Kulongoski breaks his promise to ag

Study is still needed to measure full impact of indexed wage on industry

If Oregon Gov. Ted Kulongoski was worried before about the financial sting behind a tax credit bill aimed at helping farmers deal with the indexed minimum wage in his state, he should be more prepared for what happens now that he has stirred an angry nest of farmers.

This week, it was announced he has withdrawn a request for an $80,000 objective study looking into the impact of the state minimum wage on agriculture.

Up until late last week, the agricultural community still believed in and supported the study and was involved in helping to influence what might be the questions in the study.

The study had been Kulongoski’s own idea in an attempt to pacify the agricultural community who was upset that on Sept. 2 he had vetoed a bipartisan bill to provide a tax credit to help farmers with labor costs.

Now, when he needed to show true leadership and build up trust with the agricultural community, he has lost a great deal of his credibility.

The stings of this may show up at a future ballot box.

It was an insult to agriculture — and the 40,000 farmers in this state — how he has treated the situation surrounding indexed minimum wages and their impact on agriculture.

Yes, it was the state’s electorate with probably good intent that declared in a vote in 2002 that it wanted an indexed minimum wage in Oregon.

But hard statistics are needed on what has been the impact of that on sectors such as agriculture that can’t just pass on these added costs to the consumers of their commodities they produce.

If ultimately there ends up being greater financial strain on employers to the point where there are fewer jobs or no jobs in certain areas of agriculture, is this the most beneficial labor plan for the state?

What has really angered the agricultural community is how little respect the governor shows toward its opinions and concerns. While the Department of Agriculture appears to understand the challenges facing producers, the governor’s office does not.

Oregon farm representatives asked for a tax credit on the indexed portion of the minimum wage that rises annually. This would have offset labor costs that have been rising for farmers in the state: Since 2003, Oregon’s minimum wage rose from $6.90 to $7.25 per hour, the second highest wage in the country behind Washington state. In January, Oregon’s minimum wage is rising to $7.50. Meanwhile the federal minimum wage rate is $5.15.

There was bipartisan support for the bill: the Senate passed it 25-4, the House passed it 33-27.

One of the things missing has been cold hard numbers: Numbers showing how much exactly the state would lose in revenue from the tax credit (the last estimate was $200 million). Numbers are also needed to make the governor understand the loss of revenue to the state was dearly worth it several times over in the value the state receives from agriculture, whose production last year totaled nearly $4.1 billion and was worth $11 billion in economic activity.

Surely the state could have gone ahead with an $80,000 study to understand and perhaps help farmers in this state.

The Oregon Farm Bureau Federation has said that labor costs in 1990 were just over half of the total net farm income, but by 2003 they were two times the total net farm income.

But the agricultural community admits it needed more discussion and numbers to prove its case to the governor.

Unfortunately, Kulongoski has not shown much cooperation or respect for Oregon Farm Bureau Federation, which represents the grassroots producers of the state.

He refused to meet with OFBF’s representatives prior to his decision to veto the bill.

He also did not meet with them before he sent the order to withdraw his request for a study.

OFBF found out after the fact that no longer was there a request going ahead from the Department of Agriculture to the Legislative Emergency Board. The letter to the board was to ask for the study and then $2 million in emergency funds to help farm labor costs.

Who influenced the governor? The Legislative Fiscal Office played a role, stating the labor wage issue wasn’t a true emergency.

While it may not seem like an emergency, the growing wages can have a huge impact on farmers who now must wait until 2007 to see if the issue is addressed in the next session.

More importantly, it was the critics who opposed the bill in the first place that have influenced the governor. Their fear is that once the indexed minimum wage issue is examined for agriculture, this then opens up for inspection the impact of the indexed minimum wage in other sectors of the economy.

This definitely would shed light on wages in this state and perhaps contribute to the electorate — and politicians — making well-informed decisions in the future.

For now, the governor promises to work with labor and the agricultural industry towards solutions that will be acceptable to both sides.

But to the agricultural community, the trust is gone and there is wariness about any promises made by this governor.

Once too often a promise was broken and farmers are feeling the pinch as they now attempt to find research money themselves. The study still is needed to help others understand the economic pressures farmers face from bad decisions made by voters who outnumber them.