Why This Matters

First and foremost, Portland-metro families suffer the negative impacts of the regionís sluggish economy. Fewer jobs and lower wages mean it is harder for families to get by economically year after year.

But there are broader impacts as well. Oregon is an income-tax-dependent state. The stateís schools, community colleges, universities, social and human services and corrections services all depend largely on revenue derived from taxes on personal income. The regionís low wages and declining per capita income translate into anemic state income tax revenues, which directly impacts the stateís ability to deliver social services. Economists have predicted that Oregon faces a decade of state budget deficits and is likely to fall about $3 billion short of the funds needed to maintain current services in every two-year budget cycle.

There are those who argue that we could simply increase taxes and fees to fix the stateís budget problems. However, Oregon Business Plan research indicates that since the 1970s, Oregonians have established a ceiling for the percentage of personal income they are willing to devote to state and local government services.* This research strongly suggests that efforts to simply raise taxes or fees on the existing economy will fail, and the only sustainable solution to increasing resources for public services is to increase the size and strength of the economy and grow quality private-sector jobs.

For example, if the 2008 per capita personal income in Portland-metro had equaled that of Seattle-metro, there would have been an additional $23.4 billion of income generated in the region. That would have generated approximately $1.3 billion in state revenue for schools, human services and other critical state and local programs.

Additionally, the Portland-metroís land-use and transportation strategies are predicated on robust job growth in Portland and the rest of Multnomah County. The regionís most important environmental strategy is to reduce carbon emissions and land consumption by encouraging a more compact urban form. The declining employment figures for Multnomah County call into question whether this strategy can be successful if the trend of private-sector job losses over the past decade is not reversed.

* Oregon Business Plan, Oregonís Challenge: Breaking out of a Circle of Scarcity, 2010.