Month: January 2021

Metro needs to break down barriers to nature-cm

Metro needs to break down barriers to nature

By Helen Doran

In Metro’s latest quarterly newsletter, “Our Big Backyard,” the reader is invited to agree with Metro’s vision of nature on the condition that he or she keeps off Metro’s properties.

Ways readers can have access to Metro’s “Big Backyard” are glaringly absent from the newsletter. In fact, a better title for the newsletter could be “Our Hidden Lands” because an estimated 88% of Metro’s land acquisitions are inaccessible to the public. Moreover, the parks available to the public emphasize “passive recreation,” which often means no dogs, no playsets, and no picnic spaces.

Metro has a vision for nature that fits specifically with its agenda, not with the needs voiced repeatedly by area residents. Ironically, Metro condemns this micromanaging of nature in its newest newsletter, stating that historically, “Nature often creates very real barriers to access, but more often these barriers are constructed by us” by defining what is “city” and what is “wilderness.”

It’s time for Metro to take its own advice and break down the very barriers to nature it has imposed. Residents want accessible parks with recreational opportunities near residential areas. Metro needs to abandon its agenda of hiding nature and bring it to the people it serves.

Helen Doran is a Program Assistant, External Affairs at Cascade Policy Institute, Oregon’s free market public policy research center.

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2021 - The Year of Wishful Thinking-cm

2021: The Year of Wishful Thinking

By Eric Fruits, Ph.D.

With the clock ticking down to midnight on December 31, my family was looking forward to putting 2020 behind us. The New Year held at least a small hope that the pandemic would subside, vaccines would be distributed, schools would re-open, and the chaos and violence would taper off. While the year didn’t kick off the way I’d hoped, I can still dream in what I call my Year of Wishful Thinking.

Operation Warp Speed demonstrated what awesome innovations can be achieved with massive investment and reduced regulatory hurdles. In less than a year, we went from pandemic panic to numerous effective vaccines.

Now, if we can only get those vaccines into people’s arms. With hindsight, it was probably a mistake to put trust in the states to manage the vaccination process. In Oregon, Operation Warp Speed has given way to Operation Equity Lens. The first meeting of Oregon Vaccine Advisory Committee spent a third of its time on “an hour of introductions, sharing of pronouns, expressing words of the day and a Native American prayer” according to the Lund Report. As a result the meeting ran out of time and did not cover key agenda items.

My wish is that the Vaccine Advisory Committee gets moving on putting shots in arms. There is growing evidence that a focus on age is the best strategy for allocating the vaccine. It’s simple, straightforward, and targets the population most likely to die from COVID-19. The next committee meeting should be 15 minutes. “We distribute by age, everyone who agrees, say ‘aye.’” Everyone says, “Aye.” Done. Meeting adjourned, shots go out, the state is vaccinated.

With vaccinations rolling out, we need to focus on reopening the state. People need to go back to work. Businesses need customers. Kids need to be in school, both to learn and to see their friends again. Once a large share of the population is vaccinated, there’s no more reason or excuse for emergency orders shutting down huge parts of the state.

With the re-opening, there will be a reckoning. Residents and businesses will demand that peace, safety, and livability return to their downtowns and neighborhoods. Property owners and utilities will demand back payments. Parents will demand accountability from their schools. State and local governments will demand more and higher taxes. My wish is that the joy of reopening does not devolve into rent seeking and score settling.

The pandemic has provided an opportunity to experiment with deregulation. What we learned is that many regulations do more to stifle opportunities than to protect the public. For example, during the pandemic, the state allows physicians and physician assistants with out-of-state licenses to practice in Oregon so long as they are in good standing in their home state. It seems to be working, let’s make that permanent—and expand it to every occupation. During the pandemic, the state allows restaurant to-go orders to include cocktails. Restaurants have been pushing for to-go cocktails for years. It took an emergency to make it so. Let’s make it permanent.

In my Year of Wishful thinking, I hope state and local governments review their regulations from top-to-bottom to eliminate regulations that do more harm than good.

  • As noted above, many occupational licensing laws do little to protect the public. Instead they serve merely to keep people out of the occupation and extract higher prices from consumers.
  • Oregon’s certificate of need laws have led to an undersupply of much needed hospital beds in the state. If we had more ICU beds, we would not have needed to shut down as fast and as hard as we did.
  • The state’s prevailing wage law was originally designed to exclude non-union and black-owned firms from winning government contracts. “Affordable” public housing costs almost double what privately built housing does and prevailing wages are a big reason why. Without prevailing wage laws, we could be building much more affordable housing.
  • In much of Oregon, a student’s public school is assigned by street address and public money flows to the school system rather than the student. We need to flip that system. Send the money to the student and let their family choose which school meets their needs.
  • Get government out of the business of being in business. There is no reason for Metro, the Portland area regional government, to be running the Zoo, Convention Center, Expo Center, and solid waste management. There is no reason for the City of Portland to also be the water company. We hate monopolies in the private sector and we shouldn’t tolerate them in the public sector.

The chaos of the first weeks of 2021 makes it difficult to be hopeful. But 95% of the year is still ahead of us. It’s not too late for some dreams to come true in the Year of Wishful Thinking.

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

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Why are we still paying a “temporary” energy tax 19 years later-cm

Why are we still paying a “temporary” energy tax 19 years later?

By John A. Chalres. Jr.

Every month when you pay your electricity bill, you pay a surcharge of about 5.6%. If you are a natural gas customer, you pay a similar tax ranging from 2.5% to 4.9%, depending on your vendor. Both taxes are likely identified as a “Public Purpose Charge” (PPC).

That name tells you nothing, which is by design. The proponents of the PPC don’t want you to think about why the tax was imposed or where the money goes, but you should. A lot of it is being wasted.

For example, the Energy Trust of Oregon – which receives over 80% of all PPC funding – spent $21 per million BTU of energy generated in its green power program in 2003, just after the PPC was enacted. By 2019, that cost had gone up to $135, an increase of 532%.

Between 2013 and 2016, Energy Trust also spent PPC funds to subsidize the sale of energy-efficient refrigerators, freezers and washing machines, while encouraging consumers to give the money away to the Oregon Food Bank. Many did, totaling $252,809. That was great for the Food Bank, but every penny was supposed to be used to entice consumers to buy appliances that they wouldn’t have purchased otherwise. The fact that they gave the PPC money away showed that the subsidies were wasted.

The Energy Trust is so well-funded that according to a 2018 audit by the Oregon Secretary of State, ETO spent $26,500 on a “holiday party and employee recognition expenses” for the retirement of its founding CEO.

Public schools also receive PPC funding; and in 2012, Secretary of State Kate Brown released an audit of school conservation expenditures. Her audit showed that at least 333 projects had costs that exceeded benefits. In one case, the Newberg School District installed insulated roofing panels at Mabel Rush Elementary School in 2005 that had a payback of 111 years and an expected life of 25 years. The panels were estimated to cost $84,200, but were only expected to generate $762 in energy savings each year. The measure was estimated to lose $65,150.

The Public Purpose Charge was enacted by the Oregon legislature in 1999 as a modest, 3% tax on customers of PGE and PacifiCorp. It was supposed to go into effect in 2002 and disappear by April 2012. The purpose was to create a small pot of money that could be used to subsidize both energy conservation and renewable power projects.

Instead, it morphed into something much more expensive. Soon after passage, the Oregon Public Utility Commission began coercing most natural gas companies into participating, which was not part of the original law. Then, in 2007, another add-on tax was approved by the legislature to subsidize small energy conservation projects. In that same law, the PPC expiration date was extended from 2012 to 2026.

Since 2002, the PPC has collected more than $2.3 billion from electricity ratepayers. More than 80% of funding goes to the Energy Trust of Oregon, which now has an annual budget of roughly $200 million.

The most cost-effective PPC projects were completed between 2002 and 2012, exactly as the legislature envisioned. By 2019, the cost of subsidizing energy conservation and green power projects had gone up by 73% since the start of the program.

Cascade Policy Institute recently released an analysis of PPC expenditures and concluded that the original, ten-year mission of the PPC has been met. Now in its 19th year, the tax should not be extended again and should be repealed prior to 2026 if possible. Ratepayers are reeling from the effects of the pandemic, and eliminating a combined 10% tax on electricity and natural gas would provide much-needed relief.

John A. Charles, Jr. is President and CEO of the Portland-based Cascade Policy Institute, Oregon’s free-market public policy research organization. A version of this article was published in the Portland Tribune on January 13, 2021.

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The Region’s New Transfer Station Means Frills and Bills-cm

The Region’s New Transfer Station Means Frills and Bills

By Vlad Yurlov

Would you like to have a nice picnic near a garbage dump? How about a meeting? If Metro has its way, these are just some of the frills that will come attached to its newest waste facility. A new transfer station is being planned in Cornelius to expand waste management services to the west side of the region. But instead of providing a functional facility that benefits the region, Metro is pitching expensive features that have nothing to do with waste management, such as meeting spaces, parks, and education centers.

If Metro continues down this path, the new transfer station will have flair instead of function. Waste management debt will be used to fund unrelated goals, while regional improvements still beg for attention. Metro’s systems planning manager says both of the current transfer stations in Portland and Oregon City are “at capacity” and “increasingly costly to operate.” Metro should focus on improving waste management, not adding expensive extras. If the region really needs a new transfer station, there is no room for frills.

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

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Portland’s toxic taxes will do little for clean air-cm

Portland’s toxic taxes will do little for clean air

By Rachel Dawson

In the middle of a worldwide pandemic that has decimated local businesses, Portland is proposing millions of dollars in new taxes. Officials recently announced a new proposal called “Clean Air, Healthy Climate” that would impose two separate carbon taxes on large stationary emitters as early as this month.

Portland facilities that produce 2,500 metric tons of carbon or more each year would be charged a “Healthy Climate Fee” of $25 per carbon ton. Approximately 35 Portland area facilities such as Daimler would be required to pay the fee with a minimum charge of $62,500. Officials estimate the fee will generate around $9 million dollars that would fund programs and projects “to meet the City’s decarbonization pathways.” This includes paying for engagement with specified organizations and vulnerable populations, commercial and residential building retrofits, and EV infrastructure, among other things. While these programs seem highly ambitious, specific details and outcomes remain vague or undetermined.

A separate “Clean Air Protection Fee” would apply a tiered fee of up to $40,000 on major facilities generating “substantial hazardous air pollution locally and are therefore required to hold …Air Contaminant Discharge Permits, or Title V Permits.” In 2019 a total of 72 Portland facilities held these specified permits.

The City estimates the Clean Air Protection Fee would bring in around $2 million annually in revenue. That revenue would be used for investments in “pollution reduction programs” with a focus on vulnerable and marginalized communities. Such investments duplicate current pollution reduction programs such as the Portland Clean Energy Fund and the Energy Trust of Oregon.

The City claims the taxes are needed because county data suggest the region is not meeting its self-imposed greenhouse gas reduction goals. Multnomah County data from 2018 show total GHG emissions were reduced 19% below 1990 levels. Portland claims this is “far short of the City’s goal to reduce emissions 50 percent by 2030.” Aside from the fact that there is a mismatch between Multnomah County and Portland area boundaries, the 19% statistic does not tell the whole story.

While Multnomah County emissions have gone down by 19% since 1990, the county’s population level has increased by 39%. Thus, GHG emissions per capita actually have decreased by 42%, a remarkable achievement.

However, these taxes won’t be imposed on the entire population. Only major stationary emitters, such as industrial facilities, will be required to pay them. And since 1990, industrial facilities in Portland have done more than their fair share in reducing GHG emissions. Between 1990 and 2018 total industrial emissions in Multnomah County have decreased by 51% and industrial emissions per capita have gone down by 65%. Instead of punishing industrial facilities by imposing additional fees, Portland officials should be celebrating their success.

In fact, when industrial emissions are taken out of the equation, total Multnomah County emissions have only gone down by 10% since 1990.

These taxes come at a time when many businesses are struggling to keep their doors open and staff employed. Over the past year, Oregon has lost 16,700 manufacturing jobs. As of August, Precision Castparts eliminated 10,000 jobs worldwide due to the Coronavirus, 717 of which were located in the Portland Metro area. Despite the company’s struggle to keep workers on its payroll, Portland’s proposed carbon fee would cost Precision Castparts an estimated $629,494 annually. The company has stated that “significant tax or fee increases would factor into future decisions related to our operations in Portland.”

Additionally, Evraz North America, a global steel company, would pay over $2.7 million annually. Evraz has already cut around half of its Portland area employees since last year.

Instead of fighting climate change, this tax may end up costing Portlanders their jobs.

Other eligible employers include many major hospitals such as Oregon Health & Sciences University, Legacy Emanuel Hospital & Health Center, and Providence Portland Medical Center.

Officials should be supporting businesses hard hit by the pandemic and recession, not taxing them into layoffs. These two carbon taxes will punish a sector that is already making great strides in lowering GHG emissions. Since total industry GHG emissions have decreased to 51% below 1990 levels, the industry sector by itself has already surpassed Portland’s GHG reduction goal. The City of Portland should immediately halt all current and future work on this proposal.

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

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Oregon’s new cigarette taxes will hurt, not help, low-income residents-cm

Oregon’s new cigarette taxes will hurt, not help, low-income residents

By Rachel Dawson

Oregon couldn’t let a new year commence without the rollout of a new tax increase.

Voters passed Measure 108 last year which increases cigarette and cigar taxes and establishes a new tax on vaping products beginning January 1, 2021.

The measure was approved by 65% of voters, likely because it was painted as an effort to reduce smoking and help low-income Oregonians by directing 90% of funds to the Oregon Health Plan. However, once in practice these new changes will have unintended consequences.

First, the taxes are regressive and will hurt low-income Oregonians. A recent study found that “low socioeconomic status is generally associated with a high prevalence of cigarette smoking.” Smoking prevalence was 41% among men with incomes below the poverty level versus 24% for those with incomes at or above it. It’s absurd that the state is taxing some of the very same people these medical services are supposed to help.

Second, only 10% of raised funds will go to tobacco-use prevention and cessation. It’s clear the purpose of these taxes is to fill a budget hole, not to help tobacco users quit their addiction. The state has created a perverse incentive for itself–the more people smoke, the more money the state brings in. Additionally, e-cigarettes and vaping products, both safer alternatives to cigarettes, will now be taxed. One study found that for every 10% increase in e-cigarette prices, sales dropped by 26%, leading to an increase in traditional cigarette use.

If officials are truly committed to protecting public health by reducing cigarette use, they should allocate a higher percentage of the taxes’ revenue to smoking cessation and prevention programs.

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

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