Month: June 2020

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Supreme Court Upholds Parents’ Right to Choose Religious Schools

By Kathryn Hickok

The U.S. Supreme Court ruled June 30 in Espinoza v. Montana Department of Revenue that states’ school choice laws may not discriminate against religiously affiliated schools.

Montana’s tax credit scholarship program, passed in 2015, enabled families to send their children to the private schools of their choice. The program was ruled unconstitutional by the Montana Supreme Court because some participating students wanted to apply their scholarships to religious schools, which the Department of Revenue argued violated the state’s Blaine Amendment. The Institute for Justice (IJ) appealed this decision on behalf of parents, arguing that the Court’s decision violated the Free Exercise, Equal Protection, and Establishment Clauses of the U.S. Constitution.

The Supreme Court decided in favor of the Montana parents, stating that “[a] State need not subsidize private education. But once a State decides to do so, it cannot disqualify some private schools solely because they are religious.”

Reacting to the Court’s ruling, IJ’s president and general counsel Scott Bullock commented:

The Montana high court claimed, as [educational] choice opponents have for decades, that allowing parents like Kendra [Espinoza] to [use a tax credit scholarship at a religious school] violated the state constitution’s Blaine Amendment—which forbids state funding of so-called sectarian institutions. The U.S. Supreme Court made clear in its ruling today that it was wrong. As Chief Justice Roberts wrote in the majority opinion, “Drawing on ‘enduring American tradition,’” the Court has long recognized the rights of parents to direct the upbringing of their children.

Back in 1926, another private school controversy made it all the way to the Supreme Court. With the goal of preventing students from choosing a Catholic education, the state of Oregon had outlawed all private schools. In the landmark ruling Pierce v. Society of Sisters, the Supreme Court wrote that “[t]he fundamental theory of liberty…excludes any general power of the State to standardize its children by forcing them to accept instruction from public teachers only.”

Parents have a right to direct the education of their children—they did in 1926 and they still do today. The Supreme Court’s ruling in Espinoza v. Montana upholds parental choice in education by ensuring that state-run school choice programs don’t discriminate on the basis of religion.

Kathryn Hickok is Executive Vice President at Cascade Policy Institute, Oregon’s free market public policy research organization. She is also Director of Cascade’s Children’s Scholarship Fund-Oregon program, which provides privately funded scholarships to lower-income Oregon children to help them attend the tuition-based schools of their choice.

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You can count on the “Every Mile Counts” plan to make life costlier for Oregonians

By Rachel Dawson

Governor Kate Brown took carbon policy into her own hands earlier this year after the failure of Oregon’s cap-and-trade bill by issuing Executive Order 20-04. This order creates new greenhouse gas (GHG) emissions reduction goals and directs various agencies to take actions and exercise their authority to reduce GHG emissions.

Four agencies, the Department of Transportation (ODOT), Department of Land Conservation and Development (DLC), Department of Environmental Quality (DEQ), and Department of Energy (ODOE), collaborated to develop a draft statewide work plan in response to the governor’s directive, known as the Every Mile Counts initiative.

The strategy is fundamentally flawed. On the one hand, it duplicates efforts already underway. On the other hand, it does so in a way that will impose additional costs on Oregonians without producing any measurable effects on global climate change.

Objective 1: Reduce VMT per capita

The work plan proposes a number of action items aimed at decreasing statewide vehicle miles traveled. In the 2004 Statewide Congestion Overview for Oregon report, ODOT predicted that we could expect an additional 15,500 vehicle miles traveled (VMT) annually for every job created in Oregon and 360 additional VMT for every $1,000 increase in total state personal income.

Traffic is tied to economic activity. Increased traffic is a sign of a growing economy, and VMT plummets during recessions. As the state’s economy came to a standstill during the COVID-19 pandemic, traffic volumes on Oregon roads steeply dropped. Stifling economic activity is the surest way to reduce VMT in state. Efforts to aggressively reduce VMT in Oregon go hand-in-hand with efforts to reduce employment and income growth.

Increasing VMT in Oregon is a sign that more people and businesses are moving to our state. More people are consuming goods and services; and thus, our economy is growing. Oregon is already experiencing record-high levels of unemployment due to COVID-19. The state should not actively be promoting a reduction in VMT.

This is especially important now with COVID-19. The Center for Disease Control (CDC) has concluded that cars are a better option than transit during the crisis and has urged businesses to offer their employees incentives to “use forms of transportation that minimize close contact with others,” such as driving alone or biking. This plan’s objective to reduce single-occupancy trips directly contradicts the CDC’s advice.

Business owners, and not state agencies, have a deeper knowledge of their firms’ transportation requirements. If trip reduction efforts, such as telecommuting and flexible work hours, will benefit their business and employees they should be willing to engage in such efforts without the need for government intervention.

Objective 2: Support use of cleaner vehicles and fuels

State agencies should not support a zero emission vehicle plan. This is redundant as Oregon utilities are already required by the PUC to support transportation electrification plans, which will invest ratepayer funds in statewide electric vehicle (EV) charging infrastructure and increase outreach efforts on EV adoption. Having four more agencies engage in the same type of investments would be an inefficient use of taxpayer funds.

Objective 3: Consider GHG in decision making

Finally, state agencies should not require local GHG reduction planning and related performance measures. One of the largest rulemaking efforts these agencies plan on engaging in an update to the Transportation Planning Rule (TPR) to require that local governments “plan for  transportation systems and land uses to reduce GHG emissions.”

However, the TPR already indirectly works towards reducing GHG emissions by promoting the development of transportation systems designed to reduce reliance on passenger vehicles. While explicitly adding GHG emissions reduction in the TPR may be a worthy endeavor, including it to an already lengthy list of objectives will make the planning process more complex and time-consuming for cities. According to ODOT, completing all elements of a TSP “typically takes 12-15 months, with additional time for public adoption.” This proposed change will simply add another layer of compliance.

It is not clear if the proposed actions derived from Brown’s EO are necessary given Oregon’s steady decrease in per capita emissions over the past few years. Oregon per capita emissions have decreased by 22.8% since 1990, and emissions per unit of GDP have dropped by 50.7%. According to ODOE, Oregon’s energy use per capita is the lowest it has been since 1960; and Oregonians have decreased energy consumption per capita by 37% since it peaked in 1972.

Oregon’s environmental goals need to consider the dramatic progress that has already been made in reducing emissions. For this reason, Governor Brown should suspend her costly Executive Order.

Policymakers also should acknowledge the truth about the vital role automobility plays in a strong statewide economy and rising personal incomes. The above state agencies should provide an explicit cost-benefit analysis demonstrating how the benefits of each action item will outweigh its costs. If they cannot clearly outline such an analysis, the plan should not move forward. During the midst of a financial recession and global pandemic Oregonians need stability and relief, not more costly government regulation with vague benefits.

Rachel Dawson is a Policy Analyst at Cascade Policy Institute, Oregon’s free market public policy research organization.

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OLCC Provides a Silver Lining in COVID-19 Recovery

By Vlad Yurlov

Alcohol-lovers may have a reason for a toast. Oregon’s Liquor Control Commission is taking steps to decrease regulations on sellers, thereby expanding economic opportunity in the food and beverage industry, which was hit particularly hard by the COVID-19 crisis.

Alcohol sales are tightly controlled by the OLCC, which imposes stringent rules on individuals and businesses before, during, and after alcohol purchases. When restaurants and bars had to close their doors to on-site service due to Oregon’s coronavirus response, the OLCC temporarily relaxed some rules regarding alcohol delivery. Because these rules are temporary, though, Oregonians’ easier access to wine and microbrews could once again be limited before this fall.

Recently, the OLCC has begun a process to make the temporary relaxation permanent. These changes would allow increased flexibility in how alcohol can be delivered to customers and increase the hours during which alcohol may be purchased. The changes raise the question of why such burdensome restrictions were imposed in the first place.

When Oregon has to close a door, we can open a window. Let’s keep economic freedom for Oregon businesses and customers at the forefront of Oregon’s rule-making process.

Vlad Yurlov is a Policy Analyst at Cascade Policy Institute, Oregon’s free market public policy research center.

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Supporting Students, Not Systems, Is Social Justice

By Cooper Conway

George Floyd’s tragic death has led to growing calls for changes to antiquated policing systems. The recent protests asking for police reform over these past few weeks have caused many families to question the systemic discrimination that is hardwired into the assignment of students to public schools.

Census data reports U.S. spending per student has nearly tripled since 1960—and that’s after accounting for inflation. Oregon now spends almost $15,000 per student per year. In Portland Public Schools, it’s $27,500 per student. Even so, Oregon ranks near the bottom of the states in graduation rates.

Despite this monumental increase in funding the government’s school system with no positive results to show, most Oregon students are assigned a school based on their street address. This isn’t an accident—it’s written into district policies. Kids from low-income neighborhoods are placed in low-income schools, while wealthy families have the option to move to neighborhoods with better schools.

School choice is social justice. There is nothing fair or equitable about forcing low-income students into failing public schools with few options to choose the school that meets their needs. Even better, let’s fund students, instead of schools. Put the funds in the student’s hands and let them choose the school that fits best.

Cooper Conway is a Research Associate at Cascade Policy Institute, Oregon’s free-market public policy research organization.

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The Era of Permanent Prosperity Is Over: It’s Time for a Serious Budget Discussion

By Eric Fruits, Ph.D.

The 2020 we’re living in is very different from the 2020 we rang in at the beginning of the year.

In January, there were about a dozen Democrats seeking the nomination for President. Medicare for All, the Green New Deal, free college tuition, and universal basic income were seriously debated as potential policies for a Democratic President.

State and local politicians in Oregon were eagerly awaiting the first payments from the billion-dollars-a-year Corporate Activities Tax (CAT), the money earmarked to finally pull Oregon out of its near-last in the nation ratings of K-12 achievement. Cap-and-trade would end climate change. More bike paths, sidewalks, and light rail—always more light rail—would put an end to traffic congestion. A booming stock market meant we’d never have to reform PERS.

Today, schools are shuttered, businesses are crushed by the CAT, and TriMet ridership has evaporated and may never come back. Climate change is the least of our worries, and PERS will likely sink the state.

We began the year with an illusion of permanent prosperity, a game of musical chairs in which the music never ends. There wasn’t a single problem that couldn’t be solved with more spending. Tax increases were sold as equal to the cost of a latte a day. But, there were a lot of lattes.

Little did we know the music would stop so soon. Never mind buying a latte a day, today half the state can’t get a haircut even if they could afford one. Not only is the state’s education system deeply flawed, we learned our unemployment system is completely broken and our health care system is way more fragile than we thought. Rather than ramping up testing, the state simply tells us to “Stay home. Save lives.” The myth of permanent prosperity has given way to a reality of endemic dysfunction.

The latest revenue forecast for the state should be a wakeup call for the governor and the legislature. With anticipated revenues down $2.7 billion from pre-COVID projections, there is no way to avoid big budget cuts. Tax increases must be ruled out—struggling households and businesses need the cash to pay their own bills. We can’t turn the public sector’s budget problems into a private sector bankruptcy crisis. It’s going to take strong political leadership.

Three program areas make up nearly 90% of the state budget: education, human services, and public safety. Employee compensation—salaries, PERS, and other benefits—are a huge portion of these costs. There is no way to balance the budget without cuts in these areas.

PERS must be reformed. The first step should be to move all new employees to a 401(k)-type defined contribution program. This small move won’t solve the impending pension catastrophe; it’s simply a crucial first step toward more meaningful reforms. The most meaningful would be an amendment to the state’s constitution specifying public sector employment agreements are not contracts.

Public school spending must be cut. Construction projects should be shelved, and the money used for planning these projects should be shifted to the classroom. Introducing an education savings account program could save the state money by encouraging students to pursue schooling outside of the public sector, thereby reducing public school enrollment and expenditures. The state’s university system must be streamlined. This means closing smaller, struggling public institutions that have demonstrated a low return on investment for their students.

The legislature should reconsider Oregon’s participation in Medicaid expansion. While the feds pick up 90% of the costs for the expansion population, the cost to the state for the other 10% is eye-popping. In the last budget cycle, the state faced a $1.7 billion budget shortfall. At the time, Governor Kate Brown claimed, “Three-fifths of this deficit is the cost of expanding health care to all Oregonians.” That was when the economy was going gangbusters. Today, Medicaid expansion is a luxury the state cannot afford.

The cynic says, “Never let a crisis go to waste.” Nevertheless, a crisis is a time to re-evaluate priorities, and the best measure of politicians’ priorities are the budgets they pass. The era of permanent prosperity has ended, and we have entered an age where rational realism must rule.

: Eric Fruits, Ph.D. is Vice President of Research at Cascade Policy Institute and an adjunct professor at Portland State University, where he teaches courses in urban economics and regulation. He can be reached at eric@cascadepolicy.org.

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Cars, not transit, are the COVID-19 transportation heroes

By Rachel Dawson

When it comes to commuting during COVID-19, private vehicles are coming out well ahead of mass transit.

The Center for Disease Control has stated that cars are a better option than transit during the crisis and has even suggested that businesses offer their employees incentives to “use forms of transportation that minimize close contact with others,” such as driving alone or biking.

TriMet is seeing the effects of this recommendation firsthand. Transit use is estimated to have dropped 68% between February and May of this year as Portlanders chose to either stay at home or opt for other means of transportation.

TriMet is planning for significant revenue losses in coming years due to lost funds from payroll taxes and passenger fares. It may be years before the transit agency sees pre-COVID passenger numbers, which had already been falling since 2012 despite the addition of the Orange line in 2015.

Falling ridership and revenues should come as a signal to officials to halt any further investments to the costly light rail system. Instead, Metro and TriMet continue to push for the $3 billion Southwest Corridor light rail project from Downtown Portland to the Bridgeport Village.

Businesses and workers are already struggling with lost revenues and wages due to the virus. Our region doesn’t need another boondoggle, it needs relief. Metro residents should vote “no” on Metro’s proposed transportation measure this fall.

Rachel Dawson is a Policy Analyst at Cascade Policy Institute, Oregon’s free market public policy research organization.

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The hidden truth behind the Renewable Energy Certificate market

By Rachel Dawson

You may have noticed companies and public agencies using the words “renewable energy certificates” or RECs in regard to the alleged source of their electricity, but rarely do they explain what they are. Only that purchasing RECs on your behalf is a good thing.

But what exactly is a REC? And what benefits do we as voters and consumers reap from these entities’ continued investment in them?

As it turns out, they may not do as much “good” as you’re being told.

RECs are a tradable commodity sold by renewable energy facilities (such as wind and solar farms) to the wholesale market, that purport to represent the “environmental amenities” of certain renewable energy projects. By purchasing a REC, an entity has the legal right to claim it is using renewable energy; however, the group has not purchased any energy itself.

For example, the City of Portland has the objective of generating or purchasing “100 percent of all electricity for city operations from renewable resources.” However, the vast majority of the claimed “renewable energy sources” are actually RECs purchased on the market from wind farms. In fact, 14% of the renewable energy they claim to have comes from wind farms in Alaska. Since Portland is in no way connected to the Alaskan grid, the City of Portland is using taxpayers’ dollars to lay claim to wind energy that is actually being consumed by Alaskans.

Further, TriMet claims their electric buses run on 100% wind energy, however, TriMet’s buses are hooked up to the same utility grid as your home. This means that only 9% of the electricity they consume is actually wind, while 14% comes from coal. The only difference is TriMet spends $228.75 per month to claim their electricity is completely green.

Many private companies also purchase RECs, purely for public relations purposes. Buyers include Starbucks and General Mills. These costs are then passed on to consumers even though renewable energy was not actually used.

Fortunately one major company is pulling the curtain back on this practice, and ironically it’s the company Portland politicians love to hate: WalMart.

According to WalMart: (emphasis added)

“We want to do more than just shift around ownership (and marketing rights) of existing renewable energy…we prefer not to simply offset our non-renewable power by purchasing standalone renewable energy credits (RECs)…While REC purchasing may allow us to more quickly say we are supplied by 100% renewable energy…we do not have confidence that offsetting instruments alone are sufficient to drive new renewable projects, as opposed to simply shifting around ownership of existing renewable electrons.” (emphasis added)

WalMart’s analysis is backed up by leading academics. According to Daniel Press, a Professor of Environmental Studies at UC Santa Cruz, “RECs do little to reduce emissions in the real world because they have become too cheap to shift energy markets or incentivize businesses to build new turbines.”

Further, Michael Gillenwater, a Princeton researcher who helped to develop the EPA’s carbon emissions tracking system, admits that most renewable energy projects would have been developed without the help of consumer purchased RECs. It’s hard to verify claims made by utilities regarding the amount of carbon dioxide emissions that were avoided due to RECs and “you don’t have an overseeing regulator ensuring that the claims made are backed up.”

Private companies are free to spend their money as they please. However, Oregon should prohibit the purchase of RECs with tax dollars by government agencies. If the goal is more renewable energy, then like WalMart we should focus on generating actual electricity.

Certainly, it would be embarrassing for Oregon politicians to admit that they are wrong and WalMart is right. But the long path to moral redemption begins with the first steps.

Rachel Dawson is a Policy Analyst at Cascade Policy Institute, Oregon’s free market public policy research organization.

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To Meet Kids’ Urgent Education Needs, Oregon Should Give Parents a “Money-Back Guarantee” Through School Choice

By Kathryn Hickok

School choice has been increasing in popularity with parents for years. Education policies that give parents more options for their kids have been trending positively across most demographics.

Now, a late-April poll conducted by Heart + Mind Strategies reports that a majority of parents are considering changing their children’s future school enrollment. Parents were asked: “Has the impact of coronavirus on your child’s education caused you to consider changing your child’s future schooling?” Among public school parents, 14% said they are considering homeschooling, 20% said they are considering a private school, and 26% said they are considering a different public school.

Education Savings Account programs are an education funding solution that addresses the needs of parents today. ESAs give parents a kind of “money-back guarantee” if they want to opt out of their zoned public schools and choose other options. ESA programs currently operating in five states deposit a portion of the state funding that would be spent for a student in a public school into an account associated with the child’s family. Families can use those funds to pay for tuition or other education expenses.

ESA legislation can be designed to be fiscally neutral, or even net-positive, for school districts while giving parents several thousand dollars per child to spend on the school options of their choice.

COVID-19 will change the way students attend school. Out of this situation can come a chance to improve kids’ options through flexible, personalized delivery of education.

Kathryn Hickok is Executive Vice President at Cascade Policy Institute, Oregon’s free market public policy research organization. She is also Director of Cascade’s Children’s Scholarship Fund-Oregon program, which has provided private scholarships worth more than $3.3 million to lower-income Oregon children to help them attend tuition-based elementary schools since 1999.

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