Month: September 2020

Metro Deep in Debt and Getting Deeper-cm

Metro: Deep in Debt and Getting Deeper

The regional government plans to borrow money to implement its new income taxes

By Eric Fruits, Ph.D.

Hardly a week goes by that Metro isn’t reaching into your pocketbook or getting deeper in debt. This week, Metro will move forward on issuing $28 million in bonds.

Why does Metro need to borrow $28 million? There are two reasons.

First, Metro needs the money because that’s how much it’s going to cost to set up its new system to collect TWO new income taxes that go into effect in the New Year. We warned you it would be expensive to implement two new taxes on short order. But, even we had no idea it would cost a whopping $28 million. It takes a lot of money to take a lot of money.

Believe it or not, the second reason is even worse. Metro is out of money.

Since Lynn Peterson began leading Metro, the regional government has more than quadrupled its debt load and now has more than $1 billion in debt.

And that’s where the problems really are. Metro has never brought in enough money to cover its expenses. Out of control spending combined with reduced revenues because of the pandemic have worsened its shortfall.

As a result, Metro is under enormous pressure to raise more money from taxes, fees, and charges. They’ve dug us into a hole, and the only way they can fill it is with our tax dollars.

Eric Fruits, Ph.D. is Vice President of Research at Cascade Policy Institute, Oregon’s free market public policy research center.

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Oregobn's NuScale is one step furth

Oregon’s NuScale is one step further to providing states with clean, reliable energy

By Rachel Dawson

Oregon’s very own NuScale Power, a company developing small-modular nuclear reactors (SMRs), has officially received a final safety evaluation report from the U.S. Nuclear Regulatory Commission. NuScale is the first company to be issued a report for an SMR by the Commission, and receiving one serves as a technical review and design approval for the new technology.

This is a major milestone for NuScale, which originally submitted its certification application in 2016 and puts it one step closer to installing its first 720-megawatt plant in Idaho Falls.

This is also good news for the Northwest, which is in need of reliable baseload energy in the future. Officials predict we’ll experience insufficient electrical generation by the mid-2020s.

The Northwest Power and Conservation Council estimates the earliest commercial online date for an SMR plant in our region is likely to be 2030 with energy produced by five reference plants.

However, no new SMR plant can currently be built in Oregon due to a moratorium passed by voters in 1980. Legislation was considered in 2017 to carve out an exception for SMRs, but it did not make it out of the House Committee after passing the Senate. Recent blackouts in California and upcoming coal plant retirements in the Northwest have established circumstances that call for additional reliable resources. Oregon officials should reintroduce legislation that would allow us to take advantage of NuScale’s new technology.

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Achieving Equity Oregon Students Deserve a Money-Back Guarantee-cm

Achieving Equity: Oregon Students Deserve a Money-Back Guarantee

By Eric Fruits, Ph.D.

On September 21, 2020, Oregon’s Senate heard policy proposals to advance equity in education. Senators seeking the quickest and most effective way to achieve equity during this pandemic should flip the state’s funding model. Instead of funding the public school system, the state should support students directly by providing each student as much as $10,500 from the State School Fund.

My fifth grader in Portland Public Schools just got his daily COVID-19 class schedule, and there’s a lot of alone time. On a typical day, he meets with his classroom teacher over Zoom for 75 minutes over the 6.25 hour day. There’s a half-hour “morning meeting,” 30 minutes to go over language arts and social studies, and 15 minutes to discuss math. Nearly three-quarters of the time he’s “in school” he’s actually watching videos posted by his teacher or working on his own.

Governor Kate Brown and the school system frequently remind us, “We’re all in this together.” But, if you talk to parents and kids, many feel like they’re all on their own. On their own to find space for their kids to work. On their own to buy the laptops, printers, webcams, microphones, and headphones to support “online learning.” On their own to pay their broadband providers to supply enough bandwidth to support multiple people video conferencing at the same time. On their own to balance their jobs or job hunts with the school’s Zoom-on, Zoom-off daily schedule.

When our politicians and policymakers say, “We’re all in this together,” what they’re really saying is, “Tighten your belt and toughen up.” For example, when parents tried to enroll their children in online charter schools with a long history of distance learning, the Oregon Education Association lobbied against lifting an enrollment cap. The union argued even a modest lifting of the cap would deny funding to public school districts. To them, our kids are just numbers fed into a formula that funds the system. Rather than working with existing money, they are demanding even more spending on the public school system.

Elizabeth Thiel, the president of Portland’s teachers’ union, says in order for schools to re-open to students, federal and state taxpayers must fund more “investments” in overhauling school ventilation systems, buying personal protective equipment for teachers, and “doubling or more” the number of teachers to allow small group instruction.

On average, Oregon school districts receive about $10,500 per student from the State School Fund. If students aren’t getting instruction from their public schools, they should get that money back to receive instruction elsewhere. States like Oklahoma and South Carolina have already taken advantage of similar ideas by reallocating much of their federal stimulus dollars directly to families to help them adapt to this school year.

Instead of waiting for DC to deliver more federal money, Oregon must put families first by allowing education dollars to follow children to the school that works best for them—whether that’s a traditional district-​run public school, charter school, private school, home school, or learning “pod.”

Think of it as a money-back guarantee. If the public school isn’t working for your kids or your family, you should have a right to take that money and spend it where it works with your child’s needs and your family’s schedule. If enough students leave the public system, the smaller class sizes demanded by Ms. Thiel can be achieved without doubling the number of teachers on the public payroll.

Direct funding of students reduces inequities in school systems because it allows all students to have access to education alternatives. Almost 60% of public charter school students in the U.S. are Black or Hispanic. Imagine what these families could do with as much as $10,500 per student to spend on educational expenses. If equity is the goal, school choice through direct funding is the surest and quickest path.

If your local grocery store doesn’t re-open or can’t keep its shelves stocked, families can take their money elsewhere. So why are families locked into schools that don’t fit their needs? Let’s give a money-back guarantee to every student and their struggling families. Education funding is intended to help children learn, not to entrench the education establishment.

Eric Fruits, Ph.D. is Vice President of Research at Cascade Policy Institute, Oregon’s free market public policy research organization. He can be reached at eric@cascadepolicy.org.

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Low income Oregonians need wheels not another light rail line-cm

Low-Income Oregonians Need Wheels, Not Another Light Rail Line

By Rachel Dawson

Want to help a low-income individual prosper economically? Give them a car.

Multiple studies have shown that having access to private wheels is positively correlated with income levels and hours worked. Thus, giving someone a personal vehicle is a sure way to help them gain access to more job opportunities, and thus a greater potential for increases in personal wealth.

Metro is not ignorant of this data. In a recently released Regional Mobility Policy Report, Metro admitted that “[vehicle miles traveled] has been shown to increase directly with the growth of personal income.” However, Metro appears to have learned the wrong lesson from this information based on its conclusion that this signifies “that private vehicle ownership and the coinciding motor vehicle infrastructure benefits high-income populations most” and that “reducing VMT by supporting other modes of transportation is a more equitable approach to mobility.”

Metro would rather push residents onto transit, like the proposed $2.8 billion SW Corridor light rail line running from downtown Portland to a swanky outdoor mall in Tigard. However, doing so would do little to help the vast majority of low-income Portlanders efficiently get to work, school, day care, and medical appointments. Coronavirus social distancing rules, and recommendations from the CDC to avoid transit, also make dependence on a crowded train unappealing for many people.

Many scholars would disagree with Metro’s conclusion, instead finding that the most equitable approach would be to providelow-income residents access to personal vehicles and the associated infrastructure.

For example, Margy Waller, a former Brookings Institution fellow, found that car ownership is positively correlated with both hours of work and income. Transit-dependent low-income residents have a limited number of job opportunities available to them compared to someone with a private car, due to having a commute that is nearly twice as long. In addition, the rate of homeownership among low-income car owners was twice as high as low-income households without cars, as those with cars have more options for where they could live.

Further, researchers found in an evaluation of a subsidized car ownership program in Vermont that participants’ earned income increased by around $220 per month, 2.5 times higher than their earnings prior to receiving a car. Owning a car is valuable because it opens up opportunities for increased hours worked and income for low-income residents. Instead of funding a train to a mall, Metro should reverse its war on cars and promote access to a personal vehicle for all low-income and minority Portlanders. Public transit can sometimes be a good option, but it certainly should not be the only one. Metro should demonstrate its dedication to advancing equity by promoting a low-income car program, which would cost a fraction of SW Corridor project’s price tag. Doing so would be the best way to help Portlanders get where they need to go, when they need to be there.

Rachel Dawson is a Policy Analyst at the Portland-based Cascade Policy Institute, Oregon’s free market public policy research organization. She can be reached at rachel@cascadepolicy.org

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Emancipate the students-cm

Emancipate the Students

By John A. Charles, Jr.

The state legislature is seeking policy proposals for “equity in education.” Here’s an idea: how about a money-back guarantee for public schools?

The K-12 system is based on the assumption that all students should attend neighborhood public schools. Even in the best of times, that wasn’t working for many families. Now the assigned schools aren’t even open; the governor has mandated online learning.

Virtual education has some benefits, but also imposes new costs for parents. They are now part of the educational workforce, except they’re not getting compensated.

There is a solution. School districts are funded from three primary sources: the state school fund, the federal government, and local property taxes. The state share alone averages about $10,000 per student annually. The legislature should offer parents a refund of the $10,000 if they leave the public school system. This would instantly make the departing families better off, while reducing crowded conditions for those students who remain. With fewer students, it would be easier for public schools to restore classroom education. Everyone wins. One system cannot satisfy all needs. The best way to give families more options is to provide them with the equivalent of a Food Stamp card upon request, and let them swipe it for the instructional services they need.

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 mission creep-cm

Metro’s Mission Creep

By Vlad Yurlov

Metro is expected to spend over $1.4 billion this fiscal year. That nearly triples their revenue from a decade ago. But, has anyone received three times the service?

Instead of improving its basic functions, Metro is micro-managing the entire region. Metro’s original charter provided the regional government with a modest mission of growth planning. But, it also allows Metro to address “matters of metropolitan concern.” These four words have led to decades of mission creep.

A prime example of Metro’s mission creep is their upcoming transportation ballot measure, which has only one regional project. ODOT, TriMet, and every local jurisdiction already have dedicated transportation funding mechanisms, such as the gas and property taxes. Nevertheless, Metro is seeking to funnel another $5.2 billion in payroll taxes to fund its own priorities. By disrupting the tie between local money and local projects, Metro will continue to hurt local transportation.

Instead of 17 politically chosen projects, Metro’s residents should be using their money to decrease traffic congestion. The upcoming transportation measure only offers three percent to ease traffic congestion, while using up a tax base hammered by the pandemic.

Voters should reject Metro’s transportation ballot measure and call out their mission creep. There is no sense in laundering billions of dollars through a bloated bureaucracy when locally elected organizations already manage transportation improvements. Let’s keep taxes and transportation improvements local and worthwhile.

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

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Pinocchio politics on the november ballot-cm

Pinocchio Politics on the November Ballot

By Eric Fruits, Ph.D.

President Trump is frequently accused of lying. But he doesn’t have a monopoly on falsehood. Look around the Portland region and you’ll see our local politicians lying to us. We live in our own Pinocchio-land.

Metro’s “Get Moving 2020” ballot measure is a $5.2 billion tax increase disguised as a transportation measure. It’s a permanent tax on the total compensation paid by every private business and nonprofit with more than 25 employees. Metro says it’s a payroll tax, but it’s much more. It will tax every dollar you earn — even the money you save for retirement.

Comedian John Oliver says, “If you want to do something evil, put it inside something boring.” And, that’s what Portland City Council has done with a major charter change packaged as some minor housekeeping.

Portland says the amendment merely clarifies the charter. In reality, the amendment will open a spending tap with water customers on the hook for ever rising water bills.

Portland Public Schools deserves its own wing in the Hall of Pinocchios. PPS put a $1.2 billion bond measure on the November ballot. About $200 million of the new money will be used to fill cost overruns on the projects funded by the 2017 bond.

How did PPS run $200 million over budget? Simple: PPS lied to us. The school board intentionally low-balled cost estimates to fool voters into approving the measure.

This year, voters must put an end to the billions of dollars of fibs our local politicians are telling. Pinocchio learned his lesson about lying; it’s time for our politicians to learn theirs.

Eric Fruits, Ph.D. is Vice President of Research at Cascade Policy Institute, Oregon’s free market public policy research center.

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