Year: 2016

There’s Never Enough Money for Government

By John A. Charles, Jr.

The news from Portland is that despite record levels of revenue, the City Council needs to cut $4 million in spending next year in order to balance the budget.

The news from Salem is that despite record levels of revenue, the Governor needs to close a $1.7 billion dollar budget gap for the next two-year state spending cycle.

It’s not just a coincidence that these messages are the same. Elected officials are almost always poor stewards of public money. No matter how much they receive from property taxes, income taxes, payroll taxes, liquor taxes, garbage taxes, and dozens of other fees and licenses, it’s never enough.

The primary reason is that politicians tend to adopt new programs where the costs are back-loaded. Policies are approved that sound good and don’t seem to cost much in the short-term; but decades out, the costs explode. Public employee pensions are the most painful example of this.

By the time it becomes obvious that we can’t afford the programs, the politicians who approved them are long gone, and the expenses are locked in.

We don’t have a revenue problem in government; we have a spending problem. The top priority at both the Portland City Council and the state legislature should be to reduce or completely eliminate programs before any new taxes are even considered.


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

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Educational Choice: A “Ticket to the Future” for Every Child

By Kathryn Hickok

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

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

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

It’s time Oregon took a serious look at the diversity of options parents now have in 61 school choice programs across the country, including privately or publicly funded scholarship programs, charter schools, education tax credits, vouchers, and Education Savings Accounts. Oregon has a history of bold experimentation in other policy areas. It’s time to expand the role of parents choosing―and the market delivering―better education for Oregon’s children through educational choice, because every child deserves a ticket to a better future today.


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

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Making Youth Unemployment Worse

The unintended negative effects of raising minimum wage rates

By Randall Pozdena and Steve Buckstein

President-elect Donald Trump has nominated the CEO of one of the nation’s largest fast food chains to serve as U.S. Secretary of Labor. The food preparation and serving industry employs almost half of all minimum wage workers. It is thus widely assumed that the nominee would be unfriendly to minimum wage regulation. Efforts such as the union-financed Fight for 15 are seeking to raise the federal minimum wage in the food service industry to $15 per hour—a 52 percent increase over the $9.87 average pay rate in the industry today.

The spotlight has thus returned to the issue of minimum wage regulation, including the impact of recent Oregon legislation. SB 1532, passed in 2016, phases in a $14.75 minimum wage in the Portland metro area, and $13.50 and $12.50 respectively in other metro areas and rural areas, by 2022. The average annual increase over the prior (statewide) minimum wage would be 8.5, 6.6, and 5.0 percent respectively for these three tiers over the 2016-2022 phase-in period. As with the last major reform in 2002, the legislated minimum wages would be adjusted after that time by any increases in the CPI.

To put these events in perspective, Cascade Policy Institute has released a major, new analysis of the history, theory, and empirical impacts of minimum wage regulation. The report focuses on the labor market impacts on youth, aged 16 to 24—the age cohort most likely to be affected as new entrants into the labor force. The study uses data and statistical techniques that, for the first time, allow measurement of how the impact of an increase in the minimum wage evolves over time, not just in the period immediately after the increase. In addition, it allows prediction of the interaction of the minimum wage shock with employment, wages, and labor force participation over time.

The findings have ominous implications for youth labor markets. First, as many studies over the past fifty years have shown, the new study finds that increases in the minimum wage significantly depress youth employment and labor force participation. The share of youth employed falls by 3 percent in just the first six months after a 10 percent increase in the minimum wage, and it falls by 6 percent after a year. Similarly, the share of youth participating in the labor force declines by 4 percent at 6 months and 6 percent at 18 months.

Second, contrary to the claims of minimum wage advocates that higher minimum wages create a cascade of even greater increases, youth wages only rise by the amount of the mandated increase—and then only for those lucky enough to find a minimum wage job. Collectively for all youth, what wage increases occur are more than offset by condemnation of a large share of youth to a zero wage; namely, to unemployment.

Third, the study finds that even a one-time increase in the minimum wage persistently continues to depress the share of youth who are employed. Specifically, statistically significant employment impacts can be expected to cumulate over time for at least five years into the future. Even seemingly innocuous increases in the minimum wage—such as Oregon’s prior 2002 policy of adjusting for the CPI—can significantly depress youth employment. Since the implementation of that adjustment policy fourteen years ago, the previous 56 percent share of youth employed has fallen to just 46 percent, an 18 percent decline. Thus, it appears that inflexible, automatic CPI indexing is inferior to letting markets set youth wage rates.

Oregon’s newest policy of legislating different minimum wage levels among metro and designated rural markets is, ironically, a concession to the reality that unregulated private market forces better balance the supply and demand for youth labor. Since the state imposed higher-than-market levels of wages nonetheless, the new study uses its findings to estimate the impact on the three tiers’ respective youth labor markets.

Although detailed, localized youth employment data for Oregon does not exist, application of the nationally estimated behavior measures can be used to estimate regional tier impacts. This analysis suggests that Portland metro area youth will suffer the most, with the share of employed youth falling by 30 percent by 2022. Youth in the state’s other metro areas will see a 20 percent decline, and youth in designated rural areas of Oregon will see a 15 percent decline.

Even though a three-tiered minimum wage is an attempt to accommodate real economic differences between urban and rural areas, Oregon has made a public policy mistake that predictably will be paid for by many of the state’s youngest current and soon-to-be potential members of the youth labor force.


Randall Pozdena is President of QuantEcon, Inc., an Oregon-based consultancy. He received his BA in Economics from Dartmouth College and his Ph.D. in economics from the University of California, Berkeley. He is the author of Cascade Policy Institute’s new analysis, Minimum Wage: Its Role in the Youth Employment Crisis. Steve Buckstein is Senior Policy Analyst and founder of Cascade Policy Institute, Oregon’s free market public policy research organization.

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Policy Picnic – January 25, 2017

Please join us for our monthly Policy Picnic led by

special guest Bobbie Jager

 


 

From 2012 “Oregon Mother of the Year” to School Choice Activist

 

January 22-28, 2017 is National School Choice Week. Started in 2011, NSCW has grown into the world’s largest celebration of opportunity in education. The Week is a nonpartisan, nonpolitical public awareness effort.

Held every January, National School Choice Week shines a positive spotlight on effective education options for every child.

The goal of National School Choice Week is to raise public awareness of all types of education options for children. These options include traditional public schools, public charter schools, magnet schools, online learning, private schools, and homeschooling.

In honor of National School Choice Week, Cascade Policy Institute is delighted to host guest speaker Bobbie Jager, Oregon’s 2012 “Mother of the Year” and energetic advocate for educational choice for all Oregon children. She will talk about how she got involved in education advocacy and what’s ahead for parents and students in Oregon in 2017.

Last year Bobbie wrote a Cascade Commentary in support of extending Oregon’s public school open enrollment law.

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

Reserve your free tickets here.

 

Cascade’s Policy Picnics are generously sponsored

by Dumas Law Group, LLC

dumaslawlogo 80percent

 

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Cascade Report Finds Long-Term Negative Impacts on Youth from Oregon’s New Minimum Wage Policy

FOR IMMEDIATE RELEASE

Media Contact:

Steve Buckstein

Senior Policy Analyst

Cascade Policy Institute

(503) 242-0900

steven@cascadepolicy.org

PORTLAND, Ore. – Cascade Policy Institute released a report today that has foreboding implications for young people in our state. The report was commissioned after passage of SB 1532 earlier this year, which phases in large increases in Oregon’s minimum wage. The law mandates minimum wages by 2022 of $14.75 in the Portland metro area, and $13.50 and $12.50 respectively in other metro areas and rural areas. These rates must be adjusted after 2022 by any increases in the Consumer Price Index.

Authored by Oregon economist Randall Pozdena, Ph.D., Minimum Wage: Its Role in the Youth Employment Crisis analyzes the history, theory, and empirical impacts of minimum wage regulation. It focuses on youth aged 16 to 24 because they are most likely to be affected by minimum wage increases as new entrants into the labor force. The report uses data and statistical techniques that, for the first time, allow measurement of how the impact of an increase in the minimum wage evolves over time, not just in the period immediately after the increase. In addition, it allows prediction of the interaction of the minimum wage shock with employment, wages, and labor force participation over time.

“This report confirms ominous long-term negative consequences of minimum wage increases, not just for those currently 16 to 24 years old, but for future potential workers coming into this age group,” said Steve Buckstein, Cascade’s founder and Senior Policy Analyst. 

Key findings of the report: 

  • Increases in the minimum wage significantly depress youth employment and labor force participation. The share of youth employed falls by 3 percent in just the first six months after a 10 percent increase in the minimum wage, and it falls by 6 percent after a year. Similarly, the share of youth participating in the labor force declines by 4 percent at 6 months and 6 percent at 18 months.
  • Contrary to the claims of minimum wage advocates that higher minimum wages create a cascade of even greater increases, youth wages only rise by the amount of the mandated increase—and then only for those lucky enough to find a minimum wage job. Collectively for all youth, what wage increases occur are more than offset by condemnation of a large share of youth to a zero wage; namely, to unemployment.
  • Even a one-time increase in the minimum wage persistently continues to depress the share of youth who are employed. Specifically, statistically significant employment impacts can be expected to cumulate over time for at least five years into the future. Even seemingly innocuous increases in the minimum wage—such as Oregon’s prior 2002 policy of adjusting for the CPI—can significantly depress youth employment. Since the implementation of that adjustment policy fourteen years ago, the previous 56 percent share of youth employed has fallen to just 46 percent, an 18 percent decline. Thus, it appears that inflexible, automatic CPI indexing is inferior to letting markets set youth wage rates.
  • Portland metro area youth likely will suffer the most, with the share of employed youth falling by 30 percent by 2022. Youth in the state’s other metro areas will see a 20 percent decline, and youth in designated rural areas of Oregon will see a 15 percent decline.

Buckstein and Pozdena conclude that “even while bowing to the reality of economic differences between urban and rural areas of the state in its latest minimum wage law, Oregon has made a public policy mistake that predictably will be paid for by many of the state’s youngest current and soon-to-be potential members of the youth labor force.”

The report, Minimum Wage: Its Role in the Youth Employment Crisis, is available here.

Founded in 1991, Cascade Policy Institute is a nonprofit, nonpartisan public policy research and educational organization that focuses on state and local issues in Oregon. Cascade’s mission is to develop and promote public policy alternatives that foster individual liberty, personal responsibility, and economic opportunity. For more information, visit cascadepolicy.org.

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No Standing in Lines, Just Amazon Go

By Lydia White

Amazon has introduced its new line of physical stores: Amazon Go. Using a smartphone, consumers can swipe into the store, pick up their desired items, and exit—receiving an electronic receipt for their purchases and avoiding dreaded checkout lines. Many hail this new technology as promising and exciting, while others are concerned about the potential for job losses.

Such concerns overlook a fundamental aspect of free market economies: freedom of choice. While many will choose Amazon’s technology for convenience or cost, others may prefer not to out of regard for traditional retail job opportunities or other business or personal reasons. But regardless of these differences, freedom of choice serves everyone.

This holds true across industries. You can buy a BlackBerry or upgrade to an iPhone. You can hail a taxi or download Uber. The economy is not a zero-sum game.

Consumer decisions aren’t made in an ivory tower or executive board meetings, but by each of us in our daily lives. Businesses must cater to our needs to maintain mutually beneficial, voluntary transactions. No one is forced to shop in an Amazon Go store, and traditional shopping experiences will continue to exist as long as consumer demand for them exists.

So, whether or not you are enthusiastic about capitalism’s creative destruction, the choice remains yours.


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

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Testimony Before the Oregon State Land Board on the Sale of State Trust Lands

Cascade Policy Institute President and CEO John A. Charles, Jr. presented a version of this testimony before the Oregon State Land Board on December 13, 2016.


Re: December 13 SLB hearing on the possible sale of the Elliott State Forest

Dear Land Board members:

I am writing in advance of the December 13 Land Board hearing to summarize my testimony.

First, you were correct in deciding last year that a sale of the trust lands was necessary to fulfill your fiduciary responsibilities to the Common School Fund (CSF) beneficiaries. The continued requests from public land advocates to retain ownership should be ignored.

Unfortunately, your sale protocol is fatally flawed, for two reasons: (1) the four unnecessary “public benefits” requirements inherently devalue the asset; and (2) you are prohibiting competitive bids. Both of these elements ensure that you will not be able to get the best possible offer for the transfer, which you are required to do as fiduciaries.

Any sale should be made through a straight up, no-string-attached auction of the property. That is the only way you can determine fair market value.

To illustrate how much money you are leaving on the table, we’ve done two sets of calculations. In one scenario, we took the difference between the “official” price tag of $220.8 million and the high appraisal of $262 million ($41.2 million), and calculated the value of that over 50 and 100 year periods.

In another scenario, we assumed that the Land Board took the “maximum revenue” approach by dispensing with appraisals and simply selling the Elliott via competitive bid with no public benefit requirements. For this scenario we picked $350 million as a conservative value for what the winning bid might be, then subtracted the official price of $220.8 and used the difference ($129.2 million) as the starting point.

We used two different assumptions about future return rates – the first being the 7.5% used by Oregon PERS, and the second a more conservative rate of 6.0%. The projections are below.

Elliott State Forest sale

Investment projections of net proceeds under various assumptions

Difference between high appraisal and sale price: $41.2 M
Interest rate 7.5% 7.5% 6.0% 6.0%
Time period 100 years 50 years 100 years 50 years
Present value $41,200,000 $41,200,000 $41,200,000 $41,200,000
Future value $56,982,781,049 $1,532,217,537 $13,979,245,841 $758,910,356
Difference between market price and sale price: $129.2M 7.5% 7.5% 6.0% 6.0%
Time period 100 years 50 years 100 years 50 years
Present value $129,200,000 $129,200,000 $129,200,000 $129,200,000
Future value $178,693,575,522 $4,804,915,187 $43,837,829,190 $2,379,883,932

Notice the stunning difference in earnings between the first 50 years and the second 50 years. This is, of course, the miracle of compounding. The refusal of the Land Board to sell off this land in a traditional auction will likely cost public school students somewhere between $44 billion and $179 billion in lost earnings by 2117, and much more in the centuries beyond that. 

You have a fiduciary responsibility to the CSF beneficiaries to get the best possible price for the timberland. That can only come through a traditional auction. I urge you to set aside the one offer in front of you and direct the DSL staff to design a new, competitive bid sale protocol to be implemented during 2017.

Sincerely,

John A. Charles, Jr.

President & CEO

Cascade Policy Institute

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WES Is an Energy Hog

By Allison Coleman

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

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

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

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

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


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

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Portland’s Regional Transit Strategy Is Not Working

By John A. Charles, Jr.

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

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

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

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

Travel Mode Share for Weekday Commuting

Portland citywide, 1997-2016

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

      Source: Portland Auditor, Annual Community Survey

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

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

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

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


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

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How Much Is the Elliott State Forest Worth to Oregon Schools? (Don’t Forget the Value of Compounding)

By John A. Charles, Jr.

Advocates of public schools frequently complain about the need for more money, yet many of them are now objecting that the State Land Board is on the verge of selling off the Elliott State Forest, which is an endowment asset for public schools.

The fact is, the Land Board is required by the Oregon Constitution to maximize revenue from the Elliott. The sale has to go forward because timber management is no longer profitable. But the Board should insist on competitive bids, which it is currently prohibiting. The Board should also remove all restrictions on future timber harvesting.

If the Elliott were sold in a competitive auction, it would likely go for $350 million or more. Let’s assume that the proceeds were invested in a manner similar to the PERS fund and had average annual returns of 7.5%, which is the target rate for PERS.

After 50 years, the investment would be worth $13 billion; but after 100 years, it would be worth $487 billion. The huge difference in the two time periods is due to the miracle of compounding.

Do school funding advocates have a better idea for raising $487 billion? If not, they should support an auction sale of the Elliott State Forest.


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

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Metro Should Dump the Garbage Tax

By Allison Coleman

Portland-area voters just approved Ballot Measure 26-178, which imposes a five-year property tax that will generate $80 million dollars for Metro to maintain parks owned by the agency.

On the surface, this seems like a wonderful thing; everyone likes parks, and they need to be maintained. However, local residents are already paying a Metro garbage tax of $2.50 per ton, originally intended for this very purpose.

In 2002 the Metro Council enacted a garbage tax to pay for the operating costs of parks. In 2004 the tax was raised from $1.50 per ton to $2.50 per ton. Between 2004 and 2015, this tax brought in $46.8 million dollars for Metro.

In 2006, Metro “undedicated” the tax, meaning it would still be collected but the money would be swept into the general fund for other purposes.

This year, the Metro Council claimed they needed the operating levy to maintain their parks, but they never told voters about the garbage tax.

Metro should do the honorable thing and repeal the garbage tax. Voters may not mind paying for parks, but there is no reason to tax them twice.


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

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Portland’s Zoning Policies Make the Housing Crisis Worse

By Lydia White

The masterminds behind Portland’s newest inclusionary zoning recommendations have proven once again to be economically illiterate.

The Portland Planning and Sustainability Commission unanimously recommended requiring developers with 20 units or more to make 20% of units “affordable” at 80% of median family income, or 10% “affordable” at 60% median family income.

This policy fails to accomplish the Portland Housing Bureau’s stated intentions to “harness the economic power of the private market to increase the supply of affordable housing.”

A simple economics lesson would show them their policies exacerbate the city’s affordable housing crisis.

Developers are indeed responsive to basic economic concepts like incentives and cost-benefit analyses. They will not, and cannot, eat 20% of their costs. As with any tax, costs are passed on to consumers. Developers must offset their losses by accepting taxpayer-funded subsidies, cutting costs (such as forgoing routine maintenance or major repairs), or raising the prices of remaining units. This makes housing even less affordable, forcing lower-income households out of the city and spurring gentrification.

Until such unintended consequences are seriously considered, Portland city leaders will continue to amplify the housing crisis. Only the most out-of-touch city planners believe they can defy the laws of economics and make a scarce commodity more affordable by decreasing its supply.


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

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Now What?

By Steve Buckstein

Here at Cascade Policy Institute, as a nonprofit, nonpartisan think tank we don’t support or oppose political candidates. But we aren’t shy about telling candidates and elected officials what we think about their policies.

Now that this especially contentious election is finally over, you’re probably happy about some of the results and unhappy about others. But even if you got what, or whom, you wanted, you might think about some timeless insights from two discerning historical figures.

The first insight comes from Eric Hoffer, known as the longshoreman philosopher. In his 1951 book The True Believer, Hoffer noted:

“A man is likely to mind his own business when it is worth minding. When it is not, he takes his mind off his own meaningless affairs by minding other people’s business.”

The second insight comes from American statesman Daniel Webster, who in the early 1800’s said:

“There are men in all ages who mean to govern well, but they mean to govern. They promise to be good masters, but they mean to be masters.”

Even if the worst happened on election night in your opinion, remember that America has survived as a free and strong nation since declaring our Independence in 1776. In those 240 years we’ve benefited from some great public servants, and suffered some terrible ones. But we’ve always survived and generally prospered, and odds are that we will this time too.

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Policy Picnic – November 16, 2016

Please join us for our monthly Policy Picnic led by

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


Innovations in Highway Finance

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

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

 

Cascade’s Policy Picnics are generously sponsored

by Dumas Law Group, LLC. 

Dumas Law Group
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Portland’s 100% Renewable Energy Claim Is “Greenwashing”

By Allison Coleman

In 2001, the Portland City Council declared that by 2010, all electricity used by city agencies would come from renewable energy. However, by 2010, only 9 percent of Portland’s power was renewable.

Undeterred, in 2012 Portland leaders again declared that city agencies would achieve 100 percent renewable energy. This time around, the city managed to get up to 14 percent.

Today, Portland has magically declared victory, claiming that municipal electricity use is 100% renewable. However, this is a blatant case of greenwashing. Portland is currently generating only 9 percent of its electricity from city-owned biogas and solar facilities. Another 15 percent is claimed from “green power” sold by Portland General Electric.

The remaining 76 percent of city use comes from a conventional mix of coal, gas, nuclear, and hydro. Portland then pretends to offset this by purchasing so-called “Renewable Energy Certificates” (RECs).

Unfortunately for consumers, an individual REC is not a unit of electricity; it is simply is a certificate claiming to represent the “environmental amenities” associated with one megawatt-hour of electricity generated by sources such as wind and solar. You cannot charge your phone or cook dinner with a pile of RECs because they don’t actually exist.

Last year, Portland spent $104,539 purchasing 74,671 RECs to create the image of 100 percent green power consumption. Every dollar spent buying those RECs was wasted money. Portland taxpayers should demand an end to this green power charade.


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

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Power Is the Narcotic of Choice for Politicians

By John A. Charles, Jr.

Oregon’s free-market research center, Cascade Policy Institute, celebrated its 25th anniversary with a gala dinner party on October 20 at the Tualatin County Club. Since its founding in 1991, Cascade has emerged as a leading voice for individual liberty and economic opportunity. Building coalitions with others, Cascade has helped develop innovative policies such as Oregon’s charter school law and the more recently enacted Right-to-Try statute.

Cascade helped Ethiopian immigrants break the Portland taxi cartel and secure a license to operate a new company. The Institute also helped a young Black woman start her hair-braiding business by persuading the legislature to repeal onerous licensing regulations.

And a paper first published by Cascade in 1996 suggesting that 84,000 acres of the Elliott State Forest be sold off helped persuade the State Land Board to do just that; a sale will be approved by the Board in December of this year.

However, such advancements will be tougher to come by in the years ahead, because the culture of Oregon has changed. The permanent political class that now rules the state has little respect for the entrepreneurial spirit.

The 2016 legislative session served as Exhibit A for this change. In the short space of 30 days, the majority party rammed through two major pieces of legislation: (1) a dramatic increase in the minimum wage; and (2) a mandate forcing electric utilities to provide 50% of their retail load from designated “renewable energy” sources.

Each bill only received a few hearings. Vast areas of complexity were brushed aside as unimportant. When hundreds of witnesses showed up pleading for a more incremental approach, they were dismissed. In 35 years of lobbying, I had never seen anything like it.

This was in contrast to Cascade’s early years, when the organization sponsored “Better Government Competitions” in 1994, 1996, 1998, and 2000. These events solicited good ideas from citizens about how to make government work better. Top officials including Governor John Kitzhaber and Portland Mayor Vera Katz enthusiastically endorsed Cascade’s “citizens’ suggestion box.”

Today, many elected officials openly disdain the public they serve. They don’t want your ideas, just your obedience and your tax dollars. Moreover, if you compromise and give them half of what they want today, they’ll be back for the rest tomorrow.

Nowhere was that more evident than with the so-called “coal to clean” bill in 2016. Why was this topic even being discussed when only nine years ago the legislature passed SB 838, which mandated that large electric utilities procure 25% of their power needs from specified “renewable energy” sources by 2025?

SB 838, passed in 2007, was seen as a visionary achievement. The leading legislative advocates, Senator Brad Avakian and Representative Jackie Dingfelder, were exultant. Oregon was now on a path to renewable energy Nirvana!

Yet by 2016, the “25 by 25” banner was seen as wimpy and out of date. Oregon’s perceived reputation as an international environmental leader had been undercut by legislation elsewhere. So the new (arbitrary) standard became “50% by 2040.”

We can do better than this. Perhaps if Measure 97 fails, legislators will stop looking for quick fixes and work together on tax reform. There are officials in both parties willing to tackle PERS reform and transportation finance, if the Majority party allows it.

Replacing hubris with humility would be a good first step.


John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free market public policy research organization. This article originally appeared in the October 2016 edition of the newsletter, “Oregon Transformation: Ideas for Growth and Change.”

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Something’s Rotten in Metro’s Missing Garbage Tax Money

By John A. Charles, Jr. and Allison Coleman

Metro is asking for a new tax levy this November (Measure 26-178 on your ballot) despite the fact that it already has sufficient funds to operate all its parks.

In 2002, the Metro Council enacted a garbage tax for the specific purpose of funding operations and maintenance of Metro parks. That amount was raised to $2.50 per ton in 2004. Between 2002 and 2015, the garbage tax brought in $46.8 million for Metro parks.

Given that Metro raised all this money for parks, why is Metro asking for voter approval of another $80 million parks levy in the upcoming November election? Where did the $46.8 million in garbage tax money go?

The answer can be found in a bait-and-switch ordinance adopted by Metro in 2006. The Council amended the Metro Code to retain the garbage tax, but “undedicate” its use so that revenues would be swept into the Metro General Fund.

Since 2006, regional taxpayers have paid more than $32 million in garbage taxes that should have gone to parks, but instead went to other purposes. We’ve heard the scare stories before, but it’s time to call Metro’s bluff. Voters should reject the Metro tax levy and demand that all money from the garbage tax be rededicated to parks maintenance, as promised 14 years ago.


John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free market public policy research organization. Allison Coleman is a Research Associate at Cascade.

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Oregon Must End “Economic Apartheid”

By Randal O’Toole

The housing affordability crisis is turning Portland, already one of the whitest cities in America, into one that is even whiter. Census data indicate that, between 2010 and 2014, the number of whites living in the city of Portland grew by 30,500, or 6.8 percent, but the number of blacks shrank by 4,500, or 11.5 percent.

Some of those blacks moved to Portland suburbs, but most moved out of the Portland area completely. While the number of whites in the Portland urban area grew by 94,000, the number of blacks shrank by 3,400.

Even before 2010, Portland’s high housing prices were negatively affecting blacks and other low-income groups. Census data show that, between 2000 and 2010, the share of households headed by whites living in single-family detached homes declined by 3.3 percent, but the share of households headed by blacks living in such homes declined 16.1 percent.

Housing prices also affected homeownership. Between 2000 and 2010, the share of whites living in their own homes fell by 2.2 percent, but the share of blacks (which was already well below the white share) fell by 12.6 percent.

In short, Portland’s housing affordability crisis forced some low-income people to leave the region and others into lower-quality housing. This process has led some to charge the region with “economic apartheid.” Yet, planners defend the region’s housing prices, one saying, “This is capitalism; how do you fight it?”

In fact, Portland’s high housing prices aren’t a result of capitalism; they are due to government land use restrictions. Portland planners celebrate the fact that the region’s urban growth boundary has forced the population to “grow up, not out,” as the region’s population density has grown by 20 percent since the boundary was first drawn in 1979.

Such increased densities are a prescription for increased land and housing costs. In 1990, an acre of land suitable for home construction inside the growth boundary cost about $25,000. Today, a similar acre, if you can find it, would generally cost about $300,000.

Higher land prices are accompanied by increased regulation as Portland-area governments know that homebuyers have few alternatives if they don’t want to endure long commutes. In 1999, the Portland City Council approved a comprehensive design ordinance despite warnings from the Home Builders Association of Metropolitan Portland that the new rules would make housing more expensive.

Portland and other Oregon cities also have stiff system development charges that can add $20,000 to $40,000 to the cost of a new home. By comparison, similar charges in Houston, one of the nation’s most affordable housing markets, are less than $2,000 for homes of up to 3,000 square feet.

In 1990, the median value of owner-occupied homes in the Portland area was twice median family incomes, which was very affordable. Today, thanks to the growth boundary and regulation within the boundary, it is nearly five times median family incomes, which is very unaffordable.

These policies effectively discriminate against low-income blacks and other minorities; and under a 2015 Supreme Court ruling, they violate the Fair Housing Act just as much as if Portland put out a sign saying, “No blacks allowed.” The ruling said that land use policies that make housing more expensive can be legal under the Fair Housing Act only if they have a legitimate goal and there is no other way of accomplishing that goal without making housing less affordable.

For example, requiring sewer hookups makes housing more expensive but has a legitimate goal of protecting public health. The goals of the urban growth boundary and densification, however, are either not legitimate or could be achieved without creating a housing crisis.

Boundary advocates often claim the growth boundary is needed to preserve farms and open space. But all of the urban developments in Oregon only occupy 1.5 percent of the state; and if there were no boundaries, it still would be less than 2 percent. Urbanization is no threat to Oregon farms, forests, or open space.

Advocates also claim that densification will lead people to drive less, saving energy and reducing greenhouse gas emissions. However, the effects of density on driving are tiny, especially when compared with the huge costs; and there are much better ways of saving energy and reducing emissions that don’t make housing unaffordable.

To end discrimination against blacks and other low-income minorities, the Oregon legislature must repeal the state’s land use laws that authorize growth boundaries and other regulations that make housing unaffordable.


Randal O’Toole is an adjunct scholar with Cascade Policy Institute, Oregon’s free market public policy research organization. He is the author of Cascade’s new report, Using Disparate Impact to Restore Housing Affordability and Property Rights.

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Uber Translated: Better Service for the Underserved

By Lydia White

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

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

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

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

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

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


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

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Abolish Growth Boundaries to Ensure Fair Housing

By Randal O’Toole

A recent Supreme Court decision found that government policies that make housing expensive may violate fair housing laws. This decision could have a profound impact on Portland’s housing market.

Portland’s rapidly growing housing prices are a major hardship on newcomers, renters, and low-income families. Particularly hard hit are blacks, whose per capita incomes remain only about 60 percent of whites’.

The housing crisis has actually forced many blacks to move outside of the region. According to Census Bureau estimates, between 2010 and 2014, white numbers grew by 6.8 percent in the city of Portland and 6.5 percent in the Portland urban area, while black populations fell by 11.5 percent in the city and 5.3 percent in the urban area, thus reaffirming the claim that Portland is “the whitest city in America.”

Though many urban planners deny it, there is no doubt that the ultimate source of Portland’s housing crisis is the region’s urban growth boundary. Common sense says that restricting the supply of something for which demand is increasing will cause prices to go up. This is confirmed by economic studies from Harvard, the Federal Reserve Board, the University of California, and the University of Washington, among other places, concluding that strict land-use regulation is the main cause of unaffordable housing.

Other policies also make housing less affordable, including lengthy delays in the permitting process, onerous impact fees, and gaudy architectural design codes. But these policies would have little effect if developers could meet market demand by building homes in unregulated areas outside of existing cities. Urban growth boundaries not only limit supply, but they shield city governments from outside competition.

In 1857, Oregon’s first constitution banned blacks from moving to the state. This was rendered unconstitutional by the 14th Amendment to the U.S. Constitution in 1868. But in June 2015, the Supreme Court ruled that governments that impose land-use restrictions that make housing less affordable can be just as guilty of violating the Fair Housing Act as if they put up a sign on their borders saying, “No blacks allowed.”

A rule written by the Department of Housing and Urban Development says that “land-use rules, ordinances, policies, or procedures” that make housing more expensive are allowable only if they are needed to achieve a “legitimate” goal and there were no other way of reaching that goal that wouldn’t increase housing costs. None of the reasons used to justify Oregon’s urban growth boundaries meet these tests.

For example, planning advocates say boundaries are needed to protect farms, forests, and open space. But more than 98 percent of Oregon is rural, and urbanization is no threat to the state’s agricultural or timber production.

Planning advocates also say boundaries help save energy and reduce greenhouse gas emissions. But research has shown that the effect of growth boundaries on these things is tiny, and there are far better ways of saving energy and reducing emissions that don’t make housing more expensive.

Many Portland planners argue that housing can be made more affordable by growing up, not out, that is, by increasing urban densities rather than allowing the region to “sprawl” across the landscape. But this has never worked anywhere.

Recent census data clearly reveal a strong correlation between urban densities and unaffordability. Moreover, fifty years of census data also show a strong correlation between increases in urban densities and declines in housing affordability.

For example, in 1969, the San Francisco Bay Area was very affordable, with median housing prices a little more than twice median family incomes. Since then, urban growth boundaries adopted by Bay Area counties have increased densities by 65 percent, while median housing prices have grown to seven times median family incomes.

When comparing urban areas across the country, it is clear that the key to housing affordability is to keep land outside of city limits relatively unregulated so that developers and builders can meet demand. For social justice, Oregon must repeal the laws allowing urban growth boundaries and regulation of unincorporated lands.


Randal O’Toole is an adjunct scholar with Cascade Policy Institute, Oregon’s free market public policy research organization. He is the author of Cascade’s new report, Using Disparate Impact to Restore Housing Affordability and Property Rights.

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Metro’s $32 Million Broken Promise

— Why You Should Vote Down Metro’s Natural Area Levy

By John A. Charles, Jr. and Allison Coleman

In 2006, the Metro Council submitted to the voters a general obligation bond measure in the amount of $227.4 million to fund natural area acquisition. The measure was approved.

In a little-noticed appendix to Resolution No. 06-367A, the Metro Council stated that greenway lands acquired with bond funds would be land-banked with limited maintenance beyond initial site stabilization and possible habitat restoration. The Council noted that it had the financial means to carry out this promise:

“Once the 2006 Natural Areas Bond Measure is approved by voters, Metro will commit existing excise taxes to this basic level of maintenance, with Metro having sufficient resources currently to manage the newly acquired properties in this manner for a period of approximately ten (10) years.”

If the phrase “existing excise taxes” seems puzzling, there’s a reason; almost no one remembers that in 2002, the Metro Council enacted a garbage tax of one dollar/ton for the specific purpose of funding operations and maintenance (O&M) of parks. That amount was raised to $2.50/ton in 2004. Between 2002 and 2015, the garbage tax brought in $46,789,044 for Metro parks.

Metro Solid Waste Excise Tax

Dedicated to natural area maintenance

 

Year Excise Tax Tonnage Total Revenue
2002 $1.00 1,251,823 $1,251,823
2003 $1.00 1,362,204 $1,362,204
2004 $2.50 1,563,884 $3,909,710
2005 $2.50 1,626,255 $4,065,637
2006 $2.50 1,720,168 $4,300,420
2007 $2.50 1,613,848 $4,034,620
2008 $2.50 1,524,370 $3,810,925
2009 $2.50 1,381,326 $3,453,315
2010 $2.50 1,320,992 $3,302,480
2011 $2.50 1,248,191 $3,120,477
2012 $2.50 1,297,716 $3,244,290
2013 $2.50 1,373,612 $3,434,030
2014 $2.50 1,431,132 $3,577,830
2015 $2.50 1,568,513 $3,921,282
Total Revenue     $46,789,044

Given that Metro raised all this money for parks, and promised no new taxes before 2016, why did Metro place an operating levy on the ballot in 2013 for parks maintenance (which passed); and why is Metro asking for voter approval of another $80 million parks levy in the upcoming November election? Where did the $46.8 million in garbage tax money go?

The answer can be found in a bait-and-switch ordinance adopted by Metro just a few weeks after the bond measure was referred out to voters in March 2006. The Council amended Metro Code Section 7.01.023 to retain the $2.50/ton excise tax, but “undedicate” its use so that revenues would be swept into the Metro General Fund.

Since 2006, regional taxpayers have paid more than $32 million in garbage taxes that should have gone to parks O&M, but instead went to other purposes.

Instead of owning up to this chicanery and restoring the garbage tax as a dedicated revenue source, Metro officials continue to make the case for a new property tax. In a 2011 publication, Metro claimed, “…the existing financial model is not sustainable. Metro’s portfolio of land continues to grow, while the general fund resources needed to support it are decreasing.”

In a more recent document, Metro asserted, “In Metro’s general fund, which pays for many primary programs and support services, costs continue to rise faster than revenues.”

Both of these claims are false. In 2011 Metro was already taking in more than $3 million annually in garbage tax revenue for parks. By the end of 2015 it was nearly $4 million.

Meanwhile, Metro was swimming in a sea of new revenue. The Metro Auditor found that during the 10-year period of 2003-2013, total annual revenue went up 22% in real terms, while total expenses went up only 16%. Annual revenue per capita for the Metro region went up 7%; expenses per capita increased by only 4%.

Metro Councilors now state that if voters refuse to approve a new tax levy in November, the agency will “have to ramp back pretty much everywhere.”

We’ve heard the scare stories before, but it’s time to call Metro’s bluff. Voters should reject the Metro tax levy (Measure 26-178 on your ballot) and demand that all money from the $2.50/ton garbage tax be rededicated to parks maintenance, as promised 14 years ago.


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

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New Report Highlights Civil Rights Implications of Oregon Land Use Laws, Urban Growth Boundaries

FOR IMMEDIATE RELEASE

Media Contact:
John A. Charles, Jr.

john@cascadepolicy.org

503-242-0900

PORTLAND, Ore. – A new report released today by Cascade Policy Institute demonstrates that Portland’s rapidly growing housing prices are a major hardship on newcomers, renters, and low-income families. The report claims the ultimate source of Portland’s crisis in housing affordability is the region’s urban growth boundary and that minorities suffer the most from the consequences of high housing prices.

The report, Using Disparate Impact to Restore Housing Affordability and Property Rights, is authored by Randal O’Toole, an adjunct scholar with Cascade Policy Institute, Oregon’s free market public policy research organization, and the author of The Vanishing Automobile and Other Urban Myths.

The report claims the ultimate source of Portland’s crisis in housing affordability is the region’s urban growth boundary:

“The Oregon legislature and various cities have applied band-aid solutions to this problem; but none of them will work and some, such as inclusionary zoning, will actually make housing less affordable. That is because none of these solutions address the real problem, which is that the urban growth boundaries and other land-use restrictions imposed by the Land Conservation and Development Commission, Metro, and city and county governments have made it impossible for builders to keep up with the demand for new housing.”

“Common sense says that restricting the supply of something for which demand is increasing will cause prices to go up,” says O’Toole, who cites the findings of economic studies from Harvard, the Federal Reserve Board, the University of California, and the University of Washington, among others, to conclude that strict land-use regulation is the main cause of unaffordable housing.

Other policies which make Portland-area housing less affordable, the report claims, include lengthy delays in the permitting process, onerous impact fees, and architectural design codes. But these policies would have little effect if developers could meet market demand by building homes in unregulated areas outside of existing cities. Urban growth boundaries not only limit supply, but they shield city governments from outside competition.

“These policies effectively discriminate against low-income blacks and other minorities,” says O’Toole. “Under the 2015 Supreme Court ruling, Texas Department of Housing v. Inclusive Communities Project, they also violate the Fair Housing Act just as much as if Portland put out a sign saying, ‘No blacks allowed.’”

O’Toole explains how this Court decision could have a profound impact on Portland’s housing market. He says the Supreme Court’s ruling said that land use policies that make housing more expensive can be legal under the Fair Housing Act only if they have a legitimate goal and there is no other way of accomplishing that goal without making housing less affordable.

According to Cascade Policy Institute CEO John A. Charles, Jr., “Policymakers think the solution to our housing shortage is to build more tax-subsidized apartments, but simply deregulating the land markets would result in far greater housing supply at lower cost.”

The report, Using Disparate Impact to Restore Housing Affordability and Property Rights, is available here.

Founded in 1991, Cascade Policy Institute is a nonprofit, nonpartisan public policy research and educational organization that focuses on state and local issues in Oregon. Cascade’s mission is to develop and promote public policy alternatives that foster individual liberty, personal responsibility, and economic opportunity. For more information, visit cascadepolicy.org.

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Light Rail to Bridgeport Village: The Dumbest Train Project Yet

By John A. Charles, Jr.

TriMet and Metro are promoting the idea of a new light rail line from Portland State University to the Bridgeport Village shopping mall in Tualatin.

The question is, who would ride it?

We already know from experience that mall shoppers prefer private cars to trains. The Red Line to the airport was opened in 2001 specifically to service the Cascade Station shopping center, which is anchored by IKEA, Target, and Best Buy. Field observations conducted by Cascade Policy Institute in 2010 and again in 2016 showed that more than 98% of all passenger-trips to and from Cascade Station are made in private automobiles. Light rail is simply irrelevant.

The same is true for Gresham Station, another shopping center specifically built around a light rail stop. Regardless of the time-of-day or day-of-week, virtually all trips to and from Gresham Station are made in private vehicles.

The Green MAX line, which terminates at Clackamas Town Center, has also had no effect on travel patterns at the mall.

In order for the Bridgeport Village line to be built, Tigard residents will need to approve the city’s participation in the project by voting for Measure 34-255 in the November election. Local voters should learn from experience and turn down this measure. Light rail through Tigard would be a total waste of money.

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Does Oregon Rank Dead Last in Corporate Taxes? NO

Trying to sell voters on the largest tax increase in Oregon history, Measure 97 proponents claim that Oregon ranks dead last in corporate taxes.” But the nation’s leading independent tax policy research organization, The Tax Foundation, says this claim is misleading. It looked at three ways to rate corporate taxes and found:

• Oregon’s top marginal corporate income tax rate is the 18th highest in the nation.
• On a revenue per capita basis, Oregon’s corporate income tax is the 28th highest.
• The Foundation’s State Business Tax Climate Index ranks Oregon 37th nationally for overall corporate income tax structure.

The dead last corporate tax claim relies on two national reports (AEG, COST) that look at total business tax burdens, not just the tax burdens of large C corporations; the only entities directly targeted by Measure 97. Even so, both these reports make clear that they rate Oregon’s business tax burden low not because corporate taxes are low, but rather because Oregon doesn’t have a sales tax.

As the COST report notes, “If sales tax revenue is excluded…[Oregon] moves from the lowest…to the 20th-lowest rate.”

Misleading voters about Oregon’s corporate tax structure may simply be a tactic to keep us from focusing on the fact that Measure 97 is really a hidden sales tax on steroids that will hit every Oregonian. When we realize that, Measure 97 should suffer the same fate as every other statewide sales tax measure – defeat.

Read much more about Measure 97 and why you should vote against it on
Cascade’s Measure 97 webpage.

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Does Oregon Rank Dead Last in Corporate Taxes? NO

By Steve Buckstein

Trying to sell voters on the largest tax increase in Oregon history, Measure 97 proponents claim that “Oregon ranks dead last in corporate taxes.” But the nation’s leading independent tax policy research organization, The Tax Foundation, says this claim is misleading. It looked at three ways to rate corporate taxes and found:

  • Oregon’s top marginal corporate income tax rate is the 18th highest in the nation.
  • On a revenue per capita basis, Oregon’s corporate income tax is the 28th highest.
  • The Foundation’s State Business Tax Climate Index ranks Oregon 37th nationally for overall corporate income tax structure.

The “dead last” corporate tax claim relies on two national reports (AEGCOST) that look at total business tax burdens, not just the tax burdens of large C corporations, the only entities directly targeted by Measure 97. Even so, both these reports make clear that they rate Oregon’s business tax burden low not because corporate taxes are low, but rather because Oregon doesn’t have a sales tax.

As the COST report notes, “If sales tax revenue is excluded…[Oregon] moves from the lowest…to the 20th-lowest rate.”

Misleading voters about Oregon’s corporate tax structure may simply be a tactic to keep us from focusing on the fact that Measure 97 is really a hidden sales tax on steroids that will hit every Oregonian. When we realize that, Measure 97 should suffer the same fate as every other statewide sales tax measure—defeat.

Read much more about Measure 97 and why you should vote against it on Cascade’s Measure 97 webpage.

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Measure 97 and the Mirage of School Funding

— Voters are destined for disappointment

 

By John A. Charles, Jr.

Proponents of Measure 97 have consistently claimed that if the measure passes, it will generate an additional $3 billion annually for public education and other social services. Judging from the comments I’ve read in various Oregon newspapers, many people are falling for this argument.

Apparently none of the letter writers have ever watched a legislative appropriations hearing. These are the meetings where a tiny group of senior politicians sit in a back room and decide how to spend billions of dollars. I’ve watched hundreds of such hearings, and the most predictable outcome is that politicians will spend money in front of them on whatever they want.

Let’s just take a simple example. Oregon was one of 44 states that sued the tobacco industry in the mid-1990s to recover the health care costs associated with smoking. Plaintiffs claimed that the tobacco industry had long been imposing uncompensated costs on states in the form of health care for smokers who became sick from use of the product.

The suit was settled through adoption of a Master Settlement Agreement (MSA) with the four largest tobacco manufacturers. As part of the agreement, each state was to receive payments every year from 1998 through 2025.

According to the plaintiffs, the estimated $25 billion of MSA money was supposed to be used for tobacco prevention activities and health care subsidies necessary to treat smoking illnesses. But that was not a formal part of the agreement. Each state was free to use the funds in whatever way its state legislature approved.

In Oregon, total MSA funds received since 1998 have exceeded $1.26 billion. Almost all of it was spent on programs that had nothing to do with tobacco cessation or public health. Only 0.8 percent was appropriated for tobacco prevention programs.

How could this be? They promised!

Yes, Virginia, they promised. But every two years, 90 legislators show up in Salem, and they each have their own priorities. Once you put a pot of money on the table for them to spend, it’s game over.

Almost no one in the Capitol remembers what the MSA was, and, furthermore, they don’t care. They only care about spending money for the stuff they want right now.

Measure 97 is a horrible tax proposal, for many reasons. It unfairly targets a small subset of all businesses directly, but hits all businesses and all of us indirectly. It taxes sales but not profits. It would be the largest tax increase in Oregon history.

But if voters ignore these concerns and approve it anyway because they think it will increase funding for schools, they are destined for bitter disappointment.


John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free market public policy research organization. This article originally appeared in the September 2016 edition of the newsletter, “Oregon Transformation: Ideas for Growth and Change.”

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Policy Picnic – October 26, 2016

Please join us for our monthly Policy Picnic led by

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


Watch Your Wallet November 8! Why You Should Vote No on Tigard Light Rail and Metro’s Open Space Levy

Metro is asking for a new tax levy despite the fact that it already has sufficient funds to operate all its parks. Since 1995, Metro has spent hundreds of millions of tax dollars buying up large tracts of lands far from where most people live. The Metro Council doesn’t want you (or your dog) to use most of these lands, but they do want you to pay for them. Metro’s Five-Year Operating Levy (Measure 26-178) is one more wallet-grab.

The proposed Tigard-Tualatin light rail project (Measure 34-255 in Tigard) would cost at least $240 million per mile to construct — the most expensive transit project in state history. Tigard will be required to fund part of that price tag, and increased taxes will be the result. This is what happened to the City of Milwaukie and Clackamas County when Metro forced through the Orange line.

John Charles will give you the inside story on these two ballot initiatives and tell you what their proponents don’t want you to know. He’ll explain what these measures really do and what they mean for you, your family, or your business. Bring your friends and coworkers!

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

 

Cascade’s Policy Picnics are generously sponsored

by Dumas Law Group, LLC. 

Dumas Law Group
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“The Rent Is Too Damn High!” — Why Rent Control Won’t Help

Once again, Portland led the nation this July with its home prices rising 12.4 percent year-over-year versus the national average of just 5.0 percent. As of April, Portland remained the 12th most expensive rental market in the nation. These numbers are not unrelated. Housing prices are often related to what units can be built for, whether they are single-family homes or multifamily apartment houses.

Whatever the causes of rising rents in Portland and elsewhere, the political fix bubbling to the surface not only won’t help most people afford housing, it likely will make the situation worse. That political fix goes by the name of rent control.

Last year, Willamette Week published an informative and entertaining piece entitled “The Five Myths About Portland Apartments.” In response to Myth 3, which is that rent control is the answer, Jerry Johnson of Portland real-estate consulting firm Johnson Economics noted:

“Rent control is an Econ 101-level policy disaster. If you happen to get one of the rent-controlled units, good for you. But it’s basically a lottery of who wins and who loses.”

Apparently unaware of the policy disaster that rent control forebodes, Oregon Speaker of the House Tina Kotek recently proposed allowing localities to enact their own rent control programs. She also wants to end so-called “no-cause” evictions and to ban rent increases above a “reasonable” percentage “for the foreseeable future.” In her prepared remarks she said, “Our housing crisis is a man-made emergency that demands bold action,” and, “We have privileged the right to make a profit on property far above the universal human right to safe and stable housing.”

Our housing crisis may very well be a man-made emergency. If so, the Speaker has misdiagnosed the cause, which has more to do with Oregon’s “man-made” restrictive land use laws than it does greedy landlords. And, the “bold action” she proposes likely will make the situation worse.

Economists of virtually every political stripe reject rent control as a viable way to improve housing affordability. They recognize what too few of our political leaders and voters recognize: namely, that controlling the price of a commodity, in this case rental housing, actually harms the very people the policy is designed to help. They know from economic theory and observation over many decades The High Cost of Rent Control. They know that it misallocates housing resources, heightens tensions between landlords and tenants, stifles private investment in affordable housing, and leads to deterioration and eventual abandonment of the very housing stock that middle- and lower-income tenants wanted it to protect for them at affordable prices.

Three local economists were quick to respond to Speaker Kotek’s suggestions:

“Rent control just sends us a couple hundred miles closer to San Francisco in terms of housing policy,” said Gerard Mildner, director of the Center for Real Estate at Portland State University.

“It’s almost textbook that any form of rent control ultimately harms consumers, as well as landlords,” said Eric Fruits, an economist and editor of Portland State University’s Center for Real Estate quarterly reports. “It may benefit some in the short term, but in the longer term, there will be fewer units available to rent, which will only make matters worse.” Instead, Fruits said, the free market should be allowed to work, with higher prices sending signals to developers that more units are needed.

“The demand for urban living is increasing and cities are not increasing the supply nearly fast enough,” Portland economist Joe Cortright said. “The only solution is to build new housing.”

As an Oregonian editorial then pointed out:

“Among other things, limiting rent growth dampens future investment in housing, inflates rents for unregulated units and discourages residents who secure rent-controlled units from moving, even when it’s in their best interest.”

In a lively discussion on social media following Speaker Kotek’s pronouncements, one person responded to her call for an end to “no-cause” evictions:

“No cause eviction benefits good tenants. When the bad guys move in, they threaten the good tenants who are afraid to testify about their behavior. The good tenants become prisoners in their apartments while the bad guys run wild. A landlord’s only defense is to become more restrictive on who they will rent to, therefore decreasing options for all renters.”

Even self-proclaimed “progressive” Portland city commissioner, Steve Novick, notes:

“…most economists say rent control has unintended consequences, including a decline in the production of new rental housing.”

While this is true, in “progressive” Portland and in the state Capitol economic laws are often trumped by political laws that make people feel better for a while, until economic reality rears its ugly head. Of course by then those who passed the laws have often moved on.

Accountability is rarely a part of the political process, which may be why it so often leads to unintended consequences that harm the very people the politicians were trying to help. Unfortunately, we may be destined to repeat this process again as rent control lurches onto the 2017 legislative agenda.


* Political activist and frequent candidate Jimmy McMillan memorably used “The Rent Is Too Damn High!” as his main campaign issue, slogan, and the name of his political party during his campaigns, including the 2010 New York gubernatorial election.

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Will the PUC Make Oregon’s Solar Energy Incentives Equitable?

By Lydia White

In accordance with House Bill 2941, the Public Utilities Commission (PUC) is making recommendations to the Oregon State Legislature to ensure Oregon’s solar energy incentives are equitable, efficient, and effective.

One recommendation is to modify the compensation method for solar energy, net metering. Under net metering, solar owners consume energy their panels produce. When energy produced is insufficient, solar owners purchase additional energy from traditional sources. When excess energy is produced, solar owners sell energy. Solar owners are compensated at above-market rates and are exempt from paying their portion of incurred costs. Such costs include operation and maintenance of the grid and “spinning reserves,” the alternative power source utility companies run continuously in case solar produces less energy than projected. The state’s incentive structure shifts costs from solar owners to non-solar ratepayers. As the number of solar owners increases, ratepayers bear higher costs. The PUC is recommending these costs instead be shifted to taxpayers. While the PUC proposal’s efforts to alleviate inequity are commendable, their proposed recommendations still constrain Oregonians.

Although solar owners are double-dipping into the taxpayer pot—once when receiving heavily subsidized (and therefore low-cost) solar systems and again when receiving above-market compensation—the solar community is vehemently protesting. Despite the outcries, the PUC should pursue its recommendation to transition from net metering while also rejecting subsidies from ratepayers and taxpayers alike. By doing so, the PUC’s recommendations could relieve Oregon’s ratepayers from substantial burden.


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

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Freedom in Film: Won’t Back Down (2012)

With students everywhere heading to class, we hope you enjoy Part 3 of Cascade’s “virtual” back-to-school School Choice Film Fest.

Social problem films are not generally “feel-good” movies, in the sense that viewers feel comfortable with their feet up, eating popcorn, laughing with the heroes, and hoping for happily ever after. Won’t Back Down (2012) is a bit different. The film makes clear the near-impossibility of a desperate single mother getting her small daughter out of the worst public school in town; but it maintains a buoyant, upbeat vibe.

Here is what Cascade’s Steve Buckstein said about Won’t Back Down when it opened in theaters:

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…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 schoolchildren 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….

Won’t Back Down was criticized by some as “anti-union” or even “anti-teacher.” But it is actually a relatively gentle take on union/parent/teacher conflicts. The film takes extra care to present the concerns and fears of lifelong public school teachers and union members with sympathy and understanding. The characters are lovable, and the drama is human.

The takeaway can be summed up by the school board member who, casting the decisive vote, says….Well, you’ll have to see the movie to find out.

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Freedom in Film: Waiting for “Superman” (2010)

With students everywhere heading to class, we hope you enjoy Part 2 of Cascade’s “virtual” back-to-school School Choice Film Fest.

The 2010 documentary film Waiting for “Superman” ignited new interest in the desperate desire of low-income parents to get their kids out of failing, one-size-fits-all public schools into better-performing charter schools. The five children poignantly profiled in the film faced barriers to their dreams in the form of too few charter school seats and a lottery acceptance process that made their futures dependent on a roll of the dice.

Charter schools have become a vital education option for thousands of students throughout the U.S. Moviegoers previously unfamiliar with charter schools (public schools with more freedom to be innovative than traditional district public schools) began to understand why parents―especially lower-income parents―want their kids so much to have a chance to attend charters.

Demand for charter schools far outstrips available seats, as Cascade’s 2011 study of Oregon charter school waiting lists found. Opening more charter schools is an important piece of the education reform puzzle. However, immediate, viable, successful alternatives to failing public schools have existed, often right in parents’ own neighborhoods, for decades. In much of the U.S., those options pre-date the American public school system itself.

Private and parochial schools have been a lifeline for low-income kids for generations, and today’s school choice movement seeks to maximize parents’ options for choosing the public, private, online, public charter, or home school that is the best fit for their children. Dozens of states and the District of Columbia have pioneered voucher programs, education tax credit laws, and Education Savings Accounts for parents. Private charity also plays a major role in helping children in need get a hand up early in life.

Education Savings Accounts, or ESAs, may be the most flexible way for states to help children learn in the ways that are best for them. ESAs are not a college savings plan. Rather, if families decide the public schools to which their children are assigned are not meeting their needs, they can leave those schools and instead receive money from the state to pay for approved alternative education options and expenses. Parents can spend the funds on private school tuition, individual courses at public schools, tutoring, online learning, textbooks, educational therapies, and other education-related services and products. They can use a combination of these services based on what they think would best meet their child’s learning needs.

Reforming our public education system is necessary, but low-income kids can’t wait for Superman. When the 2017 Oregon legislative session begins in January, ask your state legislators to empower Oregon children to succeed in whatever education setting works for them by supporting an Education Savings Account law.

And if you haven’t seen it yet, this is a great week to watch Waiting for “Superman.”

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Twenty-Five Years Litigating for Liberty

How many attorneys do you know who make their living defending liberty? Well, 43 attorneys work full-time at the national public interest law firm Institute for Justice. They protect school choice, economic liberty, the First Amendment, and private property. Supported by generous donors, the Institute for Justice never charges its clients.

Founded 25 years ago, the Institute for Justice has litigated over 200 cases, including five before the U.S. Supreme Court, where it won four times. The fifth case led to the infamous Kelo decision, where the Court unfortunately seemed to forget that private property cannot be taken through eminent domain for a “public purpose,” but only for a “public use.”

This year, Arizona Governor Doug Ducey appointed Institute for Justice co-founder Clint Bolick to the state Supreme Court, saying that “Clint is nationally renowned and respected as a constitutional law scholar and as a champion of liberty.”

It is fitting on this 25th Anniversary of Clint Bolick’s Institute for Justice that Oregon’s free-market think tank Cascade Policy Institute has chosen him as the Keynote Speaker at our 25th Anniversary Dinner on October 20. There, Justice Bolick will talk about how important defending personal and economic liberty has been—and still is in his new role on the Court. You won’t want to miss his inspiring talk.

For full details and to RSVP, go to CascadePolicy.org/25.

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Freedom in Film: To Sir, with Love (1967)

With students everywhere heading to class, we hope you enjoy Part 1 of Cascade’s “virtual” back-to-school School Choice Film Fest.

Nearing the end of his patience, a first-year teacher challenges his scarcely literate students to think seriously about the lives ahead of them. What will happen after high school graduation? One academically indifferent girl supposes she’ll get married, giggling that “everybody gets married.”

Such comfortable assumptions have disappeared since 1967; much else about the lives and troubles of at-risk teenagers hasn’t.

To Sir, with Love stars Sidney Poitier as Mark Thackeray, an engineer who takes a temporary teaching job. The kids are rough, uninterested in school, and oblivious to the possibility that they could become more than they are. The gentlemanly Mr. Thackeray, called “Sir” by his students, is as much a culture shock to them as they are to him.

To Sir, with Love is like a time capsule of the late 1960s: Sentimental optimism contrasts with the grittiness of poverty, illiteracy, teenage rebellion, and rapid social change. There is a sense that Mr. Thackeray’s class is careening wildly toward dead-end or delinquent adulthoods, and he has a few short weeks to reach at least some of his students before they are lost. His greatest asset as a teacher, though, has nothing to do with cutting-edge curriculum or teaching “best practices.”

It is culture. “Sir” is a living example of another world which his students could choose to enter, if only they could see themselves in it. Through him they experience, for the first time, what it is to have dignity. As the teenagers begin to awaken to their own self-worth, they start to grasp why people have manners, respect others, and behave in ways that draw respect in turn. They take interest in the written word and the process of intellectual inquiry.

Education is more than transmission of facts; it’s an invitation to explore the world of the soul, of human creative capacity, and of the physical universe. When students get in touch with their own dignity as human beings, they grasp the meaning of learning. They no longer mark time until school is out; they transform as students and as people.

Great teachers help students discover the grandeur of human existence, potential, and achievement and that they are made for more than superficial pleasures and “easy outs.” To Sir, with Love shows what can happen when the right adult comes into a teenager’s life at the right time―and why that’s so important.

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The Everyday Heroes of 9/11, Remembered

“The greatest thing I ever did with my life.”

The largest sea evacuation in history took place on September 11, 2001, when nearly 500,000 civilians were rescued from Manhattan by boat in less than nine hours. By comparison, during World War II, the evacuation after the Battle of Dunkirk saved 339,000 British and French soldiers over the course of nine days.

Many of the rescue boats were private watercraft whose owners volunteered to ferry thousands to safety.

“No training, just people doing what they had to do that day,” said a man who worked on one of the boats.

“Average people, they stepped up when they needed to,” said another.

This video narrated by Tom Hanks tells their unforgettable, moving story.

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Improve Education Outcomes Through Education Savings Accounts, Not Measure 97’s Hidden Sales Tax

On the third day of the new school year at Portland’s Madison High School, Governor Kate Brown spoke about her goal to improve educational outcomes for all students. She bemoaned the fact that at 74%, Oregon has one of the lowest high school graduation rates in the country, and then she noted that “For me this is a very personal issue”:

“My stepson blew out of one of the local area high schools a few years ago. We were very fortunate. We had the resources to provide him with another educational opportunity, but not all families do. That’s why it’s absolutely imperative that we work together to improve Oregon’s high school graduation rates.”*

So how does Governor Brown propose to assist families that don’t have the resources hers had to help their children achieve educational success? Apparently, by supporting Measure 97 on the November ballot, which would be the biggest tax increase in Oregon’s history.

In reality, Measure 97 is a sales tax hidden behind the façade of being a tax on big business. Its passage will actually make it harder for many of the families the Governor wants to help, in the questionable hope that the revenue it generates would be spent properly to give their kids a better chance at graduation from the same schools that have failed so many in the past.

Measure 97 will not only act as a consumption tax on many of the goods and services Oregon families buy every day, but it also will reduce private sector employment opportunities as more than $3 billion are siphoned out of the private sector into the state general fund each year. From there, all this money—which is about what a six-percent retail sales tax would produce—may or may not be spent in ways that would give struggling families the same opportunities that the Governor’s family had when her stepson needed help.

Rather than ask voters to take a $30 billion gamble over the next ten years on a tax measure that may not show any positive economic or educational results for Oregon families, the Governor and voters should consider another way to provide all families with the resources they need to give their children the educational opportunities they deserve. And, this other way will not raise anyone’s taxes, and it will not reduce anyone’s job prospects.

This other way is school choice. Governor Brown’s predecessor, John Kitzhaber, took a major step toward this other way when he signed Oregon’s public charter school law in 1999 that currently allows more than 30,000 students to attend some 127 charter schools for educational opportunities they otherwise would have been denied. All without costing taxpayers or the public school system one additional dime.

Oregon is one of forty-three states and the District of Columbia that offer public K-12 charter school opportunities to their families. Now, the newest wave in the school choice movement is offering Education Savings Accounts in five states, and that number is sure to grow.

Education Savings Accounts, or ESAs, are not a college savings plan. Rather, if families decide the public schools their children are assigned to are not meeting their needs, they can leave those schools and instead receive money from the state to pay for approved alternative education options and expenses. Parents can spend the funds on private school tuition, individual courses at public schools, tutoring, online learning, textbooks, educational therapies, and other education-related services and products. They can use a combination of these services based on what they think would best meet their child’s learning needs.

Each eligible child is able to draw from his or her own personal Education Savings Account maintained by the state and funded by most, but not all, of the money that otherwise would have been sent to the local school district. When properly structured, ESAs require no new taxes and are not a financial burden on the state or local public school districts. They simply allow money already allocated for public education to be used in ways individual families choose, instead of in ways dictated by the ZIP code students happen to live in.

In an improvement over earlier school choice programs such as vouchers, ESAs let families spend only what they want to each year, and save or rollover the balance toward future educational needs. If not all the money in an ESA is spent by the time a student graduates from high school, the remaining funds may be used to help cover his or her higher education costs.

So, let’s not ask taxpayers to gamble that our troubled public schools will somehow get it right this time if we simply give them enough new money out of our pockets with the hidden sales tax in Measure 97. Instead, let’s ask our legislators in Salem to explore a new, truly innovative way to improve educational outcomes for each individual student with personal Education Savings Accounts.


* Governor Brown’s complete remarks at Madison High School were recorded and can be heard on this KXL radio episode of Beyond the Headlines in the first segment of about seven minutes at https://soundcloud.com/kxl-beyond-the-headlines/week-of-8-28-16-episode-130

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MAX at 30: Portland Transit Needs a New Plan

September 5 marked the official 30th anniversary of the opening of TriMet’s light rail system. Like many Portland residents, I took a free ride that day and felt that this was a big step forward for transit service.

Unfortunately, actual performance never lived up to the hype. My hopes for “high-speed” transit were dashed when I discovered how many stops there were. The average train speed today is only 18 MPH.

My expectation that MAX would include five or six train cars was also incorrect. There are only two cars per train on MAX, and there will never be more than two cars because Portland has 200-foot blocks in downtown. Longer trains would block busy intersections.

The cost of construction also spiraled out of control. The Orange line to Milwaukie cost $210 million per mile, making it hundreds of times more costly than simple bus improvements.

In short, MAX is a low-speed, low-capacity, high-cost system, when what we really need is just the opposite—a higher-speed, higher-capacity, low-cost system.

Regional leaders should pull the plug on any more rail and start focusing on the future of transit, which will feature driverless vehicles, door-to-door delivery, and private car-sharing services such as Uber Technologies.

The passenger rail era died a hundred years ago. It’s time for Portland to get into the 21st century.

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Policy Picnic – September 21, 2016

Please join us for our monthly Policy Picnic led by Cascade’s Senior Policy Analyst and Founder, Steve Buckstein


Topic:  Measure 97 – A Hidden Sales Tax on Steroids

Description:

Measure 97 on Oregon’s November 2016 ballot would impose the biggest tax increase in Oregon history: a sales tax on steroids, hidden behind the facade of being a $3 billion annual Gross Receipts Tax on business. It will raise taxes by $600 per capita.

Contrary to claims that it is only a tax on big corporations, the nonpartisan Legislative Revenue Office found that it will act largely as a consumption tax on Oregonians, with lower-income households being hurt the most. Prior to receiving its ballot measure number, Measure 97 was known as Initiative Petition 28.

Steve Buckstein will explain what the measure really does and what it means for you, your family, or your business. Bring your friends and coworkers!

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

Please click here to reserve your free tickets.

Cascade’s Policy Picnics are generously sponsored by Dumas Law Group, LLC.

Dumas Law Group
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Two-Thirds of Oregon Union Members Want to End the Unions’ “Forced-Rider” Problem

By Kathryn Hickok and Steve Buckstein

This month, National Employee Freedom Week (August 14-20, 2016) called attention to the rights of union members to opt out of union membership if they choose and to stop paying dues and fees to unions they do not support. National Employee Freedom Week has conducted surveys of union members and households. One of this year’s significant findings is that a strong majority of union members nationwide agree that if members opt out of paying union dues and fees, they should represent themselves in negotiations with employers.

Two-thirds (66.9%) of Oregon union members agree with this proposition. “Worker’s Choice” would end the so-called free-rider problem (really a forced-rider problem), which argues that labor laws require unions to continue representing workers even after they stop paying dues. The Mackinac Center for Public Policy explains: “Without requiring a complete overhaul of collective bargaining laws, [Worker’s Choice] can free unions from having to provide services to employees who do not support them, and allow individual employees to represent themselves and negotiate independently with their employers.”

Now we know that two-thirds of Oregon union members want workers to be able to represent themselves, and they don’t want to force unions to represent non-dues payers. It remains for future court decisions, or other political efforts, to end union compulsion in Oregon. Until that happens, Worker’s Choice should continue to be brought to the attention of union members and the public.


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

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Cascade Policy Institute Says NO to Measure 97

ELECTION RESULT: 59 percent of Oregon voters said NO to this sales tax on steroids. Only 41 percent voted to impose it on all of us.
Measure 97 on Oregon’s November 2016 ballot would impose the biggest tax increase in Oregon history: a sales tax on steroids, hidden behind the facade of being a $3 billion annual Gross Receipts Tax on business. It will raise taxes by $600 per capita.
Contrary to claims that it is only a tax on big corporations, the nonpartisan Legislative Revenue Office found that it will act largely as a consumption tax on Oregonians, with lower-income households being hurt the most. Prior to receiving its ballot measure number, Measure 97 was known as Initiative Petition 28.
Below are factual and opinion sites to understand what the measure is and why it is in effect a sales tax on steroids, hidden behind the facade of being a tax on business.

•  Text of Measure 97 (IP28)

•  No on Measure 97: Defeat the Tax on Oregon Sales

The official campaign to defeat Measure 97

•  Does Oregon Rank Dead Last in Corporate Taxes? NO

by Steve Buckstein, Cascade Policy Institute, October 2016

•  Improve Education Outcomes Through ESAs, Not Measure 97’s Hidden Sales Tax

by Steve Buckstein, Cascade Policy Institute, September 2016

•  Measure 97: A $30 Billion Gamble Oregon Voters Shouldn’t Make

by Steve Buckstein, Cascade Policy Institute, August 2016

•  Cascade Policy Institute Opposes Measure 97,
the “Sales Tax on Steroids”

Media Release, August 2016

•  Like a Sales Tax on Steroids

by Steve Buckstein, Cascade Policy Institute, July 2016

•  A Sales Tax by Any Other Name

by Steve Buckstein, Cascade Policy Institute, June 2016

•  Assaulting “Corporate Profits” Will Hit Average Oregonians

by Steve Buckstein, Cascade Policy Institute, October 2015

•  Shifting the Cost of Measure 97 Forward

The Tax Foundation, October 2016

•  Supporters of Measure 97 Mislead On Corporate Taxes

The Tax Foundation, September 2016

•  Gross Receipts Taxes: Lessons from Previous State Experiences

The Tax Foundation, August 2016

•  Oregon Initiative Petition 28: The Threat to Oregon’s Tax Climate

The Tax Foundation, April 2016

•  Oregon Legislative Revenue Office Report on IP 28

(now Measure 97)

•  Portland State University Report on IP 28

(now Measure 97)

•  Oregon Legislative Counsel Opinion Letter on Measure 97

Concluding that contrary to proponents’ claims, “the Legislative Assembly may appropriate revenues generated by the measure in any way it chooses.”

Willamette University Economics Professor and Cascade Policy Institute Academic Advisor Fred Thompson has written a series of informative blog posts related to IP28/Measure 97 on the Oregon Economics Blog:

Why Are State Corporate Income Taxes Disappearing?
Tax Mavens Talk About Disappearing State Corporate-Income-Tax Revenues; Oregon Did Something About It
Where, Oh Where, Has Oregon’s Corporate Tax Gone? Where, Oh Where, Can It Be?
Update on IP28
More Background on IP28 (Measure 97?)
Measure 97: Any Pinocchios Yet?
The LRO’S Research on Measure 97

 

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Measure 97: A $30 Billion Gamble Oregon Voters Shouldn’t Make

The massive gross receipts tax Measure 97 on Oregon’s November ballot (previously known as Initiative Petition 28) is guaranteed to suck more than three billion dollars a year out of the productive private sector and deposit them in state coffers. What isn’t guaranteed is how all this new government spending might impact the state economy.

While union proponents of this “sales tax on steroids” argue that putting more money into education and other public services will be good for the state, two reputable economic studies don’t show it.

A nonpartisan Legislative Revenue Office report looks ahead five years and sees no positive economic effects showing up by then. While LRO economists may believe there will be positive effects later, that assumes the money will be spent effectively by a state that has a poor track record of doing so.

A Portland State University report, actually paid for by the measure’s public employee union proponents, looked ahead ten years and still found no positive economic effects showing up. Again, the PSU economists assume there will be positive effects eventually, but their model doesn’t show them.

So, we’re left with this inconvenient truth: If Measure 97 passes, taxpayers will send more than $30 billion to the state over the next ten years without any noticeable positive economic effects to show for it. That’s a $30 billion gamble that Oregon voters should turn down.

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Repeating Mistakes Is Not a Housing Strategy

The Portland City Council has approved a plan for the Housing Bureau to lease industrial land in North Portland for $10,000 per month, beginning October 7. The site is to be used for the construction of a large homeless shelter that potentially could serve up to 1,400 people. This idea, pushed by developer Homer Williams, was rushed through with virtually no due diligence.

Before additional money is spent, the City Council should carefully analyze what went wrong in two previous construction projects. First was the $58-million Wapato Jail built by Multnomah County in 2004, but never operated. With 525 beds in pristine condition, one would think there is potential for this site to temporarily house at least a few people now living under bridges.

Second, in 2011 Portland opened the $47 million Bud Clark Commons, which includes 130 studio apartments and extensive social services for low-income individuals. It was a nice idea, but the police have been called so often to the Commons that in December 2013, then-Chief Mike Reese told the Portland City Council that he was considering filing a chronic nuisance property complaint against the shelter.

Both structures were built with good intentions, but things did not go as planned. Let’s learn from the past before repeating mistakes in the future.

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Oregon Union Members Want the Option to Represent Themselves

National Employee Freedom Week (NEFW, August 14-20, 2016), aims to educate union members across the country about their rights to opt out of union membership and stop paying some or all of their dues and fees to unions they do not support. NEFW has conducted various surveys of union members and union households over the last several years. One of this year’s significant findings is that a strong majority of union members nationwide agree that if members opt out of paying all union dues and fees they should represent themselves in negotiations with their employer.

Over two-thirds of union members nationwide agree. By the same margin, 66.9% to 33.1%, Oregonian union members agree with this proposition. This would end the so-called free-rider problem unions hide behind (really a forced-rider problem), arguing that labor laws require them to continue representing workers even after they stop paying all dues and fees. Oregon labor law is similar to that of many states that don’t allow individual workers to represent themselves if a union has organized their workplace.

Now we know that two-thirds of Oregon union members want this to change. They want workers to be able to represent themselves, and they don’t want to force unions to represent these non-dues payers. You would think the unions would be all over this solution, known as Worker’s Choice; but they aren’t. Unions want to be forced to represent all workers because under current labor law, states like Oregon that are not Right to Work states require that non-union members still contribute the non-political portion of dues to their unions to cover bargaining and representation costs. The unions want the money, pure and simple.

A case heard by the U.S. Supreme Court in January (Friedrichs v. California Teachers Association) could have freed all public sector workers nationwide from paying compulsory union dues based on the argument that such compulsion violates their First Amendment rights to free speech and free association. Before the case could be decided, Justice Antonin Scalia died, leaving a four-four tie vote in the Court. This resulted in upholding a lower court decision denying ten California public school teachers their rights to be free of union compulsion.

This union compulsion brings to mind the well-known statement by Thomas Jefferson,

“To compel a man to furnish funds for the propagation of ideas he disbelieves and abhors is sinful and tyrannical.”

That is what the Court left in place, the right of public sector unions to compel workers to fund the propagation of ideas they disbelieve. An Oregon initiative measure that would have allowed public sector workers to opt out of all union dues and represent themselves did receive a ballot title this year, but did not collect signatures to be placed on the November ballot. Backers were hoping that the national Friedrichs case would have made their effort unnecessary, but for various reasons they were unable to mount a successful campaign.

It remains for future court decisions, or other political efforts, to end this union compulsion in Oregon and nationwide. Until that happens, National Employee Freedom Week will continue to bring this injustice to the attention of union members and the public.

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“The Best Earthly Inheritance” Our Founders Bequeathed

Every July much is said about the blessings of liberty, the meaning of the American Experiment, and the price of freedom. But this year we also mark the 240th anniversary of the signing of the Declaration of Independence and, on August 10, of the arrival of the news of this world-altering decision in London.

Benjamin Franklin is said to have advised his fellow patriots of the potential consequences of challenging the British Empire and its king: “We must all hang together, or most assuredly we shall all hang separately.” While each of the 56 British subjects who affixed their names to the Declaration risked life, fortune, and sacred honor, none may have risked as much as the delegate from Maryland, Charles Carroll of Carrollton.

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 in 1832, 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.”

As we celebrate many historic anniversaries of our freedom this year, and the legacy of each of America’s founders, let us also “remember Carroll’s sacred trust…and all [who slumber] with the just.”

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"The Best Earthly Inheritance” Our Founders Bequeathed

Every July much is said about the blessings of liberty, the meaning of the American Experiment, and the price of freedom. But this year we also mark the 240th anniversary of the signing of the Declaration of Independence and, on August 10, of the arrival of the news of this world-altering decision in London.

Benjamin Franklin is said to have advised his fellow patriots of the potential consequences of challenging the British Empire and its king: “We must all hang together, or most assuredly we shall all hang separately.” While each of the 56 British subjects who affixed their names to the Declaration risked life, fortune, and sacred honor, none may have risked as much as the delegate from Maryland, Charles Carroll of Carrollton.

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 in 1832, 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.”

As we celebrate many historic anniversaries of our freedom this year, and the legacy of each of America’s founders, let us also “remember Carroll’s sacred trust…and all [who slumber] with the just.”

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Oregonians Should Oppose Measure 97’s Regressive Taxation

The biggest proposed tax increase in Oregon history now has a measure number. Measure 97 on this November’s ballot would create a 2.5 percent gross receipts tax on C corporations with Oregon sales above $25 million.

Contrary to union claims, Measure 97 will not simply tax big out-of-state corporations. As the non-partisan Legislative Revenue Office Report has found, it will act primarily as a consumption tax on Oregonians. The estimated cost of this tax is $600 per year per person, with lower-income households being hurt the most. It is an eight-times-larger tax increase than Measures 66 and 67, which voters approved six years ago.

“Corporate taxes” are really paid by individuals, including consumers in the form of higher prices, employees in the form of lower compensation, and owners in the form of lower profits. The union backers of Measure 97 know this but claim that it will simply make corporations “pay their fair share.” This tactic is not only misleading, but if successful will harm every Oregon taxpayer.

Consumers will see price increases that in many cases will be much more than the stated 2.5 percent rate, without having any idea that the cause is Measure 97. As such, Measure 97 is the epitome of a regressive tax, and Oregonians should oppose it.

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Cascade Policy Institute Opposes Measure 97, the “Sales Tax on Steroids”

FOR IMMEDIATE RELEASE 

Media Contact:

Steve Buckstein
steven@cascadepolicy.org

503-242-0900

PORTLAND, Ore. – Cascade Policy Institute’s Board of Directors has voted to oppose Measure 97, the 2.5 percent gross receipts tax on C corporations with Oregon sales above $25 million. It would be the biggest tax increase in Oregon history.

Contrary to union claims, Measure 97 will not simply tax big out-of-state corporations. As the non-partisan Legislative Revenue Office Report has found, it will act primarily as a consumption tax on Oregonians. The estimated cost of this tax is $600 per year for every man, woman, and child, with lower-income households being hurt the most.

As the national Tax Foundation has noted, by seeking to raise more than $6 billion per biennium, Measure 97 will increase total state taxes by approximately 25 percent. It is an eight-times-larger tax increase than Measures 66 and 67, the tax increase measures that were on the 2010 ballot.

Following the Cascade Board vote, Cascade’s President and CEO John A. Charles, Jr. released this statement:

“All corporate taxes are paid by individuals, including consumers in the form of higher prices, employees in the form of lower compensation, and/or owners in the form of lower profits. The union backers of Measure 97 know this, but cynically claim that it will simply make corporations ‘pay their fair share.’ This tactic is not only misleading, but if successful will harm every Oregon taxpayer.”

“As the two most reputable studies (LRO and PSU) on the effects of Measure 97 to date conclude, it will act largely as a consumption tax on Oregonians. As the former State Economist and chief author of the PSU study noted in March, it will be ‘like a sales tax on steroids.’ That is because Measure 97 will tax multiple transactions from production, through processing, through distribution, through the ultimate retail sale.”

“Measure 97 is especially punitive because unlike retail sales taxes that often exempt necessities such as food, medicine, and housing, Measure 97 will tax everything. Consumers will see price increases that in many cases will be much more than the stated 2.5 percent rate, without having any idea that the cause is Measure 97.”

Two recent Cascade publications on the ballot initiative that is now Measure 97:
Like a Sales Tax on Steroids
A Sales Tax by Any Other Name

About Cascade Policy Institute:

Founded in 1991, Cascade Policy Institute is a nonprofit, nonpartisan public policy research and educational organization that focuses on state and local issues in Oregon. Cascade’s mission is to develop and promote public policy alternatives that foster individual liberty, personal responsibility, and economic opportunity. For more information, visit cascadepolicy.org. 

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Hillsboro Entrepreneur Manuel Castañeda Joins Cascade Policy Institute Board of Directors

FOR IMMEDIATE RELEASE

Media Contact:
John A. Charles, Jr.

503-242-0900

john@cascadepolicy.org

Portland, OR – Manuel Castañeda is the newest board member of Cascade Policy Institute. Castañeda is CEO of PLI Systems, a Hillsboro-based company specializing in soil stabilization projects. The Cascade Board of Directors elected Castañeda on July 29.

CastañedManuelCastanedaa founded his firm, now known as PLI Systems, Inc., in 1986 after coming to America from Mexico where he grew up poor in a small village. Once here, he purchased a lawnmower and a pickup truck and began his entrepreneurial journey to achieve the American Dream. In 2003, he started PLI Systems to handle the increasing number of soil stabilization projects the company was receiving. PLI is now is a full-service landscape, design, building, and maintenance company.

Castañeda joins eight current Cascade board members, including Chairman William B. Conerly, Ph.D., Michael L. Barton, Ph.D., Pamela Morris, Larry W. Dennis, Sr., Gilion Dumas, Jon Egge, William Udy, and John A. Charles, Jr.

Cascade Board Chairman Bill Conerly stated, “Cascade Policy Institute is dedicated to promoting individual liberty and economic opportunity; Manuel Castañeda is the embodiment of those values. He came to America with nothing, built a successful business, and raised a family. He is an active volunteer in the community and a long-time supporter of Cascade. We are honored to have him join the Board.”

About Cascade Policy Institute:

Founded in 1991, Cascade Policy Institute is a nonprofit, nonpartisan public policy research and educational organization that focuses on state and local issues in Oregon. Cascade’s mission is to develop and promote public policy alternatives that foster individual liberty, personal responsibility, and economic opportunity. For more information, visit cascadepolicy.org.

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Oregon Land Board Low-Balls Elliott Timber with Fixed-Price “Bidding”

Last week the Oregon Department of State Lands announced the “fair market value” of 82,450 acres of Common School Trust Lands within the Elliott State Forest as $220.8 million. The number was picked by Roger Lord of the consulting firm Mason, Bruce & Girard after analyzing three different professional appraisals. Proceeds from the land transfer will go to the Common School Fund and be invested for the long-term benefit of public school students.

At a public meeting held in Salem, the Director of the Department, Jim Paul, reiterated that anyone hoping to acquire the 82,450 acres must offer exactly $220.8 million. Any offer above that will be considered “outside the protocol” and deemed “non-responsive.” This announcement was the latest step in the Land Board’s plan to dispose of the Elliott property in a non-competitive bid process.

The Land Board has invented a “fair market” value of the Elliott timberland without allowing a market to actually function. The price investors are willing to pay might be higher than $220.8 million, or even multiples of that number. Unfortunately, we’ll never know because the Land Board is refusing to take competitive bids. Clearly, this is a breach of fiduciary trust. Public school students, teachers, and parents deserve to get top dollar in this once-in-a-lifetime sale of a public asset.

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Portland Schools Need Radical Change, Not Just a New Superintendent

Portland school superintendent Carole Smith abruptly resigned in July, after nine years on the job. She was originally planning to retire next June, but the release of an independent investigation into the district’s inept handling of contaminated drinking water caused her to speed up her departure.

The school board immediately announced a national search for a successor, and the rest of the story is predictable. After months of searching, finalists will be scrutinized in a detailed public vetting, and someone will be signed to an expensive contract. The new leader will enjoy a short honeymoon and then gradually sink into the bureaucratic quagmire of school politics.

Amidst never-ending arguments about school transfers, graduation rates, and a myriad of other issues, buyer’s remorse will set in. Eventually the superintendent will resign and the process will begin anew.

This is the way we’ve been doing things for decades, usually with disappointing results. We could take a different path. But first we have to admit that if system results are disappointing, we need to change the system, not the people.

Large urban school districts are inherently dysfunctional. Teaching is a distributed service; the learning takes place student by student, classroom by classroom. When measured in terms of students, teachers, money, and facilities, there are millions of moving parts. The notion that a single bureaucrat in the central office can design the optimal system to satisfy all customers is a fantasy.

The system itself needs radical change, and the single most important reform Portland could pursue would be to redesign how the money flows.

Right now, tax dollars go to the district, regardless of results. Students are assigned to schools like factory widgets and few families have other options. The suppliers of service have all the leverage, while consumers have almost none.

A better option would be for the district to seek legislative approval of Educational Savings Accounts (ESAs). The ESA concept is simple: Parents who are dissatisfied with the government school assigned to them can opt to have most or all of the per-student money that would have gone to that school for their children deposited instead in personal accounts managed by the state treasurer. The funds in each account become property of the family and may be used for a variety of educational services, including private education, home schools, online learning, and tutoring.

Ideally, any money left over at the end of a school year would remain in the account, available for future use. This would encourage wise stewardship of those funds. If the account still had money at the time the student graduated from high school, it could be used for college tuition or technical training.

Distributing school funding through consumers rather than providers would instantly change the balance of power. High-cost union contracts would have to change. Parents would need to be satisfied. And market discipline would replace ineffective top-down management.

Most parents would probably not use ESAs. It’s likely they are satisfied with their neighborhood school and wouldn’t want the hassle of shopping around. But the mere fact that they could use an ESA would create incentives for teachers and administrators to behave differently. When suppliers of a service know that 100 percent of their customers have the means to shop elsewhere, they focus on satisfying those customers.

Carole Smith was neither the worst nor the best Portland school superintendent in recent memory; she was just part of the conveyor belt of socialism that defines generic government education. Stopping the conveyor belt would be a good first step toward liberating students and improving educational achievement in Portland.


This article originally appeared in the July 2016 edition of the newsletter, Oregon Transformation: Ideas for Growth and Change.

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Freedom in Fiction: Ida Elisabeth

Ida Elisabeth had every reason to leave her husband. He was foolish, immature, irresponsible, and unable to change. She couldn’t respect him. She had never really loved him. When he had an affair with another woman, it was her chance to leave and take the children―and no one blamed her.

Nobel Prize-winning novelist Sigrid Undset placed Ida Elisabeth in her own contemporary 1930s Norway, a period of escalating social change prior to the Second World War. People spoke skeptically of the beliefs and assumptions of previous generations, doubting that conventional ethics would outlast their lifetime. Socialist-type welfare policies were becoming popular in noncommunist Western countries. Democratic governments, responding to the demands of the electorate, promised citizens more and more―and supplanted many social roles formerly played by spouses, families, local communities, and private charities. The modern world was unfolding―uneasily.

In a key conversation, Ida’s older mentor muses about the rise of the modern welfare state and Norway’s path to unsustainable public debt:

“…[T]he qualities which put a man in power and those which make him feel responsibility are not necessarily associated, nor do they necessarily exclude each other,” [he said.] “…We had an institution here in Norway in the saga times which was called debt-servitude. When a man had incurred more debts than he was able to pay, he could hand over his children to his creditors, and they had to work as thralls until they had earned enough to cover their father’s indebtedness. I don’t believe children are told anything about this debt-servitude in the schools nowadays. But they’re destined to experience it.”

Ida Elisabeth nodded: “They won’t have a good time, those who come after us.”

“No. And…[w]ill those who come after us be content to bear all the burdens which we still feel it our duty to shoulder? To help all that neither can nor will help themselves?…Especially when the young are aware that the old have taken upon themselves to determine, that they should come into the world, and when they should come, and how many should be put into the world to take over the burdens when they themselves are no longer able to bear them.”

In Ida’s time, the modern welfare state was already detaching individuals from reliance on those around them. While the state-run systems―“almshouses,” etc.—seemed streamlined, efficient, and economical ways of relieving people of the need to personally care for others, the underlying philosophy of utility was already becoming disturbing.

Ida’s friend wonders what will obligate future generations to honor the debts of their forebears, if people no longer believe that other human beings―just like themselves―possess innate and inalienable value? In the modern world, no one needs to be bothered with others any more than they think is reasonable, children come into the world solely at the convenience of adults, and family bonds may be broken at will. Who will decide what price is too high to meet the needs of the elderly, the sick and disabled, and those who cannot “pull their full weight” in society? (By the end of the decade in which Ida Elisabeth was published, these questions had begun to bear bitter fruit in Germany. In the novel, these musings were still largely theoretical.)

As the novel plays out, “big government” (or the welfare state) appears to be a symptom (or symbol) of another, more subtle disease: the human decision to put one’s own needs and desires ahead of the call to serve others, relinquishing individual responsibility to a nameless, faceless state. The genius of Ida Elisabeth is the connection made on the level of the heart between decisions made within personal relationships and a philosophy of self-centeredness that paves the way for far-reaching social change and loss of respect for human beings.

But the novel isn’t about government. It’s a love story of a mother and her children, her husband, and the man “who should have been.” When Ida Elisabeth falls in love with a man who shares her wishes and desires, she is forced to confront a struggle of conscience that is hard for the postmodern reader to accept. Ida tries to reconcile her mind and conscience with cutting herself off forever from family members from whom it once seemed right to separate.

While she is not a religious person and does not base her decisions on what is left of Norway’s conventional morality, Ida cannot fully agree with her secular friends that it is best to abandon those who couldn’t possibly make her feel fulfilled. “We at any rate can’t watch people drowning because they can’t swim, and not care,” she says. Her fundamental choice is between a “happy ending” and the needs of her family. Her choice determines their futures, her character, and her understanding of the meaning of life.

One of the lessons Sigrid Undset teaches so adeptly in her fiction is the step-by-step nature of discernment: Decisions made today may need to be adjusted tomorrow, because mercy has claims as well as justice. Undset deprives the reader of an easy ending because real life is often difficult. Happiness does not always appear in the form for which we wish. Deep human longings, passions, hopes, and personal needs may clash with what we know in our hearts must be done. The mysteries of life can’t be shoehorned into simplistic answers to complex problems. Codependence is not a virtue; “tough love” is a necessary, difficult road. But once Ida Elisabeth decides not to abandon the source of her sorrows to the public almshouse (so to speak), the way begins to become clear―a road of thorns for her at first, but a path of light, understanding, reconciliation, and peace.

Ida Elisabeth is a novel to be pondered with an open mind and heart―and more than a few good tears.

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Cascade Policy Institute’s 25th Anniversary Gala Reception and Dinner

Thursday, October 20, 2016 – 6:30pm to 9:00pm
Tualatin Country Club
Justice Clint Bolick, Keynote Speaker

Reserve Now 60 percent

Justice Clint BolickPlease join Cascade Policy Institute’s staff and board, and many freedom-loving Oregonians, as we celebrate 25 years promoting individual liberty, personal responsibility, and economic opportunity in Oregon.

Our Keynote Speaker will be the newest Justice of the Arizona Supreme Court, Clint Bolick. When appointing him to the Court earlier this year, Arizona Governor Doug Ducey (R) said, “Clint is nationally renowned and respected as a constitutional law scholar and as a champion of liberty.”

Clint co-founded the libertarian public interest law firm Institute for Justice the same year we founded Cascade and has been a fierce defender of individual, economic, and educational liberty even longer. He successfully defended school choice programs in two state supreme courts, and his work led to victory  in a critical school choice case before the U.S. Supreme Court in 2002.

Clint came to Portland in 1990 to give notice to the ACLU and others that if the  school choice initiative Cascade founders helped run that November were to  pass, he would defend it all the way to the U.S. Supreme Court. The measure didn’t pass, but Cascade was founded two months later to keep educating Oregonians about school choice and other important issues. We have worked with Clint on a number of issues over the years, and he’s spoken in Oregon for Cascade several times. We are excited to have him join us in October as we celebrate 25 years fighting for freedom and liberty together in Oregon and America.

$100 ticket price ($125 after Oct. 14) includes no-host cocktail reception and a delicious full-course meal. (Ticket price is $125 beginning October 15.)

Doors open for the no-host cocktail reception at 6:30 pm.  Dinner begins at 7 pm.

Sponsorship packages at $5,000, $2,500, $1,000, and $500 are still available, including premium dinner seating and a private reception with Justice Clint Bolick. Contact Cascade for the full details of each sponsorship level: (503) 242-0900 or info@cascadepolicy.org

For more information and to purchase tickets, click here.Reserve Now 60 percent

 

Platinum Sponsors

 

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Silver Sponsors

 

Mr. and Mrs. Lloyd Babler

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Oregon Land Board Low-Balls Elliott Timber at $220.8 Million

FOR IMMEDIATE RELEASE

Media Contact:
John A. Charles, Jr.

503-242-0900

john@cascadepolicy.org

 

PORTLAND, Ore. – Today the Oregon Department of State Lands announced the “fair market value” of 82,000 acres of Common School Trust Lands within the Elliott State Forest as $220.8 million.

The number was picked by Roger Lord of the consulting firm Mason, Bruce & Girard after analyzing three professional appraisals which valued the land at $262 million, $225 million, and $190 million, respectively.

All proposed “Elliott Acquisition Plans” are due to the Department of State Lands by 5:00 p.m. November 15, 2016. If there are multiple plans accepted, the Oregon Land Board will choose the winning offer at its December meeting. Proceeds from the land transfer will go to the Common School Fund and be invested for the long-term benefit of public school students.

At a public meeting held in Salem, the Director of the Department, Jim Paul, reiterated that anyone hoping to acquire the 82,000 acres must offer exactly $220.8 million. Any offer above that will be considered “outside the protocol” and deemed “non-responsive.”

Today’s announcement was the latest step in the Land Board’s plan to dispose of the Elliott property in a non-competitive bid process. This prompted Cascade Policy Institute President John A. Charles, Jr. to make the following statement:

“The Land Board has invented a ‘fair market’ value of the Elliott timberland without allowing a market to actually function. The price investors are willing to pay might be the $262 million appraisal, or it could be multiples of that number. Unfortunately, we’ll never know because the Land Board is refusing to take competitive bids. Clearly this is a breach of fiduciary trust. Public school students, teachers and parents deserve to get top dollar in this once-in-a-lifetime sale of a public asset.”

Founded in 1991, Cascade Policy Institute is a nonprofit, nonpartisan public policy research and educational organization that focuses on state and local issues in Oregon. Cascade’s mission is to develop and promote public policy alternatives that foster individual liberty, personal responsibility, and economic opportunity. For more information, visit cascadepolicy.org.

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Ten Years After Milton Friedman

One of the greatest minds of our era passed away in November 2006. This Sunday would have marked his 104th birthday. Milton Friedman won the Nobel Prize for Economics; but it was his ability to relate complex economic ideas in simple terms the average person could understand, and his devotion to liberty, that made him truly great.

Milton and his economist wife Rose spent literally decades researching, writing, speaking, and popularizing free-market economics and its connection to liberty and freedom. Rose actually grew up here in Portland, and it was my privilege to call her and Milton my friends.

This Friday, July 29th, the Friedman Foundation for Educational Choice will celebrate the 10th and final Friedman Legacy Day, which began after Dr. Friedman passed away. Rather than continue these annual celebrations, the foundation, created by and named after Milton and Rose Friedman, will move forward with a new name and a new strategic plan. Both will be announced on the foundation website, at www.edchoice.org.

Please join all of us at Cascade Policy Institute as we celebrate the lives and contributions of a great couple, and renew our commitment to promote their ideas and ideals, which include the goal of every child being able to attend the public, private, religious, or home school of their choice, with funding following the student.

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Celebrating the “Christopher Columbus” of School Choice, Milton Friedman

School choice has entered a new world. Because Americans are increasingly vocal about providing parents with 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 60 years ago.

In 1955, the yet-to-be Nobel Prize winning economist Milton Friedman introduced his vision of 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, including powerful public school teachers unions, 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 should come as no 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, according to the Friedman Foundation for Educational Choice, named after Milton and his wife Rose, we now see over half the states with one or more school choice programs, consisting of vouchers, tax-credit scholarships, individual tax credits and deductions, and Education Savings Accounts.

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. The most promising possibility here involves an update of Friedman’s original voucher idea, now seen as the “rotary phone” of the school choice movement. The school choice “smart phone” is now Education Savings Accounts. ESAs give parents and students even more choices, while replacing the old “use it or lose it” funding mechanisms with a market system. This system allows parents to shop for educational services and use their savings toward future educational needs of their children.

Limited Education Savings Account programs now exist in several states, and Nevada is on the verge of implementing a near universal ESA program that soon could be available to all its K-12 students. If achieved, this will be seen as the realization of Milton Friedman’s 60-year-old vision of full school choice for every child, at least in one state with more to follow.

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 government schools and the adults who work in them, to a better model that empowers parents. He argued that if both rich families and poor ones could receive government funding when their kids use public schools, then both rich and poor should be able to receive that same funding to make educational choices outside the government school system.

It took America more than 60 years to reach today’s environment in which parent empowerment in education is celebrated more than ridiculed. Moving forward, around the country and especially here in Oregon, we should celebrate the new world that the school choice movement’s “Christopher Columbus” opened up for us.

Milton Friedman died in 2006. For the ten years since, Cascade Policy Institute and more than one hundred other organizations around the world have celebrated what has become known as Friedman Legacy Day each year on or around his birthday, July 31. This year marks the last such formal celebration. The Friedman Foundation for Educational Choice, which has sponsored these events to honor and reflect on the life and legacy of its founder, has announced that on the day of this year’s final formal celebration, Friday, July 29, it will unveil its new name and new strategic plan designed to move Milton Friedman’s school choice vision even more effectively into the future. Please join us as we celebrate both the man and his vision, and as we look forward to many more children getting the quality educations they have been so long denied in our one-size-fits-all government school system.


A version of this Commentary first appeared in Cascade Business News on what would have been Milton Friedman’s 100th birthday, July 31, 2012. Steve Buckstein wrote about Friedman’s ties to Portland in The Oregonian the day after he died in 2006.

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Freedom in Film: Follow That Dream (1962)

What may be the funniest movie about personal initiative and limited government? Look no further than Follow That Dream (1962), a rollicking pro-freedom comedy starring Arthur O’Connell and Elvis Presley.

Elvis plays Toby Kwimper, the young adult son in a family that gets just about every possible government entitlement benefit; and his dad (O’Connell) is proud of it. When overbearing bureaucrats make them angry, what does the Kwimper family do? They swear off their benefit checks, build a homestead on an empty beach in Florida, and start a small business. With several subplots, Follow That Dream shows off Elvis’s deadpan comic ability. He outwits the mafia, cunning social workers, and (most) adolescent girls with equal aplomb.

Suitable for family viewing, the movie delivers a victory for ordinary folks over the powers that be. It’s full of jokes about welfare-state attitudes, zoning laws, and government “looking out for you.” In the climactic courtroom scene, a judge praises the American spirit of enterprise, initiative, and voluntary community.

As Pop Kwimper puts it, sometimes there just gets to be too much government, and a person wants to move someplace without all those regulations. If you’ve ever felt that way after a frustrating encounter with bureaucracy, Follow That Dream will have you in stitches.

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Oregon Teens Discover Their “Lightbulb Moment” at Young Entrepreneurs Business Week

Your average high school students may not be able to explain a fictional company’s dividends to a lecture hall full of adults from the business world. But after five days at Young Entrepreneurs Business Week, they could.

YEBW is a nonprofit annual summer camp founded in 2005 by young Oregon entrepreneurs Nick and Maurissa Fisher, hosted on the campuses of the University of Portland, Oregon State University, and University of Oregon. From 75 students on one campus during its first year, YEBW has grown to more than 400 participants on three campuses in 2016.

YEBW’s founders shared a concern that young people of all educational and economic backgrounds often leave high school with no practical business knowledge, hindering their ability to innovate, create, and produce the kinds of goods and services key to Oregon communities’ growth and success. They sought to fill the gap by drawing together curriculum developers, business professionals, educators, and successful youth-focused program leaders to launch an innovative educational program for high school students.

Participants spend one week on the UP, OSU, or UO campus and are exposed to a challenging curriculum designed to teach students that business can be fun and exciting, not to mention understandable and interesting. Students leave the camp possessing relevant, basic financial and business skills to apply to whatever goals they set for themselves. YEBW board chair Jeff Gaus says, “For some, YEBW is that lightbulb moment when they realize who they are and what they want to do in life.”

During the program, students are divided into student-led companies, guided by volunteers from the business community who share their knowledge and expertise throughout the week. The curriculum provides students with the financial literacy, business fundamentals, and confidence they need to be self-sufficient and successful.

During the first-year program, Business Week, students form mock companies where they create management teams, develop mission statements, invent a product, and conduct actual operation of their own business by competing in business simulations. Designed to broaden the practical skill sets of each student, the program incorporates professional speakers and other interactive learning exercises like mock interviews and networking events.

For returning students, Investing Week gives students the opportunity to learn about basic investment vehicles, the principles of evaluating a potential investment, and understanding the personal and business effects of the financial market system. Entrepreneur Week provides the chance to learn what it is like to start and run a business. Students prepare a full business plan, run an on-campus business as a team, and present their individual work to a panel of judges acting as potential company “investors.”

It’s not all “head knowledge,” either. YEBW fosters professional interpersonal skills. Students learn the art of the handshake, eye contact, introductions, proper business and evening attire, and table manners, so they can navigate job interviews and networking events with confidence.

Young Entrepreneurs Business Week teaches teens that “there is a business side to every occupation.” Likewise, every Oregon occupation would benefit from having more business-savvy graduates of YEBW. The young people who attend the first-year program mostly come with no prior business knowledge or experience, but they leave with well-earned confidence in their abilities and potential as tomorrow’s successful professional adults. A nonprofit program like YEBW, spearheaded by enthusiastic young business leaders, is truly a bright light for the future of the entrepreneurial spirit in Oregon.

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Portland Schools Need More Than a New Superintendent

Portland school superintendent Carole Smith announced her resignation this week after nine years on the job.

The next steps are predictable: The school board will conduct a national search for a successor and eventually sign someone to an expensive contract. After a short honeymoon, the new leader will sink into the bureaucratic quagmire and leave after a short and forgettable tenure.

Management experts know that if system results are disappointing, you need to change the system, not the people. The single most important change Portland could make would be to redesign how the money flows.

Right now, tax dollars go to school bureaucracies, regardless of results. Students are assigned to schools like widgets in a factory, and few families have a “Plan B” if they are unhappy.

A better option would be to enact Educational Savings Accounts (ESAs). This would allow every family to have their share of per-student revenue diverted from the bureaucracy to the student’s ESA, where alternative services could be purchased. Families would instantly have dozens of exciting options.

Equally important, ESAs would incentivize school administrators to make each school perform at a high level, thereby benefiting all students, including those not using ESAs.

Carole Smith made her share of mistakes, but the Portland school district needs institutional change more than it needs a charismatic new leader.

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Trust Lands Should Be Auctioned to High Bidder to Benefit Schools

In his recent guest column in The Oregonian, Director of the Oregon Department of State Lands Jim Paul summarizes the history of the Elliott State Forest. He correctly notes that the Common School Trust lands within the Elliott must be managed as an endowment asset for public schools.

Since the Elliott is now a net liability instead of an asset due to environmental litigation, the State Land Board has appropriately concluded that the Trust Lands should be sold.

Unfortunately, the sale will not take place through competitive bidding, because this is not an auction. On July 27, the Land Board will announce the results of an appraisal and set the sale price as the appraised price. If you dare to offer even one dollar more, your bid will be set aside by state lawyers as “nonresponsive.”

The three Land Board members – the Governor, the Secretary of State, and the Treasurer – do not want prospective purchasers to compete on price. They want them to compete on four non-financial variables, which will greatly complicate the sale process.

All offers must include at least the following set of “public benefits”: (1) at least 50 percent of the timberland must remain open for public recreational use even after it is transferred to new owners; (2) 120-foot no-cut buffers on each side of fish-bearing streams must be left permanently untouched; (3) at least 25% of the older stands of trees must be left standing; and (4) at least 40 full-time jobs annually must be provided over the first ten years of ownership.

If there are multiple offers at the same mandated price, the tie will be broken by the strongest package of these public benefits. But that turns the process into a beauty contest. There is no objective way to compare an offer with 130-foot buffers with another offer that has only 120-foot buffers but proposes to employ 50 people each year rather than 40.

Public school students, parents, and employees deserve to receive fair market value for surrendering this asset. An “appraisal” is not the same as market value.

Evidence of this is everywhere. For example, almost everyone selling a home in Portland right now knows that the final sale price is likely to be higher than the listed price, because the Portland market is red-hot.

When the State of Indiana decided to lease the operations of the state turnpike to a private vendor in 2006, the “experts” estimated that it might be worth $2 billion. In fact, the winning bid from a Spanish-Australian consortium was $3.8 billion.

In 1984 the Portland Trail Blazers famously appraised the value of Michael Jordan to be lower than that of Sam Bowie. Subsequent events proved that the Trail Blazers had made one of the worst talent “appraisals” in pro sports history.

And just last month, a Chinese investor paid $3.4 million for one lunch with investor Warren Buffet (the purchaser gets to bring seven of his closest friends). How many of us, if asked on the street, would have appraised a single lunch with anyone as being worth $3.4 million?

But that’s the point of competitive bidding. Only the market knows the value of an asset. If even one person in the world is willing to pay millions for a single lunch, then that is exactly what the lunch is worth. If we don’t allow a market to set the price of Elliott State Forest timberland, we’ll never know its true value.

There is a simple fix to this problem. The Land Board should require that all offers for the Elliott Trust Lands include the mandated four public benefits, and then select the highest responsible bid.

School beneficiaries such as local school boards, employee associations, and parent booster groups should prepare now to sue the Land Board for breach of fiduciary trust if the Board continues with its absurd plan to give away Common School Trust Lands without competitive bidding. The appraised value announced on July 27 should be the starting point for competitive offers, not the end point.


A version of this article originally appeared in The Oregonian on July 14, 2016.

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Children’s Scholarship Fund Closes the Achievement Gap for Low-Income Kids

Since 1999, the nonprofit Children’s Scholarship Fund has empowered more than 152,000 low-income children nationwide to receive a quality education in private and parochial grade schools through privately funded partial-tuition scholarships.

Children’s Scholarship Fund parents value high-quality education as the way out of poverty for their children and sacrifice financially to give them that opportunity. It is a feature of the CSF program that all families pay part of their tuition bill themselves, ensuring a family commitment to education.

The investments of both parents and scholarship benefactors are reaping great rewards. Over time, studies of college enrollment and graduation rates of scholarship alumni are showing that, despite coming from socioeconomic backgrounds associated with lower rates of college enrollment, CSF alumni enroll in college at an average rate that is similar to or higher than the general population.

In other words, these students’ education in private and parochial grade schools, made possible by a relatively modest level of financial assistance, is closing the achievement gap for kids from less advantaged backgrounds.

Children’s Scholarship Fund-Portland is a “hand up” here in our state that helps Oregon kids to reach for success in school and in life. If you would like to help a lower-income Oregon child to get a better education today, contact the Children’s Scholarship Fund-Portland at Cascade Policy Institute.

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Freedom in Film: Ever After (1998)

If you are looking for an uplifting summer movie for the teenage girls in your life, Ever After: A Cinderella Story (1998) provides a thought-provoking twist on the classic fairytale. While director Andy Tennant’s plot follows the traditional story, Ever After also explores themes of family loyalty, economic interdependence, social justice, and the rewards of hard work.

In a refreshing departure from predictable Hollywood storylines, Drew Barrymore’s tough and brave Cinderella (“Danielle”) combines a loving respect for her family’s heritage with a can-do approach to solving problems. A hard-working, educated girl―homeschooled by her father―she wants more than anything to restore the just order of her “economy” (in the ancient Greek sense of “managing the home”).

Orphaned young, Danielle does not dream of escaping work. Rather, she defines “happily ever after” as the restoration of her family’s estate to the prosperity it enjoyed under her parents. Like them, she takes pride in the farm and regrets it can’t reach its potential under her stepmother (Anjelica Huston), who has no interest in running what is essentially the family business. Danielle tries to be a good steward of the patrimony she should have inherited, even though her freedom to act independently is limited.

In Danielle’s world, the feudal agrarian society of the Middle Ages begins to meet the mercantile economy of the Renaissance. Forward-thinking Danielle masters the business acumen needed to keep the estate financially afloat; but her primary motivations are rooted in the medieval values of family loyalty, mutual obligation to others, and fulfilling one’s duty. Danielle considers “family” to include servants with multigenerational ties to the household. She wants to succeed for the sake of those whose livelihoods depend on her, as well as for herself.

An admirer of the English humanist Sir Thomas More, Danielle’s father bequeathed to her an inquiring mind and a social conscience. While Danielle’s Utopia-inspired prescriptions for the improvement of society have a fairytale simplicity, her instincts are basically good. She lives the Golden Rule with humility and charm. Her interactions with others show she believes in behaving with dignity and respect toward all whose various roles in society together make the world go ’round.

Of course, Ever After is a fairytale, so while it’s set in 16th-century France, the film isn’t without anachronisms and fictionalized historical events. (Obviously, the son of King Francis I didn’t marry a girl named Danielle, sorry to say.) But if you are looking for a delightful story about filial love, the blessing of honest work, and the ability of virtue to attract the right man, Ever After offers positive lessons, while entertaining the whole family.

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Like a Sales Tax on Steroids

Now that the massive Gross Receipts Tax measure IP 28 will be on Oregon’s November ballot, we likely will see many estimates of its impact on the state economy.

An economic research center at Portland State University just came out with its report on the measure, funded by the measure’s sponsor, union-backed Our Oregon.

Too bad that the sponsors picked a center headed by a respected former Oregon State economist who said publicly in March that their proposal would be “like a sales tax on steroids.”

Dr. Tom Potiowsky now chairs the PSU Economics Department and directs the Northwest Economic Research Center at the university. While the new PSU report doesn’t include the “sales tax on steroids” language that he personally used in March, it does confirm that such taxes “share many characteristics with sales taxes, and thus a greater burden on lower income households.”

The report also finds that because the tax will increase the cost of doing business in Oregon, it will destroy some 13,500 private sector jobs by 2027, while the added tax revenue will enable government employment to grow by 33,600 positions over the same period.

So, the tax will most hurt those least able to afford it, and will shift employment from the private to the public sector. Not bad for a sales tax on steroids.

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Freedom in Film: Gettysburg (1993)

“Up, men! And to your posts! And let no man forget today, that you are from Old Virginia!”

―Major General George Pickett

In Gone with the Wind, Rhett Butler grimly tells Scarlett O’Hara that a looming battle soon would “pretty well fix things, one way or the other.” It would take place in “some little town in Pennsylvania called Gettysburg.”

The 1993 film Gettysburg recreates the events surrounding July 1-3, 1863. Unlike many war movies, including Civil War films, Gettysburg doesn’t really “take sides.” Instead, the film delves into the minds and hearts of both Northern and Southern combatants, largely through the thoughts and decisions of General Robert E. Lee (Martin Sheen), Major General George Pickett (Stephen Lang), and Union Colonel Joshua Lawrence Chamberlain (Jeff Daniels), among many others.

Gettysburg manages to convey understanding of, if not sympathy for, the wide range of motives and issues with which honest people grappled on both sides of the Mason-Dixon Line in the 1860s. This approach makes the movie an excellent introduction to both the Civil War and the culture of the Old South for high school and college history students.

Because of the issue of slavery, it can be easy for many 21st-century Americans to relate immediately to the perspective of the North. However, the war was actually much more complicated than a conflict over slavery. The slavery issue brought deep-seated, decades-long tensions between the agrarian South and the industrial North to a head. The war was also about federalism, sectionalism, federal tax laws and their effects on state economies, and cultural differences between the North and the South.

Many Southerners were loyal to their home states in the same way their grandparents had been loyal to the colonies at the time of the American Revolution. They believed they had the right to declare independence if their states’ legitimate interests were no longer served (or their rights were being abused) by the federal government or by other states, just as the colonies had separated from Britain. As one Southern general put it while musing one evening in the camp, the federal government denying Southern states the right to secede from the Union seemed like a voluntary club refusing to permit people to resign their membership when aggrieved.

Countless surviving letters from Southern soldiers and their families show they believed they were fighting for their homes, freedom, rights, and the sovereignty of their states. On the other hand, the United States was becoming a world power. The Northern states feared that secession would result in numerous tiny, powerless, irrelevant countries. The United States as a nation―and its Constitution―would fail. After the Civil War, the phrase “these United States,” in common parlance in the 1800s, faded. It was replaced by “the United States,” a singular noun, as we say now.

The causes and the legacy of the Civil War are not intuitive for many Americans today, especially for those who live far from the South. Because Gettysburg is a long movie, there is enough time and thoughtful dialogue for viewers without much understanding of the history behind the battle to be pulled into the philosophical, moral, and cultural underpinnings of the events. Gorgeous cinematography and a soul-stirring musical score remind viewers that it’s possible to hold in one’s heart both Old Glory and Dixie, and still to miss Old Virginia, 150 years after the war.


This article was originally published June 22, 2013.

 

 

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Freedom in Film: Williamsburg: The Story of a Patriot (1957)

Williamsburg: The Story of a Patriot is the longest running motion picture ever, watched by more than 30 million visitors to Colonial Williamsburg since 1957. One of the most technologically advanced films of its day, it was recently remastered and restored to its original vibrancy. For those who can’t retrace the birth of freedom in Virginia’s colonial capital this Independence Day, Williamsburg: The Story of a Patriot is available online.

A 2004 feature in Colonial Williamsburg magazine explains this film’s significance: “…[F]or forty-seven years The Patriot has introduced guests to Williamsburg and America on the eve of the Revolution. It shows the people of eighteenth-century Williamsburg as they might have been, introduces characters that made the nation, [and] helps audiences understand the issues that divided colonists from one another and from the mother country.”

In one memorable scene, Virginia colonist John Frye (Jack Lord) discusses the impending war with another landowner. His friend is disturbed by talk of independence and says he has decided to go “home,” meaning back to England. John’s reply reflects the shift in loyalty felt by Virginia’s patriots: “I am home.”

Williamsburg: The Story of a Patriot is only about 40 minutes long, making it appropriate for young viewers and for classroom use. If you want to make America’s founding come alive for your family or students, Colonial Williamsburg’s website features extensive interactive history sections and multimedia presentations designed to make the people and issues of the 1770s accessible to children and teenagers.

Not everyone can experience the “Revolutionary City” in person, but through technology you can bring the characters of the American Revolution home.

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“When in the Course of Human Events…”

—A Declaration That Never Goes out of Style

Two hundred and forty years ago this July 4, the world was gifted with one of the most significant political documents ever written. It began with these words:

“When in the Course of human events it becomes necessary for one people to dissolve the political bands which have connected them with another…”

 Thomas Jefferson authored the Declaration of Independence to set out the reasons for the American people to “dissolve the political bands which have connected them” with Great Britain.

The Declaration also boldly stated:

“We hold these truths to be self-evident; that all men are created equal, that they are endowed by their Creator with certain inalienable rights, among these are Life, Liberty and the pursuit of Happiness. That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed.”

Before the Declaration, individuals accepted that Kings would run their lives. Afterward, they realized that they could run their own lives. As more people around the world discover this fact, thank Jefferson for inspiring mankind with the ideas and ideals they can use to take their lives back from Kings.

This year, for example, the people of Great Britain have just voted to “dissolve the political bands which have connected them” with the European Union in what became known as the Brexit election. While that vote is causing political and economic uncertainty in Europe and beyond, Jefferson and America’s founders would likely understand the “causes which impel them to the separation.

Jefferson also realized that government and society are not synonymous. He argued that government’s purpose is to protect the inalienable rights of the individuals that make up society. He understood that such rights are not granted by government; and that any rights government does claim to grant are really claims on someone else’s right to life, liberty, or property. What would he think of today’s politicians—and aspiring politicians—in Washington, D.C. and Salem, Oregon who propose law after law ordaining right after right?

Jefferson also understood that he wasn’t elected President in 1801 to “run the country.” He was elected President to run the executive branch of a limited, constitutional government that coincidently he helped to create.

As we consider candidates for state and federal executive offices this year, remember that Jefferson might tell us we aren’t voting for any of these men or women to “run the state of Oregon” or to “run the country.” We are voting for individuals to run the executive branches of limited, constitutional governments. Outside those governments’ limited responsibilities, we should be free to run our own lives.

To reinforce these concepts, why not read the Declaration again this Independence Day and consider the power it had—and still has—to change our world for the better.


Steve Buckstein is Founder and Senior Policy Analyst at Cascade Policy Institute, Oregon’s free market public policy research organization. He was named the 2016 recipient of the Thomas Jefferson Award by the Taxpayer Association of Oregon and the Oregon Executive Club.

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Freedom: America’s Treasure

Three days after the terrorist attacks of September 11, 2001, President George W. Bush said in a speech, “…[A]dversity introduces us to ourselves.”

“America is a nation full of good fortune,” he said, “with so much to be grateful for, but we are not spared from suffering. In every generation, the world has produced enemies of human freedom. They have attacked America because we are freedom’s home and defender, and the commitment of our fathers is now the calling of our time.”

Freedom is America’s precious treasure―and never too far from being lost. Acts of war and terrorism can undermine a nation and its values; but as Russian thinker Alexander Solzhenitsyn famously said, “the line separating good and evil passes not through states, nor between classes, nor between political parties either, but right through every human heart, and through all human hearts.”

On Independence Day 2016, it can be consoling to remember that character is the first defense against the loss of freedom, and that each of us still has the power to make it a force for good. Character under pressure built America, brought us through 240 years, and can keep our country “freedom’s home and defender”—if we want it to.

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A Sales Tax by Any Other Name…

Public employee union backers of Initiative Petition 28 have turned in more than enough signatures to place their massive 2.5 percent gross receipts tax measure on Oregon’s November ballot.

While supposedly dedicating most of the $6 billion per biennium additional tax revenue to public education, health care, and senior services, in reality legislators would be under pressure from powerful lobbyists in the Capitol to substitute at least some of this new revenue for money they would otherwise dedicate to those services. In short, the loudest voices in Salem, not voters, will ultimately control where this extra tax money goes.

While the unions portray their measure as making large, out-of-state corporations pay their fair share of Oregon taxes, the nonpartisan Legislative Revenue Office has released a detailed report giving a much more balanced perspective, which includes:

■ IP 28 will increase state and local taxes by $600 per year on average for every man, woman, and child in Oregon, totaling over $6 billion each full biennium.

■ IP 28 will dampen income, employment, and population growth over the next 5 years. In fact, it is expected to reduce employment growth by more than 20,000 jobs over the next five years, with private sector job growth slowing while public sector job growth accelerates in order to spend all that new tax money.

■ IP 28 will hit lower- and middle-income Oregonians harder than it will affect high-income earners. In other words, it is a regressive tax.

Perhaps most telling, the Legislative Revenue Office concludes that IP 28 will act largely like a consumption tax. It estimates that roughly two-thirds of that $6 billion per biennium tax increase will be passed on to Oregon consumers in the form of higher prices. Another name for a consumption tax is a sales tax.

The reality that IP 28 would effectively be a sales tax should be a lesson for all Oregonians that businesses generally don’t pay taxes, people do. Even the largest corporations are made up of people, namely employees, and sell their goods and services to other people, namely customers. It is largely these two groups of people who pay so-called business taxes like the one that IP 28 would impose.

The backers of IP 28 certainly understand that it is really a tax on people, not corporations. But, it is harder to get voters to approve a tax measure when they think it will hit them with rising prices at the store and fewer job opportunities. Better to promote the fiction that big faceless corporations have some magic pots of money that they will simply hand over to state government and public employees without any consequences for the rest of us.

Public employee unions back IP 28 because most of the tax revenue it would generate will go into the pockets of their members. Once the rest of us realize that this money will come primarily out of our pockets, we might not be too excited about voting for this massive new money grab.


 

A version of this article originally appeared in The Coos Bay World on June 1, 2016.

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"Beyond Traffic" Has a Different Meaning in Portland

Portland is one of seven cities still in the running for a $50 million grant as part of the “Beyond Traffic” challenge sponsored by the federal Department of Transportation.

While the idea of solving traffic congestion sounds great, that is not an actual goal of Portland planners. In fact, local officials are trying to make traffic worse, by downsizing roads and lowering traffic speeds. As part of this campaign, a northbound travel lane on Naito Parkway was recently removed, and later this year two lanes on Foster Road will be eliminated.

Portland planners think we drive too much, so they want $50 million in federal funds to develop new data collection systems to encourage people to travel by bus, train, or bike. Since most people prefer a car, this will be a big waste of public money.

The transportation challenge for Portland is the need for an expanded highway system. Experimenting with technologies such as electronic tolling as a way of paying for that expansion might have been a useful grant application. But Portland planners don’t want to grow the system; they’d rather keep it small and congested, then use fancy technology to entice a few people onto a slow bus.

This is not a plan that will move us “beyond traffic.”

Updated as of 6/22: According to The Oregonian, the U.S. Department of Transportation has selected Columbus, Ohio as the winner of the federal “Smart City-Beyond Traffic” competition.

With this distraction out of the way, perhaps city planners can turn their attention to something more useful, such as finding ways to actually reduce traffic congestion in Portland.

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A Sales Tax by Any Other Name…

Public employee union backers of Initiative Petition 28 have turned in more than enough signatures to place their massive 2.5 percent gross receipts tax measure on Oregon’s November ballot.

While supposedly dedicating most of the $6 billion per biennium additional tax revenue to public education, health care, and senior services, in reality legislators would be under pressure from powerful lobbyists in the Capitol to substitute at least some of this new revenue for money they would otherwise dedicate to those services. In short, the loudest voices in Salem, not voters, will ultimately control where this extra tax money goes.

While the unions portray their measure as making large, out-of-state corporations pay their fair share of Oregon taxes, the nonpartisan Legislative Revenue Office has released a detailed report giving a much more balanced perspective, which includes:

■ IP 28 will increase state and local taxes by $600 per year on average for every man, woman, and child in Oregon, totaling over $6 billion each full biennium.

■ IP 28 will dampen income, employment, and population growth over the next 5 years. In fact, it is expected to reduce employment growth by more than 20,000 jobs over the next five years, with private sector job growth slowing while public sector job growth accelerates in order to spend all that new tax money.

■ IP 28 will hit lower- and middle-income Oregonians harder than it will affect high-income earners. In other words, it is a regressive tax.

Perhaps most telling, the Legislative Revenue Office concludes that IP 28 will act largely like a consumption tax. It estimates that roughly two-thirds of that $6 billion per biennium tax increase will be passed on to Oregon consumers in the form of higher prices. Another name for a consumption tax is a sales tax.

The reality that IP 28 would effectively be a sales tax should be a lesson for all Oregonians that businesses generally don’t pay taxes, people do. Even the largest corporations are made up of people, namely employees, and sell their goods and services to other people, namely customers. It is largely these two groups of people who pay so-called business taxes like the one that IP 28 would impose.

The backers of IP 28 certainly understand that it is really a tax on people, not corporations. But, it is harder to get voters to approve a tax measure when they think it will hit them with rising prices at the store and fewer job opportunities. Better to promote the fiction that big faceless corporations have some magic pots of money that they will simply hand over to state government and public employees without any consequences for the rest of us.

Public employee unions back IP 28 because most of the tax revenue it would generate will go into the pockets of their members. Once the rest of us realize that this money will come primarily out of our pockets, we might not be too excited about voting for this massive new money grab.


A version of this article originally appeared in The Coos Bay World on June 1, 2016.

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Voters Decided to Leave Themselves Stranded by the Side of the Road

In the month since voters in Austin, Texas upheld new city regulations on ridesharing companies like Uber, the law of unintended consequences has been confirmed.

Austin’s highly regulated taxi industry got the city to impose strict regulations on their competition, but Uber and Lyft threatened to pull out of the city rather than comply with rules they said would be bad for them and their customers. The ridesharing companies backed an initiative to repeal the regulations.

As one pundit noted, a majority of voters decided “…to leave themselves stranded by the side of the road frantically searching for a ride. Well, that’s not what they’d say they did. Strictly speaking, they voted to stick it to corporate interests—by supporting political interests who favored other corporate interests.”

The unintended consequences of that vote included about 10,000 ridesharing drivers losing their employment, bars losing business as people had fewer ways to get home safely, and disabled residents looking for new ways to get around the city.

The market responded quickly with unregulated “black market” services such as Austin Underground Ride springing up to meet demand.

Austin voters may not have realized that the only way big corporations become big in a free market is by meeting consumer demand. In this case, Uber and Lyft may become a little bit smaller, but everyone in Austin lost some of their transportation freedom.

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Portland Schools Schedule Book-Burning Party

The Portland Public School board recently voted to prohibit textbooks or classroom materials questioning the mainstream thinking about climate change.

The decision has sparked an outpouring of commentary, with many writers supportive of the School Board.

However, the wording of the Board resolution should greatly concern parents of Portland public school students. Resolution No. 5272 is two pages long, but the most chilling part is the final sentence:

“[Portland Public Schools] will abandon the use of any adopted text material that is found to express doubt about the severity of the climate crisis or its root in human activities.”

The primary purpose of education is to teach students how to be critical thinkers. Now that the School Board has declared that expressions of doubt about complex scientific topics will be banned, what is the point of going to school?

Regardless of the subject we should encourage students to be skeptical. The more questioning, the better. They will be poorly prepared for adult living if they spend their childhood years being spoon-fed in schools where skepticism is prohibited.

Public education already faces a growing challenge from private schools, online learning, and home-based education. If Resolution 5272 is upheld, Portland Public Schools will give parents one more reason to leave.

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New Orleans’ Miracle School District

Ten years ago, Hurricane Katrina devastated the southeastern United States, displacing more than 372,000 school-aged children. Today, New Orleans’ school population has returned to more than two-thirds its pre-storm level, but a lot has changed for the better in the public school district.

Before Katrina, a Louisiana state legislator called New Orleans “one of the worst-run public school systems in America.” Almost two-thirds of students attended a “failing school.” After Katrina, the state legislature transferred more than 100 low-performing Orleans Parish schools to the Recovery School District. Now, the district has 57 charter schools operating under nonprofit charter management organizations.

According to The Washington Examiner, barely more than half of New Orleans public school students graduated before Katrina. Today, almost all New Orleans students attend charter schools. In the 2013-14 school year, three out of four students graduated on time, and fewer than seven percent attend a “failing school.”

This amazing turnaround is due to the hard work of teachers, administrators, local and state leaders, and parents who rebuilt New Orleans’ public school system from the ground-up, with the vision and determination to create “an all-choice school district with high-quality schools.” The unprecedented success of New Orleans’ Recovery School District serves as a model for education reform efforts across the country. Parental choice, flexibility for educators, and innovation in management really can achieve the impossible.


This article was originally published August 26, 2015.

 

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If Gambling Is a Problem, Who Is Responsible?

Governor Kate Brown opposes a plan by the Coquille Indian Tribe to build a casino in Medford.

In her public statement, the Governor said she opposes the addition of any more casinos because “even a single additional casino is likely to lead to significant efforts to expand gaming across Oregon to the detriment of the public welfare.”

Her concern for the public welfare is touching, but if one simply “follows the money” associated with the state’s own gambling franchise—the Oregon Lottery—it’s clear that the Governor has little regard for the health of Oregon citizens.

The Oregon Lottery is a state-run monopoly using a network of 3,939 retailers to offer players a wide choice of games, including Scratch-its, Keno, Powerball, Win for Life, Mega Millions, Lucky Lines, and Pick 4.

In addition, the Lottery has approximately 11,925 Video Lottery terminals deployed throughout the state. These terminals accounted for 71.5% of total sales in 2015 and are highly addictive. According to the Oregon Health Authority, roughly 90% of problem gambling in Oregon is associated with Lottery video machines.

In 2015, Oregon earned $1.2 billion from the state Lottery. In January, Powerball mania resulted in record sales of $36 million in one week. An Oregon Lottery spokesman said, “Any time sales go up, that’s a good thing for our beneficiaries.”

Who are these beneficiaries? By law, 57% of net Lottery revenues support public education. Activities loosely defined as “economic development” get 27%. State parks and salmon enhancement programs split 15% of revenues.

Those activities account for 99% of all Lottery funds. The last 1% gets allocated for problem gambling. The state estimates that 81,800 adults and 4,000 adolescents have a gambling addiction.

If Governor Brown were so interested in the “public welfare,” she would be advocating for an increase in the percent of Lottery funds dedicated to the 86,000 problem gamblers. This would at least give her some moral high ground to stand on before criticizing a casino proposed by the Coquille Tribe.

But despite total control of the legislative process by the Democratic Party, the Governor has not made this a priority.

Oregon’s misuse of tobacco tax money is even more egregious. Oregon was one of 44 states that sued the tobacco industry in the mid-1990s regarding the health care costs associated with smoking. As a result of a Master Settlement Agreement (MSA) with the four largest tobacco manufacturers, each state was to receive payments every year from 1998 through 2025.

According to the plaintiffs, MSA money was supposed to be used for tobacco prevention activities and health care subsidies necessary to treat smoking illnesses, but that was not a formal part of the agreement. Thus, each state was free to use the funds in whatever way its state legislature approved.

In Oregon, total MSA funds received since 1998 equal $1.26 billion—yet only 0.8% of the money has been used for tobacco prevention activities.

The Governor’s hypocrisy associated with the use of tobacco and gambling profits is embarrassing. She should clean up her own house before she starts lecturing any of the Tribes about their casino expansion plans.


This article originally appeared in The Coos Bay World on May 24, 2016.

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A Sales Tax by Any Other Name

Public employee union backers of Initiative Petition 28 appear to have turned in more than enough signatures to place their 2.5 percent corporate gross receipts tax on Oregon’s November ballot.

While the unions portray their measure as making large, out-of-state corporations pay their fair share of Oregon taxes, the nonpartisan Legislative Revenue Office (LRO) just released its more balanced perspective, which includes:

■ IP 28 will increase state and local taxes by $600 per year on average for every man, woman, and child in Oregon, totaling over $6 billion each full biennium.

■ IP 28 will dampen income, employment, and population growth over the next 5 years.

■ IP 28 will hit lower- and middle-income Oregonians harder than it will affect high-income earners. In other words, it is a regressive tax.

■ Finally, the Legislative Revenue Office concludes that IP 28 will act largely like a consumption tax. It estimates that roughly two-thirds of the $6 billion per biennium tax increase will be passed on to Oregon consumers in the form of higher prices.

Another name for a consumption tax is a sales tax.

Public employee unions back IP 28 because most of the tax revenue it would generate will go into the pockets of their members. Of course, that revenue will come out of everyone else’s pockets.

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Freedom in Film: Captain America: Civil War (2016)

Have you taken your children to see Captain America: Civil War? There’s nothing like a summer superhero blockbuster to jumpstart a conversation about the meaning of freedom, the importance of personal responsibility, and how to know what’s right to do. The Acton Institute’s Jordan Ballor recently described Captain America’s themes of freedom and conscience this way:

The basic dynamic of the film focuses on conflict between authority and responsibility. The film could well be understood as an extended reflection on Edmund Burke’s observation: “Society cannot exist, unless a controlling power upon will and appetite be placed somewhere; and the less of it there is within, the more there must be without.”

[…]Captain America champions the rights of conscience and roots the legitimacy of the Avengers in their responsible autonomy.

In Civil War[…]we find an expression of the perennial conflict between individual conscience and communal coercion. Cap represents the best of the liberal tradition in his emphasis on virtue, responsibility, and well-formed moral action. By contrast, Stark represents the temptation to outsource moral government to others, effectively indenturing the Avengers in servitude to some impersonal, international governmental panel….

Captain America works from the assumption that such autonomy, once given up, is perhaps impossible to regain. In a display of incisive political insight, Cap also recognizes the public choice realities of all governmental regimes. The government “runs by people with agendas and agendas change.” He thus realizes the complexities of what might happen when partisans vie for power over the Avengers, and the dilemmas they would face when ordered to engage or to disengage when their own judgment would lead them to do otherwise. The truth that Captain America recognizes is that you can never really outsource the responsibility to obey your conscience. Or as the Dutch politician and theologian Abraham Kuyper put it toward the end of the nineteenth century, “The conscience marks a boundary that the state may never cross.”

(Jordan Ballor’s article “The Captain of Conscience” [spoiler alert] can be found here.)

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Google’s War on the Poor

Google announced recently that it would no longer run ads for payday loans, the short-term loans that typically have high annual interest rates due to the poor credit of customers.

Google’s decision is significant because many states (including Oregon) have effectively regulated payday lenders out of existence, so much of the business has moved online. If Google cuts off ads, potential customers will have a more difficult time getting loans.

Google undoubtedly considers this decision part of its “corporate social responsibility.” What they overlook is the adverse impact it will have on low-income individuals. A week ago, payday loan customers had few legal options for short-term borrowing. Now they have even fewer.

When the Oregon legislature outlawed much of the payday lending industry in 2007, the most striking aspect of the public debate was the total absence of payday loan customers. Borrowers themselves weren’t the ones complaining about high interest rates; it was the upper-income Progressives, who didn’t need payday loans.

Google has been one of the most successful companies in American history. The company should stick to its core business and stop trying to protect payday loan customers by censoring ads. Borrowers don’t need that kind of help.

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Washington, D.C. Charters Called a Laboratory for Innovation in Public Education

Did you know that almost half of Washington, D.C.’s public school children attend charter schools? In fact, our nation’s capital now has 115 charters, run by 62 nonprofit organizations.

President Bill Clinton signed the legislation authorizing D.C.’s charter schools twenty years ago this spring. Since then, D.C. charter school students have made significant academic gains. A recent study on urban charter schools by the Center for Research on Education Outcomes at Stanford University found that D.C. charter students are learning the equivalent of 96 more days in math and 70 more days in reading than their peers in traditional public schools.

David Osborne, director of the project Reinventing America’s Schools at the Progressive Policy Institute, has called D.C. “the nation’s most interesting laboratory” for public education. In an article for U.S. News and World Report, Osborne compares the traditional public school system with a Model T trying to compete on a racetrack with 21st century cars. “…[F]or those with greater needs,” he writes, “schools need innovative designs and extraordinary commitment from theirs staffs.”

Charter schools’ entrepreneurial governance model allows them to innovate, adapt, and specialize to meet the particular needs of students. Their successes in educating children who face the greatest challenges to academic achievement is fueling an even greater demand for the kind of choice in education that charter schools have come to represent.

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Why is the State Land Board selling the Elliott State Forest without competitive bidding?

In August 2015 the Oregon Land Board (Governor Kate Brown, Secretary of State Jeanne Atkins, and Treasurer Ted Wheeler) voted to sell roughly 82,450 acres of “Common School Trust Lands” within the Elliott State Forest because the state was losing money on those lands. Under Oregon law, School Trust Lands are supposed to make money for schools.

Given the ongoing losses, the Board reached the correct decision. Unfortunately, the sale protocol adopted by the Board is bizarre. The Board will establish a price for the land based on appraisals, and that will be the only price accepted. If you dare to offer $1 more, your offer will be declared “non-responsive.”

How can this make sense when Trust Lands serve an as an endowment for public schools? Trustees of any endowment have a fiduciary obligation to make decisions in the best interest of beneficiaries. The 82,450 acres of timberland being sold in the Elliott may be worth anywhere from $300 million to more than $400 million, but no one knows the exact value. Setting a non-negotiable price through appraisals means that potentially vast amounts of money could be left on the table.

Anyone who has been to a charity fundraising auction knows that the estimated value of something frequently turns out to be wrong—by a lot. That’s why we have competitive bidding.

The same is true in business transactions. Just last month, for example, Alaska Airlines bought Virgin Airlines for $2.6 billion, or $57/share—a price that was 80% higher than what the shares had been trading for prior to the sale.

Instead of bidding on price, the Land Board plans to pick a winning offer based on which prospective purchaser has the best package of “public benefits.” The minimum level of benefits has been defined by the Board as the following: (1) at least 50 percent of the purchased timberland must remain open for public recreational use; (2) no-cut buffers of 120 feet on each side of fish-bearing streams must be left permanently untouched; (3) at least 25% of the older stands of trees must be left intact; and (4) at least 40 full-time jobs annually must be provided over the first 10 years of new ownership.

These benefits may have merit, but using them as the way to choose the best offer will turn the sale protocol into a beauty contest. There is no objective way to compare an offer including 130-foot buffers with another offer that has only 120-foot buffers but proposes to employ 50 people each year rather than 40.

This protocol is going to create a nightmarish decision process for the three Land Board members, while violating their fiduciary obligations to schools.

There is an easy solution to this problem: Simply make the four public benefits a minimum requirement, and then pick the highest-price offer meeting those requirements. Maybe we’ll find out that the Elliott is worth a lot more than it’s been appraised for.

Anyone who works at a public school, serves on a school board, or has a child enrolled at a public school should be outraged at this giveaway.


This article originally appeared in the Salem Statesman Journal on April 30, 2016.

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Policy Picnic – May 25, 2016

Please join us for our monthly Policy Picnic led by special guest speaker Adrian Moore, Ph.D., Vice President of Policy at Reason Foundation


Topic:  Government Worker Pension Reform – Honoring contracts and ending taxpayer debts

Description: Unfunded pension liabilities are a national problem. Oregon’s PERS system has unfunded liabilities (read taxpayer debt) of $21 billion. A number of states have overhauled their pension systems to provide sustainable retirement benefits to government workers while dramatically reducing taxpayer debts and risks. Arizona is the latest state to do so. Adrian Moore will talk about the reforms, how they happened, and what Oregon should be considering.

Adrian Moore, Ph.D., is vice president of policy at Reason Foundation, a nonprofit think tank advancing free minds and free markets. Moore leads Reason’s policy implementation efforts and conducts his own research on topics such as privatization, government and regulatory reform, air quality, transportation and urban growth, prisons and utilities.

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

Please click here to reserve your free tickets.

Cascade’s Policy Picnics are generously sponsored by Dumas Law Group, LLC.

Dumas Law Group
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New Report: Transportation Funding Should Be a State and Local Responsibility

Study Finds That Transportation Funding Should Be a State and Local Responsibility

May 4, 2016 

FOR IMMEDIATE RELEASE

Media Contact:
John A. Charles, Jr.

503-242-0900

john@cascadepolicy.org

PORTLAND, Ore. –  In a study released today by Cascade Policy Institute, economist Randall Pozdena recommends that transportation regulation and finance devolve from the federal government to state and local governments. In addition, the study recommends that most transportation taxes be replaced with targeted user fees, to ensure that those who pay for services receive benefits commensurate with those payments.

For over 30 years, the federal government has assumed a disproportionately large role in the regulation and subsidization of transportation services. Yet, most travel is local. For instance, the Cascade research paper found: 

  • More than 50% of all household trips, by all modes, are less than five miles long
  • More than 90% are less than 20 miles
  • 92% of freight shipments are less than 500 miles, by weight

Despite the dominance of local travel, 32% of all transportation funding flows through federal processes.

Of the various transport modes, private freight, airline travel, and pipeline shipments are the least regulated and least subsidized. These modes benefit from high levels of private ownership and capital investment, subject to normal market discipline.

Highway travel and transit suffer from the most distortions and cross-subsidies through federal intervention. As a result, most urban areas face growing levels of traffic congestion, and large urban transit systems are seriously (and often tragically) under-maintained.

The transit industry, which has steadily become a government-sponsored enterprise since passage of the Urban Mass Transit Act of 1964, is the sector most in need of a new business model. According to Dr. Pozdena,

“By definition, transit trips are extremely short and not important parts of larger networks. Federal and state governments should be out of the transit sector altogether, and rely on fare box revenue to ensure that the cost of the service is worthwhile to the user.”

For comparison purposes, Dr. Pozdena calculates that it costs roughly $60,000 to recruit one new additional transit rider in Oregon, which is 10 times the cost of providing new highway capacity for one additional auto commuter.

The Portland region in particular suffers from a mode imbalance in which vast sums of federal and state dollars have been spent on lightly-used passenger rail lines, while new highways and bridges have been canceled or delayed. This problem can be solved by inviting private investors to build needed new facilities through toll-based payments, and implementing time-of-day pricing schemes to ensure free-flow travel conditions on the regional highway system.

Last week the Oregon legislature announced the formation of an 18-person task force to study transportation funding for the 2017 legislative session. According to John A. Charles, Jr., CEO of Cascade Policy Institute,

“The Oregon Legislature has struggled unsuccessfully for decades to devise a sustainable transportation funding system. As yet another task force prepares to scale the fortress wall with the same weapons used in previous assaults, members should consider a new approach including targeted user fees rather than broad-based taxes, electronic tolling and variable pricing, elimination of political mandates prohibiting new highway facilities, and market-based reforms including privatization.

“These principles work everywhere else in the economy; they would work in the transportation sector as well, if we allowed them.”

The full report, Devolution of Transportation: Reducing Big Government Involvement in Transportation Decision-Making, can be downloaded here.


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. Cascade Policy Institute is a tax-exempt educational organization as defined under IRS code 501(c)(3). Cascade neither solicits nor accepts government funding and is supported by individual, foundation, and business contributions. The views expressed in Cascade’s reports are the authors’ own.

 

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Help the Working Poor Adam Smith’s Way

This year’s May Day activities in Portland centered on promoting “workers’ rights” and “resistance to capitalism.” Unfortunately, too few critics of capitalism seem to realize that many of the workers they seek to help are being kept from using their knowledge and talents by a system of occupational licensure that dates back centuries.

May Day activists may not know that eighteenth-century Scottish philosopher and political economist Adam Smith, Capitalism’s Founding Father, was not simply interested in how markets profit those they now call “the one percent.” In fact, Smith strongly condemned restrictions on the working poor that kept them from benefiting from free exchange and the division of labor enabled by markets.

What in Smith’s day was called “incorporated trade” is today known as occupational licensure. Smith noted that apprenticeship requirements for weavers, hatters, tailors, etc., kept many out of these trades, while raising the wages of those already secure in them.

Today, most states impose fees and training requirements that keep many workers from entering dozens of occupations such as cosmetology, athletic training, and dry wall installation. Oregon, in fact, imposes some of the heaviest occupational licensing burdens on the working poor.

So, rather than simply berating capitalism, it would be nice if May Day activists could study a little economic history and then help reduce some of the licensing restrictions that limit workers’ rights today.

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Get Ready for High-Cost Electricity

In the recently concluded session of the Oregon legislature, the big environmental “win” was Senate Bill 1547, a bill that was hatched in secret by two large utilities and a group of environmental activists. The bill promises to rid the Oregon electricity grid of coal-fired power and to double the required levels of “renewable energy” from 25 percent to 50 percent by 2040.

When the legislature was debating SB 1547, members were calmly assured by proponents that the cost of these requirements would be minimal. They were reminded that the existing standard of 25 percent (by 2025) had always included an “off-ramp” if the cost of compliance reached 4 percent of utility revenue—and the costs had never come close to 4 percent.

Indeed, compliance costs for PGE in 2014 were only 0.24 percent of revenue (or $4.2 million in dollar terms). Obviously, ratepayers had nothing to worry about.

This storyline was especially soothing when it was repeated by Sen. Lee Beyer, former member and chair of the Oregon Public Utilities Commission. In his grandfatherly way, he told his colleagues that everything was under control.

The problem with this narrative was that it’s highly misleading. What the advocates didn’t say was that the reason the cost of compliance so far has been low is that utilities only needed to get 10 percent of their power from designated renewable energy sources through 2014. However, from 2015 to 2019, the requirement jumps to 15 percent, and rises steadily after 2020.

No one actually knows how much it will cost to get 50 percent of the power from “green energy” sources by 2040, but it’s going to be expensive.

We get a hint of this in the PGE forecast for 2017-2021. For those five years, PGE predicts that compliance costs will total $335 million, or 3.46 percent of revenue. Those costs will have to be paid for by ratepayers, and they will get nothing in return.

Under SB 1547, the highest costs are back-loaded. Advocates know that when the program blows up a decade from now, it will be someone else’s problem. Many of the legislators who voted for it will be sitting poolside collecting their PERS checks.

Senate Bill 1547 is a fraud. Virtually every claim made by proponents is false. Instead of increasing our “energy security” by making the Oregon grid “coal-free,” it will dramatically increase the risk of power failure by force-feeding huge amounts of intermittent sources like wind and solar into the grid. In engineering terms, the electrical distribution system requires stability; SB 1547 mandates volatility.

System costs have to rise because consumers will be paying twice for the same power—once for the subsidized wind farms and again for the adult power sources used to back up the wind farms that sit idle most of the time.

The advocates also claim that SB 1547 will get coal out of the system by 2030; but Oregon’s only coal-fired power plant will be shut down in 2020 anyway. The notion that this bill will affect coal used in other states is laughable.

In his floor speech, Rep. Cliff Bentz summarized his criticism of SB 1547 by saying it was “long on symbolism, short on results, and really expensive for ratepayers.” Nonetheless, a majority of legislators voted for it, and the governor signed it.

Ratepayers deserved so much better. In 2017, repealing SB 1547 should be at the top of the legislative “to-do” list.

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Freedom in Fiction: Mansfield Park

“Wretchedly did [Sir Thomas] feel, that with all the cost and care of an anxious and expensive education, he had brought up his daughters, without…his being acquainted with their character and temper.”

Graduation season begins this weekend. With young Oregonians taking their next steps in life, why not revisit a classic story about young people setting out into the world of new jobs, independent incomes, first homes, debt, leisure, and love?

Of all Jane Austen’s novels, Mansfield Park is probably the most misunderstood and underrated. Unlike Austen’s more popular tales of upper-class English gentry, Mansfield does not star a confident young woman from a prominent family. Instead, Fanny Price is a shy teenager, dependent on wealthy relatives, who says little in public and hates attention. Mansfield is the only Austen novel in which the full force of a cynical world comes crashing down on an inexperienced teenage girl who seems least equipped to fight it.

The most contemplative of Austen’s works, Mansfield is not so much about a young girl’s search for love as it is a careful study of how not to lose oneself while trying to “make it” in the world. Because Fanny is a quiet person, she observes her peers while they hash out among themselves what is important to their lives and how they judge what they encounter. They debate―often acrimoniously―what their career choices should be, how much money they stand to make, what prestige they can earn in the eyes of others, and what are the criteria by which they should evaluate these decisions.

As their friendships unfold, the young adults of Mansfield Park don’t appear much different from today’s college students. In the brief window of time in which they settle their ideals, professions, friends, and spouses, they show each other their true colors. They discover they have irreconcilable worldviews. They decide what they can and can’t live with. Their romantic and financial decisions bear fruit.

Henry Crawford and his sister Mary, friends of Fanny’s relatives, excuse their personal shortcomings by their upbringing. Raised without the example of stable, responsible adults, they don’t have the confidence (or the will) to operate from a higher set of principles than convenience, social convention, and popular opinions. They admit they don’t have the capacity to trust others or to be reliable in their relationships. Mary is socially adept and attractive, but her cynical biases against concepts and values beyond her personal experiences are crippling. Her intellectual and romantic clashes with Fanny’s favorite cousin reveal the depth of their different approaches to discerning one’s path in life.

The Crawfords had lacked guidance, but Fanny’s cousins have the opposite problem: Sir Thomas confuses his children’s abiding by conventional rules of behavior with authentic character development. Sir Thomas “had meant them to be good, but his cares had been directed to the understanding and manners, not the disposition; and of the necessity of self-denial and humility, he feared they had never heard from any lips that could profit them.”

When three of his four children become involved in public scandals, Sir Thomas’s pain as a parent comes mostly from the realization that he does not truly know who they are. He knows them from the outside―how they tried to do what he expected of them while in his presence―without being acquainted with their minds, hearts, values, and aspirations. Their choices surprise him.

On the other hand, Fanny, despite her social and financial dependence and shy temperament, knows herself. Lacking self-deception or illusions about what will make her happiest in life, she is truly independent on a personal level. When morally unreliable (but financially eligible) Henry suggests that by becoming involved with him, Fanny could bring out the best in him, she delivers her most famous line: “We have all a better guide in ourselves, if we would attend to it, than any other person can be.” By calling him to take responsibility for his own conscience, and refusing to make him a romantic “project,” Fanny shows she understands equal relationships. Her refusal to compromise her self-knowledge by being mismatched frees her to seek a healthy relationship. She and the man she really loves are the only young couple in the novel who do not subscribe to, or settle for, a transactional view of friendship.

Mansfield Park and Fanny Price have drawn acerbic criticism from writers who cannot “like” her and wish the novel “came down” on the side of the sparkling, au courant Mary rather than the quiet, conservative Fanny. That the characters make modern readers uncomfortable says more about what we value, and what we think about how to treat other people, than perhaps we want to admit. The contrast between Mary and Fanny is exactly what we are meant to see: No matter how clever she is, Mary is tragic because she will not give up her self-centeredness; Fanny is heroic because she won’t be browbeaten into going along with the crowd.

Personal authenticity requires the ability to say no, to find happiness in simple things, to value one’s primary relationships, to resist the urge to hide from oneself in a blur of activities and friendships that mask a restless spirit, and to make choices that resonate with one’s true self. At a crossroads in life—like high school or college graduation, or any new beginning—these are crucial reflections deserving deep thought. The most important decisions a person will ever make involve choosing a state in life, establishing a healthy outlook on one’s career and finances, and loving a good person. Each involves surrounding ourselves with a set of people and activities that either will enable or inhibit us from being who we ought to be. By remaining steadfast under tremendous pressure, Fanny Price proves not to be Austen’s weakest heroine, but her strongest.


British television’s 2007 Mansfield Park is a condensed but faithful―and charming―movie adaptation which remains true to Austen’s characterization and the most important themes of the novel. The 1999 feature film is seriously flawed. It alters characters, including Fanny’s, in key ways and introduces plot elements that distract from the meaning of the novel. The 1983 miniseries is faithful in both characterization and plot, but it is missing the production values audiences are used to in Austen films made since the early 1990s.

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Do You Support the Free Market, But…?

I first wrote in 2003 about what I call “The Statement”:

“I support the free market just as much as you do, but….”

I had been hearing versions of The Statement in and around political and business circles for years. It impinged on one of the first issues Cascade Policy Institute tackled in the year of our founding, 1991. The city of Portland was planning to franchise residential garbage service (which it eventually did at the expense of consumers). At the time Portland was the largest city in the country without government garbage service or a private monopoly protected by law.

After I had written and testified before city council about the harmful effects of government intrusion into the garbage business, a local garbage hauler called me. He wanted to explain how protected franchises—that is, government-protected private monopolies—were actually a good thing.

After a few minutes he realized that I wasn’t buying his arguments, so he made what I later labeled The Statement: “I support the free market just as much as you do, but….” The “but” in this case was the exception he felt should be made to protect his business from competition and consumer choice.

Over the years I’ve heard The Statement from business people who argue that the State of Oregon and local jurisdictions should continue protecting them from new competition in all sorts of industries. The Portland taxi cartel successfully protected its position for decades before Cascade and others helped a group of Ethiopian immigrants to enter the market with Green Cab in 1998. Then, in 2015 the expanded taxi cartel tried to rely on The Statement to fight off ridesharing companies like Uber until the new smartphone technology that enabled them gave consumers power to demand that local governments allow the transportation freedom they promised…and delivered.

At the Capitol in Salem, I heard The Statement from business lobbyists who argued that the free market was great…except that their clients should be protected from new competitors in the home moving and natural hair braiding fields. Of course, these lobbyists weren’t simply protecting the interests of their paying clients…no, they always argued that keeping competitors out was for the benefit of the public health and safety. Luckily for the public, these arguments failed; and it is now much easier for aspiring entrepreneurs to enter these fields in Oregon, providing more choices for consumers and more economic opportunities for themselves.

On the national scene we’re now hearing a version of The Statement when presidential candidates say something like, “I’m for free trade too, but….” Flawed economic arguments about foreigners “taking our jobs” and other nations harming America by somehow imposing trade deficits on us are trotted out to justify protecting some businesses against others, and against consumers.

Business people argue for government protection at their peril. If government is justified in controlling who can provide our garbage service, or taxi service, or natural hair braiding, then why shouldn’t it control who can sell us our food, clothing, and shelter—all things we cannot do without?

If government can deny us the right to buy products produced in other countries, or can slap high tariffs on those products so that we have to pay much higher prices, how is this protecting “we the public”? Isn’t it really protecting “they, the special business interests”?

Lest anyone mistakenly believe that Cascade Policy Institute is “pro-business,” we are not. Rather, we are pro-liberty, pro-free-markets, and pro-consumer-choice. We understand that the slippery slope to a government-controlled economy begins when capitalists fail to consistently defend capitalism. The resulting economy harms most consumers and businesses alike at the expense of those who work for and are protected by big government.

There may be a case for government limiting competition in some fields and subsidizing some businesses at the expense of others; it’s just not a free-market case.

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Who Profits from Gambling?

Governor Kate Brown opposes a plan by the Coquille Indian Tribe to build a casino in Medford.

In her public statement, the Governor said, “even a single additional casino is likely to lead to significant efforts to expand gaming across Oregon to the detriment of the public welfare.”

What she actually means is she’s opposed to more gambling if it’s not run by state government.

During the current two-year budget cycle, Oregon expects to earn $1.2 billion from the state Lottery. In January, Powerball mania resulted in record sales of $36 million in one week. A Lottery spokesman said, “Any time sales go up, that’s a good thing for our beneficiaries.”

The hypocrisy of Oregon politicians about gambling and other so-called “sinful” activities is tiresome. We are constantly lectured to avoid smoking, drinking, and gambling because those activities are bad for us; but as soon as legislators get a cut of the action, it’s full steam ahead.

Now that recreational marijuana is legal and taxed, politicians are suddenly enjoying a new profit stream. Can marijuana advertising be far behind?

As soon as our governor starts reining in the state Lottery, I might take her concerns about tribal casinos seriously. Until then, she should stop pretending to be a voice of morality.

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Flexibility Is Key: The Next Generation of Parental Choice Solutions

Families in five states now have access to a special program called Educational Savings Accounts.

Educational Savings Accounts, or ESAs, allow parents to take money the state otherwise would spend on their children in the public system and put it on a restricted use debit card. Parents can spend this money on a wide variety of approved educational options, including private school, individual tutoring, online classes, and other services. Any money not used is rolled over for parents to spend in the future.

The Friedman Foundation for Educational Choice surveyed Arizona families to see how they are choosing to spend the resources allocated for their kids. The survey found that more than a third of participating families used ESAs for multiple educational purposes, not just private school tuition. It also found that families saved a significant amount of their ESA money for future expenses.

This indicates that ESAs not only expand the learning options available to individual children, but they also encourage fiscal discipline within education spending.

Parents and lawmakers in nearly a dozen states, including Oregon, are working to make this flexible learning option available to more children. The next generation of education reform in America needs to embrace flexibility to meet the needs of every child, and Educational Savings Accounts are proving to be a simple but powerful way to do just that.

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Freedom in Film: Bobby Jones: Stroke of Genius (2004)

“Amateur” is French for “one who loves.” But today, the word is commonly misused to imply “mediocre.” Amateurs may love their avocations, our modern minds assume, but not enough to be “really good at it.” “Professionals,” we think, are those who truly excel.

Golf prodigy Bobby Jones was an amateur in the true sense. He played for love of the game and decided not to turn professional, retiring at the astonishingly young age of 28. The only golfer to win the U.S. Amateur, the British Amateur, the British Open, and the U.S. Open in a single year (or in an entire career), Jones is still considered arguably to be the greatest golfer ever.

If you’re a golf aficionado who since last Sunday is already missing the lush greens of Augusta National, you would relish the 2004 film, Bobby Jones: Stroke of Genius.

Jim Caviezel stars as Bobby Jones during his rise from obscurity to golf legend. Caviezel brings color and depth to his portrayal of Jones, who was an academic genius and man of dignity, as well as a superb athlete. The film shows Jones’s struggle to overcome his own character flaws, including a fiery temper and a tendency to perfectionism. It also poignantly develops Jones’s relationship with his wife and children and shows how the good of his family factored into his decision to retire from golf at his peak.

Not only was Bobby Jones an outstanding athlete, but he was universally known to be a man of genuine character. Golf writer Herbert Warren Wind said of Jones, “In the opinion of many people, of all the great athletes, Jones came the closest to being what we called a great man.” (The U.S. Golf Association’s award for distinguished sportsmanship is named for Bob Jones.)

While sporting scandals often monopolize headlines, countless athletes compete with integrity, honor their families, and serve their communities. A sports hero can be both an outstanding athlete and a class-act human being. One person’s positive choices have the potential to inspire millions and make the world a better place. If you’ve ever been tempted to cynicism over athletics, Bobby Jones: Stroke of Genius is guaranteed to make you smile again.

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Policy Picnic – April 27, 2016

Please join us for our monthly Policy Picnic, led by special guest Adam Novick, MS


Topic: Let there be daylight: Politics, ecology, and the future of endangered species regulation 

Special guest Adam Novick will be at Cascade Policy Institute on Wednesday, April 27, for a special edition of Cascade’s Policy Picnic series.

Adam Novick, MS has won awards from the Oregon Department of Forestry, the Oregon Department of Fish and Wildlife, and the Oregon chapter of The Wildlife Society, for conservation and leadership in the conservation of the Willamette Valley’s oak savanna. He earned a master’s degree in Environmental Studies from the University of Oregon in 2013 and presently holds a courtesy faculty research appointment from the University. His views are not necessarily those of the University.

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

Click here to reserve your free tickets.

Cascade’s Policy Picnic series is generously sponsored by Dumas Law Group, LLC.

 
Sponsored by:
Dumas Law Group
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Enjoy the illusion that you’re not really paying taxes, when you cash that expensive refund check

Are you happy getting three extra days to file your income tax returns this year?

For nearly eighty percent of us, it doesn’t matter much because we are expecting refunds. No check writing for us. Why? Because the withholding system almost encourages over-withholding, thus giving the impression that we don’t pay taxes, the government pays us!

Try a little experiment. Ask ten of your friends how much they paid in taxes. Chances are, eight of them might say something like, “I didn’t pay anything, I’m getting money back!”

This happened because my hero Milton Friedman had one of his few bad ideas when he proposed the withholding concept while working at the Treasury Department during World War II. The government needed money fast to finance the war effort, and as Friedman said years later:

“It never occurred to me at the time that I was helping to develop machinery that would make possible a government that I would come to criticize severely as too large, too intrusive, too destructive of freedom. Yet, that was precisely what I was doing.”

Of course, by over-withholding we’re just giving the government an interest-free loan. But psychologically, doesn’t it feel nice getting that refund check?

So, enjoy the illusion that you’re not really paying taxes when you cash that expensive refund check. You paid dearly for it!

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Earning Their Keep: Do Elected Officials in the Portland Region Show up for Meetings?

By Nick Pangares and John A. Charles, Jr.

Most elected officials who serve on school boards or city councils do not get paid for service. However, for at least five governing jurisdictions in the Portland metro region, councilors do receive compensation. Those jurisdictions are: the Commissions for Multnomah, Clackamas, and Washington Counties; the Portland City Council; and the Metro Council.

This research examined the attendance records for all regularly scheduled meetings for the five jurisdictions during 2014 and 2015. In some cases, there were also “board briefings” or “work sessions” to attend.

In general, most elected officials attended a high percentage of meetings, either by being present or by participating via telephone. Group participation rates usually exceeded 85%, on average.

Washington County Commissioner Greg Malinowski had the best attendance record of all elected officials over the two-year period – 100% for both years. Multnomah County Commissioner Judy Shiprack had the worst two-year record – 70% for board briefings, and 80% for board meetings. She is termed-out and not running for re-election.

Summaries of the attendance records for all elected officials are below. The numbers indicate the percent of meetings where the officials participated.

 

Clackamas County Commission

Regular Commission Meetings

 

Ludlow Savas Schrader Smith Bernard
2014 98% 100% 82% 89% 89%
2015 98% 95% 93% 93% 89%

 

 

Multnomah County Commission

Regular Commission Meetings

 

Madrigal Kafoury McKeel Wendt Baily Smith Shiprack
2014 100% 98% 88% 98% 86% 90% 83%
2015 n/a 92% 97% n/a 89% 95% 77%

 

 

Multnomah County Commission

Regular Briefings

 

  Madrigal Kafoury McKeel Wendt Baily Smith Shiprack
               
2014 100% 93% 83% 97% 94% 90% 70%
2015 n/a 100% 100% n/a 65% 90% 70%

 

 

Washington County Commission

Regular Commission Meetings

 

  Duyck Malinowski Schouten Rogers Terry
           
2014 94% 100% 87% 87% 94%
2015 91% 100% 91% 88% 85%

 

 

Portland City Council

Regular Meetings

 

  Hales Fish Fritz Novick Saltzman
           
2014 92% 83% 92% 94% 85%
2015 97% 92% 97% 92% 85%

 

 

Metro Council

Regular Meetings

 

  Hughes Chase Craddick Harrington Stacey Collette Dirksen
               
2014 84% 97% 95% 97% 97% 97% 89%
2015 93% 98% 95% 98% 100% 98% 93%

 

 

Metro Council

Regular Work Sessions

 

  Hughes Chase Craddick Harrington Stacey Collette Dirksen
               
2014 85% 94% 96% 96% 96% 96% 94%
2015 89% 93% 93% 95% 98% 91% 91%

 

While taxpayers probably expect officials to show up, does attendance really matter? That depends. Strictly speaking, yes. Each body must have a quorum of members present to conduct business. If too many officials skip meetings, decisions can’t be made. So even if individual commissioners are ineffective, a minimum number of them are needed at any given meeting.

Moreover, at most public meetings where agenda items will be voted on, public testimony will be taken. Constituents have a right to expect that when they take the trouble to show up with prepared testimony, elected officials will be there to listen.

However, attendance has little to do with influence or effectiveness. Public meetings are a form of street theatre; all the key decisions have been made ahead of time behind closed doors. So an elected official with a spotty attendance record could easily be the most important member of the body – it’s just that the heavy lifting is being done out of sight.

For example, Portland City Commissioner Dan Saltzman had the lowest two-year record of attendance among all City Commissioners, but few observers would consider him ineffective. To the contrary, he may be the most influential member of the Council, especially with a Mayor who is not running for re-election.

Metro Presiding Officer Tom Hughes also had the worst attendance record among his peers. Yet any Council member hoping to advance new policy would hardly consider Councilor Hughes unimportant.

There are also extenuating circumstances. What we see may not reflect the whole story. According to Commissioner Malinowski:

“The issue of absences turns out to be apples and oranges most of the time. This is partially because 4 out of the 5 commissioners are part time, and most of the time the reason Commissioners miss meeting is because of prior obligations regarding outside County business. If you compare absences with the schedule of each commissioner, this is usually the case. However, meeting attendance and communication is critical, particularly when technical questions about County business need to be answered.”

When asked if there should be a required minimum participation rate for meetings, Commissioner Malinowski responded:

“Overall the honor system of attendance is working, and I don’t see a need for a minimum attendance rate requirement. Many times what happens is the Commission will cancel meetings if two or more Commissioners are going to be absent. This usually happens on Tuesday evening meetings.”

The value of attendance is ultimately determined by voters. Those who are satisfied with the performance of their representative may overlook a mediocre participation rate.

However, voters should remember two things. First, for the five jurisdictions featured in this report, elected officials get paid to show up. They are not volunteers.

Second, attendance does matter. If everyone takes a night off, no business gets transacted. And running a government entity is a business.

About the authors: Nick Pangares is a research associate at Cascade Policy Institute. John A. Charles, Jr. is President and CEO of Cascade Policy Institute and also serves on the board of a rural water district in Clackamas County. Volunteer Bob Ludlum assisted with data gathering for this report.

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Governor Jerry Brown: “Economically, Minimum Wages May Not Make Sense”

As California Governor Jerry Brown signed his state’s $15 minimum wage bill into law on April 4, he acknowledged, “Economically, minimum wages may not make sense.” He went on to say that work is “not just an economic equation,” calling labor “part of living in a moral community.” “Morally and socially and politically, [minimum wages] make every sense because it binds the community together and makes sure that parents can take care of their kids in a much more satisfactory way,” Brown said.

So now it’s official—at least in our neighbor to the south—that laws don’t have to make economic sense for politicians to enact them. Laws just have to somehow “bind the community together.” When a strong majority of voters want a law to pass, as they apparently do for higher minimum wages, politicians take that as a signal that they can give voters what they want even if the law will hurt many of the very people they claim it will help. Governor Brown was just honest enough in this case to effectively admit that people may be hurt, but so what? Binding the community together apparently makes everything OK.

Of course, communities bound together by such faulty ideas will eventually come unbound, at least in the sense that many of their members will be priced out of the jobs and economic opportunity the politicians promised they would enjoy.

Minimum wage laws primarily hurt younger, less skilled, and less educated workers who will lose their jobs or not get jobs in the first place because employers can’t justify paying them what the law says they must. Employers who can’t generate enough, or any, profits at mandatory higher wage rates will also be hurt, as will consumers who end up paying higher prices they can ill afford in return for “binding their communities together.”

The governor of New York signed his state’s new $15 minimum wage law on April 4 also, and Oregon’s Governor Kate Brown signed our new slightly lower minimum wage law on March 2. Neither of these two leaders acknowledged what California’s governor did: that minimum wage laws may not make economic sense. They probably know it, but why raise doubts? They would much rather take plenty of credit, and later blame employers for not delivering the economic goodies government is so good at promising and so bad at producing.

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TriMet’s Edifice Complex

Recently TriMet announced that after two years of planning for an expensive new “bus rapid transit” line from Gresham to Portland, the new service would actually take 8-11 minutes longer than current buses.

Over in Southwest Portland, TriMet is planning a $2 billion light rail line to Bridgeport Village near Tualatin, a suburban shopping mall.

Agency planners are fascinated with shiny new objects, but most riders don’t benefit. For example, between 2000 and 2015, TriMet opened five new rail lines, but the total vehicle-miles of daily transit service actually dropped by 5%.

It’s time to admit that TriMet’s basic business model is becoming obsolete. The agency is a sluggish monopoly that takes years to bring new service to market, while customers live in a smartphone world where they have millions of choices and same-day delivery.

In particular, the coming era of driverless vehicles will create entirely new businesses that will free riders from the tyranny of fixed-route transit service. Legacy systems such as TriMet will be stuck with a vast network of aging infrastructure that will be too expensive to maintain.

We don’t need another light rail line to Bridgeport, or a bus rapid transit line to Gresham. What we need is new vision of mobility in Portland.

(revised 4/6/16)

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How Much of the Year Do Your Taxes Cost?

If every penny earned since the beginning of the year went to pay federal, state, and local taxes, Americans would have to work until the middle of April just to cover their tax bills. Tax Freedom Day is a calendar-based illustration of the cost of government which divides all taxes by the nation’s income. By this calculation, Americans typically work more than a hundred days a year, and pay about a third of their earned income, to all levels of government.

But this is only what Americans actually pay, not what government spends. If annual federal borrowing were taken into account, representing future taxes owed, Tax Freedom Day wouldn’t occur until May. That’s more than two weeks of federal government spending paid for by borrowing.

Americans pay more in taxes ($4.85 trillion) than they do on food, clothing, and housing combined. The saying goes, you should “work to live, not live to work.” But the more government grows, the more Americans are working less to live and more to pay for runaway government spending. That leaves fewer resources to invest in the real engines of economic growth: private sector businesses that create jobs and produce goods and services for a market fueled by Americans’ hard-earned purchasing power.

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Where Did President Obama Stay in Cuba?

This week, Barack Obama became the first U.S. President in nearly 90 years to visit the country of Cuba. While security concerns may have prevented him staying in a private home rented through Airbnb, he would have had some 2,700 such homes to choose from in Havana alone.

The amazing thing is that Cuba is a communist country, yet it allows short-term room rental services to operate, while some major American cities such as Atlanta, Denver, and Los Angeles do not.

While the American President likely rode through the streets of Havana in his own armored limousine, he apparently could have ridden in one of those iconic 57 Chevys if the driver had one of the still rare and expensive Cuban email accounts. Such ride-sharing services are also allowed in Havana, while Uber and Lyft are still fighting powerful taxi monopolies in some American cities.

We can have legitimate disagreements about normalizing diplomatic and economic relations with Cuba; but we should applaud the movement toward private home ownership and use, and the entrepreneurial opportunities its communist government now allows.

It will be ironic if Cuba comes into the modern free-market era at the same time that some American politicians try to impose more government restrictions on the very economic freedoms that many Cuban refugees risked their lives to achieve by coming here.

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What Would Jefferson Advise Today’s Supreme Court About the Little Sisters of the Poor?

In 1804 an Ursuline nun in New Orleans asked Thomas Jefferson to clarify in writing her religious community’s right to retain their property and to continue their ministries without government interference following the Louisiana Purchase. As French Catholic Louisiana was being incorporated into the Anglo-Protestant United States, the nuns were concerned about the status of their institutions under U.S. law. President Jefferson assured her that the government would not interfere with the sisters’ property, ministries, and way of life. In a letter dated May 15, 1804, he wrote:

“I have received, holy sisters, the letter you have written me wherein you express anxiety for the property vested in your institution….The principles of the constitution and government of the United States are a guarantee to you that it will be preserved to you, sacred and inviolate, and that your institution will be permitted to govern itself according to its own voluntary rules, without interference from the civil authority.”

Jefferson confidently promised that the American Constitution would protect the nuns and that the government would leave them alone. So why don’t Catholic sisters today even qualify for a religious exemption from ObamaCare’s insurance mandate that requires contraception and abortion coverage? It may seem unbelievable, but according to the Obama Administration’s definition of “religious employer,” sisters are not included.

On March 23 the U.S. Supreme Court will hear oral arguments on behalf the Little Sisters of the Poor (and other religious clients of the Becket Fund for Religious Liberty) in a historic religious freedom case. The Little Sisters are a nearly 200-year-old religious community dedicated to caring for the elderly poor. They run 30 homes in the U.S. (four in the West) and care for nearly 13,000 people in 31 countries.

During implementation of the Patient Protection and Affordable Care Act (ObamaCare), the Department of Health and Human Services (HHS) directed most employers to include coverage of contraceptives and abortion-inducing drugs in their employee health insurance policies, or else pay a fine of $100 per employee, per day. The Sisters subsequently filed suit against the federal government, saying “they cannot, according to their faith, include contraceptives in their employee health plan.”

The Becket Fund, which represents the Sisters and other religious clients in their lawsuit, explains:

“The Court’s decision will finally resolve the crucial question of whether governmental agencies can, wholly without legislative oversight, needlessly force religious ministries to violate their faith….The [HHS] mandate forces the Little Sisters to authorize the government to use the Sisters’ employee healthcare plan to provide contraceptives and abortion-inducing drugs—a violation of their faith—or pay massive fines, which would threaten their religious mission.”

The “HHS Mandate” has a narrow conscience exemption that applies only to organizations whose purpose is solely to inculcate religious values and which employ and serve primarily members of their own faith. The exemption does not include religiously affiliated or faith-based institutions which serve all people without discrimination (like hospitals, colleges, schools, and social service agencies). And it doesn’t apply to communities of nuns.

“The Little Sisters should not have to fight their own government to get an exemption it has already given to thousands of other employers, including Exxon, Pepsi Cola Bottling Company, and Boeing,” said Becket Fund Senior Counsel Mark Rienzi. “Nor should the government be allowed to say that the Sisters aren’t ‘religious enough’ to merit the exemption that churches and other religious ministries have received….It is ridiculous for the federal government to claim, in this day and age, that it can’t figure out how to distribute contraceptives without involving nuns and their health plans.”

Thomas Jefferson explained to the Ursuline nuns of 19th-century Louisiana that American law would protect them and their institutions, regardless of the differences among American citizens:

“Whatever the diversity of shade may appear in the religious opinions of our fellow citizens, the charitable objects of your institution cannot be indifferent to any; and its furtherance of the wholesome purposes of society, by training up its younger members in the way they should go, cannot fail to ensure it the patronage of the government it is under. Be assured it will meet all the protection which my office can give it.”

We can only imagine what Jefferson might think of American women having to sue the Obama Administration to defend their First Amendment rights. But can we doubt he would be dismayed by how intrusive and coercive the federal government has become since the day he wrote so cordially to a group of French nuns about the safeguards of the American Constitution?

 

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Freedom in Fiction: The Leopard

While the Irish celebrate Saint Patrick’s Day this week, Italians are celebrating National Unification Day, memorialized by Giuseppe di Lampedusa’s classic novel The Leopard.

This “great book,” often called Italy’s Gone with the Wind, follows the private thoughts of a scientifically minded Sicilian prince as he tries to make sense of the newly emerging Italian democracy and his place in it. This tumultuous upheaval in 19th century Italy―obscure to most Americans―forced the aristocracy and middle class to face social and cultural change not terribly different from Margaret Mitchell’s observations of the American South during roughly the same timeframe.

The Leopard also offers a prism through which we Americans might reflect on the dramatic changes unfolding in our political landscape this presidential primary season.

Don Fabrizio―The Leopard’s protagonist―wants to preserve his aristocratic lifestyle while recognizing that the future will belong to a new kind of man. The “new man” will not be an aristocrat, but a politician. Aristocrats, for all their faults, represent stability, predictability, and unchanging order. Sicilians know what to expect of them.

In contrast, the Garibaldi revolution inaugurates the democratic age. The man and woman who can succeed socially, politically, and financially make quick impressions, change their views when their factions fall from power, and work a room full of people to their advantage.

Don Fabrizio’s nephew and his middle-class, newly rich, fiancée are this “new” man and woman:

Conquered for ever by the youth’s [his nephew’s] affectionate banter, he had begun during the last few months to admire his intelligence too: that quick adaptability, that worldly penetration, that innate artistic subtlety with which he could use the demagogic terms then in fashion while hinting to initiates that for him, [the nephew], this was only a momentary pastime….Tancredi, he considered, had a great future….[H]e lacked only one thing: money; this Tancredi did not have; none at all. And to get on in politics, now that a name counted less, would require a lot of money: money to buy votes, money to do the electors favors, money for a dazzling style of living.

The new regime respects Don Fabrizio’s “dignified and liberal attitude,” made manifest during the town’s first election; but he refuses to take a seat in the Italian Senate when begged to do so:

“I belong to an unfortunate generation, swung between the old world and the new, and I find myself ill at ease in both. And what is more, as you must have realized by now, I am without illusions; what would the Senate do with me, an inexperienced legislator who lacks the faculty of self-deception, essential requisite for wanting to guide others? We of our generation must draw aside….Now you need young men, bright young men, with minds asking ‘how’ rather than ‘why,’ and who are good at masking, at blending, I should say, their personal interests with vague public ideals.”

Don Fabrizio’s melancholy nostalgia for the old order coexists with his belief in the inevitability of the new. However, Lampedusa is clear-eyed about the human failings that can corrupt all political systems. Democracy promises an equal voice for the common man, but electoral politics are only as fair as individuals are honest. Lampedusa paints a poignant image of the middle class struggling for acceptance on equal footing with the “old families.” He shows how transparently money buys power and influence until the “new families” in time become as entrenched in their social positions as the old.

Gone with the Wind describes the blending of classes and shifting political realities under uniquely American circumstances. Lampedusa’s The Leopard shows how universal Mitchell’s themes are. Italy’s history of revolution and social change can shed light on our own American story. The consequences of cynicism, civic complacency, political corruption, and rapid change are vivid when we view them through another country’s eyes. The cultural phenomena depicted by both writers are especially worth thinking about this spring, as populist candidates from both ends of the political spectrum successfully appeal to fed-up voters—voters who have the power to bring about the next seismic wave that reshapes American politics.

(Burt Lancaster starred in an award-winning film version of The Leopard in 1963.)

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If Socialism Is Like Playing Checkers, Capitalism Is Like Playing Chess

Now that former world chess champion Garry Kasparov has weighed into the American presidential campaign, it seems fitting to explain his support of capitalism and disdain for the socialism he lived under as a Soviet citizen in terms of the differences between playing chess and playing checkers.

When you hear the expression “We’re playing checkers, while they’re playing chess,” you understand that the speaker believes his opponents are playing a more sophisticated game. In this sense, socialism is a simple economic game: You see a problem and you assume that the government is the tool that will solve it. It’s relatively easy to sell a straightforward checker move to the public. It may be harder to sell a more sophisticated chess move, even if it is the better solution to your problem.

A fascinating commentary in AgainstCronyCapitalism.org points this out:

It rarely occurs to the people calling in the government that perhaps the government will create more problems than it solves. Indeed this concept is so foreign, that when something breaks in our society due to government intervention, the call by many is almost always for yet more government intervention. It’s ridiculous. But I wonder if it is just a reflection of a checkers mentality in a world which demands an understanding of chess. 

The free marketeer is more like the chess player.…

Free market people have a better understanding of chain reactions and of unintended consequences than their statist brothers and sisters. They think a few moves ahead while also understanding the limit of their foresight.…

Society is a living, breathing being. It is organic in nature. It spins out in fractal complexity in every direction. The free marketeer understands this and is humbled by this reality.

On March 1, Garry Kasparov’s self-described “rant” against Bernie Sanders’s socialist “prescription for America” went viral on Facebook, eliciting more than 3,300 comments. Over 63,000 people have shared it with their “friends.” Here it is:

Garry Kasparov

March 1 at 11:57am

I’m enjoying the irony of American Sanders supporters lecturing me, a former Soviet citizen, on the glories of Socialism and what it really means! Socialism sounds great in speech soundbites and on Facebook, but please keep it there. In practice, it corrodes not only the economy but the human spirit itself, and the ambition and achievement that made modern capitalism possible and brought billions of people out of poverty. Talking about Socialism is a huge luxury, a luxury that was paid for by the successes of capitalism. Income inequality is a huge problem, absolutely. But the idea that the solution is more government, more regulation, more debt, and less risk is dangerously absurd. 

Garry Kasparov Yes, please take Scandinavia as an example! Implementing some socialistic elements AFTER becoming a wealthy capitalist economy only works as long as you don’t choke off what made you wealthy to begin with in the process. Again, it’s a luxury item that shouldn’t be confused with what is really doing the work, as many do. And do not forget that nearly all of the countless 20th-century innovations and industries that made the rest of the developed world so efficient and comfortable came from America, and it wasn’t a coincidence. As long as Europe had America taking risks, investing ambitiously, and yes, being “inequal [sic],” it had the luxury of benefiting from the results without making the same sacrifices. Who will be America’s America?

Kasparov then followed up with this longer article amplifying on his points:

Garry Kasparov: Hey, Bernie, Don’t Lecture Me About Socialism. I Lived Through It.

I don’t know if Kasparov thinks of socialism and capitalism in terms of playing checkers versus chess, and I don’t necessarily agree with everything he says. But, his insights are important and worth considering by anyone and everyone considering what economic system has and will best serve America and the world.

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Portland Chases Another Dream

The U.S. Department of Transportation announced this week that Portland is one of seven cities still in the running for a $50 million grant as part of DOT’s “Smart Cities” challenge. Portland is proposing to build “smarter streets” that talk to self-driving cars and to develop an app that will decrease reliance on private automobiles.

This is not a joke, and it’s not another episode of Portlandia. There are actually federal bureaucrats who think that putting sensors in streets to talk with computerized cars is important, and that Portland is capable of running such a system.

Apparently, they are unaware that Portland’s street system is so run down that the city could be the film location for a Mad Max movie.

And given the region’s obsession with 19th century street cars that move more slowly than pedestrians, why would anyone think Portland is capable of being a national leader in 21st century roads?

This is a city that tried to prevent car-sharing companies such as Uber and Lyft from legally operating here last year. No fancy street sensors were required; the necessary smart phones were already in the hands of potential customers. All the City Council needed to do was get out of the way, and even that was too complicated for them.

We should let Google worry about autonomous cars. Portland should stick to something simple, like filling potholes.

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Freedom in Film: “For Greater Glory” (2012)

“You cannot fight for something you don’t believe in,” says the wife of General Enrique Gorostieta, the reluctant hero of the 2012 film For Greater Glory. “I may have issues with the Church,” her husband replies, “but I believe in religious freedom.”

Nearly 100,000 people were killed in Mexico in a 20th century conflict few Americans have heard of. The last known living veteran of this largely forgotten war for religious freedom, Juan Daniel Macías Villegas, just passed away last month at the age of 103.

For Greater Glory captures the spirit of the Cristero War (1926-1929), depicting the conflict through the eyes of an agnostic retired general (Andy Garcia) who leads a popular uprising against the dictatorial Calles regime.

The back-story to the film is President Plutarco Calles’s draconian enforcement of Mexico’s 1917 Constitution. The constitution gave the federal government full power to regulate or suppress religion, to control the number and activities of clergy, and to ban religious schools and instruction. By implementing the “anticlerical articles,” Calles intended to neutralize the influence of Catholicism on Mexican society and to prevent opposition to his social agendas. After all churches were closed in 1926, a popular rebellion―the “Cristiada”―began.

What happened in Mexico throughout the 20th century is a warning that loss of freedom has dire consequences. By the time they come to light, it’s usually too late to undo the damage. The Cristero War eventually forced the government to reopen the churches; but Mexico’s anticlerical laws, including the ban on worship outside a church and wearing religious garb, remained on the books until 1992. (Pope John Paul II’s outdoor Masses in 1979 and 1990 were technically illegal.)

Today, many younger Mexicans are unaware that citizens ever took up arms against the Calles regime to fight for freedom to practice their faith openly. “In public school they didn’t teach that,” said actor Eduardo Verástegui in publicity interviews.

The lush cinematography of For Greater Glory―combined with a musical score by the late James Horner (Braveheart, Titanic)―captures the beauty of Old Mexico and the soul of Hispanic America. People of faith may identify with the film from the opening line to the closing photographic montage. But one need not be religious to be moved by the human cost of totalitarianism or to be deeply troubled by a government that outlaws prayer and fires on statues of Christ.

In the United States, our separation of powers under the Constitution is designed to protect citizens from fast-rising dictatorships, sweeping constitutional changes, suspension of civil rights, and armed conflict to settle differences. Mexico’s tragedies remind us of the importance of the rule of law, of vigilance in defending freedom, and of not taking for granted what we have.

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Oregon Legislators Raised the Minimum Wage; Students Lose Their Jobs

Oregon’s three-tiered minimum wage law was just signed by Governor Kate Brown last week, but it’s already set to cost Oregon university students their campus jobs. The Oregonian reports that Oregon’s public universities are now calculating how the wage increases will affect their budgets for student workers.

Most college jobs paying the current minimum wage are not part of the federally funded work-study program; student workers are hired by the universities, which pay them hourly. According to The Oregonian, “Oregon’s new minimum could put more money in some students’ pockets, but it will more likely lead administrations to either cut back on the number of students they hire or the number of hours they’re allowed to work.”

The new wage law goes into full effect over six years, and Oregon is divided into three wage regions, so the cost increases will compound over time and affect colleges differently depending on where they are located. A spokesman for Oregon State University says OSU may need to cut up to 700 student worker positions by 2019, which is about a nine-percent reduction in student employment.

Until legislators understand that income cannot be generated by state mandate, minimum wage increases will continue to hurt workers they’re thought to help, including first-time job-seekers, workers with less experience, and college students just trying to get a part-time campus job.

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Broken Promises: The Real Trends in TriMet’s Transit Performance (2004-2015)

TriMet’s ridership is declining and its level of fixed-route service is lower today than it was in 2004. According to mainstream transit advocates, the solution is to spend more public money.

The problem is we’ve already tried that, and it’s not working. TriMet has been imposing a regional payroll tax on most employers since 1972. The rate was initially 0.30%, then grew to 0.60% by 1979. During the 2003 legislative session, TriMet sought approval to raise it by another tenth of a percent. According to TriMet General Manager Fred Hansen, “TriMet’s proposed payroll tax increase will be used exclusively to provide new or enhanced transit service. This will include assisting in the operation of Washington County Commuter Rail, Clackamas County light rail, Lake Oswego Streetcar, increasing Frequent Service routes, and enhanced local service connections to these lines.”

The rate increase was approved, and was phased in over a 10-year period, beginning January 2005.

During the 2009 legislative session, TriMet lobbied for another rate increase, phased in over 10 years. The new rate of 0.7337% went into effect on January 1, 2016.

Now that we have more than a decade of experience with payroll tax rate increases, it is informative to compare revenue trends with service trends. The results show that there is no correlation between revenue and service.

 

 

TriMet Financial Resource Trends for Operations

2004-2015

 (000s) 

2004 2006 2008 2010 2012 2014 2015 % change
Passenger fares $55,665 $68,464 $80,818 $93,729 $102,240 $114,618 $116,734 +110%
Tax revenue $155,705 $192,450 $215,133 $208,933 $248,384 $275,357 $292,077 +88%
Total operations $290,513 $342,274 $404,481 $433,609 $488,360 $522,155 $493,572* +70%

 

*Grant revenue in 2015 dropped by $41,876 due to timing of receipt; those funds will appear in TriMet’s 2016 income statement.

 

VIEW TABLE IN PDF HERE

 

In fact, there is negative correlation – as TriMet’s revenue went up over the course of a decade, actual service went down. 

 

Annual Fixed Route Service and Ridership Trends for TriMet

2004-2015 

2004 2006 2008 2010 2012 2014 2015 % change
 
Hours of service 1,698,492 1,653,180 1,712,724 1,682,180 1,561,242 1,608,090 1,676,826 -1.3%
Miles of service 27,548,927 26,830,124 26,448,873 25,781,480 23,625,960 23,763,420 24,248,910 -12%
Originating rides 71,284,800 74,947,200 77,582,400 77,769,119 80,042,810 75,779,560 77,260,430 +8.4

 

Source: TriMet, http://www.trimet.org/pdfs/publications/trimetridership.pdf 

VIEW TABLE IN PDF HERE

 

There is a slight correlation between revenue and transit use, as total originating rides went up 8% while operating revenue went up 70%. However, ridership peaked in 2012 and has dropped by 3.5% since then.

It is also interesting to compare revenue trends with TriMet’s share of commute trips. The Portland Auditor has conducted an annual “community survey” since 1997, and those surveys measure travel choices by Portland residents. The results show that TriMet’s market share of commuting has remained exactly the same since 1997, despite (or because of) massive expenditures on rail transit during that period. 

 

Travel Mode Share for Weekday Commuting

Portland citywide, 1997-2015 

Mode 1997 2000 2004 2008 2010 2012 2013 2014 2015
                   
SOV 71% 69% 72% 65% 62% 61% 64% 63% 60%
Carpool 9% 9% 8% 8% 7% 6% 6% 6% 5%
Transit 12% 14% 13% 15% 12% 12% 10% 11% 12%
Bike 3% 3% 4% 8% 7% 7% 7% 8% 9%
Walk 5% 5% 3% 4% 6% 7% 7% 8% 8%
Other n/a n/a n/a n/a 7% 6% 6% 6% 7%

VIEW TABLE IN PDF HERE

Notwithstanding the obvious drop in service, TriMet claims that the legislative promise was met because new rail lines were opened. But to the 66% of TriMet riders who saw their bus service drop by 12%, shiny new rail lines were of little consolation.

The chief enablers of TriMet’s tax addiction have been Portland-area business associations, including Portland Business Alliance, Westside Economic Alliance, Oregon Business Association, and the Central Eastside Industrial Council. Those groups repeatedly embraced higher taxes for their members on the premise that more transit revenue equaled more transit service. That premise is clearly false.

When the TriMet Board meets to increase the tax rate again in September, Portland business groups should reconsider their automatic support. Unless and until TriMet service levels reach those of 2004, there is no reason to continue “throwing money” at an underperforming monopoly.


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

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