A Chicago native and a lifelong environmentalist, Bill Bradbury, 61, served as Oregon’s Secretary of State from 1999 to 2009 and in the Oregon legislature from 1980 to 1995.

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Judy Peppler, state president of Qwest in Oregon: Obviously, Bill, what’s on Oregonian’s minds are jobs. What’s your plan to create more of them?

Priority number one has to be jobs, jobs, jobs. I released an eight-point jobs plan. What’s really at the center is the idea—the Bank of Oregon—which is basically making use of the incredible resources the people of Oregon produce through the paying of their taxes. It creates a very significant capital resource that can be operated like a bank. That capital can work with local and community banks to increase lending to small businesses. Right now, the state treasury is putting out a billion dollars a quarter that goes to various banks, both community banks and some of the very large Wall Street banks that have been in so much controversy lately. It seems to me we should make use of the resources we generate to really help local businesses help local banks.

Peppler: That requires a statute change. How quickly could you get a Bank of Oregon started?

Probably in three to six months. Anything you’re talking about right now can’t happen until the legislature convenes in 2011. There are things one could do that don’t require legislation in terms of the focus of the economic development department. It has really gotten focused on economic clusters. Economist Joe Cortright has identified [clusters] as key for economic development, whether they be renewable energy, solar, or wind. In Portland, one of the most incredible clusters is the green building cluster. Portland is the green building capital of the world. That is something we need to build on.

Orcilia Forbes, educator, chair of Meyer Memorial Trust: In view of what’s happened with the Business Energy Tax Credit, would you then propose more tax credits?

You don’t really need to be giving tax credits to businesses that are going to be profitable. You need to provide that margin to help things happen. Wind needed a tax credit because it wasn’t yet at market. Today it’s a very profitable way that doesn’t need an assist. But there are significant technologies that do, whether conservation or solar, geothermal or wave energy. Those are all technologies that aren’t yet cost-effective, and that’s what credits should be used for.

Peppler: So in view of things like windmills, what’s the appropriate balance between energy and scenic values?

The energy facility siting council really weighs those kinds of things. The biggest issue with wind? Don’t site it in a migratory path for birds. I personally believe that seeing a wind farm is actually a piece of natural beauty. It’s really humans getting with the natural forces that are there. I don’t think, “Oh, it’s ugly.” I like to watch them turn.

Maria Wulff, executive director of the World Affairs Council of Oregon: We often have governors with good ideas. And then we have the legislature. And they’re often at odds. How will you build coalitions?

For whoever is the next governor of the state, that’s the big challenge they have. What it requires is for the governor to not just sit in the governor’s office. You have to visit the legislators on both sides of the aisle. One of those [ideas?] is getting Oregonians jobs. I have very fond memories of when I served in the legislature. I feel really good about finding things that people from both parties can agree upon. You have to work really hard. That’s all it takes.

Wullf: Do you think there were missed opportunities in the Kulongoski administration?

I’m sure there were. But I wasn’t involved enough to know. If you look at Ted’s efforts in green building and renewable energy, he gets an A+. He did that very clearly [by] working with the legislature. The area no one has touched since Governor Barbara Roberts is adequate funding for education. This state is not funding schools adequately: K–12, community colleges, and higher ed. In 1977, community colleges’ average tuition was $387 a year. In 2007, it was $3,870 a year—10 times as high. That has an incredibly limiting effect. It’s a key piece of readying the workforce for new opportunities to come. Right now about 8 percent of the budget [for higher education] is paid out of the state’s general fund. Is that a public university? Eight percent?

Peppler: So the three big universities have floated ideas of changing their structure of governance. What do you think?

I’ve seen some of the proposals for a kind of public/private university. I understand where the presidents are at. I don’t really like the idea very much. I really believe in public education. It’s very clear that [education] will require new taxes. The sales tax has failed. We need to look at the tax code. With a 5 percent reduction in tax credits and deductions, you’d get almost $2 billion in funding for education.

Chambers: When I was on Oregon State University’s faculty in the 1990s, for every dollar in wages, I set aside 19 cents for “Other Personnel Expenses.” Today, that number is more than 52 cents, with health care being the single biggest driver. How will you control expenses?

My preference would be to have a federally enacted universal health plan. I’m getting more and more concerned that it isn’t going to happen.

Peppler: We’re one of only 14 states whose employees don’t pay anything for health care. Just having them pay a small portion of what most private-sector employees pay could save millions and millions of dollars.

That is a negotiated benefit between the public employees and the state. I don’t think the way to solve the problem is to take away benefits from public employees. I think the way to do it is to lower the costs.

Peppler: This biennium’s budget was balanced with one-time stimulus dollars and reserve funds and Measures 66 and 67. The estimates are that those measures won’t produce the projected revenues for the next biennium because businesses and wealthy individuals will leave. And you won’t have the stimulus money. How will you balance the next budget?

The key strategy is to really work your tail off to improve the economy. That will result in a healthier general funding situation.

Forbes: Do you see a lot of prospects for really improving the economy in the next three to four years?

There are incredible opportunities in this state. One of the best examples is Karla’s Stahlbush Farms. It’s really benefiting from this incredible resource we have called the Willamette Valley. They’re selling locally and exporting. They’re not just growing the crop, they’re processing the crop, and then they are using the waste to produce electricity [that can power] 500 or 600 homes. That’s an example that shows us the future: recognizing the full circle. Every part of that puts people to work and keeps money here in our economy. Timber is another example where you can add value and significantly increase the employment per board-foot.

Wulff: Over 20 percent of Oregon jobs are dependent on export trade. As governor, what would you do to encourage growth?

When I was in the legislature in 1983, Governor Vic Atiyeh really laid out clear directions for Oregon’s international trade. He was a visionary. There are many things the governor can do to make sure our relationships with trading partners are strong and that businesses here get the technical assistance they need to meet the demand of those markets.

Forbes: Would you support using the Obama administration’s Race to the Top as a model for education reform?

Those kinds of changes are great, but you’re not going to make the fundamental quality improvements in public education until we support it. We have a wonderful program called the Quality Education Model, and it’s updated every two years. It’s not a deluxe Cadillac, but it’s designed to provide students with the options they need to succeed in the modern world. We’re $2 billion short of implementing it. That’s the next governor’s challenge—to work with the legislature to adequately fund that program. It will directly impact the economy.

Peppler: The Public Employees Retirement Fund (PERS) is looming again as a huge unfunded liability that needs to be addressed. Everybody concurs that the kicker is a problem. I want to hear from you about what you will do about PERS and the kicker.

PERS’s problems aren’t as big as some would say. The fund has already come back 50 percent from where it was, and 60 to 70 percent is for current retirees. The courts have said very clearly, “Sorry, you can’t take away what you’ve promised.” But that liability diminishes over time. The biggest challenge with PERS is the same challenge we have with the general fund, which is that we’ve got to improve the economy—not just Oregon’s, but the globe’s. As for the kicker, I’m a strong advocate for referring to the people the question of whether the kicker should be used for a rainy day fund. I believe it should be.

Peppler: How do you avoid being a kickee?

By not having it on the ballot in 2010. The legislative leadership clearly decided it did not want to have kicker reform on the ballot. At the same time, it’s trying to maintain a Democratic majority. I get that. But that’s not to say it’s not something that could be brought up very quickly after that. It’s the first step to putting our fiscal house in order.

Forbes: After Measures 66 and 67, we’ve given up the ability to do all the reform that needs to be done. There’s no trust.

I wish 66 and 67 were temporary.

Chambers: How are you going to keep businesses and individuals from leaving Oregon because of 66 and 67? Some are already planning to.

I think you need to repeal 66 and 67. That’s a huge challenge given the fiscal situation. But, frankly, I think 11 percent is a pretty high income tax. Let me be clear, I’m not proposing repeal. But I’d certainly look at it if we have serious impacts from the increase. I don’t think it’s sustainable.

Peppler: Keep in mind that part of the deal with the Oregon Business Alliance was that the members would agree to the temporary business tax and then we would help fund the campaign for kicker reform. Unfortunately, it was rejected out of hand by the legislative majority.

When you have the business community coming to the legislature, saying, “We recognize the need; we’re willing to pay our fair share,” my advice would be, go for it. Come out with a remarkable coalition. That’s the role of the governor.

Peppler: Out of the four viable candidates, you’re the most liberal. In this election, Multnomah County was very blue and the rest of the counties were very red. What would you do as governor to bring the state together?

I come from one of those areas (Coos County) that feels pretty left out. But it’s interesting to note that Measures 66 and 67 failed there by 2 percent. There are incredible opportunities for sustainable agriculture, value-added forestry, and green energy that we can look to develop in other parts of the state. Look at the economic development strategy in Klamath County: it’s really focused on sustainability. Other counties can participate. Lakeview, for instance, used to have four sawmills running. All of them shut down. The Collins Pine Company invested in a new kind of head rig that uses smaller-diameter trees from thinning. They’re producing bulding products, and the leftovers they sell to a new company that uses it to create biomass.

Peppler: How would the state look different after four years of Governor Bill Bradbury?

The state would be providing education to its kids from prekindergarten to grade 14. And we would be a very proud government that runs a public higher-ed system. And we would be developing a whole series of jobs—both farm jobs and food processing and energy production—and they would fit together to produce a sustainable vision for this state.