Author: Cascade Policy Institute

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Deal With It—Commuters Need Cars

By Eric Fruits, Ph.D.

How did you get to work today? If you’re like 80% of Portland-area commuters, you rode in a car. And, on your way to and from work, you probably grumbled about how much worse your commute has gotten.

Over the past five years, the region has added nearly 180,000 more commuters. Most of them drive to work and they’re congesting our roads.

In normal times, transportation authorities would add capacity to the road network and improve streets for safe and speedy commutes.

But, we don’t live in normal times. Last week, Portland commissioner Chloe Eudaly declared to a packed council meeting that the city was not going to build more roads. This is nothing new; it was the same no-new-roads promise Mayor Ted Wheeler made early in his term.

Their solution is to pack more people on public transit and get more people to bike or walk to work. But their solution is doomed to fail. Despite a surging growth in commuters, TriMet ridership is down while so-called “active transportation” has stagnated. The most recent data show only a little over 5% of commuters bike or walk.

After decades of trying to get people to abandon their cars, our leaders need to understand the automobile is an amazing technology of freedom and improve our roads to support that freedom.

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

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Why Cap-and-Trade Can’t Be “Tweaked”

By Eric Fruits, Ph.D.

Oregon is less than three months away from the next meeting of the Legislature and cap-and-trade is coming back.

While California is setting the cap-and-trade example with sky-high power rates and rolling blackouts, Oregon’s State Senator Michael Dembrow is reworking the bill that failed to get enough Democratic votes earlier this year.

Last summer’s attempt at imposing cap-and-trade gave rise to the Timber Unity movement, who descended on the capitol with hundreds of log trucks and whose Facebook group has more than 53,000 members.

The latest tweaks are aimed at bringing skeptical Democrats on board and stifling Republican dissent.

But, here’s the thing…. Cap-and-trade can’t be tweaked. The proposal is fundamentally flawed. It’s all pain and no gain. In fact, the only way cap-and-trade “works” is if the pain is bigger than the gain.

The state itself estimates gas prices will increase by more than 20 cents a gallon in the first year alone, which would give Oregon the third highest prices in the country—below California and Hawaii. No amount of tweaking will make that go away.

Put simply, cap-and-trade won’t work in Oregon. And no amount of reworking will make it work. Our legislators can avoid log trucks rolling through Salem and rolling blackouts throughout the state by shelving their plans for cap-and-trade.

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

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Miss Virginia

By Miranda Bonifield

Virginia Walden Ford is a mom whose extraordinary sacrifice and determination changed not just her own child’s life, but the lives of thousands of American students. Her story is now the subject of the new movie Miss Virginia, starring Orange Is the New Black’s Uzo Aduba.

Virginia’s experience as a black student integrating Little Rock high schools in the 1960s gave her a strong personal understanding of how important education is to a child’s success. When, years later, her own son William began slipping through the cracks of a Washington, D.C. public school where his teacher didn’t even know his name, she fought for a better option. Virginia’s answer came in the form of a scholarship and a second job working nights. William went from skipping school to being a joyful, enthusiastic student known by friends and teachers. Virginia believed every child should have that chance.

Virginia Walden Ford’s persistent work on behalf of low-income students in Washington, D.C. led to the creation of the Opportunity Scholarship Program, which gives thousands of low-income kids the chance to attend a private school. Virginia says, “We knew that if we raised our voices, we could win for our children. We did. And now our kids are winning as a result.”

You can watch Miss Virginia on Amazon Video, Google Play, and in select theaters around the country.

Miranda Bonifield is a Research Associate at Cascade Policy Institute, Oregon’s free market public policy research organization. She is also the Program Assistant for the Children’s Scholarship Fund-Oregon program, which helps lower-income Oregon children attend private and parochial elementary schools through partial-tuition scholarships.

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Voters Should Reject Ballot Measure 26-203

By Eric Fruits, Ph.D.

By now, Oregon voters have received their ballots for the November 5 election. One of the items is Measure 26-203: a $475 million bond measure by Metro, the regional government for the Portland area.

Metro wants the money so it can buy more land for its so-called parks and nature program, a program that has shifted from providing parks for people to more vague and speculative objectives.

In Metro’s own words, the initial promise in 1995 was to “provide areas for walking, picnicking and other outdoor recreation.” This year’s measure now gives only passing mention to parks. And, it makes no promises of new parks, only preservation and maintenance of existing parks. In terms of bang for the buck, that’s a lot of bucks but not much bang.

Despite Metro’s earlier promises to provide parks for people, the agency has opened only seven parks and natural areas to the public over the last quarter-century. In some cases, promised parks never arrived.

Metro has about $30 million still sitting in its parks and nature bond funds, and it has an operating levy that runs through 2023. Voters should reject Measure 26-203 and urge Metro to use the money it already has to turn some of the land it’s already acquired into the parks that people demand.

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

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Enough Is Enough: Voters Should Reject Metro’s Bond Measure

By Eric Fruits, Ph.D.

By now Oregon voters have received their ballots for the November 5 election. One of the items in the Portland region is Measure 26-203: a $475 million bond measure by Metro, the regional government for the Portland area. Adding in interest and other costs, Measure 26-203 will raise the region’s property taxes by about $60 million a year. Voters should say no to this measure.

Metro wants the money so it can buy more land for its so-called parks and nature program, a program that has shifted from providing parks for people to more vague and wide-ranging objectives.

Metro’s initial promise in 1995 to “provide areas for walking, picnicking, and other outdoor recreation” has changed to 2019’s bond measure promise to “protect water quality, fish, wildlife habitat, natural areas.” The 1995 ballot title mentioned parks eight times. The measure before voters now gives four passing mentions to parks. And, it makes no promises of new parks, only preservation and maintenance of existing parks.

Hidden lands, missing parks

Technically speaking, many of the natural areas are open to the public. More realistically, Metro makes great efforts to discourage public access. For example, a Metro attorney indicated to Cascade Policy Institute staff that many of Metro’s lands are not listed on its website specifically to prevent or discourage public access.

Even supporters of Measure 26-203 complain that most of Metro’s properties are out-of-reach. In three different languages in this year’s Voters’ Pamphlet, they conclude Metro’s acquisitions “exist as places on a map but not places you can actually go.”

In fact, Metro itself reports that more than 80% of the acres purchased with earlier bond funds are outside the region’s urban growth boundary. Because the UGB defines where most of the region’s population lives, much of this publicly owned land is far away from the public. For example, Metro’s much anticipated Chehalem Ridge nature park is located down a narrow, winding, gravel road more than seven miles from the nearest TriMet stop.

Despite Metro’s earlier promises to provide parks for people, the agency has opened only seven parks and natural areas to the public over the last quarter century. In some cases, promised parks never arrived. In 2005, Metro promised “at least four future public access points” for canoeing, kayaking, fishing, and picnicking. Since then—14 years later—only the Farmington Paddle Launch has been opened.

Over the years, Metro has spent more than $7 million to acquire 680 acres in the Clear Creek area, 20 minutes east of Oregon City. In 2007, Metro concluded the holdings have “such potential as a park.” Despite Clear Creek’s potential as a park, this year Metro indicated it did not have “any public access plans developed for Clear Creek Natural Area.” The site is now virtually off-limits to the public and does not appear on Metro’s parks and nature maps.

Vague promises, little accountability

Protection, preservation, and restoration of natural areas, watersheds, rivers, and streams for wildlife and fish are key components of Measure 26-203. These were also key components of the 1995 and 2006 bond measures.

Even so, Metro has provided scant information documenting its protection, preservation, and restoration efforts. While tree planting, weed removal, and volunteer efforts are mentioned in some Metro publications since 1995, the voter-approved operating levies were earmarked for restoration efforts. Metro reports that by 2018, only about 14% of the land it has acquired has been restored.

Enough is enough, vote no on Measure 26-203

Metro’s parks and nature bonds have been in place for nearly a quarter century. Over that time the agency has spent about half a billion dollars and acquired more than 14,000 acres of land. Metro has clear challenges managing the land it already holds. Promised parks have not been built, and some have been wiped off the map. Restoration efforts have not kept pace with property acquisitions.

Metro has about $30 million still sitting in its parks and nature bond funds, and it has an operating levy that runs through 2023. Voters should reject Measure 26-203 and urge Metro to use the money it already has to turn some of the land it’s already acquired into the parks that people demand.

Eric Fruits, Ph.D. is Vice President of Research at Cascade Policy Institute, Oregon’s free market public policy research organization. A version of this article appeared in The Portland Tribune on October 22, 2019.

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Metro’s Housing Philosophy is Political, Not Practical

By Miranda Bonifield

Metro’s attempts to provide low-income public housing since last year’s $653 million bond measure passed have been stymied by the same problem encountered by cities from Portland to Stockholm: Metro’s preferred way of building housing is too expensive to be sustainable.

But instead of addressing the overwhelming costs of its projects, Metro is doubling down on ineffective practices which neither accomplish its goals nor increase the supply of so-called affordable housing.

For instance, Metro’s interest in “leading with racial equity” means they prioritize firms certified to be owned by minorities, women, or “emerging small businesses.” Members of Metro’s housing bond oversight committee recounted multiple stories in early meetings of contractors who circumvent the certification’s requirements by outsourcing their government work to other, non-certified contractors—rendering the certification nearly meaningless.

A local contractor pointed out that small businesses with limited capital avoid government contracts because the government doesn’t pay on time and requires mountains of time-consuming paperwork. Cutting red tape out of the process could improve the chances of small businesses bidding for contracts. But instead of emphasizing these practical considerations, the committee recommended local governments increase the number of meaninglessly certified contractors they hire. That’s not helping our community– it’s just virtue signaling.

Miranda Bonifield is a Research Associate at Cascade Policy Institute, Oregon’s free market policy research organization.

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Press Release: Cascade Policy Institute Publishes Comprehensive Study of Metro’s Parks and Nature Program

October 15, 2019

FOR IMMEDIATE RELEASE

Media Contacts:
John A. Charles, Jr.
Eric Fruits, Ph.D.

PORTLAND, OR – In the next week or so, Portland area voters will receive their November ballots. One of the items is Measure 26-203: a $475 million bond measure by Metro, the regional government for the Portland area. Metro wants the money so it can buy more land for its so-called parks and nature program. Measure 26-203 will raise the region’s property taxes by about $60 million a year. The $475 million request is larger than the two previous Metro natural areas bonds combined, which were $135.6 million dollars in 1995 and $227.4 million dollars in 2006.

Cascade Policy Institute has published a comprehensive study of Metro’s parks and nature program, with the following conclusions:

  • Metro’s natural areas program began as a vision to increase and preserve parks and natural areas to a region facing increased population growth and density.
  • As the program evolved, the mission moved from providing parks for people to locking land away from the community that paid for it. The initial promise in 1995 to “provide areas for walking, picnicking, and other outdoor recreation” has shifted to the 2019 bond measure promise to “protect water quality, fish, wildlife habitat, natural areas.”
  • Over the nearly two decades since the first parks and nature bond measure, Metro has made, broken, and delayed its promises to voters.
    • In 2002, Metro imposed a solid waste tax enacted to pay for the operating costs of new parks. In 2006, Metro diverted the parks money into Metro’s general fund. In subsequent years, Metro put two operating levies on the ballot, increasing property taxes.
    • Chehalem Ridge was pitched as a regional park for Metro’s west side, but current plans are for a few miles of walking trails and a small picnic area. The park is more than seven miles from the nearest TriMet stop.
  • After spending hundreds of millions of dollars and acquiring more than 14,000 acres of land, less than 12 percent of Metro’s acquisitions are accessible to the public.
  • More than 80 percent of the acquisitions are outside the UGB.
  • Much of the land acquired by Metro was never at risk of development because Metro manages the region’s Urban Growth Boundary.
  • Metro’s restoration objectives, efforts, and results have been opaque and uncertain. Metro has provided no measurable documentation of changes to water quality or fish and wildlife populations.

Information was obtained from publicly available resources, interviews, and on-site visits to every natural area and nature park identified by Metro. Cascade paid thousands of dollars in public records requests to Metro.

Cascade’s report is available for download.

For more information on Measure 26-203 and Metro’s parks program, contact Cascade Policy Institute at 503-242-0900.

# # #

Contact Eric Fruits or John Charles at 503-242-0900 or by email at eric@cascadepolicy.org or john@cascadepolicy.org for more information or to schedule an interview.

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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Like Other MAX Projects, TriMet’s Green Line Underdelivers at 10th Anniversary

By Rachel Dawson

TriMet has proven time and again that it is unable to live up to past promises. The MAX Green Line, which first opened 10 years ago, is no exception.

The Green Line is fifteen miles long and runs along I-205 from Portland State University to the Clackamas Town Center (CTC). It began as a portion of the North-South light rail alignment, which was canceled in 1988 after failing to secure voter funding. TriMet attempted to scale the alignment down to run from North Portland to the CTC, but the project was again rejected by voters in 1996 and 1998.

The plan for light rail to the CTC was later resurrected in 2001, and planning for the Green Line commenced in concert with the more recently implemented Orange Line to Milwaukie.

The alignment eventually earned federal approval in 2006. Of the total $575.7 million price tag, $478.2 million came from the federal government, $23 million came from the state, and $74.5 million came from local jurisdictions.

Of the local match, $69 million came from the City of Portland, $39.3 million from Clackamas County (the majority of which came from the county’s urban renewal funds), $23 million from the Oregon Department of Transportation, $20.5 million from TriMet, and $6.2 million from land donation and other funds.

The Green Line has failed to live up to these promised expectations:

Ridership is lower than projected. When the Federal Transit Administration completed its 2015 “Before and After Study” on the line, there was an average 24,000 daily weekday boarding rides. This is well below the 30,400 riders that TriMet predicted at entry into preliminary engineering for the line’s opening year. That number has continued to decrease to just over 16,000 average daily riders in August 2019, making up only 34% of the FEIS’s predicted ridership levels for 2025. With five years to go until 2025, it seems unlikely that the Green Line will garner the 30,500 riders needed to hit TriMet’s promised level of 46,500 boarding rides.

The line has lower frequency than promised. Trains arrive at stations every 15 minutes during peak periods and every 35 minutes at other times of the day. TriMet promised trains would arrive every 10 minutes during peak hours and every 15 during other times. TriMet attempted to blame this low level of service on a decline in tax revenues during the recession, but train frequency has not increased since the economy has recovered. Furthermore, TriMet’s total operating and non-operating revenues increased from 2009 to 2018 by 54%, and revenue from payroll and other taxes increased by 71%. The payroll tax rate will continue to go up every year until 2024, although it appears the Green Line’s level of service won’t increase with it.

Instead of the promised passengers, light rail brought increased crime to the CTC area. Clackamas County experienced heightened crime in the corridor from 2009-2012 after the Green Line opened and an increase in graffiti around MAX stops, according to a survey by the Oregon High Intensity Drug Trafficking Areas Program sent to the Clackamas County Sheriff.

Unsurprisingly, the line’s cost was higher than TriMet originally anticipated. The final price tag of $576 million was 14% greater than the anticipated cost in preliminary engineering, a difference of about $70 million.

TriMet is now planning for a 12-mile line from downtown Portland to Tigard. Elected officials from Tualatin, Tigard, Durham, and Washington County should take a sobering look at TriMet’s track record on the Green Line, the Yellow Line, and WES. It shows a consistent pattern of over-promising and under-performing. Given this history, TriMet’s projections for the SW Corridor project should not be trusted.

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

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Hidden Lands, Unknown Plans: A Quarter Century of Metro’s Natural Areas Program

By Vladislav Yurlov, Helen Cook, and Micah Perry with Eric Fruits, Ph.D., research advisor

  1. Executive summary 

In June 2019, Metro’s Council referred to voters a $475 million bond measure for the acquisition and restoration of natural areas as well as future recreational opportunities. If passed, the measure will cost the region’s taxpayers approximately $60 million a year in property taxes. The $475 million request is larger than the two previous Metro natural areas bonds combined, which were $135.6 million dollars in 1995 and $227.4 million dollars in 2006. 

Cascade Policy Institute researched Metro’s management of its natural areas program. Information was obtained from publicly available resources, public records requests, interviews, and on-site visits to every natural area and nature park identified by Metro. Several areas were more thoroughly examined as case studies because of their location, size, acquisition price, and length of time owned by Metro. These case study areas comprise about 20 percent of the land acquired by Metro in the 1995 and 2006 bond measures. 

Cascade’s findings lead to the following conclusions: 

  • Metro’s natural areas program began as a vision to increase and preserve parks and natural areas to a region facing increased population growth and density. With increasing population density, local governments would offset the loss of backyards with more parks to meet, play, and offer “nature in neighborhoods.” It was an expensive vision that would require hundreds of millions of dollars. 
  • As the program evolved, the mission moved from providing parks for people to locking land away from the community that paid for it. The initial promise in 1995 to “provide areas for walking, picnicking, and other outdoor recreation” has shifted to the 2019 bond measure promise to “protect water quality, fish, wildlife habitat, natural areas.” Parks are to be “maintained” rather than built, expanded, or improved. 
  • Over the nearly two decades since the first parks and nature bond measure, Metro has made, broken, and delayed its promises to voters.  
  • Metro promised that a solid waste tax enacted to pay for the operating costs of new parks would protect residents from additional taxes for the same purpose. Nevertheless, it swept that money into Metro’s general fund and put two operating levies—increasing property taxes—on the ballot.  
  • Metro assured the region that Clear Creek would become a regional park. More than a decade later, it has no plans to make the area publicly accessible and has removed it from its maps of parks and natural areas. 
  • Chehalem Ridge was pitched as a regional park for Metro’s west side, but current plans are for a few miles of walking trails and a small picnic area.  
  • After spending hundreds of millions of dollars and acquiring more than 14,000 acres of land, less than 12 percent of the acquisitions are accessible to the public.  
  • Even the land that is open to the public is out of reach of many Portland residents.  
  • Seventy percent of Metro’s acquisitions have been outside Metro’s jurisdiction.  
  • More than 80 percent of the acquisitions are outside the Urban Growth Boundary 
  • A statement in the 2019 Voters’ Pamphlet from a group of bond supporters admits that many of Metro’s acquisitions “exist as places on a map but not places you can actually go.”  
  • Much of the land acquired by Metro was never at risk of development because Metro manages the region’s UGB 
  • Metro’s restoration objectives, efforts, and results have been opaque and uncertain. Metro has provided no measurable documentation of changes to water quality or fish and wildlife populations.  
  • Metro has promised a strategy focused on racial equity. Even so, minority communities’ desire for parks that serve as “gathering places, places to eat, security, and places for kids to play, exercise and cool off during the summer” have been overlooked in favor of natural areas amenable only to “passive recreation.” 

Metro has acquired more land than it can manage. The focus for the next decade should be on making current lands available for public use. Metro’s largest planned park—Chehalem Ridge near Gaston—has been in Metro ownership for nine years, and there is still no public access. Metro also owns about 1,400 acres in the Sandy River Gorge. These holdings are not shown on any of Metro’s parks and nature maps and Metro has no plans at all to make these properties available for swimming, boating, hiking, or family cookouts. Metro needs to turn these and other areas into parks its residents actually use before seeking more money to acquire more land.

Vladislav Yurlov, Helen Cook, and Micah Perry are Research Associates at Cascade Policy Institute. Eric Fruits, Ph.D., is Vice President of Research at Cascade.

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TriMet Broke Key Promises About MAX

Published in Portland Tribune

By Rachel Dawson

TriMet’s payroll tax has been increasing since 2005 and will continue to go up every year until 2024. There is no issue with revenue; rather, the issue lies with light rail.

TriMet’s MAX Yellow Line first opened 15 years ago in May 2004. The Yellow Line’s Final Environmental Impact Statement (FEIS) made a myriad of predictions for the year 2020, which makes now the perfect time to reflect on what officials promised and what taxpayers and transit riders since have received.

The Yellow Line originated in 1988 as a 21-mile project connecting Vancouver, Washington, with downtown Portland and Clackamas Town Center. This plan was scrapped after Clark County voters defeated a proposal to raise $236.5 million in 1995 and Oregon voters turned down a $475 million regional ballot measure in 1998.

Read the full article here

Content credit to Portland Tribune

 

 

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Oregon Distilleries Deserve Better

By Helen Cook

Oregon has a booming craft distilling industry. That’s why it’s so surprising that one popular distiller is calling it quits. Mike Selberg, owner of Cannon Beach Distillery, announced in June that he was forced to close up shop. This is largely because of Oregon’s tax structure on distilleries.

I decided to reach out to other Oregon distilleries for their situations. The resounding message was that something needs to change. Local distillers are taxed on the dollar value of their tasting room sales rather than on alcohol content. This ultimately punishes small-volume, high-price distillers and discourages small distillers from thriving as local businesses.

Oregon is a “Liquor Control State.” This means that the Oregon Liquor Control Commission (OLCC) is the sole distributor of spirits. Distillers can sell spirits in Oregon liquor stores through the OLCC’s distribution network as well as out of their own tasting rooms, but the distillers’ products are owned by the state of Oregon.

Similarly to licensed liquor stores, tasting room owners are commissioned by the state to sell their spirits. This means that a certain percentage of each liquor sale from a tasting room goes to the OLCC every week. This percentage can be detrimental to distilleries.

While several distilleries, such as Stone Barn Brandyworks, value the distribution network that the OLCC offers, the majority acknowledge that this overall structure does not benefit tasting rooms. Sebastian Deegan at Stone Barn Brandyworks stated that 38-40% of his distillery’s gross income goes to the state because of the “tax” on his tasting room. “I don’t think there is a business in the country that can operate with that overhead.” On average, Oregon distillers currently pay 33% of gross retail sales.

Tom Burkleaux runs New Deal Distillery and serves as Vice-President for Oregon’s Distillery Guild. “The state of Oregon takes more than we take,” he said. “Everyone is frustrated. The cards are definitely stacked against a small distillery.”

Larger distilleries have an advantage because they generally produce cheaper spirits in higher volume. Since money is collected based on the retail price, distilleries that produce high volumes of lower priced spirits are not adversely affected by the system. However, smaller distilleries hoping to produce high-end goods are discouraged from this craft since manufacturing and the retail price cost significantly more.

Some distillers might take a similar approach to Mike Selberg’s at Cannon Beach Distillery: move to a distiller-friendly state. But Tom doesn’t think many will follow in Mike’s footsteps. “Most people would close up shop rather than move. You want to start your business in your home.”

Michelle Ly from Vinn Distillers noted this, stating: “I would say that we do really pride ourselves on wanting to be here. Oregon is known for supporting local business and being a tight-knit community, so I think if we were given that flexibility, we would all be doing much better and contributing to the economy of Oregon.” Vinn Distillery will have to close its tasting room this summer largely because of this tax burden.

Distillers hoped that legislation could be passed to remove distillery tasting rooms from this structure. But such legislation has already been suggested without much success or interest from legislators. Tad Seestedt from Ransom Spirits noted that “there are few legislators that really would like to see parity and want to help the Oregon’s distilling community.” Other distillers shared the same sentiment.

Ultimately, tasting room sales would barely make a dent if removed from OLCC’s $1.22 billion yearly revenue. Distilleries remitted $2,775,462 to the state as net profit from their sales in 2018. While this is pocket change for the OLCC, this remittance is significant for small distilleries.

Oregonians shouldn’t have to choose between their home, their business, and the quality of their product, especially when their craft is a point of pride for Oregon residents. Our local distilleries deserve better from our legislature and the state of Oregon.

Helen Cook is a Research Associate at the Portland-based Cascade Policy Institute, Oregon’s free market public policy research organization. She can be reached at info@cascadepolicy.org.

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Shrinking Roads and Rising Fatalities Don’t Bode Well for Portland’s Vision Zero

By Rachel Dawson

Portland hasn’t seen 50 road fatalities since 1996. With 43 fatalities already, it looks like 2019 will be a record-breaking year, with no thanks to Portland’s Vision Zero Action Plan.

Placing concrete pedestrian islands in the middle of the road, giving little to no room to turn onto side streets, installing plastic pylons against the roadway, and using confusing signage and lines—all Vision Zero road changes implemented to decrease road fatalities—don’t seem to be making streets safer.

While many factors are involved, perhaps distracted and dangerous walking, driving, and biking habits play a greater role in traffic accidents than the number of car lanes or crosswalks on a given street.

As a pedestrian, I’ve walked across a street with my eyes glued to my phone. Luckily, I haven’t been hit by a car. But if I had, it would’ve been due to my inability to separate my attention from my mobile device. The same goes for distracted drivers. I’ve watched drivers on the Sellwood Bridge pull out their phones when traffic slowed. Our failure to pay attention to the road and take safety precautions, especially at night, is putting ourselves and others at risk.

Portland’s approach of downsizing roads is punitive and counterproductive. Instead, everyone on the road system should take responsibility for their own behavior, regardless of what mode of travel is being used.

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

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Where Is Our Metro Park at Chehalem Ridge?

By Helen Cook

This summer, I was walking on an old logging road in the middle of thick forest, not a person in sight. The only sign of human activity were signs nailed to the trees prohibiting fungus-collecting. A tattered strand of red tape displaying the print, “Invasive Species,” waved in the wind.

You wouldn’t know it since no signage exists, but I was hiking through Metro’s biggest natural area: Chehalem Ridge. In fact, you wouldn’t know this was public property. The trailhead is on the side of a gravel road after driving miles through rural countryside. A gated fence blocks the entrance alongside a sign forbidding a long list of activities, including dog-walking. (Ironically, later in the day, I observed a couple walking their dog in Chehalem. There was no one there to stop them.)

Metro bought Chehalem Ridge Natural Area in 2010. The land is nestled between Forest Grove and Gaston, about a 20-minute drive to Hillsboro. The size of the parcel is actually bigger than Central Park in New York. In other words, this land’s potential is not that of a typical neighborhood park.

But where is our park? Metro likened the area to the future “Oxbow Regional Park,” whose popularity is due in part to its camping sites, twelve miles of trails, and picnic areas.

The regional government is in no hurry to fulfill this promise. The land has purportedly undergone restoration for nine years. Yet when I asked Metro for evidence, few numbers were given. The only indication of restoration on the website are whimsical “field notes” by a Metro Senior Scientist. Some mentions of thinning forest and planting shrubs are sporadically found in updates. But I was unable to find proof of water quality restoration, which is one of the most important reason cited for acquiring the land.

So if Chehalem Ridge is really Metro’s next big success story, why hasn’t it become a reality? It’s unclear why we don’t see a park since Metro had several opportunities to develop the area.

Voters approved a $226 million dollar bond for parks and nature in 2006. This was supplemented by a $50 million dollar levy for maintenance in 2013 and another levy in 2016. But Metro is asking for $475 million dollars more in a 2019 bond, some of which is promised to Chehalem Ridge. All of this money comes from taxpayers, but Metro seems in no rush to return the favor.

Even when Metro eventually breaks ground on Chehalem, none of this money will go to the biggest obstacle: the roads. The winding roads leading to the park are extremely difficult to drive with traffic. But Metro has no jurisdiction to repave the roads. Washington County, which does have this authority, certainly has no intention of improving roads in the area. Just to be sure, I asked them. A definitive no was the immediate answer, despite the fact that Metro will be charged an estimated $2 million Transportation Impact Fee by Washington County when construction permits are issued.

During the next several years, you will not see campsites, twelve miles of trails, playgrounds, or access for low-income individuals who can’t drive to the park. What Chehalem’s master plan does promise you is three miles of multi-use trails, a trailhead, parking, and restrooms. To put it bluntly, you are promised a remote trail that’s less useable than your average neighborhood park.

I suggest taxpayers contact Metro to ask that it live up to the promise of an “Oxbow Regional Park.” If Metro wants voters to maintain a higher tax rate with this proposed bond, voters should demand that original promises be kept.

Maybe with more accountability, Metro would live up to its slogan, “Promises Made, Promises Kept.” But as of now, I’m skeptical. That’s why I plan to vote “No” this November on Metro’s newest $475 million bond. Metro needs more transparency, not more money.

Helen Cook is a Research Associate at the Portland-based Cascade Policy Institute, Oregon’s free market public policy research organization. She can be reached at info@cascadepolicy.org. A version of this article appeared in the Portland Tribune on October 4, 2019.

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Dumbing Down Voters

By John A. Charles, Jr.

In 2016 Val Hoyle, then a legislator from Eugene, introduced a bill to guarantee postage-paid envelopes for Oregon’s vote-by-mail system. She argued that having to find and apply a stamp was a barrier to voter participation, especially to young people.

That idea was widely ridiculed, and the bill died.

Unfortunately, the political culture has changed. In March the Oregon legislature quietly passed SB 861, which requires the state to pay for ballot envelopes that can be returned by business reply mail. It will go into effect on or after January 1, 2020.

Implementation will cost an estimated $1.6 million to the state General Fund for the first 18 months. There will be an additional cost to Counties of $84,000 to destroy obsolete ballot return envelopes.

Is Oregon really so wealthy that we should spend $1.6 million just to ensure that voters don’t have to find a first class stamp? I don’t think so. Instead of treating postage as a voting barrier, perhaps we should treat it as an entrance exam.

The test would be simple: If you can’t figure out how to use stamps, or you are incapable of hand-delivering your ballot to the county elections office, you are not qualified to vote.

We might get better results.

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

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Portland’s Rising Bills are Purposeful Accidents

By Eric Fruits, Ph.D.

Portland City Council has just learned that what it thought was a $500 million water filtration plant will now be an $850 million project–and may go as high as $1.2 billion. The reason for the 70% spike: The water bureau did not include the cost of the pipes leading to and from the plant. Those forgotten pipes are going to add more than $130 a year to the average water bill.

Truth is, those pipes weren’t forgotten. They were omitted so the bureau could low-ball the cost of the project. This isn’t a first. The Portland Aerial Tram was three times over budget in part because the city “forgot” to include soft costs. If they included these costs, the eye-popping prices for the tram would have given even a spendthrift city council some pause. Portland Public Schools intentionally low-balled the cost of school construction so voters would approve a school bond measure.

These are not accidents or mistakes. This is intentional malfeasance by the bureaucracy. Our elected officials are so busy with photo ops and posturing that they forget their jobs are to scrutinize their staff and serve the people who put them in office. Voters can’t fire the bureaucrats, but we can fire the politicians who hired them.

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

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Press Release: Cascade Policy Institute Urges a NO Vote on Measure 26-203

FOR IMMEDIATE RELEASE

Media Contact:

John A. Charles, Jr.

Eric Fruits, Ph.D.

503-242-0900

Cascade Policy Institute Urges a NO Vote on Measure 26-203

Voters should reject Metro’s tax increase and land grab

In approximately four weeks Portland area voters will receive their November ballots. One of the items is Measure 26-203: a $475 million bond measure by Metro, the regional government for the Portland area. Metro wants the money so it can buy more land for its so-called parks and nature program. Measure 26-203 will raise the region’s property taxes by about $60 million a year.

Cascade Policy Institute urges a vote NO on Measure 26-203. Voters have already approved two such measures—one for $135 million in 1995, and another for $227 million in 2006. Most of that money has been spent to buy up more than 14,000 acres of land. Yet, less than 12% of these lands are available for public use.

Metro has made it clear that many of the parcels purchased since 1995 will never be open for use. In fact, if you try to find a list of all properties bought by Metro with bond money, you won’t be able to. A Metro lawyer told Cascade staff in a meeting this summer that they don’t want the public to know where the park land is because they don’t want the public to visit it

Eric Fruits, Vice President of Research at Cascade Policy Institute, said, “Most of Metro’s nature properties are Oregon’s own Area 51—they’re owned by the government, they don’t show up on maps, and no one knows what’s going on there.”

In addition, more than two-thirds of the land bought with bond money is outside Metro’s jurisdiction, and nearly 80% is outside the Portland Urban Growth Boundary (UGB). That means most voters will never use Metro parks because they are so far away—even if the areas were open to the public. 

Measure 26-203 is on the ballot largely to ensure tax dollars keep flowing to Metro. The measure brings in so much money, the Metro Council can’t figure out how to spend it all. That’s why Metro has earmarked $50 million of the bond funds for “advancing large-scale community visions.” Metro itself says the earmark is “not well-defined” and a leader of 1,000 Friends of Oregon called it a “slush fund.”

For more information on Measure 26-203 and Metro’s parks program, contact Cascade Policy Institute at 503-242-0900.

# # #

Cascade Policy Institute is Oregon’s free market public policy research center. Cascade’s mission is to explore and promote public policy alternatives that foster individual liberty, personal responsibility, and economic opportunity. For more information, visit cascadepolicy.org.

Contact Eric Fruits or John Charles at 503-242-0900 or by email at eric@cascadepolicy.org or john@cascadepolicy.org for more information or to schedule an interview.


Why Voters Should Vote NO on Measure 26-203

Here are the top five arguments against Measure 26-203:

  1. Metro already has more land than it can manage. The focus for the next decade should be on making current lands available for public use. Metro’s largest planned park—Chehalem Ridge near Gaston—has been in Metro ownership for nine years, and there is still no public access. Metro also owns about 1,400 acres in the Sandy River Gorge. These holdings are not shown on any of Metro’s parks and nature maps and Metro has no plans at all to make these properties available for swimming, boating, hiking, or family cookouts. Metro needs to turn these and other areas into parks its residents actually use before voters give Metro a blank check for $475 million.
  2. Last year Metro spent nearly 25% of all bond expenditures on “administration.” For the past five years, Metro has failed to meet its commitment to keep administrative costs below 10%.
  3. Metro claims that it has to buy up more land to save it from development, but most properties purchased to date were never threatened because they are outside the UGB. There is no imminent threat of sensitive lands being “paved over” – precisely because the UGB prohibits development and Metro has no plans to expand the UGB to these areas.
  4. Metro is the only parks manager in the entire tri-county region that won’t allow dogs, even if leashed. For many park users, especially women, that means they won’t use Metro parks at all, because they don’t feel safe walking alone. Metro’s no dog policy is a frequent complaint at community meetings about Metro’s parks program.
  5. The primary reason for the bond measure is to prevent property tax rates from dropping. At a Metro Council retreat in July 2017, Metro’s Chief Operating Officer explained, “Debt service on the 2006 bonds is expiring. If we wait past 2020 for another bond measure, the current tax rate of 19 cents per thousand of assessed value would drop to zero, and then we would have to admit that our bond measure raises taxes.” 

    Press Coverage of Metro’s Parks and Nature Program

    Nick Budnick, “Green Acres,” Willamette Week, February 2, 2000.

    “But a five-week WW review, including dozens of interviews and stacks of real-estate files, found an agency so anxious to secure land that it has streamlined fiscal controls, creating a process that allows even overpriced land to look like a good deal. In 16 out of 32 real-estate acquisitions reviewed by WW, the land values determined by Metro appear inflated, and the combined cost to taxpayers could easily run in the millions.”

    Body Politic,” Willamette Week, October 18, 2006.

    “Conceptually, who could argue with the desire to have Metro, the regional government, buy land for green spaces? We do, for the following reasons. First of all, there are several money measures on the ballot deserving your support, and this is the least pressing among them. Second, critics have pointed to the fact that part of the land Metro seeks to buy is so far outside the urban growth boundary that it’s not only beyond Metro’s jurisdiction but is unnecessary, at least for the next several decades. Others have pointed out that some of the targeted land is farmland, which would be taken out of cultivation.”

    Nicholas Deshais, “Field of Schemes,” Willamette Week, March 27, 2007.

    “The plan would try to return the park’s entire 25 acres back to nature. That includes removing most artificial structures, non-native plants and anything else that smacks of humanity, such as the two baseball fields used by Lakeside Little League. Eventually, the city wants to see a wetland prairie instead of a pitcher’s mound. … ‘The fact that the ball fields are there is an accident of history,’ said Mike Houck, director of the Urban Greenspaces Institute and a member of the master plan’s advisory committee. ‘You wouldn’t put a ball field in the middle of Oaks Bottom.’”

    Tim Curran, “Headwaters work gives neighbors headaches,” Mid-County Memo, October 29, 2011.

    “Steve Lynch, who has lived next to the property for 12 years, said his experience with city and Metro officials has been frustrating. ‘They’ve done the most possible damage in the least amount of time I’ve ever seen any neighbor do,’ Lynch said.  ‘They will look you right in the eye and tell you what you want to hear, and tomorrow the trucks are in. I’m not going to be nice anymore.’”

    Nigel Jaquiss, “Mayors Urge Metro to Delay Planned May Bond Measure,” Willamette Week, December 6, 2012. Quoting letter from mayors.

    “In addition to concerns regarding compression, the plan for the remaining natural area’s bond purchases and impacts on long term maintenance needs are still unclear to our group. Without further information and clarity regarding the plan for past voters’approved investments, it is hard for us to see the value in asking voters for additional resources.”

    Dana Tims, “Metro’s bargain land becomes a burden to restore, maintain,” Oregonian, April 13, 2013.

    “‘We were rejecting more real estate deals than any private development team in the city,’ Metro Council President Tom Hughes said. ‘The ones we accepted let us stretch those bond dollars a lot further than we thought we could.’ All that stretching, however, came at a cost. Since the bond money can only be used to buy land, Metro’s been stockpiling acreage for years with scant means of maintaining or restoring it.”

    Rob Manning, “Metro Has The Land, But Needs Money To Make It Parks,” OPB, May 15, 2013.

    “Thousands of people drive past these creeks every day – on Highway 213. But the forest along the creeks can be hard to get to. There are no signs. You have to know the way in – past power lines and thickets of scotch broom and blackberry bushes. Metro land manager, Dan Moeller says the gate in is narrow – on purpose. ‘To manage what’s able to get in and out of here, we had to create some fencing, and we actually had to design this little post system to stop shopping carts from coming into this site.’ Moeller says the gate keeps shopping carts out — but it also blocks kids’ strollers and visitors in wheelchairs. Officials say homeless camps crop up often.”

    Peter Wong, “Metro Council seeks extension of park levy,” Portland Tribune, July 5, 2016.

    “Metro Councilor Bob Stacey said the North Tualatin Mountains plan, which the council approved April 21, calls for opening only about 25 percent of its 1,400 acres to trails for walking, cycling and horseback riding and putting most of the rest off-limits.”

    Howl, no: Metro seeks more money for anti-dog park network,” Oregonian, July 5, 2016.

    “It may surprise many people in the Portland area to know that Metro is, among other things, the owner of vast swaths of park land. Its holdings, at about 17,000 acres, were amassed largely as a result of two voter-approved funding measures totaling more than $363 million. Metro officials swept up this property for a number of conservation-related purposes, from preserving wildlife habitat to improving water quality. But that’s not all. Improving access to people — who are, after all, paying for all of this — was a goal as well.”

    Voters should say no to Metro’s bid to renew parks levy,” Oregonian, October 19, 2016.

    “Most of [Metro’s] efforts are large and expensive, such as committing $60 million in bonding capacity to an otherwise private hotel project at the Oregon Convention Center, which it also oversees. Pockets of rancor about the agency’s reach and influence nest in some suburban and rural venues, where folks have argued Metro has grown too large and operates without sufficient accountability.”

    Rachel Monahan, “Portland Begs for Bond Money to Finish Park Work It Started,” Willamette Week, June 5, 2019.

    “Behind closed doors, the city of Portland has been lobbying for more money—because the last Metro parks bond, in 2006, helped buy properties for Portland, but City Hall lacks the money to finish restoring or improving them.”

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Metro Measure 26-203 Land Grab

By Eric Fruits, Ph.D.

Soon, Portland area voters will receive their November ballots. One of the items is Measure 26-203: a $475 million bond measure by Metro, the regional government. Metro wants the money so it can buy more land for its so-called parks and nature program. Measure 26-203 will raise the region’s property taxes by $60 million a year.

Cascade Policy Institute urges a vote NO on Measure 26-203. Voters have already approved two such measures in 1995 and in 2006. Most of that money has been spent to buy up more than 14,000 acres of land. Yet, less than 12% of these lands are available for public use. This summer, a Metro lawyer told Cascade staff that they don’t want the public to know where the park land is because they don’t want the public to visit it.

More than two-thirds of the land bought with bond money is outside Metro’s jurisdiction and outside the Portland Urban Growth Boundary. That means most voters will never use Metro parks because they are so far away—even if the areas were open to the public.

In some ways, most of Metro’s nature properties are Oregon’s own Area 51—they’re owned by the government, they don’t show up on maps, and no one knows what’s going on there.

It’s time to put an end to Metro’s expensive land grab.

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

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The MAX Yellow Line: A Look Back After 15 Years

By Rachel Dawson

TriMet’s MAX Yellow Line first opened 15 years ago in May 2004. The Yellow Line’s Final Environmental Impact Statement (FEIS) made a myriad of predictions for the year 2020, which makes now the perfect time to reflect on what officials promised and what taxpayers and transit riders have since received.

Yellow Line History

The Yellow Line originated in 1988 as a 21-mile project connecting Vancouver, Washington with Downtown Portland and Clackamas Town Center. This plan was scrapped after Clark County voters defeated a proposal to raise $236.5 million in 1995 and Oregon voters turned down a $475 million regional ballot measure in 1998.

Not to be deterred by a lack of voter support, officials developed a shorter alternative in 1999 that would run from the Expo Center to Downtown Portland along Interstate Avenue. This alternative cost $350 million, 74% of which came from the Federal Transit Administration (FTA).

The construction of the new alternative was not put to a public vote. Portland officials instead expanded an urban renewal district to include the Interstate Avenue Corridor. Doing so allowed them to appropriate $30 million in tax increment funds to finance the rail that otherwise would have gone to other tax-collecting jurisdictions, including Multnomah County. The county commissioners opposed expansion of the urban renewal district, but the Portland City Council approved it anyway.

Looking back after fifteen years, we find that key promises made in the FEIS were never kept:

1.  Frequency of Service

What We Were Promised: TriMet promised FTA in their Full-Funding Grant Agreement (FFGA) that peak-hour trains would arrive every ten minutes and off-peak trains every 15 minutes. The promised service according to the FEIS was supposed to reach eight trains during peak hours in 2020.

What We Received: Instead of having 10-15-minute headways between trains, the Yellow Line runs every 15 minutes during peak-periods and every 30 minutes during other parts of the day.

2.  Travel Times

What We Were Promised: TriMet predicted travel times to be 24 minutes from Downtown Portland to the Expo Center and 19 minutes from Downtown Portland to N Lombard.[1] Light rail speeds were projected to reach 15.3 miles per hour (mph), and bus speeds were projected to be 13.2 mph in 2005.[2]

What We Received: Actual travel times are slower than predicted. It takes 35 minutes to take light rail from Downtown Portland to the Expo Center and 28 minutes from Downtown Portland to N Lombard, even though light rail has its own exclusive right of way. Actual travel times are 45.8% greater to the Expo Center and 47.4% greater to N Lombard. Actual light rail speeds in the corridor only hit 14.1 mph in 2005 while bus speeds averaged 16.1 mph—significantly faster than predicted.

3.  High ridership

What We Were Promised: The FEIS forecasted ridership in the corridor to dramatically increase with the building of the Yellow Line. By 2020 the line’s ridership was expected to have 18,100 average weekday riders.

What We Received: At no point since the Yellow Line opened has ridership met projected levels. In April 2019 ridership only reached 13,270, 26.7% less than projected. This number will not meet 2020 projected levels based upon the negative trend observed over the past three years. From March 2016 to March 2019 ridership levels decreased by 3.6%.

Lower than promised ridership isn’t unique to the Yellow Line; every TriMet rail forecast has been wrong, and always wrong on the high side.

Light Rail Is Not Superior to Bus Transit

The Yellow Line was expected to provide superior service compared to the no-build bus alternative. This forecast hasn’t panned out. The Yellow Line replaced Line #5, which if it were still operating, would have seven-minute headways between Vancouver and Downtown Portland. C-Tran express service was forecasted to have three-minute headways.[3]

Light rail does not reach any more people or businesses than Line #5 did. In fact, Line #5 had more stops along Interstate Avenue, meaning some riders now have a longer walking commute to the MAX stations.

TriMet bus service from Vancouver to Downtown Portland continues to be an option even after the Yellow Line’s construction. Line #6 was changed to pick up the link between Jantzen Beach and the Yellow Line’s Delta Park stop that Line #5 had previously serviced. It then continues down MLK Boulevard to the Portland City Center.

In Spring 2019, Line #6 saw 665 average weekday on/offs at Jantzen Beach and only 190 total on/offs at Delta Park. This means that the vast majority of Vancouver commuters on Line #6 opt to stay on the bus to Portland instead of transferring to the Yellow Line.

Given the Yellow Line’s history, we can expect the prospective SW Corridor light rail project to increase traffic, have fewer trains than promised, and have lower ridership than predicted. If ridership levels are 26.7% below forecast 15 years into service, why should the SW Corridor ridership estimate of 43,000 daily boardings be taken seriously? The FTA should not offer TriMet additional light rail funding in the future if TriMet is unable to honor its past promises.

TriMet may argue that service levels are below EIS forecasted levels due to a lack of funds. However, TriMet’s revenue increase in recent years tells otherwise. Between 1998 and 2018, passenger fares increased by 116% and tax revenue increased by 64%. TriMet’s payroll tax has been increasing since 2005 and will continue to go up every year until 2024. There is no issue with revenue; rather, the issue lies with light rail.

Moving forward, Metro and TriMet should focus on creating a more reliable bus network that runs on an already built road system. Doing so will benefit riders and taxpayers alike.

__________________________

[1] Federal Transportation Authority, Interstate MAX Before and After Study, 2005, 2-5.

[2] Id, 2-10.

[3] North Corridor Instate MAX Light Rail Project, Final Environmental Impact Statement Executive Summary, October 1999, S-17.

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

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Cascade Policy Institute Presents a Special Event with Economist Stephen Moore

Join Cascade Policy Institute for a conversation with economist Stephen Moore. This special event will be held at the Crowne Plaza Hotel Portland-Lake Oswego, Sunday, September 22, at 7 pm.

Steve Moore co-founded and served as president of the Club for Growth from 1999 to 2004, is a former member of The Wall Street Journal editorial board, and is an economic advisor to President Donald Trump. As Distinguished Visiting Fellow at The Heritage Foundation, Moore focuses on advancing public policies that increase the rate of economic growth to help the United States retain its position as the global economic superpower. He also works on budget, fiscal, and monetary policy and showcases states that get fiscal houses in order.

With Arthur B. Laffer, Moore is the author of Trumponomics: Inside the America First Plan to Revive Our Economy.

Dessert and coffee will be served. Tickets are $25 per person and must be purchased in advance.

Reservations and pre-payment are required by September 20.

For more information about the event and to purchase tickets, click here or call Janet Van Gilder at (503) 242-0900.

Don’t miss this special opportunity to see Steve Moore in Portland!

Sunday, September 22, 2019
7:00pm – 9:00pm
Crowne Plaza Hotel Portland-Lake Oswego
14811 Kruse Oaks Drive (just off I-5 and 217)
Lake Oswego, OR 97035

Founded in 1991, Cascade Policy Institute is Oregon’s free-market public policy research center. Cascade’s mission is to explore and promote public policy alternatives that foster individual liberty, personal responsibility, and economic opportunity. For more information, visit cascadepolicy.org.

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Better Buses May Be the Transit Solution the SW Corridor Needs

By Rachel Dawson

TriMet may have found a better alternative to the proposed SW Corridor light rail project without realizing it.

TriMet is planning a 15-mile-long transit project on Division Street that will run 60-foot buses from downtown Portland to Gresham. The project is estimated to cost $150 million and will include expanded bus stations that offer protection from the weather and signal priority for buses to cut down on travel times by 20%. Each bus is equipped with three doors and can hold 60% more passengers than the typical TriMet bus.

TriMet discarded the idea of continuing buses along the proposed SW Corridor route in favor of light rail despite decreasing transit ridership and increasing light rail costs. Instead of spending nearly $3 billion on a new light rail line, TriMet could mimic the Division Transit Project and run high capacity buses along the route with upgraded stations for just 5% of light rail’s cost. Running buses on an already built system will save hundreds of residents and employees from being displaced. TriMet can also decrease bus emissions by trading diesel for renewable or compressed natural gas for a cleaner ride.

It’s time for TriMet to stop making excuses for light rail and do what is best for both taxpayers and commuters in Portland.

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

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Portland’s Temporary Gas Tax Should Stay Just That

By Rachel Dawson

Portland’s temporary gas tax should stay just that: temporary.

Portland voters approved the 10 cent per gallon gas tax three years ago to fund a road repair and traffic safety program. Since its implementation, the program has failed to live up to all expectations.

Gasoline-using vehicles pay for 100% of the tax but only receive a little over half the benefits. Only 56% of tax revenues go to street maintenance projects, while 44% is spent on pedestrian and bicycle safety.

The program is also poorly managed. A 2019 audit on the tax found that program oversight has been ineffective, many projects have not been completed on time, revenue goals have not been met, and completed projects have cost $900,000 more than what was told to voters.

City staff admitted that project schedules were not realistic and took longer to begin “because the scopes of individual projects were not yet well-defined.” This lackadaisical approach to project planning would never fly in the private sector, so why is the city getting a pass?

Portland commissioner Chloe Eudaly will send the expiring gas tax back to voters in May 2020. The region needs better roads, not another poorly managed tax. For these reasons, Portlanders should vote “no” on extending the gas tax in 2020.

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

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Residents Say Portland is Not the City that Works

By Eric Fruits, Ph.D.

What if the self-proclaimed “City that Works” isn’t working? That’s what Portland residents are saying.

Last week the City of Portland published its most recent survey of city residents. Nearly 90 percent of those surveyed are dissatisfied with the city’s response to homelessness and almost two-thirds are dissatisfied with traffic congestion on their daily commutes.

This outrage comes after voters approved hundreds of millions of dollars for affordable housing projects and steep hikes in gas taxes to improve roads. Clearly, more money is not the answer: The more the city spends, the worse things get.

Council’s renter relocation payments, inclusionary zoning, and renter screening rules are shrinking the supply of affordable housing. While the city’s population is growing, it’s reducing its road infrastructure through road diets and replacing automobile lanes with dedicated bus and bike lanes.

Instead of punishing property owners for renting apartments, let’s loosen regulations on building and renting truly affordable housing. Instead of bringing traffic to a standstill, let’s add traffic lanes to foster a safe and speedy flow of auto and truck traffic. These aren’t radical ideas. In fact, these were Portland’s policies when it really was “The City that Worked.”

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

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Stop Raising Rents in Portland

By Micah Perry

On Wednesday, August 7, 2019, the Portland City Council passed yet another ordinance that will harm the housing market in the city. Landlords will now be required to register all their rental units with the city and pay a $60 yearly registration fee for each unit.

Any economist, or even a student who has taken Econ 101, can tell you that countries with more regulations are less prosperous than nations that enjoy greater economic freedom. Entrepreneurship, from the opening of a small bakery to the development of an apartment complex, is seriously disincentivized by regulations.

Rules and fees placed on the housing industry cause any would-be entrepreneurs and developers—individuals who could provide a solution to Portland’s housing problem—to think twice and reconsider investment in housing rentals. This new ordinance joins a slew of deterrent regulations on rental housing within Portland.

Over the past few years, Portland’s City Council has approved policies that restrict or complicate a landlord’s ability to reject a rental applicant for reasons such as criminal background or ability to pay rent, and that require landlords to help pay for a renter’s relocation costs. Those who have already built rental housing may find it more lucrative and safer simply to sell the property they own rather than continue to rent it. Those considering building new rentals may now balk at the opportunity altogether.

Proponents of the new ordinance will argue that the fee is critical because it funds the city’s Rental Services Office, but the necessity of the office itself is questionable. Most of the office’s responsibilities seem to involve explaining the complex landlord-tenant laws passed by the city in recent years, a self-induced problem that could be solved by simply repealing them. In addition, while the office is portrayed as a resource for tenants to utilize when being treated unfairly, the office’s website notes that it often refers those in need of help to previously existing nonprofits and advocacy groups, who would help without the city’s intervention.

There are also at least two clear structural problems with the ordinance. First, mobile homes, which provided an affordable housing solution long before the city stepped in, will be subject to the tax and almost certainly see rents rise. Second, the fee’s structure makes it an especially steep price to pay for landlords managing large complexes throughout the city, even though city bureaucrats claim that it is a moderate price.

To use an example from the testimony of one landlord, Seattle, which has a similar program, charges landlords a base rate of $175, plus two dollars for every additional unit they own. So, the owner of a 200-unit apartment in Seattle would pay $575 a year, but an identical building in Portland would be charged $12,000 a year. Landlords most likely will pass along the costs to tenants in the form of higher rent.

This new ordinance will do more harm than good. It will raise rents on most people and, more importantly, further constrict the supply of rental housing in the city.

Micah Perry is a Research Associate at the Portland-based Cascade Policy Institute, Oregon’s free market public policy research organization. He can be reached at info@cascadepolicy.org. A version of this article appeared in The Portland Tribune on August 20, 2019.

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The Government-Sanctioned Cat-And-Mouse Game

By Vlad Yurlov

Governments often try to pat themselves on the back. The minimum wage has long been a tool for this. As I began my trek from Foster Road to Oaks Park Way in 2015, I couldn’t wait to earn my own money! The minimum wage was $9.25 at the time, school was out, and I began working.

Starting off at about twenty hours a week, I was having a productive summer. A year later, I came back to an early Christmas present, the Portland Metro area received a minimum wage hike up to $9.75 on July 1st of 2016, which was just fine with me.

Then the hours shortened. New hires arrived. Overtime was a dirty word. The cotton candy I was making went up twenty-five cents! What happened?

As business-owners may tell you, these reactions were just a logical response to the pressure of the minimum wage. You get more wages, but you also work fewer hours, benefits are cut, and price increases are inevitable.

While contradictory studies continue to be published, simple logic dictates what employers do when the minimum wage rises. They try to find ways to keep their wages in step with the amount of profit workers create, and forcing fifteen dollars an hour won’t change that.

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

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Congestion Pricing in Portland: Good in Theory, Bad in Practice

By Eric Fruits, Ph.D.

“Good in theory, bad in practice.” Sure, it’s a cliché, but it’s a cliché because so often it’s true. It looks to be especially true regarding congestion pricing in the Pacific Northwest.

The Oregon Department of Transportation is pursuing plans to impose tolls on parts of Interstate 5 and Interstate 205. Portland recently announced the formation of an “equitable mobility” task force, with “congestion pricing” as a key component. Not to be outdone, Metro, the Portland area’s regional government, is launching a study it hopes will lead to region-wide congestion pricing.

One would expect that something as big and complex as congestion pricing would require substantial public input. However, Metro has made clear that, at least for its technical evaluation of scenarios, its process does “not anticipate significant public outreach.” This is likely because a key takeaway from a survey by DHM Research concludes tolling “is not a popular idea and residents are skeptical that it will be effective at reducing congestion.”

Done properly, congestion pricing reduces congestion. It increases traffic flow while reducing travel time and greenhouse gas emissions. Who knows, it many even reduce blood pressure and road rage. It also raises money. And, done properly, the money would be used to improve and increase road capacity, which in turn further reduces congestion. In theory, congestion pricing is a near-perfect solution to congestion.

But, it’s a long and winding road from theory to implementation. By the end of the trip, the plan that’s put in place often looks very different from the near perfection seen in textbooks. Along the way, policymakers see the dollar signs and shift the goals from minimizing congestion to maximizing revenues to feed their never-ending need for spending on policy priorities and pet projects. In the Portland region, there appears to be little appetite for using money raised from tolls to expand or improve the road network.

As plans progress, interest groups shift the focus from willingness to pay to ability to pay. If they get their way, the pricing scheme becomes less about reducing congestion and more about income redistribution. The way things are going, it’s likely the tolling schemes under consideration will look like nothing seen in a textbook, and roadway users will be worse off.

Recent research by ECONorthwest provides an indication of how much worse off Portland-area residents could be. The study, commissioned by Uber, estimates the costs and benefits of a tolling scheme under consideration in Seattle. The scheme would draw a line around the city of Seattle and charge every vehicle entering the cordon. The tolls would vary by time of day, based on projected congestion at those times.

The study estimates the time-saving benefits of reduced congestion against the costs of the tolls. It concludes that Seattle-area drivers would be almost $40 million a year worse off under the scheme they studied. In other words, the amount paid in tolls would be about $40 million more than the value of time saved from reduced congestion, not including rebates or benefits that could be funded by toll revenue.

While Portland-area policymakers give lip service to reducing congestion, the transportation policies they’ve put in place can only be described as congestion by design. “Road diets” such as lane reductions have choked off major arterials and sent drivers scurrying through side streets. Reduced speed limits have slowed traffic to a crawl in many areas. Speed bumps seem to be popping up faster than dandelions in spring.

Politics has a way of turning good ideas into bad policies. It’s very likely Portland-area politics will turn the good theory of congestion pricing into the bad practice of punishing drivers.

Eric Fruits, Ph.D. is Vice President of Research at Cascade Policy Institute, Oregon’s free market public policy research organization. This article appeared in The Oregonian on August 14, 2019.

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Metro: Where Temporary Means Forever

By Rachel Dawson

Milton Friedman once famously said that “nothing is more permanent than a temporary government program.” If Friedman were currently living in Portland, Oregon, it is likely he would instead be saying “nothing is more permanent than a temporary Metro tax.” The Metro Council unanimously voted in July to approve funding for planning and development grants supported by the regional government’s construction excise tax (CET) in the 2019-20 fiscal year. This CET is riddled with problems, including the removal of its sunset date and mission creep.

The CET was originally adopted by the region in 2006 as a temporary tax to support development planning for areas newly brought into the urban growth boundary (UGB). The tax is paid by anyone applying for a building permit for construction within the UGB, with some exceptions.

Its original sunset date was slated for 2009 or until Metro collected a certain amount of money. When asked if this was a permanent tax in 2006, Metro responded by saying, “No. This tax takes effect July 1, 2006, and will remain in effect until $6.3 million is collected.” This fund threshold was met and the original sunset date was passed, however, the CET was not allowed to die.

The CET was extended another five years until 2014, and again extended in 2014 until 2020. Instead of extending the CET once more, Metro voted to eliminate the tax’s sunset date in 2019, using its powers to create a continuous revenue stream. The resolution approved by the Metro Council states, “Collection of the excise tax will continue into the future until such a time as the Metro Council determines it is no longer necessary or effective.” Based on this language, the tax will never end, because Metro will never find such a flow of cash unnecessary.

It now appears that Metro has taken the liberty of shifting the scope and purpose of the tax, leading to mission creep. By the end of the CET’s original sunset date, the vast majority of the planning work the tax was established to carry out was completed. Metro no longer had enough projects to justify the tax’s existence.

Therefore, Metro expanded the scope of projects eligible for funding in 2009 so that tax revenue could be used for planning in existing urban areas in addition to the newly added territory. The purpose of the CET has again changed in recent years to prioritize “equitable development” projects within the UGB.

For example, Albina Vision Trust was awarded $375,000 for its community investment prospectus as part of Metro’s new equitable development category. Albina Vision Trust does not own any of the land referenced in its proposal. Rather, the project focuses on “community-based programming” and the “investment potential” of the lower Albina area. The desired project outcome is to pre-develop scenarios of what the community could look like and how the organization could maintain “social values” in Albina. The CET was originally created to plan development of land incorporated into the UGB, not to think about how a nonprofit can maintain social values in a neighborhood it does not own.

Metro’s approval of the Albina Vision Trust prospectus highlights another problematic change that has been made to the CET: Metro now has the authority to approve grants to private organizations instead of only to public entities. Metro should not be picking winners and losers by investing tax funds in ideas which may not be successful at the expense of other potential players.

Concerns regarding the CET do not stop there. Metro’s auditor concluded in a 2016 report that Metro has poorly managed use of CET funds. Administrative costs have increased since 2009, the program is becoming less aligned with regional planning priorities, and its regional impact is unknown. Furthermore, no performance measures were in place when the program was reviewed, and project monitoring was weak. For example, Metro amended funding of a project that was already largely completed and approved two different contracts that likely funded the same project.

Most area residents are unaware of Metro’s CET and its troubling history. This lack of regional oversight has allowed Metro to manipulate the CET to accommodate its wishes without regional approval or knowledge. The CET should have expired in 2009 when it raised the original amount of funding and completed the work it was created to support. If Metro wants to pay for other projects with CET revenue, it should go through the process of winning voter approval to create a new revenue stream.

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

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Portland’s City Council Wants Rent to Go Up

By Micah Perry

The Portland City Council recently passed a new ordinance that will require landlords to register all of their rental units with the city and pay a $60 yearly registration fee per unit.

While regulated affordable housing will be exempt, other types of rentals, like mobile homes, will still be subject to the fee. It is almost certain that landlords will pass on the increased costs to their tenants.

During one council meeting, current landlords noted that the registration fees will siphon money away that could be used for maintenance. They also said that increased housing regulations will discourage potential developers and landlords from wanting to build new rental units in the city. Many landlords are incentivized to sell their units, rather than rent them, because of the increased regulation.

The money raised by the fee will fund the Rental Services Office, a new, needless expansion of Portland’s bureaucracy that will only serve to grow the number of rules placed on housing in the city.

This ordinance adds to the long list of policies that disincentivize the operation and construction of rental units in Portland. If the Portland City Council keeps pursuing policies like these, rents will continue to go up and rental housing will continue to disappear.

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

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Oregon Distilleries Deserve Better

By Helen Cook

How much would you be willing to pay in taxes for your local business?

Thirty-three percent of total sales from Oregon distilleries currently goes to the Oregon Liquor Control Commission. This means, on average, that the state makes a greater profit from tasting room sales than the distillers making the product. In comparison, beer and wine crafters remit 0% of tasting room sales to the state.

Oregon is a “Liquor Control State.” This means that all liquor is owned by the state, entitling it to a certain percentage of each liquor sale. The revenue that distillers do receive from tasting room sales is actually a commission for selling the state’s liquor.

Distilleries are struggling to stay afloat because of this control system. In fact, Cannon Beach Distillery recently decided to close rather than pay remittance to the state. Others are worried they might have to do likewise.

Granting distillery tasting rooms the same privileges as the beer and wine industries could be what keeps craft distilleries in Oregon from disappearing. Oregon distilleries deserve better.

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

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Think TriMet’s New Electric Buses Run on Wind Power? Think Again.

By Rachel Dawson

TriMet unveiled five new battery-electric buses (BEBs) in April 2019, the sides of which all donned images of windmills and sweeping gusts of wind. The BEBs each cost around $1 million, nearly twice as much as a traditional diesel bus. And these buses are just the beginning: The TriMet board voted last year to replace the entire fleet with battery-electric buses for $1.18 billion by 2040, a $500 million premium over a diesel fleet.

TriMet has been hailed an environmental hero for “riding the winds of change.” TriMet Spokesperson Roberta Altstadt claimed that TriMet was the first in the United States to “operate an electric bus on 100% renewable energy.” Without further research, it would be easy to think that TriMet’s new buses ran on clean wind energy. And that is exactly what TriMet is hoping you would think. But you would be wrong.

If the buses don’t run on 100% wind power, how is TriMet able to get away with saying they do?

TriMet spends $228.75 per month on what are known as renewable energy certificates (RECs) from PGE. RECs are a tradable commodity sold by renewable energy facilities (such as wind farms) to the wholesale market, that purport to represent the “environmental amenities” of certain renewable energy projects. By purchasing the RECs, TriMet has bought the legal right to claim it is using renewable energy; however, the agency has not purchased any energy itself.

This would be like my paying someone else to exercise at the gym for me, and then telling my family and friends I go to the gym. The person I pay reaps both financial and physical benefits while I merely get to pretend I have them.

Supporters of RECs claim the certificates offset fossil fuels and pay for the generation of new renewable energy. However, these claims are not entirely accurate. 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.” The income generated from RECs does not come close to the millions needed to construct more wind turbines, which means that RECs themselves don’t offset fossil fuels.

Despite its claims, it would be impossible for TriMet to run on 100% wind power unless it disconnected from the regional mixed grid and hooked up to its own personal wind farm. Even then, TriMet would be forced to rely on other backup power sources due to the volatility of wind generation.

While a wind turbine may be available to produce energy around 90% of the time, the average wind farm in the United States in 2018 had a capacity factor of only 37.4%. The capacity factor refers to the amount of energy produced in a year as a fraction of the farm’s maximum capacity. Wind farms produce electricity when winds reach about nine miles per hour and stop at roughly 55 mph to prevent equipment damage. If the wind isn’t blowing (or isn’t blowing strongly enough), little to no power can be generated.

This poses problems, as the electrical grid requires constant equilibrium or blackouts will result—power supply must meet energy demand. Every megawatt of wind power has to be backed up by an equal amount of traditional, “non-green” sources like coal and natural gas to account for times when wind energy isn’t generated. This would be like keeping a car constantly running at home in case the one you’re driving on the road fails.

Instead of a wind farm, TriMet receives its electricity from Portland General Electric, the same mixed grid your home is likely powered by. In 2020, this mixed grid will be made up of 37% natural gas, 28% coal, 18% hydro, 15% renewables, and 2% purchased power (power purchased on the wholesale market). Since wind only makes up a portion of renewables used by PGE, less than 15% of the electricity used by the “wind” buses is powered by wind. A greater percentage of the electricity used by TriMet’s BEBs comes from coal plants than wind farms.

If TriMet were honest with its riders, it would replace the windmills on the sides of the new buses with coal, natural gas, and hydroelectric power plants. In the name of accuracy, TriMet could place a windmill in the corner, demonstrating the small percentage of power generated by wind farms.

So instead of riding the “winds of change,” keep in mind that you’re just riding a really expensive bus.

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

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Charter Schools Create Diverse Choices for Students with Different Needs

By Miranda Bonifield

Parents know the educational needs of their children are as diverse as they are. As Lance Izumi notes in his new book Choosing Diversity, families use the flexibility of charter schools to cater to their students’ unique needs. Some choose classical schools rooted in the Socratic method, while others seek out technical schools which cater to students’ individual learning styles. And for some kids experiencing homelessness, charter schools can provide a point of stability and hope.

Transient housing may have a lifelong impact on educational outcomes for the estimated 22,000 students in Oregon who statistically fall behind in grades and graduation rates. When a student’s address is constantly shifting, it is difficult to feel secure enough to keep learning.

Enter charter schools like Life Learning Academy in San Francisco. Instead of falling through the cracks as they might in a traditional public school, at-risk students are given the specialized attention and consistency they need. Students come to Life Learning Academy with low grade point averages and low self-confidence. They leave not only prepared for college, but with the skills they need to succeed as independent adults. As one student put it, “a little bit of care and positivity can change your life.”

School choice helps students from all backgrounds to find successful educational paths to a healthy and bright future.

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

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Why Is Oregon Centrally Planning the Cannabis Industry?

By Vlad Yurlov

Does the cannabis industry need central planning? The Oregon legislature thinks so.

On June 17, Governor Kate Brown signed a bill allowing the Oregon Liquor Control Commission to limit the number of marijuana production licenses, “based on the supply and demand for marijuana.” Senate Bill 218 actually declares the production of large amounts of cannabis an “emergency”—a legislative convention suggesting the issue at hand deserves immediate government intervention.

As cannabis businesses have increased in number, the price of legal weed has decreased. Lawmakers’ concern is that when marijuana supply is greater than demand, Oregon growers will turn to the black market and illegal interstate trade.

But the existence of a greater supply than demand for a product is not an emergency. A local cannabis grower recently stated that large supply has created “an intense pressure to come up with a really great product, to set yourself apart.”

Law enforcement should be responsible for ensuring growers comply with laws governing marijuana sales. Oregon already has statutes governing Cannabis Regulation, so why is the legislature turning to Soviet-style economic planning?

The government shouldn’t centrally plan business activities. Let law enforcement do its job, and let businesses succeed or fail on their own merits.

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

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WES at 10: Time to Admit Failure

By John A. Charles, Jr.

TriMet recently marked the ten-year anniversary of the Westside Express Service (WES), the 14.7-mile commuter rail line that runs from Wilsonville to Beaverton. Sadly, there was little to celebrate. WES ridership has been falling steadily since 2014, and there is no prospect that the line will ever meet the opening year forecast of 2,500 average daily boardings.

At the groundbreaking for WES in March 2007, then-Sen. Rod Monroe (D-Portland) gushed, “Wilsonville is jobs rich…the train will be full both ways…morning and afternoon. That is absolutely unique.”

It might have been unique if it had happened, but it had no connection to reality. Average daily ridership peaked in 2014 at 1,964 daily boardings, then dropped in each successive year. During Fiscal Year 2019, WES daily ridership has averaged only 1,505.

A central problem is that WES never had a clear mission; it was always a project in search of a purpose. At various times the train was promoted as: (1) a congestion relief tool for HWY 217; or (2) a catalyst for so-called “Transit-Oriented Development.” Neither of these arguments made sense.

During legislative hearings in Salem, representatives from Washington County claimed that WES would take 5,000 motor vehicles per day off nearby highways. But WES is not even capable of doing that because it only runs eight times (each direction) in the morning, and eight more times in the afternoon. And unlike traditional commuter trains pulling eight or nine passenger cars, WES travels only in one-car or two-car configurations. The train stations themselves are so short that even if TriMet started running eight-car trains, most passengers would have no way to get on or off.

Moreover, WES crosses more than 18 east-west suburban arterials four times each hour. On busy commuter routes, such as HWY 10, each train crossing delays dozens of vehicles for 40 seconds or more. Since the train itself typically only carries 50-60 passengers per run, this means that WES has made Washington County congestion worse than it was before the train opened.

WES has not been a catalyst for “transit-oriented development” and never will be. Train stations are noisy, and zoning restrictions would limit residential parking—even though new residents would need automobiles because it would be almost impossible to travel entirely by commuter rail.

WES was originally projected to cost $65 million and open in 2000. It actually cost $161.2 million and opened in 2009. The WES operating cost per ride in May 2019 was $18.21, roughly 4.5 times the cost of average TriMet bus service.

In June 2016, TriMet staff persuaded the Board to approve the purchase of two used rail cars to expand the WES fleet. The estimated cost for the purchase was $1.5 million, plus $500,000 more for retrofitting. At the time, TriMet claimed that this purchase was necessary to satisfy the “expected demands for growing WES service.” That demand was a fantasy.

When passenger rail forecasts fail to materialize, government planners tend to complain that “we just need more time.” After ten years, the clock has run out on WES. There are no more plausible excuses; it is simply a planning failure.

Taxpayers would be better served if we canceled WES, sold off the train cars, and moved the few commuter rail customers back to buses.

John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free market public policy research organization. A version of this article appeared in The Portland Tribune on July 18, 2019.

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You and Your Car: Portland Public Enemy No. 1

By Micah Perry

Driving around Portland could get a lot more expensive. The Portland City Council just passed a resolution to create an “equitable mobility task force” to study how imposing steep new fees on city drivers could reduce congestion.

Proponents say the fees will help Portland meet its carbon reduction goals. They also claim that, by increasing the cost of driving and parking, low-income residents and people of color will be better off. Ironically, the city itself noted that “65% of peak car commuters in Portland are medium or low income,” meaning any new fees will actually hurt the communities they seek to help.

Fees being considered include increased parking prices, Uber or Lyft surcharges, a mileage tax, and tolls to enter certain areas of the city. This shouldn’t come as a surprise to most, as Portland frequently pursues anti-car policies, such as a citywide gasoline tax, a reduction in street parking downtown, and the city’s notorious “road diets,” which essentially create congestion by design.

If Portland truly cared about easing congestion amid a growing population, it would add lanes wherever possible. And, rather than try to tax people out of their cars, the city should reevaluate its approach to transit and create a public transportation system that can be attractive to commuters without having to resort to coercion.

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

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Congestion by Design on the New Sellwood Bridge

By John A. Charles, Jr.

Portland-area motorists who have to regularly cross the Sellwood Bridge may wonder why the new structure is twice as wide as the 1925 bridge, yet has the same number of travel lanes. The answer is simple. Portland transportation planners don’t want to solve traffic congestion problems; they prefer to make them worse.

We know this because 20 years ago, Metro published a report entitled the “South Willamette River Crossing Study” (SWRCS), which examined the long-term bridge needs in the stretch of the Willamette River from the Marquam Bridge down to Oregon City. The study found that by 2015, levels of traffic congestion on those bridges would be at “unacceptable or grossly unacceptable levels” if new capacity wasn’t provided.

The study also looked at numerous potential sites for a new bridge but ultimately recommended that no new crossings be constructed. The Metro Council decided instead to focus on “transportation demand management” (TDM) to address the growing congestion.  TDM is an amorphous concept utilizing public relations campaigns and regulatory mandates to encourage drivers to shift to other modes of travel.

Once the decision by Metro was made to place a freeze on new bridge capacity, it was easy for the City of Portland to implement a new policy downsizing Tacoma Street in Sellwood from a four-lane arterial to a two-lane “Main Street,” with lower speed limits. That made it politically impossible for Multnomah County, owner of the Sellwood Bridge, to replace the aging structure with a four-lane bridge.

The decision to build a new bridge was made in 2006, and construction began in 2012. The design featured two 12-foot-wide travel lanes for motor vehicles, two 12-foot-wide sidewalks, and two bike lanes. All the proponents claimed that dedicating more through-capacity for cyclists and pedestrians than vehicles would create a world-class, multi-modal showpiece that would finally tame the automobile and shift drivers to other modes.

In fact, when a USDOT official spoke at the groundbreaking ceremony while presenting an oversized check for $17 million, she told the audience, “We looked all over the country for the best projects, and I have to say, the application for the Sellwood Bridge project knocked it out of the park!”

Unfortunately, all of the hype turned out to be wrong. Extensive monitoring by Cascade Policy Institute over the past three years shows that on a typical day, motor vehicles account for 95% of all passenger-trips. Transit gets about 2%, and walking/cycling combined garner the final 3%. Traffic congestion is growing worse by the month because regional population is growing and the bridge infrastructure has not kept pace.

With a price tag of $328 million, the new bridge is 43 times more expensive than the original; but it’s not 43 times more useful. In fact, it’s less useful, because trucks are not allowed and TriMet never restored the promised transit service.

Metro’s no-growth policy was a predictable failure. It’s time for the Metro Council to admit the mistake, and begin a new planning process with the goal of building at least one new bridge for motorists in the South Willamette River Corridor.

John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free market public policy research institute. A version of this article appeared in The Portland Tribune on July 11, 2019.

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Fresh Spinach for Indifferent Students: Oregon’s Costly Farm-to-School Program

By Helen Cook

When did you last hear a child profess his love for spinach?

Oregon’s Farm-to-School program awards grants to school districts across Oregon to give them the funds needed to purchase fresh foods from local farms and vendors. Advocates hope that by using the words “fresh” and “local,” K-12 students will nurture a healthier taste for fruits and veggies. This hope prompted legislators to budget almost $15 million for the program at the end of the 2019 session.

This is a significant increase from the program’s $200,000 budget in 2012, largely because legislators rephrased the bill to allow entities separate from Oregon school districts to accept grants. This technical rewording allows for summer meal programs, nonprofits, and even the local vendors selling food to the districts to accept grant money.

But frozen foods benefit students more than local produce does. Frozen fruits and veggies have equal or superior nutritional value and lower costs. This is important for school districts who prepare meals by the thousands.

Since the program’s main benefit is not Oregon’s students, I suggest the state reevaluate the expensive Farm-to-School program to be more cost-effective and call this current grant program what it is: a subsidy for local vendors.

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

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Portland’s Clean Energy Tax: A High Cost with Low Benefit

By Rachel Dawson

In January 2019 the City of Portland implemented a voter-approved a 1% tax on certain “retail sales” within Portland to fund clean energy projects and jobs training. This tax will be applied to retailers with $1 billion or more in total sales, $500,000 of which must be from within Portland city limits. Retailers can pass the cost of the tax along to the purchaser of the good or service. Thus, it is likely consumers—not retailers—will ultimately be paying for it. Once collected, these funds will be administered by the Portland Clean Energy Fund.

Despite claims that the Portland Clean Energy Fund is unique, the energy efficiency projects funded by this tax are already being completed by the Energy Trust of Oregon (ETO) and Oregon Housing and Community Services through a surcharge on ratepayers’ utility bills. In some cases, the Portland Clean Energy Fund will be triple-taxing Portland utility ratepayers.

Approximately 40-60% of funds will be allocated to clean energy projects including renewable energy, conservation, and green infrastructure for residential, commercial, and public school projects. At least one half of clean energy project funds must benefit low-income residents and minorities. The Portland Clean Energy Fund will also be used to help Portland meet its goal of using 100% community-wide electricity from renewable sources by 2035.

Many voters believed this tax would only affect large retailers. However, senior deputy city attorney Kenneth McGair admits the tax will affect public works projects and construction equipment wholesalers, as well as disability insurance plans and insurance policies. The only exempt transactions will be groceries, medicine, and health care services. Due to its impact on construction, this tax will increase the cost of taxpayer funded projects such as affordable housing.

While 1% may seem like a small amount, it will add up to millions of dollars when applied to high-cost construction projects. For example, the tax will add an estimated $2 million to Lincoln High School’s $200 million renovation costs.

Voters may be unaware that they are already paying for similar clean energy projects through a surcharge on their utility bills known as the Public Purpose Charge (PPC). The tax rate from the PPC has grown to over 6% for many electric utility customers and up to 5.8% for ratepayers who consume natural gas.

ETO uses funds from the surcharge to support energy efficiency projects for low-income families (low-income weatherization), rehabilitation and construction of low-income housing, above-market renewable energy, and energy conservation and market transformation. Not only will the Portland Clean Energy Fund be completing similar projects to ETO’s, but ETO projects that involve construction, such as their affordable housing and school green infrastructure projects, will now be further taxed to support energy efficiency. Some ETO ratepayer-funded clean energy projects will be taxed to further fund clean energy projects. And many Portland area residents will be caught paying for both.

In addition to the ETO, the Oregon Housing and Community Services (OHCS) agency also benefits from the PPC surcharge to fund additional low-income weatherization projects, arguably the same demographic the Portland Clean Energy Fund aims to help.

One of these tax programs should be repealed: either the Portland Clean Energy Fund or the Public Purpose Charge. Doing so will ensure that Portland residents are not double- or triple-taxed for multiple programs that provide the same services.

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

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Public Debt for Public Housing

By Vlad Yurlov

In the 2018 general election, voters approved a bond measure that enabled Metro to borrow about $652 million for low-income public housing in the tri-county area. This money will be given out to localities within Metro. With the minimum of 3,900 housing units to be built, the price-tag would be more than $165,000 per unit.

When pressed for completion times for this project, a high-level Metro staffer stated new units can be expected to be used in eight to ten years. This schedule should not surprise anyone who has dealt with government bureaucracies, but a decade is a long time to wait for a crisis we’re having today.

For comparison, more than 6,700 housing units were constructed per year between 2010 and 2018 in the tri-county area, based on the U.S. Census Annual Housing Estimates. This means that even a target of 3,900 units would be roughly 60% of just one year’s worth of private construction. In addition, if Metro does build homes, private companies have less incentive to build, thereby compounding the current crisis.

A good government delivers public services on time and on budget. Right now, Metro is taking the bucks, without making much of a bang.

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

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Portland’s Ill-Considered Climate Action Tax

By Micah Perry

Last fall, Portland voters approved a new 1% tax on large retailers to help the city achieve the goals of its Climate Action Plan. This measure has had serious consequences for Portland businesses.

Before the vote, proponents of the new tax described large retailers as places like Walmart or Fred Meyer. But, according to Dan Drinkward of Hoffman Construction, the city’s implementation of the measure “has gone beyond the clear intent of the measure as it was communicated to voters.”

Because of the measure’s broad language, many construction companies are defined as retailers and will have to pay the tax. Their clients will ultimately bear the cost increases—clients like Portland Public Schools, low-income housing developers, and the City of Portland itself.

Portland’s schools will especially suffer. The district’s projects have already increased in price because of the tax, with the Lincoln High School rebuild now costing an extra $2 million.

While certain foods, medicines, and health care services are exempt, other necessities like clothing and toiletries are subject to the tax, making Portland’s cost of living even higher, especially for low-income residents.

It would only take three commissioners from the Portland City Council to revise or repeal this poorly-thought-out tax. For the sake of the city, Portland’s voters must call on them to do so.

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

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Metro Wants More Money—For Parks You May Never See

By Helen Cook

How much would you be willing to spend to buy parkland that would ban your dog?

Metro hopes Portland area taxpayers will spend $475 million to buy land kept from public use for many years. That’s the purpose of a Metro bond measure on the ballot in November.

Much of the new tax money would go to acquiring natural areas that will be unusable by the public for an unspecified amount of time. If this feels like déjà vu, that’s because Metro passed a similar bond measure in 2006.

Rather than let the previous tax increases sunset, Metro wants more money, ostensibly to create parks for historically underserved communities. But much of the land Metro plans to buy is located far from the communities it’s intended to serve.

Metro also claims the new bond measure won’t increase taxes. This is not true. If the bond measure fails, property owners’ tax bills will go down. A “yes” vote is a vote for higher taxes. A “no” vote will save the average homeowner about $48 a year.

Metro’s new bond is neither the beginning nor the end of a cycle of buying remote natural areas that won’t allow recreational uses. Make sure to look for this measure on your ballot in November and vote no.

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

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Oregon Legislator to Oregon Business: “Let ‘em Leave!”

By Eric Fruits, Ph.D.

“Let ’em leave. Someone else’ll come in.” That was Oregon state senator James Manning’s response when told that new business taxes will cause some firms to leave the state.

Unfortunately, the senator is not alone with the let-them-leave attitude. That seems to be the attitude of the supermajority in the legislature as well as the city of Portland, who have both recently passed massive business taxes.

The legislature just passed a billion dollar a year “corporate activities tax.” The new tax is triggered once a business hits one million dollars in sales. This may seem like a lot to a legislator; but many small businesses such as restaurants, retailers, and consulting firms can easily generate a million dollars in sales. In fact, the Census Bureau reports about a quarter of Oregon employers have sales of a million or more a year. Thousands small firms will be subject to thousands of dollars in new sales taxes on top the income taxes they already pay.

Last year, Portland voters approved their own tax on business revenues, with money earmarked for so-called clean energy projects. Firms who thought they were exempt are now learning that they, too, will face a steep tax bill.

These new taxes will be a good test of Senator Manning’s let-them-leave theory, as owners look to other states for a better business environment. However, I’m not confident someone else will come in to replace the ones that leave.

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

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SW Corridor Project: A Net Negative for the Environment

By John A. Charles, Jr.

Portland politicians claim to be concerned about carbon dioxide emissions and climate change. That’s why so many of them support TriMet’s proposed 12-mile light rail line from Portland to Bridgeport Village near Tigard. They think it will reduce fossil fuel use.

Their assumptions are wrong.

According to the Environmental Impact Statement (EIS) for the project, energy used during construction of the rail project will equal 5.9 trillion Btu. Much of this will be in the form of fossil fuels needed to power the heavy equipment. Additional energy will be used to manufacture the rail cars, tracks, and overhead wires.

The EIS claims that the negative environmental consequences of construction will be made up by energy saved from operations of the train. However, the operational savings are so small it would take 61 years to mitigate the carbon dioxide emissions of construction.

2035 Daily Vehicle Miles Traveled and Energy Consumption 

Vehicle Type Daily VMT – No build option Million Btu/Day – No build option Daily VMT

With Light Rail

Million Btu/Day

With Light Rail

Passenger vehicle 51,474,286 249,084 51,415,071 248,798
Heavy-duty trucks 3,389,982 73,132 3,389,288 73,117
Transit bus 100,122 3,546 97,501 3,453
Light rail 19,189 1,247 21,200 1,377
TOTAL 54,983,579 327,009 54,923,060 326,745

                                          Source: Draft EIS, SW Corridor Project

Unfortunately, all of the light rail cars will need to be replaced before then. Building new cars will require more energy, resulting in additional CO2 emissions and a longer payback period.

Light rail is not a solution to a perceived climate change problem; it IS a climate change problem. Any further planning for the SW Corridor project should be terminated.

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

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The New Sellwood Bridge: Promises Unfulfilled

By John A. Charles. Jr.

Executive Summary

Portland has an international reputation for successfully integrating land-use and transportation planning. The primary goals of such planning are to limit the physical size of the city and reduce the daily use of private motor vehicles by encouraging alternative modes of travel.

Many transportation policies have been developed in support of these goals. One of the most visible has been the policy of slowing vehicle speeds through “traffic calming” and “road diets.” Advocates claim that reducing road capacity for motor vehicles has only minor effects on travel time. They also assert that future demand for road space can be mitigated through mode-shifting from single-occupant driving to walking, biking and transit.

In the late 1990s the Sellwood Bridge and its eastside connector, Tacoma Street, provided a perfect opportunity to test both the concept of integrated planning as well as the strategy of implementing a road diet. The original Sellwood Bridge opened in 1925, and over the next 60 years it became the most heavily traveled two-lane bridge in the state. By the mid-1980s the Bridge was badly in need of either major remediation or replacement.

Multnomah County, which owned and operated it, imposed vehicle weight limits in 1985 and again in 2004. After the second reduction, all heavy vehicles (including transit buses) were prohibited.

With traffic levels continuing to rise, it was clear that Multnomah County needed to either build a wider replacement bridge or a two-lane replacement plus another bridge nearby to the south. Local planners, however, believed the Portland region to be overly reliant on the private automobile and decided to place a moratorium on any new Willamette River bridge capacity. They assumed that if the region simply stopped building bridges, they could persuade people to switch from driving to some other mode.

Soon thereafter, the City of Portland undertook a study of Tacoma Street in the Sellwood-Moreland neighborhood, with the goal of making it more pedestrian-friendly. The result of that process was a recommendation to downsize Tacoma from a four-lane collector to a two-lane “Main Street,” even though Tacoma was already a two-lane road except for four hours each weekday – 7-9 a.m. and 4-6 p.m. – when street parking was disallowed so that traffic flowing to and from the bridge could move faster. Striped crosswalks were also recommended in three locations between SE 6th and 13th, to allow pedestrians to safely cross mid-block.

Tacoma Street was put on a “road diet” in 2002, in which two travel lanes in each direction became one travel lane each way along with a center turn lane.  These changes meant the Sellwood Bridge replacement would also inevitably be limited to two traffic lanes. While the new bridge was designed to be more than twice as wide as the original, more than half the through-lane capacity was allocated to non-motorized uses. The County made this decision even though 98% of all peak-hour passenger-trips on the old bridge had taken place in motorized vehicles.

The new Sellwood Bridge opened for travel in February 2016. The north side cycling/walking facilities were open, but the south side bikeway and shared-use sidewalk did not open until 2017.

Now that the bridge has been fully operational for more than two years, it’s possible to measure actual travel patterns and compare them with the forecasted results. It turns out that the transportation planners were wrong in their prediction of how future travel needs would be met.

Traffic congestion is worse than before. Cycling and walking levels have not gone up as predicted, and transit service is far below the levels promised in the planning documents. Moreover, peak-hour vehicle throughput on the bridge has been permanently reduced due to new traffic signals at either end of the bridge and lowered speed limits.

Since bridge “supply” was reduced but motorized travel “demand” went up with population growth, motorists have increasingly resorted to cutting through side streets north and south of Tacoma in order to gain access to the bridge. In fact, the Tacoma Street downsizing made this practice easier by creating a middle turn lane that creates shelter for motorists trying to enter the traffic queue from side streets. This has degraded the quality of life for nearby residents.

Although the new Sellwood Bridge was marketed as a cutting-edge example of the Portland commitment to “multi-modalism,” the bridge itself is not even a multi-modal facility. Heavy trucks are prohibited, and there is no bus service most of the time. Average daily travel is actually more reliant on the private automobile than it was in 1993.

This paper examines the rationale for putting the Sellwood Bridge/Tacoma Street corridor on a road diet and compares actual travel data with pre-construction forecasts. It offers a cautionary note for city leaders who are planning for growth by shrinking important arterials such as Naito Parkway, Foster Road, and NE Broadway.

READ THE FULL REPORT

John A. Charles, Jr. is President and CEO of Cascade Policy Institute, a position he has held since 2004. He received a BA degree with honors from University of Pittsburgh and an MPA degree from Portland State University. He has been writing about transportation policy for more than 30 years. The focus of his research is utilizing field studies to determine how the built environment influences urban travel behavior. He has co-authored case studies of transit-oriented developments in the Portland region related to the South Waterfront district, Hillsboro’s Orenco Station, and Steele Park in Washington County. His most recent paper is entitled, Why Cities and Counties Should Consider Leaving TriMet.

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Press Release: Multi-year case study of Multnomah County’s Sellwood Bridge explains the history behind worsening traffic congestion in the SE Portland bridge corridor

June 6, 2019

FOR IMMEDIATE RELEASE

Media Contact:
John A. Charles, Jr.
503-242-0900
john@cascadepolicy.org

PORTLAND, OR – Today Cascade Policy Institute released the results of a seven-year case study of the Sellwood Bridge reconstruction, The New Sellwood Bridge: Promises Unfulfilled.

The evidence shows that even though the new Sellwood Bridge is more than twice as wide as the original bridge, it moves fewer people at peak hours. Moreover, use of the bridge by cyclists and pedestrians has not increased significantly, despite the generous facilities provided for them.

As a result, traffic congestion in the bridge corridor is worse than it was in 2012, and cut-through traffic in the Sellwood neighborhood has seriously degraded the quality of life for those living and working there.

The increase in traffic congestion was actually planned for by Metro more than 20 years ago, when the regional agency placed a moratorium on any new Willamette River bridge capacity for motor vehicles between the Marquam Bridge and Oregon City. Metro believed that if a bridge cap was imposed, significant numbers of people could be diverted from auto travel to biking, walking, or transit.

Their assumptions were wrong. During two years of intensive field monitoring by Cascade Policy Institute, the combined travel share for biking and walking never exceeded three percent, as shown below:

Sellwood Bridge Travel Patterns, 2017-18

Based on hourly sampling

Year Total observed passenger-trips Auto share Transit share Bike share Pedestrian share
2017 13,593 95.1% 2.2% 2.2% 0.5%
2018 19,888 95.2% 1.9% 2.4% 0.6%

 

Although the new Sellwood Bridge was marketed as a cutting-edge example of the Portland commitment to “multi-modalism,” the bridge itself is not even a multi-modal facility. Heavy trucks are prohibited, and there is no bus service most of the time. Average daily travel is actually more reliant on the private automobile than it was in 1993.

According to Cascade Policy Institute President John A. Charles, Jr., who directed the study,

“Portland-area planners have long believed they could change travel behavior by starving the road system while promoting alternative modes such as transit, walking, and biking. The evidence from the Sellwood Bridge reconstruction shows that wider sidewalks are not a substitute for increased road capacity.”

John Charles is President and CEO of Cascade Policy Institute and has written about transportation policy for more than 30 years. The focus of his research is utilizing field studies to determine how the built environment influences urban travel behavior. Charles received a BA degree with honors from University of Pittsburgh and an MPA degree from Portland State University.

The full report, The New Sellwood Bridge: Promises Unfulfilled, can be downloaded here.

Founded in 1991, Cascade Policy Institute is Oregon’s free-market public policy research center. Cascade’s mission is to explore and promote public policy alternatives that foster individual liberty, personal responsibility, and economic opportunity. For more information, visit cascadepolicy.org.

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Testimony of Kathryn Hickok Before the Senate Education Committee Regarding SB 668 Education Savings Accounts

June 5, 2019

Chair Wagner and Members of the Committee, my name is Kathryn Hickok. I’m Executive Vice President at Cascade Policy Institute, a nonpartisan policy research organization.

Education Savings Accounts empower parents to customize their children’s education in the ways that are best for them as individual students. ESAs are a “ticket to the future”—today—for every child to find the right fit, to find his or her spark for learning, and to succeed in school and in life. More choices mean more opportunities.

ESAs are government-authorized savings accounts with restricted but multiple uses. ESA programs deposit a percentage of the per-student state education funding allocation into an account, from which the family pays for approved education expenses.

Unused funds may be “rolled over” for subsequent years, including post-secondary education or training within the state of Oregon.

Arizona, Florida, Mississippi, North Carolina, and Tennessee are operating ESA programs today. Senate Bill 668 would create an Education Savings Account program here in Oregon.

Unlike voucher programs, ESAs give parents the flexibility to spend education funds on more than just private school tuition. Depending on the specifics of legislation, other approved uses can include textbooks, AP and online classes, tutoring, testing, dual-enrollment courses, homeschool expenses, and education-related fees.

Some ESA programs operate like controlled-use debit cards, which ensure parents pay only for legitimate education expenses.

Critics sometimes express concern that ESAs would remove funding from the public school system; that parents wouldn’t be held accountable; that non-public schools are not held to the same regulatory standards as public schools; or that ESAs mean “public dollars would be used for private purposes.”

Proponents of ESA programs take these concerns seriously. Senate Bill 668 was designed to address them.

Kathryn Hickok is Executive Vice President at Cascade Policy Institute, Oregon’s free market public policy research organization.

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SB 668 Testimony Before the Senate Education Committee on Education Savings Accounts Kathryn Hickok 6-5-19

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Metro Transportation Funding Task Force Testimony

By John A. Charles, Jr.

At the last meeting, there was a fair amount of discussion about how the proposed bond measure should be structured to reduce GHG emissions from the transportation network.

If that is the direction the committee prefers, then it implies that the bond measure should not fund any road expansion projects. But it also has implications for light rail construction.

According to the Draft Environmental Impact Statement (DEIS) for the SW Corridor project, the estimated energy consumption during construction of light rail will be 5,886,876 million Btu. The DEIS also asserts that the “one-time energy use required to construct the Light Rail Alternative would be offset by the project’s long-term, beneficial operational impacts.”

To determine if this is true, we can look at the estimated daily energy savings from rail operations. On page 4-129 of the DEIS, the following information is presented:

2035 Daily Vehicle Miles Traveled and Energy Consumption

Vehicle Type Daily VMT – No build option Million Btu/Day – No build option Daily VMT

Light Rail option

Million Btu/Day

Light Rail option

Passenger vehicle 51,474,286 249,084 51,415,071 248,798
Heavy-duty trucks 3,389,982 73,132 3,389,288 73,117
Transit bus 100,122 3,546 97,501 3,453
Light rail 19,189 1,247 21,200 1,377
TOTAL 54,983,579 327,009 54,923,060 326,745

 

Since the energy savings from light rail operation compared with the base case are quite small, it would take 61.09 years to overcome the GHG deficit caused by construction. Also, the useful life of the equipment is likely to be only 40 years, so replacing all the light rail cars and track system would create another energy deficit.

If you asked the Energy Trust of Oregon for a grant to install an energy conservation project with a 61-year payback, they would probably reject your request. Cost-effective energy efficiency projects need to have a payback period that is less than the lifespan of the equipment.

Given the over-riding goal of GHG reduction, I recommend that bond expenditures be limited to bike and pedestrian projects only. Among other things, this would drop the total cost by about 90%, which would greatly increase the chance of voter approval.

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Metro Transportation Funding TF.testimony

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Taxpayers Should Demand Accountability Before Passing (Another) Metro Bond Measure

By Miranda Bonifield

Last November, Metro gained approval from Portland voters to borrow $652 million for low-income public housing projects. In 2020, they’ll ask for $850 million for a light rail project.

This year, the regional government is proposing a $475 million bond measure to fund parks and nature projects. While Metro argues this is not a tax increase, the reality is that borrowing $475 million will cost taxpayers over $800 million between principal and interest payments. And judging by precedent, Metro will ask for additional funds before they’ve completed the projects currently on their roster. Metro has owned its largest nature park, Chehalem Ridge, for nearly a decade without making it accessible to the public—making it a nature project, but not a park. Metro continually asks voters to pay full costs without delivering full benefits.

In 2016, Metro persuaded voters to approve additional funding for similar projects despite concerns that the regional government ought to make smaller demands and demonstrate its reliability. While audits have found some improvements since 2016, Metro still struggles to demonstrate measurable benefits from the thousands of acres they already possess.

The Metro Council will be finalizing the bond language and hearing public testimony in their Portland headquarters at 2 p.m. on June 6. Voters should require accountability and consistency from Metro before indebting ourselves for another twenty years.

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

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Carbon Regulation: Another Legislative Circus

By John A. Charles, Jr.

According to the state’s Global Warming Commission, Oregon has already met its goal of reducing per-capita carbon dioxide emissions to levels that are 20% below 1990 emissions by the year 2020. In fact, we met the goal four years ago.

Are state legislators celebrating this achievement? Not at all. They are too busy rolling out a 98-page bill that will establish a statewide limit on carbon dioxide emissions, designed to make energy more expensive. The bill also repeals the CO2 goal that we’ve already met and imposes a more stringent one: to reduce emissions to 80% below 1990 levels by the year 2050.

Why change the goal? Because proponents of the bill don’t care about results. They always want aggressive sounding goals with distant timelines, in order to give themselves bragging rights about how visionary Oregon is in restricting the use of fossil fuels.

Most of the costs are backloaded to occur after 2030, when electric utilities will be forced to buy a shrinking number of carbon dioxide allowances. At that point, electricity bills will start going up. But you won’t be able to blame politicians, because most of the legislators voting for the bill this year will be out of office by then. That’s how it always works.

We’ve already met the state goal for CO2 reduction. Legislators should leave us alone.

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

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Is Oregon Really “Disinvesting” in Education?

By Eric Fruits, Ph.D.

The Portland Association of Teachers declares Oregon has suffered “a 30-year disinvestment in education.” That’s a bold charge. Thirty years is a long time, and disinvestment is a strong word.

To disinvest literally means “to reduce or eliminate” investment. Is it true that Oregon has reduced investment in public schools over 30 years? No.

Multnomah County’s Tax Supervising and Conservation Commission has been tracking school spending in the Portland area for more than 30 years. A review of Portland Public Schools spending since 1985 shows that per student spending in Oregon’s largest school district has steadily increased over the past 30 years, as shown in the figure below.

Over the past three decades, both total spending and spending on instruction at PPS have grown faster than the rate of inflation. In recent years, Portland schools have spent about $30,000 per student, with almost $8,000 per student spent on instruction.

 

Portland Public Schools spending in dollars per student

Since the last recession, PPS total spending has accelerated. Voters in the district have approved nearly $1.3 billion in construction bonds since 2012. In 2011 and 2014, voters approved and renewed a local option property tax increase for Portland schools. Another renewal of the $95 million tax is expected to be on the ballot this year.

In Oregon, total expenditures per student were $13,037 in 2016, the most recent year for which information is available from the U.S. Census Bureau. Oregon is exactly in the middle of the state rankings of per student total expenditures. Six states, including Oregon, Washington, and California, have per student spending that is within five percent of the national average. Total expenditures include salaries, employee benefits such as health insurance and PERS, supplies, and debt service, among other things.

According to the state’s Legislative Revenue Office, annual state and local education spending in Oregon has increased by about $1.7 billion over the past ten years. This amounts to $2,350 in increased spending per student and has greatly outpaced the rate of inflation.

Despite Oregon’s smack-dab-in-the-middle per student spending, the state ranks near the bottom in graduation rate, produces mixed results on standardized tests, and has the sixth-highest student-teacher ratio in the U.S.

These dismal outcomes are not the result of disinvestment; they are a result of misinvestment—a diversion of education spending away from classroom teaching.

The Public Employee Retirement System and other benefits are the biggest drivers of Oregon’s education finance problems. The cost of paying for public employee retirements has doubled over the past ten years. In 2009, school districts paid approximately 15% of payroll to fund PERS. The latest estimates indicate next year, districts will have to pay 30% of payroll. A big piece of current so-called “instructional” expenditures is actually spent to pay for teachers who have retired.

In general, health insurance premiums for teachers in Oregon are lower than those of teachers in California or Washington, but Oregon teachers pay a much smaller share of the premium. Research indicates Oregon teachers pay approximately 12% of the premium, while teachers in California and Washington pay 22-45%.

Many school districts have taken on additional debt to reduce their PERS obligations and fund construction. Interest payments on debt are taking money out of classrooms. Census data indicate Oregon schools pay almost $600 per student per year in interest payments alone, making it the fourth highest state in per student interest payments.

Oregon taxpayers continue to support and invest in the state’s education, and any claims of disinvestment are simply wrong. Because of misplaced priorities, too many dollars earmarked for education are not used to teach students the skills they need to be productive and successful adults. PERS must be overhauled, and educational spending should be directed toward increasing high school graduation rates and making measurable improvements in academic achievement.

Eric Fruits, Ph.D. is Vice President of Research at Cascade Policy Institute, Oregon’s free market public policy research organization. A version of this article appeared in The Portland Tribune on May 21, 2019.

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Education Savings Accounts Give Parents the Power of Choice in K-12 Education

By Kathryn Hickok

This month, the Tennessee legislature passed a new Education Savings Account (ESA) law for its state’s K-12 students. The law creates the second ESA program that will operate in the Volunteer State.

The new Tennessee law provides families there with alternatives to low-performing public schools in the form of about $7,300 per student in education funding annually, if parents want to withdraw their children from their zoned district schools. Parents may spend ESA funds on private school tuition, tutoring, educational therapies, or other education-related expenses.

Education options are widespread in America, unless a family can’t afford an alternative to their zoned public school. Education Savings Accounts give parents the ability to customize their children’s education in the ways that are best for them as individual students. ESAs put parents, rather than government school bureaucracies, in the “driver’s seat” of their kids’ education. Arizona, Florida, Mississippi, North Carolina, and Tennessee are operating ESA programs today.

Unlike school voucher programs, ESAs give parents the flexibility to spend education funds on more than just private school tuition. Depending on the specifics of individual ESA programs, approved uses for ESA funds also can include textbooks, online classes, tutoring, testing, AP classes, dual-enrollment courses, homeschool expenses, and education-related fees. Some ESA programs operate like controlled-use debit cards, with which parents can pay only for legitimate education expenses.

Senate Bill 668, introduced in Oregon’s 2019 Legislative Session, would create an Education Savings Account program here. Participating children from families with income less than 185 percent of the federal poverty level and participating children with a disability would receive $6,500 deposited into their accounts. All other participating children would receive $4,900 deposited into their accounts. Funds remaining in a child’s account after expenses are paid each year could be “rolled over” for use in subsequent years, including post-secondary education within Oregon.

ESA programs are frequently designed so the amount of funding support provided to participating students would be less than the amount the state would have spent for a student to attend a public school, with the state recouping the difference. In this way, ESAs can provide a net fiscal benefit to state and local government budgets.

A fiscal analysis of Oregon’s SB 668 found the program, if enacted, likely would cost the state approximately $128 million a year but would lead to savings of about $130 million a year to local school districts, for a net state and local impact of approximately $2.2 million in reduced costs. There would be virtually no net impact on per-student spending for students who continued to choose public K-12 education.

Because parents, not the government, direct the spending of funds in their children’s ESAs, ESA programs have stood up to constitutional challenges. A state’s government is not involved in picking “winners and losers” in the non-public education sector, nor is it directing taxpayer funds to religious institutions. Schools chosen by parents are accountable to parents, who are free to “vote with their feet” and enroll in schools that are providing value. Because ESAs are not a “use it or lose it” benefit, parents are further incentivized to use their ESA funds with education providers with whom they are satisfied.

Senate Bill 668 will receive an informational hearing in the Senate Education Committee on Wednesday, June 5, at 1 pm at the Oregon State Capitol in Salem. If you support more parental choice in education, you may wish to attend the hearing or to submit your own testimony or comments to the committee online.

Children in 29 states and the District of Columbia currently benefit from 62 operating school choice programs. Oregon students, regardless of their ZIP Codes or income levels, deserve the opportunity for an education that fits their unique needs and goals. Education Savings Accounts put more options within reach for all students, especially those who need them the most.

Kathryn Hickok is Executive Vice President at Cascade Policy Institute, Oregon’s free market public policy research organization.

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Tennessee’s New Education Savings Account Law Puts More Parents in the “Driver’s Seat” of Their Kids’ Education

By Kathryn Hickok

This month Tennessee enacted a new Education Savings Account (ESA) law for its state’s K-12 students. The law creates the second ESA program that will operate in the Volunteer State.

Education options are widespread in America, unless a family can’t afford an alternative to their zoned public school. The Tennessee legislation provides families there with alternatives to low-performing public schools in the form of about $7,300 per student annually to spend on private school tuition, tutoring, or educational therapies.

Education Savings Accounts work like controlled-use debit cards. Parents can spend allocated funds on approved school expenses or educational services. ESAs put parents, rather than public school bureaucracies, in the “driver’s seat” of their kids’ education.

Senate Bill 668, introduced in this year’s Oregon Legislative Session, would implement an Education Savings Account program here in Oregon. Senate Bill 668 will receive an informational hearing in the Senate Education Committee on Wednesday, June 5, at 1 pm. If you support parental choice in education, attend the hearing or submit your own testimony online.

Children in 29 states and the District of Columbia currently benefit from 62 operating school choice programs. Oregon students deserve the same opportunities for an education that fits their needs.

Kathryn Hickok is Executive Vice President at Cascade Policy Institute, Oregon’s free market public policy research organization.

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Why Record-Breaking Revenues Aren’t Enough

By Eric Fruits, Ph.D.

This week, Oregon is facing a one-day teacher strike, with educators demanding more money for schools. Also this week, the legislature will consider a billion-dollar-a-year sales tax on business. All this is happening in the face of record-breaking tax revenues.

Research published by the Pew Charitable Trusts shows that Oregon tax revenues are nearly 30 percent higher than the pre-recession peak. Only one other state has seen bigger growth in tax revenues.

But even a gusher in tax revenues can’t keep pace with government spending. Despite a booming economy with record low unemployment, the number of people on the Oregon Health Plan has nearly doubled from pre-recession levels. Over the same period, the annual cost of the public employee retirement system has grown by 60 percent, or double the rate of tax revenues.

Nearly every problem with state and local budgets can be traced to PERS costs and Medicaid expansion. Our budget problems are spending problems, not revenue problems.

While we recovered from the last recession, our elected leaders are making dangerous decisions today that will lead to devastation when the next recession hits. If our government can’t balance the books during a boom, we won’t survive a bust.

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

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May 8 Should Be Declared “Fix PERS Now Day”

By Eric Fruits, Ph.D.

The Oregon Education Association is organizing a statewide walk-out May 8 related to what it says is inadequate school funding. What they’re really demanding is a $2 billion tax increase.

Districts across the state, including Portland, Beaverton, North Clackamas, Gladstone, and Eugene have canceled classes for the day, forcing working parents to stay home or line up day care for the strike. The teachers surely have their chants and songs already scripted for their rallies. But, there’s one slogan the teachers won’t be shouting. That’s: “Fix PERS Now!”

District administrators appear to be in support of the Oregon Education Association’s unauthorized strike. West Linn-Wilsonville superintendent Kathy Ludwig said, “OEA’s purpose with this rally is to send the message to all Oregonians that public school funding has been insufficient for decades and needs to be addressed.” A written statement made to the Portland teachers’ union by superintendent Guadalupe Guerrero reads: “Our educators and students deserve better. It is long overdue that we prioritize schools in Oregon.”

The claim that Oregon hasn’t prioritized public education is simply wrong. Portland Public Schools voters have approved nearly $1.3 billion in construction bonds since 2012. In 2011 and 2014, voters approved and renewed a local option property tax increase for Portland schools. Another renewal of the $95 million tax is expected to be on the ballot this year.

In Oregon, total expenditures per student were $13,037 in 2016, the most recent year for which information is available from the U.S. Census Bureau. Oregon is exactly in the middle of the state rankings of per student total expenditures. Six states, including Oregon, Washington, and California, have per student spending that is within five percent of the national average. Total expenditures include salaries, employee benefits such as health insurance and PERS, supplies, and debt service, among other things.

According to the state’s Legislative Revenue Office, annual state and local education spending in Oregon has increased by about $1.7 billion over the past ten years. This amounts to $2,350 in increased spending per student and has greatly outpaced the rate of inflation.

Despite a booming economy with increased tax revenues and funding for schools, many districts claim they are facing a funding gap. Beaverton expects to cut more than 200 teachers. Portland plans to eliminate 45 classroom teaching positions and combine many fourth and fifth grade classrooms. These announcements raise the question: Why are districts cutting staff in the face of rising revenues?

PERS and other benefits are the biggest drivers of Oregon’s education finance problems. The cost of paying for public employee retirements has doubled over the past ten years. In 2009, school districts paid approximately 15 percent of payroll to fund PERS. The latest estimates indicate next year, districts will have to pay 30 percent of payroll. The increased cost of PERS alone in the next biennium would cause the average class size to increase by two to four students per classroom.

It gets worse. In reaction to earlier PERS crises, many school districts took on additional debt to reduce their PERS obligations. The interest payments on the bonds are taking money out of classrooms. Census data indicate Oregon schools pay almost $600 per student per year in interest payments alone, making it the fourth highest state in per student interest payments.

The OEA claims it’s seeking more spending to reduce class sizes and improve graduation rates. However, the Oregon Business Council calculates PERS will consume much of the $2 billion in tax increases under consideration by the legislature. Without meaningful PERS reforms, Oregonians will face decades of multi-billion-dollar tax increases every time the legislature meets.

The frustration of teachers is understandable. They are on the front lines of education. However, walking off the job is the wrong approach and sets a poor example for students. It punishes pupils, parents, and employers for our politicians’ failure to fix PERS. It also misses the mark strategically because the legislature doesn’t have any more money, and neither do put-upon taxpayers. Parents who are forced to stay home to watch their kids on May 8 should take them on a field trip to the OEA’s rallies with signs of their own, reading, “No New Taxes—Fix PERS Now!”

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

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Florida Legislature Gives 18,000 More Children the Chance for a Great Education

By Kathryn Hickok

This week, the Florida legislature passed a bill that would create a scholarship program for lower-income families called the Family Empowerment Scholarship. The Family Empowerment Scholarship will provide lower-income children with scholarships equal to 95% of the state portion of funding to school districts. The Family Empowerment Scholarship is expected to be signed into law soon by Governor Ron DeSantis.

The Family Empowerment Scholarship will complement Florida’s other parental choice programs, the McKay Scholarship for children with special needs and Step Up for Students for children from low-income families. According to the American Federation for Children, which promotes parental choice in K-12 education, the parents of more than 170,000 Florida children wanted to apply for 100,000 scholarships available through Step Up for Students for the current school year. By authorizing 18,000 new scholarships in its first year, with a subsequent annual growth rate of 7,000 per year, the new Florida law will increase the education options available to low-income Florida parents.

Oregon should take a serious look at the diversity of parental choice options low-income families now have in states like Florida and across the country. It’s time for Oregon to expand the role of parents choosing―and schools delivering―better education through school choice, because every child deserves a chance for a successful school experience and a better future today.

Kathryn Hickok is Executive Vice President at Cascade Policy Institute, Oregon’s free market public policy research organization.

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A Trio of Terrible Bills for Oregon Employers

By Eric Fruits, Ph.D.

Apparently, there is no limit to the Oregon legislature’s disdain for businesses and other employers. This disdain is demonstrated in three bills that seek to saddle employers with expensive mandates and expansive regulations that will smother job opportunities, stifle employment growth, and do little improve the everyday lives of most working Oregonians.

Paid family leave

Oregon’s legislature is currently considering HB 2005, which would turn family and medical leave in Oregon into a universal benefit that would pay out a portion of an employee’s wages while they are out of work because of a difficult pregnancy, a serious injury or illness, a family emergency, or the birth or adoption of a child.

Under the bill, also known as the FAMLI Equity Act, family and medical leave would be paid for by a state insurance program. Workers and employers would each put up to one percent of an employee’s wages in a state-run insurance fund. Employees on leave would be eligible for benefits equal to some or all of their salary. Beginning in 2022, employees would be able to take up to 22 weeks of paid leave:

  • Four weeks for pregnancy, if the employee is completely unable to work due to pregnancy or childbirth;
  • Eight weeks for medical leave, which could also be used to care for a family member who is seriously ill; and
  • Ten weeks for parental leave, for use only in the year after a child’s birth, adoption, or foster placement.

The program applies to just about any firm with one or more employees, even the self-employed. Although the proposal has been amended to provide state grants up to $3,000 to help small employers while a worker is out on leave, the program would be especially costly and burdensome for small employers who do not have the ability to shift staffing or hours to cover workers who are out on extended paid leave. It will also be costly and burdensome for employers with highly specialized workers who are difficult to replace on a temporary basis.

So far, no one knows how much employers or employees would have to contribute to the fund (the bills says “not to exceed one percent of employee’s wages”), how much it would cost to run the program, or how much it would cost to set up the program. A simple back-of-the-envelope calculation suggests this will be a very expensive program. At two percent of payroll—one percent for the employer and one percent for the worker—the cost for the average Oregon employee will be more than $1,000 a year.

In addition to payroll taxes reducing their incomes, employers will be less inclined to take on new employees, especially if those potential employees are deemed likely to take paid leave. Employees will see smaller paychecks, either directly through payroll deductions to pay for the program or in lower pay to account for costs imposed on their employer.

Medicaid payroll tax

HB 2269, also known as the Employer Health Care Responsibility Act, requires employers with more than 50 workers to spend at least 50 cents per work hour per employee for employee health care. If employers do not provide health insurance coverage, they must provide the 50 cents per hour per worker on either direct spending for worker health care services or by paying into a state government fund. The bill is a major component of Governor Brown’s tax package to support expanding Medicaid.

This tax would be in addition to the two percent sales tax surcharge on health care premiums paid by many Oregon employers under HB 2010, which was signed by the governor earlier this year.

As written, the legislation does not consider the common cases in which a worker may not have insurance through his or her employer but may have coverage through a spouse or parent. It also does not consider the cases in which a worker rejects insurance from the employer, often in exchange for higher take-home pay.

The end of independent contractors

 One way employers can avoid some of the costs of the paid family leave program and the Medicaid payroll tax would be to rely more heavily on independent contractors. However, HB 2498 could eliminate this option. This bill would reclassify many, if not most, independent contractors as employees. It says that if the contractor performs services that are “within usual course of business” of the firm hiring the contractor, then that contractor is deemed an employee of the firm.

A hairdresser renting a chair in a salon would be deemed to be an employee of the salon. Uber and Lyft drivers would be deemed employees of the ride-hailing companies. Even lawyers working part-time as outside counsel would be deemed employees of their client firms. While these newly deemed “employees” may receive benefits as employees rather than contractors, they would also lose the ability to determine when they work, where they work, and even how they work.

Well-meaning policies have a tendency to backfire, even if polling says the policies are popular. Too often, the polls fail to put a price tag on the policies. When the price tag includes substantially higher taxes and diminished opportunities for work, programs such as Oregon’s proposed paid family leave and Medicaid payroll tax bills end up harming far more people than they help.

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

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Wind Energy is Just Hot Air

By Miranda Bonifield

TriMet recently announced its first “zero-emission” bus is ready to roll, claiming that wind-powered buses are cleaner and easier to maintain. But the reality is that electric buses are dirtier and more expensive than traditional buses.

Wind and solar energy are both known as “intermittent resources” because both kinds of energy farming have long time periods when they don’t generate any power. Unfortunately, energy can’t just be stored like other commodities—as soon as it enters the power grid, it has to travel directly to the end user. There must be a constant supply to meet demand, or customers will not receive power reliably.

During unproductive periods (for instance, when wind turbines aren’t turning) renewable energy farms are forced to rely upon ordinary fuel. But because these periods are unpredictable, the backup has to be running even when power is being generated. Research has indicated as much as a 1% increase in traditional fuel use for every .88% increase in the long-run share of renewable energy. In other words, this supposedly clean energy uses more fuel than it replaces.

It would be far more reasonable for TriMet to focus its energy on improving existing services rather than purchasing buses which are more than twice as expensive and may break down six times as frequently. The claim that wind-powered buses are more efficient for Oregonians is just a bunch of hot air.

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

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There’s No Such Thing As a Free Government

By Miranda Bonifield

April 16 was the first day of 2019 where the money Americans have earned finally exceeded the portion of our income dedicated to the support of the government. Tax Freedom Day is an annual reminder of the real cost of expanding government’s power and responsibilities. The $5.2 trillion we spend on taxes in 2019—29% of our income—will outpace our spending on food, clothing, and shelter combined.

Unfortunately, this is only what we’ll pay this year—not what the government will spend. If annual federal borrowing were taken into account, Tax Freedom Day would fall on May 8, meaning we would work nearly half of this year to support government programs.

Americans have handed the government an ever-growing share of our money in exchange for the promise of a chicken in every pot and a roof over every head. But prosperity is not preserved and poverty is not prevented by government spending. Rather, it is the everyday Americans who work and innovate every day to create value for ourselves and our communities who are responsible for the opportunities we can all take hold of.

Next time you’re asked to approve a tax increase, ask yourself how many days you’re willing to work to fuel government programs, and how many you’d like to work to support your family.

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Testimony Before the Joint Subcommittee on Capital Construction HB 5005

By John A. Charles, Jr.

Members of the subcommittee, my name is John Charles and I am President and CEO of Cascade Policy Institute, a nonpartisan policy research organization.

Most witnesses ask you to spend money. I am here asking you to save money – by deleting the Governor’s request for $27.5 million in lottery-backed bonds for TriMet’s planned light rail line to Bridgeport Village mall near Tualatin.

It’s important to note that HB 5005 is actually the first part of a two-part request for this project. As Ms. Gabriel stated in her April 5 briefing, the Governor will be asking for an additional $125 million of bond revenue in the next biennium, so you should really think of this as an appropriation of $152.5 million.

I encourage you to reject the request because TriMet has a consistent record of over-promising and under-performing on all its capital construction projects, as detailed below. You should stop rewarding that kind of behavior.

Analysis of the SW Corridor Project

TriMet makes two primary claims regarding this light rail line. First, it will attract 43,000 average weekday riders by 2035. Second, it will provide a “reliable, fast travel option” between Bridgeport Village and Portland.

Neither of these claims is plausible.

TriMet Ridership projections are always inflated

TriMet has a 40-year track record of making ridership forecasts. They have been consistently wrong, and always on the high side. As Figure 1 shows, actual ridership has never even reached 60% of projected ridership on a specific rail line. In 2017 total average weekday ridership was less than half the predicted ridership for MAX in 2020. 

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SW Corridor Light Rail Project Joint Ways and Means Committee Testimony John Charles April 2019

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Road Widening, Congestion Pricing Can Improve Metro-Area Drive Times

By Eric Fruits, Ph.D.

I’ve got a big family, which means we do a lot of laundry. With our old appliances, we were doing a load a day and there was a backlog of dirty clothes.

When our old washer and dryer went kaput, we decided on an upgrade. I bought the biggest, most energy efficient washer and dryer I could afford. I figured with bigger loads, we’d be doing fewer loads. But in some ways, I was wrong. Sure, the new washer and dryer could hold a lot more laundry, but we were still doing about a load a day.

However, something changed: The backlog of dirty clothes disappeared, and our utility bills decreased. Even though we are still washing clothes every day, we are washing more clothes more cheaply than we were before. Where it used to take three hours for a complete wash-and-dry cycle, now it’s closer to two hours. Those new appliances made our day-to-day lives measurably better off.

In Portland, the Oregon Department of Transportation is in the process of widening I-5 through the Rose Quarter, which has been named one of the worst bottlenecks in the country by the American Transportation Research Institute. ODOT forecasts the improvements will save more than 2.5 million hours of travel time each year and reduce crashes by up to 50 percent. For example, the current “worst” stretch (I-5 southbound, from the Going on-ramp to I-84 eastbound off-ramp), will see travel times drop 15-30 percent. Over a typical work year, that would save a commuter more than 20 hours of time stuck in his or her vehicle. Many, if not most, commuters through the Rose Quarter will be measurably better off because of this project.

Despite these anticipated benefits for commuters, opponents of the I-5 project claim that increasing highway capacity will increase congestion. They invoke a concept they call “induced demand,” arguing that wider roads “induce” people to drive more, leading to more traffic and ultimately even worse congestion than before the improvements were made. It’s much like arguing that I’m worse off because my new washer and dryer can handle more laundry than my old klunkers.

Critics of the project tend to confound traffic with congestion. Traffic is the number of vehicles or vehicle miles travelled. Congestion involves speeds or travel time. A road can have a lot of traffic and little congestion. Similarly, a road with relatively little traffic can be highly congested—such as streets around a neighborhood school in a residential area during drop-off and pick-up times.

To be sure, improvements around the Rose Quarter will increase traffic on I-5 and I-84. Some of that traffic will come from more people driving. But some of that traffic will be the result of people choosing to use the highways instead of taking arterials or residential streets, which will reduce congestion on these increasingly clogged roads. If it’s cheaper in terms of time to take a highway rather than an arterial, people will choose the highway. That’s not “induced” demand, that’s plain old vanilla demand. Lower prices lead to higher quantity demanded.

The Rose Quarter highway improvements are to be combined with a congestion pricing program that will further improve traffic speeds and travel times. Done properly, such pricing discourages driving when congestion is most likely. Anyone who has used Uber or Lyft has experienced congestion pricing with the services’ “surge pricing,” in which fares increase when demand for rides exceeds the number of drivers at a particular time. Congestion pricing smooths the timing of trips to foster a faster flow of vehicles.

The benefits of road widening are readily visible here in Portland. Last year, a newly completed auxiliary lane on I-5 southbound from OR 217 to I-205 removed a frustrating bottleneck. According to ODOT, that stretch of road went from five hours of afternoon rush-hour congestion to one hour a day of congestion, during the afternoon commute. OR 217 went from four hours of congestion to zero hours of congestion. I’m sure no one is sitting in their car on I-5 or OR 217 saying, “I really miss all that congestion.”

The Portland region is adding more than 30,000 people each year. Our transportation system needs to keep up with the influx of new residents, workers, and business activity. It’s this growth that’s inducing the demand for more and better roads, and the region needs to meet that demand.

Eric Fruits, Ph.D. is Vice President of Research at Cascade Policy Institute, Oregon’s free market public policy research organization. A version of this article appeared in The Portland Tribune on April 25, 2019.

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Portland’s Affordable Housing Bond: Nothing for Money

By Eric Fruits, Ph.D.

Remember that song about getting money for nothing? In Portland, it’s the opposite. We’re getting nothing for money.

This week, Portland’s City Council will get the first annual report on how the city is spending its affordable housing bond money. The four-page report—yes, it’s really only four pages—is colorful and has lots of pictures but nothing about actual results. So, I did some research.

Turns out, by the end of 2018, the city spent almost $38 million and built exactly zero new units of affordable housing. Sure, Portland bought two buildings. But, the buildings were already built or almost completely built, which means the money did nothing to actually add any new units.

Once the city spends millions more on the four other buildings in their pipeline, Portland might have only 250 additional units of affordable housing.

Last year, French President Emmanuel Macron announced plans to reform the country’s social welfare programs. He said, “We put a crazy amount of dough into our social benefits and poor people are still poor.”

The same can be said for Portland: We’re spending a crazy amount of money on affordable housing, but we’re not actually building much new affordable housing.

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

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Read My Lips: Metro’s Promises Are Doubtful at Best

By Miranda Bonifield

There’s nothing so permanent as a temporary government program, and nothing is quite as immortal as a temporary tax. Metro promised in 2006 that its parks bond would leave no need for new taxes until 2016. Instead, the money was sent to a general fund and additional taxpayer support was requested in both 2013 and 2016.

Now Metro is planning a new 400-million-dollar bond measure to support expansion of its parks and nature programs. The organization argues that tax rates wouldn’t be raised and that the funds would combat the challenges posed by population growth, climate change, and racial inequity.

What isn’t said is that your property taxes would go down without approval of the new 20-year bond measure. Metro can and probably will want to issue additional bonds and levies in future years, including a potential transportation bond in 2020—meaning that taxes would rise in the long term.

Metro’s auditor found in 2015 that Metro’s land acquisition often lacks clear connection to its long-term goals. This means that not only is Metro stretching for more money, it’s not even entirely sure what it accomplishes by spending it.

Read my lips: Metro’s version of no new taxes is doubtful at best.

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

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Free to Choose with Freedom Scholarships

By Miranda Bonifield

School choice made a splash in the headlines last month with the proposal of the Education Freedom Scholarships and Opportunity Act. The proposed legislation would create a federal income tax credit for donations to organizations which grant scholarships to school-aged children and create an efficient path forward for students in states which have yet to embrace educational choice.

Tax credit scholarship programs have already successfully assisted thousands of students in states like Florida, where 92% of families enrolled report satisfaction. 71% of the 108,000 students would otherwise be in a public school. But because of their option to choose, they are statistically more likely to attend a school which parents feel is positively shaping their character and to attend college after graduation. Tax credit scholarships have been encouragingly successful on the state level. Encouraging donations to scholarship-granting nonprofit organizations, while leaving states the flexibility to opt in or out of the program, is an optimal way to encourage school choice without federal overreach.

Closer to home, Senate Bill 668 is currently in the Oregon Senate Committee on Education. The bill would create Education Savings Accounts for Oregon students. ESAs direct a portion of the funds designated for a child’s education in a public school to an account which could fund the family’s choice of private, online, or homeschool options.

If implemented, both the federal and the state proposals would be real victories for American students.

Miranda Bonifield is Research Associate at Cascade Policy Institute, Oregon’s free market public policy research organization. 

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Oregon Taxpayers Can’t Celebrate $146 Million Debt Service on the Elliott State Forest

By John A. Charles, Jr.

This week our State Treasurer, Tobias Read, issued a press release bragging that investors around the country “stood in line” to loan Oregon $100 million so that Governor Kate Brown could buy part of the Elliott State Forest, which we already own.

According to Treasurer Read, “There was three times more demand than supply” of the bonds, which will be repaid to investors over 20 years at an interest rate of 3.83 percent.

While this may have been a great day for investors, Oregon taxpayers have no reason to celebrate. They will be paying roughly $146 million in debt service on the loan, while getting little in return.

The Elliott is an 82,500-acre forest in Coos and Douglas Counties. It is an asset of the Common School Fund, which means it must be managed for the financial benefit of K-12 public schools. It was once a thriving commercial forest, generating millions of dollars each year for schools. In 1994, it had an estimated market value of $850 million.

Timber harvesting started to decline in the late 1980s due to environmental litigation. By 2014, timber production was so minimal that the Elliott actually started losing money. This immediately caught the attention of the State Land Board, which owns it. Land Board members in 2015—Governor John Kitzhaber, Secretary of State Kate Brown, and Treasurer Ted Wheeler—feared they would be sued for breach of fiduciary trust if they continued to hold onto a money-losing asset.

Seeing no other options, the Board unanimously voted in August of that year to sell the forest and place the proceeds in the Common School Fund, where they could be profitably invested in stocks, bonds, and other financial instruments.

The Board set the market value of the forest at $220.8 million. After a lengthy outreach process, the Board received a bid for that amount in 2016 from a consortium of buyers led by Lone Rock Timber Co.

However, by the time the bid was evaluated in December, the composition of the Land Board had changed. Kate Brown had become Governor, Tobias Read was Treasurer, and Dennis Richardson was the new Secretary of State. At the first meeting of the board in February 2017, both Read and Richardson stated that they had a fiduciary duty to sell the forest so that $220.8 million could be invested in better-performing assets. Gov. Brown reversed her 2015 vote and urged the Board to reject the offer. The final vote was 2-1 in favor of selling the forest.

This infuriated Oregon’s environmental lobby, even though it was their own lawsuits that had turned the Elliott into a liability. After the vote, pressure mounted on Treasurer Read to change his mind.

Two months later, Read reversed himself. He and Gov. Brown decided that instead of selling the forest for $220.8 million, they would retain it and ask the legislature for permission to borrow $100 million to buy part of the Elliott so that it would no longer be required to make money. The $100 million would be placed in the Common School Fund to make up for the lost timber harvest receipts.

Unfortunately, the $100 million loan will require debt service payments of roughly $200 million, and all of it will have to be paid by Oregon taxpayers. Therefore, the benefits to schools of adding $100 million to the Common School Fund will be diluted or possibly exceeded by debt service.

Moreover, the Land Board had no clear idea of which part of the Elliott will be free of the obligation to produce revenue for schools. The $100 million certainly will not “buy” the entire forest; an unknown portion will still have to be managed for profit, if that’s even possible.

Ordinarily, one could expect the State Treasurer to be the adult in the room regarding a cash offer of $220.8 million and the Board’s fiduciary duty to schools, but this is Oregon. It’s so much easier to just borrow money and talk about something else. Tobias Read is giddy that several of the bond buyers were from “socially responsible investment funds.”

Perhaps if he talks long enough about green investing, taxpayers will forget about the $200 million they owe on the loan.

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

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What’s Causing Oregon’s “Housing Affordability Crisis”?

By Miranda Bonifield

Here’s a question for you: Why is housing so expensive in Oregon?

Government at all levels has attempted to address the issue of housing affordability for years with tax credits, occasional expansion of the urban growth boundary, multimillion dollar bond measures, and now statewide rent control in Oregon. But rather than making life easier for Americans, state and local policies play major roles in the affordability crisis.

Economist Dr. Randall Pozdena recently authored a report published by Cascade Policy Institute that analyzes the decline of housing affordability, with a particular focus on Oregon. His research confirms what any developer can already tell you: Housing is less affordable because land is less available.

Easy access to land up until the 1970s meant housing price increases roughly tracked increases in household income. But in the ’60s and ’70s, planners and environmentalists dreaming of European-style density began lobbying against automobile-driven suburban sprawl. These measures gained enough traction that by 2000, the Brookings Institution found, state ballots around the country contained 553 “anti-sprawl” measures. Supporters expected higher density to decrease the need for public spending, improve traffic conditions by facilitating the use of transit, and lower development costs.

Instead, housing is escalating further out of reach every year. Oregon, California, Hawaii, and Washington, D.C. have the worst affordability scores in the country. An expensive market might make sense in D.C. and Hawaii, as both have extremely limited land available for development. California’s problem is the bureaucratic state whose regulations keep developers from meeting demand. But it’s Oregon that has the worst score for affordability out of the fifty states: Our housing prices rose 32% faster than our incomes between 1992 and 2007. This puts housing affordability in Oregon behind every one of the other 49 states.

With some exceptions, Oregon’s income growth has generally kept pace with the rest of the nation. We have plenty of developable land and a capable, productive community. Our housing is unaffordable because we’ve embraced some of the most aggressive “anti-sprawl” policies in the country. Dr. Pozdena finds:

“The higher the rank of anti-sprawl policy in a state, the poorer is the affordability rank of the state and the lower has been the availability of additional development sites relative to population growth. The confidence that these associations are not random is 99.99 percent. This is strongly indicative of a causal relationship between implementation of anti-sprawl policy, land conservation, and the affordability problem.”

There is no market and no economic philosophy in which reducing supply while demand increases leads to lower prices. In reality, Oregon’s policies have increased public spending, damaged public service quality, made no sizable impact on the number of automobile commuters, and worsened congestion.

It’s encouraging to hear policymakers acknowledge that we need to expand urban growth boundaries and encourage more development; but until a fundamental shift occurs in the philosophy behind growth policy, these statements are all flash and no substance. Oregon’s land use regulations don’t align with the way Oregonians actually live. They worsen traffic, crowd cities, and decrease quality of life.

Oregon must address the true causes of housing affordability problems, not just the symptoms—or the crisis will never end.

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

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Cultivating Educational Choice with Education Savings Accounts

By Miranda Bonifield

A Portland public school made headlines last week for offering parents the chance to choose their child’s teacher for next year as part of a school fundraiser. Teachers cried “foul” because they thought the opportunity gave unfair advantage to students whose families were from higher income brackets.

Why not give the same opportunity to all students?

Senate Bill 668 would implement a universal Education Savings Account (ESA) program in Oregon. ESAs direct a percentage of the funds the state would otherwise spend to educate a student in a public school to the student’s family to spend on private school tuition and/or other approved educational expenses.

In other words, every family could choose their child’s teacher.

Florida implemented an Education Savings Account program for special needs students in 2014. Of the students enrolled during the first two years, 40% used the funds to customize (mix and match) aspects of their child’s education. About half of these families chose to educate their children outside of a brick-and-mortar private school. The more than 10,000 students enrolled are a tiny fraction of the 2.59 million students in Florida public schools, but their choices illustrate an important point: Families need and want options that the state does not provide in their district public schools.

Oregon’s education system perpetuates a disconnect between the interests of families seeking the best possible outcome for their children and of schools seeking the fairest possible outcome for all children. We can agree that Oregon’s teachers are overworked, that many of our schools are underperforming, and that something must change to give the best possible shot to each student. Education Savings Accounts are an efficient, compassionate, effective way to provide quality education to all Oregon’s students—regardless of income.

Miranda Bonifield is Research Associate at Cascade Policy Institute, Oregon’s free market public policy research organization.

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Local News Brings Accountability to Local Government

By Eric Fruits, Ph.D.

Fake news is bad, but no news is even worse. Across the world, across the country, across the state, and across our communities, we are witnessing an obliteration of local news media. In Oregon, local newspapers are struggling and shuttering while TV and radio outlets focus more and more on national news fed by wire services.

Research soon to be published by the Journal of Financial Economics finds that when a local newspaper closes, local government wages and employment increase, municipal borrowing costs go up, as do county deficits. The authors argue local newspapers hold their governments accountable. When a community loses a paper, it loses some of that accountability.

It’s easy to blame Google and Facebook and media mergers for decimating local news. But, we ourselves are also to blame. We’re more likely to click on a story about a Trump tweet, celebrity gossip, or cute cats than we are to read a researched investigation into steep tax hikes, onerous regulations, and municipal malfeasance.

A tweet from Trump has virtually zero impact on our day-to-day lives in Oregon. At the same time, our legislature is right now passing bills that will affect all Oregonians every day. Our local governments and school boards are making decisions that affect how we work, how we live, how we travel, and how our kids are taught.

We all need to support local media, but it’s more than just buying a paper. Listen to the local news on the radio. Watch the local news on TV. More importantly, be engaged in your local community. That’s where everyday people can make a big difference.

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

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Testimony Before the Transportation and Economic Development Subcommittee of Ways and Means Regarding HB 5039

By John A. Charles, Jr.

Members of the Subcommittee, my name is John Charles and I am President of Cascade Policy Institute. Cascade is a non-partisan policy research organization working to promote public policies based on sound market principles. As a non-profit corporation we are supported by contributions from individuals, foundations and businesses, most of them based in Oregon.

Much of the proposed ODOT budget involves dedicated funding sources such as motor fuel taxes, which means the Subcommittee has limited discretion to move money around. However, there are some programs supported by the General Fund or lottery-backed bonds, and I would like to call your attention to several that appear to have questionable value:

Willamette Valley passenger rail, $9.86 million: This allocation provides operating support for the Portland-Eugene Cascades train that runs twice daily in each direction.

As noted in the budget documents, ridership for this line peaked in 2013 and has been flat for the past three years. Moreover, the ridership numbers provided to the Committee include the POINT bus service operated by ODOT. This significantly inflates the total number of riders attributed to the passenger rail program.

The POINT bus service includes five routes with stops at 42 locations, as shown below:

  1. Portland-Eugene, 7 trips/daily each way, 5 stops
  2. Bend-Ontario, 1 trip/daily each way, 11 stops
  3. Redmond-Chemult, 2 trips daily each way, 5 stops
  4. Portland-Astoria, 2 trips daily each way, 8 stops
  5. Klamath Falls-Brookings, 1 trip daily each way, 12 stops.

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Education Savings Accounts: A “Ticket to the Future” Today

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 school choice programs across the country, including 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 Executive Vice President of Cascade Policy Institute, Oregon’s free market public policy research organization.

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Our Most Pressing Environmental Crisis Is at Home

By Miranda Bonifield

Oregon’s most pressing environmental crisis isn’t in forests or renewable energy. Our human habitats have been endangered by our restrictive so-called “smart growth” policies. Even when we talk about allowing growth, policymakers tend to favor light rail over people’s real needs. Senate Bill 10, which would require cities like Portland to allow development of 75 housing units per acre in public transit corridors, misses the mark in two key areas.

First, the bill’s attempt to legislate the location of new development won’t improve transit ridership. Despite billions in new light rail lines and mixed-use developments, TriMet’s ridership has been declining since 2012.

Second, the bill removes parking minimums from these developments. This could lower the cost of development, but it could also worsen parking and traffic problems in a city that’s been trying and failing to cut down on automobile use for decades. It’s a mistake to allow denser development while assuming that the people who live here will depend on public transit rather than cars.

Taking the shackles off developers so that we can provide housing is a good idea, but lawmakers need to plan around people rather than trying to stack people into their plan. Transit-oriented development hasn’t worked in the last twenty years. It’s not going to start working today.

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

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Metro’s Priorities Don’t Match Yours

By John A. Charles, Jr.

The Portland regional government known as Metro recently published the results of a poll regarding the most important issues to the region. Unsurprisingly, traffic congestion emerged as the number one concern: 96% of all respondents stated that congestion was a serious problem.

These results are consistent with virtually every poll taken over the past 25 years, yet congestion continues to get worse. The reason is that the Metro Council refuses to improve driving conditions and authorize new bridges and highways where they are needed, such as the west side of Portland.

Instead, Metro is determined to spend enormous sums of public money on additional light rail service that most people will never use.

Metro has appointed a 30-person Task Force to draft a ballot measure for 2020 seeking billions of dollars to build a light rail line to Bridgeport Village. This would be a complete waste of money. Transit ridership peaked in 2012. Since then, thousands of customers have left for Uber and Lyft, and they’re not coming back. TriMet is becoming irrelevant.

Sadly, no one at Metro or TriMet cares what taxpayers want—they only care about expanding their bureaucratic empires. Voters should remember this when the bond measure is unveiled later this year.

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

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A Done Deal and a Bad Deal: Why Rent Control Won’t Solve the Housing Crisis

By Eric Fruits, Ph.D.

Oregon will soon be the first state to have a statewide rent control program. Last week, in my first week at Cascade Policy Institute, I testified in opposition to the rent control bill, SB 608. The bill has the support of the Governor Kate Brown, House Speaker Tina Kotek, and Senate President Peter Courtney. About 100 people signed up to testify, and supporters outnumbered opponents by 2-to-1. It’s a done deal and it’s a bad deal.

During World War II, the federal government instituted a national system of rent controls, establishing maximum rents for rental properties. New York City was the only city to retain this first generation of rent controls after the war. During the 1970s, rent regulations were introduced in many cities, including Boston; Washington, D.C.; San Francisco; and Los Angeles.

In contrast with pure rent control (a fixed maximum price), SB 608 is a form of “second generation” rent controls that allows annual rent increases, limited to 7 percent plus inflation. Rent controls under SB 608 apply to buildings that are more than 15 years old. The bill also places strict limits on “no cause evictions.”

Nobel laureate Paul Krugman wrote in the New York Times that rent control is “among the best-understood issues in all of economics, and—among economists, anyway—one of the least controversial.”[1] Krugman’s well known and widely used economics textbook describes the economic inefficiencies associated with rent control:[2]

Rent control, like all price ceilings, creates inefficiency in at least four distinct ways. It reduces the quantity of apartments rented below the efficient level; it typically leads to misallocation of apartments among would-be renters; it leads to wasted time and effort as people search for apartments; and it leads landlords to maintain apartments in inefficiently low quality or condition.

Proponents of rent controls argue that “second generation” rent controls reduce or eliminate the inefficiencies associated with “first generation” rent controls. For example, Kotek was quoted in the Oregonian:[3]

What you’re hearing from landlords about rent control is they have an idea of it that’s very much the model that began right after World War II where properties had hard, fast caps on rents. That’s not the kind of rent control we’re talking about. We’re talking about second generation rent stabilization where there’s a process for managing rent increases that protects investors and tenants.

Kotek is correct that second generation rent controls are not as bad as first generation rent controls, but it’s matter of degree. Second-degree burns aren’t as bad as third-degree burns, but a second-degree burn still hurts.

While many proponents see rent control as one way to address housing affordability, none of them indicated it would do anything to resolve what is widely perceived to be a housing shortage. In fact, an expert flown in from Berkeley by the housing committee admitted that rent controls in other cities have led to the conversion of apartments to condominium. He went so far as to suggest legislation that would ban the conversion of apartments to condos.

This suggestion lays bare the pernicious chain of regulation that rent control brings. Second generation rent control doesn’t “work” unless there are strict limits on the termination of month-to-month rents. Then, it won’t work unless there are strict limits on the conversion of units. One witness even suggested that apartment building owners should be forbidden from selling their properties.

The limits on providers’ ability to terminate leases will lead to providers becoming more selective in to whom they rent units. In this way, the ordinance misallocates rental units among would-be renters and may do the most harm to those whom the bill is intended to help, such as those with a history of homelessness, impaired credit, criminal convictions, or employment instability. An older woman testified about her horror story of trying to find an apartment with her retired husband in Medford, applying to dozens of apartments only to be told she’d be on a list. Her story will become more common as rent controls reduce the supply of rental units.

In addition to the inefficiencies identified by Krugman, SB 608 will ultimately lead to higher rents than would occur in the absence of the law. As rental units turn over, providers will factor in the expected cost of the law into the rents and other fees that they charge incoming residents. Some or all of the expected cost associated with SB 608 will be passed on to tenants. Ultimately, the law will have the perverse impact of increasing—rather than reducing or stabilizing—rents over time and reducing the amount of market rate housing available to low- and middle-income households.

[1] Krugman, Paul. “A rent affair.” New York Times. June 7, 2000.

[2] Krugman, Paul and Robin Wells. Microeconomics, 3rd ed. New York: Worth Publishers. 2013. p. 130.

[3] Friedman, Gordon R. “Portland’s Tina Kotek explains her rent control plans—and landlord pains.” Oregonian. February 4, 2017.

 

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

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Cap and Trade in Oregon: All Pain, No Gain

By Eric Fruits, Ph.D.

The Oregon legislature is expected to pass a carbon cap-and-trade bill this session.

While there is some agreement that climate change can have a negative impact on livability in the Pacific Northwest and throughout much of the world, there has been little attention paid to how little Oregon contributes to worldwide carbon emissions.

Oregon emitted about 65 million metric tons of carbon dioxide equivalents in 2017. By way of comparison, total global emissions were about 37 billion metric tons. That means that Oregon accounts for less than two-tenths of one percent of global emissions. About one six-hundredth. That’s tiny.

In other words, even if Oregon were to reduce carbon emissions to zero, the state would do virtually nothing to change worldwide carbon emissions, which means it would do virtually nothing to slow or stop global climate change.

At the same time, the cap-and-trade program would hit the pocketbooks of every Oregonian. An earlier version of the bill estimated the state would sell about $700 million a year of carbon permits, with the costs passed on the consumers and businesses.

Oregon’s cap-and-trade bill fails the basic cost-benefit test: The costs of cap-and-trade to everyday Oregonians would be exceptionally high while doing nothing to stop or slow climate change.

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

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Portland Economist Eric Fruits Joins Cascade Policy Institute as Vice President of Research

FOR IMMEDIATE RELEASE

Media Contact:
John A. Charles, Jr.

503-242-0900

john@cascadepolicy.org

Portland, OR – Eric Fruits, Ph.D. joined Cascade Policy Institute February 1 as Vice President of Research. Fruits is president and chief economist at Economics International Corp. and is an adjunct professor of economics at Portland State University. Cascade Policy Institute is a nonprofit, nonpartisan public policy research and educational organization based in Portland.

Fruits has been a long-time academic advisor and contributing analyst for Cascade Policy Institute. His most recent report, Ride-Hailing as a Solution for TriMet’s High Cost Bus Lines: A Proposal for a Pilot Project, was published in January. As Vice President of Research, Fruits will lead Cascade’s policy team and serve as an expert analyst of Oregon state and local public policy issues.

As a consulting economist, Fruits has produced numerous research studies involving economic analysis, financial modeling, and statistical analysis. As an expert witness, he has provided testimony in state, federal, and international courts. He has written peer-reviewed articles on initial public offerings, the municipal bond market, real estate markets, and the formation and operation of cartels. His economic analysis has been widely cited and has been published in The Economist, The Wall Street Journal, and USA Today.

Cascade President and CEO John A. Charles, Jr. said, “Eric is an outstanding economist who will add depth and breadth to Cascade’s research programs. He is also an entertaining speaker who can effectively explain complex subjects to non-technical audiences.”

Fruits indicated he is excited about joining the institute: “Cascade has a long history of producing high-quality, well-researched analysis and commentary. It plays an important role both on the front lines and behind the scenes on some of the biggest issues facing state and local governments in Oregon.”

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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Rent Control Is a Steal

By Miranda Bonifield

Remember that emotional final episode of the now-classic sitcom Friends? As the group reminisces about the New York apartment that served as the stage for most of the show, Chandler tells his newborn child, “This was your first home…and thanks to rent control, it was a steal.”

His comment was more apt than the screenwriters probably realized. Rent control is a steal. It steals incentive from landlords who are interested in providing housing but can’t make ends meet when they’re no longer in charge of their rates. And especially in combination with aggressive anti-sprawl policies cities like Portland are so fond of, it steals housing opportunities from individuals who need them most.

Rather than solving housing problems, studies have found that in the long run, rent control policies increase housing costs and fuel gentrification. In San Francisco, researchers found that landlords frequently turned their apartment buildings into condominiums and invested in higher-value properties—making it even more expensive to live in the city. And unfortunately, landlords are less interested in maintaining rent-controlled apartments, which does nothing for the tenants’ quality of living.

If people are struggling to find housing, the solution isn’t to limit supply and destroy affordability. That just makes things harder. Instead, state leaders should reduce regulations that constrict housing supply, allowing developers to provide the homes Oregonians need so desperately

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

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How Ride Hailing Services Can Complement Bus and Rail—and Save TriMet Money

By Eric Fruits, Ph.D.

After teaching an evening class at Portland State University, I walked up to the kiosk showing TriMet arrival times. My bus was coming in five minutes. Good news. One of my students was standing there, too. She shook her head, looked at her phone, and said, “My next bus is in 30 minutes. I’m just going to Uber home.” Her situation wasn’t unique. Across the country, more and more commuters see ride hailing as a reliable and affordable substitute for mass transit.

Transit agencies should see services such as Lyft and Uber as an opportunity rather than a threat. Toward that end, Cascade Policy Institute recommends TriMet pursue a pilot project that replaces one or more of its high-cost bus lines with ride hailing services supported by a subsidy funded with the cost savings from eliminating the high-cost line. The experiment likely will find that replacing high-cost bus service with ride hailing will improve ridership and save money.

TriMet faces a challenge of declining ridership in conjunction with rising costs. Ridership has declined for many public transit providers in the U.S.—TriMet reports bus boardings have dropped 13 percent from their 2009 peak. As the Portland Tribune reported, the agency thinks many factors have contributed to the decline in ridership, including gentrification in Portland, the growth of urban centers inside and outside the city, and the development of self-sufficient walkable neighborhoods that has reduced the need for bus trips.

Longer travel times likely are another factor that explains the decline in bus ridership. From 2007 through 2017, the average vehicle speed for TriMet buses has dropped by almost nine percent. Portland city commissioner Amanda Fritz recently tweeted that Portland’s new speed limit law has made her bus commute five minutes longer. Over a year, that’s about 30 extra hours sitting on a bus. With longer travel times, the costs to commuters of using public transit increase, leading to a decline in ridership.

As with any mass transit enterprise, TriMet operates a number of high-cost, low-ridership bus lines. For example, the agency reports the 97 (Tualatin-Sherwood Rd) bus line has about ten riders per hour at a cost of more than $18 per ride. The fare for a ride hailing service covering the same distance as the average bus trip would be less than $8. Service on this route could be completely replaced by ride hailing services and save TriMet thousands of dollars a week.

While ride hailing can replace mass transit, it can also complement bus and rail service. Recent research finds that ride hailing services have the largest positive effect on rail service in cities with large public transit systems already in place, such as Portland. In 2015, Lyft conducted a nationwide survey of riders and found that 25 percent of riders use Lyft to connect to public transit. Uber reports that nearly 25 percent of Uber trips in suburban Portland began or ended within one quarter-mile of a MAX or WES station.

More than a dozen cities in the United States currently have programs running similar to the pilot project we propose. Detroit’s program, “Woodward 2 Work,” runs late at night and is aimed at those who work late shifts when mass transit does not run. San Clemente replaced two high-cost bus lines with ride hailing. Marin County’s service is designed to boost ridership on commuter rail by making it more convenient for riders to get to and from rail stations. Several of the programs that began as pilots have been extended because of their success in serving commuters and saving money.

Many of these cities have developed procedures to accommodate users who do not have a smartphone and users with ADA-related needs. In approving ride hailing services in Portland, the city mandated a performance standard that called for wheelchair accessible vehicles to reach riders in thirty minutes or less. In Detroit’s program, riders without bank accounts can use prepaid gift cards.

The pilot project we recommend would be a low-cost, low-risk test of potential synergies between public transit and private ride hailing. If successful, the lessons learned can and should be applied to additional high-cost transit lines.

Eric Fruits, Ph.D. is an Oregon-based economist, adjunct professor at Portland State University, and Academic Advisor at Cascade Policy Institute, Oregon’s free market public policy research organization. A version of this article appeared in The Portland Tribune on January 24, 2019.

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What’s at the Root of Oregon’s Rock-Bottom Graduation Rate?

By Kathryn Hickok

Last week the National Foundation for Education Statistics released the 2017 high school graduation rates for all fifty states. Oregon ranked 49th, at 76.7%. On the same day, Oregon officials announced an 80% statewide graduation rate for 2018. Even if Oregon’s graduation rate is making modest year-to-year gains, Oregon is still almost last in the nation.

During the past year, the Oregon legislature’s Joint Committee on Student Success asked local communities what constitutes “success” and began to work on a plan for legislative action to improve public schools. The committee published its report this month.

The committee could have saved some trouble, though, by listening to what one former Oregon college student—Steve Jobs—said about education in 1996:

“What’s wrong with education cannot be fixed with technology….It’s a political problem….The problems are unions. You plot the growth of the National Education Association and the dropping of SAT scores, and they’re inversely proportional. The problems are unions in the schools. The problem is bureaucracy. I’m one of these people who believes the best thing we could ever do is go to the voucher [school choice] system.”

With an almost-last-in-the-nation graduation rate, it’s time to free education from both union control and bureaucracy, and put the power of choice in education into the hands of parents. Oregon has tried everything else.

Kathryn Hickok is Executive Vice President at Cascade Policy Institute, Oregon’s free market public policy research organization.

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Education Savings Accounts: Fiscal Analysis of a Proposed Universal ESA in Oregon

By Eric Fruits, Ph.D.

Executive Summary

Education Savings Accounts deposit a percentage of the funds that the state would otherwise spend to educate a student in a public school into accounts associated with the student’s family. The family may use the funds to spend on private school tuition or other educational expenses. Funds remaining in the account after expenses may be “rolled over” for use in subsequent years.

Empirical research on private school choice finds evidence that private school choice delivers benefits to participating students—particularly educational attainment.

Currently, Arizona, Florida, Mississippi, North Carolina, and Tennessee have active ESA programs that are limited to particular groups of students such as those with special needs. The proposed Oregon ESA bill would introduce a universal ESA program for all K–12 students.

ESAs are frequently designed so the amount of funding provided to families is less than the amount the state would otherwise pay for a student to attend public school, with the state recouping the difference. In this way, ESAs can be designed to produce a net fiscal benefit (i.e., cost savings) to state and local government budgets.

A fiscal analysis of the proposed Oregon ESA bill finds that it would cost the state approximately $128 million a year but would lead to savings of about $130 million a year to local school districts, for a net state and local impact of approximately $2.2 million in reduced costs. There is virtually no net impact on per-student spending for students who choose public K–12 education. ♦

READ THE FULL REPORT

CLICK HERE FOR A ONE-PAGE FACT SHEET ON SB 668

Eric Fruits, Ph.D. is president and chief economist at Economics International Corp., an Oregon-based consulting firm specializing in economics, finance, and statistics. He is also an adjunct professor at Portland State University, where he teaches in the economics department and edits the university’s quarterly real estate report. His economic analysis has been widely cited and has been published in The Economist, the Wall Street Journal, and USA Today. 

Dr. Fruits has been invited to provide analysis to the Oregon legislature regarding the state’s tax and spending policies. He has been involved in numerous projects involving natural resources and Oregon forest products such as analysis for Ross-Simmons v. Weyerhaeuser, an antitrust case that was ultimately decided by the United States Supreme Court. His testimony regarding the economics of Oregon public employee pension reforms was heard by a special session of the Oregon Supreme Court.

Dr. Fruits has produced numerous research papers in real estate and financial economics, with results published in the Journal of Real Estate Research, Advances in Financial Economics, and theMunicipal Finance Journal.

 

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More Money for Schools Is Meaningless Without Controlling PERS Costs

By John A. Charles, Jr.

Several members of the Portland Public Schools Community Budget Review Committee recently co-authored an essay entitled, “The under-funding of schools must end.”

The authors assume that all money problems at public schools are the result of insufficient tax support; but the reality is that schools have been unable to control costs, especially related to pensions.

For example, in 1998 Oregon schools were required to send premiums equal to 9.9% of their salaries to pay for their share of the Public Employee Retirement System (PERS).

Since then, those rates have gone up steadily and will reach 18.3% later this year—an increase of 84% over two decades. Some school districts will pay much more. Sherwood school district will pay 27% of salaries for their PERS Tier 1 and Tier 2 obligations. Tigard-Tualatin school district will pay 28%. Tillamook Community College will pay 21%.

School support from the Oregon general fund has doubled since 2001, but it doesn’t do much good when tax money entering the front door of schools leaves out the back door for retirees. In many cases, those former workers are earning more in retirement than they did when they were actually teaching.

Unless the legislature is willing to take strong measures to control the cost of PERS, there will never be enough money to satisfy public school advocates.

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

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Press Release: Hillsboro CPA and Former Oregon State Legislator Katie Eyre Joins Cascade Policy Institute Board of Directors

FOR IMMEDIATE RELEASE

Media Contact:
John A. Charles, Jr.
503-242-0900
john@cascadepolicy.org

Portland, OR – Katie Eyre was recently elected the newest board member of Cascade Policy Institute, a nonprofit, nonpartisan public policy research and educational organization based in Portland. Eyre, a Certified Public Accountant, is a Tax Partner at Fordham & Co LLP in Hillsboro and is a former Oregon state legislator. The Cascade Board of Directors elected Eyre in late 2018 to begin her term in January 2019.

Katie Eyre joined Oregon accounting firm Fordham & Co in 1998 after gaining broad tax experience in several long-term positions with other firms. She assists business and individual clients with complex tax and compliance issues.

Prior to joining Fordham & Co, Eyre served as controller at a financial service company with more than $1 billion under management, all in multi-family housing. There, she gained experience in integrating and consolidating the financial operations of multiple companies. Since joining Fordham & Co, she now manages the firm’s tax practice as well as providing tax consulting services for closely held business, mergers and acquisitions, and estate planning.

Eyre represented House District 29 in the Oregon House of Representatives during the 2011-12 Oregon Legislative Session. She has also served on the Hillsboro Planning Commission for more than ten years, most recently as President.

Katie Eyre joins nine current Cascade board members, including Chairman William B. Conerly, Ph.D., Vice Chair Gilion Dumas, Cascade President and CEO John A. Charles, Jr., Michael L. Barton, Ph.D., Manuel Castañeda, Pamela Morris, Ruppert Reinstadler, William Udy, and Peter Wendel.

Cascade President John Charles stated, “Katie Eyre has a long record of community service at both the local and state levels. She also understands complicated tax-related problems. Her life experiences and leadership skills will significantly strengthen Cascade’s capacity to design innovative public policy solutions.”

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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Press Release: Report shows Oregon’s “smart growth” policies make housing less affordable for Oregonians

FOR IMMEDIATE RELEASE

Media Contact:
John A. Charles, Jr.
503-242-0900
john@cascadepolicy.org

PORTLAND, Ore. – Cascade Policy Institute has released a new report examining the links between anti-sprawl, “smart growth” regulations and increasing housing costs in Oregon. The report measures the extent of supply restrictions in Oregon and their impact on housing prices. It concludes that “smart growth” policies contribute substantially to the decrease in affordable housing and single-family housing options in Oregon.

The report, The Housing Affordability Crisis: The Role of Anti-Sprawl Policy, was written by Randall Pozdena, Ph.D. Pozdena is president of QuantEcon, Inc., an Oregon-based economics consultancy.

Over the last fifty years, many states have adopted “smart growth” or “anti-sprawl” policies. Enough time has elapsed for the effects of these policies to be studied. The evidence shows that many urban areas now have housing prices that make either home ownership or rental increasingly unaffordable.

In the face of resulting “affordable housing crises,” cities and states are currently considering additional regulations and subsidy policies to attempt to provide residents with more affordable housing options. There is virtually no public policy discussion of whether regulatory interventions precipitated the housing crisis in the first place, let alone consideration of abandoning these damaging policies.

In The Housing Affordability Crisis, Pozdena examines the links between anti-sprawl regulations and the spectacular increases in housing costs and the virtual disappearance of affordable housing in many markets. Specifically, he measures the extent of site supply restrictions and its impact on housing prices using an economic model of housing markets, data on the economic conditions in housing markets, and trends in development revealed in satellite inventories of U.S. land uses. At the national level, using state and Metropolitan Statistical Area data, Pozdena concludes:

  1. Twenty-three of the 50 states studied fail to provide housing units at a volume adequate to keep housing prices and incomes growing at a rate consistent with affordability. On average, these states under-provided housing units by 6.4 percent of their current stock of housing units.
  1. Those states that fail the affordability and supply adequacy test are overwhelmingly those with documented adoption of one or more aggressive anti-sprawl growth regulatory initiatives.
  1. Annual housing price inflation exceeded annual income growth by 14 percent each year during the study period in those states that failed to provide housing in sufficient quantity to keep it affordable. Extrapolating the findings to the nation, the housing stock is smaller by as much as 4.5 million housing units than it should have been to preserve affordability.

Cascade Policy Institute President and CEO John A. Charles, Jr. said, “Oregon land-use planners have long pretended that Urban Growth Boundaries and other site restrictions have no real effect on housing supply. Dr. Pozdena’s analysis clearly shows that this is wrong. We cannot solve the housing crisis by simply ‘throwing money’ at public housing projects; growth controls need to be reduced or repealed if we want to make the American Dream affordable.”

The full report, The Housing Affordability Crisis: The Role of Anti-Sprawl Policy, can be downloaded here.

Founded in 1991, Cascade Policy Institute is Oregon’s free-market public policy research center. Cascade’s mission is to explore and promote public policy alternatives that foster individual liberty, personal responsibility, and economic opportunity. For more information, visit cascadepolicy.org.

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Taiko Drums, Jazz Choir to Perform at Salem School Fair during National School Choice Week

RSVP for FREE to Options in Education Fest – 2019

SALEM (Jan. 11, 2019) – Japanese Taiko drums, a jazz choir, and an acting class will perform at the Options in Education Fest featuring a wide variety of schools from 11 a.m. to 2 p.m. Saturday, Jan. 19 at the Salem Convention Center.

Nearly 1,000 people are expected to attend the National School Choice Week celebration.

Dozens of schools from every sector – public charter, public magnet, private, virtual, and homeschool – will be represented, helping hundreds of families find the right school or educational setting for their children.

This event is planned to coincide with the history-making celebration of National School Choice Week 2019, which will feature more than 40,000 school choice events across all 50 states.

“School choice is the pathway to success,” said Bobbie Jager, school choice outreach coordinator at School Choice for Oregon. “Helping all children and parents find the right fit builds confidence and gives students the power they need to become their greatest selves.”

 

School Choice for Oregon is hosting the event. School Choice for Oregon is a project of Cascade Policy Institute, a nonpartisan, nonprofit research and education organization based in Portland. Cascade Policy Institute has promoted educational choice for all Oregon families since 1991. For more information about the Options in Education Fest and School Choice for Oregon, contact Bobbie Jager at bzmama@onlinemac.com or 503-510-9106.

 

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As a nonpartisan, nonpolitical public awareness effort, National School Choice Week shines a positive spotlight on effective education options for students, families, and communities around the country. From January 20 through 26, 2019, more than 40,000 independently-planned events will be held in celebration of the Week. For more information, visit www.schoolchoiceweek.com.

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Can National Parks’ Operations Be Funded with User Fees? National Park Service Says Yes!

By Rachel Dawson

Whether or not you have ever visited a national park, you have contributed to their budgets by paying a federal income tax. These funds help to pay for operational services like removing trash, operating camp grounds, and maintaining roads.

If you want to enjoy a national park in person, you’ll (usually) also pay an entrance fee. Under the Federal Lands Recreation Enhancement Act, park fees are designated for “repair, maintenance, and facility enhancement related directly to visitor enjoyment, visitor access…” and other visitor services. Under this law, entrance fees do not fund the previously mentioned park operations.

However, the current federal government shutdown changed this. During the shutdown, some of the nation’s most popular parks have used entrance fees to fund necessary operational expenses, due to fear that keeping the parks open during the shutdown would become unsustainable.

This change demonstrates the benefits of giving local park managers more flexibility with the use of visitor fees. Allowing individual parks to have greater control over the use of fees could reduce the parks’ reliance on Congressional (taxpayer) funding allocations, give local staffs more incentive to manage their parks efficiently, and provide a better experience to visitors. That would be an improvement both for the National Parks and for the taxpayers whose money provides for them.

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

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The Housing Affordability Crisis: The Role of Anti-Sprawl Policy

By Randall Pozdena, Ph.D.

Executive Summary

So-called smart growth policies are advocated as a means of avoiding sprawl.  These policies have at their heart a policy of reducing the availability of land for housing in urban areas. In Oregon and some other states, anti-sprawl policy is implemented by regulations that impose urban growth boundaries (UGBs).  Other regulations impose minimum density policies and others reduce spending on highways and increase spending on transit service—especially light rail—as an alternative.  Advocates of anti-sprawl policies argue that such regulations would allow urban growth to proceed at a lower overall cost.

Many states adopted smart growth policies in the last five decades—enough time for the policies to have demonstrated their purported advantages.  The evidence, at least on the housing front, is that the cost-containment claims have not materialized.  Instead, many urban areas are finding themselves with home prices that make ownership and rental of housing increasingly unaffordable.  Cities and states are thus using or considering additional regulations and subsidy policies to provide their residents with more affordable housing.  There is virtually no discussion of whether anti-sprawl regulatory interventions precipitated the housing crisis, let alone consideration of abandoning the policy.

The purpose of this study is to examine the links between anti-sprawl regulations and the spectacular increases in housing costs and the virtual disappearance of affordable housing in many markets.  Specifically, we measure the extent of site supply restrictions and its impact on housing prices using an economic model of housing markets, data on the economic conditions in housing markets, and trends in development revealed in satellite inventories of US land uses.

We apply the analysis to data from all 50 states and identify those states whose development policies reflect constrained site supply and those that do not.  Because Oregon has among the longest-standing and most aggressive implementations of smart growth land use policy, we pay particular attention to the state, and drill down with analyses at the Metropolitan Statistical Area (MSA) level in Oregon to demonstrate that the state-level findings are corroborated for all of its MSAs.

The primary metrics examined in this study are the rate of housing price appreciation, the degree of rigidity (“inelasticity”) of the supply of new homesites, and the degree to which the housing stock has failed to increase enough to affordably provide additional housing services.  Since we note that the adverse trends in house price inflation and slowing of site supply took greatest effect the last 30 years or so, we scrutinize market behavior subsequent to this period.  Because of the onset of the Great Recession in 2007, however, we estimate our models on this period.  This is because we do not wish to conflate the effects of anti-sprawl policy with the collapse of mortgage markets and home construction that persisted for the next half decade.

After establishing the linkage between constrained site supply and housing prices and affordability, we turn to the evaluation of the various policies that are in place or proposed to redress these problems.  This analysis is performed for the state of Oregon only.  The State’s wide-ranging and aggressive policies and proposals make it broadly representative of the nature, cost, and effectiveness of these policies—both those in place and those recently proposed.  With theory as a guide, and our acquired knowledge of the reactivity of the housing market to various stimuli, we can then opine on the likely effectiveness of these policies.  We also offer our own suggestions.

At the national level, using state and MSA data, we find the following:

  1. Twenty-three of the 50 states studied fail to provide housing units at a volume adequate to keep housing prices and incomes growing at a rate consistent with affordability. On average, these states under-provided housing units by 6.4 percent of their current stock of housing units.
  2. We demonstrate that those states that fail the affordability and supply adequacy test are overwhelmingly those with documented adoption of one or more aggressive anti-sprawl growth regulatory initiatives.
  3. Annual housing price inflation exceeded annual income growth by 14 percent each year during the study period in those states that failed to provide housing in sufficient quantity to keep it affordable. Extrapolating the findings to the nation, the housing stock is smaller by as much as 4.5 million housing units (in 2015 likely) than it should have been to preserve affordability.

Because Oregon has aggressively pursued anti-sprawl policy, it was given special attention in the study.  We found the following:

  1. All eight of Oregon’s MSA housing markets failed the test of affordability and adequacy of supply over the various study periods for which data was available. The estimated total shortfall in supply equals approximately 18 percent of the existing stock—virtually identical to that found for Oregon using state-level data.
  2. We analyzed the current and proposed housing policies of the state of Oregon. At present, proposals include approximately $2.3 billion by the State and the Department of Housing and Urban Development (HUD) to assist housing access and over $600 million in new affordability-related programs. This study finds that there is little hope that these policies can redress the scale and extent of Oregon’s affordable housing problems and, in some cases, may worsen them by burdening developers of housing with new regulations.

In summary, this study finds anti-sprawl policy to have been implemented in a manner that has pernicious effects on housing affordability.  Specifically, regulatory constraints on site supply have caused an on-going crisis of housing supply and affordability.  In many markets, the development of land for housing is regulated too aggressively.  Additionally, existing and new programs for addressing housing affordability rely on other regulation and spending programs that will not have the designed effect of providing affordable housing.  This study strongly recommends, instead, relaxation of regulations that limit the land area available for housing development.  Any residual concerns about sprawl should be addressed by reforming current highway and transit pricing and finance practices, which are known to be economically inefficient.

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Ride-Hailing Could Give an Uber-Needed Lyft to TriMet Service

By Miranda Bonifield

TriMet’s ridership has been steadily declining in recent years, to the great concern of transit advocates and fiscally conscious citizens alike. Proposed solutions involve sending expensive new bus and rail lines to underserved locations. But what if TriMet could reach new customers at a fraction of that cost?

Cascade Policy Institute recently released a study by economist Dr. Eric Fruits which found one or more high-cost and low-ridership bus lines could be replaced by facilitating the use of ride-hailing services in partnership with transit. Riders within particular areas could call an Uber or Lyft, ride to the bus, and then take public transit the rest of the way—a much more efficient and comfortable method than walking or biking through the rain. It could cost 55% less than expensive proposed bus lines—saving TriMet money—and slightly less than current bus and Max fares—saving customers money.

This isn’t a new idea; transit companies across the country have taken advantage of ride-hailing services’ ability to complement public transit. Studies have found a small but significant increase in transit ridership in cities with large transit systems which chose to partner with ride-hailing services. TriMet should pursue this low-risk, high-benefit option with a one-year pilot project beneficial to taxpayers, riders, and TriMet alike.

Miranda Bonifield is Research Associate at Cascade Policy Institute, Oregon’s free market public policy research organization.

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Options in Education Fest Celebrates Oregon Parents’ Education Choices

By Bobbie Jager

As a mother of 13 children (no, that’s not a typo) and grandmother of 17 more, I understand the critical role that parents play in the lives of their children. Education can make or break a child’s future, and school choice gives parents the power—and the responsibility—to decide what education options fit their children best. That’s why I support school choice and National School Choice Week.

Every January, National School Choice Week (www.schoolchoiceweek.com) shines a spotlight on effective education options for all children. A nonpartisan and nonpolitical celebration of educational choice, the Week raises awareness of the different K-12 education options available to children and families. National School Choice Week recognizes all K-12 options, including traditional public schools, public charter schools, public magnet schools, private schools, online academies, and homeschooling.

Started in 2011, National School Choice Week is now the world’s largest annual celebration of opportunity in education. Parents, teachers, supporters, and students will gather at more than 40,000 events the week of January 20-26, 2019. These events will celebrate the ways in which school choice has brought quality educational options to millions of households nationwide.

Some parents may not know it, but they do have a wide array of options. In Oregon, school choice runs the gamut, from homeschooling to magnet schools offering specialized programs in subjects like the arts or sciences. Some school districts offer choice through open enrollment (children studying in public schools outside their neighborhood borders).

Some argue that school choice undermines public education. Far from it! For one thing, many school choice options are public options, including open enrollment, magnet schools, charter schools, and online learning. Oregon’s publicly funded options include more than a hundred charter schools and 12 virtual (online) schools, all of which have greater autonomy and flexibility than traditional public schools.

But regardless of the school setting parents choose, education should always have children—and parents—as its focus. However well-intentioned, no school official can ever replace the love, care, and affection that parents will show a child. Because they care so much, and know so much about their sons and daughters, parents are the best-placed individuals to decide the right schooling option for their children. School choice gives them that power, that opportunity, and that voice.

The joy in children’s eyes at National School Choice Week festivities reminds me of my kids’ excitement when they came home from school after completing a big project or doing well on a test. When placed in an environment that nurtures and cultivates their special skills and abilities, children have a chance to shine, and their faces radiate happiness. As a mother, I hope all parents can witness that joy in their children’s faces—not just once or twice a year, but throughout their schooling.

Here in Oregon, we will use National School Choice Week to host the Options in Education Fest 2019: Exploring Your Child’s Education Opportunities, at the Salem Convention Center, Saturday, January 19, 2019. Parents and children can learn more about their options, including programs offered and application processes at various schools. This knowledge will provide parents with the power to make informed choices for their children. For more information and to attend the Options in Education Fest, visit schoolchoicefororegon.com.

A few years ago, I had the privilege of being named Oregon’s “Mother of the Year.” But in reality, all children see their parents as the Mother or Father of the Year. And all parents who make sure their children receive a quality education—and the better future that comes with it—qualify. So please celebrate National School Choice Week by considering your school options or coming out to the Options in Education Fest. Your children will thank you, both now and for many years to come.

Bobbie Jager, Oregon’s 2012 “Mother of the Year,” is a parental choice advocate and the School Choice Outreach Coordinator for the Portland-based Cascade Policy Institute, Oregon’s free market public policy research organization. A version of this article appeared in The Portland Tribune on December 18, 2019.

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Annual School Choice Week Celebrates K-12 Education Options

By Kathryn Hickok

Every January, National School Choice Week shines a spotlight on effective education options for all children. A nonpartisan and nonpolitical celebration of educational choice, the Week raises awareness of the different K-12 options available to families, including traditional public schools, public charter schools, public magnet schools, private schools, online academies, and homeschooling. This year’s celebration will be January 20-26, 2019.

Here in Oregon, Cascade Policy Institute will host the Options in Education Fest 2019: Exploring Your Child’s Education Opportunities, at the Salem Convention Center, Saturday, January 19, 2019. Parents and children can learn more about their options, including programs offered and application processes at various schools. This knowledge will provide parents with the power to make informed choices for their children.

Children have different talents, interests, and needs; and they learn in different ways. The options available to meet students’ learning needs are more diverse today than ever. For more information and to attend the Options in Education Fest, visit schoolchoicefororegon.com.

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

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ODOT’s Passenger Rail Project Equals Increasing Costs, High Taxpayer Subsidies

By Justus Armstrong

The Oregon Department of Transportation recently published its Tier 1 Draft Environmental Impact Statement (EIS) for the Oregon Passenger Rail Project, which plans to expand and improve passenger rail service between Eugene and Portland and increase Amtrak Cascades rail service from two to six round trips per day. Out of two potential build alternatives—Alternative 1, which would improve the existing Amtrak route, and Alternative 2, which would create a new route along Interstate 5 between Springfield and Oregon City—ODOT has identified Alternative 1 as the preferred alternative. Many are optimistic about improved passenger rail options, but Alternative 1 would include anywhere from $870 to $1,025 million in capital costs. Is the project worth such a high price?

One of the stated goals of the Passenger Rail plan is to implement a cost-effective project, but based on ODOT’s own testimony, it appears that Amtrak is actually becoming less cost-effective. In a 2017 Legislative report on passenger rail performance, ODOT reported that “[t]he gap between revenue and costs continues to increase.…It is likely the costs to operate the service will increase in the coming years.”

The EIS estimates that Alternative 1 would cost around $48 million a year in operations and maintenance costs—a sharp increase from the $17.75 million ODOT currently pays Amtrak annually to support the existing rail service. The EIS also admits that this is a conservative estimation based on the assumption that Amtrak payments will triple as the number of round trips triples. Currently, ODOT subsidizes each one-way Amtrak ride to the tune of about $118, and with the costs to operate Amtrak already rising, expanding an increasingly cost-ineffective service risks adding to an even greater burden on Oregon taxpayers.

On the other hand, if the improved passenger rail service were to achieve the 89 percent increase in ridership hoped for by 2035, ODOT’s subsidy would be distributed more broadly among an expected 646,000 annual rail passengers. Theoretically, this could help make ODOT’s investment more worthwhile.

More Amtrak passengers would mean more ticket revenue, lessening the gap between revenue and operating costs. However, ODOT’s ridership projections are largely based on the hope that population increases in the Willamette Valley “could result in unprecedented ridership increases.” In perspective, only 105,000 (less than 4%) of the Willamette Valley’s 2.8 million residents were riding Amtrak in 2015. Living up to the ridership goals in the EIS would require a significant shift in transportation choice towards intercity passenger rail not yet seen in Oregon.

The draft EIS does not include projections for expected revenues and fare recovery, so exact measures of cost effectiveness for the project are not yet nailed down. Unless fare recovery is significantly improved, Oregon will continue to lead the nation in passenger rail subsidies and triple already wasteful operating expenditures.

There is also the matter of the $1 billion in construction and design costs that would have to come from state and federal funds. ODOT’s passenger rail plans are likely motivated by prospects of broader eligibility for federal funding, but any advancements in rail service are bound to be a costly investment for Oregonians.

Public transportation expansions are often put forward as solutions to highway congestion. However, the EIS for the passenger rail project admits that neither build alternative would alleviate Oregon’s congestion issues, stating that the potential reduction in the number of vehicles on I-5 between Eugene and Portland “would not be significant enough to affect or improve congestion on I-5.” In fact, the EIS states that the project could even exacerbate congestion by increasing vehicle activity on surface streets near Amtrak stations. Expanding passenger rail service may benefit the small portion of the Willamette Valley population that uses Amtrak, but would do little to address Oregon’s broader transportation challenges.

Instead of expanding Amtrak rail service, ODOT could plan on gradually increasing the frequency of Thruway bus service over the next 20 years. The No Action alternative already includes plans to increase intercity bus service between Eugene and Portland to seven round trips per day, so why not focus on further increasing bus frequency rather than replacing it with a more costly rail alternative? That way, transportation service can be more flexibly adjusted to transportation demands without the same level of capital investment and heavy subsidies that expanding passenger rail would require.

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

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Ride Hailing as a Solution to TriMet’s High-Cost Bus Lines

A Proposal for a Pilot Project

By Eric Fruits, Ph.D.

Summary and recommendation

This report recommends TriMet pursue a one-year pilot project that replaces one or more of its high-cost bus lines with ride hailing services supported by a subsidy funded with the cost savings from eliminating the high-cost bus line.

  • A subsidy covering 75 percent of the fare to eligible riders would be straightforward and relatively easy to understand, implement, and use.
  • TriMet bus lines 97 (Tualatin-Sherwood Rd) and 63 (Washington Park/Arlington Hts) would be reasonable candidates for the pilot project. These lines provide the best combination of lower user costs and cost savings to TriMet.
  • The average rider’s cost would be slightly lower than current TriMet fares. Because the customer is paying a portion of the fare, riders would be more likely to weigh the benefits and costs of using the ride hail service as a connection to the TriMet system (first mile/last mile, a complement to TriMet service) versus door-to-door (a substitute for TriMet service).
  • The cost of the 75 percent subsidy on lines 97 and 63 would be approximately 55 percent lower than the current costs of operating the high-cost bus lines.

Each of the bus lines identified in this report intersects with other bus, MAX, and WES stops or overlaps TriMet transit centers. Uber found that nearly 25 percent of Uber trips in suburban Portland began or ended within one-quarter mile of a MAX or WES station, as shown in Figure 1 and Figure 2 of this report. To encourage use of ride hailing services as a complement to the TriMet system, proof of fare payment should also serve as a 2.5 hour TriMet pass.

More than a dozen cities in the United States have programs similar to the proposed pilot project. Many of these cities have developed procedures to accommodate users who do not have a smartphone and users with ADA-related needs. Several of the programs began as pilot programs that have been extended because of the success of the pilot.

TriMet faces a challenge of declining ridership in conjunction with rising costs. In addition, the agency operates a number of high-cost bus lines. At the same time, ride hailing services, such as Uber and Lyft have grown in popularity since their introduction to the Portland region in 2015, providing convenient, reliable, low-cost service to millions of riders.

Recent research finds that ride hailing services have the largest positive complementary effect on rail service in cities with large public transit systems already in place, such as Portland. For these cities, the researchers found a small, but statistically significant, complementary effect on bus ridership.

The pilot project recommended in this report would be a low-cost, low-risk test of potential synergies between public transit and private ride hailing. If successful, the lessons learned can and should be applied to additional high-cost transit lines.

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Proof by Assertion

By John A. Charles, Jr.

Many Portland drivers probably wonder why there are so many curb pop-outs on Portland streets. The pop-outs, also called bioswales, are usually shaped like rectangles or triangles and filled with plants, grass, and a drain pipe.

While advocates think the bioswales are important to protect water quality, a new report released by the Portland Auditor shows that there is little evidence to support such claims. The problem is the Portland Bureau of Environmental Services doesn’t have a monitoring plan.

In 2018 the Bureau spent $13 million in construction and maintenance costs for watershed protection, but no one was responsible for oversight. In fact, the Bureau did not even have an inventory to document where it spent money for restoration projects and the goals achieved.

This should not be a surprise. Both the Portland City Auditor and the Metro Auditor have issued multiple reports in recent years criticizing their own agencies for spending money without having systems in place to evaluate results. Those audits have generally been ignored by bureaucratic supervisors.

Unfortunately, Auditors can shine light on waste and mismanagement, but they cannot force changes. Only voters can do that by holding public officials accountable.

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

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More Spending Won’t Solve Educational Woes

By Miranda Bonifield

Increasing funding to Oregon’s school system may seem like an admirable attempt to give all kids their best shot. But the answer to our never-ending quest to educate children isn’t blowing the budget; it’s smart spending. The most recent public school spending proposals fail to mention a potential source for the extra billion dollars per year in education spending they include—which would be compounded by Oregon’s extraordinarily expensive public pension plan. Raising Oregon’s already-high taxes to hire more teachers while promising pensions Oregon can’t deliver is a recipe for disaster.

EdChoice recently published a study of the fiscal impacts of American school choice programs and found that American taxpayers saved about $3,400 for every school voucher that’s been awarded. In addition, public schools no longer have to educate the student who decides to participate in a school choice program, automatically shrinking the class size of the school she would have enrolled in.

Education Savings Account programs allow parents to withdraw their children from their assigned public schools and use some of the funding for the education of their choice. An analysis of such a proposed program in Oregon found that an allocation of $4,500 per participating student would result in a net savings of $6 million per year. I don’t know about you, but I think that sounds much better than a billion-dollar tax increase.

Miranda Bonifield is Research Associate at Cascade Policy Institute, Oregon’s free market public policy research organization.

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Prosper Portland’s Latest Business Grants Program Oversteps Again

By Justus Armstrong

Should the City of Portland invest taxpayer money in local marijuana businesses just because they’re owned by people of color? Prosper Portland seems to think so. Its new grants program seeks to expand minority-owned cannabis businesses in the Portland area.

 The Cannabis Business Development Equity Program, funded by a 3% local tax on legal cannabis sales, is intended to address the disproportionate effects of the War on Drugs on people of color. Grants ranging from $5,000 to $30,000 will be administered by the NuLeaf Project and are expected to be awarded to 10-20 businesses. Prospective grant recipients must have at least 51% ownership by people of color to qualify.

 Redressing—in some fashion—the economic impacts of marijuana prohibition on minorities might seem like a laudable goal. Grants funded by Portland cannabis tax revenue have also gone towards clearing records and assisting with workforce reentry for those disproportionately affected by marijuana prohibition.

 Measures addressing the direct criminal justice implications of drug convictions may, in fact, help to right past inequities; but the business development aspect of Portland’s program oversteps these intentions. Prosper Portland’s latest “investment” project follows the same trend as many other government programs, continuing a troubling pattern of crony capitalism disguised as affirmative action.

 Giving cannabis startups funding from the city doesn’t correlate to healing the wounds of incarceration. The NuLeaf Project doesn’t require applicants to come from a background specifically affected by cannabis prohibition. Rather, preference is given to any business with at least 51% minority ownership. The assumption seems to be that because drug possession charges have disproportionately affected people of color, all minority entrepreneurs in the cannabis industry face significant “capital, education, and connection hurdles” when starting a business.

 Prosper Portland packages the program as a way to help negatively impacted communities, but the request for proposals explicitly states that the program is “designed with an emphasis on supporting a business through growth and ensuring technical assistance leads to wealth creation outcomes.” Whether or not NuLeaf’s mission is worthwhile, it’s hard to see why public money should be given away for private wealth creation. Should Portland assume that minority-owned businesses in an industry approaching $25 billion can’t succeed without help from the city government?

 Corporate welfare is corporate welfare, regardless of the industry or the race of a business’s leadership. If you don’t believe Carrier Corporation should receive targeted tax breaks from President Trump, or that Amazon should receive special treatment from Seattle, the principle is the same. Prosper Portland’s subsidizing of cannabis companies is a similar market distortion and an illegitimate use of public funds. Tax funding should not be directed to fund businesses in Portland or anywhere in Oregon. Minority-owned cannabis businesses, like any other businesses, should succeed or fail by their own merit.

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

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QuickPoint! – “They Left Out Radio!” – The Human Genius Behind Economic Growth

By Kathryn Hickok

Bull market? Bear market? Growth? Uncertainty? What does 2019 have in store?

Economies are described in numbers, percentages, and quarterly comparisons. But the picture is richer than dollar values of production and consumption. No economy exists without millions of unique people bringing to the marketplace their creativity, intelligence, initiative, and effort. The knowledge, skills, and experiences of people are the true wealth of a society.

President Reagan once remarked on the limitations of economic predictions that can’t measure human genius. He said:

“You know, back in the twenties I think they did a report for Herbert Hoover about what the future economy would be like. And they included all their projections on industries and restaurants and steel, everything. But you know what they left out? They left out radio! They left out the fantastic rise of the media, which transformed the commercial marketplace….

“And now they make their projections, and they leave out high tech….”*

Fostering economic growth requires a tax and regulatory climate that’s friendly to businesses and the people who start them. The Oregon legislature should remember this when it convenes in February.

 

* Peggy Noonan, What I Saw at the Revolution: A Political Life in the Reagan Era (New York: Random House, 1990), 146.

 

Kathryn Hickok is Executive Vice President at Cascade Policy Institute, Oregon’s free market public policy research organization.

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Lessons in Education from Gandalf the Grey

By Miranda Bonifield

Cascade Policy Institute has supported parental choice in K-12 education since 1991. In fact, it’s the issue that convinced founder Steve Buckstein of the need for a free-market think tank in Oregon. But would you have imagined that Gandalf, fictional hero of J.R.R. Tolkien’s The Lord of the Rings, would be a voice for educational choice as well?

Yes, you read that right: Gandalf the Grey (delighter of hobbits, purveyor of fireworks, and instigator of disruptive adventures) would support school choice—giving parents the power to choose the educational setting that works best for their children. It’s all right if you need some tea to process that. I’m enjoying my second breakfast as I write this.

If you think Gandalf would never have any concern about education, consider the man who created the beloved character.

J.R.R. Tolkien was a celebrated philologist who studied and taught at Oxford. As a child, most of his initial education in languages, literature, botany, music, and art came from his widowed mother, whose creativity and passion for knowledge were passed on to her children. When her already meager allowance from her husband’s relatives was cut off upon her conversion to Catholicism, the Tolkien family moved to even harder circumstances and benefited from a local parish school. After his mother died, the young author persevered as a student.

Tolkien would later say, “True education is a kind of never-ending story—a matter of continual beginnings, of habitual fresh starts, of persistent newness.”

His character Gandalf regularly placed his faith in the character of everyday people, entrusting the most important task of Tolkien’s saga—the care and destruction of the One Ring—to an ordinary halfling. “Soft as butter as they can be,” the wizard said, “and yet sometimes as tough as old tree-roots.” Even comfortable, curmudgeonly Bilbo Baggins demonstrated how right he was—exchanging riddles to save his life from Gollum, rescuing his dwarven companions from giant spiders, and then risking the anger of the same friends to broker peace between gathering armies.

With such demonstrations of Bilbo’s merit, I think it’s safe to say Gandalf would trust ordinary people’s desire and ability to obtain a good education for their children.

Wisdom (and our favorite wizard) recognizes that life isn’t one-size-fits-all. One doesn’t reason with the evil possessing the king of Rohan—drive it out by whatever means necessary. One doesn’t send an impetuous, proud prince of Gondor into Mordor with a ring of unfathomable power. Instead, send an ordinary person whose heart is in the right place.

Likewise, parents don’t want to send their uniquely gifted child, who may have special needs, to a school that isn’t a good fit. Every parent wants to give their child the best education possible.

The most effective way to accomplish that is not by trying to force public schools to cover every eventuality and trapping students in schools that don’t meet their needs. Rather, we should return the power to parents by putting education funding in their hands to utilize resources that are already available for their children.

Last year, researchers at EdChoice combed through the highest-quality studies of school choice programs around the country. Did you know that 31 of the 33 studies on the competitive effects of school choice demonstrate a positive impact on public school test scores? Each of the three studies on the competitive effects of school choice programs found that participants in school choice programs graduate at a higher rate than their peers. School choice typically has a positive effect on racial and ethnic integration. Perhaps most importantly, parents who are able to take advantage of school choice are more satisfied with the quality of education their children receive and feel their children are safer at school.

It’s high time we brought some newness to Oregon’s education system. With good counsel from the wisest advisor of the Shire, I’m sure the excellent and commendable hobbits here in Oregon will agree: Each one of us should be a voice for school choice.

Miranda Bonifield is a Research Associate at Cascade Policy Institute, Oregon’s free-market public policy research organization. She is also the Program Assistant for the Children’s Scholarship Fund-Oregon, a Cascade program that provides K-8 scholarships to low-income Oregon children.

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Fake Leadership

By John A. Charles, Jr.

Governor Kate Brown’s proposed two-year general fund budget for 2019-21 requests $23.6 billion. That is an increase of 12.4% over the current level, which was the largest budget in Oregon history when it was adopted 18 months ago.

So far, few legislative leaders have questioned why the Governor needs so much money. At the Oregon Business Plan summit, held on December 3, most of the talk was about adopting new taxes and repealing the popular “kicker” law that rebates surplus funds to Oregon taxpayers. That’s not a good omen.

Most parents teach their children at a young age that they can’t always ask for more; sometimes you have to make do with what you have. That lesson has been lost on Oregon’s political leaders. No matter how much money we send to Salem, it’s never enough.

Before legislators vote to approve even one more tax, they should ask where the money will go, and why is it needed? And more importantly, if the current record-setting budget is not enough, what will change in the next two years to avoid another huge increase in 2020?

Any governor can demand more money; addressing the root causes of our problems takes real leadership. Gov. Brown has yet to figure that out.

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

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School Choice Improves Student Mental Health

By Miranda Bonifield

If you’ve done your homework on school choice, you know it’s been linked with improved student safety, improved quality of public schools, and academic performance. But another compelling virtue of school choice, recently published by Dr. Corey DeAngelis and Professor Angela Dills, is its association with improved mental health and decreased rates of suicide. Even when controlling for students’ family backgrounds, the paper continued to find a strong association between school choice and decreased rates of suicide.

This shouldn’t come as a surprise. When families are empowered to choose the best fit for their children, they are likely to favor schools with safe and nurturing environments that suit their child’s unique needs. The best answer to Oregon’s educational problems isn’t a longer school year or more access to preschool, even if those are potentially good things for some families. The answer is to expand Oregonian families’ choices through Education Savings Accounts, which would reserve a portion of state education funding for students’ families—making sure that money follows the educational needs of individual children, not the blanket dictates of administrators.

Every child should have the chance to receive a quality education. Oregon should make a change that’s good for our kids’ mental health and their long-term success.

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The Story Behind Thanksgiving That Every Elected Official Should Know

By Kathryn Hickok

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

Plymouth Colony originally had a socialist economy. Land and crops were held in common. In the words of Governor William Bradford, “the young men who were most able objected to being forced to spend their time and strength working for other men’s wives and children without any recompense.” Collectivism incentivized colonists needlessly to rely on the efforts of others. Realizing this, Governor Bradford assigned each household its own plot of land. Families could keep what they produced or trade for things they needed. The result was a bountiful harvest in 1623.

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

Kathryn Hickok is Executive Vice President at Cascade Policy Institute, Oregon’s free market public policy research organization.

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TriMet’s New Electric Buses Will Be Less Reliable, More Costly

By John A. Charles, Jr.

The TriMet board recently voted to replace the agency’s entire bus fleet with battery-electric buses by 2040. Since each electric bus is more than twice as expensive as a standard diesel bus, this decision will cost taxpayers more than $550 million in excess costs.

The electric premium might be worth it if there were significant benefits to switching fuels, but there aren’t. In fact, battery-powered buses are far less reliable than diesel or natural gas buses. According to a recent study by the Federal Transit Administration, battery electric buses in Seattle only traveled 2,771 miles on average between breakdowns; for diesel buses, it was 17,332.

Since moving passengers is TriMet’s primary job, this alone should have disqualified battery buses from consideration.

The primary motivation for TriMet seems to be reducing so-called “greenhouse gases,” but battery-powered buses offer no real air quality benefit. The buses must be charged from the utility grid, which is powered mostly by coal and natural gas. Even large wind farms are backed up every minute of the day by other sources such as gas and hydro dams. Using battery-electric buses simply changes where greenhouse gases are emitted, which is meaningless.

A better alternative would be renewable natural gas, derived from processing food waste or methane emissions from landfills. For this reason the Los Angeles County Metropolitan Transit Authority concluded in 2016 that it would switch its entire fleet to renewable natural gas buses because it would provide “approximately 39% greater reductions in GHG emissions at half the cost” when compared to electric buses.

Finally, TriMet has no way to pay for the electric bus conversion. The staff recommended buying the first 80 electric buses with combinations of federal grants and money from the new statewide employee tax, followed by a hoped-for legislative bailout sometime after 2022. That’s not a plan, it’s a fantasy.

TriMet has already been awarded ten battery electric buses through grants from the federal government. A more prudent option going forward would be to buy ten buses using other fuels—such as compressed natural gas and renewable natural gas—and then test them all head-to-head to measure reliability, emissions, noise, and passenger comfort.

This was a rash decision. The TriMet Board should admit that it made a mistake, and spend the next two years analyzing alternative fuels. If taxpayers are going to be forced to pay an extra half-billion dollars for new buses, there should at least be a good reason.

John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free market public policy research organization. A version of this article appeared in The Portland Tribune on November 13, 2018.

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Survey Shows Florida Scholarship Parents Are Overwhelmingly Satisfied with Their Children’s Schools

By Kathryn Hickok

Florida’s Tax Credit Scholarship Program currently helps more than a hundred thousand of the state’s most disadvantaged students to get a better education through privately funded scholarships, making it the largest private school choice program in America. The program has been funded by voluntary corporate donations to nonprofit scholarship organizations. In return for these donations, companies receive dollar-for-dollar tax credits against their state income tax.

Last week, EdChoice released the largest-ever survey of the parents of Florida’s tax credit scholarship students, revealing these families’ educational priorities and experiences.

Analyzing the responses of more than fourteen thousand parents, EdChoice concluded:

  • “The vast majority of Florida scholarship parents expressed satisfaction with the tax-credit scholarship program.”
  • “Florida parents chose their children’s private schools because those schools offer what their public schools can’t/don’t.”
  • “Among respondents whose children were previously enrolled in a public district or charter school before using a scholarship to enroll in a private school, most parents reported engaging in a variety of education-related activities more often than before switching schools….”

Children have different talents, interests, and needs; and they learn in different ways. The landscape of educational options to meet students’ learning needs is more diverse today than ever. For more information about school choice in Oregon, visit schoolchoicefororegon.com.

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 partial tuition scholarships to Oregon elementary students from lower-income families.

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Metro Should Let Transit Customers Drive Transportation Innovation

By Justus Armstrong

ABC’s Shark Tank may be coming to the Portland region—not in the form of a reality TV special, but as a taxpayer-funded project that positions the Metro regional government to act as a venture capital firm. Rather than investing in the success of growing businesses, however, the Sharks at Metro plan to fund temporary pilot projects that test new transportation technology.

Metro proposes that its Partnerships and Innovative Learning Opportunities in Transportation (PILOT) program—a component of the Emerging Technology Strategy—would help meet its “guided innovation” goals, but the shortsighted approach of this program ignores a vital question: Are risky technological investments the best use of taxpayer funding?

In a presentation at a Metro work session in July, Senior Technology Strategist Eliot Rose suggested the PILOT program would “guide innovation in transportation technology toward creating a more equitable and livable region.” Embedded in the presentation were numerous contradictions, beginning with the oxymoron of “guided innovation.” In Metro’s case, guided innovation more than likely means “hindered innovation,” with PILOT funding being a carrot-and-stick method of ensuring that emerging technologies take the direction technocrats deem appropriate, not the direction consumers are demanding.

By allocating government funding to the transportation projects of its choice, Metro risks preventing better ideas from emerging and hampering the innovation necessary for real progress to take place. As Metro strategist Rose noted, ridesharing, bikesharing, and other technologies PILOT wishes to foster have already been expanding in Portland. This technological progress has taken place with private investment, yet Rose still concludes that public money is needed for it to continue.

During the July work session, Metro staff claimed that the government “needs to intervene to bring technology to people and communities that the market doesn’t serve.” This assumption presents another contradiction: If an investment isn’t cost-effective for a private actor, what makes it a cost-effective investment to Metro? And how can successful projects be expected to continue without public funding, if the projects’ functions wouldn’t otherwise be demanded by the market?

Furthermore, Metro’s plan risks sinking taxpayer money into potentially unsuccessful projects. The $165,000 Forth-Hacienda project was presented by Metro as an example of a successful pilot project—not because the project itself was successful, but because its failure offered a great learning experience. The desire to better understand new technologies is not without merit, but the experimental nature of such pilot projects hardly makes them a good fit for taxpayer funding.

For all the project’s flaws, discussion about Metro’s Emerging Technology Strategy has included some promising aspects. For instance, during the work session, Metro Councilor Shirley Craddick brought up the idea of transitioning some of TriMet’s responsibilities to ridesharing networks. Considering more innovative modes for public transportation would be a step in the right direction and likely would improve cost-effectiveness, quality, and ridership of transit while meeting the needs of the populations Metro seeks to assist.

Perhaps a more effective Emerging Technology Strategy could focus solely on ways to improve existing public transportation through new technology, rather than interfering with private transportation markets through subsidies and attempts to shape private development. Instead of subsidizing companies with PILOT funding, Metro could offer open-ended transportation vouchers directly to transit users, especially transit-dependent and underserved populations.

Transit vouchers could be spent on a variety of transportation options, including TriMet and the newer technologies the PILOT program intends to target, such as rideshare, bikeshare, and electric vehicle and autonomous vehicle rentals. Putting the money directly into the hands of transit users could drive innovation through consumer sovereignty on the demand side, encouraging competition and making companies work to meet transit users’ needs instead of Metro’s project specifications.

With its PILOT program, Metro seeks to encourage innovation while managing risk; but any risk associated with developing new technologies should be borne by the companies driving the innovation, not by the public. If Metro moves forward with the PILOT program, it will only hinder its own goals. Instead of shaping existing markets in the private sector, Metro should focus on applying technological improvements to public transportation options.

Moreover, Metro should reform the regulatory framework and barriers to entry that may be preventing the emerging transportation technology market from functioning at its best. After all, the expansion of Uber and Lyft in Portland didn’t take place because Portland subsidized these companies. It happened because Portland stopped banning them. Metro councilors and staff can’t foresee the direction that new technologies will take, so they can’t know enough in advance to guide the direction of innovation or adequately manage its risks. The best they can do is get out of the way.

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

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Another Tax Increase from Kate Brown

By John A. Charles, Jr.

Governor Kate Brown’s top health care administrator is requesting that the legislature increase taxes on beer, wine, cider, cigarettes, cigars, and vaping pens. If approved, the taxes would result in $784 million in new revenue for the state over the next two years.

Health officials claim that this is a “public health” measure designed to reduce consumption of harmful products, but it’s really just a money grab. The state has an estimated shortfall of $800 million in Medicaid funding, and this proposal conveniently would raise almost that amount.

However, the proposed tax probably will not actually raise that much money because of a built-in contradiction: If consumption goes down, then tax revenue has to go down as well. Legislators cannot support it as both a public health measure and a revenue-raiser at the same time. For one goal to succeed, the other must fail.

It’s an open secret in Salem that the biggest “addiction” problem in the state is not tobacco or alcohol consumption; it’s the addiction that politicians have to taxation on smoking, drinking and gambling. They don’t want less of these activities; they actually want more.

Legislators are not our parents. Oregonians should be left alone so they can decide for themselves what products to use.

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’s Bond Measure 26-199 Raises Taxes on Homeowners, Requires No Accountability for Money Spent

By Miranda Bonifield

Metro claims Measure 26-199 is designed to address affordable housing, but the 652.8 million dollar bond measure raises taxes for homeowners without ensuring that it will accomplish its goals.

Metro claims these bonds would fund up to 3,900 low-income housing units. However, the measure doesn’t require a minimum number of units: Metro could build a few units, spend the rest of the money on “services,” and fulfill the requirements of Measure 26-199. The text of the measure even says these bonds may be used for things like grocery or retail space without limitation. In other words, there’s no guarantee the measure will make even a small improvement to housing affordability.

There is no deadline ensuring Metro provides these units in a timely fashion. There is no requirement for Metro to change its practices if auditors find Metro is failing to accomplish its goals. 26-199 asks you to trust Metro’s intentions without any accountability to encourage success. Meanwhile, urban growth boundaries and endless red tape keep Oregon’s housing supply from meeting the needs of our growing population.

Any major project needs firm deadlines and specific goals to have any hope of success, but Metro’s measure provides neither.

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

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