Governor Douglas McKay's Administration

Governor's Message, 1951


Mr. President; Mr. Speaker; Members of the Forty-sixth Legislative Assembly of the State of Oregon:

The Forty-sixth Legislative Assembly meets today in a period of crisis . . . a crisis not only for the people of this country but all the freedom-loving people of the world.

Once again, the forces of despotism and tyranny are on the march. Once again, our country is called upon to demonstrate its faith in the principles of Christian brotherhood among men and among nations and to defend that faith with the precious blood of our young manhood.

Many of our loved ones have already paid the ultimate price that freedom and justice may continue to live in this troubled world. Our hearts are heavy at the loss we share with their families . . . and to these families we extend the deep sympathy and understanding of friends and neighbors.

The present generation has seen American determination and heroism, ingenuity and productive might the deciding factors in two world struggles. IN both of these, Oregon met the full measure of its responsibilities. In many phases of our effort, we achieved records of national distinction. In both titanic struggles, through dark days of defeat and bright days of victory, the people of Oregon held to their faith in the ultimate outcome with a tenacity worthy of their pioneer tradition. Certainly, we may expect that Oregon will rise to the measure of its present responsibilities and that the dark days of Korea will not dim or faith in the ultimate destiny of this nation and our hope of lasting world peace.

The President of the United States has declared a state of national emergency. It may be that some of the more serious aspects of the international situation will be eased before this session of the legislature is adjourned. It appears much more probable that the opposite will be the case. In any event, this assembly can have no more important purpose than shaping the affairs of the state to insure the greatest possible service to the nation in these perilous times.

We must place first things first. We cannot afford “legislation as usual” any more that we can afford “business as usual”. IN the interest of the nation we must defer those things that are not essential to the economic and social health of the state and that do not contribute to a state of readiness for national emergency.

To achieve this purpose I make three recommendations of special importance:

First. I urge that legislation be limited to matters of importance and significance and that these matters be considered with a thoroughness and dispatch required by the serious nature of your responsibilities. Make no mistake: much is expected of you in this session.

Second. I recommend that state services not related to the preparedness effort and not immediately essential to the economic and social health of the state be held to an absolute minimum or carefully reduced. This rule should apply to every activity of local, county and state government that can safely be postponed or reduced without injure to the continuity of essential government and to the national security effort.

We must recognize that during this period of grave international crisis the federal government must have first call upon our material, manpower and tax resources. At the same time, we may properly insist that the federal administration and the federal congress be prudent in drafting these resources in the national interest.

Third. I recommend that no new state services be created except where it is found possible to combine existing agencies with a resulting economy of manpower or cost. In keeping with my part of our common responsibility, I have instructed all departments under my jurisdiction that no new positions not related to civil defense and the preparedness effort are to be created during the period of national emergency; and further, that as vacancies occur in the normal turnover of personnel the vacancies shall not be filled except under circumstances of demonstrated need.


In order to meet our responsibilities in the present emergency it is my judgment that we should provide for the immediate establishment of a central state civil defense agency with sufficient personnel to provide necessary leadership for the local organizations now being created in the cities and counties of Oregon. Thus far the effort to provide necessary leadership for the local organizations now being created n the cities and counties of Oregon. Thus far the effort to provide this leadership by means of a loosely know, largely volunteer organization has fallen short of requirements. It is vital that this agency be created at once. It is my intention to see that it is both realistic and effective.

I have caused to be prepared for immediate submission to you a bill calling for an appropriation of $68,147.’95 to cover expenses for the period February 1, 1951, to June 30, 1951, and an appropriation of $165,447.43 for the period July 1, 1951 to June 30, 1952.

Because no none can foretell today the needs which may confront us a year in the future, I am not submitting a two-year budget, but recommend that an additional $500,000 be made available to the Governor’s office, to be used if an when needed to meet the problems of relief and restoration should an enemy attack occur.

These are not large sums as compared with the tremendous importance of the purposes for which they may be required. Total defense, the defense of our people, our homes and our productive resources, are as vital to our survival and military preparedness. I consider the amounts requested as minimum requirements.

We must exert every effort to guarantee the continued ability of the nation to produce. Our unequalled forest resources, aluminum production, electric power facilities and shipbuilding possibilities represent a most important factor in the production resources of the nation. These great national assets must not be disrupted by sabotage, accident or war.

It is my hope to set up this civil defense agency by the first of February, 1951, and I urge upon you the need for quick and effective action to implement these requests for funds.


We are faced with a serious situation in our state finances --- a situation that can be successfully met only by careful study and by courage in making decisions as this session progresses. The state’s finical integrity must be maintained Considering the conditions that have developed since the budget was completed, you may well see fit to curtail further the expenditures that have been approved.

The budget contemplates the expenditure of some 505 millions of dollars for all purposes, including appropriations from the General Fund and the so-called self-sustaining activities. Of this sum the federal government contributes about 63 millions and the counties over 12 millions, the latter largely for welfare purposes. The balance of some 430 millions is collected and expended for state purposes. Of this latter figure, 180 millions is made up of General Fund appropriations, an increase of 42 millions over the last biennium. To illustrate the difference in actual operating costs, seven millions should be added to this figure, as the expenditures for permanent buildings in the last biennium exceed the present building budget figure by that amount.

The increase consists in major part of the 35 millions that will be needed for the measures approved by the voters at the last election: The basic school fund and the veterans’ bonus. Salary increases account for two and a half millions, carried as a separate budget item. The balance is made up of a welfare item of seven and a half millions, and additions for military and civil defense, emergency board allocation, higher education, Governor’s emergency fund, and institutional expense.

In order to put the general fund in position to sustain these and other payments, for which it will be called upon, an additional 18.5 million dollars must be raised. This amount will be required if the Legislature follows the budget recommendations and puts into the fund all of the excise and income tax payments, the 15 million dollar reserve fund and all miscellaneous income available.

I recommend the elimination of the federal income tax deduction from state income tax returns. It is estimated that such action will increase state income by about 11 million dollars a year or 22 millions for the biennium. This will cover the 18.5 millions required to meet present budget estimates.

I recommend your very careful consideration of the budget in view of the many changes that have occurred since it was compiled. Important reductions were made in the figures submitted for my approval, and I assure you of my complete cooperation in making further adjustments that are justified by changed conditions.

I will not go into further detailed figures at this time, as there is a great deal of source material, including your own committee reports, to which you will want to give careful study in this connection. I do want to emphasize that the great increase in property taxes, for purely local purposes, has made a state tax on property something to be avoided as long as possible. I am not, however, in favor of the passage of any law at this time which would exempt real or personal property from such a levy.


We are fortunate that provision was made for substantial new construction to house state activities at a time when materials and money were available. Appropriations fro this purpose by the Forty-fifth Legislative Assembly totaled $3,242,000 of which $2,000,000 was placed in general building fund and the balance of $1,242,000 earmarked for specific building projects.

Through funds provided by the Legislature, our System of Higher Education has build to a total of $5,375,000 of which $4,500,000 came from the General Building Fund.

Funds carried over from the previous biennium permitted the System of Higher Education other construction at a cost of $1,500,000 and from this same source came the money for construction totaling $7,078,000 at carious state institutions.

Funds borrowed from the Irreducible School fund and from the Public Employees Retirement Fund permitted construction of the new Public Service Building in Salem at a cost of $2,000,000 and the new State Office Building under construction in Portland at a cost of $2,500,000. The loans will be repaid out of rentals.

Rentals will repay bonds issued for the construction of new dormitories at various state schools of higher education. Two important buildings at these schools have been completed during the biennium without the use of any state funds. These were the Erb Memorial Union Building at Oregon State which cost $1,842,000. These buildings were financed from gift funds and from revenue bonds that will be repaid from student activity and building fees and from student activity receipts.

A new Highway building in Salem will be completed early this summer at a cost of $2,000,000. The cost of the building will be taken from Highway Commission capital funds.

A new administration building is under construction at the School for the Blind at a cost of $360,000.

A new cell block has been completed at the State Penitentiary during the biennium and a second is under construction.

Substantial progress has been made in building housing facilities for state employees at the various state institutions. It has been found that employees are not obtainable in the higher brackets unless housing is provided.

Circumstances will not permit a continuation of our building program on the scale undertaken during the past biennium. However, I recommend a careful appraisal of what has been accomplished and that this Assembly undertake the formulation of a long-range program, with prepared plans, so that there may be no delay when materials and money are again available.


The first report of the Legislative Interim Committee on State Government Administration, often referred to as the Little Hoover Report submitted to this Assembly in accordance wit House Joint Resolution 32 of the Forty-fifth Legislature, will undoubtedly be one of the important matters before this session.

I wish to commend the Committee for the thoroughness of the study it is submitting. It is a volume of the utmost importance, and constitutes a calculable analysis of state business and procedure.

It recommends sweeping changes and claims that such changes will bring about economies running into millions of dollars. If you find that the changes suggested will bring about economies running into millions of dollars. If you find that the changes suggested will bring about the economies claimed, then there can be no doubt that our present system of handling state business needs immediate and fundamental overhauling. I have no recommendation as to shifting of authority among state officers, nor do I seek in any way an increase in the power or authority of the office I now hold.

Your action should be taken on the basis of benefit to the people of Oregon, and with serious consideration to any relief that may be given in reduction of our heavy tax burden. Possibly changes could be made in line with the Committee’s recommendations without any major shift in authority, and yet accomplish the desired result. It is my sincere conviction that the authority of state officials, elective or appointive, no matter now jealously guarded, must be considered as secondary to the general welfare.

Also, it might well be that before making any sweeping changes your considered proposal be submitted to a vote of the people. Rest assured of the full support of my office in any constructive, efficient plan of modernizing state business, that will reduce taxes and, at the same time, maintain or improve service to the public.


On your desks is a report of the Legislative Highway Interim Committee of the Forty-fifth Legislature. It is a continuation of a study that has been carried on by similar committees for an umber of years. It brings down to date vital information regarding our highway situation, particularly covering the need for funds for road purposes. You will find this report extremely valuable in your deliberations, as it comes from years of experience and study on the part of some of the ablest men in our state. I recommend it for your very careful consideration.

Last year 780,000 cars from outside the state visited Oregon, carrying some 2,330,000 visitors, who spent 113 millions here. The tourist industry in Oregon is truly big business. We have achieved a goal in this respect that is very gratifying, but roads today have a far greater importance than use for recreational travel.

Oregon was a leader in highway progress until the depression of the thirties. Then, after a brief period of active building, all construction creased during the second world war, and we now find ourselves with a great backlog of critical highway deficiencies which are retarding the state’s economy.

Heretofore, I have strongly advocated a pay-as-you-go plan and have opposed incurring debt for highway construction. However, we must meet the conditions that now confront us, and the present emergency has completely changed the picture.

The Legislative Interim Committee has determined that, as of this date, the cost of completing the state highway system of Oregon would be 434 millions, and that of they amount 134 millions represents critical and immediately needed construction.

The Highway Commission has about 15 millions available annually for the new construction. It needs 30 millions annually to take care of the critical deficiencies in the next five years. This represents about the amount that can be expended economically, taking into consideration the amount that can be expended economically, taking into consideration the engineering and contracting forces available and necessary to do the job.

Both the Legislative Interim Committee and the Highway Commission have pointed our the pressing need for more money at once. They have arrived at the conclusion that it would be good management to use deferred financing because of the great benefit of new highways. It would be bad management to tolerate continuance of economic losses that can be avoided by the judicious use of funds made available immediately.

Government officials, including those in the armed services, now r recognize that roads can no longer be considered expendable, but must be improved and kept in good repair, as one of the essentials to the defense of the nation. For the first time the federal government will assist the state in paying back road bonds, provided the work is done to federal standards. I recommend legislation permitting the Highway Commission to meet the present situation by the issuance of road bonds, over the period of years you may deem necessary, and to be retired from highway revenues. Interest rates on such bonds, at the present time, would be very favorable.


In my message to the Forty-fifth Legislative Assembly I pointed our that certain payment to widow and those who had suffered permanent and total disability were not realistic in view of living costs. The Legislature moved to correct these inequities by adopting what became Chapter 103, Oregon Laws 1949, and by appropriating $900,000 for the biennium beginning July 1, 1949, and ending June 30-, 1951, to increase payments from the then current rate to $60 and $70 per month.

It has been found that the amount appropriated will not be sufficient to pay these increased benefits though the biennium ending June 30, 1951. I therefore recommend that an additional some of $99,413 be appropriated from the surplus fund of the Industrial Accident Commission.

I further recommend that the Forty-sixth Assembly continue these increased payments to widows and permanent total disability cases by apportioning $943,267 from the surplus frond of the Commission for the biennium beginning July 1, 1951, and ending June 30, 1953.

I recommend that benefits paid to workmen injured during the course of employment under the provisions of the Workmen’s Compensation Act be increased in categories which experience has demonstrated contain inequities.

Because of our expanding economy and employment in hazardous defense industries of unskilled and untrained workmen, I recommend that the ceiling of for per cent of income for safety administration be increased to five per cent based upon the average annual income of the Industrial Accident Commission during the previous five years.


I recommend that a careful study be made of the operation of the seasonality clause passed by the 1949 Legislature to determine if it places an unjust burden on the workers in the lumber and canning industries. If such is found to be the case, it should be corrected by appropriate amendatory legislation.

The continued increase in the cost of living justifies careful study of the adequacy of payment under the Unemployment Compensation Act.

Present benefits to unemployed workers are limited to one-forth of earnings for a base year. I recommend serious consideration of the liberalization of the ceiling on benefits to one-third of the earnings of a base year.


The federal “Social Security Act Amendments of 1950” contain carious provisions for increasing assistance payments to state agencies. Many of these amendments require implementing state legislation. I recommend careful study of these amendments and such amendment of our own act as will insure maximum benefits to this state and its sub-divisions.


Recent legislation by the federal congress has made provision by which various public agencies may provide coverage under the old age and survivor’s insurance law for employees of city, county, district, municipal and public corporations not covered by the state retirement act. An enabling act by this Assembly is necessary to make the benefits of the federal legislation available to the public agencies of this state that desire such coverage. I recommend that such an act be passed.

We must anticipate that the manpower requirements of the national security effort may seriously handicap the recruiting of employees for the state government. I recommend a study of the manpower requirements of state administration during the coming biennium looking toward possible modification of present requirements for retirement at age 65. it is my recommendation that any such modification be limited to the period of the national emergency as declared by the President of the United States.


The need for an intermediate institution between the state service now afforded by the training school at Woodburn and the State Penitentiary is recognized throughout the state. The need exists, too, for a special unit for the custody, care and treatment of the dangerous mental deviate.

In view of the national situation, an early state on construction of these institutions may be impossible. However, I do urgently recommend that, in the event of delay, provision be made for the completion of plans for such institutions so that they may have high priority when conditions permit a resumption of norm al building activates.


One of my first acts as Governor was to call together representatives of the carious departments, boards and commissions concerned with the consecration, utilization and development of the natural resources of the state. During the past two years the important benefits of such coordination and cooperation have been clearly demonstrated.

I recommend that this agency for coordination and cooperation be given legal status by the creation of a “Committee on Natural Resources” to be composed of the Governor, as chairman, Superintendent of Public Instruction, master Fish Warden, State Forester, Director of the State Game Commission, Secretary of the state Sanitary Authority, State Engineer, Chairman of Soil Conservation, Superintendent of Public Parks, Director of Agriculture, the Dean of the School of Agriculture of Oregon State College, the Director of the Department of Geology and Mineral Industries and the Executive Secretary of the Willamette River Basin Commission. This committee should be granted authority and responsibility for the research and recommendations to create a comprehensive program of resource consecration, utilization and development.


The experience of industrial areas of other states has provided ample warning that control legislation is needed now if Oregon is to achieve maximum industrial development without paying the price of air pollution that is a menace to public health. I recommend that the Sanitary Authority of the State Board of Health be charged wit the development of a comprehensive program for the prevention, control and abatement of all new and existing sources of pollution of the air, with sufficient authority to enforce reasonable regulations to effectuate such a program.


In my message to the 1949 Legislature, Oregon’s splendid forestry program and its continuance were stressed as being vital to the future welfare of the state. Tremendous progress has been made in reforestation, research and protection, and I am very glad to report to you that our state is maintaining its position as a national leader in these fields. This has also been a most favorable year in fire prevention.

One immediate problem of a most serious nature still confronts us in the field of forestry --- forest insect control. Our participation with the federal government and private land owners in spruce budworm control has been highly successful to date, and should be continued. You will find an item in the budget of $400,000 for this work. Its importance cannot be over estimated. Facts and figures supporting this expenditure will be furnished to you at the proper time by the Forestry Department.


It would be in the best interests of the state to reduce the term for which members of the Board of Higher Education are appointed. At present, this term is nine years. I find that the length of service involved has forced excellent prospective appointees to decline. Qualified men and women who would gladly accept the responsibility for a shorter period, hesitate to obligate themselves for such an extended term.

I recommend that the term of service on this board by changed to five years.


If there is an important weakness in our system of direct legislation, it is in the matter of placing all the facts before the voters in order that they may have a full understanding of the issues. When such is the case, there need be no fear as to the results.

In this connection, I not that the Legislative Interim Tax Study Committee recommends that “the appropriate section or section of the Constitution of the State of Oregon be so amended as to require that all initiative measures bearing upon new or additional expenditures of the state contain as an essential element to be authorized by the voters a specific source from which the monies needed f or the expenditures are to be derived.”

Oregon led the nation in adoption of the initiative and referendum. I believe it can well take the lead in further strengthening its system of direct legislation by action similar to that suggested by your committee.

No reasonable person will contend that it is within the power of all voters to familiarize themselves thoroughly with complicated tax measures such as appear on our ballots. I recommend t hat the ballot title of measures before the public, providing for expenditures, present to the voter not only the source from which such money is to come but also the maximum amount to be so spent. I make this recommendation in the sincere belief that by its adoption the “Oregon System”, so widely adopted throughout the nation, will be strengthened and the people better served.


There is no justification for disregarding the explicit provision of the Constitution of Oregon for periodic reapportionment of legislative representation.


The Constitution of our state wisely delegates separate fields of responsibility to the legislative and executive branches of state government. I have brought to your attention many of the matters that urgently deserve your consideration. Obviously, all of them could not be included in so brief a presentation. What may be lacking at this time I shall endeavor to make up by earnest and intimate cooperation with you during the session.

I hope that we may work together within our separate responsibilities to achiever an outstanding service on behalf of those who have given us their confidence. May our efforts justify their faith.

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