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“Hey Betsy, tell Ryan helping seniors offers a great return on investment and is something to be proud of 20 years from now.”

Blog Post
January 21, 2009By Joy Margheim

Last week OPB’s Think Out Loud show delved into the budget crunch facing the Oregon legislature. Among the guests was Ryan Deckert, president of the Oregon Business Association. When asked how he and OBA decide whether the policy priority should be funding immediate needs and projects or long-term “investments” in “emerging” sectors, Deckert said it was a tough choice. Then he added:

I think it’s one of the most difficult decisions those three representatives that are in the studio today will have to face. Of how do you look at helping someone today? And there’s – it’s just the right thing to do. Representative Richardson spoke about it. Helping a senior have services – it’s the right thing to do. There’s no return on investment versus funding signature research that brings in all of these federal and private dollars and produces new companies and jobs.

"There's no return on investment." That’s an amazingly incorrect statement, especially coming from a former legislator who served six sessions (1997 through 2007), including stints as chair of the Senate Revenue Committee.

State Budget 101 teaches that long-term care programs that help seniors are part of Medicaid, which means for every dollar the state spends, about $1.70 in federal dollars flow into the Oregon economy.

ECONorthwest recently evaluated the economic impacts of those federal dollars, and the report (PDF) shows that every $1 million in state General Fund (personal and corporate income tax) dollars spent on long-term care creates 56.4 jobs and $1,162,460 in wages.

Not only is that a return on investment from helping a senior stay in long-term care, but it’s a damn good ROI.

How can I say that? Compare it to the ROI for the business and residential energy tax credit programs (BETC/RETC) that OBA and the Governor advocate preserving while long-term care programs are proposed to be slashed in the Governor's budget.

A 2007 ECONorthwest report on the credits (PDF) shows that each $1 million in General Fund dollars spent on those programs created only 16.8 jobs and $253,238 in wages.

That means state investments in long-term care bring about more than three times the jobs and more than four times the wages as investments made through BETC and RETC.

So the choice for the legislature should not be as difficult as Deckert portrayed. Basic budgetary math says helping seniors offers a high ROI.

On the same Think Out Loud show newly elected State Representative Jefferson Smith said (listen (MP3) starting at 3:31) that he hopes the legislature will

make smart budgetary choices. I’m sure there will be deep cuts. There probably will also be some modest revenue increases. And that we’ll do those in a way that maximizes economic multipliers, that minimizes pain to social justice, and that puts our state in a leading position in a global green jobs economy and hopefully we will make decisions now that we will be proud of 20 years from now.

Smith’s criteria for making the tough choices ahead are the right ones: maximizing economic multipliers and minimizing pain to social justice. Maintaining long-term care and the jobs that sector now provides has those attributes. Investing in long term care is something that Smith and other members of the 2009 Legislative Assembly will be proud of 20 years from now.

This post was originally published on on January 21, 2009. The original post can be found at