Year: 2012

Imagine a World…

Imagine a world where we buy our groceries in government stores. We can only shop at the store nearest our house. If we want to shop somewhere else, we’re forced to move our family into another neighborhood―if we can afford it.

 

In this imaginary world, we elect food boards to oversee our grocery stores. And many of us think the food is free. Well, not quite. We all pay taxes to the government, which then recycles those dollars to grocery store districts and eventually down to our neighborhood stores. We think we eat pretty well, although the government spends five dollars for a gallon of milk and six-fifty for a loaf of bread. The bread is often stale and the milk sour.

 

Each district has a central office staff of specialists and administrators who work hard designing store shelves, checkout lanes, and (most importantly) the nutritional content of every food item. Since we’re a nation that separates Church and State, the big battles at food board meetings often revolve around whether stores can sell Christmas cookies.

 

Now, imagine that voters decide to give the government less money for the public food system. Suddenly, food stores find themselves in a crisis. There isn’t enough tax money to keep food district central bureaucracies intact. Stores don’t have enough money to keep all the clerks employed. Food superintendents are faced with the difficult task of eliminating some items from the shelves.

 

How could we possibly feed ourselves without the government taxing us, building big brick food buildings, and telling us where to shop?

 

If this imaginary world―and its problems―sounds familiar, you’re way ahead of me. It’s the world of our public school system. It’s the world most of us grew up in. Our parents grew up in the same world, but children now are growing up in a different world.

 

We can no longer afford to dump more money into a system that isn’t keeping pace with the progress all around us. Technology has opened limitless ways for students to gain knowledge and skills and to interact with their instructors and peers. The landscape of educational options centered on the needs and aspirations of individual students is far more diverse than it was even ten years ago.

Many advocate that we should lead the world in education spending. But you don’t get to be the competitive leader in any industry by being the world’s highest-cost producer. Don’t you want to be the producer with the highest quality, but at an affordable cost? The driving force to achieve high quality, while keeping costs down, is the profit motive. But that’s exactly the motive that doesn’t exist in our public school system.

 

Why aren’t we worried about a tax revolt decimating our local grocery store shelves? It’s because our grocery stores are private. They’re subject to intense competition, and each of us has virtually unlimited choices about where we shop.

 

For those who can’t afford food, we don’t build government food stores. We give them food stamps, and they shop in the same stores and for the same products that everyone else does. In essence, our public schools are the equivalent of the former Soviet Union’s collective farms. Communism said government should own and run the food stores―and the farms. The result was a nation that couldn’t feed itself.

 

We don’t have to ask whether to replace our current public school system with a private one. We can simply let education dollars be spent where the customers (parents) think they should go.

 

Please don’t let the details of any specific “school choice” proposal stop you from accepting the concept. Instead, let’s figure out why so many of our tax dollars don’t reach the classroom―and why nearly half the people who work for our public school system don’t teach. Let’s look for ways to put the children first and the system second.

 

The only proven way to accomplish these things is through competition and parental choice. Spending more dollars in the current system will just get us more of the same. Many states are broke, preventing them from spending more money on public schools. And many parents are fed up, wondering why their kids are underperforming or unmotivated in K-12 schools and unprepared for their college courses and future careers.

 

School choice has entered a new world. Because Americans are increasingly vocal about providing parents at every income level with the ability to choose their children’s schools, states are adopting broad-based school choice initiatives.

 

Every child who drops out of school, or who graduates functionally illiterate, is being tossed into the sea without a lifeboat. If you think rearranging the deck chairs on this ship will save those children, think again. The way of the future is to put the power of educational choice back into the hands of parents, where it belongs.

 

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

Read Blog Detail

Holiday Trees and Winter Candelabra

Calling a Christmas tree a “holiday tree” is like calling a Hanukkah menorah a “winter candelabrum.” Generic names for well-known holiday symbols don’t truly honor diversity. Instead, they “airbrush out” the meaning of experiences, traditions, and symbols that are part of people’s lives and cultures.

 

Wall Street Journal columnist William McGurn recently pointed out, “…In their own day, the 13 American colonies were among the most religiously diverse places on Earth. Yet for all the frictions and flaws, the understanding they bequeathed us in the First Amendment helped shield America from the disastrous religious wars that plagued Europe, not to mention the ones still causing bloodletting in the Middle East.”

 

By preventing the federal government from imposing or prohibiting religious beliefs and practices, the framers of the Constitution not only defended the rightful freedom of hearts, minds, and souls, but also Americans’ ability to keep traditions and celebrations associated with faith.

 

American tolerance shouldn’t be understood to mean we can’t celebrate openly or say the word “Christmas” in public. It’s a quirky postmodern phenomenon to be timid about naming the season of good cheer. Authentic respect for our various beliefs involves honoring the truth about the origins and meaning of our traditions and learning about each other. Let us take a moment to remember our freedoms as we gaze at our Christmas trees this holiday season. A Merry Christmas to all!

Kathryn Hickok is Publications Director and Director of the Children’s Scholarship Fund-Portland program at Cascade Policy Institute.

Read Blog Detail

Money for Nothing

On December 18 Metro referred a five-year local option levy of 9.6 cents per $1,000 of taxable assessed value to the voters for consideration in the May election. If passed, the measure would raise about $10 million annually for maintenance of 12,400 acres of land Metro bought over the past decade with public tax dollars.

Unfortunately, very few voters will ever get to visit those areas. Most of the large natural areas are far from population centers, such as the 1,200-acre Chehalem Ridge tract near Gaston or the 1,100 acres purchased in the Sandy River Gorge.

More importantly, Metro doesn’t want you there. The agency has announced that if the levy passes, only five to fifteen percent of the funds each year would be used to provide access for the public, such as signage, parking facilities, public rest rooms, or trails. Many of the access points, now gated, would remain closed. This is because Metro’s top priority is restoring natural areas for wildlife, fish, and water quality.

Metro likes to promote the concept of “nature in the neighborhood,” but when it comes to spending our tax dollars to buy up land, neighborhoods will be locked out. The levy should be rejected until these priorities change.

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

Read Blog Detail

Freedom in Middle-Earth: A Hobbit’s Eye View

By Lauren Hickok

The first installment of director Peter Jackson’s long-awaited film adaptation of J.R.R. Tolkien’s Lord of the Rings prequel, The Hobbit, is now in theaters. Jackson’s gorgeously rendered movie trilogy The Lord of the Rings has given Tolkien fans the joy of seeing the epic story’s “applicability” (a term Tolkien loved) discussed anew in the public square. The Lord of the Rings shares with us some insights into a value dear to the American heart: freedom.

Montesquieu famously wrote, “Countries are well-cultivated, not as they are fertile, but as they are free.” The Shire, home of the Hobbits, is both: self-governed, minimally, in a culture of hearth, home, and pride in cultivating one’s own garden. Hobbits distrust intruders. Though generous with each other, no doubt they would agree that a Hobbit’s hole is his castle.

However, insulation cannot defend home and autonomy against outside threats. In the Rings trilogy (as in The Hobbit), Hobbits sally forth and fight, proactively, for the right to live peacefully at home. Frodo and Sam travel all the way to Mordor, the land of the enemy, to save the Shire. In The Two Towers, when Merry and Pippin debate whether to give up and go comfortably home, Merry realizes that if Mordor is not challenged, “there won’t be any Shire.”

Mordor is an icon both of slavery and of infertility, a black wasteland where every will is subjugated to an eye that can penetrate minds. In Mordor as in George Orwell’s 1984, the enemy Sauron, the Big Eye, is always watching you. Sauron’s influence would lay waste the Shire, too. Totalitarianism consumes both the free peoples and, symbolically, the lands in its path.

The striking ugliness of Mordor, while symbolizing evil, is also a direct consequence of the suppression of freedom. Beauty is the domain of creative individuals. Because no one tends his or her own garden, the earth goes disregarded. Because no one takes pride in his own work, the mass-produced armor of Mordor’s Orc army is ugly and rough. Hobbit farmers and Elf craftsmen achieve excellence by doing their work with care, love, and pride. In Mordor only the design of Sauron has value, and he desires domination of mind and will.

Loss of individual livelihood breeds loss of respect for individual personhood. Thus the Lieutenant of Barad-dûr, “the Mouth of Sauron,” has forgotten his own name. Under the power of the Ring, Sméagol (Gollum) also loses his individuality, referring not to himself but to “us, Precious.” In a striking juxtaposition, the nine Nazgûl, servants of Sauron, are all faceless, clothed in black like the monotonous landscape of Mordor, while the nine members of the Fellowship of the Ring colorfully represent all the free peoples of Middle-earth, bound together by friendship, not by coercion.

Perhaps the most profound insight of Rings is that self-government requires governance of self. Freedom is not license. To be free you must exercise control over your own will, which often means doing what you would rather not and expressing your individuality in solidarity.

Throughout The Lord of the Rings, the salvation of Middle-earth’s freedom requires sacrifice. Frodo leaves home to face unimaginable horrors. Sam follows him with unflagging loyalty. Gandalf surrenders his life for his friends in Moria, dramatically increasing his power. Galadriel rejects the temptation to claim the Ring for herself; Faramir rejects keeping it for his father’s kingdom. Elves sacrifice their immortal lives to help Men achieve victory at Helm’s Deep. Arwen gives her “life’s grace” first to save Frodo (in the film) and finally to protect Aragorn. Théoden must conquer his resentment to come to Gondor’s assistance. If one person takes the Ring for himself, the entire free world will fall—the Ring even enslaves the wearer.

Finally, I assume I spill no secrets by mentioning that the king returns. Limited interference and mutual respect characterize his rule. Gandalf tells Butterbur that the new king will rebuild the old road. “It will be good for business, no doubt,” the innkeeper replies, “so long as he lets Bree alone.” Gandalf replies that the king loves the town and will do so.

This only scratches the surface. Read Tolkien’s books, see Jackson’s film adaptations, and discover for yourself how the theme of freedom permeates the fascinating story voted the greatest book of the 20th century.

Lauren Hickok is a guest writer for Cascade Policy Institute, Oregon’s free market think tank. She has a BA in mathematics and music from the University of Portland and works as an actuary.

Read Blog Detail

Testimony on the Nike Tax Bill (Economic Impact Investment Act of 2012)

Good morning, Co-Chair Burdick, other co-chairs and members of the committee. I’m Steve Buckstein, Senior Policy Analyst and founder of Cascade Policy Institute, a public policy research center based in Portland. Our mission is to promote individual liberty, personal responsibility, and economic opportunity in Oregon.

Regarding the concept of this legislation, I have some praise for the Governor, coupled with concerns and suggestions for making the bill better, and fairer.

First, the fact that the Governor is ready to grant tax certainty to Nike and other big companies in return for capital investment and job creation should be applauded. It’s recognition that taxes matter, and good tax policy can attract business and jobs. But, Oregonians of all political stripes also appreciate fairness, and I’m concerned that this legislation will be fundamentally unfair, especially to small businesses and many Oregon job seekers.

 

The Governor only wants to make tax certainty deals with what he calls “the right kind of businesses” that will drive our per capita income up. This leaves out people who, for whatever reason, have little education and/or few job skills. These are often the young and minorities, for whom a lower wage job is the first rung up the economic ladder.

 

Also, granting the Governor power to approve or disapprove such deals at all risks charges of favoritism and corruption. Just think about Nike getting its deal while one of its competitors is later turned down. A level playing field would eliminate these concerns. One way to do this is with a formula that prorates the number of jobs and capital investment required to the business size. For example, 500 jobs added to Nike’s current 8,000 Oregon employees would equate to 125 new jobs for a company that currently employs 2,000 Oregonians, without any gubernatorial discretion at all.

 

And, what’s magical about the 500-job threshold in the first place? While that’s a big number anywhere in Oregon, 50 jobs may be a big number in smaller communities. And, five jobs may be significant elsewhere. This is a small business state; so why not expand tax certainty to the businesses that create most of the jobs already?

 

In conclusion, I agree that granting Nike tax certainty is a good idea. But it would be an even better idea if all companies got the same certainty—big and small alike. That way, every Oregonian would stand to benefit, and the program would be fair to all.

 

Thank you.

Read Blog Detail

“Streetcar Drives Development”―Portland’s Urban Legend

For much of human history, mass transit has had the utilitarian goal of quickly moving people from place to place. Even Portland’s early streetcars were designed with speed in mind.

Advertisements touted how quickly people could get around by streetcar. One ad from 1920 boasted that University Park in North Portland was only 20 minutes from downtown by streetcar. That works out to a speed of more than 15 miles an hour.

Times have changed. Modern streetcars have become the pleasure boats of public transit: flashy, expensive, and slow.

Today, Portland’s streetcars quietly glide through the streetscape at a leisurely pace. Portland’s new Central Loop covers 3.3 miles in about an hour and a half. At 2.5 miles an hour, that’s slower than most people walk.

If streetcars don’t improve transit times, then what do streetcars do?

Many ascribe the development of Portland’s heralded Pearl District to the streetcar. In truth the streetcar was more of an afterthought. The Pearl’s success began with a few pioneering developments that took advantage of historic building tax abatements to convert warehouses into condos. The success of these pioneering developments attracted other investments and more developments.

After these successes, an urban renewal area was created, and the streetcar came along a few years after the birth of the urban renewal area. Development made the streetcar possible, not the other way around.

It’s impossible to find a clear-cut example of where streetcars are the single factor driving development. It’s impossible because streetcars are always just one part of a complex development package. The packages can include roadway improvements, tax abatements, rezoning and environmental cleanup. There is no way to determine whether a streetcar system is just one of many factors that boost development potential or is a vital linchpin without which development would be impossible.

Supporters argue that streetcars and other rail projects provide a magic key that unlocks zoning and uses of an area. They point to the “condotopia” that grew out of the banks of the Willamette River in Portland’s South Waterfront urban renewal area, now served by a streetcar and an aerial tram.

As early as the mid-1990s, however, private developers had their eyes on Portland’s South Waterfront. Yet, every single effort was shot down or stifled by the city’s planning process. One development didn’t follow a city commissioner’s vision for an ideal street pattern. Another development would have exceeded the city’s maximum allowable building height at the time (35 feet, or about three stories).

Even so, Portland’s planning class continues to argue that the aerial tram and streetcar have magically unlocked the ability to build waterfront skyscrapers.

In reality, there is nothing magical about streetcars and trams. City commissioners held—and still hold—the keys to unlock an area’s development potential. If rail and tram expenditures had been invested in roadway improvements, the South Waterfront would be celebrating its 15th anniversary of redevelopment instead of suffering round after round of fire sale condo auctions.

It remains to be seen whether the streetcar’s Central Loop can breathe life into Portland’s Central Eastside, Convention Center, and Lloyd District. Large-scale rezoning to unlock development potential doesn’t need a streetcar. Investments in roadway improvements best serve the way the people actually travel, rather than the way we wish they would travel.

A streetcar by itself does nothing without these other key improvements.

Eric Fruits, Ph.D. is a Portland economist and an adjunct professor at Portland State University. He is a guest contributor at Cascade Policy Institute. This article originally appeared in The Portland Tribune.

Read Blog Detail

Tax Certainty for Nike? “Just Do It” for All

Governor Kitzhaber has called a special session of the Oregon legislature to enact what he calls the Economic Impact Investment Act of 2012. It would give him the authority to directly negotiate with, and offer “tax certainty” to, any company promising to create at least 500 jobs and invest at least $150 million over five years in our state. Any future changes in Oregon’s business tax structure would not apply to such firms over the lifetime of their agreements.

 

The urgency of this proposal comes from the fact that Nike is looking to expand soon and is apparently being courted by other states. According to the Governor, if his proposal is rushed into law, Nike has agreed to expand here with a proposed $400 million investment and more than 2,000 jobs.

 

Unfortunately, the Governor made it clear that he would only approve such deals for companies that create a lot of relatively high wage jobs. He explicitly rejected the idea that a company offering 500 minimum wage jobs, for example, would be approved.

 

While it’s good to seek high wage jobs here, rejecting low wage jobs hurts those with little education and/or few skills. These are often the young and minorities. They have little reason to rejoice over the Governor’s new plan.

 

Granting Nike tax certainty is a good idea, but it would be an even better idea if all companies got the same certainty—big and small alike. That way, all Oregonians would stand to benefit.

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

Read Blog Detail

Sailing Competitive Seas

By William B. Conerly, Ph.D.

I picked up my beer at the yacht club’s bar and went out on the deck to watch the last few boats come in. It had been a good day’s sailing. We finished the race in the middle of the fleet, but we had a couple of new stories to tell. When John grabbed the chair next to me, I was all set to talk about the wind shift that had helped us at the end. John, though, had other interests.

 

“Tell me, Doctor, what are we going to do about these Japanese imports?” John asked.

 

I sail on the weekends; Monday through Friday I’m an economist. Even though I love economics, I didn’t want to spend the whole cocktail hour talking about it.

 

“Did you do the race to Drake’s Bay three years ago?” I asked. Without waiting for his answer I began my story. “After we rounded the point and turned north, a light fog set in. It wasn’t thick enough to be dangerous, but we couldn’t see the other boats.”

 

“I remember that one,” John said. “I never did figure out where the wind was that day, but everyone else seemed to find it. I think I was third from last.”

 

I continued: “After about two hours we happened to sail close enough to another boat to see her. It was Fred’s boat, which is pretty competitive with ours. We sailed side by side, about a hundred yards apart, and she was pulling away from us.”

 

“You should have been able to keep up with her,” John said. “You’ve beaten her plenty of times.”

 

“That’s what we thought. So we started looking around and decided to ease the Cunningham a bit.”

 

Racing a sailboat isn’t as simple as letting the wind catch the sails and push it along. The sails are airfoils, like airplane wings, but with an added complication: Being made of fabric, the curvature of the sails isn’t fixed in place. We have thirteen separate controls that will change the sail’s shape in one way or another.

 

The Cunningham is one of those thirteen.

 

“It was hard to tell at first, but it looked like we were no longer losing to her. We put two good fellows on the sheets—and we started to gain ground. We even got a little ahead of her.”

 

John asked if we had kept our lead. We hadn’t. After we got moving a bit faster, the other boat picked up speed. It took them 20 minutes to find the trick, and I don’t know what they did, but just as we were feeling confident, they got their boat moving definitely faster than ours.

 

“Rob looked up at the mainsail. You know how he’s so quiet. He softly said, ‘Maybe there’s too much mast bend. Can we let off on the backstay a bit?’ The mast looked fine to me, but on the rare occasions when Rob talks, we all listen.

 

“We eased the backstay a little, and then watched the speedometer. We picked up a tenth of a knot in no time, and started to gain on them.”

 

“Sounds like a game of leapfrog,” John remarked.

 

“It was. Pretty soon we couldn’t find any more gains out of sail trim. But watching Fred’s boat helped us spot a tired helmsman right away. I had been steering for 45 minutes when they pulled out on us. I felt fine, or thought I did, but when Murphy took the wheel he brought our speed right back up.”

 

“How did you finish the race?”

 

“First and second. Turns out we were the only two boats to have been in sight of anyone else for most of the race. We took second, which is too bad, but that was one of our best finishes the whole summer.”

 

“It sounds to me like you have that other boat to thank for your good finish, even if they did beat you.”

 

“Exactly. A speedometer tells you how fast you are going, but it doesn’t tell you how fast you could be going. You need a competitor to tell you if you have greater potential. It’s easy to think that you’re doing your best, but usually you aren’t. Besides,” I continued, “we were able to learn a trick from him. When the wind turned light and we were wallowing in the swells, we saw that he had vanged his boom down hard. We weren’t used to doing that, but we gave it a try and it helped.

 

“All the other crews thought they were doing their best, but they couldn’t see the other boats because of the fog. I know most of the other crews and they’re not lazy. It’s just hard to be fast when you’re out there by yourself.”

 

John finished his beer and stood up. “Well, Doctor, I’ve got to run. Thanks for the story. But I really would like to sit down some time and talk with you about the danger of foreign competition.”

 

“I thought that’s what we’ve been talking about,” I replied.

William B. Conerly, Ph.D. is the principal of Conerly Consulting, an economic and financial consulting firm, and chairman of the board of Cascade Policy Institute, Oregon’s free market research center. An avid sailor, he races his sailboat Strange Bird as often as he can.

Read Blog Detail

Raising Taxes Won’t Reduce the Deficit

With just weeks to go before America slides off the so-called Fiscal Cliff, many politicians and pundits argue that we must forge a “grand bargain” which includes tax increases and spending cuts. But now, two noted economists have crunched the numbers and conclude that Nobel-Prize-winning economist Milton Friedman was right when he said, “Politicians will always spend every penny of tax raised and whatever else they can get away with.”

 

Stephen Moore of the Wall Street Journal and Richard Vedder of Ohio University recently updated a study done for the congressional Joint Economic Committee in the late 1980s that found every dollar of new taxes led to more than a dollar of new spending by Congress.

 

Moore and Vedder “found that over the entire post World War II era through 2009 each dollar of new tax revenue was associated with $1.17 of new spending. Politicians spend the money as fast as it comes in—and a little bit more.”

 

They looked at different time periods, used different data, altered other variables, and never once found that higher tax collections resulted in less government spending. These results completely counter the argument that we can solve our nation’s fiscal problems by combining spending cuts with tax increases.

 

The “grand bargain” isn’t such a bargain after all. The only way to cut spending…is to cut spending.

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

Read Blog Detail

How Many Feet Should Sellwood’s Sidewalk Be?

If we build a new bridge over the Willamette River, how much space should we allocate for walking and bicycling?

 

This shouldn’t be a very controversial subject, but Oregonian writers Janie Har and Steve Duin have made it one. They both attacked Cascade Policy Institute recently for our efforts to save taxpayers money on the new Sellwood Bridge. Some clarification is in order.

 

Last summer we decided to count all the person-trips going over the Portland Willamette River bridges at the morning peak (7:00 a.m. – 9:00 a.m.) to see what we could learn about space allocation and user demand. One conclusion  is that space per se does not appear to be critical to bridge use by cyclists and pedestrians.

 

For example, the Hawthorne, Broadway, and Burnside bridges all have modest facilities for those modes, yet they have large contingents of cyclists and pedestrians. In contrast, the Morrison Bridge has a new 15-foot, barrier-separated bikeway, yet it is virtually unused. Non-auto travel accounts for only 1.8% of passenger throughput on that bridge

 

Clearly, there are other factors besides dedicated right-of-way that determine the intensity of bridge use by non-motorists.

 

Unfortunately, local politicians haven’t learned from this experience. The new Sellwood Bridge will allocate 24 feet for two motor vehicle travel lanes, 13 feet for cyclists with dedicated bike lanes, and 24 feet for sidewalks. There is no reason to reserve  this much space for walkers. If cyclists are traveling in their own exclusive road lane, a 6-foot sidewalk on each side will be adequate. Such a space reduction would have saved taxpayers some $15-17 million.

 

Also, heavy trucks will be prohibited from using the new bridge, due to a legislative funding dispute. This doesn’t make non-motorists on the bridge better off, but it will increase total regional driving and worsen congestion elsewhere.

 

In an essay published last summer, we criticized the bridge design, noting that trucks should be allowed and that the sidewalks should be narrower. The latter point seemed especially relevant, given that only 2% of all passenger-trips on the current bridge are by walking or cycling, and the potential for drastic increases seems slim given the distance from downtown.

 

Ms. Har, a professional fact-checker, agreed with our 2% claim, but ruled it to be only “half-true” because local planners predict that non-motorized traffic will skyrocket to 19% of all trips by 2035.

 

This is, of course, a computer-generated fantasy. It is not an actual “fact.” We stand by our assessment.

 

Mr. Duin thinks banning trucks is a great idea, while also lamenting the continued use of fossil fuels by motorists. Unfortunately, those two concepts are in conflict. Banning trucks from the Sellwood Bridge will result in greater fuel use, not less.

 

Mr. Duin also supports the 12-foot sidewalks and the extra spending of $17 million for those sidewalks. Apparently, this is more important to him than the basic road maintenance that Portland has abandoned in recent years due to budget cuts at the Portland Bureau of Transportation.

 

Increasing walking and cycling is more complicated than simply providing mega-sidewalks and barrier-protected bike lanes. Planning for future bridges and roads should be based on a realistic assessment of non-motorized use and the cost of providing space.

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

Read Blog Detail

“Pacific Coast Collaborative” Sends Kitzhaber Back to the Future

Last week Governor John Kitzhaber joined with other political leaders in the Pacific Coast Collaborative to call for a carbon tax. This announcement coincided with the official opening of California’s “cap-and-trade” program for reducing carbon emissions.

 

It’s not clear why Gov. Kitzhaber thought it was a priority to fly to San Francisco to make this announcement. Apparently, he’s forgotten that the Oregon legislature considered a “cap-and-trade” program in 2009, and the bill couldn’t even get out of committee – despite the fact that Democrats had a supermajority that year. Like elected officials in most other states, Oregon legislators correctly determined that “cap-and-trade” is just a fancy way of saying “carbon tax,” and taxing energy would be enormously unpopular with voters.

 

The governor is also overlooking the fact that just last year, Oregon left the Western Climate Initiative, a multi-state coalition expressly established in 2007 to facilitate carbon regulation across the West and into Canada. Oregon departed for the same reason every other western state besides California did: Taxing carbon is a political loser. No one outside the far-left environmental movement cares.

 

The job of any governor is to be a leader. Calling for carbon regulations that have been rejected multiple times is the opposite of leadership. Surely Gov. Kitzhaber can find something to do that’s more relevant to Oregon’s future.

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

Read Blog Detail

Why Washington’s Parents Will Love Charter Schools

By Liv Finne

Many parents are pleased voters have passed Initiative 1240, the ballot measure to allow charter schools in Washington state. This is especially true of parents whose children are trapped in failing inner-city schools. Earlier this year Representative Eric Pettigrew, speaking for many low-income families in his South Seattle district, put it this way:

 

“…[E]very year in our district for the last 15, 20 years, maybe longer there’s been a gap – an achievement gap of the students, there’s been a drop-out rate that’s been just unacceptable as far as I’m concerned. And all I’m asking in this [charter school] legislation is an opportunity to move forward and move forward quickly.”

 

Today, in 41 states across the country, 2.1 million students attend public charter schools. This is a fraction of the 55 million students in the U.S., but their parents are glad to have this opportunity. Word is spreading fast among parents that charter schools create environments well suited to student learning. Waiting lists at charter schools have swollen from about 400,000 students just two years ago to 610,000 students today.

 

Defenders of the status quo fear charter schools because they see them as a threat to funding for conventional public schools, even ones that fail to educate students. Actually, charter schools take no money out of public education, for the simple reason that charter schools operate within the public education system. Charter schools do, however, offer a new choice for parents, a choice many of them enthusiastically embrace.

 

Charter schools offer innovative ways to deliver a public school education. Some charter schools offer the famous Montessori school program. Others use cutting-edge computer programs customized to each student’s strengths and weaknesses. Some charter schools specialize in science and math. Others help special needs students, like the new charter school in New Jersey for autistic children.

 

Charter schools are generally smaller than conventional public schools. On average, a charter school enrolls 372 students, about 22% fewer than most other public schools. This allows charter schools to provide more personal attention to students and promotes a feeling of community and security within the school.

 

Many charter schools require student uniforms. Parents often like charter schools for this reason alone. They know that putting on special clothes for school puts children in the right frame of mind for study and learning.

 

Charter schools often have stronger disciplinary policies. Many parents are concerned that conventional public schools expect too little from students in the way of behavior and self-control.

 

Charter schools set high expectations for learning because they must educate students or they risk losing their charter license. Many charter schools outperform neighboring conventional schools, like Massachusetts’ Commonwealth charters, the Knowledge Is Power Program schools in Texas, or California’s Green Dot charters. These schools have either eliminated or significantly narrowed the academic achievement gap.

 

Charter schools set flexible schedules to meet the needs of students. The rigid rules in conventional schools continually distract students from important work in the classroom. Even simple schedule changes require lengthy union negotiations, and many parents wonder whether instruction time for children is being sacrificed to the priorities of adults.

 

Parents in a charter school have a real voice in their local school. They can talk to the school principal and to the members of the charter school board. These local school leaders know they must educate students in order to attract families or face financial pressures to close the school.

 

The charter school structure provides a high level of accountability―to students, to parents, and to the community. In contrast, conventional elected school boards are often more responsive to powerful interest groups than to the concerns of parents.

 

Giving Rep. Pettigrew’s constituents a charter school option is not only the right thing to do, it is the smart thing to do. People in many Washington communities are happy with their schools and see no need to change. That’s fine, but parents in districts that are allowing too many kids to fail will love charter schools.

Liv Finne is the education director at Washington Policy Center, a non-partisan independent policy research organization in Washington state. She holds a law degree from Boston University School of Law and a Bachelor of Arts degree from Wellesley College. Liv is a guest contributor for Cascade Policy Institute, Oregon’s free market public policy research center.

Read Blog Detail

Why Washington’s Teachers Will Love Charter Schools

By Liv Finne

Mr. Bob Dean is a public school teacher and a supporter of Initiative 1240, the ballot measure voters passed this November to allow public charter schools in Washington state. He is the head of his school’s Math Department, teaches Advanced Placement calculus, and is a past member of the State Board of Education Math Advisory Panel. Mr. Dean describes what teachers must endure in traditional schools today:

 

“The public doesn’t understand that today teachers are being told what to teach, how to teach, when to teach and now even how they will grade, and who they will pass or fail. They are forced to use unproven methods that fly in the face of their professional judgment and then blamed for the shoddy results.”

 

Charter schools offer teachers an escape from the unfair burdens imposed on them by traditional school administrators. How do charter schools liberate teachers? Here are six ways.

 

First, teachers in charter schools have the freedom to design their own educational program and to choose the best curriculum for their students. Teachers in traditional schools have to follow orders from so-called “curriculum experts” sitting at desks in the central district, who often require teachers to use unproven teaching methods and curricula.  For example, “curriculum experts” require Seattle teachers to use a “Reform Math” curriculum that does not work well in teaching children math.

 

Second, teachers in charter schools can offer real input into how the school’s money is spent. Under Initiative 1240, charter school principals and teachers will be able to buy the materials, books, and technology they need to help their students. Central district administrators, by contrast, make virtually all spending decisions for local schools and consume precious resources in the process, delivering to schools less than 80% of the funding they should receive.

 

Third, principals and teachers in charter schools can establish a daily schedule that best meets everyone’s needs. One charter school in Arizona, Carpe Diem Charter School, uses technology to provide instruction during a longer school day, then allows students to take Fridays off, and still achieves better learning results for students. Teachers in traditional schools have no control over the daily school schedule.

 

Fourth, teachers in charter schools are evaluated on their performance on an individualized, humane basis by a high-quality principal who knows them well. Teachers in traditional schools in Washington state will soon be evaluated on a complex checklist of factors, reduced to a matrix of numbers, which cannot possibly capture a teacher’s unique and quintessentially singular ability to motivate and inspire students to learn.

 

Fifth, teachers in charter schools benefit from the principal’s ability to place an effective teacher in every classroom. Teachers in traditional schools often receive students in their classrooms who are behind because teachers in earlier grades failed to prepare students properly. Just one weak teacher in a school has a detrimental ripple effect on the many good teachers who receive that teacher’s students in later grades.

 

Sixth, teachers in charter schools are generally happier as professionals because they are allowed to decide what to teach, how to teach, and how to evaluate their own students’ progress. Teachers in traditional schools have seen their authority eroded, as legislatures and district administrators force them to follow the latest education fads. Excellence in education cannot be standardized or mass-produced. Excellence can only be achieved when the principal and teachers work as a team and have the tools they need to deliver quality instruction.

 

Charter schools are an effective antidote to the growing standardization of traditional schools. Charter schools allow teachers the freedom to use their ingenuity, creativity, and energy to individualize the education they offer students.

 

This freedom in the classroom is why charter school teachers in other states have been so successful at educating children, especially the most at-risk and disadvantaged kids. This freedom-to-teach is why teachers in Washington state will love charter schools, now that voters have approved Initiative 1240.

Liv Finne is the education director at Washington Policy Center, a non-partisan independent policy research organization in Washington state. She holds a law degree from Boston University School of Law and a Bachelor of Arts degree from Wellesley College. Liv is a guest contributor for Cascade Policy Institute, Oregon’s free market public policy research center.

Read Blog Detail

What Governor Bradford Learned at Plymouth’s First Thanksgiving

The quintessential American holiday, Thanksgiving evolved from the Pilgrims’ celebrations to thank God for the harvests that saved Plymouth Colony. What most people didn’t learn in school is that nearly half the Mayflower Pilgrims died of starvation in 1621 because many refused to work in the fields, according to colonial Governor William Bradford.

 

Plymouth Colony originally had a socialist economy. Land and crops were held in common. In the words of Governor Bradford, “the young men who were most able objected to being forced to spend their time and strength working for other men’s wives and children without any recompense.” The colonists lacked a universal motivation to work because they were not directly responsible for their own families. Collectivism incentivized colonists needlessly to rely on the efforts of others. Realizing this, Governor Bradford assigned each household its own plot of land. Families could keep what they produced or trade for things they needed. The result was a bountiful harvest in 1623.

 

Instituting private property and a market economy, and respecting the autonomy of the family unit, caused Plymouth to survive. Collectivism and central planning produce scarcity and starvation. Private property, free markets, and personal responsibility lead to prosperity and plenty. And a healthy economy, with strong and independent families, enables a community to help those who genuinely need assistance. All are important lessons for America today from William Bradford’s first Thanksgiving.

 

Read Blog Detail

Why Has Non-Teaching Staff Surged in Oregon Public Schools?

By James L. Huffman, JD

Associate editor of The Oregonian Susan Nielsen says that Governor Kitzhaber and the legislature face a parent rebellion if they don’t figure out how to reduce class sizes pronto. (“Big classes, fed-up families: As Kitzhaber plans for later, parents ask about now,” November 11). Nielsen is surely right that today’s parents won’t wait for the new top-down education bureaucracy while it studies how to educate tomorrow’s kids.

 

But Nielsen’s reference to “a tiny support staff” as part of the problem is puzzling in light of a recent report, entitled “The School Staffing Surge: Decades of Employment Growth in America’s Public Schools.” The report provides a state-by-state accounting of the growth in public school enrollment and employment since 1950. Some will be suspect of the report because it is published by the pro-school-choice Friedman Foundation for Educational Choice. But the data all comes from the National Center for Education Statistics at the U.S. Department of Education, so it warrants attention.

 

The bottom line for the nation is that, between 1950 and 2009, public school employment growth has outstripped public school enrollment growth by a factor of four. In other words, student enrollment has increased by 96 percent, and total public school staffing has increased by 386 percent. Between 1992 and 2009 the numbers look a little better, but personnel growth still out-stripped student growth 39 percent to 17 percent.

 

What are all of these new public school employees doing? A significant number of them are teachers. Between 1950 and 2009 student enrollment roughly doubled, while the number of teachers increased by 252 percent. Between 1992 and 2009 the growth rates were 17 percent for students and 32 percent for teachers. One would expect that with student-teacher ratios declining from 27.5 in 1950 to 15.4 in 2009, there would be a significant improvement in student achievement. But no―according to the National Assessment of Educational Progress, reading scores have declined and math scores have remained level over the past two decades.

 

Even more revealing is the change in pupil-staff (as opposed to pupil-teacher) ratio. It was 19.3 in 1950 and 7.8 in 2009. While student enrollment increased 96 percent, non-teaching administrative and support staff increased 702 percent. The authors of the report estimate that if non-teaching personnel had grown at the same rate as student enrollment and the number of teachers had grown “only” 1.5 times as fast as enrollment, the nation’s public schools would have an additional $37.2 billion to spend each year. That’s enough to give every public school teacher in the nation an $11,700 raise, or to help local governments fund other public needs, or even to give taxpayers significant relief.

 

The picture in Oregon is both worse and worse. From 1992 to 2009 Oregon public school enrollment increased by 15 percent, while the number of teachers grew by 13 percent. Oregon was one of only three states with an uptick in the student-teacher ratio, which is to say a decrease in the number of teachers relative to students. But during that same period, administrators and other non-teaching staff grew by 47 percent—more than three times as fast as student growth. With slightly less enrollment growth than the national average, Oregon has managed to exceed the national average in non-teaching staff growth.

 

If class size really does make a difference, and 37 years of teaching persuade me that it does, Oregon has been putting its limited education resources in the wrong place. Our student-teacher ratio has risen while our student-administrator ratio has dramatically fallen. Of course, it varies from one school district to another; but Oregonians in general should be asking why those who run our public schools have seen fit to increase their own ranks at three times the rate of growth in student enrollment while allowing for a small decline in the number of teachers relative to students.

 

A cynic might say the question answers itself.

Read Blog Detail

How to End Poverty

President Johnson declared a “war on poverty” back in 1964 when the poverty rate was 19 percent. In the 48 years since, we’ve spent over 12 trillion tax dollars fighting poverty. The rate dipped below 11 percent in 1973, but is now back up over 15 percent. Forty-six million Americans are in poverty today. A new report from the Cato Institute, The American Welfare State, concluded that “clearly we have been doing something wrong.”

 

This year Cato finds that the federal gov­ernment will spend more than $668 billion on at least 126 different programs to fight poverty. State and local governments will spend an additional $284 billion. So, we’re spending nearly $1 trillion every year to fight poverty. That amounts to $20,610 for every poor person in America, or $82,440 for a family of four.

 

Yet, the government considers a family of four to be poor if its cash income falls below $23,050, which is less than one-third the amount taxpayers are spending to help them. Where does all that money go?

 

The solution seems simple. Instead of spending a trillion dollars every year fighting poverty, why not just cut checks to the poor and be done with it? We could raise every poor person out of poverty and still return hundreds of billions of dollars back to the taxpayers. And if we hurry, it could all be done by Thanksgiving.

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

Read Blog Detail

What Is Food Freedom?

Please join us for Cascade’s monthly Policy Picnic Thursday, November 15 at noon. Cascade Board Member and attorney Gilion Dumas will discuss the idea of Food Freedom.

Food Freedom is the rallying cry for those committed to free choice in the foods we eat and feed our families.

The general idea is to keep all food choices legal – whether healthy, unhealthy, local, global, fresh, frozen, or french fried. The goal is to limit government regulation that comes between your fork and your mouth.

Although the general idea is broad, supporters of Food Freedom tend to be particularly interested in certain issues, and these issues tend to focus on smaller producers and local markets. These issues include raw milk, farm-direct meat, pastured poultry, the farm sale of processed foods, and the sale of “home-made” food products.  Food Freedom advocates also find themselves arguing against bans and restrictions on what farmers can grow, restaurants can sell, chefs can cook, and consumers can eat.

Admission is free. Please bring your own lunch. Coffee and cookies will be served. Space is limited to ten guests on a first come, first served basis, so sign up early. To RSVP, email Kathryn Hickok at kathryn@cascadepolicy.org or call 503-242-0900.

Read Blog Detail

Portland’s Moody Avenue Project: Subtraction by Addition

Portland Mayor Sam Adams announced Monday that the reconstruction of Moody Avenue in the South Waterfront neighborhood was finally complete after 19 months of work. This $51 million project rebuilt 3,200 linear feet of the street by raising it 14 feet and widening the right-of-way to 75 feet, enough space to accommodate a six-lane freeway.

 

However, despite the huge expansion, motorists are actually worse off than they were before. Only two lanes are reserved for motor vehicles, and they now have to share space with the slow streetcar, which blocks traffic four times an hour in each direction. Virtually all of the new right-of-way is allocated to bicyclists and pedestrians, who only account for 13% of total passenger throughput on the street.

 

Motor vehicles do the heaving lifting, moving 63% of all passenger trips on Moody. Not only is this a large number, but it’s growing: Auto traffic is up 55% from just two years ago. As the district continues to develop, this road will be unable to handle future traffic loads.

 

The Moody Avenue project was a waste of $52 million, and it now has the South Waterfront district locked into a street pattern that is doomed to fail. Taxpayers should demand better from their elected leaders.

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

Read Blog Detail

Is Driving Less a Good Thing?

Recently, the Metro Council received the results of a four-county household travel survey – the first such survey conducted by its staff since 1994. Among other things, the results showed that 81% of all regional commuters use a car to get to work, compared with 90% in 1994.

 

Metro Councilors were very excited by this apparent drop. They immediately took it as proof that the agency’s anti-car, pro-density policies are “working.” Council President Tom Hughes directed staff to quickly come up with a favorable “storyline” for the survey.

 

However, that may be a difficult task, because the evidence about regional travel patterns is more nuanced than it appears. For example, automobile commuting has dropped, but that has generally not translated into higher transit use. In fact, market share for transit in Portland has flat-lined for the past 12 years, as shown below. Travel is shifting to biking, walking, and telecommuting.

 

Mode Share for Weekday Commuting in Portland

1997-2012

 

Mode

1997

2000

2004

2008

2010

2012

Auto

80%

77%

80%

73%

69%

67%

Transit

10%

12%

11%

11%

12%

12%

Drive/transit

2%

2%

2%

4%

Bike

3%

3%

4%

8%

7%

7%

Walk

5%

5%

4%

4%

6%

7%

Other

7%

6%

                  Source: Portland Auditor’s Annual Community Surveys

 

This has caused a large mismatch between mode-shifting trends and public expenditures. Since 2000, we’ve opened a commuter rail line, created the Portland Streetcar, added four new light rail lines, approved construction of a new transit bridge over the Willamette River, and watched TriMet’s annual budget grow by 142%. Yet, the transit market share for commuting is stuck at 12%.

 

Even worse, transit share is actually declining in TriMet’s most natural market, downtown Portland. According to the Portland Business Alliance, between 2001 and 2010 the transit share of commuting travel for downtown workers dropped from 45% to 38%.

 

Other travel behavior metrics are equally puzzling. For instance, Metro regularly keeps track of daily vehicle miles traveled per-person (VMTPP) in the region. Since 2000 the VMTPP for Portland residents has declined by 4 percent, from 20 miles per day to 19.2. Yet the daily VMTPP for Vancouver travelers dropped by a much bigger margin, from 21.8 miles to 17.23 – a 21 percent change.

 

So if Metro Councilors hope that their staff will create a favorable “storyline” showing how regional land-use policies have led to reduced driving, they will also have to explain why the drop has been much greater north of the Columbia River.

 

But putting these conflicting trends aside, the biggest problem with Metro’s response to the survey is the agency’s worldview that driving is socially undesirable, so if we have less auto commuting, the region is automatically more “livable.” Not only is there nothing intrinsically wrong with driving, one easily could make a case that high levels of personal automobile use are indicators of an economically vibrant and socially dynamic region.

 

Increased driving is strongly correlated with higher incomes. In the Metro travel survey, transit mode share for households with less than $25,000 of family income was 9 percent, but only 2 percent for households with income greater than $75,000. How many people in the region would be unhappy if all households had incomes greater than $75,000 but transit use dropped as a result?

 

ODOT data shows that for every new job created, we should expect to see another 15,500 vehicle miles travelled each year. If total auto use went up because vast numbers of new jobs were created, would that make the region less livable?

 

And numerous studies have shown that access to a private automobile is critical to improving the economic wellbeing of low-income households, especially for those seeking employment. In fact, a growing number of progressive social service agencies (including at least one in Portland) are now running low-income car loan programs to help get poor people into private wheels. Should we discourage such programs because they cause transit use to drop?

 

Every trip has a purpose. If that purpose can be met best through a privately owned motor vehicle, then it does not make us better off to have politicians artificially discourage auto use by using parking meter revenues to pay for the streetcar, disallowing needed highway expansion, raising the TriMet payroll tax rate, subsidizing high-density projects with tax abatements, and cannibalizing scarce roadway capacity for light rail.

 

Instead of scheming to put a political spin on its new travel survey, Metro should use it to start a new conversation about how to define “livability.”

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

Read Blog Detail

Three Oregon Tax Measures: What They Would Do

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

 

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

 

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

 

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

 

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

 

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

Read Blog Detail

Women’s 2012 “Pocketbook Issue”—Free Contraception?

Common sense should intuit that suppressing the healthy operations of a normal human body is not “preventive” medicine. One might also think it could be an offensive political point to call doing so requisite for women’s workplace advancement. However, the Department of Health and Human Services and President Obama think otherwise. Many women disagree with them.

 

The Affordable Care Act’s contraceptive services mandate requires all insurers to provide as “preventive care,” and without cost to the user, every FDA-approved method of female birth control, potentially abortifacient “morning-after” drugs, and surgical sterilization. In keeping with contraception’s new status as “preventive care,” President Obama recast it as a women’s workplace equity issue during the October 16 presidential debate. He further concluded that not having to pay the bills for their personal choices is an important economic issue for American women:

 

“Now, there are some other issues that have a bearing on how women succeed in the workplace. For example, their health care….In my health care bill, I said insurance companies need to provide contraceptive coverage to everybody who is insured. Because this is not just a—a health issue, it’s an economic issue for women. It makes a difference. This is money out of that family’s pocket….

 

“That’s a pocketbook issue for women and families all across the country.”

 

“Preventive care” guards against diseases or disorders. In contrast, contraception, sterilization, and abortion suppress the normal functioning of a healthy reproductive system or end a pregnancy already begun. Therefore, these services are not preventive care―unless women’s fertility is considered a disorder, and pregnancy a disease. This is a medically inaccurate and denigrating way to think about women and babies.

 

Does it not offend women that government policymakers believe that contraception is considered matter-of-course for achieving career success today and so, by big-government logic, it must be provided to them for free? Fertility and motherhood shouldn’t be considered incompatible with women’s success. Women need workplace policies that accommodate their nature, as opposed to requiring them to imitate men’s. Suggesting otherwise means policymakers think women can’t be women and live a successful 21st century life.

 

Women are diverse, and no one can speak for all women. However, free birth control is most likely not the fundamental “pocketbook issue” facing American women and their families. Many other things, however, could be. To succeed in the workplace and to care for their families, women need the freedom to make responsible choices in every aspect of life.

 

For both women and men to succeed in life and to support their families, government should facilitate an economic and cultural climate in which people can start and expand businesses, try new ideas, find solutions to problems, and keep more of their own hard-earned money. Government should reduce burdensome regulations, lower taxes and fees, refrain from wasting taxpayer funds, and reform entitlement programs that discourage responsibility and encourage multigenerational government dependence. Those are pocketbook issues for American women.

 

Access to affordable quality education is another. In the new movie Won’t Back Down, Jamie (Maggie Gyllenhaal), a low-income mother, wants to stop her daughter from failing in school. In a key scene, she states with determination, “Have you heard about those mothers that lift one-ton trucks off their babies? They’re nothing compared to me.” Women want to send their children to the schools they, not the government, believe are best for them. They want schools to expect excellence, to reinforce their values, and to prepare kids to lead lives of integrity and generosity.

 

Stable families are the ultimate women’s economic issue. A widely cited Brookings Institution study demonstrates that those who graduate from high school, get a job, and marry before having children almost never live in poverty (98%). Brookings’ Ron Haskins recently testified before Congress, “In 2009, the poverty rate for children in married-couple families was 11.0 percent. By contrast, the poverty rate for children in female-headed families was 44.3 percent. The difference between these two poverty rates is a specter haunting American social policy….” Government cannot replace the family as the basic unit of a healthy, upwardly mobile society. A welfare check is a Band-Aid, not a substitute for proactive and responsible decision-making between a woman and a man, marriage, and breadwinning parents in the home. Ever-expanding government programs have not produced the “Great Society,” and free “morning-after” pills don’t mend broken hearts or unhealthy relationships.

 

Women want their daughters to aspire to life-long love and commitment, to nurture high expectations for themselves and their boyfriends, and to create a good environment into which to bring their children. Some also would prefer to spend less time in the paid workforce and more at home with their children. Breathless political rhetoric about a new contraception entitlement is out of touch with women who eagerly hope that soon they and their husbands can afford to have a baby. Higher take-home pay, rather than free birth control, empowers individual women to bring about their unique personal dreams.

 

Women’s aspirations and concerns are not for themselves alone but for all those they love―spouses, children, parents, friends―who need economic and educational opportunities today. Public figures should stop reinforcing the insulting (and false) narrative that women’s economic and social advancement depend on free contraception. They also might reflect on that ancient truth about government promises of which the poet Samuel Johnson hauntingly wrote: “How small, of all that human hearts endure, / That part which laws or kings can cause or cure!”

 Kathryn Hickok is Publications Director at Cascade Policy Institute, Oregon’s free market public policy research organization.

Read Blog Detail

Steve Buckstein debates the merits of Measure 85

Steve Buckstein spoke to the Washington County Public Affairs Forum in September where he spoke out in opposition to Measure 85, a ballot initiative tasked with taking away Oregon’s corporate kicker.

Read Blog Detail

Measure 81 Would Take Salmon off the Table

By Thomas Dulcich and Michael Barton

Oregonians are most fortunate to border the Columbia River, prized for its scenic beauty, recreational opportunities, power generation, irrigation, fishing resources, transportation, and a long list of additional values. We pay for the management of this complex resource with our taxes and utility bills; but if Measure 81 passes this November, Oregonians will have another distinction. We alone will be prohibited from enjoying Columbia River salmon and other fish caught by non-tribal commercial fishers.

 

Measure 81 bans a method of commercial harvest known as gillnetting, but it also includes a stealth provision: a purchase ban for Oregonians only. The “purchase ban,” found in Section 2 (2) of Measure 81, would prevent Oregon buyers and consumers from buying non-tribal net-caught fish from the Columbia River. If you live in Washington, you still would be able to enjoy Columbia River salmon. The same is true if you live in Washington, D.C., or California, or…well, anywhere but Oregon. What justification is offered for prohibiting Oregon buyers and consumers from purchasing Columbia River-caught salmon? None.

 

Measure 81 is the latest effort by sports fishing interests to increase their share of Columbia River fish at the expense of commercial fishing that supplies product to grocery stores and restaurants. Currently, fish are allocated among the small commercial fleet, sports fishers, and tribal fishers (who also oppose Measure 81).

 

What is the source of the conflict? Perhaps it stems from the industrialization of sports fishery and the resulting overcapitalization. The Columbia River commercial fleet, which fishes for consumers, is restricted by “limited entry” laws to a specified number of licenses (only 200 in Oregon). The “guide industry,” which markets day trips for hobby fishermen, is not limited in number by Oregon law. The financial barriers to entry to become a for-profit fishing “guide” are relatively low (a $50 Marine Board license, a pick-up truck, and a boat), so it has been easy, in the absence of limited entry, for this “commercial sport fishing” endeavor to become overcapitalized. Over the past 10 years, hobby fishers got 80% of the Columbia River Spring Chinook and 80% of the sturgeon, while the non-tribal consumer access fleet got 20%. The allocation of other runs also favors recreational fishers. Does it make sense for consumers to get even less?

 

The rationale offered by the backers of Measure 81 includes the claim that removing gillnets from the Columbia River will enhance fish conservation. This idea has been promoted with scary-sounding but unsubstantiated claims of widespread killing of other wildlife by gillnets. In fact, gillnets long have been the only method allowed by law and regulation for the commercial harvest of Columbia River fish, in large part because this is the method which has the least negative impact.

 

While he opposes Measure 81, Governor John Kitzhaber has ordered the Oregon Fish and Wildlife Commission (and has “suggested” to the Washington Commission) that it adopt administrative rules severely restricting the commercial fleet by taking away the mainstream Columbia River and limiting commercial fishing only to very tiny back waters or side channels known as the “select areas.” The governor’s plan also will reduce consumer access to products of the Columbia River, such as the Spring Chinook salmon, Summer Chinook salmon, sturgeon, Fall Chinook salmon, and Coho salmon. The commercial fleet, composed of a few hundred small family businesses and several fish processors (mostly in rural Oregon and Washington), is of the opinion that Governor Kitzhaber’s plan will kill their industry and jobs―not in an overt, sudden way, but instead by slow death.

 

Why should Oregon consumers care about this? First, locally caught salmon is a very healthful source of natural protein, teeming with omega-3 heart-healthy vitamins. Second, Oregon taxpayers (and ratepayers) contribute through their taxes and utility bills to the ongoing work to sustain salmon runs, which must migrate through the hydropower system on the Columbia River and its tributaries. Given this financial investment, it is reasonable that all Oregon consumers―not just hobby fishermen―be able to enjoy Columbia River salmon. Measure 81 and Governor Kitzhaber’s plan are anti-consumer and anti-Oregon, and both should be defeated.

 

Thomas Dulcich is an attorney and one of the 200 Oregon gillnet fishing permit holders. Michael Barton is a member of Cascade Policy Institute’s board of directors.

 

Read Blog Detail

Taxpayers Should Be ReVolted by Green Business Subsidies

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

 

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

 

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

 

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

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

Read Blog Detail

Taxpayers Pay the Difference for ODOT’s Solar Power “Champagne”

By Chris Barton

Imagine heading out to your favorite bar one evening to celebrate the completion of another toiling week at work. Rather than indulging in the comfort of your favorite beer, you decide to loosen up your purse strings and order some champagne. So with only a slight sense of apprehension, you ask the bartender to serve you the best champagne in the house. The glass arrives and you take an inquiring sip. The flavor is unbelievable. The sophisticated mix of flavors is without rival. When the check comes to the table, take a deep breath and prepare for the shock of the sticker price. You flip the bill over and are instantly overcome with incredulity. Only four dollars? You assume the bartender made a mistake. Much to your surprise, he confirms the price. You have had a glass of champagne for the price of a beer.

 

Now, this story may seem purely fictional. Only a business bent on self-destruction would offer such a deal. However, in the world of the Oregon Department of Transportation (ODOT) and the Oregon Solar Highway Project, this is reality. ODOT really is able to get champagne for the price of beer, but one of the unfortunate burdens of living in reality is that someone must pay the difference for the actual cost of the champagne. Who will pick up that tab? The taxpayers.

 

The Oregon Solar Highway Project is the brainchild of Allison Hamilton, an ODOT project director, who was inspired by the solar panels straddling the autobahn highways in Germany.  Oregon Governor Ted Kulongoski declared early in 2008 that Oregon would build the world’s largest solar highway project, consisting of more than 17,000 solar panels with the productive capability of over 3.2 million kilowatt hours per year. This directive was in line with the policies enacted by the Oregon legislature in 2007 calling for a reduction in so-called “greenhouse gas emissions.”

 

The first project of the Solar Highway Program was completed in December 2008 near Tualatin at an intersection between the I-5 and 205 highways. The site, a public-private partnership between PGE and ODOT, has 594 solar panels generating 116,000 kilowatt hours annually. It powers around 30% of the night illumination of the ODOT-run interchange. The total cost of the project was $1.28 million, with most of that heavily subsidized by federal and state tax credits, along with grants including $175,000 from the Energy Trust of Oregon. The estimated cost of this solar energy, measured over a 20-year lifespan, is about $0.55 per kilowatt-hour. On average, the retail cost of energy to Oregon residents is roughly $0.10 per kilowatt-hour.

 

Alternative energy like solar power comes with a premium price tag because the technology is expensive and inefficient, but ODOT does not pay the full price. Thanks to the generosity of taxpayers through various subsidies, ODOT pays standard commercial rates for their solar energy. PGE and ODOT get to drink their champagne cheap while stiffing the taxpayers with the rest of the bill.

 

The Oregon Solar Highway’s next project was completed in January 2012 at the Baldock Safety Rest Area, and it dwarfs the Tualatin site in stature. For $10 million, the Baldock site has a massive 6,994 panels that can generate up to 1.97 million kilowatt-hours annually. PGE and ODOT once again combined to bring this project to fruition, utilizing the same federal and state tax subsidies to finance it. Over a 20-year lifespan, the cost of the solar energy produced will be $0.25 per kilowatt-hour―still more than double the average retail cost of electricity.

 

The cost is likely to be even greater than that, due to the inherent intermittency of solar energy. Since solar panels can produce energy only when the sun is shining, they always must be backed up with a traditional energy source, like natural gas or coal, in order to keep pace with the demands of consumers at night. These traditional power plants must be kept idling, severely reducing their efficiency.

 

A site in West Linn is the next proposed area for a solar energy installation. However, due to the 2012 sunset of the Business Energy Tax Credit (BETC)―a state program that provided a 50% tax break for alternative energy projects―the site is facing difficulties finding financing. The BETC was instrumental in building the other two solar energy highway installations. The expiration of this tax subsidy makes commercial solar power infeasible for private investors. Martin Shain, a consultant with BacGen Solar Group who was involved in structuring a deal for installing solar power on Oregon University System campuses, emphasized the importance of the BETC: “This wouldn’t have happened without the BETC, I can tell you that point blank.”

 

SolarWorld is a local company that provided the solar panels for both the Tualatin and Baldock highway installations and has recently made headlines for its increasing financial instability in the wake of Chinese competition. Founded in Germany, SolarWorld installed a state-of-the-art solar panel factory in Hillsboro to take advantage of the BETC and other local tax subsidies. That investment may turn out to be a failure since SolarWorld is currently being pummeled by the onslaught of cheaper Chinese-produced solar panels. SolarWorld has seen its share price fall to an eight-year low and reported a loss of 159 million euros for the first half of 2012. The company is on the ropes and might have been even closer to an early grave if it had not compelled the U.S. government to impose a 31% tariff on Chinese solar products.

 

Solar power is a clean, renewable source of energy, but it is also much more expensive than energy from traditional sources. Taxpayers should not be forced to pay for these boutique projects through import tariffs, tax credits, and other types of subsidies.

 

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

Read Blog Detail

Like Moths to the Flame

Recently, The Oregonian published a feature story about the Portland Seed Fund. This is a two-year-old “public-private” venture capital fund designed to help start-up companies. To date, the Fund has chosen 17 companies to work with, and each one has received $25,000. The public money includes $800,000 from Portland, $500,000 from the Oregon Growth Account (a state-run fund financed with Oregon Lottery dollars), and $250,000 from Hillsboro. This is blended with roughly equal amounts of money from private investors.

 

The Oregonian put a very positive spin on the concept. “We’ve learned that the model can really work in Portland,” said Jim Houston, one of the two fund managers. Amber Case, whose company Geoloqi received support last year, said, “I think it’s really important for the city [Portland] to be involved because it shows that they care.” Jefferson Smith, a state legislator running for mayor of Portland, added that the fund represents an opportunity to “build on what we’re good at.”

 

This is the way it always is with public slush funds. Politicians, fund managers, grant recipients, and editorial board writers all think it’s a great idea to hire smart people to sit at a roulette wheel with public money and pretend that they are making great public investments. There is never a concern that maybe this is not a proper role for government, nor is there a willingness to learn from history. And one doesn’t have to go too far back in time to learn.

 

The Oregon Growth Account, for example, was created by the state legislature in 1995. It was funded with state lottery dollars, and its mission was to “launch and expand young Oregon companies” (funds could not be spent out of state, even if the in-state opportunities were mediocre). As of March 2011, the fund had $105 million in various accounts.

 

In a January 2011 memo to the Oregon legislative assembly, fund managers admitted, “The internal rate of return since inception is negative 7.9%. The current value of the OGA portfolio is less than the money that has been invested to date.”

 

Not satisfied with this failure, in 2001 the state legislature created the Oregon Resource and Technology Development Subaccount (ORTDS) within the OGA. The legislative mandate was to “make seed capital investments in emerging growth businesses,” which sounds a lot like the mission of the OGA itself. The legislation stipulated that the first $4 million of funds credited to the OGA be allocated to the subaccount, in addition to a direct allocation of $5 million from the legislature. As of September 20, 2010, this fund had a return of negative 17.8%.

 

Of course these are just parochial Oregon experiences, but history repeats itself everywhere. Few people remember, but at the turn of 19th century, consumers could buy new-fangled horseless carriages from three distinct categories―steam-powered, electric, or gasoline-powered with the internal combustion engine. It was not at all clear which technology would become dominant. A great deal of money was lost by private investors betting on steam-powered or electric cars.

 

If a politician had decided to pick the internal combustion engine and wanted to spend tax funds subsidizing hot start-ups, the name Henry Ford probably would have emerged. In retrospect, this sounds like it really would have paid off―except for the fact that between 1899 and 1903 Henry Ford founded, and bankrupted, two motor vehicle companies. He didn’t become successful until he formed the Ford Motor Company in June of 1903.

 

So how would politicians have known in 1899 which of the Ford companies was going to change the world? They wouldn’t have. Nor could they have successfully picked any other great companies. Between 1900 and 1908, 502 car manufacturers were launched in the U.S., and 302 either folded or shifted to another line of business. Most companies formed before 1905 never paid back a cent to investors, and the majority never built a single car.

 

This should be humbling to anyone charged with managing public funds, but Oregon politicians are infatuated with the idea of designating certain economic sectors as “the next big thing” and then subsidizing them with tax dollars. Sometimes they even double down by mandating that we also buy the products of politically chosen industries, such as the requirement that Oregon electric utilities purchase 25% of their electricity from money-losing “green power” sources like windmills and solar panels.

 

Unfortunately, a dynamic market economy doesn’t work that way. Consumer preferences can change in a moment, technology becomes obsolete, and old businesses are supplanted by competitors in a never-ending process of “creative destruction.” It’s a fool’s errand to think that politicians and their appointed underlings can predict the future successfully. Nobody can predict the future, so the only people who should invest in start-ups are private individuals gambling with their own money.

 

The state legislature will reconvene in February. One of the first orders of business should be to euthanize every state-sponsored “investment” fund. Subsidizing politically chosen private firms is simply not a proper role for government, regardless of the return on investment.

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

Read Blog Detail

Wind Energy Can’t Stand Alone

A new Cascade Policy Institute–Reason Foundation study finds that wind energy is not suited to be the lone or primary source of a grid’s total electricity, due to its variable nature. If used to produce more than 10-20 percent of a system’s electricity, wind power increases operating costs because it requires expensive storage facilities or continuously available carbon dioxide-emitting backup power generation facilities.

 

In the Pacific Northwest, the backup to wind power has been provided by the Columbia River hydro system. However, hydroelectricity has even less carbon dioxide associated with it than does wind power. Displacing hydropower from the grid in favor of wind is actually a step backwards from the standpoint of reducing greenhouse gas emissions.

 

Two factors drive Oregon’s policy preference for wind power: subsidies to producers and Senate Bill 838’s Renewable Portfolio Standards. The Renewable Portfolio Standards force large utilities to procure 25% of their total power from politically designated “green power” sources by 2025. Both policies amount to a multi-billion-dollar tax on ratepayers, with net negative benefits for environmental quality.

 

As this study shows, policies favoring wind power are a mistake from both an environmental and an economic standpoint. Oregon legislators should repeal SB 838 and all wind power incentives in 2013.

 

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

Read Blog Detail

Cascade Update

Want to know the latest happenings at Cascade Policy Institute? Click here to see our Fall newsletter!

Read Blog Detail

Why we Left the Left

Please join us for Cascade’s monthly Policy Picnic Wednesday, October 17 at noon. Cascade CEO John A. Charles, Jr. will discuss his intellectual journey from leading a well-known environmental group to becoming the president of Oregon’s only free market think tank.

Why is central planning such a seductive concept? And why do some people embrace planning and then leave it behind? John recently published an essay on this topic in the book Why we Left the Left, and participants in the Wednesday lunch will receive a shortened version of the essay.

Admission is free. Please bring your own lunch. Coffee and cookies will be served. Space is limited to ten guests on a first come, first served basis, so sign up early. To RSVP, email Kathryn Hickok at kathryn@cascadepolicy.org or call 503-242-0900.

Read Blog Detail

Why We Left the Left

Please join us for Cascade’s monthly Policy Picnic. Cascade CEO John A. Charles will discuss his intellectual journey from leading a well known environmental group to becoming the President of Oregon’s only free market think tank.

Why is central planning such a seductive concept? And why do some people embrace planning and then leave it behind? John recently published an essay on this topic in the book Why we Left the Left, and participants in the Wednesday lunch will receive a shortened version of the essay.

Admission is free. Please bring your own lunch. Coffee and cookies will be served. Space is limited to ten guests on a first come, first served basis, so sign up early. To RSVP, email Kathryn Hickok at kathryn@cascadepolicy.org or call 503-242-0900.

Read Blog Detail

Statement on Oregon’s Measure 80 Ballot Initiative

PORTLAND, Ore- The eight members of Cascade Policy Institute’s Board of Directors have released the following statement on Oregon’s Measure 80 Ballot Initiative.

“It is time to legalize marijuana in Oregon. The long-standing prohibition on possession and use of marijuana has never served the public interest and has generated a significant amount of collateral damage. Prohibition increases the retail price of the product, which can fuel property and other real crimes as some users turn to theft to pay for it. Prohibition drives the market into the underground economy where disputes are settled with violence, creates opportunities for corruption among law enforcement personnel, and makes it difficult to provide assistance to those with addiction problems. Prohibition also turns otherwise law-abiding citizens into criminals and reduces respect for our justice system in general.”Given that other consumer products such as lottery games, motor vehicles, tobacco, and alcohol are all legal despite health and safety concerns to both users and non-users, the continued prohibition on marijuana stands out as a costly anachronism in state policy.”Unfortunately, Measure 80 is much more than a legalization measure. The proposal includes several other elements that are unnecessary or undesirable. As a result, pro-freedom voters could decide either way on this particular measure.

“On the positive side, under Measure 80, hemp production for fiber, protein, and oil is allowed without regulation, license, or fee. This brings a beneficial agricultural commodity onto the commercial market. Cultivation and possession of cannabis for personal, noncommercial use is also allowed and does not require a license or registration. This reflects the proper role of government in marijuana use, which is to allow responsible adults to make their own decisions without passing judgment about whether such use is good or bad, and without creation of new agencies or fee structures.

“Cannabis cultivation for commercial use is allowed, but only through a permit system run by a new bureaucracy, the Oregon Cannabis Commission (OCC). This is the beginning of ‘mission creep’ for Measure 80. The OCC emulates Oregon’s liquor monopoly by creating a state-run retailing program, except it is worse than the OLCC because five of the seven people who would serve on the OCC are directly elected by growers and processors of  cannabis licensed by the OCC. The state monopoly would be further strengthened by the fact that import or export of cannabis from Oregon remains illegal.

“OCC ‘contractors’ (presumably retailers) would automatically receive 15% of gross sales, a metric not explained or justified anywhere in Measure 80 itself.

“Perhaps the most troubling aspect of the Measure 80 regulatory scheme is that it attempts to ‘buy off’ opposition by liberally spreading marijuana profits around. This is immediately obvious by the formal title of the measure itself: the Oregon Cannabis Tax Act. It is first and foremost a new tax revenue program, not a civil liberties program. The state general fund would receive 90 percent of net revenues, which proponents have used to market this as a ‘pro-schools’ measure. Only seven percent of net revenues would go to drug abuse treatment programs, and the remaining three percent of funds would support two new agricultural commodity commissions and a drug education campaign in schools.

“A major problem with this new tax program is that it would worsen what is already a serious ‘moral hazard’ problem for state legislators, by handing over a lucrative new revenue stream from the sale of cannabis. This not only encourages them to spend more, it creates a vested interest in the growing and selling (for profit) of cannabis through state outlets.

“Legislators already face this problem with gambling, tobacco, distilled spirits, and gasoline. In every case, the track record over time has been to market these products more aggressively and/or raise excise tax rates in order to feed legislative spending habits.

“In fact, legislators are not content to simply spend the money received each year from these products; they routinely mortgage the future by selling bonds to Wall Street, to be paid back with earnings from the sale of the taxed products over a 20-year period. Once the Oregon Treasury is legally obligated to pay off bondholders, the state clearly becomes dependent on ever-greater levels of consumption.

“If marijuana is legalized for the primary purpose of raising tax money for the state, bond debt will grow, and the state will become an overt promoter of marijuana sales through the OCC.

“In legislative parlance, Measure 80 is a ‘Christmas Tree’ bill. It features a fundamentally good policy as the tree – ending the disastrous prohibition on cannabis use – but then weighs it down with extraneous features designed to please many different constituencies. The thinking behind such a strategy is that since the bill contains something for (almost) everyone, a plurality of voters will embrace it, however reluctantly.

“We cannot cross that threshold. We neither support nor oppose Measure 80. We urge voters to read the measure carefully and decide for themselves if this is a ‘package deal’ they are comfortable with.”

 

Read Blog Detail

Kathryn Hickok discusses the merits of the proposed Multnomah County Library taxing district measure

The League of Women Voters of Portland hosted a debate on local ballot measures, where Cascade Policy Institute Publications Director Kathryn Hickok debated the merits of the proposed library taxing district for Multnomah County.

Read Blog Detail

Sustainability Center Finally Euthanized

Reckless spending is such a way of life in Oregon politics that it is truly noteworthy when a wasteful project is terminated. Such is the case with the proposed Oregon Sustainability Center, a green building Taj Mahal that was pushed for the last four years by Portland State University and the City of Portland.

 

The building was originally envisioned to have 13 floors at a cost of $121 million, but went through steady downsizing as political reality set in. When Portland Mayor Sam Adams finally threw in the towel last week, the project had been whittled to seven floors for $62 million, but the basic problem remained: The finance model was unsustainable.

 

Project backers had always assumed that the Oregon legislature would provide the necessary subsidies; but during the 2011 legislative session, House Republicans withheld all support, and they were joined by influential Senator Betsy Johnson, a Democrat. By early 2012 it was clear that state subsidies would not be forthcoming.

 

Proponents claimed the building would have been a hub for innovation in green building design, but that was never a valid reason to build it. Such research is highly speculative and only should be financed by private investors. The proper role of government is to encourage innovation through low tax rates, minimal regulation, and enforcement of property rights.

 

*Cascade Policy Institute consistently opposed the Oregon Sustainability Center throughout its planning process. See John Charles’s March 2010 guest column published in Portland Business Journal, explaining why the Sustainability Center has never been sustainable.

 

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

 

Read Blog Detail

Charters Can Expand Children’s Options in the Evergreen State

By Paul Guppy

The school bell rings, and rows of eager young faces turn expectantly to the front of the class as the teacher begins the day’s lesson. These students look forward to graduation day, when they hope to embark on a future made brighter by a good public education. Sadly, for nearly half the students at some public schools, that day will never come. They will drop out instead.

Why would loving parents tolerate a school that fails to educate their children? Often it is because they have no choice. District officials assign students to schools, primarily based on their ZIP codes, and many families can’t afford private school tuition.

Charter schools, which have existed for over 20 years, are an alternative within public education which can give parents and children another option besides traditional neighborhood public schools. Today, 41 states and the District of Columbia have charters, serving about two million children attending nearly 5,600 schools. A further 600,000 students are on waiting lists.

Charter schools are community-based, tuition-free, and open to all students. They must meet academic standards and provide the same equal treatment and public safety protections as other public schools.

Thirteen years after Oregon’s charter school law was passed, 115 charters operate in Oregon. Washington State has no charters, but voters there have a chance to change that in November. Washington’s Initiative 1240 would create a modest charter school program. The initiative would allow up to 40 public charter schools over five years within the state system of 2,345-schools, with up to eight new schools allowed each year. Priority would be given to charter schools serving at-risk children or students attending low-performing schools.

Charter schools allow principals flexibility in areas like scheduling, teacher hiring, budgeting, curriculum, and community relations. A charter school can offer longer instructional hours and be open to students on evenings and weekends, regardless of central district rules.

Charter school enrollment is voluntary. If more families apply than there are spaces available, students are chosen by lottery. Charter schools cannot discriminate on the basis of race, ethnicity, sex, disability, or other protected categories .

Several large-scale studies show charter schools perform better in educating hard-to-teach students than do conventional public schools. For example, a Massachusetts study found that “Charter Schools in Boston are making real progress in breaking the persistent connection between poverty and poor [academic] results.” Researchers found that New York City charter school students scored 31 points higher in math and 23 points higher in English than similar students in nearby schools.

Charter schools have become a well-established educational option in Oregon and across the country. Enrollment is growing in schools which are in high demand by parents. Oregon’s Corbett Charter School was ranked second in the nation by the Washington Post in 2012.

Charter schools can play an important role in helping parents successfully educate their children. Unfortunately, defenders of the educational status quo in Washington (like defenders of the status quo elsewhere) vigorously oppose allowing charters to open there. Parents deserve better. The vast majority of Washington’s public schools would be unaffected; but for many low-income and minority children, access to a charter school could prove to be their best chance for a better life. It’s time that Washington parents had more control over the educational options available to their children―options currently available in most other states. Washington voters have the opportunity this November to make that happen.

Paul Guppy is the vice president for research at Washington Policy Center, a non-partisan independent policy research organization in Washington State. He is a guest contributor for Cascade Policy Institute, Oregon’s free market public policy research center.

Read Blog Detail

Wind Power Can’t Cost-Effectively Be a Large Grid’s Main Source of Electricity

PORTLAND, Oregon—Because of its variable nature, wind energy is not suited to be the lone or primary source of a grid’s total electricity, according to a new Cascade Policy Institute–Reason Foundation study. If used to produce more than 10-20 percent of a system’s electricity, wind power increases operating costs, due to the need for expensive storage facilities or continuously available CO2-emitting backup power generation facilities.

 

In the Pacific Northwest, the backup mostly has been provided by the Columbia River hydro system. However, since hydroelectricity has even less CO2 associated with it than wind power does, displacing hydropower from the electricity grid in favor of wind is actually a step backwards―if reducing greenhouse gas emissions is a policy objective, as it has been for Oregon legislators.

 

The new Cascade Policy Institute–Reason Foundation report uses a full year’s worth of hour-by-hour power grid data from PJM Interconnection, which manages the electrical grid in part of the Eastern United States, to simulate how wind would have supplied the necessary power to customers in 2009. The models show wind power would have failed to supply all the electricity PJM customers needed over 50 percent of the time.

 

Thus, if wind were to produce a large percentage of a grid’s electricity, it would be necessary to build expensive energy storage facilities, or to reserve power generation facilities to supply power, when there is insufficient wind to meet energy demands at any given time and to prevent brownouts and blackouts.

 

“Consumers will have to pay twice for power, since they will be supporting two duplicate generation systems,” said Cascade Policy Institute President and CEO John A. Charles, Jr.

 

The study shows that as more reserve power is needed, the environmental benefits of wind power decrease due to the C02 emissions from those facilities, which rely on fossil fuels and must operate even when not being used, in order to ensure reliability of the electrical grid.

 

In the future, the hydro system will be over-committed due to salmon mitigation requirements; thus, natural gas will have to be the backup for unreliable wind. Since gas-powered generators must be kept running 24 hours per day even if no electricity is required (the so-called “spinning reserve” mode), this practice will dramatically increase total energy consumption and greenhouse gas emissions for the region.

 

The study concludes that, given the costs involved, the practical upper limit for wind power’s contribution to the electricity grid is 10% of the total energy mix. This would result in a 9% reduction in CO2 emissions.

 

The current mania for wind power in Oregon is being driven by two factors: (1) subsidies to producers; and (2) SB 838 Renewable Portfolio Standards, forcing large utilities to procure 25% of their total power from politically designated “green power” sources by 2025. Both policies amount to a multi-billion tax on ratepayers, with net negative benefits for environmental quality.

 

“Very high wind penetrations are not achievable,” said William Korchinski, author of the Cascade Policy Institute–Reason Foundation study. “As wind’s share increases, system reliability will be adversely affected disproportionately—unless adequate reserve power is available. That power reserve is expensive and lowers any possible environmental benefits.”

 

“As this study shows, policies favoring wind power are a mistake,” Charles concluded. “Oregon policy makers should repeal SB 838 and all wind power incentives in 2013.”

 

Full Study Online

 

“The Limits of Wind Power” is available online here.

 

About Reason Foundation

 

Reason Foundation is a nonprofit think tank dedicated to advancing free minds and free markets. Reason Foundation produces respected public policy research on a variety of issues and publishes the critically acclaimed Reason magazine and its website www.reason.com. For more information, please visit www.reason.org.

 

About Cascade Policy Institute

 

Founded in 1991, Cascade Policy Institute is Oregon’s premier policy research center. Cascade’s mission is to explore and promote public policy alternatives that foster individual liberty, personal responsibility, and economic opportunity.

To that end, the Institute publishes policy studies, provides public speakers, organizes community forums, and sponsors educational programs. For more information, visit www.cascadepolicy.org.

Read Blog Detail

Won’t Back Down

It’s not often that a Hollywood movie both entertains and helps parents learn about another option to improve their children’s education. The film Won’t Back Down which opened everywhere last Friday, does both.

Inspired by actual events, it’s the story of a third-grade student trapped in a failing public school. Unable to afford a private education, her mother, played by actress Maggie Gyllenhaal, learns about parent trigger laws, now the reality in seven states, which allow parents to take control of such schools and institute improvements.

Gyllenhaal enlists the help of a dedicated teacher in her daughter’s school, played by actress Viola Davis, to jump through the myriad of hoops put in their way. Together, they learn how to fight not only the bureaucracy, but the powerful teachers union, personified by actress Holly Hunter.

The film explores the complex relationships among good teachers, bad teachers, and a union whose leader once famously said he’d represent the interests of school children when they started paying union dues. Poor parents who want the best for their children are given a glimpse of the educational choices that those with political power are able to make.

Surprisingly, the good guys aren’t all good, and the bad guys aren’t all bad, in this multi-layered drama. Parents, taxpayers, and movie fans alike will find Won’t Back Down worth the ticket price. See it soon.

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

Read Blog Detail

Oregon’s Real Education Spending Has Quadrupled Since 1957

Advocates on all sides of the public education spending-versus-results debate can cite various statistics to make their respective cases. Some argue that more money leads to better results. Others (myself included) cite studies that show spending more dollars per student―at least in the ways our public school system has spent them―makes little or no difference in educational outcomes.

Now, another fascinating fact has come to light. Oregonian education reporter Betsy Hammond recently wrote an article about what she found in an old 1957 U.S. Census document entitled “Finances of School Districts.”It turns out that Oregon spent more per pupil that year than any other state―a whopping $356, which was almost 40 percent more than the national median of $256. Of course, these were “current operating expenditures” and likely excluded items such as construction and debt service, which today raise total per pupil spending on the order of sixteen percent.

While Hammond didn’t inflation-adjust those numbers to what they would be today, it’s easy enough to do. Using the U.S. Bureau of Labor Consumer Price Index Calculator, Oregon’s $356 in per student spending in 1957 dollars is the equivalent of about $2,919 in today’s dollars.

So, what are we actually spending per pupil in Oregon today? The latest full data reported by the nation’s largest teachers union, the National Education Association, shows Oregon spent $11,391 per enrolled student in the 2009-10 school year. That’s nearly four times what we spent in 1957. And while it is about four percent below what was being spent nationally ($11,841), when you compare that difference to the fact that per capita income of Oregonians recently has been almost nine percent below the national average, you will see that Oregonians are actually funding our public schools at a higher level than the nation, compared to our ability to pay.

Even acknowledging that there are slightly different ways to count students (enrolled, average daily membership, fall enrollment, etc.) and different ways to tally spending (current or total), the order of magnitude between what we spent in 1957 and what we spent recently is so large that such differences pale in comparison.

Any way you look at the numbers, after adjusting for inflation, Oregon is spending several times what we spent per public school student in 1957. So, what are we getting for that increase?

State by state educational outcome comparisons are hard to come by for the 1950s, but more recently the national publication Education Week has rated all state school systems on a number of criteria. In 2010, 2011, and 2012, Oregon ranked 43rd overall, which gave us a C- report card score. On K-12 Student Achievement alone, we rated a D all three years. Unless Oregon rated an F on some similar scale in 1957, it is hard to see how spending nearly four times as much per student as we spent then is giving us any appreciable bang for our harder-to-come-by bucks.

So, rather than look for ways to spend in real terms, say, five times what we did in 1957, we should let families spend the dollars we do have on the public, private, religious, or home schools of their choice. School choice breaks up the monopoly control of teachers unions and the educational establishment. Unleashing consumer power gets more bang for the buck in other areas of the economy; it’s time to put it to work in education.

Read Blog Detail

Hospital Apologizes, PDC Repeats the Tragedy

Last Friday, Legacy Emanuel Hospital held a breakfast to apologize to the North Portland community for bulldozing nearly 300 homes and businesses 40 years ago. Hospital administrators conspired with Portland urban renewal officials to secretly plan a 55-acre expansion in the Albina neighborhood. By the time affected property owners were informed, the final decision had been made. The city used its powers of eminent domain to seize all private property within the district, destroying a vibrant African American community.

Hospital officials now admit they were wrong and promise never to do it again. Unfortunately, their colleagues at the Portland Development Commission (PDC) haven’t learned the same lesson. PDC is teaming up with TriMet to build the Portland-Milwaukie light rail line. Sixty-eight businesses and twenty residences will be destroyed to make way for the slow train, at a taxpayer cost of $1.5 billion.

This is a tragic waste of money, time, and energy. The Portland-Milwaukie corridor is already served by five TriMet buses, including express and local service. There will be no public benefits to the light rail line, yet 88 private buildings will be lost.

If urban renewal officials refuse to learn from experience, we should take away their powers. The State of California did this last year when it abolished all urban renewal districts. Oregon should do the same when the legislature convenes in 2013.

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

Read Blog Detail

Doubling the Sellwood Bridge for the Use of the Two Percent

By Michael Nielsen

For more than six years, Multnomah County has been considering how best to replace the Sellwood Bridge. The adopted plan calls for removing the current bridge and replacing it with a new one that is twice as wide.

However, none of the new space will be available for cars, even though cars carry nearly 98% of all passenger-trips during the peak hours. Only about 40% of the new bridge will be allocated to vehicular travel, with the other 60% dedicated to non-motorized transportation in the form of bikeways and mega-sidewalks.

The new bridge does need more space for cyclists and pedestrians because the current bridge was never designed for them. There are only about four feet for cyclists and pedestrians to maneuver around each other. However, there is no reason to allocate 60% of bridge space to satisfy two percent of all travelers.

County Commissioners were recently shocked to discover that the price tag for the bridge has increased by $70 million since last year. If planners want to save money, they should reduce the width of the bridge. Planning for two 12-foot sidewalks to accommodate a few hundred pedestrians is simply a waste of resources. Thirteen feet in all will be added to please the bikers. It is important to be honest about how people actually use this bridge. During rush hour, every time 1,200 people cross the bridge via motor vehicle, only about 21 cross the bridge on bikes. Furthermore, only three cross the bridge by foot.

In addition, the new Sellwood Bridge will have a weight capacity of only 13 tons, excluding many commercial and private trucks from crossing the bridge. Before 2004, the old bridge was thought to hold a maximum of 32 tons. Since then, however, it has been deemed unsafe for anything over ten tons. According to Multnomah County’s website, “weight limits prevent many companies from using the bridge, forcing out-of-direction travel that adds to congestion on other routes and increases costs to businesses and consumers.” While the weight capacity is being increased slightly, it will be impossible for heavier trucks to use the bridge.

Given the above criticisms, the new Sellwood Bridge could be built more effectively in a number of ways. Reducing the width and increasing the weight capacity would serve the needs of the community better. The savings from the width modification could be more efficiently used to increase the structural integrity of the bridge. This would not force large trucks to go out of their way downtown in order to cross the river.

With the total cost of the bridge at approximately $299 million, planners should look for opportunities to cut expenses. When considering the odd and, at times, useless characteristics of the bridge (along with the half million dollars being spent on decorative columns), it is hard to justify the current plans from a cost efficiency perspective.

Much of the thought process going into this plan has been political in nature. This is an effective strategy only when the purpose of building a bridge is to make Portland appear more bike-friendly. Ultimately, the cost of the new Sellwood Bridge will be paid by taxpayers. It is only just that the real transportation needs of the community be addressed by the bridge’s capacity and design.

Michael Nielsen is a research associate at Cascade Policy Institute, Oregon’s free market public policy research center. Nielsen is a student at California State University, Chico.

 

Read Blog Detail

“A Republic, If You Can Keep It”

Our Constitution is 225 years old this week. In a famous story, a woman asked Benjamin Franklin, “Well, Doctor, what have we got, a republic or a monarchy?” He replied, “A republic, if you can keep it.”

Constitutionally limited government was our new country’s distinctive characteristic. But while we have rights as individuals, we are also members of society. Limited government works best when our common values act as our rights’ line of first defense. John Witherspoon, a member of the Continental Congress from New Jersey and a signer of the Declaration of Independence, wrote: “A Republic must either preserve its virtue or lose its liberty.”

Personal virtue, honesty, responsibility, and courtesy are the basis of relationships, communities, and a sound marketplace. Expanding government regulations will fill the vacuum created when people don’t respect each other, keep their word, or deal fairly with others. Every time we experience an epic failure of honesty, integrity, and justice, government responds with thousands of pages of laws and regulations.

Defending American freedom and minimizing intrusive government require both standing up for our founding principles and proactively living with integrity. “Character,” it is said, “is doing what is right when no one is looking.” If we do that, we’ll keep our Republic. When we don’t, government will arbitrate, and regulation will increasingly dictate every aspect of American life.

Kathryn Hickok is Publications Director and Director of the Children’s Scholarship Fund-Portland program at Cascade Policy Institute.

 

Read Blog Detail

The Unsustainability of Green Buildings

By Victoria Leca

Portland politicians and civic leaders have tried to “brand” the city as a world leader in “sustainable development” for the past decade. Now that Portland has so many buildings built to so-called “green standards,” it’s appropriate to take a look back at the track record.

One of the first eco-buildings built in Portland with help from the local government was Viridian Place in Lake Oswego. It is a three-story office building with 15,000 square feet, built by Blazer Development and CES Northwest. Construction on the building began in 1999, and the building opened two years later. The cost was $2 million or $130 per square foot. It has maximum exposure to sunlight, low-flow water fixtures to cut use by 20 percent, and efficiency measures to reduce energy consumption by 40 percent. It was the region’s first LEED project, and people all over the world came to look at it and tried to replicate the model. However, the problem with replication is that the project was not financially viable without government subsidies.

The developers went to the Oregon Office of Energy, which offers low-interest, fixed-rate, long-term loans for projects that save or produce energy. The low-cost energy loans serve as incentives to encourage businesses and governments to incorporate energy efficiencies into their projects and “get more for their money.” The money is geared towards only the energy saving parts of the project; but the loan committee can recommend financing for the entire project, if it qualifies as a demonstration project.

In the case of Viridian Place, the entire project qualified as a “demonstration” project since it was one of the first eco-buildings in Portland. In order for a project to be placed into this category, the project has to act as a model for subsequent projects, be visible to the general public, and be as energy efficient as possible. Viridian Place fell under all three categories. Thus, the Office of Energy Loan Program offered the developers of Viridian Place a $1.8 million loan for 15 years at a fixed rate of 7.11 percent. Commercial lenders at the time were charging nine percent interest rates for comparable loans.

“The Office of Energy loan made this facility possible,” said Tom Kelly in “Growing a Green Building,” a case study published by the Oregon Office of Energy. Kelly, a co-partner in the construction of Viridian Place, said he could not have started the project without the resources the Office of Energy provided. “They made it work. I wouldn’t have done it without them, because it would not have made economic sense,” he said. “We were on the edge of financial viability, and those programs helped make conservation make sense.”

One reason the building was financially infeasible was that the developers chose to install expensive solar panels that had a payback period of more than 40 years. From the developers’ perspective, it was worth the cost because they “wanted something to show our commitment. Without those solar panels there is nothing to say this is a sustainable building by looking at it.”

However, there is one way to offset the unwillingness of the customer to pay for a symbolic, but high-cost product: tax credits and low-interest loans from the government. At the time of Viridian Place’s construction, the Oregon Office of Energy offered Business Energy Tax Credits (BETC) to encourage investments in energy conservation, recycling, renewable energy resources, and less-polluting transportation fuels. Any Oregon business could qualify, and the tax credit was 35 percent of the project cost. Viridian Place received $21,136 in tax credits. The BETC program expired in July 2012, but provisions were added to a new Tax Credit Extension Bill which still allocate public money either to energy conservation projects or to renewable energy developments.

When developers apply for government help, they don’t think of how sustainable the project’s business model is or what their customers really want. When a project has such an unsustainable business model, it shouldn’t be touted as a ground-breaking, energy-saving project. In order for a project to be sustainable, it also must be financially sound.

Currently, another sustainable building faces the same financial dilemma. The now-stalled Oregon Sustainability Center needs to be massively subsidized with state funds and government tenants in order to be built. No private investor is willing to pay the high price of building an eco-building with a projected price tag of $62 million. The early lessons of Viridian Place seem to have been lost on Portland politicians.

Victoria Leca is a research associate at Cascade Policy Institute, Oregon’s free market public policy research organization. She is a student at Portland State University.

Read Blog Detail

Agassi Foundation for Education Is Tennis Great’s “Life’s Work”

Last Sunday tennis great Andre Agassi was inducted into the U.S. Open Court of Champions. Agassi is famous for regaining his #1 world tennis ranking after falling to #141. But today, he helps children in need of a quality education pull off their own extraordinary achievements. Since his retirement, the eight-time Grand Slam winner has dedicated his time, effort, and financial resources to developing charter schools for at-risk children as an alternative to failing conventional public schools.

“Education is a tool a child can use to create their own life and hopefully change the world,” Agassi explained. “…But once you start, you can’t stop….What are you going to do then? Send them back into a failing system?…[S]uccess is going to be these children coming back to their community and making a difference in the next generation.”

“The [Andre Agassi Foundation for Education] is my heart and soul,” Agassi has said. “It’s my life’s work. It’s my future.”

Innovative schools like Agassi’s succeed because the people behind them are results-oriented, entrepreneurial, and committed to making decisions that are professionally, fiscally, and educationally sound, maximizing the impact of the private philanthropic investments they work hard to raise. If Andre Agassi puts half the passion into education reform that he put into advancing his tennis career, America’s at-risk children can only come out winners.

Kathryn Hickok is Publications Director and Director of the Children’s Scholarship Fund-Portland program at Cascade Policy Institute.

Read Blog Detail

“Kicking” Education Funding Around―Why Measure 85 may not do what you think

Please join us for Cascade’s monthly Policy Picnic. Senior Policy Analyst Steve Buckstein will lead a discussion of the proposal to reform Oregon’s corporate kicker, Measure 85.

Measure 85 on the November ballot purports to redirect any future corporate kicker funds to public education. Steve will discuss why that won’t necessarily happen, and what other agendas the public employee unions that put it on the ballot may have.

Admission is free. Please bring your own lunch. Coffee and cookies will be served. Space is limited to ten guests on a first come, first served basis, so sign up early. To RSVP, email Patrick Schmitt at patrick@cascadepolicy.org or call 503-242-0900.

Read Blog Detail

Power Buoys or Expensive Anchors?

Commercial wave power soon may be coming to the Oregon coast. Last month, a New Jersey-based company, Ocean Power Technologies Inc., received the first federal permit to develop a 30-acre wave energy park near Reedsport. If successful, the facility would generate 1.5 megawatts of electricity from 10 buoys, enough to power 1,000 average homes.

While this sounds like a breakthrough for green energy, in fact it is just another example of Crony Capitalism. Ocean Power Technologies already has received grants of $4.4 million from the federal government and $420,000 from the Pacific NW Generating Cooperative, a $900,000 tax credit from the state of Oregon, and more than $430,000 from the Oregon Wave Energy Trust. Thus, each of the 1,000 homes receiving “wave power” will be subsidized by roughly $6,150.

That scenario assumes that the project ever produces electricity at all. The same company previously built the nation’s first wave energy generator off Hawaii, and it was decommissioned by the Navy after only two years of operation. Thus, there is a good chance that the Oregon project will never become commercially viable, and the taxpayer money will disappear.

This is the problem when politicians try to pick winners and losers in the economy. Nobody can predict the future, so most of the time they are wrong.

Wave energy yet may prove to be a great source of renewable energy, but choosing the right technology should be left to the private sector, where investors voluntarily bear all the risks as well as the rewards.

Read Blog Detail

“Kicking” Education Funding Around―Why Measure 85 may not do what you think

This November, Oregon voters will be asked to direct a highly uncertain, highly volatile, and relatively small amount of income tax money into the state’s General Fund, supposedly to help school children.

If Measure 85 would surely benefit kids, we might have a serious debate about it. But it won’t.

Measure 85 was placed on the ballot by several public employee unions. It would take any future corporate kicker money from businesses that paid those taxes and redirect it into the state’s General Fund to “…provide additional funding for public education, kindergarten through twelfth grade.”

As most taxpayers know, the “kicker law” requires state economists to estimate how much income tax revenue will be generated over each two-year budget period. If actual revenue exceeds the estimate by two percent or more, the entire surplus is returned to those taxpayers who earned it.

The kicker law covers both personal and corporate income taxes. The vast majority of income tax money comes from individuals. Corporate income tax receipts are often highly volatile and recently amounted to only seven percent of General Fund revenue.

Some argue that the way the kicker “kicks” makes little sense, because it is terribly difficult to estimate state revenue two years out. Others defend the law as an important brake on runaway government spending, especially since Oregon has no other strong tax or expenditure limitations.

Whether the kicker is good or bad policy, Measure 85 does not guarantee any benefit to public education, even though it implies that it will. This is because the General Fund can be allocated to various government programs at the full discretion of the legislature. So-called “Other Funds” are dedicated for specific purposes, as are federal funds the state receives. The General Fund is called that for a reason—it’s the one pot of money legislators can allocate at their discretion.

When asked whether Measure 85 guarantees more funding for public schools, the legislature’s Chief Deputy Legislative Counsel said in writing, “I think the answer to your question is no….[Measure 85] does not require the Legislative Assembly to appropriate a total amount of moneys from the General Fund to K-12 public education that is greater than what it might appropriate under current law.”

Of course, if Measure 85 passes, legislators will spend any future corporate kicker money on public education as it requires, but they then can turn right around and spend less than they otherwise might have on public education from the rest of the General Fund. Voters will have no way of knowing whether Measure 85 will result in more spending on public education or not.

Why? Because any new money in the General Fund will attract “special interests” arguing that they need some or all of that money for their own programs. And, those “special interests” may be some of the same public employee unions that put Measure 85 on the ballot in the first place. In particular, they might be unions whose members work in agencies not involved with public education.

This is the way the legislative process works now, and it will work virtually the same way if Measure 85 passes.

The fact that Measure 85 won’t ensure any additional spending on public education should be reason enough for voters to reject it. They also should oppose it because there are better ways to reform the kicker law. Reform could place all corporate and personal kicker money into a rainy day fund. Or, the entire kicker law could be replaced with a strong state spending limitation tied to the growth of population and inflation.

Whichever reform voters prefer, Measure 85 is arguably the worst way to reform the kicker. It will take money from the private sector and let state government grow without any assurance that Oregon’s school kids benefit at all. It should be rejected in November.

Read Blog Detail

Banning Plastic Grocery Bags: Environmental Savior or Wasteful Eco-Fad?

By Todd Myers

From Bellingham, Seattle, and Issaquah, Washington to Portland, Oregon and parts of California (most recently, Pasadena, as of July 1), cities are joining the latest environmental trend―banning plastic grocery bags. Concerned about the amount of plastic that reaches our oceans and its impact on wildlife, communities have decided that banning the bags is a simple and environmentally responsible approach.

But is it? What does the science say?

Banning the bags actually may be a net negative for the environment, yielding little environmental benefit while increasing carbon emissions and other impacts.

Advocates of the ban cite the bags’ effect on marine life and mammals. Unfortunately, their claims are often false or misleading. For example, the Shoreline city council was told “the ecological impacts of this plastic include over a million sea-birds and 100,000 marine mammals killed by either plastic ingestions or entanglement.” In fact, this assertion has nothing to do with plastic bags.

NOAA corrected the claim, saying, “We are so far unable to find a scientific reference for this figure.” The only study NOAA can find does not deal with plastic bags or even marine debris, but “active fishing gear bycatch”―in other words, fishing nets that are used at sea, not discarded plastic bags.

A Greenpeace biologist quoted in the Times of London agreed, saying, “It’s very unlikely that many animals are killed by plastic bags. The evidence shows just the opposite. We are not going to solve the problem of waste by focusing on plastic bags.”

Others claim plastic bags have created a “Pacific Garbage Patch,” twice the size of Texas. This is simply false. Oregon State University reports that the actual amount is less than one percent the size of Texas. Oceanography professor Angel White sent out a release last year saying: “There is no doubt that the amount of plastic in the world’s oceans is troubling, but this kind of exaggeration undermines the credibility of scientists.”

In addition, the Wood’s Hole Oceanographic Institute found the amount of plastic in the Atlantic Ocean hasn’t increased since the 1980s.

This doesn’t mean plastic bags have no impact. When determining the environmental costs and benefits, however, we need to be honest about the science. Indeed, there are environmental risks from banning plastic grocery bags.

The most significant risk is the increase in energy use. Plastic bags are the most energy-efficient form of grocery bag. The U.K. Environment Agency compared energy use for plastic, paper, and reusable bags. It found the “global warming potential” of plastic grocery bags is one-fourth that of paper bags and 1/173rd that of a reusable cotton bag. In other words, consumers would have to use a cotton bag 173 times, or once a week for more than three years, before it matched the energy savings of plastic bags.

Ironically, many of the cities leading the charge against plastic bags are signatories to the U.S. Conference of Mayors Climate Protection Agreement. Yet, few of these cities even attempt to assess the climate impact of switching from the least energy-intensive grocery bag to those requiring far more energy to produce.

It also should be noted that the benefit of banning plastic bags is mitigated by the fact that half of the bags are reused for other purposes, like garbage or picking up after pets. Grocery shoppers will still have to buy other bags, likely plastic, for those purposes. Those who worry about trash reaching landfills are doing little by banning plastic bags.

In the end, communities need to sincerely weigh these various environmental costs. Unfortunately, few public officials do any analysis because the political symbolism of banning the bags is powerful. It is often easier to ignore the science that indicates such bans actually may harm the environment than to make an honest effort to weigh these difficult issues.

Put simply, plastic bag bans have become more about the latest environmental fad than about environmental benefits. State and local politicians should stop trying to enact into law whatever the latest politically correct ecological trend happens to be. Instead, they should leave customers free to make environmental and conservation judgments for themselves.

Todd Myers is the environmental director at Washington Policy Center. He has more than a decade of experience in environmental policy and is the author of the book Eco-Fads: How the Rise of Trendy Environmentalism Is Harming the Environment. He is a guest contributor for Cascade Policy Institute, Oregon’s free market public policy research center.

 

Read Blog Detail

Creativity and Initiative Drive Our Economy

The first Labor Day was celebrated 130 years ago in September 1882. Labor Day was created by labor unions as “a yearly national tribute to the contributions workers have made to the strength, prosperity, and well-being of our country.”

What began with organized labor is now a celebration of Americans in all sectors of the economy, whose individual initiative is what drives economic innovation and success. There is no economy without millions of people bringing to the marketplace their particular gifts of human creativity, intelligence, initiative, and effort.

Human work is more than just performing tasks or exchanging services. Persons are more than machines, and the things we create to make our lives easier and our work more efficient exist only because we invented them. We bring unique intelligence and problem-solving capabilities into our interactions with others. Human capital―the knowledge, skills, and experiences of human beings―is the true wealth of a society.

For a healthy economy, we must remember that wealth doesn’t create itself. Government doesn’t create it, either. People create wealth. New jobs, industries, and a strong economy are the fruit of our individual creativity. So on Labor Day, let’s celebrate the freedom we have in America to bring our best to the world.

Read Blog Detail

Lisa Graham Keegan discusses the importance of school choice

Cascade Policy Institute sat down with former Arizona school chief and national school choice advocate Lisa Graham Keegan to talk about how she became a supporter of educational freedom and why it’s important for our children.

Read Blog Detail

Why the School System Doesn’t Just “Buy Local”

By Erin Mae Shiffler

The Oregonian’s recent PolitiFact “Feds Don’t Think Local on School Lunch Ingredients” was prompted by Senator Ron Wyden’s complaint that “Oregon schools receive millions of dollars per year in federal school lunch assistance and yet they are required to spend that money almost anywhere but Oregon.” Politifact concluded that Wyden’s claim was “true” because “96% of food served in Oregon schools and purchased with federal dollars came from another state.” This is a false conclusion. Just because the “one definitive document” cited shows that most school food comes from out of state doesn’t mean it is required to come from out of state.

Oregon schools are not “required” to spend federal school lunch money outside Oregon. For the largest portion of their purchasing budget, schools must obtain food products through a competitive bidding process that also includes quality and nutrition standards.

Requiring food suppliers to bid makes sure schools do not favor suppliers unfairly. The bidding process allows schools to receive bids from local producers and suppliers throughout the country. Producers which meet quality and nutrition standards at the lowest cost will be chosen. Schools cannot afford to discriminate against out-of-state suppliers in favor of local food sources because they have a limited budget with which to feed the whole student population.

The other aspects of this process that may impede local suppliers are the nutrition and quality standards. These standards may increase the cost of food and make it harder for Oregon’s farms to produce items up to par while simultaneously underbidding producers in states like California. But standards are applied across the board, not just to Oregon suppliers. These standards include criteria such as: lunches must provide at least one-third of the recommended dietary allowances for key nutrients, they may have no more than 30 percent of their calories from fat, they must have less than 10 percent of calories from saturated fat, they must reduce sodium levels whenever possible, and they must increase fiber content whenever possible.

According to the article, Sen. Wyden assumes that local produce is more nutritious than food from out of state, but this may not be true. According to Cynthia Sass, Nutrition Director for Prevention magazine (January 2008): “A lot of people think fresh is best, but believe it or not, frozen produce is even more nutrient packed. That’s because the moment produce is picked, it starts to lose nutrients, but freezing slows that loss. A 2007 study found that vitamin C content of fresh broccoli plummeted 56% in 7 days, but dipped just 10% in a year’s time when frozen. In addition, the levels of disease-fighting antioxidants called anthocyanins actually increased after freezing.” This is just another reason why schools may choose to buy from outside Oregon.

A small portion of Oregon schools’ purchasing budget must be spent on specific items from the USDA’s program and is called “commodity money.” Commodity money is an extra $0.2225 per lunch served the previous school year. The bulk of the federally funded budget is non-commodity money that is reimbursed depending on the student’s status. For schools with less than 60% of children qualifying for free/reduced price lunches, the reimbursement rates are $0.26 for paid, $2.37 for reduced price, and $2.77 for free lunches. The rates are even higher in schools with more than 60% eligible.

According to a study of the commodity program done by the Food Research and Action Center, “when only expenditures on food are included in the calculation, the value of the commodities makes up about one-fifth of the federal resources spent on food for school lunch.” This means that four-fifths of the money is subject to the requirements above and do not need to be purchased from the USDA’s list of food. If a school found better quality items at lower prices through bids from Oregon suppliers, then they could spend about 80% of their federal funds here in Oregon.

If we are only spending 4% in Oregon, there are several possible reasons. It could be because the supply locally costs too much, lacks in quality, local suppliers are not bidding for the schools’ business, non-commodity money is following the commodity money to a single supplier to make buying easier, or the person at the school district in charge of buying food doesn’t have time to personally contact all of the small local providers that could supply cheaper and better quality food.

Oregon schools do not refuse to buy from Oregon suppliers because federal restrictions require them to buy outside Oregon or from any particular supplier. If we want to increase sales to local vendors, then local farms and food producers must offer bids for high-quality products at competitive prices. This scenario is incorrectly being used to promote the “buy local” mentality when in reality, buying local right now would only hurt the kids this program is supposed to feed because higher food prices would decrease the quantity that can be purchased. If our schools are buying food from anywhere but Oregon, don’t blame the federal government. Instead, figure out why Oregon suffers from a lack of locally available quality and low-cost food options.

Erin Mae Shiffler is a research associate at Cascade Policy Institute, Oregon’s free market public policy research organization. She is a student at Brigham Young University-Idaho.

Read Blog Detail

Testimony before the Clackamas County Board of Commissioners

Testimony before the Clackamas County Board of Commissioners

Regarding the revised IGA for the Milwaukie Light Rail Project

August 22, 2012

 John A. Charles, Jr.

President & CEO

My name is John Charles and I represent Cascade Policy Institute, a non-partisan policy research center.

The Clackamas County Board seems to think that the financing agreement signed with TriMet in 2010 is a binding contract. However, TriMet itself has already breeched the contract, as follows:

  1. The Clackamas County Commission formally endorsed the “PMLR Locally Preferred Alternative” (LPA) on July 24, 2008. That endorsement was for a light rail plan including 1,000 parking spaces at the Park Avenue station and another 1,000 spaces at the Tacoma Street station.

In addition, the LPA offered a possible alternative alignment, known as the “Minimum Operating Segment”, terminating at Lake Road in Milwaukie. If this plan were chosen, the Tacoma Street station would include 1,250 parking spaces.

  1. The LPA with 1,250 – 2,000 committed parking spaces was endorsed by the County Commission when it signed the IGA in 2010.
  1. The project now being built has changed dramatically. The Park Avenue station includes only 350 parking spaces and the Tacoma Street station 320 spaces. This will lower the expected ridership of the project by a wide margin.

The entire 26-year experience with TriMet’s light rail system shows that outside the Portland city center, light rail is largely dependent on park-and-ride lots for ridership.  For example, the Gateway Transit Center has had a chronic parking shortage for decades because it is the closest parking lot to downtown on the east side. On the Westside, the Sunset Transit Center has only 587 spaces. Since this is the closest Westside TriMet lot to downtown Portland, it is usually filled to capacity every weekday by 7:00 a.m. TriMet would have higher ridership on the Westside MAX if it had built a much larger parking lot.

  1. By under-building for parking on the PMLR line, TriMet is asking both Clackamas County and the City of Milwaukie to absorb the many downsides of this project – including the taking of homes and businesses, loss of express bus service to Portland, and the cannibalization of other public services – while offering no transportation benefits compared with existing bus service.

Since TriMet has chosen to begin construction on a different project than the one promised, the Clackamas County Commission is free to opt out of previously made commitments, and should do so. The PMLR project never made any sense from a transit standpoint, and is clearly a step backwards for express bus commuters on HW 99e, who will be forced to transfer from the fast bus to the slow train in Milwaukie if this is built.

Regardless of how the project was perceived in 2008, public sentiment has changed. The County’s most recent “Community Services and Issues” survey, conducted by Davis, Hibbitts & Midghall during late February and mid-March, asked respondents for “the most important issues” facing the county. Supporting light rail elicited only a 3% positive response, while 5% of respondents stated that “stopping MAX” was important to them. Overall, many other issues are of greater concern to county taxpayers, including the economy, road maintenance, education and law enforcement.

Recommended Course of Action for Clackamas County:

  • The BCC should formally state that the IGA with TriMet is no longer binding because TM is building a different project than the one promised in 2010 and 2008.
  • The county’s plan to sell bonds should be abandoned and the entire PMLR project de-funded.

 

  • The terminus of the line should be moved from Park Avenue to Tacoma Street, and the parking facility at that station should be increased to 1,250 spaces, as originally anticipated in the EIS. That would be financially feasible with savings from shortening the line.

Conclusion

It is clear that the September 18th ballot measure requiring a public vote on rail expenditures is going to pass easily. Instead of fighting the obvious, the BCC should use this vote as a mandate to protect county taxpayers from a bad deal negotiated in a different era.

 

Fortunately, it’s not too late to make this move; the single most expensive property scheduled for condemnation on the entire PMLR right-of-way – the Beaver Heat Treating facility on Moore Street – is still standing. This one property alone is likely to cost more than the entire $19.1 million IGA that is being discussed tonight. If the BCC does the right thing, the family-wage jobs at Beaver Heat Treating and other businesses in the ROW will be protected, and we won’t throw scarce tax dollars down a rat hole.

However, the window of opportunity is closing, because TriMet knows that the faster they destroy private property, the more difficult it becomes politically for elected officials to do the right thing. I encourage you to reject the proposed amended IGA, and to terminate the County’s interest in this project immediately.

Read Blog Detail

Costs of Utility Mandate Ultimately Borne by Consumers

By Eric Revell

With the passage of Senate Bill 838 by the Oregon legislature in 2007, most electric utilities in Oregon are required to provide certain levels of electricity from so-called renewable resources. The mandate is 15% of electricity from renewable sources by 2015, rising to a target of 25% in 2025.

In the event that a utility is unable to meet the renewable energy mandate with their own resources, they can purchase renewable energy certificates (RECs). RECs are not an actual source of electricity; they are simply trade-able certificates representing the “environmental amenities” of power generated from politically correct sources, such as windmills and biomass facilities. They can be sold by the power generator to a retail utility company in need as a stand-alone certificate, or they can be bundled with the electricity actually produced. Unused RECs can be banked and sold to achieve compliance with green energy requirements at a later date.

While there is nothing wrong with consumers purchasing a fake commodity like a REC of their own volition, the state legislature should not make utilities purchase them simply to comply with expensive green power mandates. The additional costs incurred from REC purchases are passed on to all consumers through higher rates, an encumbrance that will increase as the renewable energy benchmarks continue to rise.

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

Read Blog Detail

History Need Not Repeat Itself in Oregon’s Foreclosure Crisis

By Eric Revell

Recently, a foreclosure mediation program passed by the Oregon state legislature in March took effect, allowing distressed borrowers to meet with their lenders before foreclosure proceedings begin. This common-sense approach to solving the lingering issues with the state’s housing market was passed with overwhelming bipartisan support in the legislature and will allow borrowers who can agree to terms with their lenders to stay in their homes, a clear positive for all parties involved.

With this state-level solution in mind, it is truly unfortunate that members of Congress couldn’t produce a more intelligently designed patchwork for addressing the causes of the 2007 housing market collapse. For all its good intentions, the Dodd-Frank Act was abysmally inadequate at preventing the deterioration of lending standards that built up the subprime mortgage bubble. Even worse, it was passed on a series of strict party-line votes, is over 800 pages long, and directs democratically-unaccountable regulators to create still more rules if they view them necessary. Those regulators have graciously obliged, as Dodd-Frank now encompasses 8,843 pages of regulations, a daunting compliance challenge for America’s banks and lenders.

The 2007 failure of the subprime mortgage market was due in large part to the federal government’s crusade to promote affordable homeownership for those who lacked the ability to make a significant down payment or earn enough annual income to justify a mortgage. Through the government-sponsored enterprises of Fannie Mae and Freddie Mac, mortgages had been approved for these individuals who, absent the federal regulatory push on the financial sector, wouldn’t have been able to buy a home.

This was a continuation of the trend that began with the 1990s revisions to the Community Reinvestment Act, which encouraged banks to lend to those with insufficient personal finances. From this period to the collapse of the housing market, the affordable housing goals as stipulated by government regulators rose from 30% of all mortgages originated in 1992, to 55% in 2007.

Once consumers were locked into mortgages that they couldn’t afford, foreclosures ensued. People lost their homes, and those who kept their homes saw their equity and home values plummet. Even more people were forced to tap into their savings and retirement, forestalling their plans for the future. Many banks had invested heavily in mortgage-backed securities, viewing them as safe assets. With foreclosures rising they struggled mightily to maintain their balance sheets. All told 445 banks have failed since the beginning of the crisis, and thousands of those former employees have struggled to find work in a floundering economy.

Out of this backdrop, then-senator Chris Dodd (D-CT) and soon-to-be former representative Barney Frank (D-MA) drafted legislation to rein in what they viewed as “predatory lending” on the part of banks. The Dodd-Frank Act imposed regulatory costs on private sector mortgage lenders and originators with the goal of aligning their incentives with consumers, so that fewer risky mortgages would be made.

But this goal of Dodd-Frank was grievously undermined by the failure of the legislation’s creators to apply the same risk retention requirements to government providers of mortgages―namely Fannie Mae and Freddie Mac―that it imposed on private mortgage originators. Private lenders already have a clear incentive to ensure that the mortgages they provide are of adequate quality, lest they join the swelled ranks of failed banks. Those private lenders can no longer expect a taxpayer-funded bailout, given the popular furor that arose in the wake of this crisis. That is a luxury that Fannie Mae and Freddie Mac implicitly enjoy, as they are allowed to do business with sub-market standard capital requirements.

Given the widespread economic hardship that the housing bubble wrought on our country and state, especially in Central and Southern Oregon, it would be utterly tragic for us to allow history to repeat itself due to the ineptitude of Dodd-Frank’s creators. Perhaps the simplest solution to the problem would be to privatize government mortgage lenders like Fannie and Freddie, so that they would become subject to the same requirements imposed on private mortgage originators. Allowing them to continue doing business as government-sponsored enterprises puts our economy in future jeopardy of another collapse. Mortgage standards will degrade over time as uninformed members of Congress loosen Fannie and Freddie’s already less stringent requirements in the name of promoting “fairness” in homeownership. Such a scenario is certainly not an intelligent path forward for our economy, country, or state.

Eric Revell is a research associate at Cascade Policy Institute, Oregon’s free market public policy research organization. He is a recent graduate of the University of Oregon.

Read Blog Detail

Why Can’t Portland’s Pension Problem Be Solved Voluntarily?

By Shane Young

In 2008, the Portland public safety fund realized it had been accidentally overpaying pension benefits to 980 police and firefighter retirees for the last 13 years. This cost the fund $2.89 million. In 2011, the fund tried to recoup this money by withholding the cost of living increases for the retirees until the amount they were overpaid was returned. Alternatively, the retirees were given the option to repay the amount they were overpaid directly back to the fund.

However, as a response to a class action lawsuit brought by five of the affected retirees, a Multnomah county judge has recently declared that the fund cannot recoup the overpaid money by withholding cost of living increases, as such an act would violate the wage claim statute. The fund is now forced to figure out new ways to recoup this money.

While the retirees are not to blame for the overpayments, it is sad that such great lengths have to be taken to recoup what was overpaid. Only 52 of the 980 beneficiaries have chosen voluntarily to pay back their portion of the overpayments.

As ex-public servants, these retirees should be doing all they can to figure out how to voluntarily repay taxpayer money that they did not earn. It shouldn’t be the taxpayers’ job to force them to do the right thing.

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

Read Blog Detail

Portland’s Proposed “Arts Education Tax”― Why Creativity and Government Subsidies Are Fundamentally at Odds

By Shane Young

The “Arts Education and Access Income Tax” proposed by Portland Mayor Sam Adams aims to hire more elementary school art teachers and fund local arts organizations by implementing a $35-per-year income tax (maximum) on all residents 18 years old and older who live above the poverty line. The City of Portland is promoting the levy, expected to raise $12 million annually, on the grounds that art education in public schools is vulnerable to budget cuts relative to schools’ other academic priorities.

Numerous criticisms of the tax measure have been raised, including the likelihood that the tax as constructed would be unconstitutional under Oregon law. It also can be noted that it is not the proper function of city government to levy this kind of tax, since the Portland School Board has primary jurisdiction over funding public education in Portland and has its own tax base. Even the editorial board of The Oregonian opposed the ballot measure on the grounds that art education, while valuable, doesn’t merit a dedicated tax. According to the board, Portlanders have “plenty of opportunities and incentives to support” the arts and art education, including a state income tax credit.

The proposed tax measure can and should be opposed on any or all of these grounds, but there is another reason why levying a tax to benefit art fails on principle. Portlanders should recognize what makes art so important to begin with and why government involvement and taxpayer subsidies are at odds with its purpose.

Art allows us to develop and foster creativity. It allows us to take chances and risks. It allows us to make sure that the diverse realm of ideas remains constantly expanding. Because of these benefits that art gives us, Portland should be cautious about putting creativity and diversity, the heart and soul of art, into jeopardy through dedicated, taxpayer funding of government-selected arts institutions.

Unlike the sciences, music, painting, sculpting, photography, poetry, and the many other constantly growing categories of art, have no black-and-white criteria with which to determine their success. In fact, many times art is admired, and established into history, because of its willingness to stray from the standard. It is this very deviation from the norm that allows creativity and diversity, the things art should be praised for in the first place, to flourish.

By allowing the city to take over more responsibility for the artistic growth of children, and to fund organizations solely of its choosing, taxpayers give city bureaucrats complete control over defining what exactly “art” is―and, furthermore, what “good” art is―for the purposes of public funding. Taxes thus will go to promoting one art form over another―and one standard of “good” art over another.

This isn’t to say that artistic development and success do not require discipline and some kind of formal guidance in an art class―it almost always does. Yet, because of the diverse nature of art, and the wide range of criteria used to judge its quality, this discipline and guidance must happen at a much more specialized and intimate level than what the city can or should provide. Therefore, if people are not satisfied with the art education available in Portland’s public schools, they should take The Oregonian’s advice and support the arts on an individual level.

Instead of increasing dedicated spending on the arts through taxation for the benefit of public schools and selected nonprofits, Portlanders should supplement the current art activities in schools, as they choose, with a willingness to allow and encourage children to individually explore the arts for themselves. Financially contributing directly to the areas in which children are interested, rather than simply allowing the city to mass-regulate artistic creativity and diversity, honors and respects the nature of creative expression. This November, Portlanders should allow future generations to answer the age-old question of “What is art?” for themselves, rather than hand city government more taxpayer money to answer it for them.

Shane Young is a research associate at Cascade Policy Institute, Oregon’s free market public policy research organization. He is a student at Whitman College.

Read Blog Detail

Instead of More Public Housing, How About Housing Freedom?

By Victoria Leca

The activist on hunger strike outside Portland City Hall ended his 55-day housing protest on July 26. In response to the protest, the City Council will participate in a Regional Summit on Housing and Homelessness this fall. The Council also will support a public vote on new funding for “affordable housing.”

Homelessness is a tough problem. No matter how much assistance is given, it will never completely go away. Self-destructive choices or mental problems will impede some people from living normal, healthy lives. No matter how much help is provided, they may never live in independent housing, no matter the price tag.

For those for whom price is the barrier to stable housing, “portable rental assistance” programs, which already exist on the federal level, can be a less restrictive option that empowers them to live outside the public housing system. Obtaining “decent and affordable housing on the private market” maximizes opportunities to escape poverty and promotes integration with the wider community. But while preferable to public housing, even housing vouchers come with their own dangers, such as reinforcing dependence on government cash subsidies.

Portland must acknowledge that its restrictive Urban Growth Boundary is at the root of high housing prices. The City Council could make housing more affordable for everyone simply by ending zoning policies that inflate the price of land within the Urban Growth Boundary and make more land available for low-cost housing. But the Council’s proposal simply to fund more public housing for the homeless is neither a desirable nor a sufficient solution to high prices and homelessness. Throwing more public funds at “affordable housing” only masks symptoms, rather than addressing the causes, of high housing prices in Portland.

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

Read Blog Detail

The New Sellwood Bridge: Subsidizing the Two Percenters

By Michael Nielsen

For more than six years, Multnomah County has been considering how best to replace the Sellwood Bridge. The plan that has been adopted calls for removing the current bridge and replacing it with a new one that is twice as wide.

However, none of the new space will be available for cars, even though cars carry nearly 98% of all passenger trips during the peak hours. Only about 40% of the new bridge will be allocated to vehicular travel, with the other 60% dedicated to non-motorized transportation in the form of bikeways and mega-sidewalks. Heavy trucks will be banned entirely from the bridge, increasing congestion on nearby streets and raising transportation costs for businesses.

The new bridge does need more space for cyclists and pedestrians because the current bridge was never designed for them. However, there is no reason to allocate 60% of bridge space to satisfy two percent of all travelers.

County Commissioners were recently shocked to discover that the price tag for the bridge has gone up by $70 million since last year. If city planners want to save money, they should reduce the width of the bridge. Planning for two 12-foot sidewalks to accommodate a few hundred pedestrians is simply a waste of resources.

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

Read Blog Detail

Charting a New World of Educational Freedom

School choice has entered a new world. Because Americans are increasingly vocal on providing parents the ability to choose their children’s schools, states are adopting broad-based school choice initiatives. Those successes can be attributed to various individuals, groups, and campaigns nationwide. However, it is school choice’s “Christopher Columbus” who deserves recognition for starting this movement more than 50 years ago.

In 1955, Milton Friedman introduced school choice as a way to improve the quality of American education. His idea was simple: Give parents access to their children’s public education funding, rather than require they attend the government (public) schools nearest their homes.

“Governments could require a minimum level of education which they could finance by giving parents vouchers redeemable for a specified maximum sum per child per year if spent on ‘approved’ educational services,” Friedman wrote in 1955. “Parents would then be free to spend this sum and any additional sum on purchasing educational services from an ‘approved’ institution of their own choice. The educational services could be rendered by private enterprises operated for profit, or by non-profit institutions of various kinds. The role of the government would be limited to assuring that the schools met certain minimum standards such as the inclusion of a minimum common content in their programs, much as it now inspects restaurants to assure that they maintain minimum sanitary standards.”

Because of vested interests in the education arena, Friedman’s suggestions were ignored. And, as a result, the cost of public education doubled while its academic performance stayed the same. As Friedman noted, that shouldn’t come as a surprise because that’s exactly what monopolies do: They offer a product of similar, if not worse, value at a higher price than normally would be allowed if they had to compete in the free market.

But those days are over. Many states are broke, preventing them from dropping more money out of airplanes over public schools. And many parents are fed up, wondering why their kids are underperforming or unmotivated in K-12 schools and unprepared for their college courses and future careers.

Because of that sentiment and cash crunch, last year a historic number of choice programs were enacted across the country. Substantiating that momentum, the Wall Street Journal called 2011 “The Year of School Choice.”

Today, 18 states and the District of Columbia provide some type of private school choice for their residents. And more states continue to come online. Already in 2012, Virginia has joined the school choice “family;” New Hampshire’s legislature has passed a school choice measure; Florida and Arizona expanded their programs; and Louisiana dramatically increased the scope of its school voucher program. Oregon is behind the curve, with no significant private school choice programs―yet. But widening charter school and online school options hopefully will soon lead to more school choice for all Oregon children.

Of course, no state has followed Friedman’s vision entirely―i.e., school choice for all families. Indiana and Louisiana are close, in that both make more than half their states’ student populations eligible.

But Friedman’s vision was not for school choice to be just another government program. He wanted to see school choice fundamentally change the way public education operates from its current structure that supports schools to a better model that empowers parents. Both rich families and poor ones can receive government funding when their kids use public schools. And both rich and poor should be able to receive government funding for their kids to use vouchers.

It took America more than 50 years to reach today’s environment in which parent empowerment in education is celebrated, not ridiculed. Moving forward, the late Milton Friedman’s voucher idea is more important than ever, for it is the tool advocates can use to navigate the new world for school choice they helped discover.

Steve Buckstein is Founder and Senior Policy Analyst at Cascade Policy Institute, which is participating in July 31st Friedman Legacy for Freedom Day, an international event celebrating the late Milton Friedman on what would have been his 100th birthday.

Read Blog Detail

Oregon’s Status Quo Lobby: How Teachers Unions Retard Real Education Reform

Oregon’s public education system is beset with problems. Too many students drop out, and too many of those who stay aren’t achieving to the levels we expect. The national publication Education Week ranked Oregon’s public education system 43rd in the nation in 2011, and our K-12 achievement level only earned a D grade last year.[1]

Some people argue that more money will solve our schools’ problems. But with total expenditures now over $11,000 per public school student, according to the nation’s largest teachers union,[2] it’s hard to believe that $330,000 for each 30-student classroom is not enough money to get education right.

What happens in our public school system is driven more by politics than anything else, and for many years the most powerful political force driving education decisions in our state is what we call the Status Quo Lobby. While many children continue to fall through the cracks, this Lobby fights for more of the same: more powerless parents, more powerless principals, more hamstrung teachers, more taxpayer spending, and more control over the decisions parents should make for their own children.

Who is the Status Quo Lobby? Primarily, it’s the Oregon Education Association, the teachers union that represents most public school teachers in this state. The OEA is primarily concerned with the paychecks of its members, not with the achievement and success of Oregon schoolchildren. Unfortunately, what’s best for OEA members’ pocketbooks isn’t necessarily best for our kids’ education. Make no mistake, huge financial interests rest on the bulk of the laws for which they lobby. And, the Status Quo Lobby is often the biggest contributor to political campaigns in Oregon.

In a word, the Status Quo Lobby fights for more centralization, which Nobel Prize winning economist Milton Friedman said is responsible for much of the decline in the public school system over the decades.

In 2006, the year he died, Friedman noted, “When I went to elementary school, a long, long time ago in the 1920s, there were about 150,000 school districts in the United States. Today there are fewer than 15,000, and the population is more than twice as large.”[3] Friedman blamed what he called “your friends in the teachers union” for this centralization and corresponding decline in educational results for America’s children.

The Status Quo Lobby has long claimed to lobby in the name of helping kids. But it itself typically has the most to win or lose―in terms of money and power―when it shows up to a hearing for proposed laws. While children’s futures are at stake, the choices legislators make today often have a delayed impact for kids. The Status Quo Lobby, however, often sees a quick impact to its bottom line.

Because far too many people seem to think these lobbyists are just in it “for the kids,” Cascade Policy Institute has launched a new website called “Enough with the Status Quo Lobby” at www.StatusQuoLobby.com. At this website, Oregonians can discover just who the Status Quo Lobby is, which policies it advocates, and what kinds of results are seen from these policies.

At this site Oregonians also can see just how the Status Quo Lobby stands in the way of real education reform, often labeled “school choice.” Milton Friedman first described school choice in 1955 as letting parents choose which schools their children attend―public, private, religious, or home school―with the money following the student.[4] Most Oregon parents want such choices,[5] and they shouldn’t let the Status Quo Lobby stand in their way.

To help educate voters on how to keep their legislators accountable for their voting on educational policies, the StatusQuoLobby.com website includes a report card grading every legislator during the 2011 legislative session on their votes either supporting the Status Quo Lobby, or supporting school choice for Oregon’s children.

Oregonians also will be able to see how much money the Status Quo Lobby has contributed to each legislator’s campaigns, along with videos of them speaking on policies affecting the education of Oregon’s children.

We urge all Oregonians interested in learning about who is standing in the way of real educational reform in our state to go to www.StatusQuoLobby.com and see for yourselves.

 

Endnotes

[1] Report Awards State Grades for Education Performance, Policy…, Education Week, January 11, 2011

2 National Education Association report Table F-2 (pg 39)

3 Teachers Unions and Public Schools: Who Needs ‘Em?, latimes.com, Bob Sipchen, July 3, 2006

4 The Role of Government in Education, Milton Friedman, Economics and the Public Interest, 1955

5 Nearly Nine of Ten Oregonians Would Opt Out of Regular Public Schools, Cascade Policy Institute, Steve Buckstein, January 5, 2009

Read Blog Detail

After a Century of Friedman, Parents Should Be “Free to Choose”

By Erin Mae Shiffler

Nobel Prize-winning economist Milton Friedman would have turned 100 years old on July 31. This will be an opportunity to remember his accomplishments and to celebrate his legacy. Dr. Friedman was thoroughly invested in the cause of educating children by fixing our current school system. He once said, “The only solution is the same solution as we found everywhere else―which is competition. The essence of an effective television industry, an effective telephone industry, an effective computer industry, or an effective mail delivery industry―you name it―is competition. That’s what we need to get in schools.”

Friedman promoted competition among teachers themselves, as well as among schools. By allowing competition, successful and innovative teachers would earn more for their efforts. Schools would obtain more students, and therefore additional revenue, to educate those students, if they were good schools. Poorly performing schools would lose students until they found ways to improve.

Unfortunately, we have not seen this kind of system in Oregon because teachers unions and lobbyists protect teachers at the expense of what is good for students. As parents who want a better education for our kids, we need to promote Dr. Friedman’s ideas in order to push against the current stagnant system. To learn how teachers unions stand in the way of real education reform, and to see if your local representatives are holding back or trying to improve your choices and your child’s education, visit www.statusquolobby.com.

Erin Mae Shiffler is a research associate at Cascade Policy Institute, Oregon’s free market public policy think tank.

Read Blog Detail

Air Quality and Economic Innovation: “You Didn’t Do That”

By Todd Myers

Asked by reporters how he felt after a victory over the Cleveland Cavaliers, former Chicago Bulls center Stacey King told reporters, “I’ll always remember this as the night that Michael Jordan and I combined for 70 points.” This is the comment that came to mind when President Obama told an audience recently, “If you built a business – you didn’t build that. Somebody else made that happen.” The President went on to say, “If you were successful, somebody along the line gave you some help.”

Certainly, Stacey King legitimately could tell reporters that without him, the two players would not have scored 70, even though King scored only one point and Michael Jordan contributed the other 69. Indeed, the President legitimately can say that government services like road construction, national defense, and the like contribute to a climate that allows economic growth and innovation. It would be hard to imagine, however, Stacey King telling Michael Jordan, “You didn’t do that. Somebody else made that happen.”

The economy isn’t the only area where politicians attempt to grab more credit than is deserved. Air quality is another good example.

For many on the environmental left, the story of air quality begins in 1972, the year the Clean Air Act (CAA) took effect. There are a couple reasons for this. First, prior to 1972, air quality data is intermittent. As part of the monitoring included in the CAA, the government began collecting data on a consistent basis. So, history appears to begin in 1972 because records before that are incomplete.

Second, it marks the beginning of a government program promoted by politicians and activists. They have a strong interest in demonstrating that the policy for which they advocated is working. How many times have you heard a politician say, “I advocated for this, but it didn’t work the way I wanted. I was wrong”? I’ll give you a minute to think.

In fact, the Clean Air Act has contributed to air quality. Air quality today is dramatically better than it was forty years ago, despite a significant increase in population, wealth, and miles traveled. That story, however, ignores the role the private sector played in making this happen, long before the CAA took effect.

The following graph shows the trend in indoor air quality from 1940 through 1990. As you will notice, the vast majority of the reduction in traditional air pollutants had occurred by the time the CAA was enacted in 1970 and implemented in 1972. Trends in outdoor pollution are similar. A major reason for this is that improvements in energy efficiency meant fewer pollutants per unit of energy. Unburned coal dust emitted from a smokestack was not only air pollution, it was lost energy. Burning coal or gas more completely and efficiently meant less air pollution and increased wealth.

Ignoring the value of private sector innovation ignores a key part of the story. Claiming the Clean Air Act was entirely, or even mostly, responsible for improved air quality is not accurate.

Pretending the Clean Air Act had no role to play is equally false. The most dramatic example is lead. Between 1970 and 2005, nationwide lead emissions decreased by 99 percent, largely due to the switch to unleaded gasoline. Everyone has their role to play; and belittling others to build your own role up is not only incorrect, it is childish.

Success has many fathers, especially when there are politicians around whose profession is taking credit for others’ success. This impulse, however, makes for bad policy and bad basketball. A team that demeans Michael Jordan’s contribution because “somebody else made that happen” is as likely to have as much success as a government that tells innovators like Steve Jobs or Jeff Bezos they owe their success to government regulation.

Todd Myers is the environmental director at Washington Policy Center. He has more than a decade of experience in environmental policy and is the author of the book Eco-Fads: How the Rise of Trendy Environmentalism Is Harming the Environment. He is a guest contributor for Cascade Policy Institute, Oregon’s free market public policy research center.

Read Blog Detail

Oregon Cosmetology Regulations Entangle Hair Braiders

By Shane Young

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

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

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

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

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

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

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

Read Blog Detail

Taxmageddon Would Wreak Havoc on Oregon Taxpayers

By Sven R. Larson, Ph.D.

By now, I am sure you have heard of Taxmageddon – the $494 billion tax increase set to hit America’s already overburdened taxpayers in January 2013. If you haven’t, check out this informative website provided by the Heritage Foundation. Taxmageddon is a combination of expiring Bush-era tax cuts, expiring payroll tax cuts, and new incoming ObamaCare taxes. Together they will create the largest single-year tax increase in American history and very likely the largest tax increase ever created in the entire world.

Taxmageddon will, of course, wreak havoc on our already fragile economy. The only comparable tax increase is the one Sweden went through in 1995-98, when the government took away three percent of GDP per year, three years in a row. This sent the Swedish economy into a lasting depression, brought standard of living to a standstill for a good decade, and caused the permanent loss of hundreds of thousands of jobs.

If Taxmageddon were to happen here in America, we most certainly would experience something similar, only on a much grander scale. To put some perspective on what this massive tax increase would mean, let us break it down to Oregon size. According to the Heritage Foundation, Oregon taxpayers would face a $5.8 billion tax increase, distributed as follows:

  • Expiring Bush-era tax cuts: $2 billion;
  • Expiring payroll tax cuts: $1.5 billion;
  • New ObamaCare taxes: $2.3 billion.

President Obama has indicated that he might want to see the Bush-era tax cuts extended for most taxpayers, but don’t hold your breath on that until there is a bill with his signature on it. And even if Congress and the President reached a deal on that part of Taxmageddon, the remaining parts are bad enough.

To begin with, the cost of the payroll tax hike alone is big enough to place a looming threat of job losses over the Oregon labor market. It remains to be seen how resilient private employers are in the face of this kind of tax hike and just how many private-sector jobs would be on the line. What is absolutely clear, though, is that Oregon cannot afford to lose any private sector jobs: As we reported recently, there has been no real increase in private employment in Oregon over the past decade.

We need more jobs, not fewer.

On top of that, consider the effect of the new ObamaCare taxes. Designed to hit “wealthy” Americans earning more than $250,000 per year, these taxes are eerily reminiscent of the Alternative Minimum Tax (AMT). When first introduced, the AMT was designed to make sure a very small group of very wealthy people could not reduce their tax burden to zero. Today, the AMT is a middle-class problem.

It is more than likely that the ObamaCare taxes will go the same way. For Oregon’s hard-working taxpayers, the $2.3 billion looming to fund the Affordable Care Act are equal to a 23 percent increase in the taxes that Oregonians pay on their personal income each year. That would be a bad-enough tax increase to hit all taxpayers; but since the tax is supposed to be limited to the top two percent of the Beaver State’s earners, the effect will be much more dramatic.

The two percent of Oregonians who earn more than $250,000 pay 38 percent of all personal income taxes in the state. According to the IRS, in 2011 this amounted to a total tax liability of $3.7 billion. If these income earners were hit with the $2.3 billion in ObamaCare taxes, their total tax liability would increase by 61 percent.

Imagine that: For every $100 you pay in taxes this year, you will pay $161 next year.

Added together, the rise in the payroll tax and the new ObamaCare taxes equal the average earnings of 66,139 taxpayers in Oregon. This does not mean that so many people will lose their jobs in 2013 if the payroll and ObamaCare taxes come down on us. But it does raise the question how many more people will have to file for unemployment when Uncle Sam takes $3.8 billion more out of the Oregon economy.

Sven R. Larson, Ph.D., is Senior Fellow in Economics at the Wyoming Liberty Group and a guest contributor for Cascade Policy Institute. He holds a Ph.D. in social sciences with major in economics and has taught economics at colleges in three countries. His research on health policy, taxes, and government budgeting and entitlement reform has been published by free market think tanks across the country.

 

Read Blog Detail

Lower the Capital Gains Tax, Ignite Oregon’s Recovery

By Eric Revell

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

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

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

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

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

Read Blog Detail

Kathryn Hickok discusses Americans’ "Best Earthly Inheritance"

In her latest interview with Cascade Policy Institute, Kathryn Hickok talks about her latest commentary on religious freedom and the principles left to Americans as their “Best Earthly Inheritance.”

 

 

Read Blog Detail

Policy Judgment on Health Care Law “Is Reserved to the People”

By Jason Mercier

The Affordable Care Act is constitutional in part and unconstitutional in part.”

With these words, the Chief Justice of the U.S. Supreme Court John Roberts, in a 5-4 decision, removed the policy fate of the federal health care law from the hands of judges and placed it squarely in the lap of voters this fall to decide what happens next.

Depending on your perspective, Roberts’ decision was either an example of judicial restraint or, as the four Supreme Court Justices who dissented wrote, “carries verbal wizardry too far, deep into the forbidden land of the sophists.”

Either way, the Chief Justice repeatedly made it clear that the Court was not passing judgment on the “wisdom or fairness” of the federal health care law or if it “embodies sound policies.”

Roberts explained, “Members of this Court are vested with the authority to interpret the law; we possess neither the expertise nor the prerogative to make policy judgments. Those decisions are entrusted to our Nation’s elected leaders, who can be thrown out of office if the people disagree with them. It is not our job to protect the people from the consequences of their political choices.”

Perhaps it should be no surprise that a vast law that has deeply divided the country and barely passed Congress on a party-line vote would be decided by just one vote in a 5-4 opinion by the Supreme Court.

It is also somewhat fitting that the law about which then-Speaker of the House Nancy Pelosi said Congress “[has] to pass the bill so you can find out what’s in it, away from the fog of controversy” would contain a tax on Americans who don’t buy a product the government wants them to, which no one knew was in the bill until the Supreme Court ruled on it.

This, despite the promises made by President Obama proclaiming to the public that he “absolutely reject that notion” that the proposed health insurance mandate was a tax. Despite these public statements, the President did, in fact, argue to the Court that the mandate was a tax (after first telling the Court it wasn’t on the first day of arguments). This two-faced defense of the law proved to be its saving grace, as otherwise the Court would have tossed the individual mandate and the law as a violation of the Commerce Clause.

After winning the legal debate by arguing the health insurance mandate was instead a tax, the President is back to telling the American people it isn’t a tax but a penalty. The White House proclaimed after the Court’s 5-4 ruling, “It’s a penalty, because you have a choice. You don’t have a choice to pay your taxes, right?”

The one choice we do have is to decide what happens next.

Some would have the Court’s decision be the last word on the policies of the federal health care law. While it is in the legal sense, to paraphrase Winston Churchill, the Court’s decision is not the end. It is not even the beginning of the end; but it is, perhaps, the end of the beginning of the policy debate.

Placing the ultimate decision on the fate of the federal health care law back in the hands of voters, Chief Justice Roberts wrote, “The Framers created a Federal Government of limited powers, and assigned to this Court the duty of enforcing those limits. The Court does so today. But the Court does not express any opinion on the wisdom of the Affordable Care Act. Under the Constitution, that judgment is reserved to the people.”

This November, we the people will have the opportunity either to affirm the policies of the federal health care law or to pursue a different direction.

Jason Mercier is director of the Center for Government Reform at Washington Policy Center in Olympia and a guest contributor for Cascade Policy Institute, Oregon’s free market public policy research center. Washington Policy Center’s 10th Annual Health Care Conference on July 10 will focus on the next steps for state policymakers on implementation of the Affordable Care Act.

Read Blog Detail

Oregon BLM Counties Must Craft Their Own Sustainable Funding

By Randal O’Toole

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Read Blog Detail

Oregon’s Minimum Wage Prices Teens Out

By Michael Nielsen

Oregon’s minimum wage laws are changing our economy, and it doesn’t seem to be for the better. When analyzing Monthly Current Population Survey data from the Census Bureau for 2012, it is suspicious that we are behind the rest of the nation in teen employment, while our lowest paid workers are paid the second highest in the country. Teens, who often hold entry-level, minimum wage jobs, are severely disadvantaged by this policy.

Oregon’s unemployment among high school graduates aged 18 to 20 tops the national charts, with a rise of more than 200% from 2008 to 2011.* This gigantic leap dwarfs the U.S. unemployment rate for the same demographic, which only shows an increase of around 30%. Our minimum wage, being tied to inflation, has increased steadily over the last four years and has been harming the bottom line for employers because of higher labor costs.

It seems impossible that increases in the minimum wage are helping employment rates among teens. Considering that Oregon’s young workers are employed at some of the worst rates in the country, it seems probable that our minimum wage laws are pushing young workers out of the labor market. Our state wage regulations should be seriously reconsidered.

* This number was corrected on 7-9-12 from “more than 300%” in the original post. While the rate did more than triple from 2008 to 2011, the increase from 11.1% to 35.4% is actually about 218%, not 300%.

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

Read Blog Detail

The “Best Earthly Inheritance” Our Founders Bequeathed

Every July much is said by eloquent historians, civic and religious leaders, and—thanks to blogs and social media—Americans everywhere, about the Declaration of Independence, the meaning of the American Experiment, and the price of freedom. Independence Day is a moment to be grateful for the blessings of liberty and to remember the gifts many sacrificed so much to leave us.

But this year we also mark the 180th anniversary of the death in 1832 of the last surviving signer of the Declaration. Charles Carroll’s life spanned nearly a century. By the fiftieth anniversary of July 4, 1776, Carroll had outlived Thomas Jefferson and John Adams, who both died on that day.

At the time of the signing, Charles Carroll was the wealthiest man in the American colonies. The risk he took in siding with the cause of independence was acknowledged to be substantial, both in material terms and in his social standing as one of the most prominent citizens of Maryland. In his book, Charles Carroll of Carrollton: Faithful Revolutionary, biographer Scott McDermott recounts that when John Hancock asked Carroll to sign―and Carroll responded, “Most willingly”―a bystander commented, “There go a few millions.”

And just to make sure that everyone, including King George III, knew which of Maryland’s many Charles Carrolls was the signer, he proudly added the words “of Carrollton” (his Frederick County estate). Thus, history remembers him as “Charles Carroll of Carrollton.”

Carroll is unique among the signers for more than just his wealth. He was, in fact, ineligible to vote or to hold public office when he was chosen by the Maryland Convention as a delegate to Congress to approve the Declaration on its behalf. Maryland’s early Toleration Act granting religious freedom had been overturned in 1692, so Catholics could not vote, hold public office, worship in public, or freely educate their children in their faith.

Carroll’s participation in the War of Independence was motivated by his firm belief in natural law and rights, government by consent of the citizens, and freedom of religion. The Catholic minority in the British American colonies recognized in the cause of liberty the path to equality under law.

Carroll strongly supported and collaborated with George Washington during the war, influenced the crafting of the Maryland and the U.S. Constitutions, and served as the first senator from the new state of Maryland. His public life was long, and he was a giant figure through the early decades of the 19th century. Looked up to as an elder statesman and symbol of national unity, at his death, the Baltimore American called him “the last of the Romans”―a reference to the classical prototype of the generation who built the new but maturing Republic.

Charles Carroll’s brief testament to the America he would leave behind was written on a parchment copy of the Declaration, dated July 4, 1826. He wrote in the style of a man educated in the 18th century, but behind the formality is a stark humility and a simple message intended for today:

“Grateful to Almighty God for the blessing which, through Jesus Christ our Lord, he has conferred upon my beloved country, in her emancipation, and upon myself, in permitting me, under circumstances of mercy,…to survive the fiftieth year of American Independence, and certifying by my present signature my approbation of the Declaration of Independence adopted by Congress…, and of which I am now the last surviving signer, I do hereby recommend to the present and future generations the principles of that important document as the best earthly inheritance their ancestors could bequeath to them, and pray that the civil and religious liberties they have secured to my country may be perpetuated to the remotest posterity and extended to the whole family of man.”

This July 4th, as we celebrate our freedom and the legacy of each of America’s founders, let us also “remember Carroll’s sacred trust…and all [who slumber] with the just.”

Kathryn Hickok is Publications Director at Cascade Policy Institute, Oregon’s free market public policy research organization. A lover of history, she has traveled extensively to sites of historical and cultural significance throughout the U.S., Canada, and Mexico. She is a graduate of the University of Portland and Kolbe Academy Home School.

Read Blog Detail

Supreme Court Upholds Constitutionality of ObamaCare – Not its Efficacy

“The U.S. Supreme Court’s ruling that most of the Patient Protection and Affordable Care Act (ObamaCare) is constitutional means that Congress now has power to do virtually whatever it wants,” says Steve Buckstein, Senior Policy Analyst and founder of Cascade Policy Institute, Oregon’s free-market think tank. “But having the power to write health care rules and actually improving our health care system are two very different things.”

“By finding that the individual mandate cannot stand under the Commerce Clause, but can stand when looked at as a tax, the Court essentially seems to be telling Americans that while Congress cannot control every aspect of our behavior, it has virtually unlimited powers to tax us and spend the money as it sees fit.”

“Moving more control over health care to Washington, D.C. means that Oregonians, and citizens of every state, will have even less control over our own health care decisions. Big, centralized government systems mean higher costs, less access and less innovation in one of the most important areas of our lives,” Buckstein added.

Buckstein concluded that, “Now that the Court has failed to limit the role of the federal government in health care, it is up to Congress and the states to try to do so. The better chance for a lasting health care system fix involves empowering patients rather than marginalizing them. It involves giving them choices, and letting them do the inevitable rationing themselves, even if part of the money comes from public sources.

“Today’s Court decision was a step in the wrong direction, but Cascade Policy Institute will continue working to reaffirm that in America personal liberty is a cornerstone, not an afterthought, of our way of life.”

Read Blog Detail

Supreme Court Strikes Down ObamaCare Individual Mandate

The U.S. Supreme Court ObamaCare decision reinforces what British researcher John Spiers told Oregonians when he came here to study the Oregon Health Plan in 1999:

Political fixes in health care come unfixed fast.

They came unfixed for The Oregon Health Plan as pressure groups succeeded in eviscerating its rationing scheme, and they came unfixed for ObamaCare today as the highest court in the land struck down its centerpiece, the individual mandate.

Oregonians should be happy that the Supreme Court ruled as it did. After all, it was just six years ago that the Court sided with the state against the federal government in a health care regulatory case. In Gonzales v. Oregon (2006), the Court upheld Oregon’s “right-to-die” law, approved twice by Oregon voters. The U.S. Attorney General argued that federal law pre-empted the state law.

The Court disagreed and found that states generally have wide discretion in regulating health and safety, including medical standards. Finding that the Bush Administration’s reading of the federal statute would mark “a radical shift of authority from the States to the Federal Government to define general standards of medical practice in every locality,” the Court ruled that Oregon could protect the rights of its citizens, at least in this specific instance.

ObamaCare is a far broader “radical shift of authority from the States to the Federal Government.” By striking down its most onerous feature, the individual mandate, the Court recognized a bright line protecting every American against an overreaching federal government that tried to force us to purchase health insurance against our will. Any perceived reduction in health care benefits is far outweighed by the restoration of our personal liberty that the Court affirmed today.

The rest of ObamaCare is still an overreach by the federal government, even if the Court didn’t find it unconstitutional. The better chance for a lasting health care system fix involves empowering patients rather than marginalizing them. It involves giving them choices, and letting them do the inevitable rationing themselves, even if part of the money comes from public sources. And, again, it involves reaffirming that in America personal liberty is a cornerstone, not an afterthought, of our way of life.

Read Blog Detail

Supreme Court Strikes Down ObamaCare

The U.S. Supreme Court ObamaCare decision reinforces what British researcher John Spiers told Oregonians when he came here to study the Oregon Health Plan in 1999:

Political fixes in health care come unfixed fast.

They came unfixed for The Oregon Health Plan as pressure groups succeeded in eviscerating its rationing scheme, and they came unfixed for ObamaCare today as the highest court in the land struck it all down including its centerpiece, the individual mandate.

Oregonians should be happy that the Supreme Court ruled as it did. After all, it was just six years ago that the Court sided with the state against the federal government in a health care regulatory case. In Gonzales v. Oregon (2006), the Court upheld Oregon’s “right-to-die” law, approved twice by Oregon voters. The U.S. Attorney General argued that federal law pre-empted the state law.

The Court disagreed and found that states generally have wide discretion in regulating health and safety, including medical standards. Finding that the Bush Administration’s reading of the federal statute would mark “a radical shift of authority from the States to the Federal Government to define general standards of medical practice in every locality,” the Court ruled that Oregon could protect the rights of its citizens, at least in this specific instance.

ObamaCare was a far broader “radical shift of authority from the States to the Federal Government.” By striking it all down, including the onerous individual mandate, the Court recognized a bright line protecting every American against an overreaching federal government that tried to force us to purchase health insurance against our will. Any perceived reduction in health care benefits is far outweighed by the restoration of our personal liberty that the Court affirmed today.

The better chance for a lasting health care system fix involves empowering patients rather than marginalizing them. It involves giving them choices, and letting them do the inevitable rationing themselves, even if part of the money comes from public sources. And, again, it involves reaffirming that in America personal liberty is a cornerstone, not an afterthought, of our way of life.

Read Blog Detail

Union Members Can’t Be Forced to Pay for Political Activities

By Victoria Leca

Last Thursday the Supreme Court rejected the idea that public sector unions can charge non-members for political activities.

It was a 7-2 decision, and the practice was struck down on First Amendment grounds. The majority opinion held that while employees can be required to pay dues for the direct benefits they get from the union, they cannot be forced to give money to unions for political activities.

At first the Service Employees International Union offered refunds to employees who were non-members and who disagreed with the political cause the union was promoting, but the Supreme Court ruled that the individuals had to choose to “opt-in” to the payment.

The workers who do not join unions should not be forced to pay for the union’s political activities. The fact that the Supreme Court majority decided that the worker has to opt-in to paycheck deductions, rather than opt-out of these payments, restores protection of individuals’ right to free speech and property.

Coming on the heels of Governor Scott Walker surviving his recall election in Wisconsin, this is one more victory for the rights of workers to be independent of union control. Workers shouldn’t have to join a union to have the right to work, and they certainly shouldn’t be forced to make political contributions against their will.

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

Read Blog Detail

Kathryn Hickok talks about the first amendment fight to serve

We sat down with our Publications Director Kathryn Hickok to discuss her latest commentary, This First Amendment Fight Is for Freedom to Serve, where she discusses the threat to religious freedom from a recent U.S. Department of Health and Human Services mandate.

Read Blog Detail

Supreme Court to EPA: “You Are Not Above the Law”

By Daniel A. Himebaugh

Five years after the Environmental Protection Agency forced them to stop building their dream home, Mike and Chantell Sackett are celebrating a major legal victory. If you don’t already know, the Sacketts are the now-famous Idaho couple who have become the new poster children for victims of EPA bullying.

In 2007, the Sacketts were blind-sided by the EPA when the agency ordered them to restore a residential lot they were preparing for a home site. The EPA, lacking any proof of violation, asserted that the Sacketts’ property is a wetland which the Sacketts had filled without a required federal permit. The agency issued a “compliance order” directing the Sacketts to remove all fill, plant new vegetation, fence the lot for three years, provide off-site mitigation, and pay a fine; or risk ruinous civil penalties (up to $75,000 a day) and possible criminal sanctions.

Holding all necessary state and local permits—and adamant that they had not filled a wetland—the Sacketts filed a lawsuit with the help of Pacific Legal Foundation attorneys, challenging the EPA’s claim of jurisdiction over their property. The EPA, for its part, brushed aside the Sacketts’ complaint, arguing that the Clean Water Act did not provide the Sacketts with an opportunity to seek judicial review of the agency’s compliance order.

The Sacketts lost their case in every court until March 2012, when the U.S. Supreme Court ruled in Sackett v. U.S. Environmental Protection Agency that the Sacketts are entitled to challenge the EPA’s assertion of jurisdiction over their property. In a unanimous opinion written by Justice Antonin Scalia, the Court held that the Clean Water Act does not preclude the Sacketts from seeking judicial review of the EPA’s compliance order. In one of the more strongly worded passages of the opinion, Scalia remarked that “there is no reason to think that the Clean Water Act was uniquely designed to enable the strong-arming of regulated parties into ‘voluntary compliance’ without the opportunity for judicial review.” As a result of the Court’s opinion, the Sacketts now have the opportunity to show that their property is not a wetland under the Clean Water Act, which means they could eventually be able to build their home as they originally planned.

In a forceful concurring opinion, Justice Samuel Alito expressed his disapproval of the EPA’s overbearing administration of the Clean Water Act: “The reach of the Clean Water Act is notoriously unclear. Any piece of land that is wet at least part of the year is in danger of being classified by EPA employees as wetlands covered by the Act, and according to the Federal Government, if property owners begin to construct a home on a lot that the agency thinks possesses the requisite wetness, the property owners are at the agency’s mercy….In a nation that values due process, not to mention private property, such treatment is unthinkable.”

True, the Sackett v. EPA decision does not solve every problem that builders might encounter when dealing with the EPA, but it goes a long way in the right direction. Homebuilders finally have the opportunity to challenge EPA compliance orders, an option that had heretofore been unavailable to them. And hopefully the decision will cause the EPA to base future compliance orders on more than mere suspicion, since the agency can now be held to account in federal court when it asserts wetlands jurisdiction over private property.

The Sacketts should be commended for pursuing a case that injects some much needed fairness into the compliance order process, which for too long has been dominated by an agency utterly disdainful of any constraints on its authority.

Daniel A. Himebaugh is an attorney with Pacific Legal Foundation in Bellevue, Washington. PLF is the oldest and most experienced nonprofit legal foundation litigating for property rights, free enterprise, limited government, and a balanced approach to environmental regulation. He is a guest contributor for Cascade Policy Institute, Oregon’s free market research center. This article originally appeared in Building Insight Magazine, April 2012.

Read Blog Detail

Limit Government, Not Consumer Choices

By Erin Mae Shiffler

We live in a country founded on freedom and limited government. We choose where we live, what we do for a living, and what products we buy. If we aren’t satisfied with our decisions, we choose differently next time. Consumer choices are an important market signal that directs the allocation of resources more efficiently in our economy. It is not the proper role of government to micromanage those choices in order to enforce a “politically correct” lifestyle on everyone else.

The plastic bag ban that took effect eight months ago is just one recent example of how Portland imposes its “green” ideology on everyone who does business here. If enough people thought refraining from using plastic shopping bags would protect the environment, and valued the importance of that, they would choose not to use plastic bags. Plastic bags are a reusable product I get when I buy something else. But I no longer get the choice of canvas, paper, or plastic. Instead of reusing my plastic bags, I have to buy other plastic bags to take out my garbage. Where is the net environmental benefit in that?

Our choices are our personal liberty in action. If we want to preserve our freedom in the most important areas of our lives, we need to stop government from encroaching even on what may appear to be the most trivial of things.

Erin Mae Shiffler is a research associate at Cascade Policy Institute, Oregon’s free market public policy research center.

Read Blog Detail

Friedman Legacy for Freedom Day

RESERVATION DEADLINE IS THIS WEDNESDAY, JULY 25TH AT NOON.

The Cascade Policy Institute cordially invites you to participate in this year’s Friedman Legacy for Freedom Day on July 31st, which would have been Milton Friedman’s 100th birthday. This annual, international event provides fans of Professor Friedman and lovers of liberty the opportunity to learn about the late economics Nobel laureate, to share his ideas, and to celebrate the impact they still have on our country and the world.

Join us at the Portland Golf Club to hear School Choice Reform Advocate and former Arizona school chief Lisa Graham Keegan talk about Milton Friedman and the future of school choice in Oregon.

Sponsor tables of eight available

To RSVP, complete this form and send to:

Patrick Schmitt at

503-242-0900

or by e-mail at patrick@cascadepolicy.org

Milton Friedman Birthday Celebration

Read Blog Detail

Steve Buckstein talks with Victoria Taft on ending forced unionism

KPAM’s Victoria Taft interviewed Cascade Policy Institute Senior Policy Analyst Steve Buckstein about the involvement of Congress in professional sports and his latest QuickPoint about ending forced unionism in Oregon.

Read Blog Detail

This First Amendment Fight Is for Freedom to Serve

Fifteen million. That is the number of meals Blanchet House of Hospitality estimates it has served to the needy in Portland since 1952. Blanchet House originated as a Catholic social and service group started by University of Portland students in 1938. Today, Blanchet serves an estimated 700 to 900 people every day in Old Town/Chinatown. If fifteen million people stood next to each other, the distance would stretch from about the North Pole to the Equator.

Nearly forty years ago, a Salem priest wanted “to provide a safe and loving home” for pregnant teenage mothers so they wouldn’t believe their only option was an abortion. The Father Taaffe Foundation says: “They were given a home, not just an address. They were treated with respect, love and care, some for the first time in their lives. They were given a sense of safety, structure, and direction; an example of family life and hope for the future.”

Monday through Saturday, volunteers provide help for those most marginalized and forgotten at Saint André Bessette Catholic Church, better known by its former name―the Downtown Chapel. Says St. André Bessette’s mission statement: “Compelled by our faith, our parish honors the dignity of each person by providing hope, healing and hospitality to all who come to our doors.”

Catholic Charities is the professional social services arm of the Archdiocese of Portland. It offers housing assistance, disaster relief, human trafficking outreach, immigration legal services, pregnancy and adoption counseling and services, Hispanic outreach, and more. It provides these things “regardless of faith, race, marital status or condition in life. [Catholic Charities’] activities are based upon the fundamental belief in the dignity and sanctity of human life and the principles of Catholic Social Teaching.” Catholic Charities served 1,323 people in 1952. Today, Catholic Charities helps more than 100,000 Oregonians in need every year.

The Society of St. Vincent de Paul, with a highly active council in Portland, is a “worldwide Catholic organization of laypersons, open to all who wish to live their faith by loving and serving their neighbor….[M]embers…help those in need, regardless of race, ethnicity, creed, gender, orientation, handicap or religion.”

All of these organizations provide vital assistance to the needy in Oregon, all are inspired directly and explicitly by the faith of the people who work and volunteer for them, and all operate in accordance with the moral beliefs and values of the Catholic Church.

But organizations like these would not be considered “religious employers” by the federal government, because they do not exist solely for the purpose of serving members of their own faith.

Last summer, the Department of Health and Human Services (HHS) directed virtually all employers to include coverage of contraceptives, sterilization procedures, and abortion-inducing pharmaceuticals without copayment in their employee insurance policies. HHS subsequently published a final rule that requires many health insurers to charge all enrollees in order to cover the cost of other people’s elective abortions.

The HHS mandate on contraception, sterilization, and abortion has an extremely narrow conscience exemption only applicable to organizations whose purpose is solely to inculcate religious values and which employ and serve primarily members of their own faith. It will not include the vast majority of religiously affiliated or faith-based institutions like hospitals, colleges, schools, and social service organizations which may have moral objections to paying for or providing these products and services. Grimly dubbed “the parish secretary exemption,” it would apply mostly to houses of worship, not to ministries and charitable agencies which serve all people without discrimination.

For the federal government to attempt to force organizations like Catholic Charities to pay for or to provide contraception and abortion is absurd. Equally absurd is forcing Catholic organizations to assist only members of the Catholic Church or else to be considered “not religious”―and therefore subject to government regulations that violate their moral standards. In fact, this should be ruled unconstitutional.

Catholic social services are the fruit of people’s faith, but they don’t help others because the needy share that faith. Catholics believe that Christ’s words and example require them to reach out to all. Restricting assistance only to members of their religion is unacceptable to them. This is why forty-three Catholic dioceses, universities, Catholic Charities chapters, and other entities have brought a historic lawsuit against the federal government. Through the new HHS rules, the federal government, in effect, has created “two classes of religious organizations”―houses of worship which are exempt from its conscience-crushing directives, and service organizations which may have to violate their moral principles or stop serving the needy.

The Catholic Church, and Americans of all faiths or none who are uniting in defense of religious liberty, are not seeking special treatment under the law, but only the freedoms guaranteed by the First Amendment of the Constitution. The Archbishop of Washington, D.C., Cardinal Donald Wuerl, said, “Just as our faith compels us to uphold the liberty and dignity of others, so too, we must defend our own.” This First Amendment fight is not for believers’ freedom to worship behind church doors, but for their freedom to serve millions of their neighbors who stand outside, in accordance with their faith and moral values.

Kathryn Hickok is Publications Director at Cascade Policy Institute, Oregon’s free market public policy research organization, and a graduate of the University of Portland.

 

Read Blog Detail

End Forced Unionism Now

The failed June 5th recall election of Wisconsin Governor Scott Walker was supposedly over collective bargaining reform, but syndicated columnist Charles Krauthammer points out that the real battle was over ending automatic collection of union dues by government: “Without the thumb of the state tilting the scale by coerced collection, union membership became truly voluntary. Result? Newly freed members rushed for the exits. In less than one year, AFSCME, the second largest public-sector union in Wisconsin, has lost more than 50 percent of its membership.”

Indiana Governor Mitch Daniels ended that practice in his state seven years ago, and 91 percent of public union members no longer pay dues. Then, on February 1st of this year, Daniels signed legislation making Indiana the 23rd Right to Work state so that no workers, public or private, can be forced to join a union or pay dues against their will.

The Walker recall failure shows that a politician can stand against forced unionism and still keep his job. It is time for Oregon politicians to take such stands. They should stop forcibly collecting union dues from unwilling workers. Then, they should make Oregon the 24th Right to Work state so all workers can keep their jobs without some third party coming between them and their employer.

Read Blog Detail

Cascade Update Spring 2012

Want to know the latest happenings at Cascade Policy Institute? Click here to read our Spring newsletter.

Read Blog Detail

Oregon Lawmakers: Get Proactive on the Economy

Who wouldn’t want to live in the Pacific Northwest?

According to the 2010 Census, Oregon has enjoyed a relatively large population growth. There were 12 percent more people in the Beaver State in 2010 than in 2000. This is good compared to the national growth rate of 9.7 percent.

Oregon is attractive. But other than a pleasant climate, a breathtaking coastline, and beautiful mountains, what makes Oregon stand out?

From an economic viewpoint the answer is “not much.” Over the past decade Oregon had a few years of strong growth, but that was driven entirely by computer and electronics manufacturing. While production of computer components and other electronic products surged from ten percent of the state’s economy in 2001 to 30 percent in 2010, the rest of the private sector stood still or declined. And even though recent media headlines noted that Oregon saw the second highest economic growth rate in the country at 4.7 percent in 2011, you would have to read down the page to realize that this was a 42 percent decline from our 8.1 percent growth rate the year before.*

It is a bit frightening to see the numbers from the Bureau of Labor Statistics. Comparing the recession year of 2001 to the recession year of 2010, there is absolutely no private-sector job growth. There are as many people working private jobs in Oregon today as there were a decade ago.

Again, it is nice that electronics manufacturing has become big in Oregon, and 16,000 Intel employees should be proud of their jobs. But it is problematic that this particular branch of manufacturing is the only driver of the state’s economy. Jobs in the electronics industry are among the easiest to move, both nationally and globally.

The problem is that the Beaver State lacks consistent growth-promoting policies. Instead of being economic visionaries, the lawmakers in Salem come across as run-of-the-mill ho-hummers.

Oregon’s ranking with the Tax Foundation has not changed much over the past ten years. Taxes are relatively high – currently 17th highest in the nation. Oregon is not in the tax dungeon like New York or California; but on the other hand, there is no concerted effort in Salem to make Oregon attractive relative to its peers in the West.

Oregon’s tax rates continue to make the state uncompetitive compared with others. The high individual income tax is a good example. Since two thirds of the state’s tax revenues come from the individual income tax, state legislators are more interested in a tax code that maximizes revenue than one that promotes growth. As a result, Oregon has a nine-percent state income tax bracket that covers the vast majority of income tax filers. Even California is more lenient toward individual incomes.

And let’s not forget that Washington and Nevada have no state income tax at all.

In terms of business taxes, Oregon ranks about the same as for individual income taxes: better than California and Idaho, but worse than Washington and Nevada. This is yet more evidence that state lawmakers are taking a passive, go-with-the-flow attitude to economic policy.

Government employment is another area where state legislators could be proactive. While there is no steady, long-term growth in private employment in Oregon, government employment is doing well. In 2001, at the bottom of the Millennium recession, there were 181 state and local government employees per 1,000 private-sector employees. In 2010, at the bottom of the Great Recession, that ratio had risen to 191. This means, in plain English, that while the private sector was essentially standing still, job-wise, over the long term, Oregon’s governments kept adding to their payrolls.

Since the summer of 2010 there have been some reductions in local government employment, but available Bureau of Labor Statistics data shows no break in the trend of swelling state payrolls. In other words, the prevailing spending-as-usual attitude continues in Salem.

Instead of complacency, the state legislature needs to take a proactive approach to the economy. Their duty is not first and foremost to maintain government and the status quo, but to facilitate the growth of prosperity and economic freedom in the state. To do this, they could start with something as simple as capping tax-funded payrolls to what the private sector can afford. If there are no new jobs being created in the private sector, then at the very least there should be no expansion in tax-funded payrolls, either.

Another step is a more competitive tax code. Interstate migration data from the Census Bureau shows that while Oregon has gained population over the past decade, Washington is a much stronger magnet. It is fair to assume that Washington’s lack of income tax is a major reason for this.

There is a lot more to do, of course, but these two measures would be a good way to start.

 

*http://www.oregonlive.com/business/index.ssf/2012/06/oregon_economy_growing_at_nati.html

 

Sven Larson is Senior Fellow in Economics at the Wyoming Liberty Group and a guest contributor for Cascade Policy Institute, Oregon’s free market public policy research center. He holds a Ph.D. in social sciences with major in economics and has taught economics at colleges in three countries. His research on health policy, taxes, and government budgeting and entitlement reform has been published by think tanks including Cascade Policy Institute and the Wyoming Liberty Group.

Read Blog Detail

Zoning Oregonians out of House and Home

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

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

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

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

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

Read Blog Detail

Bill Post interviews Sarah Ross on the role of government

Cascade Communications Coordinator Sarah Ross speaks with KYKN talk show host Bill Post about the role of government and the latest commentary from Steve Buckstein, Oregon’s Budget Transformation.

Read Blog Detail

Steve Buckstein interviewed about his commentary, Oregon’s Budget Transformation

We sat down with Cascade Policy Institute Senior Policy Analyst, Steve Buckstein, to talk about his latest commentary, Oregon’s Budget Transformation which discusses government trying to do efficiently that which it shouldn’t be doing at all.

 

Read Blog Detail

Kathryn Hickok talks with John Kuzmanich about the U.S. exit tax

KUIK radio talk show host John Kuzmanich interviewed Cascade Publications Director, Kathryn Hickok, about her latest piece, Divorcing Lady Liberty, which discusses ex patriots renouncing their U.S. citizenship because of U.S. taxes.

Read Blog Detail

American Nightmare: How Government Undermines The Dream of Homeownership

Why did the American Dream turn into a nightmare when the housing bubble burst? Who should we blame: Greedy bankers? Corrupt politicians? Ignorant homeowners? In his latest book, American Nightmare: How Government Undermines the Dream of Homeownership, Oregon native Randal O’Toole explores the forces at play in the housing market and shows how we can restore high rates of homeownership by eliminating federal, state, and local policies that distort the free market for housing.

O’Toole says that Metro, the Portland area’s regional government, is aiming to reduce single-family home ownership from 65 percent down to 41 percent; which is nothing short of a war on homeownership.

O’Toole contends that we could boost home ownership rates to nearly 75 percent by eliminating land use-regulations and subsidies.

You can meet this provocative author and hear him expound on his home ownership theories at next week’s Executive Club dinner; Wednesday, June 6th at the Portland Airport Shilo Inn.

Come for the $20 buffet dinner beginning at 6pm, or skip dinner and arrive by 6:45pm for the meeting. O’Toole, Senior Fellow at the Cato Institute, will have copies of his book for sale before and after his keynote address. There is no charge for this important event, unless you choose to buy dinner or a book. We hope to see you there.

Read Blog Detail

U- Choose Education Forum: Business and Government

Meeting the challenges of running a business in Oregon

Join the U-Choose Education Forum addressing government’s escalating attacks on business.  Tuesday June 19, 6:30- 9:00PM, West End Building, 4101 Kruse Way, Lake Oswego, OR 97035

Oregon is a beautiful place to live, but, unless you are in one of the government favored industries, it is perceived to be one of the less business friendly states.  Over the last decade the economy of this state has been in steady decline.

Are taxes, regulations, and mandates strangling the economy of this state?  Can businesses survive and thrive in Oregon? How can our elected officials, at every level of government in Oregon, work to make Oregon more business friendly?

These questions will be addressed by speakers who operate businesses in this state and who are, or have been, candidates for public office.

Moderator:

Karen Bowerman- Dean Emeritus, College of Business and Public Administration, California State University San Bernardino and primary candidate CD5.

Speakers:

Lew Barnes: Founder and president of Summit Manufacturing, former Vietnam Marine, and candidate for State Representative District 31.
Gary Coe: Founder and leader of seven successful businesses which have employed hundreds of Oregonians including Speed’s Towing and Pacific Cascade Towncar.  He is a candidate for State Senator District 14.
Representative Matt Wingard: Oregon House of Representatives, R-Wilsonville, District 26.
Councilor Mike Kehoe: Lake Oswego City Council and recent founder of four new companies.

Are you running a business in Oregon? Come share your own views and experiences during U-Talk.

Children, teens, adults welcome.

Read Blog Detail

Oregon’s Budget Transformation

Governor John Kitzhaber has called for transforming state government, in part by proposing a new ten-year budget process that he says “is necessary to change a decade of declining employment and wages.” The Governor hired former Metro Chief Operating Officer Michael Jordan to implement this transformation, while leading and supervising all aspects of the state’s day-to-day operations as its first COO. Jordan’s charge includes reviewing outdated state systems, streamlining departments, and creating efficiencies and cost savings.

The transformation process includes a set of Guiding Principles and Outcome-Based Budgeting Principles that sound good but so far fail to address adequately at least four important concerns:

First, Government cannot and should not do everything. Determining core functions and prioritizing them should be the first step to achieving more accountability in state government.

Many state agencies don’t have a clear understanding of what their priorities should be. This concern was highlighted in a legislative hearing where the head of an agency was asked by a freshman legislator what his highest priority activities were.* Without hesitation, the agency head looked at the freshman and told him that everything his agency did was high priority.

The legislator then asked what would be cut if the agency budget ended up smaller than requested. The agency head stated, again without hesitation, that he couldn’t cut anything. He repeated that everything his agency did was a top priority.

If everything is a top priority, then nothing is a top priority.

The proper role of government in a free society clearly includes the protection of our rights to life, liberty, and property. But just as clearly, for example, it should not include provision of our jobs, entertainment, and alcohol. We should be willing to end state economic development programs, which do not create jobs so much as they pick winners and losers in the economy.

We need to end state control of liquor through the OLCC, and we should not even consider using tax dollars to fund entertainment venues such as sports stadiums. These belong in the private sector.

Of course, sticking to core functions is hard, especially because of the misguided belief that anyone’s unmet need is the proper concern of government. It is not. The average person can’t afford the time in Salem to lobby against any given program that may only cost him or her a few dollars a year. However, it is well worth the time for those who benefit from a program to spend as much time and money as needed to ensure that the millions or billions of dollars at stake move from the taxpayers to them.

The pressure is always in favor of more government, not less. To resist this pressure, lawmakers need to understand government’s proper role and the harm they do when taking money from some to provide benefits to others. Citizens need to learn why more government means less freedom and how they might meet their needs better through voluntary, private sector approaches.

Second, we need to understand why one of the Governor’s 10-Year Plan Guiding Principles—the reliance on evidence-based information to make informed policy decisions—hasn’t worked before and may not work in the future.

In the late 1980s, then-Senator President John Kitzhaber relied on this principle when he helped create the Oregon Health Plan (OHP). The Plan attempted to use medical and scientific evidence to prioritize treatment of medical conditions for Medicaid patients based on cost-benefit analysis. The problem then was (and likely will be now) that politics gets in the way.

Medical conditions that objectively should have fallen below the cutoff line in the OHP rose above the line because special interest groups successfully lobbied for their constituents. Consequently, the plan saved little, if any, money for taxpayers. As long as government provides the service, or provides the funding, this dynamic will be hard to change.

Third, achieving streamlined operations and cost savings through consolidation of agencies, boards, and commissions will be harder than it sounds.

Forces are at work in large firms and governments that cause them to produce goods and services at increased per-unit costs. Economists call these forces diseconomies of scale. They are especially prevalent when trying to combine monopolies―which defines government agencies.

Take, for example, Oregon’s attempt from 1992 through 2001 to reduce education costs by consolidating school districts. Legislation resulted in 277 school districts being consolidated down to 198. Rather than fewer districts resulting in less administrative overhead, at the end of the period there were actually more central office staff per pupil than at the beginning. Also, non-teaching staff grew faster than teachers, and real per student spending rose more than 11 percent. We should not be surprised if upcoming efforts to consolidate boards, commissions, and agencies yield similar results.

Finally, as famed management consultant Peter Drucker warned: “There is nothing so useless as doing efficiently that which should not be done at all.”

This gets us back to the first concern above. Unless we prioritize core functions, and stop doing other things, state government will expend a lot of energy, and a lot of taxpayer dollars, trying to do efficiently that which government should not be doing at all.

* House Agency Oversight and Efficiency Committee, Oregon Legislature, April 8, 1997. Rep. Ryan Deckert (D) questioning William Scott, Director, Oregon Economic Development Department.

Read Blog Detail

Executive Club: Oregon’s (free market!) Environmentalist

Randal O’Toole a Senior Fellow at the Cato Institute is one of the most respected thinkers and essayists to grace our meeting lectern and we are delighted to bring him back to mark the publication of his latest work, American Nightmare: How Government Undermines The Dream of Homeownership.

In American Nightmare, O’Toole says Portland Metro is aiming to reduce Portland-area single-family homes from 65 percent to 41 percent … this is nothing short of a war on home ownership.  The author also inveighs against government subsidies for housing by illustrating how subsidies do more harm than good by actually making housing more expensive.

O’Toole contends that the elimination of both land use-regulation and subsidies would increase homeownership rates to nearly 75 percent!  Be there to meet this original thinker and enjoy what is guaranteed to be a lively, informative and, above all, a thought provoking presentation.

Read Blog Detail

Tear Down These Walls!

As a founder of Cascade, I was asked to speak at the fourth annual Oregon Tax Day Tea Party, this year held on April 14 in Clackamas County. Some 400 activists attended what turned out to be the most inspiring event of its kind since the Tea Party began organizing in 2009. For a full description and video of the event, go to www.OregonTeaParty.org.

 

I told the audience a human story from when the Berlin Wall fell in 1989. My friend Wall Street Journal editorial writer John Fund wrote about his encounter with four teenage girls while visiting East Berlin in 1984. As he prepared to board the train that would take him back to the West, John asked them what they wanted to be when they grew up.

 

“A schoolteacher, said one. A hairdresser, said another. A nurse, said the third. Only Monika, the oldest and clearly the wisest, hesitated. Finally, she sighed and said, ‘It doesn’t make any difference what we become when we grow up. We will still always be treated like children.’”

 

That statement made a profound impact on John. He noted how he could go anywhere in the world from that street corner, but these teenagers could not go 500 yards to see the bright lights of West Berlin.

 

They had to remain in “a semi-comfortable, but drab and kindergarten-like existence, in which independent thoughts were hidden from the government.”

 

John and Monika kept in touch over the next few years. Then, two days after the Berlin Wall fell on November 9, 1989, John’s phone rang.

 

There was the unmistakable sound of an overseas call. “This is Monika!” she shouted in halting English. “I am calling from Berlin West! I am over the Wall!”

 

Monika did not plan to flee East Germany. But now that the Wall was down, she could leave if the people who ran that government reneged on their promises of free elections and economic reforms.

 

John reminded Monika of their first meeting and asked if she felt she was finally being treated like a grownup.

 

“Yes,” she said. “I think everyone in my country decided for themselves to grow up overnight.”

 

I explained to the Tea Party audience that Monika knew what it was like to be treated like an adult by her government; but Americans are now being treated more like children, as the limited government our Founders gave us morphs into a behemoth. Activists like them must stand up and tear down the Walls of national programs like ObamaCare, and the Walls erected by local programs like “Smart Growth” that have overtaken Multnomah County and threaten to encroach into neighboring counties.

 

Many in the Tea Party audience were part of what is becoming known as the “Clackastani Rebellion” because of their efforts to defeat smart growth and light rail plans in cities like Damascus and throughout Clackamas County.

 

Cascade Policy Institute has helped educate Oregonians since 1991 about the benefits of freedom and liberty. We look forward to working even more closely with everyone who is committed to keeping our communities and our state from being encircled by our own, self-created Berlin Walls.

Read Blog Detail

Divorcing Lady Liberty

Numerous recent news stories have reported on high-net-worth Americans renouncing their U.S. citizenship to protect assets from high tax rates. Last Friday, a Wall Street Journal editorial suggested the U.S. government should not seek to “punish” ex-citizens through high “exit taxes.” Instead, Congress should work “to make the U.S. so appealing and dynamic again” that people will be “sorry [they] ever left.”

 

It seems unreal that citizens should find it in their interest to leave the United States of America. Our country and its material success were built by millions of the world’s “huddled masses, yearning to breathe free.” Men, women, and children have come to America for centuries in search of freedom, justice, and an upwardly mobile future that results from both. When the tax code is so punitive that Americans would relinquish willingly the rights and privileges of U.S. citizens, we know we have a problem.

 

Our tax policies should encourage entrepreneurs, investors, and individuals of financial means not only to come here but to stay. Yet, it bears remembering that our identity as Americans and our relationship with our country should have value to us beyond whether they are financially “worthwhile.” Americans have grown used to acquiring whatever we desire, but our American heritage can’t be purchased―and you can’t put a price on freedom. That’s why it’s a sorrow to see Americans choosing to go.

Read Blog Detail

John Charles talks with Victoria Taft about the Portland-Milwaukie Light Rail Project

Victoria Taft, radio host on KPAM 860, interviewed John Charles about his latest commentary, Transit Hypocrisy, which discusses TriMet’s Portland-Milwaukie Light Rail Project.

Read Blog Detail

Testimony Regarding TriMet Proposed FY 13 Budget

Testimony before the Multnomah County Tax Supervising and Conservation Commission

Regarding the TriMet Proposed FY 13 Budget

 

John A. Charles, Jr.

President & CEO

May 23, 2012

 

 

The TSCC is charged with reviewing local government budgets and certifying that they comply with state law. I encourage you to withhold your approval of the TriMet FY 13 budget, on the grounds that it is not balanced.

 

TriMet pretends to show a balanced budget by using at least two gimmicks: (1) assuming that $5 million in potential employee compensation costs will disappear via labor arbitration with the ATU; and (2) deliberately under-funding pension and OPEB trust funds to solve immediate cash problems.

 

If the TSCC were to use a more realistic assumption for the ATU/TriMet arbitration, and if you required TriMet to begin funding retirement trust funds at prudent levels, the TriMet budget would be severely out of balance. That should be addressed now, not next year.

 

Problem #1: Assuming that management will win the arbitration with  ATU

 

By making this assumption, TriMet closes a $5 million gap in the budget. But why is this a realistic assumption? TriMet has been making the same prediction for over a year, and has yet to be right, as seen in the following statements:

 

  • TriMet press release, April 13, 2011: “The FY2012 budget assumes that a new Working and Wage Agreement with the ATU has benefits more in line with peer agencies, and consistent with those contained in TriMet’s July 2010 Final Offer.”

 

  • TriMet FY 2012 budget message, July 2011: “A critically important assumption upon which TriMet’s financial forecast and the FY 12 Adopted Budget are based is that TriMet enters into a Working and Wage Agreement WWA) with the Amalgamated Transit Union, and that the wages and benefits are consistent with those contained in TriMet’s July 2010 Final Offer….”

 

  • TriMet FY 13 budget message, April 2012: “…the FY 13 proposed budget includes a $12 million revenue increase/expenditure reduction package, based on the assumption of a labor arbitration decision favorable to TriMet.”

 

Unless TriMet can provide you with some analytical justification for its continued assumption that management will win the ATU arbitration, TSCC should reject this forecast as wishful thinking and require that TriMet plan a budget on the assumption that ATU wins. That would require $5 million in new revenue and/or expense cuts.

 

Problem #2: Disguising revenue-expenditure imbalances by underfunding retirement trust funds.

 

TriMet has been hiding budget problems for decades by deliberating underfunding the trust accounts established to pay for post-employment obligations. This is not apparent to anyone who simply reads the budget; it can only be discerned by looking at the budget and the audited financial statement together.

 

For your convenience, page 48 of the 2011 TriMet Annual Report is attached. It shows that the trust funds for OPEB and the two pension plans are severely underfunded. Not only that, when expressed in terms of “UAAL as a percentage of covered payroll”, the trends since 2004 are all going in the wrong direction.

 

Lest you think that this is some kind of 8-year statistical fluke, the chart below shows that management has been underfunding the largest employee pension fund for nearly 30 years.

 

Trends in pension obligations for TriMet

1983-2011

(millions)

 

Bargaining Unit Plan                      1983       1987       1991       1995       2001       2005       2009       2011

 

AAL                                                        $17.5     $23.6     $33.1     $113.1   $194.9   $345.4   $460.3   $517.9

Unfunded AAL                                  $7.1        $17.7     $22.7     $61.1     $94.6     $189.6   $243.2   $228.6

 

UAAL as a % of Cov. PR                  17%        46%        52%        92%        107%     178%     196.5%  192%

 

 

TriMet managers know this is not prudent. They have repeatedly stated that changes must be made. For example, in the budget message for the FY 2011 budget, management stated: “Over time, TriMet will need to increase annual pension fund contributions in order to achieve 75% or higher funding of the defined benefit pension plans.”

 

The message also noted,  “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 language was repeated almost word for word in the FY 2012 budget message last May.

 

The message for the FY 13 budget states, “TriMet must continue to improve its financial position by addressing the following areas: reduce retiree medical costs and fund existing liabilities with deposits to an OPEB trust; increase the funded ratio for existing pension plans.”

 

For three years in a row, TriMet has promised to address this problem, yet as of June 2011, the funded ratios for the OPEB trust, the management DB pension plan, and the union DB pension plan were 0%, 68%, and 56%, respectively.

 

The relative scale of TriMet’s OPEB liability can be seen in the attached spreadsheets, which are excerpted from a larger analysis we undertook last year. The first spreadsheet (blue) is rank-ordered by Actuarial Accrued Liability; the second by UAAL as a % of covered payroll. By either metric, TriMet has the biggest OPEB problem of any unit of government in Oregon.

 

According to the auditor, the annual OPEB cost last year was $86.2 million, and TriMet only paid for $15.9 million, or 18% of the total cost. If TriMet tried to make the Annual Required Contribution of $77.6 million calculated by the actuary, it would almost wipe out TriMet’s transit service.

 

At the January meeting of the TriMet board, the TriMet CFO reported that OPEB unfunded liability had increased by roughly $60 million since June 30, which implies that the unfunded liability is (or was) growing at a rate of $2.3 million per week. In essence, TriMet cannot afford to pay its workers, and is using the OPEB trust fund as an ATM.

 

If an employer paid its employees under the table to avoid payroll taxes, everyone would know that the business was not really viable. Yet TriMet is essentially doing the same thing by moving the growing levels of UAAL for OPEB and pensions off the balance sheet. While this may be legal in the public sector, it is not a sound budgeting practice, and guarantees an even worse budget crisis in the future.

 

Conclusion

 

Municipalities and special districts across the country are facing massive budget problems caused by unsustainable retirement obligations for public employees. Yet in every case, something could have been done about it in prior decades, if only policy-makers had had the courage to act.

 

The same thing is happening at this very moment with TriMet. Year after year, the agency defers more unfunded liability to future years, because the TriMet board is unwilling to make the tough decisions. Members of the TSCC have an opportunity to help put a stop to that practice.

 

I hope you will reject the proposed budget on the grounds that it hides the true long-term effects of current and past decisions, and require that TriMet resubmit a budget that more accurately states the costs of fringe benefits.

Read Blog Detail

Legislative Testimony Regarding Public Purpose Tax

Testimony of John A. Charles, Jr.

President & CEO

Regarding Oregon’s Public Purpose Tax

 

May 22, 2012

 

Oregon’s public purpose tax was enacted in 1999 through the passage of Senate Bill 1149. The tax went into effect on March 1, 2002. The stated purposes were to subsidize “new cost-effective local energy conservation, new-market transformation efforts, the above-market costs of new renewable energy resources, and low-income weatherization.”

 

Many diverse interests went into formulating the bill, and all participants were clear that the tax would sunset in ten years. For example, Ron Eachus, the chair of the Public Utility Commission at the time, stated:

 

“[The public purpose tax] provides a reasonable sunset that is long

 enough that enables a more competitive market to develop for those

programs and it gives some stability to the financing of these programs.”

 

He reiterated that, “10 years provides both an assurance of funding and provides some stability and at the same time it provides an opportunity for a competitive market to develop. Then you can decide that the public purpose charge is not needed.”

 

Rep. King stated, “…[renewables] might require a period of ten years until it could be competitive and survive in a competitive market.”

 

In 2007, the legislature passed SB 838, which imposed renewable portfolio standards (RPS) on large electric utilities.  For reasons never explained, the bill also extended the sunset date of the public purpose tax to 2026. So instead of having the PPT disappear on March 1 of this year – as promised in SB 1149 – ratepayers are facing billions of dollars in rate premiums during the next 14 years. This is a legislative bait-and-switch that should not be tolerated.

 

During the 2012 interim, the Legislative Audits committee should take a hard look at the history of SB 1149 and ask the proponents why their 1999 predictions were so wrong. And more importantly, if subsidies for 10 years turned out to be inadequate, why should we assume that more subsidies will make the renewable energy industry competitive?

 

Read Blog Detail

Jeff Kropf talks with John Charles about TriMet’s Transit Hypocrisy

KUIK radio host Jeff Kropf interviewed Cascade President John Charles on his latest commentary, Transit Hypocrisy, about federal funding for the Portland-Milwaukie Light Rail Project.

Read Blog Detail

Transit Hypocrisy

Two years ago, the head of the Federal Transit Administration (FTA), Peter Rogoff, gave a speech to a room full of transit executives. His remarks were unusually blunt. Mr. Rogoff admitted that the transit planning process for new projects was biased in favor of light rail. But he reminded people that rail systems had significant long-term costs. FTA recently had concluded there were more than $78 billion in deferred maintenance costs for public transit agencies in the U.S., and three-fourths of those costs were associated with rail systems.

Mr. Rogoff pointed out that many local transit districts were seeking large federal grants for new rail lines, even though their overall levels of service were shrinking. He asked rhetorically, “If you can’t afford to operate the system you already have, why does it make sense for us to partner in your expansion?”

In the face of funding shortages at all levels of government, Mr. Rogoff reminded the executives that decisions about new transit service were moral decisions and that political leaders needed to “have the guts to say ‘no’ when everyone else wants to say ‘yes’.”

Unfortunately, Mr. Rogoff apparently forgot this speech as soon as he gave it. During the next two years, his agency encouraged Portland’s TriMet to continue planning for the most expensive transit project in the state’s history, the Portland-Milwaukie light rail line (PMLR). The Milwaukie line will cost more than $205 million per mile to construct and will destroy 68 businesses and 20 private homes.

In order to partially finance the so-called “local share” of the price tag (50% of construction cost), TriMet will have to sell $60 million of bonds in the next two years, and the debt service on those bonds will cannibalize bus service that has already been reduced four times since 2009.

Since TriMet service is shrinking, the agency is clearly in need of the “tough love” that Mr. Rogoff preached in 2010. Yet tomorrow, Mr. Rogoff himself will be in town to announce FTA approval of a Full Funding Grant Agreement (FFGA) that will waste some $745 million in federal money on the project over the next eight years.

There are many reasons why federal funding should have been denied years ago for the PMLR project. The most important is that TriMet has consistently violated FTA requirements that local transit agencies successfully operate federally funded capital projects for at least 20 years.

The most egregious example is the original MAX line that opened in 1986. At the time the Blue Line was being planned, TriMet promised that trains from Gateway to downtown Portland would run every five minutes during peak periods. Today, the actual frequency (known as “headways”) is every 8 minutes, or 60% worse than promised.

TriMet learned a lesson from this experience, but unfortunately it was the wrong lesson. Instead of killing the expensive rail program, TriMet simply lowered expectations for service on future rail lines. For the Yellow Line to North Portland, TriMet promised 10-minute service intervals for peak periods. Yet even with this lower bar, the agency could not meet its commitment. Peak-hour service on the Yellow Line currently operates at 15-minute headways, 50% below what was committed to.

The agency’s newest rail line, the Green Line to Clackamas Town Center, opened in September 2009. By then TriMet’s finances were so bad that project managers knew even before it opened that promised levels of service would not be met. Green Line service has been at least 33% below FFGA requirements since day one.

TriMet is now promising FTA that when the Milwaukie line opens in March 2016, it will offer peak-hour service every 10 minutes and off-peak service every 15 minutes. But since TriMet is unable to offer such service on any of its rail lines right now, no one should take this forecast seriously.

The saddest part about Milwaukie light rail is that it will make current transit riders in that corridor demonstrably worse off than they are today, due to the elimination of express bus routes. Nine buses stop at the Milwaukie Transit Center, and five of them travel on McLoughlin Boulevard to Portland city center. However, once light rail opens, all of these buses will no longer provide service north of Milwaukie. Transit customers boarding buses from points south will be forced to transfer at Milwaukie.

Light rail will also take longer than express bus service. The current scheduled time-of-travel for a trip from downtown Milwaukie to Portland State University on the #99 McLoughlin Express bus averages 17.5 minutes. An early morning run makes it in 12 minutes. The forecasted time of travel for light rail – which offers no express service – is roughly 19 minutes for the same distance.

None of this is necessary, because there is a very cheap alternative – a fact well known to Mr. Rogoff. Last month the FTA released a study, Metro Orange Line BRT Project Evaluation, looking at the cost-effectiveness of two different versions of bus rapid transit (BRT) in Los Angeles. The Orange Line is high-end BRT that resembles light rail because it has its own exclusive right-of-way and never has to travel in mixed-flow traffic. A second variation, known as the Metro Rapid bus, operates in general purpose arterial lanes, but achieves relatively high travel speeds simply by spacing stops apart by about 0.8 miles.

The study showed that in most respects, both light rail and exclusive-lane BRT are not cost-effective. The Metro Rapid bus system is the real bargain, especially compared with expensive light rail projects:

Capital Costs of Light Rail and Bus Rapid Transit Projects

Portland-Milw. Light Rail Line

LA Gold Line Light Rail

LA Orange Line BRT

LA Metro Rapid BRT, Ventura Line

Capital cost/mile

$205 million

$62.7 million

$26 million

$0.2 million

Peter Rogoff is about to hand over $745 million in federal funds for a Portland light rail line that will cost 1,017 times more than the LA Metro Rapid system. In what ways is it 1,017 times better?

Actually, it’s not even as good. The Rapid Bus system is cheaper, more flexible, twice as fast, arrives more often, and is easier to implement.

For more than 25 years, the Federal Transit Administration has been playing Charlie Brown to TriMet’s Lucy. No matter how many times TriMet promises to successfully operate another light rail project, in the end they always yank the ball away from FTA. Yet, here is the FTA administrator, getting ready to tee up another new project.

We know how this is going to end. TriMet’s rail empire will grow by a tiny fraction, while more bus service gets cut. As Mr. Rogoff once said, we need someone with the guts to say “no,” but it certainly won’t be him.

Read Blog Detail

Bill Post interviews Sarah Ross on a need for competition in education

KYKN radio host, Bill Post spoke with Cascade Communications Coordinator Sarah Ross on Thursday to discuss the evolution of technology and a need for competition in education.

Read Blog Detail

Bill Meyer talks with Steve Buckstein about Right to Work in education

KMED host Bill Meyer spoke with Cascade Senior Policy Analyst Steve Buckstein about the philosophy of right to work, education unions, and the Eagle Point School District teacher strikes.

Read Blog Detail

Bill Meyer talks with Steve Buckstein about right to work in education

KMED host Bill Meyer spoke with Cascade Senior Policy Analyst Steve Buckstein about the philosophy of right to work, education unions, and the Eagle Point School District teacher strikes.

Read Blog Detail