nice place in the country around the increasingly trendy towns of Jacksonville or Applegate.

Consequently, she recently switched from psychology to business out of fear her old major wouldn't fulfill her Rogue Valley dreams.

Health industry grows big

The one field that seems guaranteed to produce a good job is health care.

In the past 10 years, jobs in this sector grew by 51 percent in Southern Oregon, while employment in the wood-products industry dropped by 28 percent.

The biggest player is the Medford-based Rogue Valley Medical Center, a prime example of the hub-and-spoke system transforming the hospital industry in much of Oregon. Increasingly, regional hospital systems are absorbing smaller community hospitals, giving the new entities economies of scale and the ability to funnel patients from smaller areas into comprehensive medical centers.

The nonprofit Asante Health System, which owns the Rogue Valley center, bought two community hospitals in Grants Pass and replaced them with a new facility. But the biggest business is in Medford, where patients come from a nine-county area in two states for surgeries, tests and other services. Hospital officials brag they can do nearly everything in Medford except for transplants and advanced burn care.

In a sense, that makes Asante's chief executive, Roy Vinyard, the modern equivalent of the old mill owner, although he has the earnest demeanor of a Boy Scout rather than the entrepreneurial flamboyance of someone like Burrill.

Still, Vinyard is responsible for 3,300 jobs at Asante and is embarked on a $120 million expansion of the hospital that dwarfs anything else being built in Southern Oregon. Convinced that the growing population -- particularly of retirees -- will end the surplus of hospital beds, he's adding more capacity and modernizing several parts of the facility.

Vinyard, once a top business administrator at Oregon Health & Science University in Portland, wants to attract patients to Medford who might choose other regional centers or, for some services, a competing hospital in Medford run by Providence Health System. And, like a university that spruces up its locker room to attract recruits, Vinyard has to make the hospital facilities as attractive as possible to medical specialists -- who can go elsewhere -- if he wants to offer a wide range of services.

"With health-care reimbursement so uncertain, it's definitely a risk," Vinyard says of the expansion. "We're financing it with debt. But we felt it was a risk we needed to take for the community."

If he's right, the Rogue Valley will be an even bigger magnet for retirees and new businesses that want extensive medical services.

Searching for advantages

While supporting the hospital expansion plan, business leaders talk a lot about focusing their economic-development efforts on small employers.

"We've not put all our chips on a Sony or a Hyundai coming in," explains William Thorndike, president of Medford Fabrication, referring to two big companies that Lane County landed -- only to see the Sony plant later shut down.

Thorndike, who has been on numerous statewide commissions and is now on the Port of Portland board, thinks the region can prosper in large part by cultivating migrants from the huge California market.

"We want to recruit people who, first of all, want to live here and then bring their business," he says. "You don't need much of a dip from California to keep us going."

In fact, for all of the talk in Salem and Portland of the state's inhospitality to business, Thorndike and other officials here tend to see several of Oregon's advantages.

They point out that Oregon has lower workers' compensation rates and energy costs than California, along with an overall lower tax burden. Thorndike, who acknowledged he might feel different if he faced the local taxes added on to business in the Portland area, called the tax increase passed by the Legislature a reasonable compromise to preserve services.

One of the biggest changes in the Rogue Valley is literally in the air. Longtime residents remember when they had to clean the soot off their cars from the once-ubiquitous wigwams and smudge pots that billowed mill smoke into the air. The steep slopes of the valley tended to trap pollutants, giving the area the kind of smog problems more associated with Los Angeles.

In the 1980s, new emissions testing requirements for autos and tighter restrictions on woodstoves produced epic public battles. But the changes, along with new industrial smog controls and a decline in timber production, allowed the valley to finally comply with federal air standards.

Still, it doesn't take much to expose the fragility of the valley's airshed. In July, smoke from a 5,000-acre fire near Eugene blew all the way down to Medford, casting a visible pall in the sky.

"We've had companies we've told, 'We'd like to have you here, but you're not going to fit in the airshed,' " explains Gordon Safley, who heads Southern Oregon Regional Economic Development.

Safley and others also acknowledge that clean air has become an even more important selling point for an area that depends on its quality of life to attract retirees and businesses.

Not everyone tolerates change

There are, however, increasing signs that not everyone's happy about the business community's stress on growth.

Pushed by citizen activists, the Medford City Council this summer tried unsuccessfully to block a new Wal-Mart that would have replaced an existing store about half as big. And neighborhood activists also put a measure on the local ballot aimed at blocking a new freeway interchange in south Medford.

The region is also increasingly taking on the different political colorations of a complex urban area.

The one Democratic stronghold is Ashland, a college town and home to the Oregon Shakespeare Festival that politically, at least, has a lot in common with Eugene. At the other end of the spectrum is the staunch conservatism of voters in Josephine County, who have repeatedly limited county spending.

Overall, though, the region's voters appear to be settling into a kind of moderate conservatism. For example, Southern Oregon's vote last January on a temporary state income tax increase was close to the statewide average -- and the yes vote was much stronger than it was in most of Eastern Oregon.

In Jackson County, Democrat David Gilmour won election to the county commission last year after running on a pro-environmental platform. His victory probably had more to do with his opponent's well-publicized marital and alcohol problems, but it also showed that being labeled an environmentalist was no longer a political kiss of death in the county.

Josephine County is less ready to tolerate environmentalists. But there are intriguing signs of cultural change there as well. Grants Pass has reacted to Medford's retail dominance by working to turn its own downtown -- which once rumbled to the vibration of passing log trucks -- into a quaint tourist destination with boutiques and antique stores.

Part of what the city wants to do is change its old image of a rough-and-ready timber town, says Mitchell, the city's economic development officer. "We want people to see us as a safe place for their investments."

A region on the ropes: Cowboy Country

A region on the ropes
Rural ranchers and farmers fight to survive as their political power withers

Tuesday, November 4, 2003

ALEX PULASKI of The Oregonian

Seven generations of Hanleys have wrangled a living out of the sage and rabbit brush since settling in Eastern Oregon in the early 1880s.

Man-made and natural forces have forged their resilience: rustlers, restless cattle markets, volatile weather, grasshoppers of biblical proportions.

Today, like thousands of Eastern Oregon ranchers and farmers, they see themselves under siege by city dwellers -- latte-sippers armed with legal briefs. As they see it, environmental groups in Portland and Eugene are searching for a crowbar big enough to pry them off the land.

"I suppose what we are going through now is just another type of plague," said rancher Mike Hanley, 62, of Jordan Valley along the Oregon-Idaho border.

Cowboy Country, isolated from much of the state and watching its political power drastically dwindle, is clawing to stay alive. Its business leaders and politicians are trying to establish a foothold in state government through a newly created office of rural policy.

Except for Klamath Falls, where a ready highway, tourism to nearby Crater Lake and a significant population base have helped foster business, much of the region remains rooted in ranching and farming. Its economic outlook is as bleak and parched as the land.

"There are folks so down that they don't know what they're going to do, and they're just sort of terrified," said state Sen. Ted Ferrioli, R-John Day.

From the 1930s through the 1950s, Cowboy Country typically sent 10 or 11 legislators to Salem. But as urban Oregon has grown, the eastern region's political voice has shrunk to a whisper: Ferrioli was among five legislators representing the region this year.

Ferrioli puts out environmental fires, pleading ranchers' cases to state and federal land managers. He pressed hard to reopen a youth correctional center in Burns because, in a town of 3,100 people, restoring 25 jobs means something.

Similarly, the region's politicians and Gov. Ted Kulongoski worked this session to find funding in the corrections budget to resume construction on a $27 million prison at Lakeview.

"I'm trying to do what I think is available to me," Kulongoski said. "I cannot get Hewlett-Packard to locate there."

Feeling politically powerless

From Klamath Falls to Wallowa County, Cowboy Country embraces romance and tradition. Residents are angry and resentful that urban interlopers keep barging in.

As the region's economic underpinning erodes, the fissure between the state's most- and least-populated areas keeps widening. Politically, Eastern Oregon is Portland's polar opposite, with the highest percentage of registered Republicans and a deep-rooted mistrust of government.

In the governor's election last November, Republican candidate Kevin Mannix won two-thirds of Eastern Oregon's vote. Two months later, the region rejected the state's attempt to temporarily raise income taxes by a nearly identical fraction.

But urban Oregon -- "the other side of the mountain," you'll hear Cowboy Country call it -- contains the money, the votes, the power.

"Portland can vote in anything it wants for the state of Oregon, basically," said Vale rancher Tom McElroy. "Over here we feel like we have no control over our own destiny."

Cowboy Country doesn't listen to traffic reports on the radio. Its residents cast one eye to the weather and the other to cattle markets. Town fliers advertise talks on "Why your horse needs dentistry." Mention a "partner" and everyone knows you're talking business.

The further east U.S. 20 stretches, the more the horizon expands and the clock's urgency recedes in the rearview mirror.

Yet the state's eastern quarter totters between a frontier optimism and the insistent reminders of every empty storefront that time is running out.

The region is isolated from Oregon's urban hub. Only in the northeast, where Interstate 84 connects La Grande and Ontario, and in Klamath Falls to the south on U.S. 97, are cities situated on highly traveled routes.

Most of sparsely populated Malheur County lives on Mountain time, an hour later than the rest of the state.

There, in communities such as Jordan Valley and Ontario, economic ties and political sympathies are more strongly associated with Idaho than Oregon.

Television news comes out of Boise, not Portland. Newspapers carry word of Idaho, not Oregon.

"We're really out here floating, not even able to hear the ongoing news in our own state," said Frank Yraguen, a retired judge from Vale.

Lowest pay in Oregon

Because of its isolation, the region has not been able to attract service and manufacturing jobs.

Of the 10 Oregon counties with the highest per-capita agricultural production, six are in Eastern Oregon.

But those agricultural jobs don't pay well. The region's per-capita income, $16,133, is the lowest in the state, 50 percent below Portland's.

As a result, the pews, retail spaces and homes are emptying.

Evelyn Loveland, 91, has driven nearly an hour to Homedale since Jordan Valley's last grocery store closed two years ago. Attendance at her United Methodist Church has dwindled to about a dozen on an average Sunday, mostly seniors.

"We're just about ready to close the doors," Loveland said.

Four of the five Oregon counties in which the population dropped between 1996 and 2001 are in Cowboy Country -- Lake, Grant, Wallowa and Wheeler.

Although cattle prices have rebounded in the past year, most farmers and ranchers are being squeezed by oversupply, foreign competition and consolidation by packers and buyers.

"Men my age, at 55, used to be out of debt, driving a Cadillac or a Lexus," said John Kirby, who owns Ontario's True Value hardware store. "Now they drive a beat-up old pickup, and they're mortgaged to the hilt.

"They've got their assets in the land, and their land isn't worth much. So we're all choking to death. We're just slowly dying."

Already hamstrung by forces largely beyond their control, residents who directly or indirectly live off the land are angry at coming under attack on another front: the environment.

Environmental groups file suit to protect salmon or sage grouse. Klamath Basin farmers see federal water shut off. Vale ranchers battle to keep federal grazing rights.

From phosphate restrictions in the Snake River to land-use laws that limit rural development to feedlot regulations on manure discharge, state rules are viewed as stumbling blocks to economic survival.

Even when the laws are federally enforced, Cowboy Country sees the enemy in Portland, home of the bureaucrats and the lawyers.

"We've been forced to become more conservative to deal with the liberals," Yraguen said. "It creates this rancor."

In 1996, when the unsuccessful Measure 38 sought to fence in cattle operations to prevent stream pollution, cattlemen raised more than a half-million dollars and targeted their message of opposition.

"We knew we had to put most of our money into Portland and Eugene," said Bonanza rancher Glenn Barrett. "That's where the votes are."

The truth is, if you took all of Eastern Oregon's residents and corralled them into a city, they would barely outnumber Eugene's.

Being outgunned at the polls, it might be tempting to surrender. But the Eastern Oregonians who are sticking believe they have too much to lose.

They enjoy the simplicity afforded by small towns.

Chance Peila, a senior at Burns High School, has been dragging a rope around since he was old enough to walk. He rides, hunts, fishes.

"Here, we make our own fun," he said.

When troubles come, people stand by one another.

In Merrill, southeast of Klamath Falls, Robin King and a friend have converted a farmhouse into Tater Patch Quilts. Four thousand bolts of bright calico, homespun and chenille draw hundreds of women from miles around.

Four years ago, as her best friend lay dying of breast cancer, King finished a quilt her friend intended for a daughter. The friend died the next morning.

The same year, King accompanied her husband to Seattle for a bone-marrow transplant. Surgery and recovery dragged on for four months; neighbors kept the Kings' farm running and helped care for their children.

"We have this whole society built on 'Why doesn't the government do something?' " King said. "We have to get back to helping ourselves and each other."

Legal fights drag for years

Cowboy Country residents think Portland voters don't know them well enough to care about their fate.

They come over to hunt or fish -- Jordan Valley residents have taken to calling Mahogany Mountain "Portland Heights" during hunting season -- and thus view the east as their playground.

In 1991, Oregon's cattlemen established a cowboy museum in Portland. But it closed four years later, largely because ranchers believed their money was better spent fighting environmental lawsuits than trying to romance the hearts of urban schoolchildren.

"The industry didn't understand that education was more important than litigation," said Hanley, then-chairman of the Cattlemen's Heritage Foundation.

Hanley figures he spends as much as $15,000 a year on legal fights to maintain his water and grazing rights.

When he needs an escape, Hanley seeks the cluttered comfort of his shop. The lathe, grinder and triphammer are worn and draped in dust, but all still work.

With a wooden mallet and chisels of his own making, Hanley patiently chips away at the hub of a wooden stagecoach wheel. Three restored stagecoaches reside in the shop, including a brilliant red beauty, an 1865 model contracted by Wells Fargo.

Every wheel starts with the hub, hard oak or locust shaped on his lathe. He mortises the wooden spokes and rim pieces, cold shapes steel bands into circles, welds them, heats them over an open fire, then pours cool water over the steel until it contracts to make a tire wrapping the wooden rim.

Such a wheel might have helped convey Hanley's ancestors to Oregon. True now as then, each of the wheel's elements depends on the others to keep it rolling.

Hanley has never stopped to calculate how many hours each wheel consumes. He just keeps hammering away until he is done.

Alex Pulaski, 503-221-8516;  alexpulaski@news.oregonian.com

A deepening divide: Central Oregon

A deepening divide: Central Oregon
As more development and wealth flow in, Central Oregon finds new political clout but little agreement on its future or identity

Sunday, November 9, 2003

GAIL KINSEY HILL of The Oregonian

Central Oregon residents like to argue.

About soaring home prices. About dwindling farmlands. About multiplying golf-course resorts.

"There's a lot of polarization," says Kate Kimball, a relative newcomer to the region who works for the land-use group 1000 Friends of Oregon and raises sheep on a farm outside Bend.

Fundamental forces drive the discord: growth and money.

Thousands of people have poured into Deschutes, Jefferson and Crook counties in recent years -- boosting the population 49 percent since 1990 -- many with hefty bank accounts and a desire to build the home of their dreams.

Mansions have spread up hillsides and along riverfronts, pushing aside timber-era shacks and accentuating the gap between rich and poor. Luxury resorts have spread emerald green amid the sagebrush and juniper. Out-of-state corporations have come knocking, not the least of which has been Powdr, the Utah company that bought the Mt. Bachelor ski area two years ago.

The pace of the changes has provoked an identity crisis within Central Oregon. Is it urban or rural? Pro-growth or protective? Working-class or wealthy leisure? Hard-core athlete or martini-inclined duffer?

These Central Oregon spats have spilled into statewide politics, with the region's lawmakers emerging as major players in the state's divisive debates over land use, water rights and education.

Both parties see the region as increasingly important in the fight to control Salem. Republicans think the influx of wealthier residents will cement their electoral edge, while Democrats see the potential for inroads in the growth, civic activism and new links to Portland.

The differing visions for the region's future are clashing in boardrooms, resort lounges, alfalfa fields and city halls across three counties.

The disagreements are as sharp as those between Mike Hollern and Bill Smith, two of the most prominent developers in Bend, the region's epicenter. Hollern, a Democrat, welcomes government oversight. Smith, a Republican, feels constrained by it.

"It's a changed place," says Bob Woodward, a kayaker, cross country skier, outdoor writer and former Bend mayor who has lived in the area for 26 years. "Everything's more contentious."

Dueling business approaches

Central Oregon slips off the east side of the Cascade Range into a scenic feast of cool pine forests and high-desert steppes. With 300 days of sunshine a year, plenty of places to play and a horizon full of mountain peaks, it hardly looks like a spot for tumult.

"It's an absolutely beautiful place," says Hollern, president and chief executive of Brooks Resources, Bend's largest development company and a spinoff from Brooks-Scanlon, the timber company that once dominated the town's economy.

Hollern, who lives along the Deschutes River as it curves through an established city neighborhood, lauds some of the dramatic changes of the past decade. But he acknowledges they also include an increasing gap between "the haves and have-nots."

Of the three counties in the region, Deschutes County has seen the fastest population growth -- almost 10 percent from 2000 to 2002 alone. In the late 1990s, when a cooling high-tech sector pulled down Portland's job-growth rates to 2 percent and less annually, Deschutes barreled along with 6 percent increases.

Not surprisingly, the lack of affordable housing has become one of Bend's most pressing problems. The median home price hit $184,000 last year, forcing many would-be residents into outlying communities such as La Pine, Redmond and Prineville.

In the county's development circles, Hollern, something of a city patriarch, is known for a restrained approach to growth, with projects that include the Shevlin River Front industrial park, an assortment of businesses along the river on the south end of town.

He also was involved in a transportation coalition that brought swirls of roundabouts to the city's west side, giving parts of the onetime timber town an oddly European flair.

While Hollern talks with the finesse of an urban planner, his friend and business rival Smith is more the frontiersman.

Smith chafes at development restrictions and growls at state land-use laws that he says reflect the values of effete urbanites.

"The state is an inhibitor, not an enabler," says Smith, still angry that a recently completed project, the Old Mill District, took so long -- "four years, 11 months, one day" -- to gain zoning approval.

The development, a huddle of national-chain shops and small businesses on an abandoned mill site on the Deschutes River, has yet to prove itself financially. But the complex, which includes retailers such as the Gap and Victoria's Secret, and an amphitheater that has hosted Coldplay and Bob Dylan, reflects the town's leap toward the urban mainstream.

Smith is convinced his project will succeed because Central Oregon's deep tourism base is so broad, attracting not only the travel-trailer set, but also wealthy leisure-seekers and second-home buyers.

Unlike Hollern, Smith doesn't worry about the region's increasing affluence. He applauds it.

Still, not everyone is happy with the retailored downtown.

"It's all restaurants and jewelry stores," grouses Dennis Shaw, who spent years skiing Mount Bachelor and traveling the world before buying the Baja Norte restaurant on a prime downtown corner.

Rents have jumped so dramatically that Shaw, 50, who lives modestly in Northwest Bend and drives around town in a battered 1949 Willys Jeepster, questions whether he can make a profit.

"I should have stayed in Tahiti," he says.

Gap grows between rich, workers

Statistics back up some of the locals' concerns.

One-quarter of workers in Central Oregon earn less than $25,000, says Nancy Knoble, director of the Central Oregon Partnership, a nonprofit group dedicated to eliminating poverty.

"They're really economically stressed," says Knoble, a silver-haired woman who exited life in San Francisco's fast lane in 1999 for Bend's mountain climbing and hiking.

Knoble acknowledges there is little connection between the flow of wealth into the region and the erosion of blue-collar incomes, which began decades ago as timber mills closed. But she has a dim view of the low-paying service industry jobs that have taken over.

"Personally, I don't think trickle-down economics works," she says.

Knoble points to the vacation communities -- "destination resorts" in land-use parlance -- that have sprung up in Deschutes County. Black Butte Ranch and Sunriver are among the best known, but others, including Jeld-Wen's Eagle Crest, have entered the scene, giving the county more such resorts than any other part of the state, including The Coast.

The newest and snazziest is Pronghorn, a $150 million golf resort being carved out of the high desert northeast of Bend.

Mike Parker, a North Carolina transplant who heads Pronghorn's marketing effort, says the home sites are selling fast at $450,000 apiece. Buyers are primarily from Portland, Seattle and Central Oregon, although the region quickly has become known in more far-flung parts of the country.

Parker can't understand why anyone would criticize a development that feeds so much money into the economy. Beefed-up property tax rolls channel money into schools and social services, he notes, and new jobs include architects and home builders as well as maids and waiters.

"They say the little people get left out," he says, "but that's just not true."

Future of farmland questioned

Others uneasy with the money and the tourists are farmers and ranchers, who, by nature, are leery of leisure.

Yet Mike McCabe, a farmer and Crook County commissioner, sees no reason why his constituents shouldn't partake of the same cash benefits that fall to neighboring Deschutes.

A three-mile buffer between resort and farmland -- a state requirement for destination resort sites -- guards against potential conflict, says McCabe, who admits that golf balls and combines can be testy neighbors.

On a clear August day, McCabe, 51, stops his pickup to survey a field of carrots.

"They're a good crop," he says, stooping to examine the tawny green plants. "I talk to them. I practically pet them."

Despite his affectionate care, McCabe knows his carrots might fail him. Like all Central Oregon farmers, McCabe battles the region's short growing season, rock-infested ground and, increasingly, competition from China. He sinks hundreds of thousands of dollars into tractors, swathers and irrigation lines. He prays for break-even seasons.

A third-generation farmer, McCabe is growing tired of the struggle. He just put 900 acres on the market. More could follow.

He figures a wealthy doctor or lawyer from San Francisco, Portland or Seattle will buy the acreage, hire a caretaker and fly in on weekends to enjoy the view.

"I don't resent it," he says of the region's gradual gentrification. "It's just too bad it's so hard to make it work in farming."

A little northwest in Jefferson County, farmer Gary Harris takes a different view.

Here, where better soil and slightly lower elevations increase the odds of profitable cultivation, resistance to urban encroachment runs the deepest.

"We don't want to look like Deschutes County," says Harris, a second-generation farmer with 600 acres of onions, carrots and wheat. "Some of us in this community want to stay small and rural."

Jefferson County became the battleground for one of the most contentious efforts to bring a destination resort into a rural setting. In the mid-1990s, developers sought approval for a golf resort on 1,800 acres near popular Smith Rock State Park.

The development, called Rimrock, was in Deschutes County. But immediately across the Crooked River lay prime Jefferson County farmland and, ultimately, the project's nemesis.

Despite intense lobbying during two sessions of the Legislature, developers failed to secure the necessary land-use changes.

"To try to change land-use laws is like challenging the Bible," says Neil Bryant, a Bend attorney who, as a state senator, supported the measures for Rimrock.

Harris, a member of the state commission that oversees Oregon's land-use laws, impatiently waves off the land-use grousers. His advice to critics: "Quit trying to move the goal posts."

Politicians weigh multiple sides

The pressures to reconcile the rural and urban forces riling Central Oregon aren't going away.

Republican state Sen. Ben Westlund -- who lives in unincorporated Tumalo, a farming community increasingly of the hobby variety -- finds himself stuck in the fray.

Growth's "creeping encroachment has created a very suspicious and cynical attitude" on the part of Central Oregonians, especially where private property and water rights are concerned, he says.

Westlund acknowledges the region's more "cosmopolitan flavor," which he says makes Central Oregonians more understanding of urban-oriented issues such as health care, higher education and job training.

That kind of talk has made Westlund a moderate among his Republican colleagues in the Legislature. His leanings came out most dramatically earlier this year when he helped broker an $800 million package of tax increases. The deal freed a gridlocked Legislature to balance the state budget and end what had become the longest session in state history.

But conservative Republicans and antitax forces are gathering signatures in an attempt to put the issue before voters in a special Feb. 3 election. And Westlund knows his decision and his politics are controversial among his constituents.

The resistance shows up in House Majority Leader Tim Knopp, a Republican elected by Bend voters who might be expected to hold the region's more liberal, urban leanings.

Knopp opposed the tax package, and he is confident his fiscal hard-line sentiment is shared by most of his constituents. He sees no inroads by party rivals anytime soon.

"Deschutes County is remaining solidly Republican, much to the consternation of the Democrats, who would like to believe it's much more liberal than it is," he says.

Voter registration bears him out.

But Central Oregon continues to change so quickly, and in so many ways, that residents and politicians alike acknowledge this region is still up for grabs.

Gail Kinsey Hill: 503-221-8590;  gailhill@news.oregonian.com

A way of life in flux: Columbia Corridor

A way of life in flux
The Corridor clings to its rural roots as the economy forces it to try new things

Monday, November 10, 2003

GAIL KINSEY HILL of The Oregonian

For years, farmers working the fertile land along Oregon's northern border have relied on the Columbia River to move their crops to market.

"The river -- it's absolutely critical," says Matt Wood, a fifth-generation farmer who grows winter wheat, much like his father before him, on the broad, rolling hills of Umatilla County.

Major transportation corridors define this region. The river. The interstate. The railroad. From Hood River's pear orchards to Pendleton's wheat fields, these routes, and the connections they represent, have sustained rural economies and driven the region's politics.

But conditions have changed dramatically in the past decade.

International competition, led by countries such as China, Brazil and Australia, has dislodged local economic advantages and confounded state policy-makers.

The upheaval has cut into profits up and down the Columbia Corridor and forced people in the agriculture industry to question traditional ways of doing business. While many remain tied to the old ways, others have begun experimenting with new products and markets.

Wheat farmers, for example, are exploring ways to grow protein-specific grains for specialty bakery goods like breads and muffins. A huge dairy near Boardman is pouring more than 100,000 gallons of milk daily into Tillamook cheeses, enabling the regional brand to whet national appetites. A Hood River orchardist is making a snack bar out of pureed pears, hoping to sell it to local schools and U.S. military recruits.

"You can't compete on a pure commodity basis anymore," says Katy Coba, who grew up on a Pendleton wheat farm and now heads the Oregon Department of Agriculture. "There has to be some value added, like processing or packaging or finding niche markets."

Corridor communities are hoping these strategies will help pull them out of a stubborn recession and tie their livelihoods to more sophisticated national and international markets. Even so, they remain distinctly rural and fiercely self-reliant.

All this has made for a complex political brew. Columbia Corridor lawmakers find themselves dealing not only with perennial controversies, such as water rights and land use, but economic strategies, such as product branding and research grants.

Consequently, the Columbia Corridor is just as likely to elect middle-of-the road Republicans as it is to send strict conservative Republicans to Salem and Washington, D.C., as neighboring Eastern Oregon tends to do. Consider the re-elections of Republicans U.S. Sen. Gordon Smith of Pendleton, U.S. Rep. Greg Walden of Hood River and state Sen. David Nelson of Pendleton, who helped reach compromise on the temporary income tax surcharge used to balance the state budget this summer.

Conservative, less-government politics -- dominant in many rural corners of Oregon -- also softens here, with so many farmers in the Corridor still depending heavily on federal subsidies and price supports.

Economic realities on the farm

Wheat farmer Mike Weinke, 41, says he's always battling forces over which he has little control, whether local drought or global price wars.

It's made him a frugal man, he says. And if he must pinch pennies, the Legislature should have to do the same.

"We've had to make do with what's coming in, and government should, too," says Weinke, who lives in a modest ranch-style home near Pilot Rock with his wife and three young children.

On this bright September day, Weinke stands on his porch, a Pendleton Grain Growers cap pulled hard over his forehead. Big, tan and blue-eyed, he brings order to a front yard littered with farm equipment.

He nods at a battered flatbed truck and at a 1979 tractor, which he vows to drive "until the wheels fall off."

Umatilla County produces more wheat than any other county in the state. The Columbia Corridor counties, all told, turn out more than 80 percent of the state's wheat -- almost 45 million bushels in 2000.

But the money doesn't come easy. Competition from Brazil, Australia and China continues to mount, swelling supplies and depressing prices. Rising costs for everything from combines to fertilizer further crimp margins.

Pendleton is Umatilla's county seat and the region's historic core. But nearby Hermiston, with a grittier, more industrial lineage, has begun to rival Pendleton in size and economic influence.

In the late 1990s, Wal-Mart chose Hermiston -- which lay equidistant from Portland, Seattle, Spokane and Boise -- for a huge distribution warehouse. Union Pacific expanded its rail yard. The state built a prison near the river. And the U.S. Army is building a chemical weapons incinerator at its Umatilla depot.

To the west, several small ports lie along the river. But the Port of Boardman is the busiest -- the second-largest in the state in terms of annual tonnage.

Boardman's general manager, Gary Neal, works from a big-windowed building that looks out on a broad reach of river. He's an energetic, sometimes abrasive, advocate of economic development, and he thinks the state should do more to help rural communities snag new businesses.

"This last session didn't do justice to our rural areas," Neal says of the 2003 Legislature's funding of economic development projects.

The port's industrial park boasts a wide range of companies, including potato and onion processors, a gravel operation, hay storage, a mint still and a gas-fired power plant. But there's plenty of land still available.

"We're trying to diversify, but it's not easy," Neal says of recruiting efforts that often find him in competition with sites along the more urban Interstate 5.

Folks adapt differently on river

Just before harvest, Gary Willis' trees hang heavy with Bartletts, Anjous, Boscs and Forelles. A cavernous refrigerated warehouse, visible behind one of the groves, stands ready to chill thousands of bins of pears and prolong shipments to market.

Imports of pears from Chile and Argentina have cut deeply into profits in recent years. Higher labor costs and more regulatory requirements make it hard to compete with operations abroad.

Willis hopes to compete by growing bigger, better pears and pushing marketers to promote the superiority of Hood River fruit. But, in an effort to do something more with his product, he has launched a side venture -- Gorge Delights -- that makes a pre-sliced fruit packet and a 100 percent natural pear nutrition bar.

He's trying to persuade school districts to add the sliced pears to their lunch programs. And, he says, federal government officials are interested in making the nutrition bar a military ration.

"It could be huge," Willis says.

Northwest farmers are doomed if they rely solely on selling fruit straight off the tree, he says. "As long as we come up with new ideas, we'll survive."

The Corridor counties in the worst economic shape are Gilliam and Sherman, which, defined by wheat and cattle farms, have the smallest populations of any county in the state except Wheeler.

Twenty years ago, there were more than 300 wheat farmers in Gilliam County; today, there are 57, says Laura Pryor, a flamboyant woman with bright white hair who grew up on a cattle ranch, married a wheat farmer and now heads the county commission.

Long an advocate for the agriculture industry and rural communities, Pryor is devoted to a project that's experimenting with ways to identify and segregate wheat by protein content. The goal: to link farmers to specialty bakeries.

Pryor calls the strategy "field to fork." Dalton Hobbs, an administrator with the Oregon Department of Agriculture, calls this break from traditional commodity markets "the principal savior of agriculture."

Capitalizing on the wind

Farther west in Hood River, the landscape changes again. Fruit dominates the agricultural base, but recreation is a heavy player in the economic mix.

When Brian Carlstrom, owner of Windance Sailboards in Hood River, set up shop in a old warehouse on the east end of town in 1984, he became one of the first to tap into a sailboarding craze just beginning to blow through town.

Enthusiasm for the sport has calmed in recent years, a condition Carlstrom attributes to the sluggish economy, aging baby boomers and competition from other sports. But he isn't worried about a sustained slump.

"Windsurfing will be around forever," Carlstrom says, "as long as there's the river and the wind."

The Columbia River Gorge forms a natural funnel for wind, sucking up westerlies from the coast.

On good days, the winds lure sailboarders as far east as Rufus and Threemile Canyon, but Hood River is the sport's retail center. Sailboard shops, boutiques and restaurants clog the downtown district. Rigs from British Columbia, Utah and Michigan cruise the streets when the wind drops, racks loaded with gear, drivers hungry for entertainment.

Meanwhile, Hood River also is luring urban commuters -- mostly professionals happy to live 60 miles east of their livelihood in Portland. City officials are busy accommodating a building boom. And home prices, among the highest of any spot east of Multnomah County, keep rising.

Corporate, family farms compete

Pressures to cut costs and develop higher-end products are forcing farms in the Corridor toward consolidation and more tightly run operations.

A standout is Threemile Canyon Farms, a 93,000-acre tract near Boardman that includes a dairy with 18,000 milk cows and a farm with 35,000 acres of crops.

Potato giant R.D. Offutt of Fargo, N.D., linked up with dairy operator Bos Family Farms of Bakersfield, Calif., to develop the massive operation. They bought the land, previously leased by Boeing, from the state two years ago. They gathered top lobbyists and attorneys to guide the project through a tangle of regulatory requirements.

"It was basically sagebrush, bunny rabbits and rattlesnakes," says Marty Myers, the farm's general manager, who helped put the deal together.

The key, Myers says, was to lock in the market. He was among the people who talked an expansion-minded Tillamook Creamery into building a new processing plant at the Port of Boardman. The farm's cows provide enough milk for the creamery to turn out 100,000 pounds of Monterey Jack and mild cheddar cheese daily.

The 40-pound blocks are trucked to Tillamook to be aged and packaged. When the new creamery is at capacity, it will double Tillamook's output, pushing the brand into major grocery stores throughout the country.

"I knew if you could incorporate the dairy into the farm and operate it as an integrated unit, you could make it work," Myers says. "If you rely on commodities alone, you lose."

Not a single milk cow had set hoof on county farmland before Threemile Canyon. Now, cows outnumber people.

The cows have their own barns -- six of them, half-mile-long affairs with compost-softened beds and retractable side panels. Jerseys and Holsteins feed through metal slats on either side of a concrete corridor, a dizzying lineup of brown eyes and wet noses.

The farm employs 250 year-round and 470 seasonal workers. Many are Latino, Oregon's fastest-growing minority group. They make up 24.4 percent of Morrow County's population.

For years, the farm's corporate managers battled regulations and lawsuits on everything from land prices to manure disposal. Controversy continues over labor issues and union organizing.

Despite such competitive forces that favor the big and the corporate, family farms continue to dominate the Corridor.

Matt Wood, the Umatilla County wheat farmer, tills about 1,400 acres -- the average is about 3,000 acres -- and more accurately typifies the region's agriculture profile.

Wood says he's always looking for ways to squeeze more from his crops, but the climate, with less than 10 inches of rain a year, makes dryland wheat, along with a little barley and canola, the only viable options.

He pegs survival on a different kind of diversification. He helps maintain the tall, pale wind turbines that rise from some of the fields he leases. He offers his equipment and services to nearby farms. His wife, Cindy, holds down several part-time jobs. He has dabbled in different protein contents for his wheat but hasn't yet found reason to significantly alter the type of grain he grows.

Someday Wood hopes to turn the farm over to his son, Willie.

"He's only 7," Wood says. "But he seems to like it."

Gail Kinsey Hill: 503-221-8590;  gailhill@news.oregonian.com

Seeing beyond the trees: Timber Country

Seeing beyond the trees
A weakened region seeks new ways to survive, but a sense of betrayal lingers

Tuesday, November 11, 2003
GAIL KINSEY HILL of The Oregonian

Sixty-seven years ago, when Allyn Ford's father opened his first sawmill in Roseburg, he found a straightforward way to make money: A grinding, steel maw chewed through locally cut trees, spitting out millions of board feet of lumber annually.

Those days are long gone. Today, trees from nearby state and federal forests are nearly as scarce as spotted owls.

Now, Ford's family-owned Roseburg Forest Products is betting its future on high-tech home-building materials and tight relationships with customers. Trouble is, Ford's competitors in South America, Canada and Asia are all vying for the same markets.

"We'd better be good," says Ford, an affable man with a Stanford University M.B.A. who admits to healthy revenues but elusive earnings. "We're competing with everyone in the world."

Similar stories echo through Timber Country, which stretches along the western face of the Cascades, curls west around Eugene and brushes the Coast Range. Survival of the fittest applies equally to the flora and fauna of the Elliott State Forest's mist-filled hills and the struggling mill towns of Oakridge, Mill City and Sweet Home.

Most of the trees in Timber Country belong to the federal government. During the past decade, in response to environmental regulations and lawsuits, the feds have drastically scaled back logging, dragging down harvests to record lows in 2001. Since 1989, about 160 mills statewide have closed, taking with them 35,000 jobs.

While regions such as Southern Oregon, Central Oregon and the Columbia Corridor have rallied around new industries, new residents and new identities, Timber Country has struggled, with limited success, to right itself.

The bigger towns, especially those along Interstate 5, are slowly diversifying. But they're still counting on timber companies to fortify the region. Many smaller towns, which lost their livelihoods along with the logs, are trying to turn to tourists, commuters and retirees.

The industry that once ruled Oregon's economy, politics and identity watched as Portland's 1990s boom made high-tech king. It was a financial and psychological blow that has deepened tensions in the region and made the politics of Timber Country increasingly conservative, defensive and angry.

At best, the mood in these blue-collar towns is skittish.

"Everyone's feeling insecure," says Randy Fouts, who drove a forklift for Roseburg Forest Products for 30 years before becoming a business agent for Lumber and Sawmill Workers Local 2949. "They don't know what the future holds."

Gap in wages doubles

Despite the industry's decline, Oregon remains the largest softwood producer in the country.

Wood products workers account for 15 percent of the state's manufacturing employment, compared with 20 percent in high-tech. Timber companies and their executives contribute heavily to political campaigns and maintain a powerful lobby in Salem and Washington, D.C.

The industry's resilience has forced state leaders to question economic development policies that have favored high-tech over timber. Gov. Ted Kulongoski, for instance, has signed legislation making it easier to redevelop abandoned mill sites.

And it has kept the pressure on lawmakers to balance environmental, recreational and logging interests. Last legislative session, the industry pushed a bill to increase logging on some state forests, but it died after heated debate.

Still, with most of Timber Country's forests in federal hands, state influence is limited.

"I don't think Ted can do much good," Fouts says.

Amid the clash of interests, timber companies are finding ways to survive. Roseburg Forest Products bought up private timberland, branched into a wide array of lumber products and modernized operations.

Instead of selling off its mills, as others have done, it has been investing in new ones. The latest is a highly automated $75 million building products plant. Unlike its forerunners, which turned big logs into millions of two-by-fours, the plant assembles composite materials into sturdy, easy-to-use joists, beams and columns for homes and other structures.

The operation sprawls across 70 acres. A single building encloses 11 acres and contains such proprietary equipment that managers won't talk about details.

"We've decided to go big and fast," says Ford, who continues to pump millions of dollars into capital improvements.

With annual sales of about $800 million and a work force of about 3,000, Roseburg Forest Products is one of the state's largest privately held companies. For decades, it has been Roseburg's biggest employer.

Even so, the company hasn't turned a profit in the past two years. And this summer, it announced layoffs in its plywood unit, including the closure of a plant in Green on the outskirts of Roseburg.

The layoffs will leave more than 600 people -- 20 percent of the work force -- without jobs. They shocked a community still raw from a decade-long slump.

"It wasn't a pleasant decision," Ford says. "We're part of the community, and we feel it."

Judy Sherman, 60, a short, strong-looking woman with graying hair and rugged hands, learned of the layoffs -- including hers -- while buying bread in a downtown bakery.

"All kinds of things ran through my mind -- what bills hadn't I paid, how long would the money last," says Sherman, who had worked for timber companies for 30 years, the last eight in one of Roseburg Forest Products' plywood mills.

Sherman, who is single and cares for two young children and a grown grandson and granddaughter, can't afford to retire. She also doesn't expect to get her old job back. "Everything is so downsized and mechanized," she says. "We knew it was just a matter of time before our jobs were gone for good."

Other jobs, such as those with Dell Computer's new call center in Roseburg, have helped offset declines in timber employment. But service-oriented jobs generally are lower-paying and can be ill-suited to mill workers' skills.

From 1990 to 2000, the gap between the county's average wage and Oregon's more than doubled to $3,688. The divide between county and national average wages: $7,604.

Sherman hopes to go back to school, using money from a federal aid program for dislocated workers, to earn a degree in early childhood education.

She says she should have changed her career years ago. Even so, she doesn't understand why federal policies have come down so hard on harvest levels.

"There's no reason or rhyme why they can't harvest and replant and harvest," she says.

Looking for income, federal help

When Paul Ehinger, 80, worked for Edward Hines Lumber in Westfir, the company ran a sawmill, a plywood mill and a logging operation, dominating the bustling town east of Eugene.

Today, the company's office is a bed-and-breakfast.

Runaway costs shut down Westfir's timber operation by the early 1980s. The town where Ehinger raised his family has dwindled to 307 people and three businesses: the bed-and-breakfast, a U.S. post office and a massage therapist.

The most vulnerable mills lay in small towns like Westfir -- next to, or within, federal forests and heavily dependent on publicly owned trees. Boring, Estacada, Lyons, Idanha, Sweet Home, Oakridge, Dillard, Drain, Creswell, all suffered mill closures. Like Westfir, many have found little to fill the void.

"The ones in the center of government forests have pretty much disappeared over the horizon," says Ehinger, now a private timber consultant in Eugene.

State employment economists say almost half of the timber workers who lost their jobs in the 1990s fell off employment rolls for good. They moved to other states or retired or became part of "a cadre of chronically underemployed rural residents," labor expert Art Ayre wrote in a June article in the Journal of Forestry.

When harvests in Oregon peaked in 1986 at 8.7 billion board feet, 56 percent of the logs came from federal lands. At the low in 2001, the share had plummeted to 5 percent.

The hardships have laced communities with bitterness and a sense of betrayal. Politics are more polarized and conservative, Ehinger and others say.

"We're Republican-based but labor-friendly. That's a tough mix," says Fouts, the union leader. "Add environmental issues, and that's really a problem."

Many blame the federal government for shoddy forest management. They blame environmentalists for extremist tactics in the courts and in the forests. They blame Portland for forgetting its roots and fostering liberal attitudes unsympathetic to Timber Country's problems.

"I'm not saying they're ignorant. They just don't understand," Fouts says.

Republican state Rep. Susan Morgan has lived for 25 years in Myrtle Creek, a onetime timber town south of Roseburg. She's looking to Congress to increase federal timber harvests -- not to the levels of the past, but substantially above those of today.

The forest fires that have raged through the West in recent years have fueled the Bush administration's efforts to thin more trees and increase harvests. After Bush visited Oregon this summer to promote his cause, Timber Country residents began talking more optimistically about federal policies easing.

"There's hope here that we can regain some of the losses," Morgan says. "There has to be some kind of rational approach to managing the federal forests."

Counties also are lobbying for the continuation of their timber subsidies, put in place in 2001 and due to expire in 2006.

Yet analyst Ehinger remains cautious. "Honestly," he says, "I don't see the environmental movement turning over and playing dead in the sand."

Timber Country tries to diversify

Like many towns, Oakridge isn't banking on timber's return.

In the mid-1990s, the city bought the abandoned Bald Knob sawmill at the edge of town, eager to tear it down and forget about the past.

But the community, which lies in the lush Willamette National Forest southeast of Eugene, hasn't been able to lure a new manufacturing tenant to the site. So the mill gathers rust, its pale green sides ripped and ragged, its rafters dripping rain.

"The pigeons rent it," says Jay Bennett, a former city administrator.

Government money helped Oakridge buy the 220-acre site, which the town plans to turn into a campuslike industrial park. Some of the work is done, and a few small businesses have moved in.

Bryan Huber, chief executive of Creative Composites, came to Oakridge to build high-end snowboards, but he ended up manufacturing aircraft parts for the U.S. Air Force, a more lucrative niche. With annual sales approaching $1 million and employment growing, he plans to expand the business into an available building at the industrial park.

Huber is a sailor, as well as a snowboarder and businessman. He says Oakridge, resting in a tight valley pocket within the forest, is the perfect spot to play and make money. Highway 58 brings travelers to nearby rivers, lakes and the Willamette Pass ski area.

Randy Dreiling, chamber of commerce president and owner of Oregon-adventures.com, is convinced the town can become a destination for mountain bikers, rivaling hot spots like Bend in Deschutes County.

Dreiling tried to get traction for his business back in the early 1990s. But the mill had recently closed, and laid-off timber workers were in no mood for the peddlings of forest-loving mountain bikers.

" 'Tree-hugger' was the politest thing they called us," Dreiling recalls.

Now, many of the timber families are gone. And the townspeople who remain seem more receptive to new ventures, Dreiling says. Early this year, he moved to Oakridge from Eugene, set up a Web site and began organizing mountain-bike tours.

With 500 miles of trails winding through the surrounding forests, "the atmosphere up here is great for biking," he says. "It's just a matter of time."

Gail Kinsey Hill: 503-221-8590;  gailhill@news.oregonian.com

Plying an idle economy: The Coast

Plying an idle economy
Retirees help chart the future of a region divided in two by money and political differences

Sunday, November 16, 2003

ALEX PULASKI of The Oregonian

It's just 15 minutes from Dewey Pilcher's driveway to the clubhouse at Bandon Dunes Golf Resort.

But you won't find Pilcher, a retired Teamster, driving a Titleist on Bandon Dunes' wind-swept fairways. Not when a summer round of golf and a caddie cost the same $235 that he spends on a month's rent.

In many respects, the golf courses there embody the Oregon Coast's future -- a multimillion-dollar magnet drawing free spenders from across the globe.

Retirees such as Pilcher, however, represent the area's economic and political present.

One of every five coastal residents is over age 65 -- the highest fraction of Oregon's nine regions and nearly double that of the Portland area. The senior influence helps bolster the region's conservatism on spending, taxes and social issues, even though Democrats outnumber Republicans.

From a map, it's easy to see how the Coast hangs together as its own state. The tall, skinny region elbows against the rugged Coast Range and is linked to the rest of Oregon by only a handful of two-lane highways.

The area's history and common identity are grounded in fishing and logging -- industries long faded from their glory days in the 1940s, '50s and '60s.

But the Coast is also a state divided.

The north coast economy is weathering the recession better because of its proximity to Portland, whose residents pump millions of dollars into popular seaside communities.

As you head south, especially below Florence, the cash flow slows. Oregon's south coast holds more in common with the people of Southern Oregon. But without a strong transportation route between the two, south coast citizens have had to hitch their futures to a slow-growing retirement economy and weak tourism connections to California.

Consequently, the Coast has ruptured politically, north and south.

Because of its ties to Portland and its wealthier retirees, the north coast tends to send more moderate politicians to Salem and has a more accepting view of government programs. To the south, residents more often elect conservative Republicans and feel they are being neglected or ignored by the state's politicians and big cities.

"People here don't really trust Portland and Salem, and they don't feel connected to them," said Ralph Brown, a Curry County commissioner and commercial fisherman.

Tourism rules on north coast

To continue attracting tourist dollars, central and north coast communities are dressing up.

Coastal beauty and opportunity act as a magnet for both visitors and out-of-state entrepreneurs hoping to cash in.

In Newport, pastel exteriors and street improvements draw visitors to the old Nye Beach area. Scott and Stephanie Doll opened Cafe Stephanie there in March after moving from Seattle.

"I see this as undiscovered country," Scott Doll said. "The beaches are spectacular."

In Lincoln City, John Myers, 65, wheels his gift cart most mornings onto a baywalk completed last year as part of a $1.2 million redevelopment project. Myers moved from El Cajon, Calif., last year.

On summer days, Myers and his grandson, Adam Austin, 13, hawk shells (shipped from the Philippines) as their wind chimes clang in the breeze.

In Seaside, a beachfront condominium development completed in July and $1 million in new sidewalks and streetlights have erased much of the decadence that a few years ago was the city's hallmark.

The boardwalk smell of cooking waffle cones hangs in the air. Step inside George Tipton's candy and home decor shop, and a subtle hint of vanilla wafts from a burning candle.

Tipton, who moved to Seaside from Spokane in 1997, sells no taffy, no beach umbrellas or shot glasses. He does have chocolate-covered macadamia nuts for $14.99 a pound and Tuscan-style table runners from $13.99 up. A 4-foot-tall resin angel goes for $650.

"We have grown and grown and grown," Tipton said.

Although the north coast holds strong ties to Portland, it doesn't always share the same values. For example, all but one coastal legislator this year refused to support a plan to finance a Portland baseball stadium.

"I've got real reservations about whether they'll ever put that together," said state Rep. Alan Brown, R-Newport, one of the nay votes. "We were spending a lot of time dinking around on it when we had some serious things that we needed to get handled, like paying for good schools and keeping prisoners in prison."

Similarly, Brown voted no on the taxation and schools bills because he felt certain they would fail if put to a vote of the people.

"I didn't sign a 'no tax' pledge," Brown said. "But I also didn't go to Salem with the feeling that my constituents were telling me to raise their taxes."

South coast businesses hit rocks

On Oregon's south coast, the decline of commercial fishing, coupled with timber's collapse, has hit the area hard. Next month, about one-third of Oregon's commercial trawl fishing fleet will be retired as part of a federal buyout.

Such a prospect was unimaginable when Mark Cleary moved to Brookings from Southern California in 1979.

He spent two decades on the ocean, then sold his commercial fishing boat to a private buyer. Given how much federal catch limits had cut into his income and boat's value, he felt himself lucky to sell at all.

"If I hadn't sold, I would have lost everything," he said. "I don't have any regrets."

But he can't help feeling wistful on the workday drive down Highway 101, knowing that the expansive Pacific is on his right and the concrete and razor-wire embrace of Pelican Bay State Prison awaits him ahead across the state line.

Cleary, 43, figures that a few dozen area fisherman have capitalized on one of California's biggest growth industries and, like him, now work as correctional officers.

"If it weren't for the prison, this town would be totally washed up," Cleary said.

Kismet A. Winslow, a Brookings denturist, has watched the businesses break up like ships on the rocks. A beautician. A brewery. An art gallery.

"This happens three times a year," she said. "They come and they go."

Winslow has kept her business going since 1980, depending largely on local seniors and retirees passing through each summer. She said she barely scraped by in the months after the Sept. 11 attacks and always feels the pressure from stock market dips because so many seniors own shares.

Coastal retirees such as Pilcher are adamantly against new taxes. He worked hard for his money, passing more than 40 years behind the controls of loaders and dump trucks.

Oregon has a money problem? Spend less, same as everybody else. Don't expect Pilcher to vote yes on any tax increase.

"This state has frittered away more money than it had coming in," Pilcher said. "They've got to pay the fiddler."

Pilcher, 65, has reached a point in life where the real issues are: filling his wife's seven prescriptions, checking her heart monitor and oxygen levels and ensuring that their pension and Social Security checks cover the bills.

When the last economic and demographic profile of the region was completed nearly a decade ago, one discovery stood out from the rest: Transfer payments -- largely Social Security -- and investments contributed 45 percent of Coast residents' income.

That compared with 35 percent for all of Oregon and 33 percent for the United States.

"We are graying," said Onno Husing, executive director of the Oregon Coastal Zone Management Association, which commissioned the 1994 report. "Young people can't afford to live here."

A changing, elderly population

The senior population, however, is oftentimes just passing through, seemingly more interested in hanging onto a slice of what they have earned than anyone else's problems.

Real-estate agents keep their coastal home buyers on mailing lists because they know from experience that the house bought today is likely to be for sale three or four years from now.

There are three reasons why: Grandchildren don't visit as often as expected; buyers underestimate the wind's winter fury in Oregon; and failing health and limited medical care choices force retirees back onto the urban Interstate 5 corridor.

"There are 10 houses in this city that I've sold more than three times," said Dale Dearing, a Port Orford broker.

Registered Democrats outnumber Republicans 41.5 percent to 34.9 percent on the Coast. Only in portions of Lane and Curry counties do Republicans hold a plurality.

But the Coast's vote on Measure 28, a temporary tax increase in January to help balance the state budget, was a resounding no: 58 percent to 42 percent.

That is the senior vote talking, says Arthur Boileau, 63. He retired from a marketing job four years ago and moved from Anaheim, Calif., to Florence.

Reflecting the obstacles coastal school districts face in passing bond measures, Boileau said his response is automatic when he sees a new tax on the ballot.

"Anytime I see taxes, I just vote no," he said. "We pay enough, and if you don't say no they'll keep throwing taxes at you."

One mile up from Florence on Highway 101, Mary Remer has had to adapt to the importance of seniors.

Visitors to her Golf Camp 101 used to be able to whack golf balls onto a driving range that included old television sets and a convertible Fiat as targets. But the targets were removed last month, making way for a pitch-and-putt course designed to appeal to an older crowd.

Catering to seniors is an element of survival, she said. The median age in Florence is nearly 56 -- two decades older than the rest of the state.

"The retirees are very nice, but just a little bit selfish," Remer said. "Their mentality is, 'Bread costs 50 cents a loaf, and why should I pay you a buck and a half to golf?' "

Remer said it had been more arduous traversing Lane County planning rules than actually converting a run-down RV park to golf use.

She sees those hurdles, like the opposition organizing against a Native American casino planned for the town, as a symptom of senior-driven politics bent on keeping Florence exactly as it is.

"This is not a quiet little fishing village," Remer said. "This area is poised for significant growth, and we have to share it between the retirees and the visitors.

"I've always said this place can't just be a good place to die. It has to be a good place to live."

Alex Pulaski: 503-221-8516;  alexpulaski@news.oregonian.com

An area ripe for change: The Valley

An area ripe for change
Jobs and population grow diverse, but the Valley's roots remain firmly conservative

Monday, November 17, 2003

ALEX PULASKI of The Oregonian

From union mills to farm fields to government offices, a strong work ethic and conservative values have anchored deep roots in the Willamette Valley.

Residents' feet are planted in the soil, but their hands guide forklifts and graze computer keyboards. It's a land of picket fences and picket signs, fading farm towns and front-yard flags.

The Valley contains four of Oregon's 10 largest cities outside the Portland area. But remove the liberal influence of the university towns Eugene and Corvallis -- as The Oregonian has done in analyzing the state's nine distinct regions -- and the Valley looks and votes a lot like rural Idaho.

The Valley's rich soils drew its settlers, and farming remains an important economic element, especially nurseries. But as agriculture and manufacturing falter, the region has been able to buffer the damage by spreading jobs across a wide variety of small- and medium-sized employers. In the past two years, the Valley has experienced modest job gains in government, health and business -- never sharing in the giddy highs of the Portland area's high-tech rush, but not crushed by its demise, either.

"We didn't have as far to fall," Mary Wright, an Oregon Employment Department regional economist, said of the Valley.

The Valley's wobbly transition to a broad-based economy appears to be less the product of a cohesive strategy than a natural extension of two of the area's situational advantages: Salem is the seat of state government, and Interstate 5 slices right down the Valley's middle.

Like the Columbia Corridor and Southern Oregon, the Valley has been able to attract businesses that need an interstate to succeed. Woodburn lured an outlet mall and distribution center, and after a huge food processor failed in 2001, the property was snapped up by a national food-service distributor.

Like those other two regions, the Valley has seen significant growth in its Latino population. One in every eight Valley residents is Latino, altering the region's cultural and business mix. But there has not been a corresponding change in political representation.

Linn County, where one of every five jobs is in manufacturing, has Oregon's highest unemployment rate at 10 percent. Workers in Albany make things, such as manufactured homes and paper products, and when the orders stop, so does the work. To get by, laborers are learning new skills.

Despite such struggles, the Valley has lost far fewer jobs proportionately than the Portland area since 2000. Buoyed by increases in government and health jobs -- Salem Hospital is the city's largest private employer, with 2,700 workers -- the region lost 1.7 percent of its jobs in two years.

In contrast, the Portland area lost 3.1 percent of its work force between 2000 and 2002.

The Valley's households make do with about 27 percent less income -- about $100 a week -- than their Portland-area neighbors. If anything, the recession has cemented the region's determination that government must watch its budget as closely as residents have had to.

"Everybody else has to cut back. Why can't the state?" said Tom Bauman, a Marion County farmer.

God and the U.S. Constitution

It's only a 90-minute drive from Portland to Albany.

But it's a long, ideological journey from Oregon's largest city to the working-class neighborhood where an American flag stands sentinel in Tim Pitzer's front yard. In many respects, he captures the Valley's work ethic and conservative social and spending sentiments.

Pitzer, 53, has lived in Albany for the past 35 years. He is an assistant operator in the melting department at Allvac, a titanium manufacturer.

Inside the plant, the hydraulic press rumbles and the floor shakes. Bridge cranes whir and hum.

At times, Pitzer's task is to baby-sit computer screens. They register voltage and amperage and provide remote images of molten titanium dripping into a water-cooled copper crucible.

The process begins by pressing scrap titanium into electrodes, adding an electrical charge and melting the metal at more than 3,000 degrees Fahrenheit. The result: shiny 10-ton ingots the size of a love seat.

Like the principles that Pitzer holds dear, they are incredibly strong and resistant to change.

He believes in God and the U.S. Constitution.

He is a union member who thinks unions should support workers, not back every liberal, politically correct cause in sight.

He owns guns, enjoys shooting them and wholeheartedly endorses the Second Amendment. He galvanized opposition to legislative attempts in 1999 -- the work largely of urban lawmakers -- that would have required criminal background checks for sales at gun shows.

He thinks government can't fix everything and shouldn't try to.

Instead of spending more on schools, he wants districts to stop teaching sex education and preaching diversity and start spending their money better.

"Every time somebody decides they want something, they start looking for a new tax to pay for it," Pitzer said. "That's just using the system to take your money."

Through their legislators, Valley voters such as Pitzer are sending a clear conservative message to the rest of the state.

In 1999, then-Sen. Marylin Shannon, R-Brooks, sponsored an unsuccessful bill that would have made late-term abortion a crime and supported another that would have banned gay marriages.

Two years later, Rep. Cliff Zauner, R-Woodburn, championed a bill that would have eliminated bilingual education. It failed, too.

This year, Rep. Betsy Close, R-Albany, led an unsuccessful attempt to require women seeking abortions to receive detailed information about the procedure and wait 24 hours before proceeding.

In the 2002 governor's race, conservative Republican Kevin Mannix of Salem fared better in the Valley than anywhere else west of the Cascades, winning 53.4 percent of the vote.

Berries plummet; nurseries expand

If you grow up in the Valley -- except perhaps in Salem, the seat of state government -- your life intersects with agriculture.

Pam Morin started picking berries as an 11-year-old and has been working ever since. She regularly puts in 60-hour weeks at the Woodburn Auction, which her family owns.

If anything makes her angry, it's the thought of paying for people who are not willing to work.

"There's so much money being wasted on welfare programs," she said. "You see them with the baby crying and a cigarette in one hand and a beer in the other.

"People figure they might as well milk the system since everyone else is doing it."

Four times a year, the Woodburn Auction yard fills with farm equipment for seasonal sales.

Thick, sunburned men in suspenders and baseball caps eyeball red, green and rusted farm implements, nod, and wait for auctioneer Emery Alderman's verdict:

"Sold. Two hundred dollars. What's your number?"

But as the often-low prices at the auction attest, the Valley's mainstay crops -- from beans to berries to mint -- and the processing jobs that accompanied them have gone bust.

For example, strawberry acreage in Oregon has dropped by more than half in the past decade.

The state remains the nation's fifth-largest producer of processed vegetables, much of them grown and packed in the Willamette Valley.

The Valley contributes about one-third of the state's $3.3 billion agricultural industry. Marion County leads the state year after year, with $448 million in farm sales in 2002.

The remarkable exception to farming's downturn has been the state's nursery industry, with more than $727 million in annual sales of trees, flowers and decorative plants.

Nurseries are capital- and labor-intensive, but in the past decade Oregon's nursery acreage has grown by 34 percent, to 45,200 acres.

Ninety percent of the state's nurseries are concentrated in the Willamette Valley.

While farmers such as Bauman are ripping out marionberries because of falling prices, those who can afford it are starting nurseries or expanding existing ones.

A changing population

As the Valley continues to adapt from its farming roots to a broader base of manufacturing, retail and services, its residents are observing and experiencing fundamental changes themselves.

In downtown Independence, Panaderia San Miguel -- its windowfront advertising tacos, lengua, tripas and chicharron -- stands next to Taylor's Fountain, a 1950s throwback.

In downtown Woodburn, the warm, moist smell of corn tortillas drifts from La Morenita Tortilleria. Six Greyhound buses a day stop at La Caseta de Woodburn, a money-changing and phone service. In summer months, the three northbound buses disgorge passengers who pile sleeping bags and suitcases next to the big-screen television.

The laborers come, work, spend and send money home to Mexico. Some stay. They are fueling the local economy, La Caseta owner Pam Freeman notes, but "they don't vote."

Half of Woodburn's 20,100 inhabitants are Latino. Even with its distinction as the most Latino district in the state, the area sent an Anglo, Zauner, to Salem in 2002.

Perhaps nowhere in the Valley is the crossroads between the old agricultural economy and the opportunity for new careers so apparent as in Tangent. The town of 950, just south of Albany, includes faded storage sheds for grass seed and buildings housing the Central Electrical Training School and the International Brotherhood of Electrical Workers union.

Valley workers such as Jamie Boe are finding it necessary to reinvent themselves at middle age.

Boe, 45, of Independence, can recall irrigating hops and working in the corn, grass seed and mint harvests.

"Everybody worked, and everybody had money," he said.

From the farm work of youth, men graduated into plentiful mill and manufacturing jobs.

But during the past two decades, as the timber economy failed and mills closed, "people who had the boat and the house and the family -- it all went out from under them," Boe said.

Boe dived into a new career.

He left a low-wage tech job in Albany in 1999, borrowed money and started studying electrical engineering at Oregon State University.

But as high-tech jobs dried up, his road to riches looked more like a trip to nowhere. He spent this summer watching the remains of his cashed-out retirement fund dwindle and transferring credit-card balances in search of low interest rates.

Finally, after two years of sending out resumes, in September he landed a job conducting lab tests for a Clackamas company.

Unlike Pitzer, Boe is a liberal on most social issues. But he also holds a concealed-weapon permit.

"I consider myself a gun-toting liberal," he said.

Alex Pulaski: 503-221-8516;  alexpulaski@news.oregonian.com

Wise to its future: Edutopia

Wise to its future
A campus-based economy and liberal vigor keep Edutopia ahead of the curve

Tuesday, November 18, 2003

JEFF MAPES of The Oregonian

You almost need a degree in construction management to keep track of the new buildings at the University of Oregon and Oregon State University.

Oregon is finishing a sleek $41 million business school complex, financed largely with private money. Oregon State just opened the world's biggest tsunami research center.

UO also is building a new art museum, and OSU is at work on an engineering building. And a new basketball arena for the Ducks is in the works.

The state's two major research schools have the students to fill the buildings. UO has just about as many -- roughly 20,000 -- as it wants. OSU, after serious enrollment declines in the early 1990s, has marketed its way back to a record enrollment of 18,974, according to a report released Wednesday.

In short, the university communities of Corvallis and Eugene are finding a new prosperity, despite state budget cuts and the resulting increases in tuition.

Their political liberalism, which stands out from the surrounding conservatism of the Willamette Valley, has made them a key to Democratic political success in Oregon.

More important, the schools of Edutopia have largely turned back pressure to shift major research and graduate engineering and science programs to the Portland area to serve the high-tech community there.

Although Portland State University and other institutions have grown in importance, Edutopia will continue to make most of the big decisions on the subject -- higher education -- that almost everyone agrees is becoming increasingly important to Oregon's prosperity.

With increasing confidence, leaders in Eugene and Corvallis now see the schools, along with their potential for attracting knowledge-based businesses, as the key to their own economic future.

"I don't think there is a better place to ride into the future than here," Eugene Mayor Jim Torrey said, "and it wouldn't happen without the University of Oregon."

In turn, voters in the two cities that make up the island state of Edutopia have become reliable supporters of the argument that government investments bring good things. If the Legislature's income-tax increase has any chance of surviving a referendum to nullify it in February, it will have to win big in Edutopia.

Eugene has long been famous as an outpost of the counterculture and a bastion of liberalism. Corvallis remains a smaller, quieter and more culturally conservative place, as befitting its agricultural education roots. But less noticed is that Corvallis has shifted from a tradition of moderate Republicanism to being firmly Democratic.

Each city gave more than 60 percent of its vote to Democrat Ted Kulongoski in the 2002 governor's race, and Corvallis actually had a higher yes vote than Eugene on the proposed income-tax surcharge that voters statewide rejected in January. That doesn't mean they'll buy anything, though: In September, voters in Corvallis and surrounding Benton County rejected a local income tax for schools after opponents argued it wasn't necessary.

"We're still the cow town and they're still the liberal arts town," said Hal Brauner, a Corvallis city councilor, "but it's less distant than it used to be."

Corvallis also has become, in a sense, the model of what leaders in many communities wish to accomplish for the new economy in Oregon. The city's largest private employer is Hewlett-Packard, which from its campus-like facility in Corvallis has a close working relationship with OSU. If there's a problem, it's one generated by prosperity: Builders have no problem selling high-end homes, but it's becoming harder for young families to afford to live there.

"Corvallis is in danger of being an economically advantaged gated community," said Charles Tomlinson, who owns a bed-and-breakfast near OSU and narrowly lost a race for mayor last year.

Universities show resilience

For the past decade, the state university system has often seemed preoccupied by problems of money, image and competing demands.

The Legislature cut the higher education budget this year after several years of largely failing to keep pace with inflation. And the schools have suffered unflattering comparisons to more high-powered university systems in states such as Washington and North Carolina.

But the two venerable schools -- OSU was founded in 1868 and UO eight years later -- have shown their resilience. They followed the lead of other universities across the country in adapting a new entrepreneurial model that has brought in hundreds of millions of dollars in grants and donations.

They may not be at the top of the U.S. News & World Report rankings, but they're in a business with high demand -- little wonder, given that census statistics show the average college graduate makes a million dollars more during a lifetime than someone without a degree.

As a result, the schools have been able to make up much of their losses in state financing in the past decade by increasing their tuition, without a big negative effect on their enrollment. Part of it is that tuition and fees -- nearing $5,000 a year -- are still a bargain compared with private or out-of-state public colleges.

Last year, in fact, the state university system attracted its largest share of the Oregon high school graduating class in at least 25 years. And a statewide survey of Oregon values conducted in 1992 and again in 2002 found that respondents last year ranked higher education as the fourth-most-important government service, up from ninth in 1992.

The schools also happen to run the state's most popular sports franchises, which are increasingly big-dollar affairs that blanket the state with the UO and OSU logos.

"The irony is that by dint of very good management of resources, we have become a better university even against this tide of (taxpayer) support going down," said Dave Frohnmayer, the University of Oregon president. His biggest worries, he said, are that he won't have the resources to compete for the best faculty and that the university is becoming increasingly unaffordable for less well-to-do students.

Frohnmayer, a former state attorney general who lost a race for governor in 1990, is unquestionably the most powerful figure in Edutopia. His background as a law professor gives him academic credentials, and the fund-raising skills he honed as a politician helped produce $255 million for a capital campaign that ended in 1998. He has embarked on a new campaign he says will be even bigger.

Donors "believe in the transformative experience of a university," he said. "It's a very magical, almost religious commitment that people feel."

Taxpayer support at question

Oregon State had a rockier time in the early 1990s, with its enrollment dipping from slightly more than 16,000 at the beginning of the decade to 13,800 in 1996.

The drop coincided with the boom in Portland's high-tech economy, as well as strong pressure to concentrate the state's top engineering programs -- long OSU's bailiwick -- in the Portland area.

Paul Risser, then the OSU president, launched a marketing campaign that included advertising and carefully honed mail appeals to the best prospects. The school also juggled tuition aid money to more carefully match the needs of each student.

It worked. Enrollment, at about 19,000 this fall, is up to record levels. "We are competing for students," said Bob Bontrager, the assistant provost who heads OSU's enrollment program. "We created in people's minds a greater sense of value in coming to Oregon State University."

The school also attracted a former top official from the heart of the Silicon Forest -- Ron Adams, a former Tektronix vice president -- to be its engineering dean. He has set a goal of turning OSU into a top 25 engineering school in the U.S. News rankings and, even in this tough budget time, persuaded the Legislature to pony up $21 million for nanotechnology research that will be done mostly at UO and OSU. He says he doesn't worry about being 80 miles from Portland.

"The distance has evaporated because we have been able to supply the goods that are needed," Adams said of OSU's research. "The bottom line is, the best assets were here."

Not everyone is convinced the schools can continue to thrive without steady support from taxpayers.

After taking big cuts in the early 1990s, the state university system had regained much of its taxpayer financing by the end of the decade. But when the recession began to bite, state support dropped again. During the next two years, tuition and fees will cover nearly two-thirds of the cost of the university's core education programs, compared with a roughly 50-50 split in the 1999-2001 budget.

"I do think that we are attempting to keep ourselves at a level that is not sustainable in the long run," said Bruce Weber, an OSU economist who worries about being able to maintain the quality of the faculty and about increasingly crowded classes that make it harder for students to complete coursework.

But the university system continues to expect strong enrollment, although it grew more slowly this year than last, a possible effect of the tuition increases. And compared with the wrenching economic changes in many areas of the state, Edutopia is doing fine. Corvallis' unemployment rate is 4 percent, the lowest in the state. The Eugene-Springfield metro area, which is much larger and is not as dominated by the university, has a 7.3 percent rate, six-tenths of a percentage point below the rate for the Portland area.

In Corvallis, Mayor Helen Berg devotes much of a tour of the city to showing off publicly financed housing developments aimed at providing homes for lower-income families.

"We don't want" the city to turn into a wealthy enclave, she said, admitting that she's continually astonished by the number of upscale hillside homes being snapped up by executives from companies such as Hewlett-Packard or Samaritan Health Services, a regional hospital chain headquartered in Corvallis.

Much of the cheaper housing in the city is corralled by investors who can make more money renting to students than selling to young families. As a result, enrollment is declining in the local school district.

Voters' resistance to growth has exacerbated the housing squeeze. Corvallis was the first city to require a public vote on annexations, and voters have repeatedly made it clear they want to preserve the city's amenities and small-town nature.

The insular nature of the city extends to the students, who tend to get their education and move on. "Corvallis is a good town, but it does not have a whole lot of opportunities," said Quyen Yen, 25, a pharmacy student. "Staying in a small town is just not a good option."

Collegiate lifestyle highly valued

In contrast, Eugene residents joke about the underemployed Ph.D.s who don't want to leave.

"There is this indescribable feel that Eugene has -- and always has had," said Mike Baker, who owns a New Age store on the fringe of downtown. He moved to the city in 1981 to go to school and has repeatedly moved back. "This is the third time, and it keeps drawing me back."

There's more to Eugene, of course, than its counterculture image. It is part of a complex metro area where it is not unusual to see a pickup sporting an NRA sticker idling at a stoplight next to a Volvo station wagon with a Darwin symbol. Timber mills have pretty much disappeared from the city, but the state's biggest logging show is still held annually at the county fairgrounds in Eugene.

"Very friendly, close-knit people live here," said Judi Williams, who bought a bicycle shop after retiring from a job selling ads in the Yellow Pages. "Family outings and recreation are pretty important."

The city's extensive network of bicycle paths -- there are five bridges over the Willamette River just for pedestrians and cyclists -- and proximity to river rafting and the mountains make it a mecca for outdoor enthusiasts.

Philip Romero, a former Californian who became dean of Oregon's business college four years ago, understood his new market when he began planning the new building that houses his college.

It has a soaring atrium that sucks cooler air into upper stories and solar cells that produce electricity. The truth, he acknowledged, is that the environmental add-ons won't pay for themselves anytime soon.

"But I did it anyway because I wanted an environmental billboard," Romero said. "If I was the dean in some other state, it probably never would have occurred to me. That is the way the Eugene culture has penetrated my psyche."

Jeff Mapes: 503-221-8209;  jeffmapes@news.oregonian.com


There's a similar site about California, for the curious:


The Nine Nations of North America
by Joel Garreau
 link to www.amazon.com


Dwellers in the Land: The Bioregional Vision -- by Kirkpatrick Sale
 link to www.amazon.com

Thank you 07.Mar.2004 22:19

Nopey Duke

EXCELLENT. Well researched and relevant. I have down-loaded it. Thank you.