Land Board Votes to Sell Elliott State Forest

By John A. Charles, Jr. 

On February 14 the Oregon State Land Board – comprised of Governor Kate Brown, Treasurer Tobias Read, and Secretary of State Dennis Richardson – voted 2-1 to sell 82,450 acres of the Elliott State Forest to a consortium of private parties led by Lone Rock Timber Management Company. The agreed-upon sale price is $220.8 million; and the net proceeds will be placed in the Oregon Common School Fund (CSF), an endowment for public schools.

This parcel is a small part of the Oregon Common School Trust Land portfolio of 1.5 million acres of lands that must be managed by the Land Board to maximize revenue over the long term for the benefit of public schools.

For many years the Elliott was a money-maker, but environmental litigation steadily reduced timber harvesting to a trickle. For the last three years the Elliott has actually lost money, which prompted the Board in August 2015 to vote unanimously to sell the Elliott and put the proceeds into alternative investments.

As a long-time Board member, Gov. Kate Brown repeatedly voted to sell the forest, but in December 2016 she changed her mind and announced her intent to use state bonding capacity to buy a portion of the Elliott and keep it in public ownership. Treasurer Ted Wheeler and Secretary of State Jeanne Atkins agreed with her conceptually, but no formal vote was taken and both of them have since left the Board.

At the meeting earlier this week, Gov. Brown made a motion to terminate any further negotiations to sell the forest, despite the fact that Lone Rock and its partners had spent at least $500,000 putting together a good-faith offer in response to the Land Board’s sale protocol. Her motion never received a second.

New Treasurer Tobias Read indicated that he was uncomfortable walking away from the offer at the last minute, and that the legal doctrine of “undivided loyalty” to Common School Fund beneficiaries – public schools – compelled him to sell the money-losing forest. Secretary of State Dennis Richardson concurred and the Governor was out-voted.

Cascade Policy Institute has been urging the Land Board to sell the Elliott since 1996, when the forest was valued at roughly $800 million. It was evident to us that over the next several decades, environmental lawyers would treat the Elliott like a legal piñata and file continuous lawsuits to prevent timber harvesting. That is exactly what happened, turning this vibrant forest into a net liability by 2013.

Cascade published a number of technical papers demonstrating that over virtually any time period and under any reasonable set of assumptions, Oregon schools would be better off if the Board simply sold the forest and put the net proceeds into stocks, bonds, and other financial instruments. These papers were ignored by multiple generations of Land Board members, including John Kitzhaber, Ted Kulongoski, Jim Hill, Phil Keisling, Randall Edwards, and Kate Brown.

Many editorial writers are urging the Land Board to “hit the pause button” on this sale, but the fact is the Board has been “pausing” since at least 1995. As timber harvest receipts steadily declined over the next several decades, Oregon wasted more than $3 million trying to negotiate a so-called “Habitat Conservation Plan” with the federal government that would shield Oregon from further litigation. Such an agreement was never reached.

In a report paid for by the Department of State Lands in 2015, experts found that the failure to sell the Elliott in 1995 – as recommended by a Department of Forestry consultant – had cost public schools $1.4 billion in lost earnings over a 20-year period.

Gov. Brown’s last-minute effort to buy back timberland the public already owns was poorly thought out. Most of the media observers – who tend to favor public ownership – have apparently overlooked the fact that any revenue bonds sold by Oregon would have to be paid off by profits generated on-site. Since the Elliott has been steadily losing money under public management, it’s unlikely that anyone would even buy such bonds.

Although selling the Elliott was the right thing to do, we will never know if the public received fair market value because the Land Board refused to take competitive bids. In 2016 the Board established a price of $220.8 million based on multiple appraisals, and no one was allowed to offer a higher amount. Clearly, this was a bizarre way to sell a valuable asset and demonstrates how Kate Brown, Ted Wheeler, and Jeanne Atkins consistently abdicated their fiduciary responsibilities in favor of a political agenda to retain public ownership.

Treasurer Read and Secretary Richardson deserve credit for moving forward with the sale. Neither of them wanted to do it, but they understand that they have an obligation to current and future public school students to add value to the Common School Fund.


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

Car Ownership Is Not a Crime

By John A. Charles, Jr.

A bill has been introduced in the state legislature that would impose a $1,000 ownership tax every five years on automobiles more than 20 years old.

Fortunately, leaders of the Republican Party quickly denounced it; and without bipartisan support the bill has no chance of passage. The chair of the House Revenue Committee, Rep. Phil Barnhart of Eugene, has announced that the bill is dead.

The fact that this legislation was even introduced points to a conceptual problem shared by many lawmakers: They think that owning a vehicle is undesirable and should be taxed.

But owning a car imposes no cost on the public; it’s the use of the vehicle that we should be concerned with.

As one legislator told me many years ago, “I own four cars—but I only drive one at a time!”

Since we do need money for improved roads, any transportation tax should focus on road use. One option would be to lower the cost of vehicle registration in exchange for a small increase in the gas tax.

Motorists deserve all the roads they are willing to pay for. Raising the gas tax would give drivers a chance to vote with their tires 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.

Parental Choice Champion Betsy DeVos Confirmed as U.S. Secretary of Education

By Steve Buckstein

Opponents of Betsy DeVos tried everything they could to keep her from becoming U.S. Secretary of Education. In the end, she was approved by the Senate on Tuesday with Vice President Pence breaking a 50-50 tie vote.

In addition to arguments that she is wealthy (which she is) and that she never attended public schools (which she didn’t), opponents feigned shock that she had the temerity to argue that educating children takes precedence over protecting and funding public schools that may not meet their needs.

Perhaps her opponents’ biggest error is thinking that private schools are not providing “public education.” But they are. Many Americans recognize that meeting the educational needs of children trumps meeting the financial needs of the adults who work in public school buildings.

Public education means educating the public—or it should. Students don’t suddenly stop being part of the public just because their parents believe they will be better educated in other than their local public school building.

Betsy DeVos believes that public funding of education shouldn’t be limited to schools dominated by public teachers unions. She may not be a friend of those unions, but she is a friend of children who may need those funds to help them learn somewhere else. She has, and will advocate for school choice programs including charters, vouchers, and Education Savings Accounts that allow those children to take their public education funds to the schools they and their families—not the government—choose.


Steve Buckstein is Founder and Senior Policy Analyst at Cascade Policy Institute, Oregon’s free market public policy research organization.

“Facing Reality” Report Offers Solutions to Governor Brown’s $1.7 Billion Budget Hole Without Raising Taxes

FOR IMMEDIATE RELEASE

Media Contacts:

Steve Buckstein (503) 242-0900

Jeff Kropf (541) 729-6229

PORTLAND, Ore. – Cascade Policy Institute and Oregon Capitol Watch Foundation jointly released a new report Wednesday, entitled Facing Reality: Suggestions to balance Oregon’s budget without raising taxes. The report offers practical solutions to fill Governor Kate Brown’s estimated $1.7 billion budget hole without raising taxes.

Facing Reality is the third budget blueprint in a series: In 2010 and 2013 Cascade Policy Institute and Americans for Prosperity-Oregon published Facing Reality reports that offered state legislators an opportunity to “reset” state government using the time-tested principles of limited government and pro-growth economic policies.

“Oregon has over one billion dollars more to spend than the last budget but is still nearly two billion short because Governor Brown’s budget continues out-of-control and unsustainable spending,” said Jeff Kropf, Executive Director of Oregon Capitol Watch Foundation. “It’s time to face the reality that raising taxes will never provide enough money to build the fantasy utopia envisioned by the Governor and current legislative leadership. There is no free lunch, and new taxes are only going to hurt the poor and the middle class.”

Facing Reality outlines $1.3 billion in reduced spending in seven specific areas which, coupled with small across-the-board agency reductions, equals $1.7 billion, enough to fill the Governor’s estimated budget hole and removing the need to raise taxes.

“Keep in mind that even with our Facing Reality budget reductions, the state of Oregon will still be spending more money than the previous budget,” said Steve Buckstein, Senior Policy Analyst and Founder of Cascade Policy Institute. “The reality the Governor and the legislature must face is that the bill for years of overspending is coming due, and raising taxes that hurt the economy is not the answer. Reducing how fast spending grows is the sustainable way forward.”

This third Facing Reality report offers politically possible solutions to meet the needs of Oregonians. It still gives most state agencies more money to spend, but without enacting new taxes being proposed by the several dozen tax increase bills introduced for consideration in the 2017 legislative session.

Here are the seven specific budget reductions proposed in Facing Reality:

Solution Impact
PERS—$100,000 cap $135 million
Department of Administrative Services—halt additional hiring $120 million
Medicaid—opt out of ACA expansion $360 million
Cover All Kids—reject expansion $55 million
Department of Human Services—targeted reductions $321 million
Department of Human Services—cash assistance reforms $160 million
State School Fund—reject Measure 98 $139 million
Total $1,290 million

For agencies not identified for specific reductions in the report, across-the-board reductions of about three percent from Governor Brown’s budget would eliminate the shortfall she identified. If this plan were implemented, none of the tax and fee increases outlined in the Governor’s budget would be necessary.

Buckstein and Kropf note, “Most Oregonians must face their own family budget realities every day. Facing Reality is a good-faith effort to hold our state government to the same budgetary realities. We look forward to working with state legislative and executive branch leaders to help implement such realities in 2017.”

Read the full report here: Facing Reality: Suggestions to balance Oregon’s budget without raising taxes

Founded in 1991, Cascade Policy Institute is a nonprofit, nonpartisan public policy research and educational organization that focuses on state and local issues in Oregon. Cascade’s mission is to develop and promote public policy alternatives that foster individual liberty, personal responsibility, and economic opportunity.  Oregon Capitol Watch Foundation is a 501(c)3 charitable educational foundation dedicated to educating Oregon citizens about how state and local governments spend their tax dollars by researching, documenting, and publicizing government spending and developing policy proposals that promote sound fiscal policies and efficient government.

###

Renewable Energy Certificates Don’t Turn on Your Lights

By Allison Coleman

Over the past two decades there has been a large push for environmental policy initiatives.

Unfortunately, some of these policies do nothing for the environment. The sale of so-called “green power” by electric utilities is one example. More than 60 Northwest utilities market green power products to consumers through monthly subscriptions, in which consumers think they are buying electricity from clean and renewable sources. Utilities promote these at different levels, ranging from platinum to silver, depending on the amount a customer spends.

However, customers are not actually buying renewable energy. Instead, they are buying “Renewable Energy Certificates” (RECs), which simply offer them the bragging rights associated with renewable power produced somewhere. The electricity may be sold to a homeowner in Montana, while the REC associated with that power is sold to a consumer in Oregon.

The REC itself is not a unit of electricity. In fact, it doesn’t even exist; it’s just an electronic number.

From 2011-2015, Multnomah County spent $230,000 on RECs. In 2016, the City of Beaverton spent $29,282. In 2015, Metro spent $104,539.

Every dime of that money was wasted. Taxpayers received no green power, or power of any kind.

Individual consumers are free to spend their own money on worthless junk. Elected officials spending tax dollars should be held to a higher standard.


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

Oregon Leaders Must Reject ACA’s Medicaid Expansion

By Eric Fruits, Ph.D.

Despite an eight percent increase in general fund revenues, Governor Kate Brown and some lawmakers say the State of Oregon is facing a $1.7 billion budget shortfall in the 2017-19 biennium. In her inaugural address, the governor blames more than $1 billion of the shortfall on the state’s choice to expand Medicaid and other taxpayer-funded insurance. The Census Bureau estimates that about one in four Oregonians are in the state’s Medicaid program.

In addition to the expansion provided by the Affordable Care Act, the governor seeks new state money to expand single-payer public insurance to those who are not “lawfully present” in the United States, under a program called Cover All Kids.

Although the federal government pays a large portion of the costs of Medicaid expansion, the state’s share of the costs is growing under the ACA. The huge costs of Medicaid mean even a small increase in Oregon’s share has big impacts on the state’s budget. State Senator Elizabeth Steiner Hayward, incoming co-chair of the Ways and Means Committee for Human Services indicates that about one-third of the deficit at the Oregon Health Authority comes from what she called a “minuscule” reduction in the federal match. This deficit is certain to grow as federal support for expansion shrinks over time, as outlined in the ACA.

The state has massively underestimated the costs of Medicaid expansion in Oregon. A 2013 report prepared for the state estimated that the Medicaid expansion would cost Oregon’s general fund $217 million in the upcoming 2017-19 biennium. Janelle Evans, budget director for the Oregon Health Authority, now estimates a cost to the state’s general fund of at least $353 million. For the federal government, the cost of Oregon’s Medicaid expansion will cost more than $3.5 billion over the next two years.

Oregon simply cannot afford the ACA’s Medicaid expansion and Governor Brown’s expensive new entitlement. Nationally, expansion costs and enrollment have grown much faster than projected. Previous expansions of the Medicaid program have resulted in crowding out, the process by which taxpayer funded Medicaid replaces private health insurance. These earlier expansions have seen crowd-out rates ranging from 15 percent to 50 percent, depending on the type of expansion. Not only does the expansion crowd out private insurance, government spending on the expansion crowds out funding for other state and national priorities, such as education, infrastructure, and defense.

In Congress, repeal of much of the ACA is imminent. Oregon Congressman Greg Walden, incoming chairman of the House Energy and Commerce Committee, is working on a timeline for repealing major provisions of the health care law, including the expansion of Medicaid. In the absence of repeal, Congress should consider an enrollment freeze approach. A freeze would halt new enrollment while allowing current enrollees to stay in the program until their incomes climb above eligibility limits. It would be an intermediate step towards repeal with immediate benefits for taxpayers and current enrollees.

However repeal of the ACA rolls out, Oregon’s congressional delegation should be at the forefront of ending the Medicaid expansion as soon as possible. While Congress works through the details, Oregon can take steps in the upcoming legislative session to protect the state’s fragile finances. One first step would be to opt out of the ACA’s Medicaid expansion and reject Governor Brown’s proposal to expand coverage even further. As noted in the governor’s inaugural address, the state’s choice to expand Medicaid is the single largest source of the impending budget deficit. Rejecting the health care law’s expansion is the clearest path to fiscal solvency and financial responsibility.


Eric Fruits, Ph.D. is president and chief economist at Economics International Corp., an Oregon based consulting firm specializing in economics, finance, and statistics. He is also an adjunct professor of economics at Portland State University, an Academic Advisor to Cascade Policy Institute, and author of Cascade’s report, The Oregon Health Plan: A “Bold Experiment” That FailedThis article originally appeared in The Oregonian on January 27, 2017.

The Past, Present, and Future of School Choice in Oregon

By Steve Buckstein

The vast majority of Oregonians attended public schools assigned to them based on their ZIP codes. Yet, everyone has friends or relatives who made different choices such as private, religious, and home schooling.

Few know, however, that these other choices were almost eliminated in the 1920s. Bigotry was strong across America then, and not only against Blacks. The Ku Klux Klan and others placed a measure on Oregon’s 1922 ballot that would have required children to attend only schools run by the government. The Oregon Compulsory Education Act was defended as “a “precautionary measure against the moral pestilence of paupers, vagabonds, and possibly convicts.”

Approved by a narrow margin, the measure was challenged and overturned by a unanimous U.S. Supreme Court decision in 1925. In its ruling the Court said “the fundamental theory of liberty upon which all governments in this Union repose excludes any general power of the State to standardize its children by forcing them to accept instruction from public teachers only. The child is not the mere creature of the State; those who nurture him and direct his destiny have the right, coupled with the high duty, to recognize and prepare him for additional obligations.”

So, while choices other than public schools remained available, most families have been unable to afford public school taxes and private school tuition at the same time. This reality caused a small group, including myself, to place a citizen initiative on Oregon’s ballot in 1990. Measure 11 would have provided refundable tax credits to every K-12 student in the state, which they could use to attend any public, private, religious, or home school of their choice. No state had voted on such a sweeping reform before, and we felt it was time for Oregon to lead the way.

On election night that November we came up short, with only about one third of the vote. That didn’t surprise us, because school choice was a new concept to most people, and it was easy for our opponents to scare voters into saying No. Before the votes had even been tallied, we began thinking about how we could move our school choice agenda forward in the future. We decided that Oregon needed a free-market think tank to advocate for school choice as well as other limited government ideas. We incorporated Cascade Policy Institute two months later. In the 25 years that have now passed some significant progress on the school choice front has been made.

We worked hard to introduce the charter school concept in the state in the mid-1990s. By 1999 the Oregon legislature passed a charter school bill that now allows more than 120 public charter schools to operate across the state.

Also in 1999 we evolved from just talking about school choice to actually providing choice to hundreds of low-income kids in the Portland area through our Children’s Scholarship Fund program. We initially raised $1 million of private money that was matched by $1 million nationally to provide partial scholarships to over 500 students for four years at the schools of their choice. The fact that over 6,600 children applied for those 500 slots demonstrated that the demand for school choice is great in Oregon. We can’t help them all, so we continue to advocate for broader programs that will.

In 2011 three school choice bills passed as part of an education reform package, including expansion of online charter schools, more options to sponsor new charter schools, and open enrollment between public school districts.

Over these past twenty five years Cascade and others have brought a number of national speakers to the state talking about the benefits of school choice elsewhere, including some 61 privately or publicly funded scholarship programs, charter schools, education tax credits, vouchers, and Education Savings Accounts (ESAs).

In 2014, Cascade proposed a limited Education Savings Account bill to help disabled, foster, and low-income children. ESAs allow students to take some or all of the money the state would spend on them in a public school and put it on a restricted use debit card. They can fund a wide variety of approved educational options, such as private school, individual tutoring, and distance learning. Any money not used in a given year can be rolled over to spend on educational expenses in the future, even into college.

Earlier tax credit and voucher programs are now seen as the rotary-dial telephones of the school choice movement. ESAs, with their expansive array of options and their ability to hold costs down as students plan and save for the future are seen as the smartphones of the movement— smartphones with virtually unlimited apps to help children learn in their own unique ways.

This year, Cascade is promoting a broad ESA proposal in the Oregon legislature. Senate Bill 437, and other bills that may emerge, are designed to enhance school choice for everyone. In the future, our mission—and yours if you choose to accept it—will be to help our fellow Oregonians understand and support what many now call the new civil rights issue in America: the right of every child, no matter where they live or their parents’ financial means, to reach their own potential by making their own educational choices affordable. Until this right is achieved, too many children will remain trapped in schools assigned to them by their ZIP code that fail to meet their needs.

We won’t stop advocating for school choice until every child has the real choices they deserve. We appreciate the help of everyone who shares this vision. It can’t become a reality too soon.


Steve Buckstein is Senior Policy Analyst and Founder of Cascade Policy Institute, Oregon’s free market public policy research organization. 

An Oregon Education Solution Whose Time Has Come

By Kathryn Hickok

Derrell Bradford has spent his adult life passionately advocating for education reform through parental choice. Derrell grew up in southwest Baltimore and received a scholarship to a private high school. Better than anyone, he knows the power of educational choice to unleash a child’s potential.

“A scholarship is not a five-year plan or a power point…,” Derrell explained recently. “It’s a ticket to the future, granted today, for a child trying to shape his or her own destiny in the here and now….”

Choices in education are widespread in America, unless you are poor. Affluent families can move to different neighborhoods, send their children to private schools, and supplement schooling with enrichment opportunities. Lower- and middle-income families, however, are too often trapped with one option: a school in need of improvement assigned to them based on their home addresses. Families deserve better.

January 22-28 is National School Choice Week, the world’s largest celebration of parental choice and effective educational options for all children.

Students have different talents and needs and learn in different ways. The landscape of options to meet those needs is more diverse today than ever. These options include traditional public schools, charter schools, magnet schools, online learning, private schools, and homeschooling.

Oregon’s 2012 “Mother of the Year” and parental choice activist Bobbie Jager says, “The word ‘choice’ in our home means, ‘of high quality and carefully selected,’ as our children’s education and schools should be. As parents, we need to be able to make these choices for each of our children.”

It’s time Oregon took a serious look at the diversity of options parents now have in 61 school choice programs across the country, including privately or publicly funded scholarship programs, charter schools, education tax credits, vouchers, and Education Savings Accounts.

Parents—not public school bureaucracies—should be in the educational “driver’s seat.” To really empower Oregon families, the Legislature should enact Senate Bill 437 during this year’s upcoming legislative session. This law would give parents who want to opt out of a public school that is not meeting their child’s needs a portion of the per-student state funding for spending on their child’s education in other ways. With this “Education Savings Account” (analogous to a debit card for qualifying education expenses), parents can choose the schools or services that will meet their children’s learning needs.

Oregon has a history of bold experimentation in other policy areas. It’s time to expand the role of parents choosing―and the market delivering―better education for Oregon’s children through educational choice, because every child deserves a ticket to a better future right now. Parental choice is the way of the future, and Education Savings Accounts for Oregon parents are a life-changing education solution whose time has come.


Kathryn Hickok is Publications Director and Director of the Children’s Scholarship Fund-Portland program at Cascade Policy Institute, Oregon’s free market public policy research organization. This article originally appeared in The Coos Bay World on January 23, 2017.

Limiting Government: A Goal That’s Always Worthwhile

By Lydia White

As inauguration weekend unfolded, Republicans cheered with a gasp of relief, Democrats protested, and many broke down into tears and even violence.

The extremity of responses from people across the political spectrum reveals a troubling aspect of contemporary politics: Many are terrified the “wrong” party will come into the federal government’s vast powers.

If Americans feel their livelihood depends on one election cycle, the scope of government is far too big.

Since the 1990s, each party held control of the White House and both chambers of Congress for four years. Under their leadership, Republicans ballooned public debt by 32%, Democrats by 45%.

Every new administration, whether Republican or Democratic, brings more spending and less freedom. Yet, for some reason, Americans find this acceptable as long as the spending is on their party’s preferred programs, compensating for the other party’s inane spending. This never-ending cycle sets precedent for every subsequent administration to retaliate and further mushroom public debt.

Instead of continuing this trend of ever-growing government, self-declared limited-government advocates should live by their principles and scale back bureaucracy across the board.

Should they be tempted to engorge themselves by forcing “favorable” big government policies through Congress, conservatives must be ready to face the consequences. The powers amassed may very well land into the “wrong” hands yet again.


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

The Oregon Education Solution Whose Time Has Come

By Kathryn Hickok

Next week is National School Choice Week, the world’s largest celebration of parental choice and effective educational options for all children.

Students have different talents and needs and learn in different ways. The landscape of options to meet those needs is more diverse today than ever. These options include traditional public schools, charter schools, magnet schools, online learning, private schools, and homeschooling.

Oregon’s 2012 “Mother of the Year” Bobbie Jager says, “The word ‘choice’ in our home means, ‘of high quality and carefully selected,’ as our children’s education and schools should be. As parents, we need to be able to make these choices for each of our children.”

Parents—not public school bureaucracies—should be in the educational “driver’s seat.” To really empower Oregon families, the Legislature should enact Senate Bill 437. This law would give parents who want to opt out of a public school that is not meeting their child’s needs a portion of the per-student state funding for spending on their child’s education in other ways.

With this “Education Savings Account” (analogous to a debit card for qualifying education expenses), parents can choose the schools or services that will meet their children’s learning needs. Parental choice is the way of the future, and Education Savings Accounts for Oregon parents are a life-changing education solution whose time has come.


Cascade Policy Institute will host a National School Choice Week Policy Picnic on Wednesday, January 25, at noon. Oregon’s 2012 “Mother of the Year” Bobbie Jager will talk about how she got involved in education advocacy and what’s ahead for Oregon parents and students in 2017. Those interested in attending can find more information and RSVP here.


Kathryn Hickok is Publications Director and Director of the Children’s Scholarship Fund-Portland program at Cascade Policy Institute, Oregon’s free market public policy research organization.

1 2 3 4 5 140