Overtaxed and Underbuilt

By John A. Charles, Jr.

An Oregon Legislative committee is proposing a massive series of tax increases to pay for various transportation projects.

The proposal calls for higher taxes on vehicle registration, increased gas taxes, a new sales tax on motor vehicle purchases, a statewide employee tax to subsidize transit, and a new bicycle sales tax.

While there are many bad ideas on this list, perhaps the most offensive is the sales tax on vehicle purchases. It is being crafted so that most of the money would be diverted from highway maintenance into something called the “congestion relief and carbon reduction fund.”

Anything that includes “carbon reduction” in the title is guaranteed to be a boondoggle.

Before this proposal goes any further, legislators should consider a bill simply focusing on improving the road system. We all benefit from better roads.

In addition, they should try to charge people based on actual road use, not the mere ownership of vehicles. The gas tax is a good surrogate for this, so it would make sense to increase the gas tax rate while lowering vehicle registration fees. This would be fair to motorists, while still raising the funds needed for road improvements.


John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free market public policy research organization.

Oregon Politicians Support Better Roads, Just Not Here

By John A. Charles, Jr.

Recently the Oregon Legislature held a hearing on HB 3231, a bill promoted by Rep. Rich Vial (R-Scholls) that would authorize the formation of special districts for the purpose of constructing and operating limited-access highways.

Opponents made many of the same arguments they’ve been using for decades: new highways threaten farmland; increased driving will undermine Oregon’s “climate change” goals; and we can’t “build our way out of congestion.”

Perhaps the most comical opposition argument was made by Marion County, which sent all three of its Commissioners in a show of force. The Commission Chair concluded his remarks by saying, “We understand progress; we just want that progress to go somewhere else.”

Oregon stopped building new highways in 1983 after I-205 was completed. Elected officials came to believe that our needs for mobility could be met through increased urban densities, massive subsidies for public transit, and various forms of “demand management” to entice or even force people out of their cars.

The new approach didn’t work.

It turns out that manipulating urban form through land-use controls has very little influence on driving. Sure, you can regulate suburbia out of existence through density mandates, as Metro is doing. You can also reduce the parking supply and bring light rail right to someone’s front door.

But no matter how much some people fantasize about using alternatives to cars, it’s not very practical. Midday meetings, post-work errands, childcare obligations, and countless other demands lead people to rationally opt for driving for most trips.

That’s why, after a 20-year spending binge of $3.67 billion for new rail lines, TriMet’s share of daily commuting in Portland actually dropped from 12% in 1997 to 10% in 2016.

Auto-mobility is a wonderful thing, and there is no reason to feel guilty about new roads. For one thing, driving is strongly associated with economic growth. According to ODOT, for every job created in Oregon, we can expect an additional 15,500 miles of auto travel each year. If you’re in favor of new job creation, you have to accept increased driving as a logical consequence.

Moreover, the emissions associated with driving are now so minor that the real concern should be reducing air pollution from congestion. Vehicles sitting in gridlock have per-mile emissions of infinity; getting those vehicles into free-flowing conditions will improve local air quality.

Autos generally have the lowest emission rates when traveling at steady speeds of around 50 MPH. This is also a driving speed that makes most drivers happy, especially at rush hour. The way to accomplish both goals is through the construction of new highways when needed, coupled with the use of variable toll rates (also known as “dynamic pricing”). This could happen under HB 3231.

Across the country, dozens of impressive new highways are being built, many with private financing. Dynamic pricing is being be used to pay off bonds and eliminate congestion. This is the progress that most commuters dream about.

Unfortunately, it probably won’t happen here. Oregon politicians only support progress somewhere else.


John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free market public policy research organization. A version of this article originally appeared in the Portland Tribune on April 25, 2017.

The Greatest Challenge to Traffic Safety? It’s Not Residential Speed Limits

By John A. Charles, Jr.

Earlier this week the Oregon House of Representatives passed HB 2682, which will allow Portland to lower traffic speeds on residential streets from 25 MPH to 20 MPH. This was hailed as an important step towards reaching the city’s goal of zero traffic fatalities by 2025, but in reality the bill is mostly symbolic.

First, HB 2682 only affects residential streets. Most traffic fatalities occur on higher-speed arterials.

Second, reducing travel speed is just one of many factors in traffic safety, and not always the most important. According to the 2015 Portland Traffic Safety Report, 54% of fatal crashes involve alcohol or drugs. When pedestrians are involved, 30% of fatalities involve either an intoxicated walker or driver.

Traffic speed is a factor, but 80% of Portland’s fatalities and serious injuries occur on the 19% of roadways that are posted at 30 MPH or higher. None of those roads will be affected by HB 2682.

The ubiquitous use of digital devices by motorists, cyclists, and pedestrians represents the greatest new challenge to traffic safety. Unfortunately, people who would rather text than watch the road are unlikely to be helped by a law that reduces speeds in quiet neighborhoods from slow to slower.


John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free market public policy research organization.

Testimony Regarding Senate Bills 432, 602, 608, 612 and 618

Testimony of John A. Charles, Jr.

President & CEO, Cascade Policy Institute

Regarding Senate Bills 432, 602, 608, 612 and 618

April 6, 2017

Advocates of land-use planning strongly believe that the benefits of planning always outweigh the costs.

But no regulatory system is perfect. Certainly the Oregon program can be improved, if we have the will.

The most obvious problem is that land-use regulation imposes a static vision on a dynamic economy. Oregon demands “urban containment” as the top priority, enforced through urban growth boundaries and rural exclusionary zoning. This has to result in an imbalance between housing supply and demand, leading to rapid price escalation. There is no other logical outcome unless planning advocates have invented a new economic theory that only they understand.

The bills under discussion today may not be the perfect responses to current problems, but surely at least one of them could be used by the Committee as a vehicle for modest reform.

I encourage the Committee to pick one flaw in the Oregon system and address it going forward.

You could focus on the dysfunctional urban growth boundary management process, the punitive “Transportation Planning Rule,” or perhaps farmland preservation requirements that are disconnected from economic reality.

It doesn’t matter which problem you address, but to say that no flaws exist and all reform bills must be killed year after year is not plausible.

Failure to address obvious problems will undermine public confidence in the legislative process. Please use the remaining time in this session to solve at least one problem related to zoning.


John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free market public policy research organization.

Let’s Build Some Highways

By John A. Charles, Jr.

Oregon stopped building new highways in 1983 when I-205 was completed. Top planning officials began espousing a philosophy of spending money on rail transit rather than roads. The government also used the power of zoning to crowd more people into urban centers, in the belief that high density would lead to less reliance on cars.

The new strategy failed.

The Portland regional transit agency, TriMet, was given more than $3.6 billion to build a light rail system; yet between 1997 and 2016, TriMet’s market share of all commute trips in Portland fell from 12% to 10%. As a result, traffic congestion has become a major barrier to regional mobility.

Now a bipartisan group of legislators, led by Republican Rich Vial of Wilsonville and Democrat Brian Clem of Salem, has introduced a bill that would jump-start the highway-building process. HB 3231 would authorize cities and counties to jointly form special districts for the purpose of building and operating limited-access public highways.

If built, such highways would likely be financed through loans, with debt service paid off by tolls.

So far HB 3231 has not received a public hearing. It should. Motorists deserve all the highways they are willing to pay for. Let’s give them a chance to vote with their dollars for a better road system.


John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free market public policy research organization.

Oregon Taxpayers, Not Riders, Pay Most Costs of Public Transit Operations

By John A. Charles, Jr.

In a recent interview with the Portland Business Journal, Chris Rall of Transportation for America argues for increased state support of public transit service. He says that Oregon only covers three percent of the operating costs of transit, while other (unnamed) states pay for 24 percent.

I don’t know the source of Mr. Rall’s claim, but the audited financial statements for the largest transportation districts in Oregon show a very different picture.

In FY 2016 TriMet had total operations revenue of $542,200,000 but only $118,069,000 came from passenger fares. That means TriMet riders received a 78% subsidy from other sources.

At Lane Transit District in Eugene, passenger fares in 2015 were only $7.2 million, while total operating revenue was $60.9 million. Non-riders paid for 88% of operations.

For Cherriots Salem-Keizer transit, public support totaled 94% of all operating revenue in 2015.

Undoubtedly the largest subsidy goes to the Portland-Eugene passenger rail line operated by ODOT. For every one-way ticket sold in 2015, the public paid $120.

Before state legislators approve any more subsidies to transit, they should require that transit operators recover at least 50% of costs from customers. If riders are only willing to pay 10 percent, why should taxpayers have to pick up the rest of the tab?


John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free market public policy research organization.

WES Is an Energy Hog

By Allison Coleman

In 2009 the regional transit agency, TriMet, opened a commuter rail line running from Wilsonville to Beaverton. The line is known as the Westside Express Service, or WES.

According to transit advocates, commuter rail would help reduce energy consumption in the Portland region because it was assumed that trains moved people more efficiently than private automobiles.

However, the energy efficiency claims about WES turned out to be wrong. WES uses 6,753 BTUs of energy per passenger mile, which is 4,000 more than the national average of all commuter rail lines. WES also uses more than twice the amount of energy as a car to move the same number of passengers. On average, automobiles consume only 3,122 BTUs per passenger mile, and that number has been dropping steadily since 1970.*

Many transit advocates have been so enthused about commuter rail that they have urged lawmakers to fund an expansion of WES to Salem. Not only would this be costly, it would be a step backwards for energy efficiency. Surprising as it may seem, the average automobile is now far more efficient than commuter rail.

*See http://cta.ornl.gov/data/tedb35/Edition35_Chapter02.pdf, page 2-20, table 2.15.


Allison Coleman is a Research Associate at Cascade Policy Institute, Oregon’s free market public policy research organization. 

Portland’s Regional Transit Strategy Is Not Working

By John A. Charles, Jr.

The Portland Auditor released the 2016 Annual Community Survey on November 30. The responses show that the share of all commute trips taken by public transit fell 17% during the past year.

This was part of a longer-term decline in transit use. The transit share of all Portland commute trips peaked in 2008 at 15%. Since then it has hovered near 12%, and now rests at 10%.

Taxpayers should be especially concerned about the negative correlation between passenger rail construction and market share. In 1997, when the region had only one light rail line—the Blue line to Gresham—transit market share was 12%.

After extending the Blue line to Hillsboro and adding four new lines plus the WES commuter rail and the Portland Streetcar, transit market share is only 10%.

Travel Mode Share for Weekday Commuting

Portland citywide, 1997-2016

Mode 1997 2000 2004 2008 2010 2012 2014 2015 2016
                   
SOV 71% 69% 72% 65% 62% 61% 63% 60% 61%
Carpool 9% 9% 8% 8% 7% 6% 6% 5% 6%
Transit 12% 14% 13% 15% 12% 12% 11% 12% 10%
Bike 3% 3% 4% 8% 7% 7% 8% 7% 8%
Walk 5% 5% 3% 4% 6% 7% 8% 9% 9%
Other n/a n/a n/a n/a 7% 6% 6% 7% 7%

      Source: Portland Auditor, Annual Community Survey

The numbers cited above are for citywide travel patterns. When broken out by sector, the Auditor found that just 5% of all commuters in Southwest Portland took transit to work in 2016. Despite this lack of interest by commuters, TriMet and Metro are working to gain approval for another light rail line extension from Portland State University through SW Portland to Bridgeport Village. The likely construction cost will be around $2.4 billion.

Unfortunately, there is no empirical basis for thinking that cannibalizing current bus service with costly new trains would have any measurable effect on transit use.

Transit advocates like to claim that we simply need to spend more money to boost ridership, but we’ve already tried that. TriMet’s annual operating budget went up from $212.2 million in 1998 to $542.2 million in 2016. After adjusting for inflation, that’s an increase of 72%. Those increases were on top of construction costs for rail, which cumulatively exceeded $3.6 billion during that era.

It’s time to stop the myth-making and start holding public officials accountable for a plan that isn’t working.


John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free market public policy research organization.

Policy Picnic – November 16, 2016

Please join us for our monthly Policy Picnic led by

Cascade’s President and CEO, John A. Charles, Jr.


Innovations in Highway Finance

All over the world, new highways, bridges, and tunnels are being built, paid for with tolls. But these not your grandfather’s tolls, and there are no toll booths. These are collected electronically, with variable price rates to ensure traffic speeds of 45 MPH or better. This presentation will summarize the latest roadway projects and the implications for Oregon.

Admission is free, but reservations are required due to space limitations. You are welcome to bring your own lunch; light refreshments will be served.

 

Cascade’s Policy Picnics are generously sponsored

by Dumas Law Group, LLC. 

Dumas Law Group

Uber Translated: Better Service for the Underserved

By Lydia White

It’s not news that free-market visionaries provide better service than their corrupt competitors, but big government advocates are reluctant to admit it, even when such enterprise benefits their causes.

Ride-hailing services like Uber and Lyft provide cheaper, timelier, and higher quality rides. They better serve those with lower incomes and disabilities. They give Portland residents a local source of income. They also better comply with city regulations.

Uber serves high- and low-income communities equally; taxis underserve poorer neighborhoods. Ride-hailing services connect the disabled with handicap-accessible cars; taxi companies force disabled users to wait and hope for one to eventually pass by.

The Portland City Auditor claims the Portland Bureau of Transportation (PBOT) isn’t doing enough to “monitor the quality of service by ride-for-hire companies” and ensure riders from low-income communities or with disabilities are fairly served. Yet PBOT found that while Uber and Lyft provide a plethora of data (too much, in fact, for PBOT to analyze), taxi companies fail to comply with the Bureau’s requirements. Moreover, Uber’s internal rating system provides its own system of accountability—including cleanliness and efficiency.

The free market is forging ahead with 21st-century technology. While cronyism befell taxi companies, Uber and Lyft created an innovative alternative.

Proponents of big government should embrace the free-market sharing economy, especially if they truly wish to help traditionally underserved minorities.


Lydia White is a Research Associate at Cascade Policy Institute, Oregon’s free market public policy research organization.

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