The Opportunity to Protect Our Rights and Our Children

By William Newell

Medical technology has miraculously saved millions of lives. Our constitutionally limited, representative government is just as miraculous. Both are designed to improve the human condition. Sometimes though medicine and government clash. The ongoing debate in Oregon concerning religious exemptions from vaccinations exemplifies this conflict.

Over 90 percent of Oregon parents currently vaccinate their children, but the state legislature still passed Senate Bill 132 which requires proof that parents seeking a religious exemption have been notified of the benefits and risks of vaccines. The legislation targets religious individuals because of their beliefs and burdens those individuals with complying to state desires. The Constitution of Oregon makes clear the state’s duty to protect religious liberty under Article 1, Section 3, which reads: “no law shall in any case whatever control the free exercise, and enjoyment of religeous (sic) opinions, or interfere with the rights of conscience.”

Additionally, placing informed consent stipulations on religious parents serves little purpose because  such information is widely accessible from doctors and government websites. Mandating parents watch a video or see a doctor is not going to change people’s minds. While vaccinating children is worthwhile, this legislation will not be very effective and undermines our precious constitutional rights.

William Newell is a research associate at Cascade Policy Institute, Oregon’s free-market think tank.

Three Oregon Tax Measures: What They Would Do

With less than a week to go in this election cycle, Oregonians are faced with nine statewide ballot measures.

 

Here are my thoughts on the three that are primarily tax measures.

 

Measure 79 bans future state or local real estate transfer taxes. Only Washington County imposes such a tax now, as anyone who has sold a home there knows. The realtors who put Measure 79 on the ballot don’t want to see such taxes spread to the rest of the state. Government always looks for ways to raise revenue, but taxing home sales isn’t a good idea now or later. I voted Yes.

 

Measure 84 phases out Oregon’s estate tax and forbids taxes on property transfers between family members. Working all your life to build up an estate valued over the $1 million estate tax exemption should not give government the right to tax what you or your family have paid taxes on all your lives. I voted Yes.

 

Measure 85 takes any future corporate kicker money from the companies that earned it and places it in the state General Fund. Nothing in the measure assures that the money will benefit public education as the public employee unions that put it on the ballot claim. Special interests will be in Salem lobbying for that money just as they do now. Measure 85 simply takes money from the private sector and grows government. I voted No.

 

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

Taxpayers Should Be ReVolted by Green Business Subsidies

Last week another publicly subsidized “green business” company filed for bankruptcy in Portland. ReVolt Technology had received $6.8 million in state and local subsidies, plus another $5 million from the Obama administration, for its electric car battery technology, but could not get the product to market.

 

One would hope that the repeated failures of subsidized companies would induce a modicum of humility among the political class, but this does not appear to be happening. The director of the Portland Development Commission, which approved a $1.3 million loan to ReVolt, told The Oregonian, “It’s obviously disappointing, but we certainly know we’re going to have a few of these.”

 

Taxpayers should be outraged by this attitude. The Oregon Constitution prohibits public investment in private companies, so none of the companies being propped up with taxpayer money should have ever received a penny in the first place. Yet, the Portland Development Commission is fully expecting to have more public money lost in private sector bankruptcies.

 

There is an important role for government to play in technological innovation, but it’s not to serve as a venture capital fund. In the daily competition among market participants, government should simply call the balls and strikes and enforce the rules of the game. Players should come from the private sector; and the best products should be determined by consumers in the market process, not by government cronyism.

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

Oregon Cosmetology Regulations Entangle Hair Braiders

By Shane Young

Did you know you need a license to braid hair in Oregon?

Last year, Amber Starks of Portland tried to start a hair braiding business geared towards young girls in foster care. The State of Oregon informed Starks that she could not start her business without a cosmetology license. A cosmetology license typically requires over $1,000 and a minimum of 1,700 hours of training focusing heavily on the proper use of hairstyle chemicals and heating equipment―things hair braiders don’t use.

Starks then tried to braid hair as an unpaid volunteer with the state foster care system. She was told once again that it would be illegal for her, and nearly anyone else, to dress hair outside their own homes without a license.

Regulations like these prevent people like Starks from providing simple yet desired services at competitive market prices. Meanwhile, those with cosmetology licenses are protected from competition in markets such as hair braiding―fields that hardly require 1,700 hours of training.

Where public health and hygiene are issues, the state could require professional braiders to undergo a basic health course in lieu of a cosmetology license. By analogy, the Oregon Food Handler’s Card certifies that people who prepare and serve food for the public know basic food safety.

In 2005, Washington State declared that braiders no longer need cosmetology licenses. It’s time for Oregon to do the same.

Shane Young is a research associate at Cascade Policy Institute, Oregon’s free market public policy think tank.

Lower the Capital Gains Tax, Ignite Oregon’s Recovery

By Eric Revell

As the state of Oregon struggles to ignite an economic recovery, barriers to economic growth must be removed. Oregon’s overall tax burden is among the highest in the country, both in terms of the 9.9% personal income rate, but also more importantly when it comes to attracting investment, in capital gains, which are also taxed at a 9.9% rate. A commonly held misperception about the capital gains tax is that it only affects the rich. In truth, the chilling effect it has on investment has a much broader reach.

For businesses to make sound choices regarding new projects and hiring that lead to growth, they require a tax code that doesn’t discourage private individuals from risking their assets in the marketplace. When people view a given state as hostile to investment, they simply relocate to a friendlier environment, taking jobs and tax revenue with them.

Such an onerous business climate has become the norm in Oregon, which is vying with Massachusetts for the highest capital gains rate in America. Washington, our neighbor to the north, has no state tax on capital gains, so its investors are only subject to the federal capital gains tax―which is currently 15%―a far more palatable total tax burden than what Oregonians face.

For Oregon to spur the economic growth necessary to put its fiscal house in order, its lawmakers would do well to significantly reduce―if not eliminate―the capital gains tax in the Beaver State.

Eric Revell is a research associate at Cascade Policy Institute, Oregon’s free market public policy think tank.

Oregon BLM Counties Must Craft Their Own Sustainable Funding

By Randal O’Toole

Many Oregon counties, particularly in Southwestern Oregon, are in deep financial trouble. Coos, Curry, Douglas, Jackson, Josephine, Klamath, Lake, and Lane counties historically received 15 to 33 percent of their revenues from the federal government as payments in lieu of property taxes for the national forest and Bureau of Land Management (BLM) lands in those counties.

Those payments came out of timber sale revenues; but as concerns over the spotted owl and other environmental issues led to a decline in timber sales after 1990, the payments also fell. To ease the transition to more sustainable revenue sources, Congress provided “temporary” funding out of general funds.

Each time temporary funding was set to expire, though, counties complained about a financial crisis; and Congress extended the funding. The latest extension was added to a transportation bill that Congress passed on June 29. But this bill extends the funding only one more year, so county treasuries may be emptied next year. Curry County has threatened to simply shut down, and the Oregon state auditor recently reported that all of these counties have a high risk of financial distress.

The truth is that taxpayers in these counties (of which I am one) have been getting a free ride for decades. While federal lands impose little cost on counties, the payments out of timber receipts have been many times greater than the federal government would have paid if it had paid ordinary property taxes.

Counties throughout the country that have national forests in them receive 25 percent of timber sale receipts. In most cases, this was more than property taxes before sales declined. But the greatest difference was in Oregon, whose valuable old-growth timber produced 40 percent of national forest revenues in the 1970s and 1980s.

Congress allowed the states to divide these “25-percent funds” between schools and county road departments. Most states gave half to each, but Oregon gave 75 percent to roads and 25 percent to schools. This meant that Oregon county road departments were literally rolling in cash in the 1970s and 1980s, but it also meant that the decline in timber sales hit them the hardest.

To make matters worse, the BLM paid a whopping 50 percent of the revenues from most of its western Oregon timber sales to counties. This compares with just 10 percent of timber receipts paid by the BLM to counties elsewhere. While the national forest funds were split between roads and schools, all BLM funds went straight into county general funds.

The result is that these counties have some of the lowest property tax rates in the state. While the average Oregon property owner pays more than $2.80 per thousand dollars in assessed value to the county, property owners in Curry and Josephine counties pay only 60 cents, and rates are also much lower than average in Coos, Douglas, and Jackson counties.

Raising property taxes to somewhere around the statewide average would solve the problems in all of these counties except Lake and Lane. But Oregon law prevents counties from raising taxes without voter approval, and county commissioners suspect that few voters will be willing to double or quadruple their county tax burden.

Representative Peter DeFazio has proposed to divide western Oregon BLM lands into two chunks. One portion, containing mostly old-growth timber, would be set aside for conservation. The other portion, mainly second-growth timber, would be managed as a source of revenues for the counties.

While some environmental groups oppose this plan, I don’t see anything wrong with managing cutover land for timber. But I have to wonder why Southwest Oregon counties should continue to live off of federal taxpayers, who otherwise would get any receipts from Forest Service and BLM sales.

County leaders say these BLM lands (which Congress originally granted to a railroad, then took back when the railroad failed to live up to the terms of the grant) would have been private had they not been taken back by Congress. Perhaps so, but the amounts the counties are asking federal taxpayers to pay—either through an extension of timber payments or via DeFazio’s bill—greatly exceed the amount that private forestland owners pay in property and harvest taxes.

Most of these counties spend the largest share of their funds on public safety, including the sheriff, courts, and jail. Other funds go for health and human services. But most also spend a significant amount of money on what might be called luxuries, including recreation, cultural resources, and community development programs (which mainly means land-use planning).

County leaders need to accept reality and make some hard decisions about their budgets. Recreation, culture, and most public works programs should be funded out of user fees rather than taxes. If users aren’t willing to pay for them, then they aren’t really needed. Counties could also stop funding land-use planning and let the state pay for those programs if it feels they are needed.

To the extent that these cuts aren’t enough to maintain public safety and human service programs, county leaders will have to make it plain to voters that they will have a choice between somewhat higher property taxes or accepting major cuts to these programs. There is no justification for forcing federal taxpayers elsewhere to subsidize county taxpayers in Oregon.

Randal O’Toole is a senior fellow with the Cato Institute and author of American Nightmare: How Government Undermines the Dream of Homeownership. He is a guest contributor for Cascade Policy Institute, Oregon’s free market public policy research center.

Zoning Oregonians out of House and Home

In a four-part feature this week, The Oregonian writes about the failure of government policy to provide “affordable housing” in the Portland metro region. Extensive public subsidies for low-income housing have failed to ameliorate the problem, and legislative efforts to force homebuilders to provide lower-priced housing (at a loss) have been unsuccessful.

What the story largely ignores, however, is that Oregon’s land-use regulatory system makes it illegal to build any kind of housing on most private land in Oregon. In addition, the small amount of land available for housing is subject to extensive planning and zoning requirements. This was explained 10 years ago by consulting economist Randall Pozdena in an econometric study entitled, “The New Segregation.” His analysis found that Portland-style “smart-growth” policies across the country were making it increasingly difficult for low-income and minority households to become homeowners.

Other housing experts, such as Harvard’s Edward L. Glaeser, reached similar conclusions.

Housing was not always so expensive. In the decades immediately following World War II, when there was enormous demand for more homes, the private sector was able to respond because large tracts of surplus farmland were converted to residential housing. Such conversions are illegal in Oregon today.

The Oregonian is correct in saying that government housing policy has failed, but forcing private builders to sell homes at a loss will only make things worse. The real solution is to get government zoning out of the way so housing markets can begin to work again.

Cold Medicine Prescriptions Have Not Reduced Meth Lab Incidents or Use in Oregon

The production and use of methamphetamine—a highly addictive drug often made with store-bought ingredients—continues to be a serious problem for many states around the country, including Oregon.

Curbing meth’s negative impacts on communities, individuals, and families is an important societal goal; and it is understandable why our state legislators sought to do something about it in 2005.

That year, Oregon adopted a law that included a prescription requirement for what were then over-the-counter medicines containing pseudoephedrine (PSE), such as Advil Cold & Sinus, Claritin-D, and Sudafed. Because PSE is also an ingredient used in the manufacture of meth, the idea behind the prescription requirement was to keep it out of the hands of meth cooks.

The problem is that since 2006, law-abiding Oregonians have had to obtain a prescription to treat minor cold or seasonal allergy symptoms, something consumers in 48 other states don’t have to bother with.

As a result, responsible Oregonians are now forced to take time off work, call a doctor, visit a hospital or clinic, and pick up a prescription—just to buy a box of Mucinex-D. Not only is that a significant hassle for most people, it also leads to higher health care costs, involuntary time away from work for individuals, and lower productivity for Oregon businesses.

Putting aside these considerable burdens, Cascade Policy Institute set out to determine whether the prescription mandate actually has been successful in reducing meth’s impact on the state.

Our study looked at meth trends in Oregon from 2004 to 2010 and compared what was happening here to similar states and the country as a whole. We found that while the number of meth lab related incidents in 2010 is down 97% from 2004, that doesn’t speak to the success of the prescription requirement.

Why not? Because six nearby states that don’t have a prescription requirement, including Washington State and California, experienced similar declines in meth lab incidents. In addition, almost all of Oregon’s 97% drop occurred between 2004 and 2006, before the prescription law even took effect.

The decline in illegal meth manufacturing also has not corresponded to a decline in meth use or availability in Oregon. The sad fact is that the reduction of one source of methamphetamine only leads to the increased availability of the drug from other sources, including Mexican super labs.

Furthermore, a new study by Jane Carlisle Maxwell of the University of Texas at Austin and Mary-Lynn Brecht of the University of California at Los Angeles found that Mexican meth manufacturers (in a country that imposed a ban on pseudoephedrine in 2008) are increasingly using alternative methods to make the drug, including the P2P method, which doesn’t rely on PSE.

In addition, Maxwell and Brecht pointed to findings from the U.S. Drug Enforcement Administration which indicate that Mexican meth cooks are also “looking to other areas in the world for the required chemicals and the ability of Asian manufacturers who use ephedrine and pseudoephedrine to produce large quantities of high quality methamphetamine which may become another source of the drug in the U.S.”

But independent of the new realities in the manufacturing of methamphetamine, Oregon’s own High Intensity Drug Area (HIDTA), reported in September 2011 that meth continues to be “highly available” and remains “the most serious drug threat in Oregon.” Maxwell and HIDTA’s findings are consistent with Cascade’s conclusions.

While legislators who voted for Oregon’s prescription requirement no doubt had good intentions, the bottom line is that it has been ineffective in achieving its intended purpose of significantly reducing meth production and use in the state.

Given that the law has fallen short of its goals, and because responsible Oregonians have been significantly affected by its prescription requirement, it’s time for Oregon lawmakers to revisit the six-year-old-law and, hopefully, repeal it.

Click here to read the full report.

 

“The Boondoggle of Boondoggles”

By Nick Sibilla

Oregon is a pioneer in green power. But we’re also a pioneer in wasting other people’s money. Right now, Oregon is home to one of the largest energy boondoggles in the nation: Shepherds Flat wind farm.

Currently under construction in Gilliam and Morrow counties, Shepherds Flat soon will have the largest wind farm in the world. Since wind power is expensive, Shepherds Flat has received over $1.2 billion in federal, state and local subsidies. Apologists say these subsidies will create jobs. But according to The Oregonian, this wind farm will create only 35 permanent jobs. In other words, each job created will cost American taxpayers over $34 million.

Meanwhile, Caithness Energy, the developer of Shepherds Flat, will bear only 10% of the cost. But Caithness will earn a 30% return on investment. In addition, this wind farm will not even power Oregon. All of the subsidized output will go to Southern California Edison, which provides electricity to places like Orange County. This project is nothing more than a triad of corporate welfare, government subsidies and exorbitantly expensive jobs. So is it any wonder residents in Shepherds Flat are calling this project the “boondoggle of boondoggles?”


Nick Sibilla is a research associate at Cascade Policy Institute, Oregon’s free market public policy research organization.

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