Year: 2011

Testimony in Favor of HB 3477: Privatizing State Parks Operations

At the May 24th House General Government and Consumer Protection Committee, Karla Kay Edwards testified in favor of HB 3477. HB 3477 would create a pilot program to contract with private companies to perform State Park operations and maintenance.

Click here to listen to her testimony. Karla Kay Edwards’ testimony begins at 1:36.

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Rural Oregon Is Tired of Being Ignored

A statistic commonly used to highlight the economic hardship Oregonians bear is that Oregonians on average earn 91 cents to every dollar of average earned income nationwide. But that story is even more dramatic for rural Oregonians, who earn a mere 75 cents on the dollar when compared to personal income nationally. Yet, the Oregon legislature has done nothing significant to begin to change this dire situation, despite the fact that bills have been introduced that could help rural economies.

 

The few economic stimulus bills that have worked their way through the system are quite limited and will benefit urban areas far more than rural areas. Bills that could have an immediate and direct benefit to rural areas have been essentially ignored, like bills to allow more water withdrawal from the Columbia River, better management of our state forests, or a pilot project to privatize some management functions of our state parks. Instead of moving these important ideas forward, we have seen the persistent movement of ideas which continue to handicap already depressed economies, like increasing marine reserves or establishing additional unnecessary government imposed natural resource protection programs.

 

Rural Oregon is tired of either being completely ignored by the legislature or told that eco-tourism is the beacon of hope and we should be thrilled with the seasonal minimum wage jobs that have replaced living wage jobs once provided by a thriving renewable natural resource industry.

 

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KPOJ podcast of Mark Zusman of WW talking about Oregon Capitol News

Click on Listen (to the right) to hear Carl Wolfson talk to Mark Zusman, editor of Willamette Week, about WW’s story on Oregon Capitol News.

To listen to all of Carl Wolfson’s recent shows, click here.

To read the Willamette Week article, click here.

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Arizona’s Empowering Education Savings Accounts: An Example for Oregon

Leading by example, Arizona’s government recently passed a bill creating Arizona Empowerment Accounts. Under the new program, if a child with special needs leaves his or her traditional public school, a portion of the state funding that would have gone toward educating that student will go into an education savings account for that student. The money then can pay for other educational options: private school tuition, online courses, tutoring or homeschool curriculum. The money left when the child finishes high school can be used for college within four years of high school graduation.

This program harnesses the benefits of both vouchers and savings accounts. Vouchers have been shown by gold standard social science studies to improve educational outcomes for students who receive vouchers and even for those who remain behind in regular public schools. Nine out of the ten random assignment empirical studies found that vouchers improve student outcomes; one found no impact. 19 out of 18 studies found that vouchers positively impacted regular public schools; only one found no impact.

Vouchers help give kids the intellectual background to better succeed in life, while the savings function of the program will also likely increase students’ financial ability to attend college. Research has shown that having economic assets substantially increases kids’ educational outcomes and likelihood to attend college. Of children who expect to one day graduate from a four-year college, those with savings accounts are six times more likely to attend college by the time they are 23.

Educational savings accounts will empower families to choose the type of education that will best serve their kids, leading to better outcomes for students. Oregon’s legislators should take note and bring such great opportunities to our state.

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You’re teaching my child what?

Join U-Choose exploring public school and private education. Speakers will present information on degradation of curriculum, sex education, and political correctness.  Cost of public education will also be addressed, along with controversies in Portland and Tigard Tualatin and Lake Oswego School Districts.

 

Featured Topics/Speakers:

 

§         “Dumbing Down” of America’s Youth – Dr. Chana Cox, Retired Faculty, Lewis and Clark College

 

§         Sex “Hyper” Education Indoctrination – Suzanne Gallagher, Business Owner, Past President Eagle Forum Oregon

 

§         Education Spending in Oregon and Nationally – Christina Martin, Policy Analyst, Cascade Policy Institute

 

 

You will not want to miss this lively event!

 

Come share your views and experiences during U-Talk.  Children, teens, adults welcome.

 

When: Thursday June 2, 6:30pm- 9:00pm

 

Where:         Tigard Chamber of Commerce

12345 SW Main Street

Tigard, OR

 

If you are interested in learning more about this event, contact Debra at debrauchoose@gmail.com.

 

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Replace “Buy Local” Laws with the Laws of Economics

In the Great Depression many Americans thought they would be better off if they only bought American products. Congress passed the Smoot-Hawley Tariff Act in 1930. It raised import duties to protect American businesses and farmers, becoming a symbol of “beggar-thy-neighbor” policies designed to improve one country’s lot at the expense of others. Of course, those “others” retaliated in kind, resulting in everyone becoming worse off as trade declined.

 

Trade is almost always beneficial because of the economic law of comparative advantage, which says that any two countries, states or localities can both benefit from trade when they have different relative costs for producing the same goods. Even if one place could produce all goods more efficiently (which is virtually never the case), it still can gain by trading with less-efficient places as long as they have different relative efficiencies.

 

Today, many Americans again believe that globalization and free trade are “stealing” American jobs and harming American small businesses and consumers. This has given rise to a new movement called Buy Local First. Its proponents argue that we will all be better off if we simply shop at local stores and buy locally made products. While there can be good reasons to prefer local merchants, imposing “buy local” ordinances and laws surely will end up harming most of us because consumers will be forced to pay extra money for things they could purchase less expensively from elsewhere.

 

One particularly instructive aspect of localism is the purchase of food. Purchasing all our food locally may benefit local farmers, but we forget that:

 

“Practically all the food which has become an integral part of our culture originated someplace else. Archeological evidence suggests that sheep were first domesticated in what is now Iraq; chickens, in Pakistan; cattle, in Greece and Anatolia. The Egyptians were among the earliest people to domesticate wheat. Apples are considered about as wholesomely American as anything can be, but the apple…seems to have come from central Asia. Pears and grapes are from central Asia, too. Oranges, peaches, apricots and Japanese plums, from China. Bananas, from India or Malaysia. Pineapples, from Brazil or Paraguay. Cherries, from northern Europe.”*

 

What would have happened if localists had imposed trade restrictions on food before we had chickens, cattle and apples? We have them now, they might say, but what other products won’t we have in the future if trade is restricted now?

The latest evidence that too many of us don’t understand the benefits of trade comes from the Oregon legislature, where the House recently passed, and the Senate likely will pass, HB 3000, the Buy Oregon First bill. It would allow state agencies to pay at least 10 percent more for goods fabricated or processed or services performed entirely within the state. Governor John Kitzhaber issued a press release stating that “this bill will help Oregon businesses by encouraging the development and growth of our local supply chains, which will help create local jobs and revitalize our state’s economy.”

Economists have exposed the fallacies of such thinking over the centuries. Henry George may have said it best in 1886 when he wrote:

 

“If to prevent trade were to stimulate industry and promote prosperity, then the localities where he was most isolated would show the first advances of man. The natural protection to home industry afforded by rugged mountain-chains, by burning deserts, or by seas too wide and tempestuous for…the early mariner, would have given us the first glimmerings of civilization and shown its most rapid growth. But, in fact, it is where trade could be best carried on that we find wealth first accumulating and civilization beginning. It is on accessible harbors, by navigable rivers and much traveled highways that we find cities arising and the arts and sciences developing.”**

 

Here in Oregon, we should recognize that Portland was located on two navigable rivers for a reason. Early settlers knew that having access to world markets was good. When people freely choose to trade with one another, consumers have access to more products at better prices, and workers have more job opportunities.

 

Adam Smith wrote in “The Wealth of Nations in 1776”, “Consumption is the sole end and purpose of all production, and the interest of the producers ought to be attended to only in so far as it may be necessary for promoting that of the consumer.”

 

Journalist James Glassman says of the Smith quote above, “That is a great lesson for all policymakers to bear in mind. Ask, does this policy help consumers? Free trade allows consumers to buy a cornucopia of higher quality goods from other countries at lower prices than they would pay if they were restricted to buying homemade goods. Trade is obviously a huge benefit for consumers….And, says Adam Smith, what is better for consumers is always better for an economy….It is indeed true that some producers are hurt by free trade. And we can expect producers−such as textile industries and their employees and tomato growers−to kick and scream over free trade. Fine. But consumers…benefit mightily.”***

 

Oregon legislators are desperate to create jobs, but any jobs created from the Buy Oregon First bill almost certainly will be offset by lost jobs and lost opportunities in the state as government agencies unnessesarily pay more for some products, thus having less to spend on others. While these choices may benefit some Oregon producers, they will almost certainly harm Oregon consumers in general.

 

Rather than enshrine Buy Local First into law, we should educate Oregonians about more time-tested laws: the laws of economics.

_______________________________________________

*Jim Powell, “How markets nurtured our civilization,” 1999.
** Henry George, “Protection or Free Trade,” 1886.
*** James K. Glassman, “The Blessings of Free Trade,” Cato Institute, May 1, 1998.
 

 

 

 

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Testimony on Renewable Energy credits

John Charles testified on HB 3571, regarding renewable energy credits, before the Senate Environment and Natural Resources Committee on May 12, 2011.

Click here to listen.  John starts at 1:31

 

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Testimony on Bottle Bill expansion

John testified against the Bottle Bill Expansion, HB 3145, before the Senate Environment and Natural Resources Committee on May 17, 2011.

Click here to listen.  John starts at 1:41

 

 

 

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TriMet is violating its Full Funding Grant Agreement with the federal government for MAX Green Line

A letter sent yesterday to the regional administrator of the Federal Transit Administration by Cascade Policy Institute President John A. Charles, Jr. claims that TriMet is violating Sections 2(d) and 12(b) of its Full Funding Grant Agreement (FFGA) with the federal government on its South Corridor I-205/Portland Mall light rail project.
According to Charles, TriMet’s Green Line service is 33% below what the agency originally planned for, yet the FFGA “requires the transit agency to successfully operate the light rail line and the rest of the transit system after the project opens for revenue service.”

TriMet has repeatedly claimed that the reductions of service on the Green Line and throughout the entire system during the past two years are the result of declining revenues caused by the recession. However, Charles points out that since TriMet’s payroll tax rate was first increased by the legislature in 2003 (and implemented in 2005), TriMet’s annual payroll tax revenues have increased by 34% and total general fund dollars by 44% (inclusive of revenue expected in the draft FY 12 budget).

Moreover, during the 2005-2010 period, TriMet took in $60.3 million in new tax revenue but spent only $13.9 million on operation of the Green Line, in violation of its contract with the FTA.  The Green Line was subsidized with $345.4 million in federal capital funds.

Charles requests that the FTA take steps to enforce the terms of the contract by requiring that TriMet operate the Green Line at 100% of the originally planned service levels, “or pay back one-third of the total federal grant funding used for capital construction.”

Cascade is also asking that “until one of these actions takes place, FTAwithhold all capital funding for future TriMet rail projects, including but not limited to the $1.5 billion Milwaukie light rail line and the $932 million rail extension to Vancouver, WA.”

Click here to read the full letter to FTA.

 

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Testimony in opposition to SB 909

Before the Joint Education subcommittee of Ways & Means
Regarding establishing an Oregon Education Investment Board to oversee a unified public education system from early childhood through post secondary education
May 19, 2011

Audio can be found Here. Steve begins at the 49:20 mark.


Chairs Komp and Monroe and members of the Committee, my name is Steve Buckstein. I’m Senior Policy Analyst and founder of Cascade Policy Institute, a non-partisan, non-profit public policy research organization based in Portland. Our mission is to promote policies that enhance individual liberty, personal responsibility and economic opportunity in Oregon.

I’m here to oppose SB 909 because I’m afraid that the legislature is about to fall into the “bigger is better” trap. You can’t unify everything from early childhood through post-secondary education without pushing power and control even farther away from the people who should matter most – parents and students.

You’re also about to fall into a related trap that says consolidating agencies, school districts, ESD’s, etc. will lead to efficiencies and cost savings.

Similar efforts have already been tried in Oregon, and failed. Starting before Dr. Kitzhaber became governor the first time, while he was Senate President, the legislature mandated a reduction in the number of school districts, hoping to see cost savings. Between 1992 and 2001 the number of districts fell from 277 to 198.

At the end of the process there were actually more central office staff per pupil than at the beginning. Also, non-teaching staff grew faster than teachers, and per student spending, adjusted for inflation, rose more than 11 percent.

You should ask how the new unifying effort embodied in SB 909 squares with the Education Act for the Twenty-First Century, which passed the legislature in 1991. Remember the certificates of initial and advanced mastery? Some of you probably don’t because they never gained any traction; they just cost taxpayers a lot of money.

And how does this new effort square with the Quality Education Model, which the legislature approved in 1999?

Why haven’t such efforts in the K-12 education system achieved their goals? Because, according to the late education policy analyst John Wenders, they “…suck power upward and away from parents and students into top down, centralized and inflexible political arrangements, where unions and other special interests have more political clout. This causes accountability to decline and results in higher per pupil costs and lower educational results.”*

Is the answer really to put everything from early childhood through post-secondary education into one centrally planned system? I’m sure the Governor and the people he’ll appoint to the Oregon Education Investment Board are very smart people. But no such group can hope to design a system that meets the needs of every, or even most, Oregon children and their parents.

To better meet those needs, we should be going in the opposite direction. Find ways to push power down from the current systems toward teachers, and parents and students. Whatever funding the legislature appropriates to education, give the parents and students much more say in where, and how, it’s spent. Until you can move in that direction, the least you should do is reject this latest attempt to push the power even further away from the people who the system is supposed to help.

Thank you.

 

* John T. Wenders, Ph.D., “Deconsolidate Oregon’s School Districts,” Cascade Policy Institute, March 2005.

 

 

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How to Turn Oregon’s Business Climate Around

Two recent reports confirm that Oregon has a long way to go if it wants to be seen as a business-friendly state.

 

Earlier this month, Chief Executive magazine released its latest survey of 550 CEO’s. They were asked to rank states for their business environment based on a wide range of criteria, including taxation, regulation, workforce and quality of living. Oregon came in at a disappointing number 33. The top five states, in order, were Texas, North Carolina, Florida, Tennessee and Georgia.

 

Last week, the co-authors of “Rich States, Poor States,” which ranks every state’s economic competitiveness, reported in the Wall Street Journal that two of the 15 policies they look at “have consistently stood out as the most important in predicting where jobs will be created and incomes will rise. First, states with no income tax generally outperform high income tax states. Second, states that have right-to-work laws grow faster than states with forced unionism.”

Authors Arthur Laffer and Stephen Moore further noted that “between 2000 and 2008, 4.8 million Americans moved from forced union states to right-to-work states—that’s one person every minute of every day.”

Oregon doesn’t have either of these two most important business-friendly policies. Not only do we have an income tax, but it’s the highest in the country at 11 percent right now. And, we allow forced unionization.

 

Oregonians, and their elected representatives who are looking for ways to improve our business climate and create jobs, need look no further than these two policies. Eliminate our income tax and end forced unionism, and watch Oregon grow.

 

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Karla Testifies on HB 3290 to Allow More Land Use Options for Farmers

On May 10, Karla Kay Edwards testified before the Senate Environment and Natural Resources Committee on HB 3290.

Click here to listen to her testify. Karla’s testimony starts at 45:29.

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Why This Mom Is Speaking out Against the PPS $548 Million Bond Measure

We’ve heard the Portland Public School District propaganda machine and the bureaucratic sound bytes about how the so-called school modernization bond will begin the important process of updating Portland schools, bring jobs to the community, increase student achievement, attract young families to the District, and on and on….

But what we don’t hear is a logical, compassionate response to the fact that this bond will tax people out of their homes. I’ve raised this issue many times and given the District plenty of opportunity to respond, but all I get is…crickets….

Could it be because they don’t want to recognize the striking disconnect between their establishment and the financial realities of most in their community?

I’ll let you decide the answer to that, but one thing is clear: It’s time they heard the voice of the taxpayers footing this bill.

I have received criticism from Portland bureaucrats that I couldn’t possibly understand what this means for the school district since, after all, I live in Wilsonville, I have a construction bond in my district, and our schools are being taken care of.

Here’s my response: It doesn’t take a genius to figure out how a monumental tax increase will affect a community, especially in a recession. And, I don’t have to live in the District in order to pick up the phone, listen to heart-wrenching stories from folks on fixed incomes or barely scraping by, understand that this bond measure will put them on the streets, and become enraged at the audacity of the Portland Public School district for putting a “utopian” measure on the ballot with no regard for our economic condition.

I am an advocate for taxpayers statewide, and I will continue to speak out as long as the District remains deaf to the financial reality of its residents.

Since PPS likes to point out that I enjoy a school construction bond already in my district, I’d like to point out the consequences of that. Wilsonville is one of the highest property-taxed areas in Oregon, and when I receive my tax bill every year, it’s like swallowing a jagged horse pill. In fact, my mortgage payment was increased by $300/month at the start of this year to cover my bloated property taxes, which was devastating to my household budget.

Sound like something Portlanders want to take on? I think not.

Not when Portland is still suffering from the grips of economic recession, not when unemployment remains above 10 percent, not when homeowners are barely able to cover basic expenses, not when renters are in no position to deal with rent increases, not when foreclosures are still on the rise and this bond may add 1,000 homes to that list, not when this bond will cost the community 5,000 jobs due to the drastic decrease in disposable income, not when bricks and mortar will do absolutely nothing to increase the atrocious graduation rates within the district (average 53%), and not when the major supporters of the bond measure are the ones who stand to have their pockets lined at our expense.

This is a teachable moment for taxpayers. A time to push back against excess and to demand a more reasonable, financially viable option. The District needs to go back to the drawing board and come up with a proposal that only focuses on the basic, critical structural needs of our schools.

PPS needs to heed the warning that this is no time for “wish list items.” Save those for after the economic recovery.


Lindsay Berschauer is a former Washington state construction company owner. Now an Oregon resident, she is speaking out against the School Modernization Bond Measure as a private citizen. Lindsay recently worked with Cascade Policy Institute as a research associate and now works for Third Century Solutions on the Oregon Transformation Project, which brings to Oregon citizens information and opportunities to bring about lasting budget and regulatory reforms that will ensure a robust and growing private sector. Berschauer’s son will be entering the public school system next year.

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Testimony in opposition to HB 3000

On May 11, 2011 Steve Buckstein testified against HB 3000, which would allow state and local government agencies to pay more for Oregon-made products.

Click here to listen to the hearing, which begins at 1:31 into the recording. Steve’s testimony begins at 16:31.

Testimony before the Senate General Government, Consumer and Small Business Protection Committee in opposition to HB 3000

Chair Shields and members of the Committee, my name is Steve Buckstein. I’m Senior Policy Analyst and founder of Cascade Policy Institute, a non-partisan, non-profit public policy research organization based in Portland. Our mission is to promote policies that enhance individual liberty, personal responsibility and economic opportunity in Oregon.

I believe the so-called Buy Oregon First Bill, HB 3000, is not only bad public policy, but runs the risk of continuing an economic misunderstanding that will lead to repeated policy mistakes in years to come.

Basically, the bill allows state agencies to pay up to 10 percent more for goods fabricated or processed or services performed entirely within the state. The Governor says that “this bill will help Oregon businesses by encouraging the development and growth of our local supply chains, which will help create local jobs and revitalize our state’s economy.”*

Economists have exposed the fallacies of such thinking over the centuries. Henry George may have said it best in 1886 when he wrote**:

If to prevent trade were to stimulate industry and promote prosperity, then the localities where he was most isolated would show the first advances of man. The natural protection to home industry afforded by rugged mountain-chains, by burning deserts, or by seas too wide and tempestuous for…the early mariner, would have given us the first glimmerings of civilization and shown its most rapid growth. But, in fact, it is where trade could be best carried on that we find wealth first accumulating and civilization beginning. It is on accessible harbors, by navigable rivers and much traveled highways that we find cities arising and the arts and sciences developing.

Here in Oregon, we should recognize that Portland was located on two navigable rivers for a reason. Early settlers knew that having access to world markets was good. When people freely choose to trade with one another, consumers have access to more products at better prices, and workers have more job opportunities.

Any jobs that will be created from this bill will not offset the lost jobs and/or other lost opportunities that it imposes on consumers. Paying more for some goods and services means that agencies will have less to spend on other goods and services. While these choices may benefit some Oregon producers, they almost certainly will harm Oregon consumers in general.

As Adam Smith wrote in The Wealth of Nations in 1776, “Consumption is the sole end and purpose of all production, and the interest of the producers ought to be attended to only in so far as it may be necessary for promoting that of the consumer.”

Journalist James Glassman says of the Smith quote above, “That is a great lesson for all policymakers to bear in mind. Ask, does this policy help consumers? Free trade allows consumers to buy a cornucopia of higher quality goods from other countries at lower prices than they would pay if they were restricted to buying homemade goods. Trade is obviously a huge benefit for consumers–that is, individual buyers. And, says Adam Smith, what is better for consumers is always better for an economy…It is indeed true that some producers are hurt by free trade. And we can expect producers–such as textile industries and their employees and tomato growers–to kick and scream over free trade. Fine. But consumers–all 270 million of us–benefit mightily.”***

Everyone in this building wants to help create jobs; but favoring some producers at the expense of most consumers won’t, on balance, create jobs. Mankind has learned this lesson the hard way at least since the mercantilism of the 15th through 18th centuries. We forget it now at our peril.

Thank you.

 

* Governor Kitzhaber’s News Release, April 29, 2011, issued upon the passage of HB 3000 in the House.

** Henry George, “Protection or Free Trade,” 1886.
*** James K. Glassman, The Blessings of Free Trade, Cato Institute, May 1, 1998.

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Testimony in favor of House Bill 2825 A

Testimony before the Senate General Government, Consumer and Small Business Protection Committee in favor of House Bill 2825 A

Chair Shields and members of the Committee, my name is Steve Buckstein. I’m Senior Policy Analyst and founder of Cascade Policy Institute, a non-partisan, non-profit public policy research organization based in Portland. Our mission is to promote policies that enhance individual liberty, personal responsibility and economic opportunity in Oregon.

It’s not often that I testify in favor of proposed legislation in this building. More often than not I’m in the minority, arguing against new laws, taxes or regulations.

Today, I’m happy to join with a diverse group of people and organizations asking you to add relevant information and results of select tax expenditures to the Oregon transparency website.

I know that we will have disagreements about individual economic development tax expenditure programs. In my case, I don’t believe that the state should be “picking winners and losers” through such programs in the first place. Either way, I hope we can all agree that as long as such programs do exist, they should be transparent to your constituents.

The original transparency website legislation last session (HB 2500) resulted in a good start toward providing useful state financial information online. I believe that HB 2825 A this session takes a significant step forward in that process, and I urge you to support it.

Thank you.

 

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Ideas Matter, and So Do Institutions

When Cascade was founded in 1991, I was in my 12th year as executive director of the Oregon Environmental Council. Before that I had worked for a national environmental group based in New York. I was an unlikely candidate to ever lead a free-market think tank.

While I was not immediately aware that Cascade had been formed 20 years ago, I was aware that my own views about environmental protection were changing. The large sources of smokestack pollution I had seen as a boy growing up in northern New Jersey were well-controlled by the 1990s. Chronic urban smog, largely the result of auto emissions mixing with other chemicals in the presence of sunlight, had been permanently eliminated in most major cities due to dramatically improved auto technology. With virtually all pollution trends moving downward, things were so much better that environmental activists were increasingly looking for things to do just to keep busy (though they would never admit that).

In 1992 a friend suggested I take a look at Reason magazine, the journal of policy and culture published by the Reason Foundation. Becoming a subscriber opened my eyes to new ways of thinking about how we organize ourselves as a society and prompted me to think critically about natural resource policy. At roughly the same time, Oregon economist Randal O’Toole began publishing Different Drummer, a journal for “libertarian environmentalists.” I had a hard time even understanding that phrase, but I had followed Randal’s work for over a decade (pioneering the use of economic analysis of public land timber sales) and had a lot of respect for his thinking. Different Drummer regularly showed how large, intrusive government inevitably created incentives that resulted in both economic inefficiency and environmental destruction.

In 1994 Cascade Policy Institute sponsored its first Better Government Competition (BGC), which it billed as a “statewide citizens suggestion box” for ideas about how to reduce the size of government or to improve the delivery of government services. For some random reason I received a copy of the announcement, and since there were cash prizes available (always a good incentive), I carefully read it over. After thinking about it I submitted an idea related to electronic tolling of roads and variable (peak-hour) pricing.

My concept was not named one of the 10 finalists, but I enjoyed writing it and it introduced me to Cascade’s work in a more personal way. As I received announcements about CPI events, I began attending just to check out this whole free-market policy scene. I went to a Cascade lunch featuring José Piñera, the world’s leading authority on converting Social Security programs to asset accounts. That was quite a refreshing presentation.

I also attended a small meeting where I was introduced to Ted Kolderie from Minnesota, the father of the charter school movement. The meeting was facilitated by Cascade, though CPI’s co-founder Steve Buckstein now admits he thought the whole charter school concept was never going to work. So much for predictions!

I also went to a highly entertaining CPI presentation by Marshall Fritz, who made a compelling argument for a complete return of education services to the private sector on a voluntary, market-driven basis.

By 1995 it had become clear to me that the environmental movement was no longer focused on protecting the environment; it had been taken over by people who were much more interested in simply controlling people’s lives. Oregon land-use planning in particular had become a nightmare that was destroying the lives of thousands of people, for no reason other than the planner obsession for control. And federal forest regulation in the wake of the Spotted Owl litigation had placed thousands of Oregon workers on the unemployment list, while turning federal forests into museums that we could look at but not touch. I knew that my time at the Environmental Council was drawing to a close.

In 1996 Cascade sponsored its second BGC, and I entered it again. This time I suggested selling the Elliott State Forest and placing the proceeds (estimated at the time to be $880 million or more) into the Common School Fund to finance a school voucher program. I was named one of the 10 winners of the 1996 competition (apparently the judges were better that year); and in the process of converting my concept into a business plan, I got to know the early CPI staff – Steve, Tracie Sharp, Kurt Weber and Patrick Stephens. We had fun visiting in the office and at events, but it never crossed my mind that I might eventually work there.

However, in the spring of 1996 I announced my resignation from OEC, effective October of that year. I had pushed the OEC board as far as I could in the direction of free-market environmentalism, but they would not go any further. And my public questioning of land-use regulation and the Portland obsession with light rail made it clear that we needed to part company. I had no master plan for my next step and no job offers, but I knew it was time to leave.

In November and December of 1996, I began enjoying being out of the work force for the first time in my adult life and occasionally dropped by the CPI office to chat. On one of those visits, Steve engaged me in a long conversation (which turned out to be my job interview), and then asked if I would like to work full-time at Cascade to promote a property rights-based approach to environmental policy. I didn’t really know what it would mean to be an analyst with CPI, and I’d have to take a pay cut from my previous job, but I decided that working at Cascade would be fun. And professionally, it was a relief to know that Cascade was a place where I would never be too radical when it came to limiting the scope of government!

So now I’m in my 15th year at Cascade. Steve works for me (where he is happy to be out of management), and two of the three founding board members – Dave Gore and Bill Udy – are still serving. Our annual budget has gone up from $67,000 to $1.1 million, and our staff includes 12 people. We’ve evolved from the traditional “think tank” role of publishing papers and hosting speakers; we’re now very active in state legislative affairs and routinely send our analysts around the state to engage people and encourage their activism at a grassroots level.

Among think-tankers it’s common to hear the phrase “ideas matter,” and that’s true. But ideas by themselves rarely change society. We also need social change agents. We need institutions that can nurture ideas, market them, engage potential allies, and help tear down the various Berlin Walls that separate selected fields of state-dominated policy (such as the monopolies in education, highways, transit and public lands) from the marketplace. We need organizations that can attract unlikely supporters – like former leaders of environmental groups – into a growing parade for freedom.

Now in its 20th year, Cascade Policy Institute has changed my life, by taking ideas espoused by Madison, Jefferson, Friedman and others and making them policy-relevant to contemporary times. Cascade’s stated mission – to promote “individual liberty, economic opportunity and personal responsibility” – is one that I am passionate about. We are changing lives, one step at a time, and it is very rewarding to play a role in this process.

Cascade still has a lot of work to do, but we are gaining new supporters almost every day. The freedom parade is growing, and we appreciate everything you have done to make this happen.

 

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Poison Pills vs. Gun Rights

Three common sense firearms bills passed the House of the Oregon Legislature and are now in the Senate Judiciary Committee. However, they are not only in jeopardy, but there is a possibility they will be amended with “poison pills.”

 

The three bills address very different, yet important, issues. The first makes Concealed Handgun Licenses (CHL) not subject to public records laws except under specific circumstances; the second allows reciprocity to out of state CHL holders; and the third provides a legal means to carry a firearm on a motorcycle, snowmobile or ATV.

 

During recent Senate hearings on these bills, the public was asked to testify on concepts that were not in writing, yet were under consideration as amendments to the bills. One concept was simply stated as “guns on public school grounds.” Another was “access to firearms for persons suffering from mental health issues.” The concepts were not defined or thought out. They are broad, sweeping issues that in no way pertained to the bills under consideration. Currently, these bills have bipartisan support and likely would pass the Senate in their current form. But if they are amended to include any of these concepts, the bills may suffer a quick death even though they address important issues that affect our 2nd Amendment rights.

 

The “poison pill” tactic isn’t new in politics, but it is cowardly. If anti-gun activists have issues they want addressed, they should introduce a bill and go through a legitimate public process, not hide behind political antics.

 

 

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Testimony regarding HB 3605: Requires Oregon Governments to Fund OPEB Benefits

Testimony of John A. Charles, Jr., regarding HB 3605: Requires Oregon Governments to Fund OPEB
Before the House Rules Committee, May 9, 2011


My name is John Charles and I am President & CEO of Cascade Policy Institute, a non-profit policy research organization. Cascade supports HB 3605 and believes it can be one of the most significant bills of the session.

 

HB 3605 grew out of concern regarding the unfunded, long-term public sector liabilities associated with “Other Post-Employment Benefits”, or OPEB. These benefits include things other than pensions, such as dental, vision and medical coverage.

 

All across the country, state and local governments are discovering that many of the commitments made to public employees about retirement benefits require funding that those units of government don’t have. Consequently, most governments are failing to place adequate reserves in trust funds to pay for future obligations. Instead, they are paying only what they owe current retirees, while allowing future obligations to quietly grow.

 

Up until recently, taxpayers and even most elected officials had no way of knowing how bad the problem was. However, in 2004 the Governmental Accounting Standards Board (GASB) adopted Statement 45, which requires that all units of government undertake a valuation of their OPEB obligations and state those obligations in annual financial reports. Implementation of GASB 45 was phased in during 2007-2009, and all units of government must now comply.

 

OPEB audits must calculate liabilities for all current and future retirees, amortized over a period not to exceed 30 years. Based on these calculations, actuaries determine what the Annual Required Contribution (ARC) would be if each entity paid for current OPEB benefits as well as a pro-rated share of future obligations.

 

However, the ARC is not actually mandatory, despite use of the word “required”; governments must publish information about net OPEB liabilities, but are not required to create OPEB trust funds or pay anything into trust funds. That remains a policy choice of each individual government.

 

Additional background information about GASB 45 is attached on the yellow sheet.

 

The Oregon Problem

 

A review last year of audited financial statements for 100 randomly-chosen Oregon governments (green spreadsheet, attached) by Jacob Szeto of the Oregon Capitol News (an affiliate of Cascade Policy Institute) showed that there are more than $3 billion in OPEB liabilities. Of that total, only 7.8% is funded. Most governments have no money set aside in OPEB trust funds, as can be seen in the “Funded Ratio” column on the green spreadsheet (3rd column from the right).

 

By way of comparison, at December 31, 2010, Oregon PERS was funded at roughly an 88% level, plus the total obligations are known. For OPEB liabilities, the level of under-funding is much worse, and the total obligations are not known. If there are $3 billion in unfunded OPEB liabilities from 100 units of government, one can only speculate what the total is for the roughly 1,700 units of government in Oregon.

 

Reliance on a pay-as-you-go system means that long-term unfunded liabilities will likely grow, creating cash flow problems for future managers, especially as large numbers of baby boomers begin retiring.

 

The Policy Solution: HB 3605 takes a very simple approach to this problem by requiring that all units of government in Oregon make Annual Required Contributions (ARC) into OPEB trust funds, as determined by outside actuaries.

 

This is not a new concept. ORS 238.420 already requires an ARC for the Retirement Health Insurance Account (RHIA), which is a multi-employer OPEB system administered by PERS.  That law states in part:

“The Retirement Health Insurance Account shall be funded by employer contributions. Each public employer that is a member of the system shall transmit to the board such amounts as the board determines to be actuarially necessary to fund the liabilities of the account. The level of employer contributions shall be established by the board using the same actuarial assumptions it uses to determine employer contribution rates to the Public Employees Retirement Fund. The amounts shall be transmitted at the same time and in the same manner as contributions for pension benefits are transmitted under ORS 238.225.”

 

 

If you look on the green spreadsheet, you’ll notice that RHIA (listed as #2 on page one) has a funded ratio of 41.9%. It is one of the very few entities with any money in a trust fund. Although the agency has unfunded actuarial liabilities of $297 million, that amount represents only 3.5% of the covered payroll, so the risk is minor.

Some people may ask if this bill is an “attack” on organized labor, or government itself. The answer is “no.” It is simply an attempt to ensure that promises made to employees about retirement benefits are kept. If specific units of government will not have the money to keep those promises, then managers should have an adult conversation with their employees NOW, not at some unknown time in the future when the crisis explodes.

 

Note that HB 3506 does not tell governments how to respond to an OPEB funding problem; it simply requires them to comply with the ARC. If there is no way to make sufficient cash payments into OPEB trust fund accounts now, then that problem needs to be addressed, and there are probably thousands of ways that individual OPEB liabilities could be reduced.

 

One of the most common methods is to change the vesting period for post-employment benefits. If, for instance, employees now have only a two-year vesting period to receive retirement medical benefits, and the vesting period were changed to six years, the OPEB liability (as calculated by the actuaries) would go down, thus the ARC would go down.

 

For employees who actually work longer than six years, this would have no effect on their benefits, so it is a relatively painless way of addressing the OPEB funding problem.

 

Other potential solutions would depend on the specific nature of employee contracts at the various governments.

 

Poster Child for HB 3605: TriMet

 

A quick glance at the attached spreadsheet will show that TriMet is #1 in unfunded liabilities, by any measure. In fact, the agency is not just #1 – it is an outlier so extreme that it begs some form of explanation. A brief discussion may assist legislators in understanding the need for HB 3605.

 

In 1994 TriMet changed the basic template of its union contract, incrementally lowering the age of retirement and dramatically increasing post-employment benefits. The cost of these obligations steadily accrued each year, but TriMet did not create a trust fund to pay for them. Since GASB 45 did not yet exist, almost no one outside the agency knew about this ticking time bomb.

 

In 2008 TriMet adopted GASB 45, and the district’s outside audit showed, for the first time, a “schedule of funding progress” for OPEB. The Unfunded Actuarial Accrued Liability (UAAL) for OPEB as of January 1, 2008 was $ 632 million.

 

In the 2010 TriMet budget document, the narrative to the Board stated, “TriMet needs to begin to take steps to partially fund a retiree-medical trust to assure a funding source for retiree health benefits, which have already been accrued but are not yet funded.” That was a clear and concise statement of need — yet the adopted budget for that year (FY 10-11) included zero funding for the OPEB trust fund.

 

In the very back of that document, on page 241, TriMet presented a revealing 10-year financial forecast. A copy is attached (the blue page). In that forecast, TriMet predicted that it would finally begin funding the OPEB trust with a token payment of $1 million in 2012, followed by identical payments for the next four years (line U on the blue sheet). The agency did not anticipate getting serious until FY 2019, when it projected an OPEB payment of $10 million.

 

Five months later, TriMet’s 2010 audit was released. The audit showed that in just two years the OPEB liability had ballooned from $632 million to $817 million, and all of it was unfunded.

 

Last month, TriMet released its draft budget for FY 11-12. The narrative is now much more evasive about the subject of OPEB. On page six, it simply states, “The FY 12 proposed budget reflects pay as you go funding of OPEB costs for retirees, and an initial deposit to an OPEB trust to begin funding future retiree OPEB benefit.” It does not say how much.  Also, the 10-year financial forecast page has been deleted.

 

If you search long enough, however, you can finally find on page 45 that the promised payment of $1 million has been downgraded to $410,000. Meanwhile, the OPEB liability keeps rising by the month, and is now probably in the neighborhood of $900 million.

 

Like high school students who keep telling their parents that they will start on that big term paper “tomorrow”, the TriMet Board has been procrastinating for 17 consecutive years on OPEB. This is setting up both employees and future board members for a massive meltdown later this decade.

 

It is important to note that TriMet’s OPEB problem is not the result of declining revenues. To the contrary, TriMet has been one of the few units of government with rising revenues, thanks in part to the legislature.

 

In both 2003 and 2009 the legislature authorized increases in the regional payroll and self-employment tax for TriMet (and Lane County Transit). TriMet began implementing the tax rate hike in January 2005, and will continue to implement it by raising the rate by 1/100th of a percentage point every year through 2024.

 

The chart below shows that the payroll tax increase, combined with substantial increases in passenger fares and federal grants, has led to both operating and capital funding increases that most local governments could only dream of.

 

TriMet Financial Resources, 2004-2012[1]

(millions)

 

FY 04/05 FY 08/09 FY 09/10 FY 10/11 (est) FY 11/12 (budget) % Change 04/05-11/12
Passenger Fares $   59.49 $   90.10 $   93.73 $   97.97 $103.80 74.5%
Payroll tax revenue $171.23 $209.10 $207.10 $217.20 229.10 33.8%
Total operating resources $308.77 397.24 $423.50 $424.20 $443.21 43.6%
Total resources $493.72 $888.35 $809.75 $763.66 $1,004.44 103.44%

 

TriMet will likely respond by stating that the purpose of the payroll tax rate increase was to pay for the “operating cost of new service”, not OPEB liabilities, which is true; but as the chart below illustrates, the increased service never materialized. In fact, service has been steadily dropping for the past three years:

 

Service Trends for TriMet Since the Payroll Tax Rate Increased in 2005

Fixed Route Service – light rail, bus, commuter rail[2]

 

 

March 2004 March 2006 March 2008 March 2010 March 2011 % Change
Peak vehicles 620 602 611 627 599 -3.4%
Service hours 147,138 143,308 144,912 143,089 132,777 -9.8%
Vehicle miles 2,684,606 2,620,246 2,546,365 2,531,041 2,357,214 -12.2%

 

 

To summarize, the agency hit a gusher of cash in the past seven years, but proceeded to cut service by 12% while dramatically increasing its unfunded OPEB liability. This is a financial disappearing act that would make Penn & Teller envious.

 

While TriMet is an extreme form of the management problem HB 3605 attempts to address, the challenge is the same across the board: promises are being made at many governments for post-employment benefits that probably cannot be kept. The time to deal with fiscal reality is now. The legislature should step in to require that modest steps be taken based on a 25-year amortization schedule.

 

It is rare that legislators have a chance to enact laws that will demonstrably make a positive difference for future generations. This is one of those cases.

 

Thank you for your consideration.


[1] TriMet budget documents, various years, 2004-2011

[2] TriMet monthly performance reports, 2004-2011

 

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2011 Spring / Summer newsletter is out

Keep your eyes open for the latest issue of the Cascade Update, coming to a mailbox near you! If you’d rather check it out online, you can download it here.

To get on the mailing list for the Cascade Update, email deanne@cascadepolicy.org

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Testimony on SB 99 A: Oregon Health Insurance Exchange as public corporation to be governed by board of directors

Testimony on SB 99 A: Requires Oregon Health Authority to establish Oregon Health Insurance Exchange as public corporation to be governed by board of directors

Before the House Committee on Health Care

by Steve Buckstein

Click Here for Audio (Steve begins at the 31:56 mark)

Co-Chair Greenlick, Co-Chair Thompson and members of the Committee, my name is Steve Buckstein. I’m Senior Policy Analyst and founder of Cascade Policy Institute, a non-partisan, non-profit public policy research organization based in Portland. Our mission is to promote policies that enhance individual liberty, personal responsibility and economic opportunity in Oregon.

I’m here today not to support or oppose SB 99 A, but to put on the record my concerns that if the state does enact an insurance exchange as envisioned in the bill, it should use the exchange as an opportunity to expand rather than restrict consumer choice.

As you may know, the U.S. House earlier this week voted to bar funding for state insurance exchanges. While this effort may very well fail, the Obama Administration took the vote as an opportunity to re-state its position that:

“Exchanges will allow Americans to compare prices and health insurance
plans and decide which quality, affordable option is right for them.”*

In order to make such decisions meaningful, Oregonians should have more insurance plan options than the state currently allows.  As I testified here on March 7th in favor of HB 2977, Oregonians should be allowed to purchase any policy offered in other states by companies licensed to sell insurance in those states. I’m sure that DCBS concerns about putting these companies on a level regulatory playing field with companies already approved to sell insurance in Oregon can be satisfied.

The exchange should also be open to approving new policies offered within Oregon that do not include all the current state mandates. Whatever decisions are made at the national level regarding the so-called “Essential Health Benefits” package, Oregon should be a leader in allowing our citizens as much choice as possible consistent with full disclosure. This will allow the exchange to satisfy the needs of consumers who want more affordable insurance choices as well as those who want more comprehensive coverage.

If the exchange does not offer such choices, it will quickly become part of the problem, both driving up costs and pushing more people out of the insurance marketplace.

In conclusion, I hope the exchange you envision is charged with helping to open up the insurance marketplace to more affordable plans, thus being be part of the solution.
Thank you, and I would be happy to take any questions.

* “House Votes to Bar U.S. Funding for Insurance Exchanges”, Bloomberg.com, May 4, 2011,

 

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Additional Graduation Requirement Misses the Point

Last week, Oregon’s state House passed a bill that would require students to apply for post-secondary education, the military, or an apprenticeship or to attend an informational session on a training program in order to receive their high school diploma. Bill supporters argue that this could increase the number of kids who enroll in higher education.

Yet, there is no evidence that such a program will increase enrollment in higher education. Already, 70% of U.S. students enroll in college within two years of high school graduation. But around 30% of students drop out, and many more fail to graduate on time according to the NCES, a division of the U.S. Department of Education. One major cause is that students are commonly unprepared for college-level work.

Around 40 percent of Oregon’s community college freshman enroll in remedial courses. And surveys by the NCES have found that about 1 in 4 freshmen in 4-year public universities enroll in remedial courses. Students who take remedial courses are far more likely to drop out of college. Yet startlingly, in a 2008 survey only 14% of such students thought their high school coursework had been difficult.

Rather than heap more top-heavy mandates on schools and students, the legislature would be wise to free schools to do what they are supposed to do: educate kids. And rather than manipulate children to apply for post-secondary education or the military, the legislature should empower kids to seek out and choose a high school education that will challenge them and prepare them for life.

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Oregon’s Anti-BPA Packaging Legislation May Jeopardize Public Health

The Oregon Senate recently voted in favor of SB 695, which would ban BPA use for children’s food containers, baby bottles and sippy cups starting in January 2013. The Oregon House has yet to vote on the bill. While environmental activists were unable to get an all-out ban on BPA in other food packaging, they did get a provision that they will use to build momentum for such bans in the future: The bill creates a panel to “study” the potential for similar bans on other food packaging. However, BPA has already been studied extensively around the world. This new state-level panel is unlikely to discover any new information, but instead it simply will be used to push the activists’ agenda to ban more uses of BPA.

This anti-BPA legislation is based on environmental activists’ wrongheaded claims that BPA poses unreasonable risk to human health, specifically to children, although the overwhelming body of research suggests otherwise. Ironically, these policies threaten to undermine food safety because BPA is used to make resins that line metal cans and other packaging to prevent development of dangerous pathogens and other contamination. And there are few good alternatives should lawmakers eventually ban BPA. According to a World Health Organization report: “[A]t present, there appears to be no single replacement for BPA for all food contact applications. Furthermore, data on the safety of some of these replacement materials are limited or non-existent.” In other words, misguided bans of BPA in food packaging could have serious, adverse public health implications.

WHAT IS BPA? Bisphenol-A is a chemical intermediary used in the manufacturing of certain products, including polycarbonate plastics and epoxy resins. These plastics are used in a variety of products: baby bottles, five-gallon water jugs used in water coolers, medical equipment, sports safety equipment, cell phones and other consumer electronics, household appliances, and many other products. The resins are used for industrial flooring, adhesives, primers, coatings and computer components. Its applications for food packaging and containers, particularly uses for water cooler jugs, canned foods and baby bottles, have been the focus of much debate.

NEGLIBLE RISK. In wide use for over 50 years, BPA has been extensively studied. The best science tells us that consumer exposure to BPA is far below levels of concern. An analysis published in Medscape General Medicine reveals that consumers are most likely exposed to BPA at levels that are 100 to 1,000 times lower than EPA’s estimated safe exposure levels. It notes further that the research on BPA also shows that the exposure levels per body weight are similar for adults and children, which indicates that infant exposure is not significantly higher. Moreover, risks to humans are probably much lower than these estimates suggest because humans metabolize BPA faster and better than do the rodents used in BPA studies.

ENDOCRINE SCIENCE. Scientific research identifies BPA as “weakly estrogenic.” Humans are regularly exposed to such estrogen mimicking compounds. Most are produced by plants: so-called phytoestrogens. Phytoestrogens are found in all legumes, with particularly high levels found in soy. The impact of weakly estrogenic synthetic substances like BPA is insignificant compared to human exposures to naturally occurring phytoestrogens in the human diet. According to data from a 1999 National Academy of Sciences study, exposure to natural phytoestrogens is 100,000 to 1 million times higher than exposure to estrogen mimicking substances found in BPA. “Given the huge relative disparity between the exposure to phytoestrogens as compared to BPA concentrations, the risk of BPA in consumer products appears to be about the same as a tablespoon of soy milk,” notes researcher Jonathan Tolman.

COMPREHENSIVE STUDIES AND REVIEWS. Scientific panels around the world have reviewed, and continue to review, the complete body of evidence and none report serious concerns about BPA. These include:

U.S. Food and Drug Administration:

“An adequate margin of safety exists for BPA at current levels of exposure from food contact uses.”

The European Union Risk Assessment: The EU’s risk assessments in 2006 and reviews in 2008 and 2010 find no compelling evidence of BPA-related health effects at estimated human exposure levels.

National Institute of Advanced Industrial Science and Technology (Japan): This extensive study found that “the risks posed by BPA were below the levels of concern.”

U.S. National Toxicology Program (NTP): This review found no direct evidence of problems among humans. It expressed minimal to negligible concern for almost all factors. It called for more research in one area where it has only “some concern” because rodent studies showed some association of potential effects on behavior.

Health Canada: “Health Canada’s Food Directorate has concluded that the current dietary exposure to BPA through food packaging uses is not expected to pose a health risk to the general population, including newborns and young children.”

BPA bans will do little for public health, since they do not address significant risks. They are part of an ever-expanding arbitrary regulatory state that places many valuable products and freedoms at risk.

This Commentary is drawn from “Anti-BPA Packaging Laws Jeopardize Public Health,” by Angela Logomasini, Ph.D., published by the Competitive Enterprise Institute.

 


 
Angela Logomasini is Director of Risk and Environmental Policy at the Competitive Enterprise Institute. At CEI, Angela conducts research and analysis on environmental regulatory issues. She is co-editor of CEI’s book “The Environmental Source”, and her articles have been published in The Wall Street Journal, The New York Post, The Washington Times and other papers.

 

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Press Release: Light Rail and Streetcar Fail to Provide “High-Capacity” Service, Study Shows

study released today by Cascade Policy Institute shows that TriMet’s so-called “High-Capacity Transit” system – comprised of light rail, the Portland Streetcar and commuter rail – is incapable of actually moving large numbers of people when needed. Moreover, most of the time there is no demand for high-capacity transit because the region’s population is too dispersed, and people prefer to travel by modes other than passenger rail.

The study, Light Rail, Streetcars & the Myth of “High Capacity Transit,  measured actual trip choices made during 2010 at five big events when presumably “high-capacity” transit would be in demand: the Portland Green Building home show held in March at the Multnomah County Expo Center; the opening night show of the Cirque du Soleil in April; the final playoff game of the year for the Portland Trail Blazers in May; “Black Friday” at the Cascade Station shopping center in November; and December 21st at the Gresham Civic Station shopping center in December. The results were:

  • Light rail use at the Green Home Show averaged 20% of all passenger-trips;
  • Streetcar use at the Cirque du Soleil opening show was 8%;
  • Light rail use at the Blazer game was 21%;
  • Rail use at Cascade Station averaged 2% over a two-day period in November; and
  • Light rail at Gresham Civic Station carried 2% of all passenger-trips for the morning commute period and 2% of all passenger-trips for the mid-day shopping period.

In total, 47,666 passenger-trips were observed or estimated, and rail only garnered 11% of the market share, as summarized below.

Summary Totals
All passenger-trips to all events, by mode choice

 

Green
home
show
Circus Blazers Cascade
Station
Gresham
Station
Totals Market
share
(%)
Rail 516 110 4,238 333 120 5,317 11%
Auto 2,106 1,245 14,636 (est) 17,570 5,101 40,658 85%
Other 0 0 1,626(est) 5 55 1,686 4%
Total 2,622 1,355 20,500 17,908 5,276 47,666 100%

Note: For the Blazer game, only light-rail trips were observed; other mode totals were estimated.

In all cases except for the Blazer game, actual seating capacity of the trains was never an issue because so few customers chose to ride, even when on-site parking was quite expensive. In the one case where high-capacity transit would have been very helpful – the Blazer playoff game – the light rail system was overwhelmed by crowds and could only muster 21% of market share despite the use of four different MAX lines – the Yellow, Green, Blue and Red lines.

The reason for the modest transit totals is that light rail is inherently a low-capacity system, because there are only two rail cars per train. The system cannot use more than two cars because trains travel on surface streets in downtown Portland. If trains had 8-9 cars, as is common with the New York City subway or other heavy rail systems, the trains would be blocking downtown intersections for minutes at a time.

Also, trains generally cannot run at greater frequencies than every three minutes due to operational and safety requirements. In most cases, trains only run every 12-15 minutes, or less often. These constraints limit passenger-throughput compared to a bus transit system where vehicles can travel with minimal spacing requirements.

Cascade President John A. Charles, Jr. conducted the research with the help of several assistants. He stated, “The field research shows that continued use of the phrase ‘high-capacity transit’ by local planners to describe the regional rail program is Orwellian. Light rail is actually a low-capacity system, and the streetcar is simply irrelevant. TriMet’s buses carries two-thirds of all regional transit trips on a daily basis, and that’s the service that should be recognized as high-capacity transit. Unfortunately, bus service is being sacrificed by TriMet in order to build costly new rail lines that carry relatively few people.”

 

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Oregon Budget 101 feat Dan Lucas – Other Funds Budget

Dan Lucas discusses the Oregon Other Funds Budget, from the origins of the money to the reasons why we need to get the money into the General Fund.

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The high price of “green” power

The following excerpt is provided by The Executive Club:

6:00 pm •  Wed, May 4th  •  Airport Shilo
The high price of “green” power


Todd Wynn, Vice President of Cascade Policy Institute, will be on hand for the May meeting to, well, illuminate the dramatic increases in Oregonians’ utility bills because of the pop-culture foolishness that passes for wisdom in Salem.

Since January 1,  Pacific Power electric rates have increased by 14.5% and PGE rates by 4.2%.  These increases were due largely to restrictive energy policies adopted in Salem under the state’s politically trendy  “Renewable Portfolio Standard.”   Cascade has just released a report showing that this energy mandate, passed in 2007, is already laying additional financial burdens on Oregonians and will certainly do much more damage over the next 15 years!

Be at the Shilo meeting to fully understand the plight facing you and other Oregon ratepayers.  More to the point, learn what you can do to fight back against this state’s latest politically correct, foolish, threat to the entire Oregon economy.

Meeting Bonus!
(something else to make make your blood boil).
Many who benefit from the clear and sparkling water provided by the Bull Run watershed (most of you) may be surprised to hear that not all is well in the Portland Water World.  That is why we will also a have a quick update from Scott Fernandez, the man who is confronting Portland City Commissioner Randy Leonard over Leonard’s  determination to push a needless modification of the pristine water system.

This is a fascinating story.  If Leonard prevails, water bills from that system will be rising 85% over the next 5 years!  Fernandez, a trained microbiologist, in a short, concise presentation, will tell us why Leonard’s plans are so very costly and so unnecessary!

 

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Is Oregon Business Friendly?

Many factors go into determining if a state is business friendly. A recent national report concludes that Oregon has the nation’s second-lowest effective business tax rate for new investments. Some commentators are jumping all over this, as if it more than offsets all the negative factors for businesses, such as the passage last year of Measures 66 and 67.

But, the report actually has only limited good news, and then only for investments in Oregon by profitable corporations that are already here. It fails to consider other factors that don’t make Oregon look nearly as good. For example:

First, it doesn’t even consider the fact that unprofitable corporations can be hit by the gross receipts tax of Measure 67.

Second, it doesn’t consider the impact of Oregon’s high personal income tax rates on the decision of corporate managers about whether they want to move here. Under Measure 66, Oregon has the highest personal income tax rate in the nation at 11 percent, not a strong selling point to move here from somewhere else.

Third, the report says nothing about Oregon having the highest personal capital gains tax rate right now, again at 11 percent.

Add such factors as the open-ended Business Income Tax in Portland and Multnomah County, and there are plenty of reasons for Oregon to be considered less than an attractive state to do business in.

A low effective tax rate for investment in Oregon by profitable corporations that are already here is great. If only it wasn’t offset by high tax rates on everything else.

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The ABCs of Environmental Hysteria: Activists, Bisphenol-A and Children

Spreading like wildfire, more attempts have been made to ban Bisphenol-A (BPA) at the state level in 2011 than in any previous year. More than 50 bills have been introduced in legislatures across the country to ban a chemical that commonly lines beverage and food containers. The Oregon Senate recently passed Senate Bill 695, which would make illegal the sale, distribution or manufacturing of a child’s beverage container made or lined with BPA. The bill, now headed to the Oregon House, is a perfect example of baseless environmental hysteria leading to illogical and destructive regulations.

 

Year after year, despite overwhelming scientific evidence to the contrary, environmental lobbyists and activists descend upon the state capitol to convince legislators that “evil” corporations insist on using a chemical they claim is unsafe. With the emotional argument of “saving children from cancer” as their mainstay, these activists are pressuring Salem politicians to ban BPA altogether.

A number of important lessons can be gleaned from their efforts:

First, people tend to overestimate risk and to exaggerate the benefits of risk-reducing laws. Proponents of banning BPA insist that government should use the “precautionary principle.” This means that if a possibility of causing harm to the public exists, despite lack of a scientific consensus, then politicians have a “social responsibility” to protect the public by passing laws to prevent possible harm. The precautionary principle allows politicians to justify discretionary decisions based solely on public fear. In the case of BPA, politicians may choose to ban the product entirely, even if the scientific community continues to exonerate this chemical of the claims made against it.

In BPA’s defense, we know a lot about it. In wide use for over fifty years, the chemical has been  extensively studied. The science has revealed that consumer exposure to BPA is far below levels of concern, even for infants and children. BPA is actually quite useful in protecting consumers against food contamination. In other words, banning BPA could create significant new risks. Products or other chemicals that would be introduced to perform the same functions may be more expensive, not work as well, and produce new safety problems that have yet to be studied. Thus, switching to a less tested and potentially less safe alternative is risky for children and infants. In this case, adherence to the precautionary principle actually should preclude the use of the precautionary principle by those concerned about public health!

Second, the consumer market is already adjusting to meet the demands of chemical hypochondriacs. Numerous manufacturers produce BPA-free beverage containers, and major retailers such as Walmart are asking for alternatives to meet consumer demand. BPA-free manufacturers openly advertise their products as BPA-free. When a consumer desire becomes mainstream, regardless of whether it is scientifically justified, a free market will meet that demand. This should make one wonder why politicians in Salem think they need legislation to address BPA worries.

Finally, BPA is just today’s target in a never-ending war by environmentalists to eliminate from the environment anything humanly manufactured. This attitude can be summed up with one word: chemophobia – the unreasonable conviction that all chemicals are bad and that all things loosely defined as “natural” are good. Fear makes it difficult for anyone – let alone politicians – to take a rational look at the issue, especially when ban proponents are pulling the “Do you hate children?” card.

Although reason and objectivity eventually should win a debate, they often don’t. That is yet another reason why it is so important to limit government interference. As more state politicians pressured by hard-charging environmentalists and misguided parents move to ban BPA, pressure will build on those who hold out. Unjustified bans become the rationale for more bans. Sadly, it won’t stop with BPA, as special interests always will strive to use government to control fellow citizens and to limit their choices.

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Oregon Budget 101 feat Dan Lucas – Regional Spending Comparisons

Watch part II of Dan Lucas’s Oregon Budget 101 series. This episode discusses regional spending comparisons between Oregon, Idaho, Washington, Utah, and California.

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Cut ODOT’s “Drive Less. Save More.” Ad Campaign

On April 21, 2011, John Charles testified before the Joint Ways and Means Transportation Subcommittee. He suggested ways to cut spending from ODOT’s budget, including ending the $1.5 million “Drive Less. Save More” ad campaign.

Listen here, John’s testimony starts at 35:40.

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Testimony on ODOT’s Budget for Rail and Transit

John’s testimony before the Ways/Means subcommittee on Transportation on 4/20/2011 at 9:30am.

Listen to the audio here. John begins at 30:21.


Members of the committee, I am a lifelong transit user and take transit to Salem on most days (TriMet’s commuter rail from Beaverton to Wilsonville, connecting with an express bus to Salem operated by SMART or Cherriots).  However, notwithstanding my personal preferences, there is no compelling state interest that would justify subsidies for rail programs through the ODOT budget.

 

Passenger rail is simply irrelevant in a low-density state like Oregon. The Portland rail program has failed because it is too slow, too expensive, and too inflexible. My daily ride on WES costs TriMet $18 per one-way trip, but I only pay $2.35. None of the capital costs are paid for by users. That is not a “sustainable” business model.

 

Rubber-tired transit continues to carry two-thirds of daily transit trips in the Portland region, despite being virtually ignored by TriMet. With low capital cost, this is the only mode that makes sense for transit in Portland.

 

For inter-city transit, we already have unsubsidized private bus companies operating, and further subsidies to Amtrak will be counter-productive.

 

For freight movement, rail is a for-profit business that should be supported by its customers. If that is not possible, then the business is not viable.

 

In looking at the specifics of HB 5046, I have the following brief comments:

 

  • The Connect Oregon programs have relied so much on spending future lottery funds that the lottery is now tapped out. I’m sure you have all seen the February 11 memo from the state Treasury regarding the need to re-finance debt. Continuing to fund transit projects that are inherently uneconomic with lottery funds simply forecloses future uses of that money.

 

  • Expansion of the Portland Streetcar to the south end of the South Waterfront district was financed in part with a $2.1 million Connect Oregon grant. The grant application promised a 30% market share of all district trips for the streetcar and 40% market share for commute trips. Having just completed field research in the district, I can assure you that actual transit use is far lower; on a typical weekday, the streetcar accounts for only 9% of all passenger-trips to and from the district during the hours of 6:00 a.m. to 10:00 p.m. (summary results attached).

 

  • Oregon should stop chasing federal dollars for the Obama “medium-speed” rail program. Passenger rail will never be competitive or cost-effective in Oregon, and there is no willingness on the part of customers to pay for true “high-speed” rail.

 

  • The ODOT “Oregon Rail Funding Research Task Force” should be disbanded. There is already an obvious source of funding: customers. If they are not willing to pay the cost of capital expansion and maintenance, the business is not viable.

 

  • There should be no more funding for the OTC “flex funds” program; this has already been abused by TriMet to promote Milwaukie LR at the expense of more effective bus service.

 

  • The $250 million previously appropriated for lottery-backed bonds to pay for Milwaukie LR was an egregious waste of money and should never be repeated. In its Fall 2010 Financial Forecast TriMet predicts 13,000 average weekday boardings for the opening year of this project, 2015. Of those, 4,500 are estimated to be former bus passengers switching due to the loss of bus service. Since one customer usually creates two “boardings” per day, the total number of new daily passengers is estimated to be only 4,250. At a total capital cost of roughly $1.5 billion, that works out to be $333,333 per new rider. I suspect that if we could locate these speculative new riders and ask them how they would like us to spend $333,333 to improve their mobility, few would actually vote for a slow train from Milwaukie.

 

  • TriMet successfully manipulated the legislature into approving substantial payroll tax rate hikes in both 2003 and 2009 for the stated purpose of paying for the operating cost of new rail service such as the I-205 MAX line, but that line is operating at 33% below the service level promised to FTA. Therefore TriMet is defrauding the federal government, which paid for more than 70% of capital expenses (New Starts grants + flex funds used for the local match), and breaking promises made to the state legislature when the payroll tax rate was approved.

 

This pattern is about to repeat itself with the Milwaukie project, where planned levels of operating service have already been lowered due to TriMet’s financial problems.

 

  • Contrary to claims made by TriMet, passenger rail is not “high-capacity” transit; it is “low-capacity, high-cost” transit, which is the exact opposite of what we need.

 

  • Local transit districts should be raising operating and capital funds locally through customer fares; there is no role for ODOT to play in local matters unless it is simply passing through federal funds.

 

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Improving Citizen Access to the Oregon Legislature

Are Oregon citizens able to engage with the legislature in a meaningful way? The flurry of bills and amendments can be overwhelming for a professional lobbyist, so it is easy to understand why a citizen or group of volunteer citizens want to throw up their hands.

 

Tracking a bill in the legislature would seem to be relatively easy with access to the internet. But, as many folks are finding out, it isn’t quite that easy. Once a hearing is scheduled for a bill, a person may have to commute hundreds of miles to Salem to testify. Written testimony can and should be provided on a bill, but actually being present seems to give more deference to an argument. Then, amendments often have been added to the bill that weren’t available on the web, and a citizen’s comments might no longer be pertinent. In fact, with cutoffs approaching, committee members often haven’t even seen amendments before they arrive at the hearing.

 

Many new citizen activist groups are recognizing that for them to be effective at the legislature, they must have someone at the Capitol on a daily basis monitoring activities. Even then, it is difficult to be effective. Small unofficial workgroups of lobbyists may be working on new language for bills that you may or may not be invited to participate in. This can result in amendments being introduced as “compromise language,” even though interested private citizens never saw the language.

 

The Oregon legislature could be more accessible to the average citizen. Here are few ideas that could make great strides in that direction:

 

  • Establish video conference areas around the state for citizens to provide testimony. This is currently being done by the Redistricting Committee, so it is possible. Facilities with this technology already exist at most college facilities throughout the state, so the infrastructure need would be limited.
  • Require all amendments to be posted electronically 24 hours before they can be considered in a work session, and the work session must open a public hearing for comments on those amendments.
  • The number of bills a legislator can introduce should be further limited to three, as well as those introduced on behalf of agencies. However, this has to be well thought-out. The last thing that should be encouraged is large omnibus bills with very general relating clauses.

 

These changes won’t eliminate the power of professional lobbyists, but they would begin to create a more accessible process for citizens. As legislators contemplate rules by which to conduct business at the beginning of each session, they not only should consider how to make the session most productive for the body, but also how to make their process more conducive to citizen participation.

 

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Testimony in favor of reducing Oregon’s Capital Gains Tax Rate

This testimony was given April 19, 2011 before the House Committee on Revenue.  It is in response to HB 3420, HB 3282, HB 3283, HB 2562, HB 2730 and HB 3296.


Co-chairs Berger and Barnhart and members of the Committee, my name is Steve Buckstein. I’m Senior Policy Analyst and founder of Cascade Policy Institute, a non-partisan, non-profit public policy research organization based in Portland. Our mission is to promote policies that enhance individual liberty, personal responsibility and economic opportunity in Oregon.

I’m here to testify in favor of reducing Oregon’s capital gains tax rate, which is currently the highest rate in the country. This high rate has the effect of discouraging investment and hiring activity in the state.

Previous research by a member of the Governor’s Council of Economic Advisors calculated that cutting the capital gains tax rate to 4.5 percent would add approximately 6,000 new jobs a year and increase venture capital activity in the state by approximately $300 million a year. This is consistent with more recent research suggesting that completely eliminating the capital gains tax would add approximately 14,000 more jobs by 2013.*

As I’m sure you already know, the capital gains tax is the most volatile segment of Oregon’s tax structure. Between 2007 and 2008, revenue from capital gains declined by 60 percent. Capital gains accounted for 10 percent of state income in 2007, dropping to 4 percent in 2008, and I believe it was as little as 2 percent of income in 2009. In fact, because of tax-loss carry-forwards, in a deeper recession it wouldn’t be impossible to see capital gains income actually turn negative.

From a legislator’s standpoint, I think the best time to reduce or eliminate the capital gains tax is when there aren’t many gains to be taken. Like now.

I’m not a fan of putting conditions on any capital gains rate reduction, as all these bill being heard today do. Requiring investors to reinvest in specific businesses may be well-intentioned, but it’s not necessary. Reducing or eliminating Oregon’s capital gains rate would send a positive message to business people and investors everywhere. It not only would unleash more economic activity from those already living in Oregon, it would help attract such people to relocate to Oregon and bring their capital with them.

The more strings you put on the deal, the less likely enough people will want to take advantage of your offer.

So, rather than trying to pick winners and losers, in this case trying to direct more capital to Oregon businesses through favors in the tax code, simply ensure a level playing field and then trust in the market’s ability to evaluate good deals and invest in them. The more attractive you make Oregon as a place to do business, the more business and investment capital will flow here.

So, in closing, please reduce or eliminate Oregon’s capital gains rate, and then watch the economy pick up. Watch jobs be created. And watch state revenue increase as a result. This is a perfect example of where asking for less will result in generating more.

Thank you.

 

 

* All numbers from “Facing Reality: Ideas to Reset Oregon’s Budget and Recharge its Economy”, Cascade Policy Institute and Americans for Prosperity-Oregon.

 

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Testimony in opposition to SB 692

Testimony given before the Senate Finance and Revenue Committee regarding SB 692, which covers:

  • Removes prohibition against imposition of taxes by county on cigarettes and tobacco products.
  • Requires at least 20 percent of any tax imposed by county on cigarettes or tobacco products to be used for public health programs or services.

Chair Burdick and members of the Committee, my name is Steve Buckstein. I’m Senior Policy Analyst and founder of Cascade Policy Institute, a non-partisan, non-profit public policy research organization based in Portland. Our mission is to promote policies that enhance individual liberty, personal responsibility and economic opportunity in Oregon.

I cannot attend your hearing on SB 692 so I wanted to submit brief written testimony in opposition.

I noted in this week’s Oregonian editorial in favor of this bill a telling paragraph:

“Try walking around your own neighborhood and you’ll quickly discover,
as Multnomah County did in a price survey, that cigarette prices are
extremely varied. Moral of the story: People addicted to a product are
inclined to run in and pay the going rate and ask questions later, at least
until they get fed up enough to seek help and quit.”*

So, at least some of the bill’s supporters assume that counties will be able to impose a tax on smokers and they either won’t notice, won’t care or won’t have a choice in the short run.  In the long run…well, you know what economist John Maynard Keynes said about that.

If taxing a relatively low-income, less-educated, more minority population is bad public policy on the state level, which I think it is, then it is equally bad public policy on the county level.

Governments too often see smokers as a minority that the rest of us will tax because we don’t smoke, so who cares. Well, the defeat of Measure 50 in 2007 should put that canard to rest. I don’t believe it was the heavy spending against the measure that swung voters to the No side on that tobacco tax. I believe it was a realization that it simply isn’t fair to tax a small minority just because we can.

And, if it isn’t fair to tax a small minority at the state level, then it isn’t fair at the county level either.

So, it isn’t good public policy, and it isn’t fair to tax smokers just because we can. SB 692 tries to look like it’s for the smoker’s own good by requiring at least 20% of the revenue be spent on public health programs, presumably to help smokers quit.  But that means that up to 80% of the revenue could be spent on anything else counties want to spend it on. It seems to me that this is simply a way to let counties impose a tax on a minority of their citizens with very little connection to the needs or wants of that minority.

I’m all for local control; in fact, I think the best local control is control by the individual over his or her own life. That includes the decision to smoke or not smoke without facing unfair taxation of that choice.

Thank you.

 

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Is Kitzhaber’s Oregon Investment Board a Good Investment in Kids’ Education?

Governor Kitzhaber is seeking to consolidate power over education. Early childhood, K-12 and post-secondary education would be overseen by a single board, the Oregon Investment Board.

Surprisingly, most of the education establishment approves of these changes, saying they will improve things at the ground level. Yet, how would shifting power upward improve educational outcomes for children at the bottom? For decades, we have tried that as the state and federal governments have gotten increasingly involved in our neighborhoods’ classrooms. Likewise, consolidating school districts to find savings and improve outcomes has not borne fruit.

But empowering individuals at the bottom – kids and parents – has made a world of difference to those on the ground level. Likewise, it has freed teachers to use their talents and passion to innovate at the classroom level. Choice programs like charter schools, vouchers and K-12 education tax credits have improved outcomes for kids, saved money and made parents happier in places like Milwaukie, Florida and Washington, D.C. Oregon parents, too, see the value of choice as waiting lists at local charter schools persist even as charter schools grow.

This issue boils down to your belief in freedom and governance. Do you believe a handful of elite individuals can determine best how to meet your children’s needs? Or do you believe that you know your children’s needs better than a distant group of bureaucrats?

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Testimony on HB 3109: Creating Ecosystem Services Credits

On April 12th, John Charles testified before the House Energy, Environment and Water Committee on HB 3109 which would create ecosystem services credits.  Click here to listen.  John starts at 32:15.

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On the CRC Mega-Project: Differing Visions, Shared Sense

The two of us may be strange bedfellows. Over the past twenty years, we’ve disagreed about many issues, including transit investments, land use laws and the underlying role of government. But recently we were both in Salem criticizing HJM 22, a bill asking the federal government to spend over a billion dollars on the ill-conceived “Columbia River Crossing” mega-project.

We each bring decades of experience in transportation policy to the table. Among the hundreds of projects we’ve seen, the current CRC proposal stands out as a doozy, throwing staggering amounts of money at a wasteful, ineffective plan.

Others, including the project’s own Independent Review Panel, have written about the huge costs to the taxpayers and the state, about the risks of cost overruns in the hundreds of millions of dollars, and about the project not fixing congestion but merely moving it from Vancouver to the I-405/Rose Quarter area. Those are serious problems.

As transportation experts from very different perspectives, we diverge on other flaws of the project. However, we agree on several actions Oregon should take instead of building the highway departments’ current bloated plan:

– Build an additional bridge. Having only two road crossings of the Columbia in the greater Portland area doesn’t make long-term sense. Clark County is an integral part of the region. We should be increasing the number of crossings of the river, whether the new bridge be a local or highway bridge, and whether it includes light rail or not.

– Retain the existing bridges. The current pair of I-5 spans have decades of life left in them. Spending $74 million to demolish them and build something in their place is wasteful.

Use tolling. A well-designed tolling system could fully finance the cost of a properly designed and scaled new bridge.

– Increase the legislative oversight of mega-projects. ODOT and the Oregon Transportation Commission, rather than the Legislature, have historically guided and decided on projects. But the CRC mega-project’s bill of $450 million or more to Oregon taxpayers demands enhanced accountability measures.

– Strategically focus taxpayer investments in seismic upgrades. Oregon’s Bridge Inventory doesn’t list the I-5 bridges among those most threatened by earthquakes. We should be concerned about the impact of earthquakes. But we should examine all of Oregon’s infrastructure, from schools and bridges to water and sewer lines, and figure out which are the highest priority to reinforce or rebuild.

– Fix what we have before creating more money sinkholes. Our backlog of maintenance for existing roads and bridges is large and includes hundreds of structurally deficient bridges. We should make sure we can afford to maintain the infrastructure we have before building more.

Every independent review of the CRC mega-project has found major flaws. While some flaws can be fixed, the current plan to build five huge highway interchanges, tear down existing bridges, and build a new bridge is simply too costly and too risky. It won’t get us what we want, but it will stick us with a huge bill. The legislature should demand we do better.

The piece was co-authored by Bob Stacey. Bob Stacey is the former Executive Director of 1000 Friends of Oregon.

 

 

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A “Training Wage” Can Get Teens Their First Job – And Jumpstart Their Earning Potential

Have you ever tried to hire an average teenager? A few years ago, when I needed some furniture moved, my mother reached out to some fundraising teenagers on my behalf, offering the wage that I had set. The three boys eagerly accepted the offer, showed up for work and proceeded to demonstrate why it can be so difficult for many teenagers to land and maintain employment. They not only lacked experience, but they required detailed tutoring in seemingly straightforward work. More time was spent teaching them how to lift, move and pack furniture than they actually spent working. 

In Oregon, you cannot legally employ anyone, teen or otherwise, for less than $8.50 per hour, even if his actual labor is worth much less. It should be little surprise then, that our population’s least experienced workers – teenagers – had an unemployment rate of 28.8 percent last year (much higher than the state’s rate of 10.2 percent). The national teen employment rate in 2010 was a meager 27 percent, which has dropped substantially since 2000, when it was healthier (but still too low) at 45%.

Such dismal employment levels are what inspired House Bill 3279, for which the Oregon House Business and Labor Committee held a hearing a few weeks ago. The bill would allow teens to work for less than minimum wage (as low as $7.25, the federal minimum wage) for their first 90 days of employment. Sadly, many legislators met the bill with suspicion, fearing it would create an unfair bias in favor of teenage workers. These legislators worry that teenagers would displace adults by being able to work for less.

Six percent of U.S. workers paid by the hour earn federal minimum wage or less. Only four percent of workers older than 25 earned at or below the federal minimum wage in 2010, according to the Federal Bureau of Labor Statistics. But 25 percent of working teenagers earned at or below minimum wage. Multiple studies have shown that most minimum wage workers move ahead to higher wages. A more detailed study of minimum wage workers revealed that few adults, and even fewer parents, rely on their minimum wage job as their primary source of income. Most minimum wage workers are providing a secondary or third source of family income. And most workers, as they build skills, eventually will earn more than minimum wage. Accordingly, it would behoove legislators to help teens build their skills earlier, rather than pricing them out of the market.

Instead, with the bar set too high for many teens, not only are they earning less money to spend and save for valuable investments later (like college), they are not gaining the invaluable experience that will allow them to earn more down the road by developing their skills, or “human capital.”

“Human capital” describes a person’s attributes that increase her earning potential and ability to grow wealth. It includes a person’s “intelligence, educational background, work experience, knowledge, skill and health,” according to Michael Sherraden’s influential book, Assets and the Poor. It is also important to our nation. According to Gary Becker, a prominent theorist, human capital accounts for around 75% of the United States’ wealth, with the rest consisting of capital in businesses, homes, goods, and government capital and cash. It is the proverbial knowledge of how to fish, versus the fish itself.

Teenagers are easily influenced. According to Andrew Sum, Director of the Center for Labor Market Studies at Northeastern University, especially among low-income and minority youth, “[t]he more teens work this year, the more they work next year.” If they do not work now, they are less likely to work later. But with increased experience, teens will earn better wages and be more likely to hold a steady job later. They are also more likely to graduate from high school (developing another form of human capital).

With such a weight of evidence, legislators should reconsider HB 3279. Inexperienced teens need the opportunity to work for a “training wage,” something less than minimum wage, so that they, too, can acquire the skills and experience to earn more in the future.

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Oregon Budget 101 with Dan Lucas – Overview and Growth

Part I in the Oregon Budget 101 series by Cascade Research Associate Dan Lucas.

This segment discusses the components of the Oregon budget, and the growth of the Oregon budget.

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You’re teaching my child what?!

You’re teaching my child what?

And it is costing us how much!

Join U-Choose exploring public education curriculum and upcoming school bond measures. Speakers will present information on sex education, degradation of curriculum, and political correctness.  Cost of public education in light of upcoming bond measures and controversy in Portland Public Schools will be presented, along with controversies in Tigard and Lake Oswego School Districts.  In addition meet candidates running for school board and education service district positions.

Featured Topics/Speakers:

§         “Dumbing Down” of America’s Youth – Dr. Chana Cox, Senior Lecturer in Humanities, Lewis and Clark College

§         Sex “Hyper” Education Indoctrination – Suzanne Gallagher, Business Owner, Former Candidate for State Representative, Past President Eagle Forum Oregon

§         Political Incorrectness and Censorship – Surprise speaker

§         Lindsay Berschauer- Policy Analyst with Third Century Solutions –School Bond Measure

You will not want to miss this lively event!

Come share your views and experiences during U-Talk.  Children, teens, adults welcome.

If your organization would like to have a booth at this event, please contact Marsha at ware8753@comcast.net

If you can help with event publicity within the Lake Oswego, Tigard or Portland, please contact Debra Mervyn at debrauchoose@gmail.com

 

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Redistricting Decisions Must Respect Rural Reality

Redistricting decisions made in 2011 will have a significant impact on the future of all Oregonians. If history replays itself, Oregonians in rural areas again may become victims of poorly drawn political districts.

For ten years, rural “communities of interest” have been victims of gerrymandering. The small community of John Day is divided at the only traffic light in all of Grant County. Coastal communities are lumped with interior farmland and bedroom communities which share little to no economic commerce or even a common news source.

The opportunity to change these outcomes is before us. Oregon’s Legislative Redistricting Committee is conducting meetings and asking for input throughout the state. It is up to the citizens to participate and to inform the committee about what works best for their community.

It is imperative that the committee draw district lines that don’t divide common communities of interest. For rural Oregon, that means understanding where folks commonly go to shop, where they get their news, what schools their children attend, and what transportation corridors are used to access these communities. Districts should be drawn in geographically compact and contiguous areas which also recognize natural geographic boundaries.

Despite a seemingly bipartisan effort, the cards are stacked against legislators. The legislature has not successfully drawn districts in sixty years. Oregonians must pay attention and engage in redistricting discussions. If we dislike the outcomes, we must insist on an independent redistricting commission.


Karla Kay Edwards is Rural Policy Analyst at Cascade Policy Institute, Oregon’s free market public policy research organization.

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Comprehending a Comprehensive Plan

RSVP: Email askdamascus@yahoo.com

Event goes from 9:00 am – Noon

The Taxpayer Foundation of Oregon presents an important seminar on “Comprehending a Comprehensive Plan” this Saturday in Damascus.  Comprehensive Plans are the vehicle by which Metro advances its agenda at the expense of taxpayers and property rights.  A repeal of the Damascus Comprehensive Plan – passed last year – will be on the May ballot in that community.

Saturday’s event will feature John Charles, President and CEO of Cascade Policy Institute and Randal O’Toole, a senior Fellow at the Cato Institute.  Each brings expertise in the relationship between government and local development, land use, and transportation issues.

Don’t miss this important seminar!

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Todd on "I Spy on Salem"

Todd was a guest on I Spy on Salem radio last week. Todd’s clip is part two of a three part series on the Energy Trust of Oregon. You can listen to Todd’s portion by clicking to the right, otherwise part one is below.

Part I

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FEDERAL LANDS: Should we sell federal lands to pay off the national debt?

By Glen Stonebrink, Guest Writer

History: A historical understanding of so-called federal lands is necessary in order to grasp the true “intent” of their existence and usage. From the Pilgrims of 1620 and the creation of the original colonies, there was no such thing as federal lands because there was no “federalism.” As the people of the colonies became equally and increasingly abused by the King of England, they found it necessary to join their efforts to address their concerns to the King – thus the birth of the Continental Congress, which later was used for their common defense and war against England. It was this newly created Continental Congress that started the road to federalism among the separate and sovereign states. Even though each state gave very little in rights or property, they did give away some degree of their power to federalism.

As the Revolutionary War was nearing its end and prior to the formation of “the United States” as we know it, two basic events were taking place: (1) the western colonies/states were looking to extend their western boundaries into the Ohio Territory in order to accommodate more settlers, which thus would create additional wealth for their individual sovereign states; (2) soldiers from the Revolutionary War soon would be returning to civilian life and were desperately seeking new soils to cultivate, but more importantly their promised wages for their service in the war.

Both of these events were giving rise to a problem. States with no western boundaries were not happy about the expansion of those that did, and the Continental Congress was not able to pay the back wages of the armies. To satisfy both issues the Northwest Ordinances (1784 & 1787) were adopted. The 1787 Ordinance codified how new states were to be formed: on equal footing with the original states in every respect whatsoever, and by selling the western lands the “federal government” could pay its debts. Obviously, there were many land grants and homestead previsions, but clearly these lands were to be “disposed of” – not retained!

It is critical to understand that in the beginning the original states agreed through the Northwest Ordinances that newly formed states were to enter the Union “on equal footing” with the original states in every respect whatsoever, including debts and obligations, and these lands were to be disposed to bonafide purchasers. This is where the debate about federal lands begins.

Intent: Who would have envisioned among the pilgrims, settlers, pioneers or especially the framers of the founding documents that someday there would be an overpowering federal government which would claim ownership over huge amounts (nearly 30%) of this newly formed country? NONE! The thirteen original and sovereign states never would have agreed to a central federal government owning large amounts of the soils within “their boundaries” as a price for statehood within the Union. In fact, before there were nine states (2/3 of 13) in agreement to forming the United States with a binding Constitution, there was an insistence that a Bill of Rights be produced that would limit the power of the federal government to only those things specifically listed within the Constitution, and everything else was to be retained by the individual states or the people.

The intent of ownership of the soils within each state’s boundaries was made extremely clear with the Northwest Ordinances’ Equal Footing Doctrine. The Continental Congress through the Northwest Ordinance, on July 13, 1787, provided that when each of the designated states in the territorial area achieved a population of 60,000 free inhabitants it was to be admitted “on an equal footing with the original States, in all respects whatever.”

To further emphasize the strength of this law that was to determine new statehood, Georgia and Virginia ceded their claim to large areas of western lands, but only on the condition that new states should be formed therefrom and admitted to the Union on an equal footing with the original States. Texas, on December 29, 1845, then an independent nation, “was admitted into the Union on an equal footing with the original States in all respects whatever.” In fact, since the admission of Tennessee in 1796, Congress has included in each State’s act of admission a clause providing that the State enters the Union on equal footing. The Act of Congress that admitted Oregon states ACT OF CONGRESS ADMITTING OREGON INTO UNION [Approved February 14, 1859] Whereas the people of Oregon have framed, ratified, and adopted a constitution of State government which is republican in form, and in conformity with the Constitution of the United States, and have applied for admission into the Union on an equal footing with the other States….

So if the founders of the Constitution did not indicate any intent on retaining large amounts of federal lands, what exactly were their intentions for the uses of federal ownership? The answer lies within the Constitution (Article 1, Section 8; Article IV, 5th Amendment and 9th/10th Amendments) and is supported by The Federalist Papers.

Article 1, Section 8 – Powers of Congress:

  • To establish Post Offices and Post Roads;
  • To exercise exclusive Legislation in all Cases whatsoever, over such District (not exceeding ten Miles square) as may, by Cession of particular States, and the acceptance of Congress, become the Seat of the Government of the United States, and to exercise like Authority over all Places purchased by the Consent of the Legislature of the State in which the Same shall be, for the Erection of Forts, Magazines, Arsenals, dock-Yards, and other needful Buildings….

Their intent is quite clear as to the reasons for federal ownership: roads, post offices, needful federal buildings, military facilities and dockyards. Nothing else is listed. There is not a clause that says “…and anything else Congress chooses any time they wish.” There is not a clause that says “…and Congress may choose to be prejudiced against certain states by retaining ownership of large quantities of land.” Or a clause that says “…and Congress does not have to treat new states on equal footing in every respect whatsoever with the original states.”

The key words in the above Constitutional language need close scrutiny in order to understand the full intent. “To exercise exclusive Legislation in all Cases whatsoever…” simply means the federal government would have full legal power to own and control their property within any particular state without any interference or taxation from that state. Does this mean then that since the Constitution grants power to the federal government to levy taxes, the government simply may buy all the land within a state and have full and unchecked power over the entire state? No! The state first must give away its control and power by Cession of particular States, and then the Congress (not just a federal agency) must agree. This means the two United States Senators from the state in question would have a strong voice, as well as the state’s members to the House of Representatives. How would a state agree to grant the federal government exclusive legislation? This is addressed with these words “…by the Consent of the Legislature of the State in which the Same shall be….” Again, the people who are elected to serve in the legislature of the state in question have the final say as to whether or not to grant the federal government these powers over lands within their state. James Madison wrote in Federalist Paper number 43: And as it is to be appropriated to this use with the consent of the State ceding it; as the State will no doubt provide in the compact for the rights and the consent of the citizens inhabiting it; as the inhabitants will find sufficient inducements of interest to become willing parties to the cession; as they will have had their voice in the election of the government which is to exercise authority over them; as a municipal legislature for local purposes, derived from their own suffrages, will of course be allowed them; and as the authority of the legislature of the State, and of the inhabitants of the ceded part of it, to concur in the cession, will be derived from the whole people of the State in their adoption of the Constitution, every imaginable objection seems to be obviated.” Madison makes it clear that the people’s voice through their representation in their legislature and Congress must be heard before powers are to be given away.

Was it the intent for the federal government to purchase lands and obtain exclusive powers on any land for any reason? Of course not, thus the reason for the final wording in Article 1, Section 8, Clause 17: “…for the Erection of Forts, Magazines, Arsenals, dock-Yards, and other needful Buildings.” This limited ownership and specific activities were mentioned by Madison in Federalist Paper 43. If the founders had any thoughts of large holdings of lands within the states, they would have made it clear at this point. They knew full well that the people of the various states would not have agreed to the formation of a new nation had this been the case.

Article IV: This article of the Constitution has two important sections.

  • Section 2, which states, “The citizens of each State shall be entitled to all Privileges and Immunities of Citizens in the several states.” Obviously, if more than half of Oregon’s land mass is owned and controlled by the federal government, the citizens of Oregon are not being “…entitled to all Privileges and Immunities of Citizens in the several states,” when other states east of the Rocky Mountains contain a very small percentage of federal ownership.
  • Section 3, paragraph 2, which states: “The Congress shall have Power to dispose of and make all needful Rules and Regulations respecting the Territory or other Property belonging to the United States; and nothing in this Constitution shall be so construed as to Prejudice any Claims of the United States, or of any particular State.” This section is vital because it only addresses “disposal,” not retention, of federally owned properties, which meant the intent was to do just that very thing (dispose of these lands), and this section addresses “no prejudice against any state.” Obviously, there is a huge prejudice against western states concerning federal ownership within their boundaries.

5th Amendment: The 5th Amendment to the Constitution and an important part of the Bill of Rights addresses the importance of private property. In fact, the wording “…nor be deprived of life, liberty, or property…” is similar and connected to the Declaration of Independence’s wording “…with certain unalienable Rights, that among these are Life, Liberty, and the Pursuit of Happiness.” The Declaration uses the terminology “unalienable rights” and the Constitution uses “…nor be deprived…” within the Bill of Rights. Both documents address “rights of the people.” Furthermore, historical letters point out that Jefferson and others considered using the word “property” in the place of “pursuit of happiness” in the Declaration. They concluded that property and pursuit of happiness were synonymous. However, the creators of the Bill of Rights, including George Mason, James Madison and Thomas Jefferson, did not overlook the opportunity to codify in the Constitution that private property was a right of the people, and knowing that private ownership of the land was indeed the avenue to pursuit of happiness. With huge federal ownership of lands, there is a direct conflict with the intent of both the Declaration of Independence and the 5th Amendment because it denies private ownership.

9th/10th Amendments: There would not have been enough states to agree to the Constitution and the formation of a central government had there not been a Bill of Rights forthcoming, especially including these two amendments to limit the powers of the federal government:

• 9th: The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people.

• 10th: The powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states respectively, or to the people.

Had the founders ever had any intentions to have the federal government retain or obtain large areas of land within the individual states beyond that explicitly specified in Article 1, Section 8, here was there opportunity to do so, but they did not. They did just the opposite: The wording is self-explanatory.

To conclude this understanding of the Constitution’s intent, here are the words of James Madison, also known as the Father of the Constitution, in his Federalist Paper number 45:

The powers delegated by the proposed Constitution to the federal government are few and defined. Those which are to remain in the State governments are numerous and indefinite. The former will be exercised principally on external objects, as war, peace, negotiation, and foreign commerce; with which last the power of taxation will, for the most part, be connected. The powers reserved to the several States will extend to all the objects which, in the ordinary course of affairs, concern the lives, liberties, and properties of the people, and the internal order, improvement, and prosperity of the State.”

 

The debate: The question is whether to sell the lands held by the federal government to private ownership or to grant the title to the individual states? There is little doubt that federally held lands have a great amount of value. Whether their value would equal the debt owed is not for this debate, but only if these lands could or should be disposed of by the federal government. To this, the answer is “absolutely.”

A prudent-minded person would have to conclude that the founders never envisioned the federal government owning large amounts of lands within the states, or they simply would have mentioned it in the Constitution. Since they did not, then they did not. There is no mention of designating wilderness areas, national forests,[1] or grasslands, or any so-called “beautiful places” to be locked away forever. All the resources of the states were to be for the benefit of the inhabitants of the states or of the state itself.[2]

Every founding document clearly specifies the intent of land holding of the federal government was to be small, limited and for specific purposes only. All other lands were to be in the ownership of the states or of the individual. Moreover, the intent was for the soils to be for productive uses to create wealth for the states and the nation. That, once again, is where we are today.

Sell these lands to bonafide purchaser,[3] pay off our national debt, allow private ownership to makes these lands productive; and this nation will prosper and have a wonderful future.

[1] Federal laws that created national forestlands, monuments, grasslands, etc. have no standing within the intent of the Constitution or any other founding documents.

[2] In the book entitled History of the Oregon Constitution, the lands within Oregon’s boundaries were not intended for federal ownership, but rather for private ownership and productivity.

[3] Bonafide purchasers of grazing lands would be those producers currently with leases and/or qualified for leases under the Taylor Grazing Act of 1934. Purchase price would be based in connection with current leasing rates and on a 30-year amortization.


Glen Stonebrink was Executive Director of the Oregon Cattlemen’s Association (1998-2005) and previously served as Oregon’s State Executive Director of USDA federal farm programs under the Reagan and George H.W. Bush administrations. He held staff and administrative positions in the U.S. Congress and the Oregon Legislature and has been a rancher, a teacher, and a member of the Oregon National Guard. He lives in Rickreall, Oregon.

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Atlas Shrugged Movie Coming to Portland: Who is John Galt?

[Update 4-29-11: Atlas Shrugged Part 1 continues to play in Portland (Fox Tower and Eastport) and Tigard (Bridgeport) theaters through at least May 5th and is now playing in these additional cities:
Vancouver, Salem, Eugene, Klamath Falls, North Bend, McMinnville and Roseburg. It will open in Bend on May 6th.]

Ayn Rand’s epic novel, Atlas Shrugged, is finally coming to the silver screen.

Whether you’ve read the 1,000-plus page book or not, you won’t want to miss Part 1 of the film, which debuts the weekend of April 15, 16 and 17. Parts II and III will follow. If you read the book, you’ll understand why it opens on Tax Day.

Because the film is an independent production, it won’t open everywhere, but thanks to the persistence of Cascade Policy Institute and Portland fans it has been booked into the Regal Fox Tower theater downtown. It’s a relatively small theater, so if you want tickets I strongly suggest that you pre-order them at Fandango.com now. Or, you can purchase them at the theater box office.

The book was published in 1957, but the film’s producers have wisely set the story in 2016. This way, Americans can see what’s coming if we don’t turn around the collectivist government in Washington, D.C. The plot involves “men of the mind” who are asked by the mysterious John Galt to go on strike and “stop the motor of the world” rather than let the “parasites,” “looters” and “moochers” benefit from the fruits of their labor. In fact, the book opens with the question, “Who is John Galt?”

It’s a great story, and a powerful warning. Don’t miss it.

If you’re on Facebook, please click “Attending” at the Oregon Atlas Shrugged event page so we can build support for the film and help ensure a longer run.

Many Cascade staff and supporters will be attending the film during the three-day opening weekend. We hope you can join us.


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

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Testimony of HJM 22: Regarding Columbia River Bridge Project

Testimony before the House Transportation and Economic Development Committee on March 30, 2011

I have followed the CRC process quite closely for the past decade. Based on this experience, I offer the following comments about HJM 22:

This is a random request for a random project. There is no evidence that the CRC is part of a strategic transportation vision for the Portland region. Unless and until ODOT comes up with a plan to address related congestion problems and the need for new capacity at the I-84/I-5 interchange, I-405, the Marquam Bridge, and the West Hills Tunnels, the CRC will just absorb vast resources while offering few public benefits.

There is no price tag listed and no specific amount requested. It’s difficult to see how anyone in Congress would take this seriously when the only message seems to be, “more, now.”

 

There needs to be a coherent rationale for the use of tolls and the setting of toll rates. I am not opposed to highway tolls per se; it’s a time-honored method of financing new infrastructure. In fact, I have no doubt that within the next 20 years much of Oregon’s highway system will be converted to an electronic tollway (with variable rates in dense urban centers), and I look forward to those changes.

But unfortunately the most obvious interest in tolling on the CRC has been to use toll revenue as a local match for federal funding, especially for the uneconomic light rail[1] portion. That is the wrong use of toll revenue and will generate a much-deserved rebellion among highway motorists. If the project is really cost-effective, it should be 100% financed by local user fees, and the toll rates should be set to generate adequate cash flow for debt service as well as to vary by time-of-day/direction-of-travel to ensure free-flow driving conditions at all times. I testified before the CRC tolling subcommittee on three different occasions last year making these points, but to this day the proponents of tolling cannot explicitly state a principled rationale for the use of tolls.

The light rail element is a total waste of money. Vancouver transit riders are express bus commuters and will have no interest in a slow train. At a capital cost of $321.27 million mile, this will be the most expensive transit project in the history of Oregon. By comparison, the earlier portion of the MAX Yellow Line (Interstate Avenue) was constructed for about $60 million per/mile. That project was also a mistake; there is no policy reason to magnify the error at 5 times the cost.

Moreover, neither C-TRAN nor TriMet is planning on putting any of their own money into construction of light rail; both agencies expect everyone else to pick up the tab[2]. One can reasonably conclude that if the two transit districts don’t think light rail is worth one dime of their own funds, it is worth even less to the rest of us.

The mega-bridge concept is doomed to fail under any scenario. The CRC project epitomizes the old-guard, “build up, not out” approach beloved by land-use planners. They oppose new bridges because they imagine that more bridges would encourage more driving. But reality is passing the Oregon system by. Between 1998 and 2006, even with no new highways, the percentage of jobs located within 3 miles of downtown decreased from 27% to 23%. The percentage of jobs located more than 10 miles from downtown increased from 24% to 29%. The future of employment and housing is on the periphery of Portland; thus a massive highway structure on Hayden Island will be irrelevant to many motorists and force them to drive out of their way to cross the river.

The more appropriate response would be to build multiple bridges, much smaller in scale, to accommodate the increasingly scattered travel patterns of the next three decades. It’s interesting that Portland has 10 bridge crossings over the Willamette River and only two are highways; the rest are arterials. Yet no one would seriously suggest that Portland rip out the eight smaller bridges in order contain “bridge sprawl”; everyone recognizes that with more bridges, people drive less because they have more direct avenues to travel on.

The City of Pittsburgh, comparable in size to Portland and located along three major rivers, has 29 bridge crossings, and only 5 are connected to Interstate Highways. The rest are small-scale, two- and four-lane bridges handling local traffic.  Since the I-5 Interstate Bridge is not structurally flawed, it seems evident that Oregon should leave the I-5 Bridge in place and look at adding 2-3 smaller bridges upriver and downriver on the Columbia. In particular, there needs to be a way to get Washington-bound traffic originating on the west side of Portland off of HW 26 by creating an alternative route north to HW 30 from Beaverton/Hillsboro, and then over the Columbia. That would reduce congestion problems on HW 26, I-405, the Fremont Bridge, and I-5 north – which the currently proposed CRC will never do.


[1] Consolidated Appropriations Act, 2010, Section 173 (H.R. 3288, December 9, 2009). “Hereafter, for interstate multi-modal projects which are in Interstate highway corridors, the Secretary shall base the rating under section 5309(d) of title 49, United States Code, of the non-New Starts share of the public transportation element of the project on the percentage of non-New Starts funds in the unified finance plan for the multi-modal project: Provided, that the Secretary shall base the accounting of local matching funds on the total amount of all local funds incorporated in the unified finance plan for the multi-modal project for the purposes of funding under chapter 53 of title 49, USC and title 23, USC.”

[2] CRC Finance Plan, September 2010: “The forecast assumes no TriMet funding of CRC capital costs”, p. 3-27.  “No linkage is required between the CRC LRT capital plan and the capital expenses included in the agency-wide systems plan because the capital finance plan for CRC LRT does not include any C-TRAN revenues”, p. 4-22.

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Testimony on House Bill 3538: Regarding Climate Trust’s Offset Programs

Testimony before the House Committee on Energy, Environment and Water on March 29, 2011:

Co-Chair Cannon, Co-Chair Gilliam and members of the Committee, my name is Todd Wynn. I am Vice President and energy policy analyst at Cascade Policy Institute, a non-partisan, non-profit public policy research organization based in Portland. Our mission is to promote policies that enhance individual liberty, personal responsibility and economic opportunity in Oregon.

I am here to testify today against House Bill 3538.

Background

The original purpose of House Bill 3283 is to regulate and reduce CO2 emissions from regulated facilities by implementing carbon offset projects. The Climate Trust, the only “qualified” organization that receives funds according to the bill, has proven ineffective and wasteful.

House Bill 3538 would change the original purpose of the carbon dioxide standard set forth in HB 3283 and set up the possibility for more fraud and abuse with regard to delivering real, verifiable, and additional carbon offsets.

1. The Climate Trust is not transparent

Because The Climate Trust’s existence is a function of state law regulating facilities, it should be subject to the same standards as public agencies for release of public records.

The Climate Trust has refused to answer questions that could be considered “critical” of carbon offsets[1] and has refused to provide access to the recent five-year report.[2]

The Climate Trust’s annual reports have not been accurate updates. They have been overly positive reports addressing self-proclaimed success and not mentioning failure or specifics of projects.

Many documents such as funding and dollar amounts spent on certain projects are unable to be retrieved or accessed.

2. The Climate Trust has failed to reduce carbon dioxide and to adhere to the monetary offset rate according to House Bill 3283

The Climate Trust has never adhered to the monetary offset rate established by the Energy Facility Siting Council (EFSC), and this has led to a major shortfall in offsets that were paid for by regulated facilities.

The Climate Trust has admitted to paying more than the established monetary offset rate in the last five-year report to the EFSC. Out of thirteen projects, the Climate Trust estimates they spend an average of $3.45 per metric ton, which is well above the current 2007 rate of $1.40 per metric ton. Since The Climate Trust pays an amount higher than the established rate, carbon dioxide is not being offset as according to HB 3283.

The table above shows five of The Climate Trust’s projects that have data on offsets delivered and funds spent. This table describes the shortfall of offsets that should have occurred and the value of these offsets to regulated facilities.

The Climate Trust on these five projects alone has an offset shortfall of 649,923 metric tons which, at the offset rate of $1.40 per metric ton, amounts to $909,893 of regulated facility money.

3. The Climate Trust has continuously failed to produce verifiable and additional carbon offsets

Cascade Policy Institute audited 58% of the offset projects in The Climate Trust portfolio. Cascade Policy Institute audited projects that were completed or near completion in order make use of monitoring and verification reports and other data.[3]

A closer look into the portfolio showed there are numerous problems that undermine the quality and effectiveness of The Climate Trust’s projects. Lack of additionality and accountability of funds, inaccurate assumptions, difficulty in verifying and monitoring results, lack of permanence and leakage issues are most of the problems that plague the analyzed offset projects.

Brief overview on failure of projects:

 

Deschutes Riparian Reforestation– In addition to only completing approximately 18% of its 2008 goal, The Climate Trust needlessly paid a lumber company to plant more trees on an already stocked land thus negating additionality.

Preservation of a Native Northwest Forest– Climate Trust funds that were supposed to be allocated to the Lummi Indian tribe to purchase 1,654 acres of forest were used to fund the tribe’s annual canoe journey and a college scholarship program.

Blue Heron Paper Manufacturer Efficiency Upgrade– Climate Trust funds that were supposed to be the deciding factor in whether Blue Heron could finance an energy efficiency upgrade were not allocated to the company. Blue Heron’s energy and environment department head stated that they would have completed the upgrades at some point in the future in order to stay competitive thus negating additionality.

Portland Building Efficiency Program– Monitoring and verification reports used two different estimates to calculate the offsets that were not additional. These figures were highly significant in determining the actual amount of offsets paid for and claimed by The Climate Trust. This leads to serious questions on the additionality of these offsets.

Traffic Signal Optimization– The City of Portland already committed to optimizing traffic signals over two years before The Climate Trust’s involvement which negates additionality. In addition, the third party that performed the calculations on fuel savings admitted the estimates were inaccurately calculated.

Internet Based Carpool Matching– The Climate Trust only achieved 1.4% of the ten-year goal and allowed the City of Portland to “make up” the offsets through two projects that were neither monitored nor verified.

Innovative Wind Financing– The Climate Trust paid for renewable energy certificates (RECs) which do not represent actual reductions in carbon dioxide. Subsequently, The Climate Trust has written a policy paper proving why RECs are not offsets.

4. Allowing the Climate Trust to offset more than carbon dioxide goes against the original purpose of House Bill 3283 and opens up the opportunity for more waste and abuse.

The original intent of House Bill 3283 was to reduce and offset carbon dioxide emissions from regulated facilities. This did not include all greenhouse gases.

The majority of fraudulent carbon offset projects have stemmed from greenhouse gases other than carbon dioxide. Massive fraud on the international scale has been attributed to the destruction of trifluoromethane (HFC-23) a greenhouse gas byproduct of manufacturing refrigerant gases. The carbon offset credits that sold to reduce HFC-23 are twice as valuable as the refrigerant itself.

 

A study found that almost three-quarters of Clean Development Mechanism (CDM) registered offset projects were already complete at the time of approval, and thus, didn’t need carbon credits to be built. An estimated 40 percent of CDM projects registered by 2007 represented “unlikely or at least questionable” emission cuts. Between a third and two-thirds of CDM offsets don’t represent actual emission cuts.[4]

Conclusion

HB 3283 was originally passed with the intention of reducing manmade carbon dioxide, not other greenhouse gases.

The Climate Trust has proven itself to be wasteful and non-transparent in its operations.

Allowing The Climate Trust to offset more than carbon dioxide violates the original intent of the law and opens the door for more fraudulent non-additional offsets at the Oregon ratepayer expense.

I urge the members of this committee to vote no on HB 3538.


[1] Email from Mike Burnett, Executive Director of The Climate Trust. November 28, 2008.

[2] Phone call from Amy Phillips, Marketing and Communications Director of The Climate Trust. September 9, 2009.

[3] Money for Nothing: The Illusion of Carbon Offsets. February 2009. Available at https://cascadepolicy.org/pdf/env/Climate_Trust_Audit_021009.pdf

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Selling Public Land Could Help Budget Woes

by Karla Kay Edwards

The federal debt limit of $14.29 trillion dollars is projected to be reached between April 15 and May 16 this year. Many argue that the ceiling must be raised or the U.S. will begin to default on debts owed. Others believe the U.S. must cut costs and begin to live within our means. But the U.S. government is now spending three dollars for every two it brings in, so if Congress succeeds in cutting the proposed $100 billion out of the budget, it might relieve federal borrowing for a single month. (more…)

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Al Gore, Newt Gingrich, and the Unintended Consequences of Ethanol Policy

By Eric Lowe

Successive presidential administrations over the past 50 years have vowed to aggressively pursue energy independence, attempting to decrease the amount of oil imported from the Middle East. The federal government has latched onto corn ethanol as the silver bullet solution to domestic fuel production disparities. Yet again, public policy creates a set of unintended consequences that ought to be fully considered if Oregon and the nation as a whole are going to continue to transfer demand and taxpayer dollars to this fledgling industry.

 

As it currently stands, regulation requires a certain volume of ethanol to be blended into domestic fuel supplies annually, and a percentage ratio of this ethanol-to-petroleum blend is “permitted” in gasoline refining by the EPA. Additionally, the subsidies, grants and tax loopholes for the ethanol industry are numerous. According to Rice University’s Baker Institute for Public Policy,[1] in 2008, roughly $4 billion in taxpayer dollars were spent to subsidize replacement of about 2 percent of the U.S. gasoline supply. Up to 15% of gasoline now can be replaced with ethanol (E15 blends), and taxpayers subsidize half of all related costs for ethanol.[2]

 

Starting with the 2005 Energy Policy Act, 12.95 billion gallons of renewable fuel must be used in 2010, increasing to 36 billion gallons per year by 2022.[3] The EPA recently raised the amount of ethanol permitted in the blending of fuel to 15%, effectively mandating that many refiners produce at this level to meet legislative requirements. U.S. ethanol enjoys a roughly half-dollar per gallon import tax, making domestically produced ethanol artificially competitive over cheaper, more energy-dense Brazilian sugarcane ethanol. In addition, domestic producers receive a whopping 45-cent per gallon tax credit, a handout even certain refiners within the industry have said they don’t need.[4]

 

Many have begun realizing that ethanol policies may be causing more problems than they solve. Studies show that vehicles built in or before 2007 and all non-road engines aren’t designed to operate on the E15 ethanol (15% ethanol) currently being pushed by the EPA. These higher blend fuels increase emissions of particulate air pollution, ground-level ozone (which is harmful to humans) and other toxic air pollutants.[5] These emissions can mitigate or entirely eliminate the public health arguments for ethanol.

 

Ethanol policies on the state and federal levels also don’t account for cost. According to the U.S. Department of Energy research, E10 has a 3.6% fuel economy loss compared to traditional gasoline, E15 has a 5% loss, and E20 has a 7.7% loss.[6] Furthermore, older vehicles and all non-road engines (ATVs, leaf blowers, tractors, generators, etc.) are put at risk by these policies. These generally do not have oxygen sensors, so with more oxygen-rich fuel they burn “lean,” or hotter than normal, contributing to significant wear and tear and early degradation. For the average family, having these expensive machines break down far faster than they otherwise would is an expense they can hardly afford. This means that the roughly 247 million “legacy” vehicles and 400 million non-vehicle gasoline engines are negatively impacted by these policies.

 

The mandates, regulations, grants, tariffs and tax credits surrounding the ethanol industry are, unsurprisingly, of a political origin, and not necessarily pertaining to sound environmental or economic policy. Even Al Gore admits as much in a recent public reversal of his support for what he then referred to as “gasohol.”[7]

 

“One of the reasons I made that mistake is that I paid particular attention to the farmers in my home state of Tennessee, and I had a certain fondness for the farmers in the state of Iowa because I was about to run for President,” he said. This isn’t the first time a presidential candidate has supported something purely to gain favor from a specific constituency.

 

Al Gore also admits a common problem with government programs, particularly the ethanol industry, when he said, “It’s hard once such a program is put in place to deal with the lobbies that keep it going.”

 

Interestingly enough, at a recent Renewable Fuels Association conference (in, of course, Iowa), Newt Gingrich called upon the government to mandate all vehicles sold be flex-fuel models.[8] Mr. Gingrich explained that “the big-city attacks” on ethanol subsidies are really attempts to deny prosperity to rural America. Not only were his remarks politically tinged and partisan, they lacked any sound basis.

 

While it is hard to believe Al Gore is wiser on the topic of government intervention than Newt Gingrich, in the case of corn ethanol, he is. Politicians ought to account for the unintended consequences of public policies that affect every American. It is well overdue to reverse the subsidies, taxes and mandates on the state and national levels that force ethanol upon consumers and artificially prop up the industry for reasons of political favoritism.


[1] http://www.bakerinstitute.org/publications/EF-pub-PolicyReport43-121809.pdf

[2] Ibid.

[3] http://www.afdc.energy.gov/afdc/ethanol/incentives_laws_federal.html

[4] http://switchboard.nrdc.org/blogs/slyutse/top_us_oil_refiner_says_corn_e.html

[5] http://www.ewg.org/biofuels/report/Ethanol-Health-Risks-and-Engine-Damage

[6] Ibid.

[7] http://online.wsj.com/article/SB10001424052748703572404575634753486416076.html

[8] http://online.wsj.com/article/SB10001424052748704698004576104682930044012.html

 

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Karla on Caepla Connections in Canada

Check out Karla talking about the dangers of land use reforms on the Caepla Connections radio program out of Canada.

You can listen by using the player to the right.

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Cascade 20th Anniversary Dinner Cruise

Listen to an Audio advertisement from KBNP radio for the event

Come celebrate Cascade’s 20th Anniversary in style on the Portland Spirit in downtown Portland.

Speaker: Stephen Moore – Wall St. Journal and Fox News Contributor
Cost: $75

Boarding: 5:30pm
Set Sail: 6:00pm
Disembark: 8:30pm

YOU MUST RSVP AHEAD OF TIME.

There are 3 ways to RSVP:

1. Register online below (there is a small fee for registering online)

2. Email deanne@cascadepolicy.org

3. Call Deanne at 503.242.0900

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Cascade Marks Its 20th Anniversary

In 2011 Cascade celebrates its 20th anniversary. Formed shortly after the Berlin Wall came tumbling down, the Institute’s growth since 1991 is a tribute to the principles which form its foundation and to the ideas that arise from them.

 

Much has changed since then and continues to change in Oregon, America and the world. More people are free from arbitrary government constraints than ever before. Open markets and property rights are now recognized as essential elements of a free and prosperous society. Cascade is part of a growing network of think tanks worldwide finding a growing acceptance of these classical liberal ideas.

 

We founded Cascade to promote public policy that advances individual liberty, personal responsibility and economic opportunity in Oregon. We were convinced then, and are still convinced today, that these ideas and principles will produce positive consequences for all Oregonians.

 

The idea for Cascade actually emerged from an initiative campaign that I and a small group organized and placed on Oregon’s 1990 general election ballot. 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 ever voted on such a sweeping reform before, and we felt it was time for Oregon to lead the way.

 

As it became clear that we would not win that election campaign, 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. That’s why, barely two months after Measure 11 lost at the polls, we incorporated Cascade Policy Institute in January 1991.

 

Cascade began with a one-person staff (me) and a vision of a freer society in Oregon. We began researching, writing and hosting speakers on a number of important public policy topics. We strategically hired additional staff and built a board of directors capable of carrying our vision forward.

 

Today, Cascade has a team of twelve full-time staff and eight board members. We now concentrate on a number of policy areas including tax and budget, education reform, health care reform, land use, transit, energy and climate change, and rural policy. We also facilitate the Children’s Scholarship Fund-Portland, which has helped hundreds of low-income students attend the tuition-based schools of their choice.

 

Cascade has become the “go to” organization for legislators and news media around the state looking for a limited government, free-market perspective on legislation and the issues of the day. And, we host Oregon Capitol News which provides timely news and investigative stories about Oregon policy and politics.

 

Our budget has grown from $57,000 in the first year to one million dollars today. In our first twenty years, supporters of liberty and markets have voluntarily donated  ten million tax-deductible dollars to support the Institute’s work. That’s a generous sum for an organization in a small state, whose primary “products” are ideas. We believe our donors’ funds have been well spent, and we greatly appreciate the faith they have placed in us to promote our ideals for the betterment of all Oregonians.

 

As we enter our second twenty years working for Oregonians, we will take a few hours in May to stop and celebrate what we’ve accomplished. We hope you can join us for a Willamette River Cruise on the Portland Spirit the evening of May 26, 2011. Details will be available soon. In the meantime, thanks for all your support, financial and otherwise. We couldn’t do it without our supporters and fans.

 

 

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Unemployment Benefits Warrant a Second Look

Oregon’s legislature is currently rushing to approve bills that will extend unemployment insurance yet again. But legislators should pause to consider that while it may feel good, the costs may sabotage the effect they seek.

 

This year, the average payroll tax to support unemployment insurance is $995 for an employee who makes at least $32,300 in Oregon. This is $109 more than it was in 2010. And that doesn’t even include the costs of large federal extensions. Why have these taxes increased so much? Because Oregon’s unemployment is high and our benefits are generous, or at least prolonged. In Oregon, workers can claim benefits for more than two years.

 

Some will say that $1,000 per worker is a fair price to pay for a popular safety net. Yet, such a hefty price demands that we ask hard questions or at least look for ways to improve unemployment insurance. The current program has repeatedly been shown to increase unemployment. It also indirectly taxes many employees who personally can never benefit from the program if they become unemployed because they, for example, cannot accept full-time work.

 

Let’s encourage our federal and state legislators to stop rushing through extensions and pause to ask hard questions about unemployment insurance. The cost is too great to continue ignoring its problems.

 

 

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Testimony on House Bill 2992: House Committee on Energy Environment and Water

March 24, 2011

 

Co-Chair Cannon, Co-Chair Gilliam and members of the Committee, my name is Todd Wynn. I am Vice President and energy policy analyst of Cascade Policy Institute, a non-partisan, non-profit public policy research organization based in Portland. Our mission is to promote policies that enhance individual liberty, personal responsibility and economic opportunity in Oregon.

 

I am here to testify today in support of House Bill 2992.

 

Economic Costs of Not Classifying Hydro as Renewable

 

In 2007, legislators passed Senate Bill 838 which established the Renewable Portfolio Standard (RPS). This legislation forces the major utilities to procure 25% of their electricity from renewable energy by 2025. The bill established a narrow definition of renewable energy which specifically excludes the vast majority of energy produced from Oregon’s hydroelectric system.

 

Cascade Policy Institute’s recently released economic analysis, The Economic Impact of Oregon’s Renewable Portfolio Standard, shows that the RPS with the current strict definition of renewable energy will lead to significant negative economic consequences as only more expensive and intermittent sources of energy qualify[1]:

 

Over the period of 2015 to 2025, the mandate will cost Oregonians an additional $6.811 billion over conventional power within a range of $4.009 billion and $9.310 billion.

 

In 2025, the mandates will cost families an average of $247 per year, commercial businesses an average of $1,394 per year and industrial businesses an average of $11,585 per year.

 

By 2025 the Oregon economy will lose an average of 17,530 jobs, within a range of between 10,025 jobs under the low-cost scenario and 24,630 jobs under the high-cost scenario.

 

Due to higher home energy costs, in 2025, annual real disposable income will fall by $170 million, within a range of $101 million and $230 million.

 

 

 

 

 

Oregon is One of the Nation’s Leaders in Clean Energy Generation

 

Oregon is ranked 48th out of 50 states in the amount of carbon dioxide and nitrogen oxide produced per unit of electricity generated. The state is also 46th in the amount of sulfur dioxide per unit of electricity generated. This is mainly due to Oregon’s high use of hydroelectricity.[2]

 

 

 

Emissions (thousand metric tons) Rank out of U.S. States
Sulfur Dioxide 11 44
Nitrogen Oxide 12 43
Carbon Dioxide 7,088 42
Sulfur Dioxide (lbs/MWh) 0.5 46
Nitrogen Oxide (lbs/MWh) 0.5 48
Carbon Dioxide (lbs/MWh) 293 48

 

 

The Energy Information Administration currently considers hydroelectricity to be a renewable energy source. When hydroelectricity is defined as renewable energy, Oregon is third out of the entire nation in capacity and generation of renewable energy, generating more than 60% of its energy from renewables.

 

In contrast, for the nation as a whole, renewable sources supply approximately eight percent of total electric power generation.[3]

 

Conclusion

 

Establishing a strict politically motivated definition for renewable energy does not acknowledge the vast amount of clean electricity that the state is producing and using.

 

Excluding hydroelectricity from the RPS will also cause significant negative economic impacts on the state’s economy as utilities are forced to increase their percentage of expensive and unreliable sources of energy.

 

It is best to establish a realistic definition of renewable energy, finally acknowledge our clean energy production and begin reforming a forceful and unrealistic push for expensive renewable energy sources.


[1] The Economic Impact of Oregon’s Renewable Portfolio Standard, Cascade Policy Institute. March 10, 2011. Available at https://cascadepolicy.org/news/2011/03/10/new-study-forcing-oregonians-to-purchase-renewable-energy-proves-costly/

[2] Energy Information Administration 2008. Statistics are for 2006.

[3] Energy Information Administration.

 

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Oops! Renewable Energy Costs Oregon Billions

In 2007, Oregon legislators decided they would force Oregonians to purchase renewable energy whether or not they wanted it or could afford it. Legislators proclaimed this would help the Oregon economy and make our energy system more affordable and reliable. They were wrong.

 

Last year, one in 30 Oregonians had their electricity cut off due to inability to pay, and enrollment in the low-income energy assistance program has increased significantly. On January 1, 2011, electricity rates increased significantly for Oregon households: Pacific Power rates increased by 14.5% and PGE rates by 4.2%. PGE also added a “Renewable Resource Adjustment” to ratepayers’ bills in January 2010. Currently, this rate is set at 0.22 cents per kWh, or approximately $2.13 extra per month, for an average household. Rate increases such as these will be the norm over the next fifteen years as utilities work to comply with restrictive energy policies on the state and the federal levels.

 

But legislators proclaimed that the 2007 renewable energy mandate would help “accelerate the transition to a more reliable and more affordable energy system.” What went wrong?

 

Unfortunately, renewable energy costs more than traditional energy sources and is often less reliable. Although generating energy from wind turbines and solar panels is essentially free, the costs of construction, maintenance and integrating inconsistent energy into the grid are prohibitively expensive. Thus, adding more renewable energy will increase costs and cause substantial economic hardships for Oregonians and Oregon businesses.

 

A Cascade Policy Institute report, The Economic Impact of Oregon’s Renewable Portfolio Standard, exposes the cost of renewable mandates on the Oregon economy. Over the period of 2015-2025, the average Oregonian household will pay an additional $1,706 in higher electricity costs. The average commercial business will spend an extra $9,641 and the average industrial business an extra $80,115. Over the same period, the mandate will cost Oregonians an additional $6.811 billion over conventional power, within a range of $4.009 billion and $9.310 billion.

 

Higher costs will lead to loss of jobs as well. By 2025 the Oregon economy will lose an average of 17,530 jobs, within a range of 10,025 jobs under the low-cost scenario and 24,630 jobs under the high-cost scenario.

 

Legislators may be able to justify higher electricity costs if environmental benefits, in terms of reduced emissions, outweigh the costs. However, it is unclear that the use of renewable energy resources, especially wind and solar, actually reduces emissions. Due to their intermittency, wind and solar require significant backup power sources that are cycled up and down to accommodate the variability in the production of wind and solar power. As a result, a recent study found that wind power actually increases pollution and greenhouse gas emissions.

 

Also, businesses and industries with high electricity usage likely will move their production, and emissions, out of Oregon to locations with lower electricity prices. Therefore, increasing renewable energy in the state will not reduce global emissions, but rather send jobs and capital investment outside the state.

 

In the end, renewable energy can and should expand according to voluntary purchases that reflect true demand. Government should not be mandating that citizens purchase a product they may not value or cannot afford.

 

It is time to face the truth. Legislators thought that by forcing Oregonians to purchase renewable energy they could make electricity more affordable and reliable. They were wrong. As a first step, legislators should repeal the renewable energy mandate and other restrictive energy policies before electricity costs spiral out of control. In addition, future energy policies need to be subject to a rigorous analysis of economic costs and environmental benefits.

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Todd talks Renewable Energy Portfolios on Jason Lewis

Listen to Todd Wynn talk about renewable energy portfolios on the Jason Lewis show (click play to the right).

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John Charles talks light rail on Fox Business’s Tom Sullivan Show

Watch John Charles discuss the cost of light rail and the bankrupting state of Portland public transit.

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Christina Martin talks education reform at LLF

Watch the following video of Christina Martin talking education reform before Oregon legislators and staff in Salem on March 16th, 2011.

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Oregon Catalyst features Cascade’s newest report on the cost of renewable energy

http://oregoncatalyst.com/8204-darker-side-green-tens-thousands-lost-jobs-oregonians-pay-electric-bills.html

Oregon Transformation makes a blog post on Oregon Catalyst describing the impacts of restrictive energy policies on the Oregon economy.

These results came from our recently released economic analysis showing that renewable mandates imposed by the Oregon legislature in 2007 will have a significant and negative impact on our economy and standard of living.

 

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Oregon Catalyst blog features Cascade’s renewable energy economic impact report

http://oregoncatalyst.com/8204-darker-side-green-tens-thousands-lost-jobs-oregonians-pay-electric-bills.html

Oregon Transformation makes a blog post on Oregon Catalyst describing the impacts of restrictive energy policies on the Oregon economy.

These results came from our recently released economic analysis showing that renewable mandates imposed by the Oregon legislature in 2007 will have significant and negative impacts on our economy and standard of living.

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Will Oregon’s Legislature Help K-12 Education Get Online?

Oregon’s legislature is again considering bills that would affect K-12 students’ access to online education. While virtual charter schools (public schools operated by non-profit organizations that provide a full-time online education for K-12 kids) are valuable and worth protecting, it seems that our elected officials are missing the forest for the trees.

The most exciting potential for online education to advance K-12 learning is not in the full-time online education model, although that is an essential option. Rather, part-time and the blended learning approach hold the greatest promise to rapidly improve Oregon’s educational opportunities. Part-time learning allows students enrolled in a regular brick-and-mortar public school to enroll in one or more online courses. Blended learning combines face-to-face teaching with online curriculum.

The House Education Committee has heard three bills this session that would affect online education: One simply would end enrollment caps for virtual charter schools. Another, inspired by an OEA recommendation, essentially would end virtual charter schools and replace them with a public (i.e., unionized) online option. The third, House Bill 3201, which has the most momentum, carries some oppressive rules that would limit competition, but also would open up online options to more families. HB 2301 would:

  • Generally end enrollment caps on statewide virtual charter schools and allow students to transfer to out-of-district statewide virtual charters without getting their local district’s permission. However, once three percent of a district’s students are attending a virtual charter, the district could refuse to allow additional students to transfer, as long as the district offered another full-time online option. Parents could appeal transfer denials to the State Board of Education.
  • Decrease how much the state would compensate a virtual school for providing education to a regular student. The current bill provides for 80% of state ADMw (that is, 80% of the state’s per-student funding), but that is fortunately likely to increase, according to insiders.
  • Limit the number of statewide K-12 virtual charter school providers to three, thereby limiting families’ online educational options and competition among providers. This doesn’t make any sense, unless you simply dislike competition and prefer monopolies or oligopolies.
  • Open up greater opportunities for kids across Oregon to enroll in public part-time online options once programs are approved by the ODE. The programs would be created by districts or ESDs and would be available to students in any school district.

This bill is yet another “mixed bag” that should be improved to maximize options and quality of online programs. Obviously, the number of virtual charter schools should not be limited. Also, the bill should be altered to allow students to attend existing charter schools (virtual or regular) part-time, provided that the virtual schools agree to accommodate part-time students. Nonetheless, the bill would open up more opportunities for students to enroll in full- or part-time online options. This couldn’t come soon enough.

In Oregon, 75% of schools do not offer Advanced Placement or IB classes in all core subjects (reading, math, science and social studies), according to the College Board. Oregon lags well behind the national average in this respect. Even worse, one-fourth of U.S. high schools do not offer advanced classes, according to Michael Horn, a co-author of Disrupting Class. In other words, one in four U.S. high schools do not offer chemistry, physics, algebra II, Calculus or even honors English.

At the same time, many of Oregon’s schools have faced budget cuts during the current economic trouble. Even in the midst of budget cuts, how can schools increase opportunities for students, allowing more kids to reach their academic potential? By giving power back to parents to choose programs beyond their local district school. This should extend beyond the classic “take it or leave it” approach, by allowing kids to choose to remain in their local public school while still having access to classes that aren’t offered locally.

Online education programs are already making a wide array of courses available to kids across the country while keeping costs low. Programs like Florida’s Virtual School have allowed thousands of kids attending regular public schools to enroll in effective advanced courses, as well as in rudimentary courses designed to help students catch up with their peers. The beauty of these online programs is not only accessibility, but also that they can be personalized, allowing students to work at their own pace and to spend more time on lessons that they struggle with or that interest them more.

For these same reasons, full-time online charter schools have excelled in Oregon. In 2005, Oregon’s first virtual charter school opened. By 2009 (when the legislature capped the schools’ enrollment), more than 4,000 students attended online charter schools, with many more asking for the opportunity. Oregon’s kids deserve more options, not fewer. Creating more effective educational opportunities does not require increased spending, but it does require smarter spending and flexibility.

 

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Renewable Energy: Leaving Oregonians out in the Cold

In 2010, approximately one in 30 Oregonians had their electricity cut off due to inability to pay. Enrollment in the low-income assistance program has increased significantly in the past few years. Part of this was undoubtedly due to the recession, but mandating the addition of more renewable energy to the grid has and will continue to increase electricity rates. Ever-increasing rates will leave even more Oregonians unable to pay their bills.

In 2007, Oregon legislators passed Senate Bill 838 which established a state Renewable Portfolio Standard (RPS), effectively forcing utility customers to purchase renewable energy. A recent economic analysis by Cascade Policy Institute reveals this bill has significant negative consequences which are just beginning to come to light.

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HB 3510: The Affordable Health Care for All Oregon

Testimony on HB 3510
Before the House Committee on Healthcare
March 11, 2011

Co-Chair Greenlick, Co-Chair Thompson and members of the Committee, my name is Steve Buckstein. I’m Senior Policy Analyst and founder of Cascade Policy Institute, a non-partisan, non-profit public policy research organization based in Portland. Our mission is to promote policies that enhance individual liberty, personal responsibility and economic opportunity in Oregon.

I’m here today along with Dr. Eric Fruits and Arnie Poutala to share with you some of the reasons I believe this bill will not only fail to achieve its goals, but will actually make our health care system worse.
_____

First, let me share with you part of the introduction to the 2007 “Handbook on State Health Care Reform,”* published by the National Center for Policy Analysis. I’ve provided a link to the entire book online at the end of my written testimony.

There are three features of health policy everyone needs to understand:

Number one, health care is far and away the most complex social system there is. In fact, it may be even more complex than all other social systems combined.

Number two, health policy has been the object of more studies than any other market or area of human activity.

Number three, despite the huge volume of research, the large number of active researchers, and the best of all possible motivations, we have managed to produce hardly any truly workable solutions to the problems of cost, quality and access.

All too often, we seek solutions from the outside — usually in the form of government efforts to force the system to change.

To control costs, the conventional solution is to artificially push down provider incomes or restrict access to new technology.

To improve quality, the conventional solution is for government to dictate standards, in effect telling doctors how to practice medicine.

To improve access, the conventional solution is to expand government-funded health care to more and more groups and to make health care free at the point of delivery.

These conventional solutions have been tried in other developed countries and to a large extent they have been tried in the United States as well.

It is probably no exaggeration to say they have not worked very well.

In contrast to the conventional approach, we do not take the most important problems in health care as natural or inevitable. They are instead the artificial byproduct of the systematic suppression of normal market forces — which took place over the course of the 20th century.

Further, the solution to these problems does not lie in top-down, government-imposed remedies. It instead lies in bottom-up liberation. In particular, we need to free people from institutions that prevent them from solving problems on their own.

The most common source of problems in our health care system is the fact that people generally do not bear the full costs of their bad decisions or realize the full benefits of their good ones. On the buyer side, this means that patients who wastefully overuse health care resources usually pay only a small fraction of the cost of that waste. Conversely, patients who economize and avoid waste usually reap only a small fraction of the savings from their economizing.

 

On the provider side of the market, incentives are also distorted. In fact, health care providers rarely reap the benefits of being better at what they do.

 

Yet these problems are not unsolvable. One of the most amazing facts about our health care system is that for virtually every problem there are tangible, visible solutions — not hypotheticals, but real flesh and blood answers operating here and there, in diverse places.

 

For example, there are numerous examples of high-quality, low-cost health care in America — they are just not the norm. If we all got our health care at the Mayo Clinic, the nation’s health care bill could be reduced by one-fourth and the quality of care would be improved. If everyone went to Intermountain Healthcare in Utah, total spending would be reduced by one-third, again with higher quality.

Not only does health care not have to be expensive, there is no reason in principle why we should have to wait for it. In pharmacies, shopping malls and “big box” retailers around the country, people are getting high-quality primary care at walk-in clinics for half the normal cost and with very little waiting.

Nor does price and quality information have to be hidden. In the international marketplace hospitals routinely quote package prices for all manner of standard surgical procedures and publish quality data (including their mortality rates) as well. Furthermore, patients can get top-quality care at a fraction of what it would cost at most U.S. hospitals.

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Get Involved: National School Choice Week January 23-29

On January 23-29, school choice supporters across the U.S. will shine a spotlight on effective educational options for kids. This is an opportunity on a state and national scale to raise awareness of the need to reform public education and to build support for School Choice. There are many ways to get involved and to show your support!

1) On January 25, attend Cascade Policy Institute’s Policy Picnic about school choice. Cascade’s School Choice Project Director will talk about school choice and the research in favor of expanding educational options. Space is limited! Email deanne@cascadepolicy.org for more information and to RSVP.

2)  School boards play a pivotal role in expanding or restricting school choice in Oregon. On Saturday, January 29, attend the “You Can Be Superman” candidate call. Cascade’s Christina Martin will explain why school choice is important. Several speakers will address major school choice issues and talk about how to start and run a campaign for a school board position. Although this event is hosted by the Washington County Republican Party, ALL charter school supporters are welcome to attend this event regardless of party affiliation.

Full details and free registration are available at http://rescueoregon.com.

3) On Wednesday, January 26, join Americans for Prosperity for a viewing of The Cartel in Clackamas, Oregon. The Cartel is an award-winning documentary about corruption in public education and the promise of school choice. View the movie trailer. Find out more and RSVP by visiting http://schoolchoiceweek.com/Event/afp-oregon.

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New Study: Forcing Oregonians to Purchase Renewable Energy Proves Costly

Cascade Policy Institute has released a new study showing that the Oregon legislature’s renewable energy mandates passed in 2007 will be costly to citizens and will threaten standards of living and economic recovery.

The Oregon legislature has officially convened, and legislators are hard at work crafting or reforming energy policy. With an economy in recession, budget shortfalls and a recent and significant increase in electricity rates, legislators have much to address with regard to how we generate electricity in this state.

Renewable energy mandates and other restrictive energy policies are just beginning to cause financial burdens to Oregonians and, according to Cascade’s report, over the next 15 years much more damage will be done.

The report, The Economic Impact of Oregon’s Renewable Portfolio Standard, prepared by economists at the Beacon Hill Institute at Suffolk University in Boston, found that mandates forcing renewable energy on ratepayers will increase electricity rates significantly. Between 2015 and 2025, the average Oregon household will pay an additional $1,706 in higher electricity costs. The average commercial business will spend an extra $9,641, and the average industrial business an extra $80,115.
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Testimony on HB 2977 – Allowing purchase of health insurance across state lines

UPDATE – Listen to Steve’s testimony by clicking here!

Steve BucksteinCascade Commentary
Testimony before the House Committee on Health Care on HB 2977, allowing purchase of health insurance across state lines

by Steve Buckstein
Co-Chair Greenlick, Co-Chair Thompson and members of the Committee, my name is Steve Buckstein. I’m Senior Policy Analyst and founder of Cascade Policy Institute, a non-partisan, non-profit public policy research organization based in Portland. Our mission is to promote policies that enhance individual liberty, personal responsibility and economic opportunity in Oregon.

I’m here today to support HB 2977. I believe that allowing Oregonians to purchase health insurance across state lines is a good thing. I want to focus my testimony on one concern often raised about this concept.
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Todd Wynn testifies before the Oregon Senate on the proposed plastic bag ban

Todd Wynn presents the Oregon Senate with information from Cascade Policy Institute and the Beacon Hill Institute on the financial and job related impacts of the plastic bag ban.

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Testimony to the House Education Committee

Update: Last month, House Bill 2287 passed out of the House Education Committee. Next week, the House is scheduled to vote on this bill.

Christina MartinCascade Commentary

Testimony to the House Education Committee
Re: H.B. 2287
February 4, 2011
by Christina Martin

Chair Wingard, Chair Gelser, Members of the House Education Committee,

My name is Christina Martin, I am a policy analyst with the Cascade Policy Institute, a non-profit, non-partisan, public policy think tank. Cascade researches policy issues including education reform.

After seeing The Lottery, The Cartel, and anticipating Waiting for Superman, I wanted to know how many of Oregon’s children were on waiting lists to get into a school of choice – a public charter school. So I contacted every charter school in the state. As you can imagine, it is not easy to get a hold of busy school administrators to find out how many kids were waiting. However, out of Oregon’s 108 charter schools, 92 schools responded. I discovered that more than 4,700 kids were on waiting lists for a charter school last summer.  In October, still more than 3,600 kids were waiting to get into charter schools, even though parents do not usually like to disrupt their children’s education with mid-year transfers.
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Take a Gamble on the Train

Steve BucksteinQuickPoint!

[audio:3-9-11SteveTakeaGamble.mp3]

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by Steve Buckstein

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The Oregon state legislature has used the state lottery as an almost endless source of funds for various projects over the years. When gambling doesn’t generate enough revenue for current wish-lists, legislators can authorize the sale of bonds repayable from future lottery revenue. According to official state documents, principal and interest remaining to be paid on lottery bonds is $1.6 billion, and the bonding capacity is virtually stretched to its limit. If they borrow much more they may not be able to repay the bonds.
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Kathryn Hickok talks Children’s Scholarship Fund before the House Committee on Education

Watch Kathryn Hickok testify before the House Committee on Education about the benefits of School choice.

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Testimony in Favor of HB 2291 Kathryn Hickok

Kathryn HickokCascade Commentary
Testimony in Favor of HB 2291
Kathryn Hickok
Director, Children’s Scholarship Fund-Portland
Portland, Oregon
March 4, 2011

Co-Chairs Gelser and Wingard and members of the committee, my name is Kathryn Hickok, and I am director of the Children’s Scholarship Fund-Portland. For twelve years our program has provided privately funded partial-tuition scholarships to children from lower-income Oregon families.

CSF-Portland is a partner program of the national Children’s Scholarship Fund, headquartered in New York. Our mission is to maximize educational opportunity by offering tuition assistance for children from needy families. We provide partial tuition scholarships based solely on income and applicable to any private school chosen by the students’ parents or guardians. To be eligible for a scholarship, families must demonstrate financial need according to standards similar to the federal free and reduced price lunch program.
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No Property Rights, No Economic Freedom

Karla Kay EdwardsQuickPoint!

[audio:3-1-11KarlaNoPropertyRightsAudio.mp3]

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by Karla Kay Edwards

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After nearly forty years, no other state in the Union has adopted statewide land use laws. Yet, Oregonians continue to falsely believe these laws are necessary as they currently exist. An entire generation has not been exposed to the freedoms of property rights, so many Oregonians have no comprehension of what could be accomplished without these laws. They see only the dangers of the unknown. However, a variety of bills filed this session indicate the legislature may be grasping the absurdities of Oregon’s land use system.
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Michael Horn testimony before Oregon’s House Education Committee

Full text below


 

My name is Michael Horn; and I am the coauthor of Disrupting Class: How Disruptive Innovation Will Change the Way the World Learns, along with Harvard Business School Professor Clayton M. Christensen and Curtis Johnson, president of the Citistates Group. I am also the cofounder and executive director of education for Innosight Institute, a nonprofit think tank devoted to applying the theories of disruptive innovation to problems in the social sector.

When we approached writing about education originally, we came at it from a very different viewpoint from what has been discussed here today. Our work has centered around how do we make innovation far more predictable and successful?

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Hearing on Friday for K-12 Tax Credit Scholarship Program

The House Education Committee will hear a bill proposing a K-12 tax credit scholarship program this Friday, March 4, at 1pm in Salem. House Bill 2291 would increase opportunities for K-12 students from low-income and working-class families to attend private schools by granting tax credits to individuals and businesses for donations to qualified scholarship organizations. (Read about how this program could save Oregon millions.)

Two other bills that would create similar scholarship programs for special education students (HB 2290) and students attending failing schools (HB 2289) also will be heard on March 4. EmailChristina@Cascadepolicy.org for more information about how to show your support!

These bills are part of a package of Florida style reforms (House Bills 2288-2295). The other portions of the Florida package include HB 2288 for A-F Grading of Schools; HB 2292 for Teacher Licensure; HB 2293 for Every Third Grader Reads; HB 2294 for Incentive Pay/AP Success Bonuses. Of these bills, we encourage you to specifically support HB 2292, which would allow alternative means of licensure for teachers. This bill would allow teachers with doctoral degrees and equivalent out-of-state teaching licenses to teach in Oregon. It would make it easier for Oregon’s schools to attract and retain talent. Currently, only 24% of Oregon’s high schools offer Advanced Placement or IB courses in the four core subjects. This bill, and HB 2294, would help give students more advanced course options.

Please attend the hearing on March 4th to show your support. If you are interested in testifying, please emailChristina@cascadepolicy.org for more information about how to submit testimony. If you cannot attend, please email legislators on the house education committee to let them know that you support these bills.

House Education Committee Members:
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Todd Hosts Bill Post Part 2 (VIDEO)

Click here for part 1

Todd Wynn fills in for Bill Post on Feb 7th, 2011. Guests from this second hour include:

John Audley from the Renewable Northwest Project and Paul Bachman from The Beacon Hill Institute on renewable mandates in Oregon

John Audley from Renewable Northwest Project and Paul Chesser from the American Tradition Institute on renewable mandates in the US

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Steve Buckstein reports from the Stand For Children Rally on Bill Post

Check out Steve Buckstein reporting live from the Stand For Children Rally on Bill Post.

[audio:2011-21-2BillPostSteveBuckstein.mp3]

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John Charles on OPB Think Out Loud

Check out John Charles on OPB’s Think Out Loud.

You can listen/download John’s segment on the right, or download the whole show by clicking here.

For more information, visit http://www.opb.org/thinkoutloud/shows/high-speed-momentum

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Todd Wynn on Bill Post Hour 1 (VIDEO)

Click here for Part 2

Todd Wynn fills in for Bill Post on Feb 7th, 2011. Guests from this first hour include:

Christina Martin – Cascade Policy Institute – discusses education, school choice, and the upcoming legislative session.

Gus Gates – Surfrider Foundation – discusses the plastic bag ban in Oregon.

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Steve’s Testimony before the Senate Committee on Finance and Revenue (UPDATED)

Chair Burdick and members of the Committee, my name is Steve Buckstein. I’m Senior Policy Analyst and founder of Cascade Policy Institute, a non-partisan, non-profit public policy research organization based in Portland. Our mission is to promote policies that enhance individual liberty, personal responsibility and economic opportunity in Oregon.

As a member of Governor Kulongoski’s Task Force on Comprehensive Revenue Restructuring, I must express reservations about Senate Joint Resolution 26 which seeks to revise the Oregon Constitution in a number of significant ways.

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Don’t Make Nicotine a Prescription Drug

Steve BucksteinCascade Commentary

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by Steve Buckstein

If you thought that nothing could be more hazardous to Oregonians’ health than plastic grocery bags, just wait until the health police make nicotine a prescription drug.

Think I’m kidding? House Bill 2233 is already in the pipeline in Salem. Among other good works, it would classify nicotine, an active ingredient in cigarettes, as a Schedule III controlled substance available only by prescription. It would be a crime to possess nicotine, punishable by up to year in prison, a fine of up to $6,250, or both. And it would be a crime to unlawfully distribute nicotine, with the same punishments.

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Oregon’s K-12 Future Must Include Online Education Options

Christina MartinQuickPoint!

by Christina Martin

Click here to hear the audio            Download PDF

According to the College Board, 75% of Oregon schools do not offer Advanced Placement or IB classes in the four core courses: reading, math, science and social studies. Even worse, one in four U.S. high schools do not offer anything above geometry, biology or English. That means one in four high schools do not offer chemistry, physics, algebra II, calculus or even honors English.

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John Charles on OBP’s Think Out Loud Program

John Charles on OBP’s Think Out Loud Program: “High Speed Momentum

When: Monday, February 28 from 9:00 am – 10:00 am

Where: Click here to listen live on the Internet or learn where to find it on the radio

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Todd debates the bag ban on Populations TV

Todd and Gus Gates of the Surfrider Foundation debate the plastic bag ban on Populations TV.

A special thanks to Jim Winkle and Populations TV

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Christina Martin on Lars Larson

Check out Christina Martin talking education on Lars Larson.

[audio:2011-2ChristinaMartinLarsLarson.mp3]


Click the play button to hear the audio commentary

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John Charles on Lars Larson

John Charles talks public transit in an interview with Lars Larson on 2/18/2011.

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John Charles letter to the Oregon Transportation Commission

February 14, 2011

Oregon Transportation Commission

Salem, OR  97301

RE: Feb. 16th meeting, Agenda Item F – Flexible Fund Allocations

Dear Commissioners,

I am writing to express my opposition to the plan to appropriate $13 million of scarce flex funds to the Milwaukie Light Rail project. The reasons for my opposition are as follows:
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Push Education Power Down, Not Up

Governor John Kitzhaber recently announced plans to consolidate control over all levels of education, from pre-Kindergarten through college, in a single board that he would chair. Earlier he proposed consolidating school districts and Educational Service Districts as a way to generate cost savings to taxpayers.

Such efforts have already been tried, however, and failed. Starting before Kitzhaber became governor the first time, while he was Senate President, the legislature mandated a reduction in the number of school districts, hoping to see cost savings. Between 1992 and 2001 the number of districts fell from 277 to 198.
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The Proper Role of Government: Banning Bags and Setting Prices?

Todd WynnCascade Commentary

The Proper Role of Government: Banning Bags and Setting Prices?
by Todd Wynn
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One of the most controversial debates in Oregon’s state capitol this year is banning single-use bags, Senate Bill 536. There is something more important to add to the debate than just the rhetoric from environmental activists, politicians, paper companies and grocery stores. The question of whether government has the right to ban a product and to force retailers to charge a government-created price is an important one to consider, and it has significant implications for government involvement in Oregonians’ lives.
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TriMet Throws Bus Replacement Funding Under the Bus

UPDATE: Read the full letter below

FOR IMMEDIATE RELEASE  February 14, 2011

Contact: John A. Charles, Jr.
Cascade Policy Institute
Tel.: 503-242-0900
Fax: 503-242-3822
E-mail: john@cascadepolicy.org
Website: www.cascadepolicy.org

TriMet Throws Bus Replacement Funding Under the Bus

Portland, OR – Cascade President John A. Charles, Jr.  sent a letter to the Oregon Transportation Commission (OTC) today opposing TriMet’s request to allocate federal dollars away from bus replacement projects to the Milwaukie Light Rail Project. The plan is on the agenda for OTC approval at its February 16th meeting in Salem.

The Oregon Transportation Commission has created a new program called the Flexible Funds Program. This program will use federal surface transportation funds to support non-highway projects. Based on the stated OTC criteria, the maximum award available will be $2.1 million. The regional transit district for Portland, TriMet, is requesting $13 million in support of the Milwaukie light rail project. The request has been endorsed by the ODOT staff.

If the request is approved, TriMet would be barred from seeking any bus replacement funds from this fund for the next six years. TriMet has agreed to this condition even though the agency has one of the oldest bus fleets in America and the agency asked voters last November to approve a $125 million bond measure for the purpose of replacing buses and upgrading bus stops.
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Karla’s Legislative Testimony on Oregon Forest Lands

Karla Kay EdwardsCascade Commentary

Testimony on HB 2781 Before the House Judiciary Committee

February 14, 2010
by Karla Kay Edwards

Good afternoon, Judiciary Co-Chairs Krieger and Barker and members of the committee. Thank you for the opportunity to testify on HB 2781. My name is Karla Kay Edwards. I am the Rural Policy Analyst for Cascade Policy Institute, a public policy research organization.

HB 2781 takes a huge step toward attempting to take control of Oregon’s own destiny. More than 53% of Oregon’s land mass is in federal ownership and thus off-limits to any kind of private investment. From 2000 to 2010 federal ownership of land in Oregon has increased by 2,515,739 acres, according to Payment In Lieu of Taxes (PILT) payment records. The federal government has virtually eliminated commodity production on federal forest and grazing lands and continues to further restrict the uses of these lands. A few recent examples: Secretary of Interior Salazar on December 22 issued Order 3310 to designate wild lands (beyond the Wilderness program already in place) and to protect the wilderness characteristics of a potential 245 million additional acres of lands across the U.S. In addition, there is a movement to establish the Siskiyou Crest National Monument which essentially would put another 600,000 acres off limits for many uses in Oregon. Both of these and many other federal land management decisions in Oregon will further limit the ability to manage these lands for multiple uses and generate any significant economic returns for the communities surrounding these areas. Federal land management decisions coupled with state land use laws have reduced more than 90% of non-urban lands in Oregon to what Peruvian economist Hernando de Soto refers to as “dead capital.”
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Todd Hosts the Bill Post Radio show

Check out the audio of Todd filling in as host for the Bill Post Radio show (2/7/2011).

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Todd and Christina talk education

 

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Todd talks to Gus Gates of the Surfrider Foundation about the plastic bag ban

 

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Todd talks with John Audley from the Renewable Northwest Project and Paul Bachman from The Beacon Hill Institute on renewable mandates in Oregon

 

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Todd talks with John Audley from Renewable Northwest Project and Paul Chesser from the American Tradition Institute on renewable mandates in the US

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Ohio “Rosa Parks” Wants to Choose Another School Bus

What made a low-income African American single mother risk jail time in Ohio? Akron resident Kelley Williams-Bolar recently served nine days in prison after a felony conviction. She used her father’s home address to send her children to a neighboring school district. She says she feared for her kids’ safety in their neighborhood and wanted them to get a good education.

Overnight, Kelley Williams-Bolar became a symbol of the desperation of low-income and minority parents who believe their local public school districts are failing their children. The outrage spans the political spectrum. An online petition for her pardon has 85,000 signatures. Governor John Kasich’s lawyers are investigating the harshness of her sentence. Congressman Jesse Jackson, Jr. asked the U.S. Attorney General to intervene on her behalf. Editorials for The Washington Post and National Public Radio have referred to this as a “Rosa Parks moment for education.”

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Oregon’s Bag Tax: The Economic Impacts on Oregonians and Retail Stores

FOR IMMEDIATE RELEASE, February 8, 2011
CONTACT: TODD WYNN
CASCADE POLICY INSTITUTE
TEL.: 503-242-0900
FAX: 503-242-3822
E-MAIL: TODD@CASCADEPOLICY.ORG

Oregon’s Bag Tax: The Economic Impacts on Oregonians and Retail Stores

Download the report here

A proposed retail bag ban in Oregon would have a significant negative economic impact according to a report released today by Cascade Policy Institute and Americans for Tax Reform.

One of the first bills likely to be voted on during this 2011 legislative session is the ban on single use bags in retail stores across Oregon. The Senate Committee on Environment and Natural Resources will hold a public hearing in Salem today at 3:00pm on the ban. If the legislature ultimately passes Senate Bill 536, it would be the first statewide bag ban in the United States.

If passed, retail stores will still be allowed to offer paper bags, but they must charge a minimum of 5 cents per bag. This minimum charge has the same effect as a new tax on consumers.

Cascade Policy Institute and Americans for Tax Reform (ATR) partnered with the Beacon Hill Institute in releasing a short report, Oregon’s Bag Tax: The Economic Impacts on Oregonians and Retail Stores, showing the financial burdens that would be imposed by the bag tax.

The report, prepared by economists at the Beacon Hill Institute at Suffolk University in Boston, found that the bag tax would have a significant negative impact on the state’s economy and on Oregonians.  All other things being equal, Oregonians will allocate a portion of their spending to the bag tax and, as a result, businesses will suffer a reduction in sales and profits. The reduction in sales would lead to a reduction in employment and investment.

“At a time when voters are concerned about jobs and the economy, sponsors of this regressive bag ban seek to destroy millions of dollars of disposable income and investment in Oregon,” said ATR President Grover Norquist. “This is yet another example of government’s penchant for collateral damage – in this case slamming job seekers and the working poor.”

For fiscal year 2012, the report finds:

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Lake Oswego Streetcar Proposal: John Charles Testifies in Favor of a Less Expensive Solution

John A. Charles, Jr.Cascade Commentary

Lake Oswego politicians want to spend more than $400 million in tax dollars to build a five-mile trolley line to service 1,900 transit riders. CPI President John A. Charles, Jr. testified before the Lake Oswego-Portland Transit Project Steering Committee on January 24th. In his testimony, he explained why a simple express-bus option would provide better commuting times at far lower cost. Read the whole testimony below.

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The Fallacy of a $3.5 Billion State Budget Deficit

Steve BucksteinCascade Commentary

The Fallacy of a $3.5 Billion State Budget Deficit
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by Steve Buckstein

$3,500,000,000. That’s the latest official state estimate for what is described as a looming deficit in Oregon’s General Fund Budget for the upcoming 2011-13 biennium. Ask the average Oregonian what this means, and he or she is likely to say that the state must cut its spending by $3.5 billion, increase taxes by that amount, or do some combination of the two. In reality, such stark choices are not necessary because the deficit is not what it appears.

Read almost any news article about the budget crisis and you would think that state revenue will be lower in the next biennium than it is in this one, which ends in June. Actually, current official estimates peg this biennium’s  General Fund and lottery resources at $13.54 billion, while projecting $14.76 billion in the next biennium. Although both these estimates are down from earlier projections, note that as of now state officials believe that they will have $1.2 billion more to spend through the General Fund in the next two-year period than in this one.
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Intertwined: Fish Consumption and Water Quality Standards

The Oregon Department of Environmental Quality (DEQ) has scheduled a series of public workshops in February regarding raising the state’s water quality standards. DEQ proposes to make Oregon’s water quality standards among the toughest in the country. The reason? DEQ argues that the more fish you eat, the more you are exposed to the cumulative effects of toxins in water, and therefore the higher the standard should be for those toxins.

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National School Choice Week: Oregon Could Save Millions by Giving Kids a Choice

This week is National School Choice Week. School choice stands apart from other education reforms, not only in its growing bipartisan support, but also in its ability to deliver results without increasing costs to taxpayers.

One school choice reform that is getting results is Florida’s Tax Credit Scholarship Program for low-income kids. Florida’s program began in 2001 providing tax credits for scholarships to students from low-income families. In 2007-08 alone, the program supported about 23,000 students, about 95% of whom would not have been able to attend a private school otherwise. It has helped bring Florida from among the lower performing states in educational achievement to among the best. While Education Week now ranks Florida as 5th in the nation, Oregon (despite having a more privileged population and spending more per student) is ranked at 43rd.
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Fiscal Impacts of an Oregon Tax Credit Scholarship Program

Summary

A Modest Tax Credit Scholarship Program Would Produce a Fiscal Net Benefit to Oregon State School Funding
The Florida Tax Credit Scholarship Program was established in 2001. It provides an income tax credit for corporations that contribute money to nonprofit scholarship-funding organizations (SFOs) that award scholarships to students from families with limited financial resources. The Florida legislature calculates that the program saved the state $36.2 million in fiscal year 2008-09.

If Oregon adopted a program similar to Florida’s, the benefits of reduced demands for education funding would exceed the costs of the tax credit, producing a net savings to the state of $7.7 million.

Click here to view the complete study.

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