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State treasurer speaks on Oregon economy By GREG STILES Consumers aren't alone in their opportunity to take advantage of low interest rates that create extra cash flow. State Treasurer Randall Edwards told a Chamber of Medford/Jackson County forum gathering on Monday that this is a prime time for Oregon to borrow money for infrastructure projects. "Right now it's very inexpensive for the state to be borrowing money and we should be capitalizing on it to the greatest degree we can," Edwards said at the Rogue Valley Country Club. Edwards suggested the state could double its $400 million transportation package through the sale of Garvey Bonds, which give states access to cash repaid by future federal receipts. Projects paid for now would cost less than those done in the future, giving the state more fiscal mileage. "It's critical that we look at the long-term of being able to capture some of these low interest rates and put the money to work here in the state," Edwards said. "We can also help get through this short-term revenue (shortage) by looking at alternatives to raising taxes." The Portland Democrat pointed to the tobacco settlement as one source of cushioning the recessionary blow. He said the $2.2 billion in capital improvements authorized by the Legislature will spur local economies as well. "Those numbers translate into jobs, whether it's transportation projects, other infrastructure or rural infrastructure needs," Edwards said. "These are dollars that are going back into the communities to keep people employed and help improve our economy." He said the Legislature enhanced engineering schools at Oregon State and Portland State, and Oregon Health Sciences University gained $200 million for biomedical research. That will help keep intellectual capital in the state as well. Edwards said one of the largest challenges for a state that has slipped into recession - and more so following the Sept. 11 terrorist attacks - is the rebuilding of consumer confidence. "Oregon is well-positioned to get through this," Edwards said. "From my vantage point, as state treasurer managing billions of dollars of state pension funds ... we've done a fairly good job in managing through this tough time. "The first week after the (stock) market was open, we went back into the marketplace with about a billion dollars, because we had a long-term perspective and it was a time to re-invest." Edwards predicted the state's economy would rebound by the third or fourth quarter of 2002. Federal Reserve interest rate cuts along with pending tax and capital gains cuts will further stimulate recovery, he said. "That puts money back in people's pockets so they can either save or consume." Following the Chamber presentation, Edwards said Fed cuts have encouraged companies to borrow or refinance their own debt so they can make capital improvements or expand. "The bigger challenge for business is to get consumption up there so there is a demand for goods, regardless of the interest rates," he said. "When that happens, then business can start borrowing." Edwards echoed economists who pin Southern Oregon's relatively upbeat economy on a growing population and a strong retirement sector. He added that the area's proximity to California is another factor weighing in the Rogue Valley's favor. Reach reporter Greg Stiles at 776-4463 or e-mail [email protected] Mail Tribune Home | Ottaway Newspapers, Inc. | Dow Jones & Co., Inc. | Privacy | Contact Us Copyright � 2001 Mail Tribune, Inc.