Author: Cascade Policy Institute

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As more people work remotely, a reliable grid is needed now more than ever

By Rachel Dawson

“The vast disparity between the rich and the poor is, in large part, designed by the disparity between those who have electricity and those who scrape by on small quantities of juice or none at all.”
– Robert Bryce

Electricity is at the epicenter of modern life, yet rarely does the average person consider the complexities behind the power grid when a light is turned on. The advent of technology, fueled by electricity, has created an era of human prosperity unseen throughout the history of mankind. We can pick up our smartphones and call friends from across the world, cook meals on a stovetop, and pay for goods and services with electronic banking without a second thought.

Electricity has proven to be especially important during the COVID-19 outbreak. Governor Kate Brown issued an executive order on March 23, 2020 that directs Oregonians to stay at home, closing many businesses and requiring social distancing measures. Many who did not suddenly find themselves out of a job were forced to work remotely. These workers rely on the grid to power their computers and connect them to distant coworkers via video conferencing websites. If communities in Oregon were to face a major electricity blackout that lasted 3-4 days, the state would be paralyzed.

We take for granted the access we have to the cheap and abundant electricity available here in the United States, especially in the Northwest with hydroelectric dams. While we can study, work, and play at all hours of the day, millions around the world continue to live in the dark. Their lack of electricity inhibits children’s abilities to study at night and further their education. It threatens people’s health due to unclean water and cooking on open fires in homes.

Unfortunately, our access to cheap and reliable energy in the Northwest is at risk. Oregon’s only coal-fired power plant, located at Boardman, will be decommissioned at the end of 2020 due to an environmental lawsuit settled a decade ago. A second coal plant located in Centralia, Washington will also go dark this year; and a total of 4,800 MW of coal power will be taken off the Western Interconnection (the power grid that connects most western states with British Columbia and Alberta) over the next several years. Unfortunately, utilities seem to have no real plans for replacing those megawatts with firm power.

Former Bonneville Power Administration (BPA) Administrator Steve Wright stated that this “is pretty much unprecedented” and that “we are quite concerned about whether we have enough time to address this issue.”

Wright himself has experience dealing with inadequate electricity resources. He was in charge of BPA during the 2001 energy crisis when a drought significantly reduced power from hydroelectric dams and threatened rolling blackouts in the Northwest. To conserve power, BPA took back electricity previously sold to the aluminum industry. In doing so, BPA essentially shut down the aluminum industry in Oregon, putting 5,000 aluminum employees out of work.

This isn’t a future problem for our region: Oregon’s grid is at risk right now. Frank Afranji, the President of the Northwest Power Pool, stated in an Oregon House Interim Committee on Energy and Environment that brownouts in Oregon could occur starting in 2020 and “we have an urgent situation because of the capacity deficit. We really need to move expeditiously and come up with a solution.”

Afranji also stated that battery storage technology cannot bridge the gap between supply and demand.

The Power Pool is a voluntary organization that includes electric utilities from the Pacific Northwest, Alberta, and British Columbia, and it is focused on power planning in the Northwest. The Power Pool published a report on resource adequacy in 2019 that concluded:

  1. The region may begin to experience power shortages as soon as this year.
  2. By the mid-2020s, the region may face a capacity deficit of thousands of megawatts which may result in both extreme price volatility and unacceptable loss-of-load, or blackouts.

With more employees currently working from home and communicating electronically, utilities must ensure that our region has enough reliable electricity to meet current and future demand. State policymakers and utilities can, and should, do a number of things to prevent another crisis, including:

  • Delaying the decommissioning of the Boardman Coal Plant until its principal owner, PGE, can replace the lost megawatts with reliable power; and
  • Removing the state moratorium on nuclear power to allow Oregon to invest in reliable and carbon-free power.

The Northwest Power and Conservation Council stated that the 2001 crisis developed largely unnoticed over a number of years before striking the region. It is imperative that we are not caught flat-footed again.

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

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ODOT Must Move Forward on the Rose Quarter I-5 Bottleneck

By Eric Fruits, Ph.D.

Last week, the Oregon Transportation Commission took a significant step in the process of widening I-5 through the Rose Quarter.

This stretch of freeway 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.

Despite these clear benefits, a small but noisy coalition calling themselves “No More Freeways” has tried to stymie the project at every step. Their spokesman, Metro Council candidate Chris Smith, is so upset that he has demanded the legislature strip the transportation commission of its power and hand it over to Metro, the regional government for which he is seeking a seat.

He points to Metro’s so-called success in planning for the SW Corridor light rail project. But, Metro’s light rail project will add to traffic congestion at more than 30 intersections and several freeway ramps. Ridership estimates are already down nearly 15% from earlier projections. And, the project has no guarantee of state, local, or federal funding to cover the costs. This isn’t success, it’s fumbling toward failure.

The Rose Quarter project has a plan, it has the money, and it’ll play a crucial role in relieving congestion at one of the country’s worst bottlenecks. It’s time to move forward on I-5 improvements.

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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Online charter school students were learning at home just fine, so why have their schools been taken away from them?

By Kathryn Hickok

If Oregon charter school students can stay at home and stay in school at the same time, shouldn’t they be able to?

Governor Kate Brown’s Executive Order 20-08, which closed all Oregon public schools due to COVID-19, has been interpreted to also close Oregon’s online charter schools. This means students who were enrolled as online charter students before COVID-19 have had their online schools closed, even though these students already learn at home and can safely comply with Oregon’s social distancing and stay-at-home norms. Like other public schools, online charter schools are permitted to offer “supplemental” educational materials, but not their full curriculum, according to Willamette Week.

Apparently, this decision isn’t about students; it’s about school funding. A memo from the Oregon Department of Education suggests that because online charter schools already have a curriculum for students to learn remotely, more parents may want to enroll their students in those programs now. And that would “impact school funding for districts across Oregon.”

The ODE’s logic in closing online charters seems to be that because all students can’t enroll in online charters, then no students should. So, thousands of kids who were learning online just fine three weeks ago have lost access to their programs.

Online charter school students should not be at a disadvantage compared with other children who are continuing to learn at home—those who are enrolled in private schools and home schools. The Oregon Department of Education should reverse its guidance and allow students who were already enrolled in virtual charter schools to stay in school.

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

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Small Modular Reactors Are Not the 20th-Century Nuclear Plants We’re Familiar With

By Rachel Dawson

Oregon, it’s about time we talk about nuclear power.

No, I don’t mean major reactors like PGE’s decommissioned Trojan Nuclear Plant which shuttered in 1992. Rather, I’m talking about small modular reactors (SMRs) which are experiencing rapid development and receiving great international interest.

Countries around the world, such as Russia and Canada, are currently exploring this technology. The U.S. Nuclear Regulatory Commission has completed its first SMR certification review for a company called NuScale Power, which expects final approval by 2020. As it so happens, NuScale is headquartered right here in Portland.

NuScale is developing a new type of nuclear reactor that it claims is safer, smaller, and more affordable than traditional nuclear reactors.

NuScale’s major advancement is related to the circulation of water for the reactor’s safety system. Traditional nuclear reactors circulate water by using electricity. NuScale SMRs use natural circulation and thus don’t rely on power to cool the reactor down. According to a NuScale representative, the Fukushima nuclear disaster could never happen with an SMR. In Fukushima, the plant lost power to its safety system during an earthquake and tsunami, which caused the plant to melt down. SMRs can cool themselves without any intervention in the case of a major natural disaster.

SMRs are significantly smaller than traditional nuclear reactors. Because of this, the modules can be produced in a factory and shipped onsite. Doing so allows costs to come down and ensures that quality control is more evenly managed.

SMRs also have a unique business model. Instead of operating a single large reactor, SMR plants will consist of a single or multiple smaller modules. This allows for flexible operation, and a region can add more modules as its population grows.

NuScale expects its first SMR to come online in Idaho Falls in 2026. The line item estimates for the first NuScale plant will be approximately $65 per MWh, though a NuScale representative stated that costs are expected to come down with increased production. This initial cost places SMRs within the estimated cost range of a gas combined cycle plant according to Lazard’s Levelized Cost of Energy Analysis.

Though SMRs are carbon free, they aren’t considered to be a substitute for other renewable resources, such as solar or wind, by their developers. Rather, NuScale has emphasized that SMRs are competing against natural gas as a baseload power that will keep the grid reliable during times when the sun isn’t shining, or the wind isn’t blowing.

Of course, there’s the issue of what to do with nuclear waste produced by the reactors. The most efficient way to deal with nuclear waste is to recycle it. NuScale has more modern recycling technology than France (where nuclear power accounts for 72% of total electricity production and nuclear waste is recycled), but NuScale cannot take any action as it’s currently illegal to recycle nuclear waste in the United States. In lieu of recycling, NuScale plans to create onsite storage for nuclear waste, though disposal is left up to utilities.

Unfortunately, NuScale is not able to construct an SMR plant in Oregon even though the company is located here. Oregon passed a moratorium in 1980 that effectively banned the construction of any new nuclear plants in the state.

Wind and solar plants are not currently able to power the grid by themselves given their intermittency, and battery technology is not developed enough to be implemented at utility scale. The grid needs some kind of baseload power that is capable of backing up renewables when they fail to produce power. Right now, that role is being filled by natural gas and coal plants. If Oregon officials are serious about operating the grid with 100% renewable power, they need to bring SMRs into the discussion. Otherwise the reliability—and affordability—of the grid could be at stake.

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

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The Upcoming PERS Crisis: The system is facing a $30 billion shortfall—radical reform is needed

By Eric Fruits, Ph.D.

Coronavirus has hit the economy hard. Nearly all the stock market gains from the past two or three years have been wiped out. While it’s painful for investors and retirees, it’s likely to fuel the third major PERS crisis since the dot-com bust.

PERS, the public employee retirement system, has two major sources of funds: investment returns and employer contributions. PERS investments are managed by the state treasurer, under guidance from the Oregon Investment Council. “Employers” are state and local governments whose employees are PERS members.

PERS charges these employers a rate equal to some percent of their payroll to fund the costs of their employees’ anticipated retirement benefits. Currently, the average rate is approximately 25% of payroll. For example, for a city employee with a salary of $60,000 a year, the city must pay an additional $15,000 to PERS.

One of the many factors that affect the employer rate is the unfunded actuarial liability, or UAL. The UAL is an estimate of how much money would be needed to pay off all existing beneficiaries if the system were liquidated. Think of it this way: If you sold everything you owned—house, car, checking, savings, retirement—would you have enough to pay everyone you owe? If you don’t, you have unfunded liabilities.

PERS currently has a UAL of $24.5 billion. If PERS liquidated all its assets to pay its existing members, the system would be $24.5 billion short. The employer rate is set to fill that gap over a period of approximately 20 years. So, if the UAL increases, the employer rate increases. Similarly, if the UAL decreases, so does the employer rate.

Here’s where investment returns come in.

Because of the way PERS benefits are calculated, the system’s investments must earn an average of at least 7.2% a year to stop the UAL from getting bigger. That’s a very aggressive, and optimistic, target.

In good times, when PERS investments earn above average returns, the money from the investments reduces the UAL, which in turn reduces the employer contribution rate. If, on the other hand, PERS investments tank, the UAL balloons, and state and local governments must make bigger contributions to fill the gap.

PERS investment returns are correlated with stock market returns. Generally speaking, in a bull market, PERS investments run with the bulls; when the market drops, PERS investments suffer as well.

The stock market is down more than 20% from the beginning of the year. That means PERS investments would be down by about 11%. Based on past experience, such a drop would add another $6 billion to PERS’ unfunded liabilities, for a total UAL of about $30 billion.

Let’s say the economy improves and the stock market recovers all its losses, ending the year unchanged from the beginning of the year. PERS investments would be up by about 5%, based on past experience. Even so, PERS unfunded liabilities would increase by about $3 billion for a total UAL of about $27 billion.

Based on these observations, it’s very possible that state and local governments would face an employer contribution rate for PERS of 30% or more. That $60,000 employee would now come with an $18,000 additional cost to pay for PERS.

Where will that additional money come from?

It’ll come from us. Legislators and local governments will be under tremendous pressure to raise taxes to pay for skyrocketing PERS costs. Along with that will come budget cuts, with fewer teachers, state police, foster care workers resulting in bigger class sizes, reduced law enforcement, and more children stranded in the foster system. It’s not just a financial crisis, it’s a human crisis.

PERS has been a ticking time bomb for two decades. Attempts at meaningful reform have been put off by timid politicians and thwarted by powerful public employee unions. In the first PERS crisis of 2002, the system’s unfunded liabilities were less than $4 billion. In the second crisis, beginning in 2008, the UAL ballooned to $16 billion. Today, we’re looking at a third crisis with a UAL of $30 billion or more, or nearly $19,000 per household.

We are entering an era in which PERS cannot be merely tweaked or reformed. We are entering a PERS crisis that will require a radical overhaul of the entire system. It can begin with some straightforward first steps:

  1. Move all new public employees into a 403(b) defined contribution plan. These are similar to the 401(k) plans held by many private sector employees. TriMet has already made the switch, and it saved the agency from insolvency.
  2. The PERS Board must change its assumed rate of return on PERS investments. Because of the mismatch between assumed and actual investment returns, PERS is accruing liabilities much faster than it’s growing its assets. Bad assumptions were unsustainable 20 years ago, and they’re disastrous now.

These are just first steps that can be handled quickly in an emergency session of the legislature and an emergency meeting of the PERS board. There’s never a good time to upset the public employee unions. Now that we’re in a crisis, it’s time for leadership and action to save the state from fiscal disaster.

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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Oregon Can Support Workers by Reducing Regulations

By Rachel Dawson

Businesses across Oregon are laying off employees and shuttering their doors, triggered by the COVID-19 outbreak and Kate Brown’s executive order requiring social distancing and closing specified businesses. Unemployment claims jumped by around 3,200% in Oregon last week and unemployment could reach 20% in the coming months.

Due to the outbreak and increased statewide demand, the state is relaxing requirements for some occupations. For example, the state will be expediting the licensing process for daycare providers and will “waive, suspend or amend existing administrative rules pertaining to child care while allowing for emergency child care to be established.”

Easing the burden and costs of licensing for daycare workers is a good first step, but the state can go farther to help more Oregonians access jobs they otherwise would be locked out of due to costly fees and lengthy processes. Oregon has the 8th most burdensome licensing laws in the nation and licenses 69 of 102 lower-income occupations identified by the Institute for Justice.

For instance, residents who are already certified as an EMT in another state must apply, pass a background check, and pay a fee to be granted a license in Oregon. Officials can reduce or waive these requirements to improve access to the health care industry, which may be especially important now if others fall ill while caring for sick Oregonians.

Oregon can support workers and help more people attain employment by cutting the red tape now and committing to reduced occupational regulations in the future.

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

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Tax Relief Can Slow the Spread of COVID-19 Financial Panic

By Eric Fruits, Ph.D.

The coronavirus is already taking a toll on our pocketbooks. Families are facing layoffs. Businesses are closing—and some may never reopen. Our elected leaders are urging everyone to do their fair share. Property owners have been asked to give tenants a six-month grace period to pay their rents. They’re considering forcing small businesses to provide paid sick leave to their employees. That means property owners won’t have the money they need to pay their mortgages and property taxes. That means small businesses will be spending money on workers who aren’t working.

Oregon politicians have been silent on how government is going to do its fair share to relieve the burden of COVID-19. They need to do more than just promise more facemasks and testing kits.

People need cash, but they don’t want handouts. And that’s where state and local governments can help out. Now.

For years, Oregon politicians have been loading new and higher taxes on its people and businesses. They had a permanent prosperity mindset. They believed employment would always increase, wages would always grow, and the stock market would always rise. Year after year, more and more taxes were added—just the price of a latte a week, they’d tell us. But, it all adds up. Property taxes, gas taxes, business taxes, and payroll taxes are just a few of the nibbles that over time have added up to a big bite out of our wallets. It’s time to let us keep some of that money until this crisis passes.

First, the state and local governments must give everyone an automatic six-month extension to file—and pay—their income taxes. Families need that money more than the government.

Next, the Kicker. Oregonians are due for $1.5 billion in Kicker refunds this year. That’s about $350 for the average taxpayer. Instead of waiting to get a credit on this year’s tax return, the state should send out Kicker checks. That’s what the state used to do. Plus, it’s not new spending, it’s money that’s already owed to taxpayers.

As an emergency measure, the governor should order the Oregon Department of Revenue to delay implementation of the Corporate Activities Tax (CAT) for another year. The CAT’s implementation has been chaotic, and many businesses don’t know if they owe money or how much they owe. The first of the quarterly CAT payments are due April 30. Businesses struggling to survive the virus outbreak can’t afford to spend the time and money it takes to figure out this complex and uncertain tax.

Portland should suspend the Clean Energy Fund’s gross receipts tax on retailers. Portlanders need cash on hand now and businesses need to stay solvent. Solar panels can wait until the pandemic passes.

Now’s the time for Portland to kill its Arts Tax and stop its collection efforts. In this time of worry, the city can bring a small piece of relief to the region by ending its hated Arts Tax. The first mayoral candidate who promises to get rid of the Arts Tax has a good shot at being Portland’s next mayor.

Metro should pull its May 2020 ballot measure that would impose two new income taxes on families and businesses. Portland Public Schools should stop the clock on its $1.2 billion school construction bond. Multnomah County should realize the folly in raising taxes for free preschool when students across the state are on a near-permanent Spring Break.

The age of permanent prosperity has come to a quick and unexpected end. Who knows when prosperity will return? Our leaders need to adopt a crisis mentality and work hard to make sure citizens stay solvent and businesses survive. Providing tax relief isn’t “austerity;” it’s action. Action that informs voters that the politicians they vote for care about them when leadership is needed most.

Government is rarely the solution to a crisis, but it can take concrete steps to stop today’s health care scare from turning into a financial panic.

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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Kate Brown is out of touch if she thinks an executive order is needed to reduce emissions

By Rachel Dawson

Oregon’s Governor Kate Brown responded to the Republican walk-out and end of the 2020 legislative short session by saying that she “will be taking executive action to lower our greenhouse gas emissions.” Brown is also “open to calling a special session if we can ensure it will benefit Oregonians.”

Despite what Brown may believe, executive action is not necessary to lower our state’s greenhouse gas emissions. Oregon residents and businesses are way ahead of the governor and are already cutting emissions in their daily lives. And they’re doing it without heightened government regulation or a burdensome tax.

According to the Oregon Global Warming Commission, per capita emissions have decreased by 22.8% since 1990, and emissions per unit of GDP have dropped by 50.7%.

                      Source: Oregon Global Warming Commission, 2018 Biennial Report

Additionally, Oregon’s energy use per capita is the lowest it’s been since 1960; and Oregonians have decreased energy consumption per capita by 37% since it peaked in 1972.

                                Source: Oregon Department of Energy, 2018 Biennial Report

If these trends continue, aggregate GHG emissions will decrease in the future without placing an undue financial burden on rural and low-income residents.

Oregonians, and not Kate Brown, are doing what needs to be done to benefit Oregonians.

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 Asks the Federal Transit Administration to Enforce Light Rail Contracts with TriMet

March 9, 2020

FOR IMMEDIATE RELEASE

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

Portland, OR – Cascade Policy Institute has submitted a letter to the Federal Transit Administration (FTA) requesting that the agency enforce contracts with TriMet for three light rail projects: the Yellow Line, the Green Line, and the Orange Line. Each project received substantial federal funding, which came with contractual obligations to provide minimum levels of service. TriMet has not met those obligations.

For both the Yellow and Green Lines, TriMet is supposed to be providing 8 trains per hour during peak periods. Current service on those lines is 4 trains per hour.

For the Orange Line, TriMet is supposed to be providing 6 trains per peak-hour. Current service provides only 4.6 trains per hour.

All three lines are also traveling at slower speeds than promised, and ridership projections have been missed by large margins.

Under FTA policy, the agency is empowered to demand repayment of federal funding if grant recipients fail to meet the terms of funding contracts. In its letter, Cascade Policy Institute is asking that FTA require TriMet to begin operating light rail lines in accordance with grant agreements within six months or begin paying back the federal funding.

Cascade is also requesting that FTA embargo any future funding for the Southwest Corridor Project, until such time as previous light rail projects are in compliance with contracts.

According to John A. Charles, Jr., President of Cascade Policy Institute, “TriMet’s under-performance is not an aberration, it’s a pattern. Since FTA has funded more than half the cost of the total MAX system, FTA should hold TriMet accountable by requiring the district to provide the service that was promised.”

The letter can be read here.

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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The Housing Crisis Isn’t a Portland Problem; It’s a UGB Problem

By Rachel Dawson

Portland’s housing crisis isn’t unique to the Metro region. Other areas of Oregon, such as Bend in Central Oregon, are also experiencing rising housing costs. But the high price of living isn’t the only similarity between these two areas: Both Portland and Bend have strict urban growth boundaries (UGB) and government regulations that artificially inflate the cost of building homes, and thus their prices to buyers.

Permits in Bend are low; twice as many building permits were pulled in 2005 compared to now. Given Bend’s population growth, this certainly isn’t due to a lack of demand.

So then why are homes in short supply when demand is only growing? There are two major factors driving this issue: land availability and regulatory fees.

Just like in Portland, Bend has a UGB and an influx of residents. This boundary restricts the amount of buildable land available for purchase, which in turn increases both the value and the cost of the land.

On top of artificially high land prices, regulatory fees to construct a home in Bend are around $30,000 before any shovel hits the dirt. Further, the new Corporate Activities Tax is “a huge devastating reality for the industry and will ultimately be passed on to the home buyer.”

To make housing more affordable, both Bend and Portland officials should make more land available to developers and cut back on regulatory fees. Doing so will help ease the housing crisis without increasing the burden placed on residents.

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

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Metro’s Housing Tax Requires Serious Oversight

By Eric Fruits, Ph.D.

At the first—and likely only—public hearing on Metro’s “supportive housing” tax measure, one resident asked a question on everyone’s mind: “Our money isn’t being spent the way it should be now, so what assurances do we have that this will be any different?”

The question highlights the fact that trust in local government is at a low point. Among Portland areas voters who have an opinion of their local government, approximately one-third have an unfavorable opinion of Metro or county government and more than 40% have an unfavorable opinion of their city government, according to a survey by FM3 Research.

With more than a billion dollars a year in new taxes heading to the ballot in 2020, voters deserve assurances their hard-earned money won’t be wasted or soaked up in administrative costs. If all the measures pass, some households will pay thousands, literally thousands, more in taxes. That means fewer meals out, reduced back-to-school shopping, and “staycations” instead of vacations. If taxpayers are working more to pay their tax bills, they should feel confident local governments will ensure that money is well and wisely spent. Our local governments, however, do not instill much confidence.

When asked how the regional government’s supportive housing measure could be set up to have more accountability, Metro Council President Lynn Peterson responded, “Well, we’re going to be setting up an oversight committee.” In some ways this is an admission that Metro Council can’t be bothered to oversee the program and instead intends to farm out oversight to a group of unelected and hand-picked volunteers.

In other words, “oversight committee” is a politician’s way of saying, “Nothing to see here, move along.” Voters envision a group of serious citizens scrutinizing spreadsheets, pushing back on smoke-blowing bureaucrats, finding fraud and waste, and dropping the hammer on malfeasance. The reality is different from the vision, as seen in Metro’s “Parks and Nature” oversight committee.

The committee has overseen more than $250 million of taxpayer money spent on Metro’s parks and nature program. It has 12 members, serious citizens who do, in fact, scrutinize spreadsheets. But this group has become less serious over time. At one meeting last year, only two of the 12 members attended; at another only five members showed up. At the most recent meeting, one member complained, “My eyes glass-over a bit when reviewing” the program’s spreadsheets.

While there have been attempts to see through the haze of smoke-blowing bureaucrats, the committee has been stymied more often than it’s been successful. For example, the committee has been repeatedly rebuffed in attempts to review pending land purchases. By withholding important information until a deal has closed, the committee cannot provide effective oversight.

More recently, the committee has raised questions about the administrative costs of the parks and nature program, which Metro promised would not exceed 10% of total costs. In recent years, administrative costs have skyrocketed to 20% or more of total costs; and “indirect” administrative costs have more than tripled relative to the program’s first years. In response to these questions, the committee and Metro staff decided that the 10% cap should be applied over the life of the program, rather than year-by-year. In other words, they hope overspending this year can be offset by underspending is some previous or future year.

Even worse, on at least two occasions, Metro’s “Parks and Nature” oversight committee held meetings in violation of Oregon Public Meetings Law. Metro provided no public notice of meetings in September 2019 and February 2020. At both of these meetings, the committee discussed the program’s administrative costs and other issues of public interest. By withholding public notice, these meetings were effectively conducted in secret. This is serious business. The public meetings law specifies members of a governing body may be liable for attorney and court costs both as individuals or as members of a group if found in willful violation of the law.

As Metro is asking voters to approve $300 million a year in new taxes for supportive housing, oversight of spending must be transparent, energetic, and effective. Unfortunately, Metro’s experience with its parks and nature program calls into question how effective any oversight of the housing measure will be.

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 was published by Pamplin Media on March 1, 2020.

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The Grid Is Not a Tinker Toy

By John A. Charles, Jr.

Rarely has Oregon’s lack of political leadership been as painfully obvious as it is now on the topic of grid reliability.

Most of us take for granted the miracle of electricity. We flip a switch and the lights come on. Computers, air conditioners, smartphones—all powered by the magic of the grid. We don’t care how electricity arrives; we just want it, every hour of the day.

One of the intriguing characteristics of the grid is that electricity must be consumed at the same time it is generated. It cannot be stockpiled the way water can be stored in a tank. As a consumer, you can’t go next door and borrow a cup of kilowatts.

Supply and demand on the grid must be in equilibrium at all times, to avoid blackouts. This makes power generation tricky. Utilities need electricity sources they can count on—known as “baseload” power. They typically use coal, natural gas, nuclear, and hydroelectric generators for this purpose. Those sources with the most operating flexibility—typically gas and hydro—are also used as “peakers,” to alter the power supply so it matches hourly changes in consumer demand.

The Oregon legislature declared war on reliable sources in 2007, when the first “Renewable Portfolio Standard” (RPS) law was passed. The RPS mandated that large utilities procure at least 25% of their power from politically-designated “renewable energy” sources by 2025. The most notable feature of this law was that it disallowed hydro dams built prior to 1995 to count as “renewable” energy—creating the legal fiction that the Columbia River hydropower system did not exist as a clean energy source. The point of this definition was to force utilities to switch to wind and solar.

Legislators doubled the RPS mandate to 50% (by 2040) in 2016. This was referred to by advocates as the “coal to clean” bill. They falsely promoted it as a means to eliminate coal-fired electricity. But the grid doesn’t work that way. Oregon is part of a multi-state network, in which thousands of power sources are being used at any given time. Once on the grid, electricity flows at the speed of light throughout the distribution system, powering millions of toasters, microwaves, and HVAC systems. Coal power is not physically isolated from solar or hydro.

In response to these political mandates, electric utilities are gradually shutting down coal plants in Oregon, Washington, Montana, and Wyoming. Unfortunately, they are proceeding without a clear plan for replacing baseload power. Wind and solar won’t cut it; as “intermittent” sources they fail to produce electricity about 70% of the time.

Oregon’s only coal-fired plant, located near Boardman, is owned by Portland General Electric (PGE). Due to an environmental lawsuit that was settled a decade ago, Boardman is scheduled to close by the end of this year. Electricity forecasters are predicting Northwest power shortages as early as 2020, and deficits of thousands of megawatts later in the decade.

PGE does not have a precise plan to replace Boardman. The utility expects to sign hydro contracts as a transition strategy. But any weather-related power source can disappear quickly, as happened in 2001 when the region experienced a low-water year. The result was a shortage of electricity, and the painful shutdown of the aluminum industry. Some 5,000 jobs in the Northwest disappeared.

PGE also expects to build or buy more wind and solar, coupled with battery storage. But the best utility-scale storage facility in the country can only deliver power for four hours.

We are on the brink of a blackout crisis. Instead of addressing a problem they created—the RPS law—state legislators have wasted the 2020 short session trying to prevent “global climate change” by placing limits on fossil fuel use in Oregon. Even if enacted, this would have no measurable effect on climate, so it is a waste of time and money.

Business leaders and civic groups should demand an end to this insanity. Here’s a short agenda:

First, investigate the possibility of extending the life of Boardman. The facility was designed to run for another 20 years. We should not shut it down unless all of its baseload power can be replaced by other reliable sources, at a reasonable cost.

Second, consider having the legislature refer out a referendum to re-legalize nuclear power. Some of the most cutting-edge research on smaller-scale nuclear energy is being done here in Oregon, but any commercialization will have to take place elsewhere. It’s time for a new conversation on this subject.

Finally, repeal the RPS statute. Operating the grid is complicated enough; mandating the types of power sources utilities can use is only making things worse.

John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free market public policy research center. A version of this article appeared in the February 2020 edition of The Oregon Transformation Newsletter.

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Cap Taxes or You’ll Trade Business

By Miranda Bonifield

You may not be able to tax carbon out of existence, but you can tax agriculture out of business.

That’s the refrain of Timber Unity, the coalition which sees the resurrection of last year’s cap-and-trade bill as a threat to businesses which have called Oregon “home” for decades. One woman at the Timber Unity protest in Salem February 6 said she would see an additional $45,000 in taxes if SB 1530 passes. That’s a non-starter for small businesses whose profit margins are often in the single digits.

In other words, hardworking people will be put out of business if this bill passes: folks who brought their trucks from around the state before dawn to remind Salem what the voice of Oregon sounds like. The atmosphere among the thousands gathered wasn’t tense or angry. The thousands gathered were just ordinary people who care about the environment and want to make an honest living.

Timber Unity has proposed alternatives that could help continue the downward trend of carbon emissions, which are already at their lowest level per capita since 1960. But a bipartisan compromise or referring the issue to voters don’t seem to be options. (Perhaps that’s because we already know passing a carbon tax would be a hard sell at the ballot box.)

As Senator Betsy Johnson (D, Scappoose) said, “Real Oregonians are affected by what we do in this building. …This was a bad bill last session. It’s a bad bill this session.”

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

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TriMet Drops Ridership Estimate by 13% for Tigard Light Rail

By John A. Charles, Jr.

After eight years of bragging that the proposed light rail line to Tigard would result in average daily ridership of 43,000, TriMet has quietly dropped the estimate to 37,500.

This “bait-and-switch” was totally predictable. At the start of every rail planning process, TriMet creates a high ridership estimate to get local politicians excited. Once the politicians agree to help fund the project, ridership forecasts are revised downwards. Eventually construction begins, and just before opening day, ridership estimates are lowered again.

At that point, it’s too late for politicians to back out.

TriMet promised Milwaukie officials that there would be 19,450 average daily rides on the Orange line in 2020. The actual ridership today is 12,160—63% of the forecast.

For the Blue line, ridership today is only 50% of the 2020 forecast.

The worst performer is the Yellow line, where ridership is a paltry 38% of the 2020 forecast.

While ridership is always low, construction costs are always high. For the Tigard line, cost estimates have gone up by 58% just since 2016. The current estimate is $2.85 billion.

Tigard light rail will be the most wasteful project in state history, if it ever gets built. The time to pull the plug is now.

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

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Frustrated with Traffic? According to PBOT, That’s Your Problem

By Rachel Dawson

The Portland Bureau of Transportation (PBOT), the agency charged with building and maintaining the city’s transportation system, is shifting the responsibility of improving traffic congestion away from itself and onto individual residents.

This was made apparent in a recently released 2018 report provided by Bloom Communications that surveyed Portland residents’ attitudes and perceptions of the Bureau. The contents of the survey are unsurprisingly critical of PBOT and demonstrate Portlanders’ increasing frustration with the region’s transportation system.

Of the themes that emerged, survey participants were generally concerned with safety on public transit, potholes and degrading roads, increasing traffic congestion, and PBOT’s lack of vision.

People want safe and efficient commutes. 81% of participants said that driving their car was the safest way for them and their families to commute, as they have greater control over who they come in contact with and what happens to them. Another 64% said they would consider taking transit if they were sure they “could reliably get to [their] destination faster or in the same amount of time as driving [their] personal car.” However, the current transportation system is seen as an inconvenience for many participants, and it is quicker for them to drive their car due to the frequency at which the MAX and city buses make stops.

PBOT is charged with repairing potholes and maintaining roads in Portland, yet some participants voiced their frustration with potholes not being filled in and car lanes disappearing across the city, replaced by bike lanes.

When it comes to bike lanes, PBOT doesn’t seem to know what it wants. Various striping patterns around the city lack consistency and confuse bikers and drivers alike.

According to one PBOT stakeholder (emphasis added):

“…The average joe probably doesn’t want the bike lane; they just want the street maintained. These are not necessarily the vocal people that come in and drive the budget. It’s concerning to see most of our city policies focused around that vocal minority. Are we aligning with who the general people are? Or are we focused on the Biker’s Alliance?”

Despite this concern, it seems that PBOT will continue to turn a deaf ear to the majority of commuters who want improved roads and more efficient commutes. The report states that “Portlanders demand a solution to traffic congestion but are unwilling to alter the way they are used to commuting to make positive changes and ease the situation….[R]esidents will have to start changing how they commute.” PBOT has no desire to increase road capacity and is placing the responsibility for rising levels of traffic congestion on individual Portlanders.

Portland commissioner Chloe Eudaly will send Portland’s expiring 10 cent per gallon gas tax back to voters in May 2020. Gasoline-using vehicles pay for 100% of the tax but only receive 56% of the benefits. The other 44% is spent on pedestrian and bicycle safety. Portland’s auditor reported in a 2019 audit that the program was poorly managed and lacked realistic project schedules. Moreover, the program’s spending seems to highlight the concerns held by the above PBOT stakeholder, that city policies are focusing disproportionately on pet projects and the vocal biking minority instead of aligning with the general public.

Commuters want efficient and safe commutes on well-maintained roads. PBOT should be serving the public, not dictating how residents should commute. Voters should reject the 10-cent gas tax and demand that PBOT take responsibility for Portland’s increasing congestion. PBOT should try to reduce congestion, not make it worse. Portlanders deserve better.

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 Raises Concerns Metro Is Flouting Oregon Public Meetings Law

Transparency is critical as Metro asks voters to trust the agency with billions in new taxes

February 11, 2020

FOR IMMEDIATE RELEASE

Media Contact:
Eric Fruits, Ph.D.
503-242-0900
503-928-6635
eric@cascadepolicy.org

Cascade Policy Institute has raised concerns with Metro Council that the regional government’s Parks and Nature program may be violating Oregon’s Public Meetings Law.

In a letter to Metro President Lynn Peterson and Metro Council, Cascade Policy Institute has identified two meetings of the Parks and Nature Oversight Committee that were held without public notice.

One of these meetings was last Tuesday, February 4, 2020. At an afternoon work session, Councilor Sam Chase informed the rest of Council that he had met with the Oversight Committee earlier that day. At the meeting Councilor Chase and the committee discussed issues Cascade Policy Institute’s Eric Fruits had raised regarding the Parks and Nature program in testimony to council on January 23, 2020. Councilor Chase says he and the committee discussed the administrative costs of the Parks and Nature program, which skyrocketed last year. There was no public notice of the public meeting of the Oversight Committee.

The other meeting was September 24, 2019. There is no record of a public notice announcing this meeting of the Oversight Committee. According to minutes the committee discussed the program’s administrative costs, which at the time were running at 20% for the year, or double the amount Metro promised to voters. Other issues included the upcoming Parks and Nature ballot measure and land acquisitions.

As late as December 6, 2019, the Oversight Committee’s webpage had no record of the September 24, 2019, meeting according to an archived copy of the webpage.

After Dr. Fruits’ testimony to Metro Council regarding the Oversight Committee, it appears Metro created a backdated webpage to give the appearance that it provided public notice of the September 24, 2019 meeting. For example, the page says, “The Sept. 24 meeting will include a tour of Killin Wetlands Nature Park” (emphasis added).

A review of the source code for the webpage reveals that the page was published on January 24, 2020, one day after Cascade Policy Institute’s testimony to Metro Council.

Oregon Public Meetings Law requires that public notice be given of the time and place of meetings and that the time must be “reasonably calculated to give actual notice to interested persons.”

Metro provided no notice of its most recent meeting of the Parks and Nature Oversight Committee. Even worse, it appears Metro created backdated notice to cover its failure to notify the public of its September 2019 meeting of the Oversight Committee.

Oregon’s Public Meetings Law indicates members of a governing body may be liable for attorney and court costs both as individuals or as members of a group if found in willful violation of the Public Meetings Law. To reduce the risk of such consequences, Metro Council must perform a thorough review of the relevant law regarding its public meetings and take whatever actions necessary to ensure Metro abide by both the letter and the spirit of the law.

As Metro is asking voters to approve billions of dollars in new taxes for housing services and transportation, transparency encouraging citizen oversight of the regional government’s spending is more important than ever. Proper notice of public meetings is not just the law, it’s the right thing to do.

A copy of the letter and documentation is available here.

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They Always Want More: Voters Face at Least a Half Dozen New Taxes in 2020

By Eric Fruits, Ph.D.

With this year’s “short” session of the legislature, the $700 million a year cap-and-trade bill is on everyone’s mind.

As they say on the infomercials: “Wait, there’s more.” Way more. Way more taxes. This year, Portland area voters are facing at least six new tax measures.

First, we have Metro’s transportation package that will amount to more than $400 million a year in new taxes.

This week, Metro is also looking to move forward with another set of taxes for homeless services. That’s expected to cost about $300 million a year.

Then, we’ve got Portland Public Schools’ billion dollar plus school construction bond, where $200 million will be used to pay for cost overruns from the last bond measure.

Wait, there’s more.

In November, Portland voters will be asked to renew the city’s 10-cents per gallon gas tax.

In the Portland area alone, voters will see at least six new taxes totaling more than a billion dollars a year.

Also in November, ballots will go out for a $2 per pack increase in Oregon’s cigarette tax plus a massive new tax on vaping products.

Wait, there’s one more.

In response to House Speaker Tina Kotek’s call for a housing emergency in Oregon, Governor Kate Brown is pressing for a new tax on home sales. That’s right, the state with a housing affordability crisis is looking at a tax to make homes more expensive.

No matter how much they spend, they always want more. It’s time for Oregon voters to pick up their ballot and tell their politicians, “Enough is enough.”

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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Supreme Court Espinoza Case Debates Parents’ Freedom to Choose Religious Schools

By Miranda Bonifield

When Kendra Espinoza’s husband suddenly left their small family, her two daughters’ lives were thrown into chaos. Separation is never easy on kids. But on top of all the normal anxieties of the situation, Naomi and Sarah went from homeschooling with a stay-at-home mom to enrollment in the local public school while their mom worked. While this might be a smooth transition for some kids, Naomi was bullied and Sarah struggled in her classes.

Kendra knew it wasn’t the right option for them. So, the Montana mother took a second job and pursued every financial avenue she could to send them to a Christian private school. There, her daughters flourished in an environment where Kendra felt they were learning good values.

Tuition became more burdensome when in 2017 Montana ended the tax credit scholarship that helped stabilize Naomi and Sarah’s lives. The small program had allowed Montana taxpayers to deduct up to $150 from their taxes when they voluntarily donated to scholarship organizations that helped kids like the Espinozas.

Montana’s tax credit scholarships could be used at any school, whether secular or religious, until the Montana Department of Revenue chose to interpret the state’s prohibition against aid to religious organizations to include participation in this program. Though a trial court found in favor of families’ free exercise, the Montana Supreme Court struck down the entire scholarship tax credit to avoid either benefiting or discriminating against religious schools. On January 22, the Supreme Court heard oral arguments in the case Espinoza v. Montana Department of Revenue.

Ending a scholarship program which helped families across the state solely to prevent religious schools from benefiting is arguably a violation of the free exercise and equal protection clauses of the U.S. Constitution. Previous Supreme Court cases like Trinity Lutheran v. Comer (2017) established that a church’s status as a religious organization may not be used to deny it benefits from an otherwise secular aid program.

Montana has argued, tenuously, that the precedent set in Locke v. Davey allows a state educational funding program to refuse funding explicitly religious options such as pastoral degrees. But even the scholarship program in Locke included religious schools and religious classes, drawing the line only at explicitly religious purposes.

Montana’s tax credit scholarship, which originally assisted school-aged children to attend any participating private school, could have legally and Constitutionally continued to help Kendra Espinoza and her kids without providing undue support to religious organizations. In fact, out of 29 states with a total of 62 school choice programs, Montana’s is the only program which chose to explicitly remove support for religious schools on the basis of their religion.

While school choice programs may allow funding to be directed to a variety of schools, the real beneficiaries are the families who can choose schools which help their unique children. The real beneficiaries are kids like Naomi and Sarah. Espinoza v. Montana is less a question about public funding for private schools and more an issue of equal access to education for American families. While striking down Montana’s tax credit scholarship program removed options for all children, it disproportionately impacted the children of low-income families for whom private school tuition is at best a major sacrifice and at worst an impossibility.

For moms like Kendra, school choice isn’t a distant political ideal. It’s an immediate practical reality which means the difference between watching your child struggle through a one-size-fits-all system and choosing a school that can nurture your child’s growth. This month’s arguments in Espinoza v. Montana should become an important precedent for defending a family’s right to choose an education consistent with their values, bringing a fairer understanding of what it means to provide equal access to education.

A favorable ruling in Espinoza v. Montana could help empower families who otherwise would be unable to attend private schools—a boon both to public schools which would benefit from increased competition and to students who could thrive with the education that best fits them.

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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Oregon is meeting its 2020 GHG emissions goals, depending on how you measure it

By Rachel Dawson

Is Oregon meeting its 2020 greenhouse gas (GHG) emission reduction goals? It depends on how you measure emissions.

The Oregon Legislature established GHG reduction goals in 2007 through HB 3543. The law called for reducing GHGs to 10% below 1990 levels by 2020, and 75% below 1990 levels by 2050.

However, the statute does not say whether GHGs should be measured in the aggregate or on a per capita basis. This is an important distinction given Oregon’s population growth since 2007.

The Oregon Global Warming Commission (OGWC), a group created by HB 3543, insists on measuring total GHG emissions. Using this metric, Oregon produced 13% more total emissions in 2017 compared to 1990 levels, and thus appears to be failing.

When measured on a per capita basis, Oregon GHG emissions in 2017 were actually 21% lower than 1990 levels. We have more than doubled the 10% emissions reduction goal, three years ahead of the deadline.

In fact, Oregon has improved its energy efficiency so much that per capita energy use in 2016 was the lowest it’s been since 1960, declining 37% since it peaked in 1972. Oregon has the lowest per capita energy use in the entire Northwest.

Unfortunately, you won’t see any celebration from the Global Warming Commission, because good news doesn’t sell. More importantly, the Commission needs the perception of a crisis in order to justify Governor Brown’s climate change agenda. Oregon legislators should remember this when the Governor’s cap-and-trade bill is debated in February.

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

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Oregon and Washington Need to Think Bigger on I-5 Bridge Project

By Eric Fruits, Ph.D.

“It’s time to get this done!” Governor Kate Brown told the crowd at this year’s Oregon Leadership Summit, referring to a replacement for the Interstate 5 bridge over the Columbia River. The statement ended with an exclamation point, but it should have ended with a question mark. Despite the urgency, it’s not clear what the governor means by “this” or when “this” should be completed.

Last month Governor Brown met with Washington Governor Jay Inslee and inked a deal to begin the process of replacing the I-5 bridge connecting the two states. The two states have allocated $44 million to open an office for the I-5 bridge project. Governors Brown and Inslee hope to pick up some of the pieces of the Columbia River Crossing project that fell apart in 2013 after a dozen years of planning, costing taxpayers more than $200 million.

But what is “this” bridge replacement? Will there be more lanes than we have now, or fewer? Will lanes be set aside for buses or light rail? Will bicyclists and pedestrians get their own lane? These are all different ways of asking the same question: Will the replacement have more lanes for cars and trucks?

If the answer is “yes,” there will be more lanes to relieve traffic congestion, then the governor should push to get as much done as possible before her term is over. If the answer is “no,” there won’t be new through-lane capacity, then she should admit the project is an expensive no-growth policy and be upfront with Oregonians about it.

Since the beginning of the original CRC planning in 2001, the region’s population has grown by nearly 30%. Over that time congestion has worsened, commuting times have lengthened, and the bridge has become one of the worst freight bottlenecks in the country, according to the American Transportation Research Institute.

At this point there are no clear plans for how the I-5 bridge replacement will relieve pressure on this key pinch point. The current bridge has three northbound and three southbound lanes. At the time the CRC project imploded, there were no clear plans to add through lanes for cars and trucks—just added lanes for bikes, pedestrians, and public transit.

Opponents of the bridge replacement come from all sides. Environmentalists and active transportation advocates argue that relieving traffic congestion will trigger “induced demand” for travel that will make congestion worse and increase carbon emissions. Commuters and freight haulers complain the set-aside for bikes, pedestrians, and public transit is a wasteful use of lane capacity. Good government folks question spending billions of dollars on a project that would do little or nothing to relieve one of the nation’s worst traffic bottlenecks. Another group of good government folks—mostly from Washington and Clark counties—are clamoring for a third bridge that would allow Westsiders to avoid slogging through US Highway 26 and I-5 through Portland.

Opponents of the original CRC noted that improving traffic flows crossing the Columbia on I-5 would not solve any congestion problems. Instead, they argued, the new bridge would shift the bottleneck further south to the Rose Quarter. Things have changed, and that argument will soon lose its relevance.

In particular, the Oregon Department of Transportation is in the middle of a project to widen I-5 through the Rose Quarter. The addition of lane capacity alone will do much to relieve congestion in this choke point. But, there’s more.

Along with the addition of lane capacity, the legislature directed ODOT to experiment with congestion pricing along the improved stretch—an experiment supported by Governor Brown. The money raised from congestion pricing should be used to improve and expand roads for the people paying the tolls. If the governor doesn’t want to use the funds to expand highway capacity, she owes the people of Oregon a clear vision of where she thinks it should go.

Transportation is a crucial element of economic development. With transportation improvements, trade between regions increases. With easier commutes, employment opportunities open up. Increased trade and improved employment drive economic growth and prosperity. An I-5 replacement that does nothing to improve the flow of goods and people is a waste of money. A replacement that adds capacity and reduces congestion is an investment in shared prosperity for Oregon, Washington, and the West Coast.

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

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Miss Virginia: A Trailblazer for Educational Opportunity for Today’s Kids

By Kathryn Hickok and Miranda Bonifield

Virginia Walden Ford is a Washington, D.C. mom whose extraordinary sacrifice and determination changed not just her own child’s life, but the lives of thousands of low-income and minority students. Her story is now told through the new movie Miss Virginia, starring Orange Is the New Black’s Uzo Aduba.

Virginia’s experience as an African American 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 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 private school scholarship. William went from skipping school to being a joyful, enthusiastic student known by friends and teachers.

Virginia Walden Ford believes every child should have that same chance to succeed in school and in life. Her persistent work on behalf of low-income students in Washington, D.C. led to the creation of the Opportunity Scholarship Program (OSP). The OSP is a congressionally funded scholarship program which has given thousands of District kids the chance to attend private elementary and high schools chosen by their parents or guardians. 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.”

January 26-February 1 is National School Choice Week, the world’s largest celebration of parental choice and effective educational options for all children. To celebrate National School Choice Week, Cascade Policy Institute will host a special screening of the film Miss Virginia in Lake Oswego on Thursday evening, January 30, at 6:30 pm. (Admission is free, but reservations are required due to space limitations. For theater information and to reserve tickets, call Cascade Policy Institute at (503) 242-0900.)

As Virginia Walden Ford and her son William knew too well, choices in education are widespread in America, unless families are poor. Parents with the financial means to do so will buy homes near public schools they like, pay tuition for private schools, or supplement the classroom experience with enrichment opportunities. But low-income families generally find themselves trapped with only one option: a public school assigned to them based on their address, which too often fails to meet their children’s educational and personal needs.

All families deserve better.

The landscape of options to meet students’ unique learning needs is more diverse today than ever. These options include traditional public schools, charter schools, private and parochial schools, homeschooling, magnet schools, online learning, and more. Today, more than half the states in the U.S. provide parents with flexibility in their children’s learning options through 61 different educational choice programs such as privately or publicly funded scholarships, education tax credits, and Education Savings Accounts (which can function like restricted-use debit cards for a child’s education expenses).

Every child has one chance to grow up, and each year is precious. Parents know it: The right educational environment can change a student’s life. Empowering parents to give their children the education that’s right for their talents and needs unlocks the unique potential of every child. Virginia Walden Ford’s experiences and advocacy on behalf of Washington, D.C. students demonstrate how important school choice policies are to the future of low-income children in America. She also shows us what a difference one dedicated and courageous parent makes, not only for her own child, but for thousands of others as well.

Kathryn Hickok is Executive Vice President at Cascade Policy Institute and director of Cascade’s Children’s Scholarship Fund-Oregon program. Miranda Bonifield is CSF-Oregon’s Program Assistant. CSF-Oregon has provided scholarships worth more than $3.3 million to lower-income Oregon children to help them attend private or parochial elementary schools since 1999.

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Eric Fruits, Vice President of Research of Cascade Policy Institute submitted testimony to Metro Council regarding the lax oversight of Metro’s Parks and Nature Program

Press Release: Eric Fruits, Vice President of Research of Cascade Policy Institute submitted testimony to Metro Council regarding the lax oversight of Metro’s Parks and Nature Program.

January 23, 2020

FOR IMMEDIATE RELEASE

Media Contact:
Eric Fruits, Ph.D.
(503) 242-0900
eric@cascadepolicy.org

Thursday, Metro Council will be receiving from staff an annual report on Metro’s Parks and Nature program. Cascade Policy Institute urges the Council reject the Annual Report and demand a revised report that includes details of the program’s skyrocketing administrative costs. In addition, the Council should replace the current members of the Oversight Committee with individuals who have the time, energy, and expertise to provide adequate oversight to the nearly billion dollar Parks and Nature program and Council should provide the new Oversight Committee with the information and staff support necessary for them monitor the Parks and Nature program.

REJECT THE PARKS & NATURE ANNUAL REPORT

In the last fiscal year, Metro spent $42 million on its Parks and Nature program. Yet the annual report provided to Metro Council is only four pages and runs less than 1,400 words with high-res photos making up about one-third of the report. What little information is presented raises more questions than it answers, in particular:

  • The Annual Report provides no explanation for skyrocketing administrative costs, which last year account for 30% of total program expenditures. Metro promised taxpayers that administrative costs would be no higher than 10%.
  • The Annual Report provides no useful information regarding how many acres were purchased in the past year, where they were purchased, or how much was paid. Previous annual reports provide at least some of this information. Metro Councilors and Metro voters deserve to know how much of their tax dollars are being used to buy land outside of Metro’s jurisdiction and/or outside the Urban Growth Boundary.
  • In April 2019, the Oversight Committee requested the Annual Report include information regarding “extra resources (bond proceeds and grants) that helped pay for capital projects at Chehalem, River Island, etc.” The only mention of capital projects in the Annual Report are forward looking promises regarding the proceeds from the 2019 bond measure. The Annual Report has no discussion of Chehalem Ridge nor River Island. The omission of these items specifically requested by the committee demonstrates the Oversight Committee has no sway over Metro staff.

REPLACE THE MEMBERS OF THE PARKS & NATURE OVERSIGHT COMMITTEE

Metro council and staff frequently repeat the tired phrase “promises made, promises kept” with respect to their Parks and Nature program—it even makes its way into the most recent Annual Report. One promise made to voters in every Parks and Nature ballot measure since 2006 has been vigorous oversight of the program by a citizen Oversight Committee.

  • Beginning with their earliest meetings, Metro staff made clear the committee would be denied key information required and requested to provide oversight. For example, the committee has repeatedly been rebuffed in its efforts to provide oversight on pending land purchases.
  • Over the past year, the already weakened Oversight Committee has become a farce. The last time the Oversight Committee met was April 5, 2019, or nearly 10 months ago. This is the longest gap between meetings of the Oversight Committee. At the last meeting only 2 of the 12 committee members were in attendance.
  • The Oversight Committee was expected to meet in Summer 2019, with a discussion of the Annual Report to be an agenda item. That meeting was never held and there is no record of the Oversight Committee meeting to review the 2018-19 Annual Report.

The members of the current Oversight Committee should be replaced by individuals who have the time, enthusiasm, and expertise to serve. The newly formed committee must be provided the power—and support from Metro Council and staff—to exercise effective oversight of this billion dollar program.

For more details on Cascade Policy Institute’s recommendations to Metro Council, please read the complete letter below.

Click here for PDF version:

Testimony to Metro-Letter 200123a

 

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National School Choice Week Celebrates All the Ways Kids Learn

By Kathryn Hickok

January 26-February 1 is National School Choice Week, the world’s largest celebration of parental choice and effective education options for all children. Since 2011, more than 180,000 independent NSCW events and activities have been planned in local communities across the country.

The landscape of options to meet the learning needs of today’s students is more diverse than ever. These options include traditional public schools, charter schools, private and parochial schools, homeschooling, magnet schools, online learning, and more.

Empowering parents to choose among these options can unlock the unique potential of every child. More than half the states in the U.S. now help families to have more flexibility with their children’s education through educational choice programs like privately or publicly funded scholarships, education tax credits, and Education Savings Accounts.

To celebrate National School Choice Week, Cascade Policy Institute will host a screening of the new feature film Miss Virginia in Lake Oswego on Thursday evening, January 30, at 6:30 pm. Admission is free, but reservations are required due to space limitations. For more information about the event and to reserve tickets, call Cascade Policy Institute at (503) 242-0900.

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

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Why are rural, low-income residents subsidizing Teslas for Oregon’s urban elite?

By Rachel Dawson

Oregon state officials recently celebrated helping the state reach 25,000 registered electric vehicles (EVs) through local incentives and the Clean Vehicle Rebate Program. This celebration, however, is a punch in the gut to the state’s low-income and rural residents whose taxes fund the rebates and incentives used to purchase the EVs by predominantly wealthy and urban Oregon residents.

Programs include two rebate programs through the Oregon Department of Environmental Quality, a federal tax credit, and local utility rebates (though local utility rebates generally tend to target businesses and the 2019 Nissan LEAF). For example, a consumer could use between $7,500 and $10,000 taxpayer dollars to purchase a new 2020 Tesla Model 3, which currently sells for $39,999. In fact, 24% of the EVs registered in Oregon are Teslas.

These incentive programs may shave a couple thousand dollars off the consumer cost of EVs and plug-in hybrids, but their prices will likely still be too high for those with lower incomes. Purchasing an EV also isn’t a viable option for many residents living in rural counties due to a lack of EV infrastructure.

The three counties with the largest number of EV purchases, Washington, Multnomah, and Clackamas, are all coincidentally located in the Portland metro area. They also happen to be the three most wealthy counties in the state, so it’s no wonder their residents purchase 75% of the state’s registered EVs.

David Larson, Jaguar Land Rover’s general manager of product development, told ABC news that EVs “still cost a lot more than ICE [internal combustion engine] cars and charging takes a long time … For a rancher in Montana, EVs are not the solution. These cars are for people who live in urban areas and don’t travel more than 100 miles or more a week.” The same logic could be applied to people living in Eastern and Southern Oregon.

EVs are being promoted due to their supposed environmental benefits, but in reality, the emissions are simply being shifted from urban cities to rural areas. The electricity powering the vehicles comes from a mix of coal, hydro, wind, solar, and gas power plants. You won’t see any of these plants in Portland as most of them are located in other areas of the state, such as Eastern Oregon, where utilities can purchase and construct facilities on large plots of land.

Oregon officials are very vocal when it comes to “environmental benefits,” but seem to have tight lips when it comes to the range of issues EVs experience.

The vehicles use lithium ion batteries which are sensitive to temperature changes. Larson says that cold weather can cut range by up to one third. These issues make EVs a suitable option for warm, urban areas—a big reason why the largest markets for EVs in the US are located in California, Texas, and Florida. This may not be an issue in warmer climates, but EVs will experience a variety of problems during Oregon’s cold winters. The battery can also be significantly drained depending on how fast one drives, heating or cooling the vehicle, and radio usage.

Portland also has one of the milder climates in the state, so it is no surprise that the state has seen a surge of EV purchases in the urban metro area.

But even in an urban environment, relying on an EV can prove costly and inefficient. Recent electricity blackouts in California have left thousands without power, leaving EV owners stranded unless they own a gasoline powered generator to charge their vehicle or have access to other means of transportation.

Officials’ environmental concerns should be eased by the fact that vehicle emissions in Oregon are decreasing despite a growing population and are projected by ODOT to decrease to 20% below 1990 levels by 2050. This is due in part to older vehicles being retired and replaced by more efficient cars.

Multiple legislative concepts related to EV infrastructure will be discussed in the legislative short session this year. LC 222 would amend building code requirements to create an EV infrastructure requirement for the construction of certain buildings, such as privately-owned commercial buildings and residential and mixed-use buildings with five or more “dwelling units.” LC 224 would authorize the Public Utility Commission to allow utilities to recover the costs of EV infrastructure from all ratepayers.

The passage of these potential bills would further disperse the cost of EVs to those who do not own one through increased power bills and housing prices. Oregon taxpayers from across various counties and income levels should not be subsidizing EV purchases that tend to be used by wealthier residents living in urban environments. Given that EVs are already decreasing in price as new vehicles enter the market and technology improves, state officials should not move forward with the above legislative concepts and should eliminate the unjust EV rebates.

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

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New Year, New Tax: What You Need to Know About Oregon’s Gross Receipts Tax

By Katie Eyre, CPA

The 2019 Oregon Legislature established a new tax affecting all firms that do business in Oregon. While it is called by its misnomer the “Corporate Activity Tax,” the CAT actually applies to most types of organizational entities such as partnerships, individuals, limited liability companies, and trusts that have commercial activity generated in Oregon in the regular course of their trade or business. It is a tax paid annually for the privilege of doing business in Oregon. Initial expectations are that it will raise about $1 billion in new revenue annually. These funds are to be set aside for exclusive use for education and school purposes.

By now, every business in Oregon should have received a generic letter from the Oregon Department of Revenue alerting them to this new tax. This letter is a helpful primer on the CAT, but is not incredibly useful in figuring out the impact on each business’s specific situation. As is usual with all tax law, the devil is in the details.

How did the Corporate Activity Tax come about? In May 2019, the Oregon Legislature passed HB 3427. In this bill, it established the CAT as the primary mechanism to fund the new Fund for Student Success. Then in June 2019, the Legislature passed HB 2164 which provided technical corrections to HB 3427. As a follow up, the Department of Revenue held informational and listening sessions around the state through the last half of 2019. In December 2019, the Department of Revenue issued 12 temporary rules related to this new tax. The agency intends to release additional temporary guidance through March 2020. Any time there is a new tax put in place, there is much ambiguity, and so as a tax practitioner, we appreciate any guidance that is issued, especially since the effective date is January 1, 2020 and the first estimated tax payment is due April 30, 2020 (more on that later).

Who is subject to the CAT? That tax is imposed upon enterprises with a trade or business and “substantial nexus” in Oregon, who also meet certain specific thresholds. We’ll drill down on some of the definitions, but here is a quick threshold listing:

  • Any business with Oregon “commercial activity” in excess of $750,000 will need to register,
  • Any business with Oregon “commercial activity” in excess of $1,000,000 will need to file, and
  • Any business with Oregon taxable “commercial activity” in excess of $1,000,000 will need to pay the CAT.

How much is the CAT? It is 0.57% of a firm’s Oregon taxable commercial activity in excess of $1,000,000 plus $250. If a business does not have Oregon taxable commercial activity in excess of $1,000,000, then it will not owe any tax, including the $250 minimum tax.

What is a “substantial nexus”? HB 3427 states that a business has a substantial nexus if it:

  • Owns or uses a part or all of its capital in this state,
  • Holds a certificate of existence or authorization issued by the Secretary of State’s office,
  • Has a “brightline presence” in Oregon, defined as:
    • Owns property in Oregon with an aggregate value of at least $50,000, or
    • Has Oregon payroll of at least $50,000, or
    • Has commercial activity in the state of at least $750,000, or
    • At least 25% of the total property, payroll, or commercial activity is in Oregon, or
    • Is a resident or domiciled in Oregon for commercial, corporate, or other business purposes.

The Department of Revenue provides an example of a hypothetical out-of-state firm that would be subject to CAT regulations:

Atlas Company (Atlas Co.), headquartered in Maryland, operates a website supporting internet sales, primarily to European country customers. Atlas Co. made approximately 10,000 sales at $99.00 per sale, to residents of Oregon during the year, realizing $990,000 of commercial activity. Atlas Co. contracts with an Oregon mailing service to deliver the merchandise in Oregon. While the amount of commercial activity realized by Atlas Co. is below the threshold to file a corporate activity tax return and pay tax, Atlas Co. does have substantial nexus in Oregon, and must register with the department when commercial activity exceeds $750,000.

What is commercial activity? HB 3427 introduced many new terms that require definitions. Fortunately, the law provided some definitions that will add partial clarity. The definition of commercial activity is the total amount realized by a subject taxpayer, arising from transactions and activity in the regular course of the taxpayer’s trade or business, without deduction for expenses incurred by the trade or business. For the most part, many businesses will think of this as their gross sales. For the most part, that is accurate. However, HB 3427 and HB 2164, list 47 exceptions to the calculation of commercial activity. They fall in to two categories:

  • “Excluded persons” like non-profits and some health care providers, for example. There are many others.
  • “Gross receipt exemptions” like non-trade interest income, excise taxes collected from customers, or wages received as an employee, for example. There are many others.

The CAT also introduces a “use tax” concept which will be unfamiliar to most Oregon businesses. If a business purchased equipment/property out of state, then brings it in to Oregon within one year of purchase, the value of the property is included in “commercial activity” unless the buyer can show that it wasn’t purchased out of state to avoid the CAT. This now requires the taxpayer and the state of Oregon to consider an Oregon business’s motivation in purchasing equipment/property from out of state suppliers and puts the CAT burden of the “gross receipts” tax on the buyer rather than the seller for this transaction.

What is Oregon taxable commercial activity income? We have discussed what “commercial activity” is, but not what the Oregon taxable commercial activity is. The CAT is only assessed against the Oregon taxable commercial activity. It is broken down as follows:

Commercial activity apportioned to Oregon

minus

35% of the greater of

  • Oregon cost inputs (as defined by the Internal Revenue Code Sec 471) or
  • Oregon labor costs
  • Note: This subtraction is limited to 95% of the Oregon commercial activity

What this means is that of the included commercial activity, only Oregon commercial activity is included. Non-Oregon activity is excluded. From there, a taxpayer can subtract out 35% of certain costs that are apportioned or sourced to Oregon.

What if a taxpayer has more than one business? The Oregon CAT requires a taxpayer to look at their businesses as a “unitary business” rather than separate businesses. This concept was designed for the situation where on a separate business basis, some of the businesses would not be subject to the CAT. But if aggregated into a unitary business, then they would meet the thresholds and therefore be subject to the CAT. A unitary business must file their CAT returns on a unitary basis, even though they are separate taxpayers for other purposes. This is one of the most complicated areas of the new law. The draft regulations provide the general rule that “if the activities of one business either contribute to the activities of another business, or are dependent upon the activities of another business, those businesses are part of a unitary business.” HB 3427 also discusses common ownership, centralized management, common executive force, among other things.

What are some of the administration aspects of the CAT? The Department of Revenue is still working out some kinks, but here in a nutshell is what we know to date:

  • The effect start date is January 1, 2020.
  • All CAT filings must be done on a calendar year basis, regardless of any fiscal year end for the taxpayer.
  • A taxpayer must register if their commercial activity is at least $750,000. (If not previously required to register, the taxpayer must register within 30 days of reaching the $750,000 threshold or face per month penalties).
  • Estimated taxes are required to be paid quarterly if the CAT will be greater than $5,000 for the year.
    • Due April 30, July 31, October 31, and January 31 for the previous quarter.
    • Note the first quarterly estimated payment will be due April 30, 2020.
    • All estimated tax payments must be paid electronically.
  • The annual tax return is due April 15 of the following year.
    • Note the first annual return filing will not be due until April 15, 2021 for the 2020 tax year.
    • A 6-month filing extension may be granted only for “good cause.” Extensions do not appear to be automatically granted.
  • Unitary groups must file as a single taxpayer. Each member will be jointly and severally liable for the filing and payment of the estimated taxes and the annual filing and taxes.

What can a business do now? This is just a general discussion of the new CAT and should not be relied upon for your unique situation. Because this is a new and complex tax, both the Oregon Department of Revenue and tax advisors are trying to understand as much as possible. The information is still evolving. Any Oregon business should consult with their tax advisor immediately so that they can understand how this new tax will impact their specific business. If subject to the tax, the business will need to budget for it and be prepared to register, as well as be prepared to file and pay the quarterly estimated tax. If you have a financial review or audit, talk with your certified public accountant to find out if it should be included in your tax provision analysis. And because of the definition of “cost inputs” for subtractions, you may want to talk with your tax advisor to see if you can enhance what is currently put into your cost of goods sold.

What kind of money are we talking about? Per the revenue impact of HB 3427, each of the next biennia will generate $1.6 billion to $3.1 billion for the Fund for Student Success. However, $423 million to $762 million will be sent to the general fund, an amount totaling approximately 25% of the new tax. In addition to collected taxes from businesses, the government will also add employees. Per the fiscal impact statement of HB 3427, government will also grow. In the first biennium, 87.62 FTEs will be needed to administer the various accounts within the Fund for Student Success and for the Department of Revenue to administer the CAT.

In addition to discussing with your tax advisor, you can find more information online at:

Oregon.gov/DOR/programs/businesses/pages/corporate-activity-tax.aspx

Katie Eyre, a Certified Public Accountant, is a Tax Partner at Fordham & Co LLP in Hillsboro. She is a former Oregon state legislator and served on the Hillsboro Planning Commission for more than ten years. She is a board member of Cascade Policy Institute.

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Espinoza and Equal Opportunity in Education

By Miranda Bonifield

In 1926, an Oregon school controversy made it all the way to the nation’s Supreme Court. But the issue on the table wasn’t teacher pay, proper curriculum, or student safety. Oregon had outlawed private schools in a discriminatory effort to remove Catholic education. But in the landmark ruling Pierce v. Society of Sisters, the Court recognized that “The fundamental theory of liberty… excludes any general power of the State to standardize its children by forcing them to accept instruction from public teachers only.” Families have a right to choose how they educate their children.

Later this month, the Court will consider another landmark education case, Espinoza v. Montana. Montana’s tax credit scholarship program, which enabled families to send children to the private schools of their choice, was struck down because some participating students attended religious schools. That decision removed options for all children, but disproportionately affects the children of low income families for whom private school tuition is at best a major sacrifice and at worst an impossibility.

A favorable ruling in Espinoza vs. Montana could help empower rather than exclude families who would otherwise be unable to attend private school—a boon to both the public schools which would benefit from increased competition and the students who could thrive with the education that best fits them.

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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New Portland Design Guideline Will Place Responsibility for Homeless Crisis on Private Property Owners

By Rachel Dawson

There is a homeless crisis in Portland. According to a recent count by Portland State University, the number of people found living in “unfit” conditions, such as in a tent outdoors, under a bridge or overpass, or in their car, has increased by 20% between 2017 and 2019.

Instead of providing sound and beneficial policies to help get homeless individuals on their feet and off the streets, Portland officials are pushing the issue onto private businesses.

The Portland Planning Commission recently affirmed a proposal submitted by Commissioner Oriana Magnera that would require new private downtown buildings, including stores and apartment complexes, to have a space where Portlanders can “rest,” including pitching tents and sleeping. She stated in a November meeting that current buildings may have “benches but not a lot of place to pitch a tent.”

Magnera blames the current homeless crisis in part on a housing shortage. It would thus make sense to provide shelter to those living on the streets and reduce restrictive city codes and laws that make it difficult to build homes in the Metro region. One such change could include enlarging the current Urban Growth Boundary that limits the amount of land available for new homes and artificially raises prices.

Portland officials should not place the responsibility for the homeless crisis on developers and private property owners. They should remove this new design guideline language and create policies that will tackle the root of the homeless crisis.

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

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Press Release: Report shows possible benefits to workers, employers, and unions from increased competition in representation

December 30, 2019

FOR IMMEDIATE RELEASE

Media Contact:
Eric Fruits, Ph.D.
(503) 242-0900
eric@cascadepolicy.org

PORTLAND, Ore. – Research published by Cascade Policy Institute concludes workers, employers, and unions could benefit from increased competition among labor unions. Competition among unions and workplace freedom would lead to improved choice and representation for workers, reduce costs for employers, and may lead to increased union membership.

Introducing competition among unions can be accomplished in several ways. States, such as Oregon, could pass legislation allowing for competing bargaining units and forbidding “no raiding” pacts among unions. In addition, litigation challenging exclusive representation on First Amendment grounds would present a logical next step after the U.S. Supreme Court’s Janus decision.

Inter-Union Competition and Workplace Freedom: Ending Exclusive Representation was authored by Eric Fruits, Ph.D., a Portland-based economist. Fruits is president and chief economist at Economics International Corp., a consulting firm specializing in economics, finance, and statistics. He is also Vice President of Research at Cascade Policy Institute and an adjunct professor at Portland State University.

Fruits says, “First principles of freedom of association dictate that workers should be allowed to choose whether to be represented by a union and should be allowed to choose which union represents them. Aside from first principles, workplace freedom provides individual employees the opportunities to negotiate the wages, benefits, and working conditions that work best for him or her as an individual.”

Labor unions exist to improve compensation and working conditions for their members. While unions themselves benefit from increased membership, individual workers see varied levels of benefit from the services provided by a union. In particular, the one-size-fits-all nature of most collective bargaining agreements—along with the take-it-or-leave-it vote to approve the agreement—means that many employees are covered by contracts that do not reflect their preferences.

Under current collective bargaining practices, employment arrangements are negotiated between an employer and a union with the union acting as the exclusive representative for the workers. As a condition of this exclusive representation, the union has a duty to fairly represent all workers subject to the agreement it negotiates.

Because all employees presumably benefit from the duty of fair representation, this duty has been invoked to justify the imposition of union fees on non-union employees whom unions deride as “free riders.” At the same time, exclusive representation by a single union unjustly reduces freedom of speech and association for workers and stifles individuals’ ability to negotiate employment agreements in both parties’ economic interests. The U.S. Supreme Court in Janus highlights this tension between the unions’ view of a “free rider on a bus headed for a destination that he wishes to reach” versus an employee’s opinion that he or she is “a person shanghaied for an unwanted voyage.”

Unions could avoid the duty and costs associated with representing members and non-members alike by giving up exclusive representation and allowing additional unions to compete for members. Since each union would represent its own members’ interests, individual unions would escape the obligation to represent the differing interests of other unions’ members or of non-union employees. Individual workers would have the freedom to join any one of several competing unions or to negotiate directly with his or her employer.

Empirical analysis indicates states with compulsory collective bargaining in the public sector have higher per-person government spending. This suggests that mandatory collective bargaining may drive up the costs of government. Thus, the elimination of mandatory collective bargaining and the introduction of inter-union competition and freedom of association for public employees may slow the growth of state and local spending.

Inter-union competition and workplace freedom can be implemented via several avenues, including lawsuits challenging exclusive representation on First Amendment grounds, the voiding of “no raiding” pacts, or the implementation of state-level legislation allowing for competing bargaining units.

The full report, Inter-Union Competition and Workplace Freedom: Ending Exclusive Representation, can be downloaded here.

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Contact Eric Fruits by email at eric@cascadepolicy.org for more information or to schedule an interview.

About Cascade Policy Institute:

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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Inter-Union Competition and Workplace Freedom: Ending Exclusive Representation

By Eric Fruits, Ph.D.

EXECUTIVE SUMMARY

Labor unions exist to improve compensation and working conditions for union membership. Consequently, unions act to increase their own members’ wages and benefits. While unions benefit from increased membership, workers themselves see varied levels of benefit from the services provided by a union. Workers recognize the tradeoff between wage gains, benefits, employment opportunities, working conditions, and the nature of the political activities in which the union engages. The one-size-fits-all nature of a collective bargaining agreement, along with the take-it-or-leave-it vote to approve the agreement, means that many employees are covered by contracts that do not reflect their preferences. The exclusive representation by a single union in collective bargaining unjustly reduces freedom of speech and association for workers and stifles individuals’ ability to negotiate employment agreements in both parties’ economic interests.

Under current collective bargaining practices, employment arrangements are negotiated between an employer and a union acting as exclusive representative for the workers. As a condition of exclusive representation, the union has a duty to fairly represent all workers subject to the collective bargaining agreement. The benefit all employees theoretically gain from this duty of fair representation has been invoked to justify the imposition of agency fees on non-union employees. Janus, however, prohibits public sector unions and employers from collecting agency fees from non-union employees.

Unions could avoid the duty and costs associated with representing members and non-members alike by giving up exclusive representation and allowing additional unions to compete for members. Since each union would represent its own members’ interests, individual unions would escape the obligation to represent the varied interests of other unions’ members or non-union employees. Individual workers would have the freedom to join any one of several competing unions or negotiate directly with his or her employer.

  • Research indicates unions exert greater effort to attract and retain members when they are competing with other unions. Competition and the threat of membership “raids” provides an incentive for union leadership to be more responsive to its members’ demands.
  • Because of the moderating effect on wages, inter-union competition is expected to be associated with increased employment.
  • Evidence points to ambiguous effect of inter-union competition on union membership. In the United States, competition was associated with increased union membership. In New Zealand, the introduction of competition along with the ability for workers to negotiate directly with their employers was associated with decreased union membership.

Empirical analysis indicates states with compulsory collective bargaining in the public sector have higher per-person government spending. This suggests that mandatory collective bargaining may drive up the costs of government. Thus, the elimination of mandatory collective bargaining and the introduction of inter-union competition and freedom of association for public employees may slow the growth of state and local spending.

Inter-union competition and workplace freedom of choice can be implemented via several avenues, including lawsuits challenging exclusive representation on First Amendment grounds, the voiding of “no raiding” pacts, or the implementation of state-level legislation such as Tennessee’s Professional Educators Collaborative Conferencing Act.

READ THE FULL REPORT

Eric Fruits, Ph.D. is president and chief economist at Economics International Corp., a consulting firm specializing in economics, finance, and statistics. He is also Vice President of Research at Cascade Policy Institute and an adjunct professor at Portland State University, where he teaches in the economics department and school of business.

 

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Don’t Pop the Champagne on Oregon’s Job Numbers

By Eric Fruits, Ph.D.

Oregon is at near full employment. That’s good news, but don’t break out the champagne just yet. Our fizz may soon go flat. Job growth is slowing. And this year, the number of working-age people moving to the state was lower than predicted. In addition, Oregon is the state with the third highest level of people who want to work full-time but are forced to work part-time because they can’t find full-time work.

All of this is troubling. And we’re running the risk that our policymakers will make things worse.

Over and over, I’m hearing politicians tell us that because we have full employment, we can afford to load businesses with ever-higher taxes. They say we can afford to mandate expensive paid time off policies. They say we can afford a costly cap-and-trade program. They act as if full employment gives them the freedom to ignore the consequences of their policies.

These reckless policies assume the party will never end. But the party will end someday, and we will wake up with a nasty hangover in the next recession when an army of unemployed struggle to find work in a state that spent the boom years snuffing out employers.

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 Wapato Is the Right Facility for Portland’s Homeless Crisis

By Rachel Dawson

On December 2, I had the opportunity to tour the Wapato Corrections Facility, along with about 100 others. It sits at the heart of a debate raging between the owner, who wants to transform it into a homeless facility, and elected officials who would rather see it destroyed.

 

I previously conducted research on criminal justice reform and have toured correctional facilities around the world, most of which were not inviting spaces. Bolstering my skepticism were criticisms from Multnomah County commissioners who claimed this was inappropriate for a shelter because it contained cells, lacked Wi-Fi, and was too isolated.

 

After the tour concluded, I was confident that every critique I’ve heard about the facility was absolutely baseless. The overwhelming opinion from others on the tour was that demolishing this structure was absurd. It was not like any jail I’d ever visited; the building had nine dorm-like wings with gyms and showers instead of cells, a large kitchen, a theater room, and a medical wing. Bruce Warner, TriMet’s board president, also raised the prospect of TriMet providing bus service between Wapato and downtown Portland.

 

We have a crisis. We have a facility. Now all we need are elected leaders to put the two together.

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

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T2020 is the transportation measure that Metro wants—not Portland residents

By Rachel Dawson

Is it possible to spend billions of dollars on transportation to make congestion worse? According to Metro, the answer is “yes.”

More than 75% of residents in the Portland tri-county region commute to work by car. Therefore, it should come as no surprise that a similar percentage of voters surveyed by Metro consider traffic congestion a serious problem (73%) and say that improving roads, bridges, and highways to ease traffic should be a regional goal (78%).

Share of respondents who answered each issue is an “extremely” or “very serious” problem.

Next year, Metro wants to raise at least $3 billion in taxes for its transportation package (informally known as “T2020”). That $3 billion is just for what Metro calls its “Tier 1” projects; it still has a long list of “Tier 2” projects that could significantly increase the price. To pay for all that, Metro is considering bonds that would increase property taxes, an additional vehicle registration fee of up to $59, an income tax, or possibly a sales tax. Conservatively, Metro’s transportation package would cost the average household an additional $530 a year in taxes and fees and would be the largest proposed tax increase in Metro’s history.

But, Metro’s T2020 tax package is not the proposal residents in the region want. Close to $2 billion from the plan have been earmarked for transit. Of that amount, nearly $1 billion would go toward a light rail line to Bridgeport Village. Another $50 million would be spent on planning for a MAX light rail tunnel under the Willamette River—planning that most survey respondents did not support. Millions more will be spent devising potential MAX light rail expansions along Powell Blvd to I-205 and 99E from the Orange line’s last stop in Milwaukie to Oregon City.

In contrast, when voters were surveyed regarding the goals for additional transportation funding, more than twice as many people indicated that widening roads and highways to address bottlenecks (31%) was their first choice, compared with only 13% of respondents who preferred providing more frequent and faster bus and MAX service. Widening roads was by far the most popular choice, beating out retrofitting bridges to be earthquake resilient and improving pedestrian safety on streets.

Finally, when asked about specific types of projects that could be funded by a transportation ballot measure, repairing potholes had the highest percentage of support (86%), while upgrading MAX to run underground at a cost of $5 billion dollars was the only potential project mentioned to have support from less than half of respondents (only 44%).

Portland residents were clear about what they want: better roads and less congestion on roadways. They were equally clear about not supporting MAX upgrades.

Instead of crafting a measure that reflects what people want, Metro has chosen to allocate the majority of funds in their 2020 transportation measure to areas that received the lowest amount of support, such as public transportation and biking/walking infrastructure improvements. It is clear these are projects that Metro staff, not voters, want for the region.

Based on respondents’ answers, officials should consider adding auxiliary lanes on freeways and major arterials to address congestion in bottlenecks. For example, a new auxiliary lane on I-5 southbound from OR 217 to I-205 brought congestion levels down from five hours a day to only one; and an auxiliary lane added to 217 between 99W and I-5 S improved congestion from four hours to zero. Adding auxiliary lanes decreases the number of merges that occur at a given section. This in turn would lead to fewer vehicle emissions, as cars idling in congestion produce more emissions than driving in free-flowing traffic. Also, merging onto a freeway is a major cause of accidents, so decreasing the number of merges also improves safety.

Metro staff seem to forget their job is to serve the public. They are attempting to force their own transportation agenda on the region instead of providing the improvements residents say are most important. Portland metro residents should stand up to this bullying by voting “no” on Metro’s transportation bond measure next year. We need improved transportation, not more low-use government pet projects.

Rachel Dawson is a Policy Analyst at Cascade Policy Institute, Oregon’s free market public policy research organization. A version of this article was published by Pamplin Media Group on November 27, 2019.

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Oregon’s population growth: Slow and steady may not win the race

By Eric Fruits, Ph.D.

Oregon’s population grew by more than 41,000 residents last year, according to Portland State University’s Population Research Center. That may sound like a boom and lead some to conclude the state is doing great: “Look! People are still flocking to Oregon.”

But, in fact, the state’s population grew by about 1%, which is the slowest growth in the last six years. In contrast, Washington’s population has grown at a pace that’s about 50% higher than Oregon’s. Idaho’s and Nevada’s population growth have been about double the rate of Oregon’s. We may no longer be the first choice for people heading Out West.

Because job and population growth go hand-in-hand, employment growth tells a similar story. While the Oregon Employment Department says the state’s economy is in a “sweet spot,” Oregon’s employment growth has been eclipsed by Washington, Idaho, and Nevada. Indeed, it can be argued that Oregon’s employment growth is looking more like lackluster California than the rest of the Pacific Northwest.

Some might cheer Oregon’s slower growth. With the state’s land use and tenant laws constraining housing supply and sluggish residential construction driving up housing prices, slower population growth relieves some of the upward pressure. Although the state’s housing prices have rapidly increased, over the past five years Oregon home price increases (49%) have been much smaller than neighboring Washington (56%), Idaho (56%), and Nevada (64%). For the second month in a row, Portland-area rents have declined.

Slower employment growth means fewer commuters, thereby delaying the day of reckoning for Oregon’s no-more-roads policies. Even so, Portland is rated the tenth most congested city in the U.S.

However, no one should cheer slower growth. A growing population and growing employment are signs of a healthy economy. Over time, when Oregonians’ incomes were growing, so was its population. When job opportunity grew, so did population. The reverse is true, too.

Oregon politicians and policymakers tend to take population and employment growth for granted. Or, even worse, they ignore Oregon’s performance relative to other states. By their way of thinking, so long as employment is up and people are moving in, everything is A-OK. They see high-income Californians moving to Oregon and see the dollar signs of more tax revenue.

It’s not A-OK. Looking around the Northwest, Oregonians should ask: “Why are Washington and Idaho growing so much faster?” It’s not an accident. Over the years, state and local policies have made it harder to live and work in the state; and it’s showing up in sluggish growth and fewer job opportunities. Rather than micromanaging to “control” growth, the state should enact policies to foster growth: lower taxes, fewer regulations, and investments that benefit the people who live and work here—or want to live and work here.

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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Early Coal Closures Could Spell Trouble for Grid Reliability

By Rachel Dawson

The Northwest Power and Conservation Council regularly assesses the adequacy of our region’s power supply using a loss of load probability (LOLP). This measure informs us that power supply is not adequate if 5% or more modeled simulations show insufficient generating capacity at any time in a given year.

Due to the early closure of Boardman and Centralia 1 coal plants in 2020, the Northwest is projected to not meet this standard by 2021. The probability of a future inadequate load capacity increases to as high as 26% if Wyoming’s Jim Bridger 1 coal plant closes in 2023. To put this in perspective, the loss of load probability was expected to climb to 24% by 2003 after the 2001 energy crisis occurred.

This crisis was due in part to an unexpected decrease in hydroelectric power. It seems that utilities in the region have not learned their lesson, as they plan on replacing the coal plants with even more unreliable wind power and costly storage systems.

Advocates for these plants’ early closures must demonstrate that doing so will not damage grid reliability or increase ratepayers’ power bills. So far, they have not met that test.

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

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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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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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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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