Portland Drives Oregon – Withouth Portland, Oregon would be a conservative, rural Western state. But now, Portland is in trouble.

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

JEFF MAPES OregonLive.com

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; [email protected]

http://www.oregonlive.com/news/oregonian/index.ssf?/base/news/1067605737124440.xml