Author: cascade policy institute

Too Late to Fix PERS by Fooling Oregonians

By Scott Shepard

Governor Kate Brown’s task force, assigned to find ways to cut Oregon’s yawning unfunded PERS pension liability, is approaching its November 1 reporting deadline. Governor Brown is relatively new at her job, so perhaps she can be forgiven for hoping her PERS task force can produce magical founts of free money. But it can’t.

The Governor wants proposals to cut the admitted pension deficit of about $25 billion by 20 percent ($5 billion). Even if the task force managed this feat, the recognized debt would only return to its 2015 level, before the PERS Board started inching the assumed rate of return down from its long-standing eight percent figure toward more plausible figures. If the Board shifted to an assumed rate that matched risk with the certainty of payment obligations, unfunded pension liabilities would approach $50 billion.

Oregon taxpayers simply cannot—and will not—pay this tab. Oregon is not wealthy or highly populous. Raising an extra $50 billion—or even 25—is likely impossible. Taxes would have to rise and services decline to the point that businesses and families would begin to flee the state. This would spark a vicious cycle. Fewer taxpayers would be taxed even more to pay a fixed, unpayable bill, creating more incentives for emigration, until the state inevitably declared defeat. While this might sound apocalyptic, it’s not far-fetched: Puerto Rico has already slid into this vortex, and Illinois may become the first American state to fall into default and possible federal receivership.

Governor Brown’s task force efforts cannot thwart this process. She has charged it to find “out-of-the-box solutions” for raising these $5 billion. But no such ideas, out of any box whatever, can come without cost to taxpayers. Some ideas recently floated include increased “sin” (e.g., alcohol and tobacco) taxes. Those who don’t drink or smoke might think themselves off the hook, but they’re not. These increases, if not dedicated to PERS payments, could (and probably would) go to other purposes, like funding the state’s perennial non-pension budget deficit.

The same is true of all proposals floated. Money spent one way can’t be spent in others. Raiding the rainy day fund would force tax increases during the next economic downturn, increasing the pain of the next recession. Raiding the workers’ compensation fund would increase fees to employers, which would increase the costs of goods and services and decrease wages. Selling government property for pensions would mean that property is not available for public use or to sell for other purposes.

Governor Brown knows this. When she seeks “out-of-the-box” funding increases, the constraint she seeks to escape is really our knowledge that taxes are rising, public assets are shrinking, services are being curtailed, and our options are closing around us.

The only viable answer to Oregon’s pension and budget crisis is to reduce pension benefits for government workers. They enjoy more generous wages and benefits than those of comparable private-sector workers. Older government workers also earn benefits for every hour of work that are far higher than those earned by their younger peers.

The legislature first must shift all government workers, for work not yet performed, to the lower benefit structure that serves as a permanent cap for newer public employees. A 2015 Oregon Supreme Court opinion* fixed a long-term Court error by recognizing that the state can take this basic, equitable step to put all employees on the same basis for work not yet completed.

Then it must make use of another implication of that 2015 decision: that the Supreme Court has wrongly suppressed a set of amendments added to the Oregon Constitution in 1994 that, if followed, would have averted this crisis. The legislature should pass legislation to facilitate the equitable adjustment of excessive pension payments made for more than 20 years on the basis of the Court’s error, and fast-track review of the legislation to the Court.

Finally, the legislature should move all government employees into the type of 401(k), defined-contribution retirement plans that are the only sort available to most taxpayers.

It is far too late for panels tasked with finding ways to fool the public. Oregon’s pension crisis requires fair but real pension payment adjustments. Nothing else can succeed.


* Moro v. State, 357 Or. 167 (2015).

Measure 8 (1994), incorporated at OR. CONST. art. IX, § 10–13.


Scott Shepard is a Salem lawyer and law professor and author of an academic study on Oregon state pensions published August 1, 2017 by the Mercatus Center at George Mason University. He is also an Academic Advisor to Cascade Policy Institute in Portland. A version of this article appeared in The Portland Tribune on September 28, 2017.

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Portland’s latest attempt to centrally plan transportation patterns is backfiring

By Jessica Miller

Portland has a longstanding history of attempting to socially engineer people’s transportation patterns, and the “Better Naito” project is no different.

In 2015, a group of students from Portland State University created the idea of “Better Naito” as their capstone project. From April 28th until September 30th each year, Portland planners intend to enhance the lives of pedestrians and bikers along the Waterfront by reducing car capacity from two lanes to one on SW Naito Parkway and transforming one lane into an open area for walkers and bikers. The project was implemented and paid for by the Portland Bureau of Transportation (PBOT), Portland State University (PSU), Better Block PDX, and $350,000 from the Portland City Council.

Advocates of “Better Naito” claim that “[f]eedback from the public was very positive,” but there is more to the story. After receiving copious amounts of negative feedback from business owners who see fewer shoppers, employees who experience longer commutes, and shoppers who can’t reach desired downtown destinations, the Portland Businesses Alliance created a petition to the Portland City Council in opposition to “Better Naito.” They claim the project is “harmful to our city’s economy and extremely disruptive to commuters.”

It’s no surprise Portland’s latest attempt to centrally plan commuters’ lives is backfiring, but that hasn’t stopped advocates from making the project annual. To voice your opinion on “Better Naito,” visit the Portland Business Alliance’s online petition.


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

 

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Oregon’s New Health Care Taxes Are Unjustifiable

By Lydia White

Soon after the Oregon Legislature passed a bill expected to generate $550 million of tax revenue to help pay for Medicaid, the state found nearly 45% of all Medicaid recipients are currently ineligible to receive health care benefits.

The bill imposes a sales tax on health insurance premiums and hospital revenue that will be borne by Oregonians. For example, 217,000 people in the individual market and over 11,000 college students who buy their own health insurance are among the hundreds of thousands of Oregonians who will pay. Local Oregon school districts will pay some $25 million and community colleges will likely be forced to raise tuition costs, all because of these new taxes.

If the state hadn’t awarded Medicaid benefits to over 37,000 unqualified people, costing $191,000,000, wasted over $300,000,000 on the failed Cover Oregon insurance exchange website, or spent an additional $166,700,000 on another failed IT system, even proponents of these new sales taxes would have had a hard time justifying them.

Fortunately, Rep. Julie Parrish (R) and two other state legislators are gathering signatures to refer these taxes to the ballot at what might be a January special election. They need almost 59,000 voter signatures by October 5th to qualify for the ballot.

To help hold Oregon’s political leaders and health care bureaucracies responsible, download and sign a petition at StopHealthCareTaxes.com.*

* The Referendum did collect enough signatures, and is now Ballot Measure 101 on the January 23, 2018 Oregon ballot. A No vote will keep these taxes from going into effect.


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

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Oregon’s new minimum wage law will hurt the people it aims to help

By Lydia White

Just prior to Oregon’s July 1 minimum wage* increase from $9.75 to $11.25 (Portland Metro Area), a team of researchers from the University of Washington produced a study, published by the National Bureau of Economic Research, that measures the effects of Seattle’s $13 minimum wage. In just nine months, Seattle wages rose substantially, from $9.47 in 2014, to $11 in 2015, to $13 in 2016 (an increase of 37.3%), and again to $15 on the first of this year.†

Unique to this study is a data set collected by Washington’s Employment Security Department which tracks hours worked in addition to earnings, making this particular study the first of its kind. Washington and Oregon are among four states that track these data.

The study‡ found that the city’s mandates resulted in 5,000 fewer jobs around Seattle. The average low-wage employee saw 3% higher hourly wages, but 9% fewer hours worked, resulting in a net loss of $125 per month. For low-income households especially, an annual loss of $1,500 is significant.

Jacob Vigdor, one of the study’s authors, said, “Traditionally, a high proportion of workers in the low-wage market are not experienced at all: teens with their first jobs, immigrants with their first jobs here.”

Wages are prices, or market signals, that indicate the value of labor productivity employees create. Low-skilled, low-paying jobs provide the opportunity to acquire knowledge and experience they were previously without, setting up workers for their next, potentially higher paying jobs. Henry Hazlitt, author of Economics in One Lesson, wrote:

“The more the individual produces, the more his services are worth to consumers, and hence to employers. And the more he is worth to employers, the more he will be paid. Real wages come out of production, not out of government decrees.”

The least skilled are further disadvantaged when artificially high price floors are implemented. As described in the UW study, when the cost of employing a worker exceeds the value that worker creates, employers are forced to reduce hours or eliminate positions within their business by laying off employees, who are often replaced by automation. These alternatives harm low-wage employees.

Additionally, employers are less likely to take a chance by hiring an unskilled worker and instead will search for only the most qualified candidates. Since teenagers are naturally less skilled due to lack of work experience, these policies create higher youth unemployment. A study last December by Cascade Policy Institute examined these and other “unintended consequences” of the minimum wage on youth.

Instead of, or in addition to, cutting costs of labor, employers increase prices of their goods or services. Consumers may choose to forgo such products or reduce their levels of consumption, in turn decreasing the need for labor. When the price of goods inevitably catches up to the employee’s higher wages, they find the purchasing power of their earnings has diminished.

Furthermore, large businesses can more easily absorb wage increases by operating within thinner profit margins or relocating to a region with a lower minimum wage. Local mom-and-pop stores don’t enjoy that same flexibility and must close their doors. With less competition, larger businesses have more power to raise prices.

When economists warn against the costs associated with the minimum wage, it’s not to protect greedy capitalists; it’s to protect both the worker and the small business owner from being priced out of the market.

For the benefit of all Oregonians, political leaders should learn from our northern neighbors and create an environment that doesn’t punish low-wage workers and the businesses that employ them. They can start by repealing the state’s onerous minimum wage law.


*Oregon’s and Washington’s minimum wages vary depending on region, population, benefits, tips, and business size. The minimum wages discussed here refer to those of Seattle and the Portland Metro Area.

†The latest 2017 increase was not included due to incomplete data.

‡The study used a “relatively conservative” $19 per hour low-wage threshold to account for the spillover effect of “miscoding jobs lost when they have really been promoted to higher wage levels….”


Lydia White is a Research Associate at Cascade Policy Institute, Oregon’s free market public policy research organization. A version of this article originally appeared in The Coos Bay World on July 10, 2017.

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Critiquing Minimum Wage Laws Is About Protecting the Working Man (or Woman)

By Lydia White

A team of researchers from the University of Washington produced a study, published by the National Bureau of Economic Research, that measures the effects of Seattle’s minimum wage requirement of $13 per hour.

The study* found that the city’s mandates resulted in 3% higher hourly wages, but 9% fewer hours worked. As a result, the average low-wage employee lost around $125 per month. For low-income households especially, an annual loss of $1,500 is significant.

Jacob Vigdor, one of the study’s authors and a professor at UW, said, “Traditionally, a high proportion of workers in the low-wage market are not experienced at all: teens with their first jobs, immigrants with their first jobs here.”

Low-skilled, low-paying jobs provide the opportunity to acquire knowledge and experience, setting up workers for their next, potentially higher-paying jobs. The least skilled are further disadvantaged when artificially high price floors are implemented. Employers instead search for only the most qualified candidates, leaving more teens jobless, as Cascade Policy Institute’s study on the effects of the minimum wage on youth reported last December.

When economists warn against the costs associated with the minimum wage, it’s not to protect greedy capitalists; it’s to protect the worker from being priced out of the market.

For the benefit of all Oregonians, political leaders should learn from our northern neighbors and repeal the state’s onerous three-tiered minimum wage law.

*The study used a “relatively conservative” $19 per hour low-wage threshold to account for the spillover effect of “miscoding jobs lost when they have really been promoted to higher wage levels….”


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

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President Trump’s Environmental Agenda: An Insider’s Perspective

Cascade Policy Institute Hosts Lunch with Special Guest Speaker Myron Ebell

President Trump’s Environmental Agenda: An Insider’s Perspective

President Trump’s administration has begun to implement a long list of campaign promises on energy, climate, and environmental policy. Taken together, these policies represent the most ambitious attempt to deregulate energy production and consumption ever undertaken.

But is deregulation possible?

Myron Ebell will speak at Cascade Policy Institute’s June 9 luncheon event

at Ernesto’s Italian Restaurant in Portland.

Ebell led the Trump Presidential Transition’s agency action team for the Environmental Protection Agency. He will discuss how the President’s deregulatory agenda is proceeding and its prospects for getting the economy going again after a decade of stagnation.

Reservations are required. Get yours today!


Myron Ebell is director of the Competitive Enterprise Institute’s Center for Energy and Environment, which is one of the most effective advocates for Free Market Environmentalism. He also chairs the Cooler Heads Coalition, an ad hoc coalition of 28 nonprofit free market and conservative groups that question global warming alarmism and oppose energy-rationing policies. CEI and the Cooler Heads Coalition led the successful decade-long fight to defeat cap-and-trade legislation.

From September 2016 to January 20, 2017, Mr. Ebell led the Trump Presidential Transition’s agency action team for the EPA. His involvement in the transition led to public protests and marches in several cities in America and Europe. In one of countless fundraising emails and letters from environmental pressure groups, Michael Brune, president of the Sierra Club, wrote that “Myron Ebell is…one of the single greatest threats our planet has ever faced.”

A native of Baker County, Oregon, where he grew up on a cattle ranch, Mr. Ebell earned degrees at Colorado College and the London School of Economics (where he was a student of the renowned political philosopher Michael Oakeshott) and did graduate work at the University of California, San Diego, and at Peterhouse, Cambridge University in philosophy, history, and political theory.

For complete information and to reserve your tickets, click here.

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Oregon Land Board Should Take the Deal

By Lydia White

At a time when Legislators threaten to slash government services to cover a $1.6 billion budget shortfall, Governor Kate Brown and Treasurer Tobias Read plan to make things worse.

Next week, the State Land Board will meet to consider selling 84,000 acres of the Elliott State Forest to Lone Rock Timber Management for $221 million. If the sale is approved, all the money would be invested in the Common School Fund, generating billions of dollars in earnings for K-12 schools.

Governor Brown, who supported the sale in 2015, now wants the state to buy out the Elliott for $100 million by issuing bonds. Taxpayers would pay back the principal and interest for the next 25 years, at a cost of $120 million or more.

But the Land Board has a constitutional obligation to produce revenue for Oregon schools by either managing the Elliott for a profit or selling off dead assets. Forcing taxpayers to buy an asset they already own, plus forgoing $121 million in additional funds from a willing buyer and millions more when factoring in compound interest, would violate the Board’s fiduciary trust.

Fortunately, the Oregon School Boards Association, one beneficiary of the Common School Funds, expressed intent to sue if the Land Board refuses to “fulfill its fiduciary duties.”

The Board has a firm offer of $221 million. They should accept it.


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

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Challenges to Free Expression and Academic Integrity on Campus

Join Cascade Policy Institute for an evening with special guest Dr. Jacqueline Pfeffer Merrill,

Monday, May 8, 2017 at the Crowne Plaza Portland-Lake Oswego, from 6:00-7:30 pm.

 

With a constant stream of headlines about campus disruptions and lightweight curricula, alumni are rightly concerned about the erosion of academic freedom and the decline of academic standards on American college campuses.  The evening’s presentation will spell out why the trends are so worrying and ways in which some intrepid college leaders, college trustees, and alumni donors are showing how to stand up for academic excellence and intellectual openness that the public demands.

Dr. Merrill is executive director of the Fund for Academic Renewal, a program of the American Council of Trustees and Alumni, which works with donors to create and monitor high-impact gifts to colleges and universities. ACTA is an independent, nonprofit organization committed to academic freedom, excellence, and accountability at America’s colleges and universities.

A dessert buffet with coffee and tea will be served.

There is no charge for this event, but reservations are required in advance.

If you have friends, family, or colleagues who may be interested in learning more about Cascade, please invite them as our guests.

For more information, and to reserve tickets, please click here.

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New Report Analyzes Fiscal Impact of Proposed Oregon Educational Opportunity Act

— Education Savings Account (ESA) program awaits Senate action

April 13, 2017

Media Release

FOR IMMEDIATE RELEASE

Media Contact:
Steve Buckstein
503-242-0900
steven@cascadepolicy.org 

PORTLAND, Ore. – Cascade Policy Institute today released a review and evaluation of a universal Education Savings Account (ESA) program for Oregon. Senate Bill 437 would cover all K-12 students and is awaiting a hearing in the Senate Education Committee. SB 437 is also known as the Educational Opportunity Act: The Power of Choice.

ESAs deposit a percentage of the funds that the state otherwise would spend to educate a student in a public school into accounts associated with the student’s family. The family may use the funds for private school tuition or other approved educational expenses such as online learning programs, private tutoring, community college costs, higher education expenses, and other customized learning services and materials. Funds remaining in the account after expenses may be “rolled over” for use in subsequent years, even into college.

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

Currently, Arizona, Florida, Mississippi, and Tennessee have active ESA programs that are limited to particular groups of students such as those with special needs. Nevada passed a near-universal ESA bill in 2015, but it is yet to be funded. Last week, Arizona lawmakers passed a new ESA bill that will open their state’s ESA program to all Arizona children, phased in over the next few years.

A fiscal analysis of Oregon’s SB 437, as introduced, finds that it would have a net fiscal impact on the state and local school districts of approximately $200 million. This net impact can be reduced—and turned into a net cost saving to state and local governments—by adjusting the annual amount deposited into the ESAs. The program would “break even” at an amount of $6,000 for each participating student with disabilities and/or in a low-income household and $4,500 for all other students. These are the dollar amounts suggested in an Amendment to SB 437.

Cascade founder Steve Buckstein notes, “While vouchers may be considered the rotary telephones of the school choice world, Education Savings Accounts are the smartphones of that world. They offer many more opportunities for families and students, and introduce competitive forces into education finance, which may help keep costs down.”

The full report, Education Savings Accounts: Review and Evaluation of a Universal ESA in Oregon, can be found online here.

Founded in 1991, Cascade Policy Institute is Oregon’s premier 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 and schoolchoicefororegon.com.

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How Portland’s Inclusionary Zoning Policy Makes Development Less Affordable

By Lydia White

The City of Portland’s inclusionary zoning* requirements have turned a once-gushing housing development market into sludge. This was predicted by nearly everyone outside the central planning bureaucratic bubble.

In a rush to beat a February 1st deadline, developers submitted permits for 7,000 units in less than two months. Since then, that number has dropped by 1033%. Combined with other onerous mandates, inclusionary zoning has pushed developers to build in Portland’s surrounding suburbs. Developers aren’t doing so out of greed; they cannot feasibly finance projects within city limits.

Incentives provided by the city aren’t enough to supplement the costs of inclusionary zoning units. Portland-based Urban Development + Partners estimates that an “affordable rate” building costs over $300,000 more than its value, which is the primary number banks and investors use to determine a project’s viability. Eric Cress, a principal with Urban Development + Partners, says, “You can’t finance that [inclusionary zoning projects]. The financing world does not accept anything that costs more than its value.”

The unfortunate, yet not unforeseen, consequence of inclusionary zoning is that some low-income households benefit, while the policy serves as an informal gentrification program suffered by other residents. If Portland’s city planners want to help people afford housing, they should repeal inclusionary zoning requirements and let developers increase housing supply in a free and open housing market.

*Portland’s inclusionary zoning policy requires developers with 20 units or more to make 20% of units “affordable” at 80% of median family income, or 10% “affordable” at 60% median family income.


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

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75th Anniversary of Roosevelt Order a Sober Reminder to Defend Constitutional Liberties

By Lydia White

On Monday, government offices were closed in honor of Presidents’ Day. Americans enjoyed a break from work and school, and some championed historic Leaders of the Free World.

But, just one day before, few observed a Day of Remembrance for abominable actions committed by a still-celebrated President.

Seventy-five years ago, Franklin D. Roosevelt issued Executive Order 9066. The order evicted nearly 120,000 citizens and nationals of Japanese descent from Oregon, Washington, and California. Men, women, and children were forced to abandon their homes and businesses simply because of their ethnicity.

Many victims, over half of whom were U.S. citizens, were rounded up and relocated to temporary internment camps. Stables, including Portland’s own Pacific International Livestock Exposition, were converted into living quarters. Most victims were shipped to long-term incarceration camps, where they stayed for four years until the war concluded. All were subjected to bitter hostility, even upon returning home.

During the hysteria of war, racism swept the nation. The duress caused by international tensions led citizens and political leaders alike to choose security over liberty, destroying thousands of innocent lives in the process.

On Presidents’ Day, we should celebrate the achievements of our past leaders. But let us not forget the atrocities committed by Presidents past, and work diligently to prevent present and future leaders from further violating civil liberties.


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

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Policy Picnic – February 23, 2017

Please join us for our monthly Policy Picnic led by

Cascade Policy Institute’s

Research Associate Lydia White


The Seen and Unseen World of Solar Net Metering

Environmentalists claim residential solar energy is the solution to fulfilling our energy needs, but they often overlook its unintended consequences. Looking through the lens of Frédéric Bastiat’s “That Which is Seen, and That Which is Not Seen,” Lydia will address the flaws of solar net metering. The “Seen” paints a rosy picture of sustainable green energy captured by our greatest renewable resource, the sun. But, the “Not Seen” reveals the unreliability and unaffordability of net metering and the inequity this program creates.

Admission is free, but reservations are required due to space limitations. You are welcome to bring your own lunch; light refreshments will be served.

Reserve your free tickets here.

Cascade’s Policy Picnics are generously sponsored

by Dumas Law Group, LLC

dumaslawlogo 80percent

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“Facing Reality” Report Offers Solutions to Governor Brown’s $1.7 Billion Budget Hole Without Raising Taxes

FOR IMMEDIATE RELEASE

Media Contacts:

Steve Buckstein (503) 242-0900

Jeff Kropf (541) 729-6229

PORTLAND, Ore. – Cascade Policy Institute and Oregon Capitol Watch Foundation jointly released a new report Wednesday, entitled Facing Reality: Suggestions to balance Oregon’s budget without raising taxes. The report offers practical solutions to fill Governor Kate Brown’s estimated $1.7 billion budget hole without raising taxes.

Facing Reality is the third budget blueprint in a series: In 2010 and 2013 Cascade Policy Institute and Americans for Prosperity-Oregon published Facing Reality reports that offered state legislators an opportunity to “reset” state government using the time-tested principles of limited government and pro-growth economic policies.

“Oregon has over one billion dollars more to spend than the last budget but is still nearly two billion short because Governor Brown’s budget continues out-of-control and unsustainable spending,” said Jeff Kropf, Executive Director of Oregon Capitol Watch Foundation. “It’s time to face the reality that raising taxes will never provide enough money to build the fantasy utopia envisioned by the Governor and current legislative leadership. There is no free lunch, and new taxes are only going to hurt the poor and the middle class.”

Facing Reality outlines $1.3 billion in reduced spending in seven specific areas which, coupled with small across-the-board agency reductions, equals $1.7 billion, enough to fill the Governor’s estimated budget hole and removing the need to raise taxes.

“Keep in mind that even with our Facing Reality budget reductions, the state of Oregon will still be spending more money than the previous budget,” said Steve Buckstein, Senior Policy Analyst and Founder of Cascade Policy Institute. “The reality the Governor and the legislature must face is that the bill for years of overspending is coming due, and raising taxes that hurt the economy is not the answer. Reducing how fast spending grows is the sustainable way forward.”

This third Facing Reality report offers politically possible solutions to meet the needs of Oregonians. It still gives most state agencies more money to spend, but without enacting new taxes being proposed by the several dozen tax increase bills introduced for consideration in the 2017 legislative session.

Here are the seven specific budget reductions proposed in Facing Reality:

Solution Impact
PERS—$100,000 cap $135 million
Department of Administrative Services—halt additional hiring $120 million
Medicaid—opt out of ACA expansion $360 million
Cover All Kids—reject expansion $55 million
Department of Human Services—targeted reductions $321 million
Department of Human Services—cash assistance reforms $160 million
State School Fund—reject Measure 98 $139 million
Total $1,290 million

For agencies not identified for specific reductions in the report, across-the-board reductions of about three percent from Governor Brown’s budget would eliminate the shortfall she identified. If this plan were implemented, none of the tax and fee increases outlined in the Governor’s budget would be necessary.

Buckstein and Kropf note, “Most Oregonians must face their own family budget realities every day. Facing Reality is a good-faith effort to hold our state government to the same budgetary realities. We look forward to working with state legislative and executive branch leaders to help implement such realities in 2017.”

Read the full report here: Facing Reality: Suggestions to balance Oregon’s budget without raising taxes

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.  Oregon Capitol Watch Foundation is a 501(c)3 charitable educational foundation dedicated to educating Oregon citizens about how state and local governments spend their tax dollars by researching, documenting, and publicizing government spending and developing policy proposals that promote sound fiscal policies and efficient government.

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Renewable Energy Certificates Don’t Turn on Your Lights

By Allison Coleman

Over the past two decades there has been a large push for environmental policy initiatives.

Unfortunately, some of these policies do nothing for the environment. The sale of so-called “green power” by electric utilities is one example. More than 60 Northwest utilities market green power products to consumers through monthly subscriptions, in which consumers think they are buying electricity from clean and renewable sources. Utilities promote these at different levels, ranging from platinum to silver, depending on the amount a customer spends.

However, customers are not actually buying renewable energy. Instead, they are buying “Renewable Energy Certificates” (RECs), which simply offer them the bragging rights associated with renewable power produced somewhere. The electricity may be sold to a homeowner in Montana, while the REC associated with that power is sold to a consumer in Oregon.

The REC itself is not a unit of electricity. In fact, it doesn’t even exist; it’s just an electronic number.

From 2011-2015, Multnomah County spent $230,000 on RECs. In 2016, the City of Beaverton spent $29,282. In 2015, Metro spent $104,539.

Every dime of that money was wasted. Taxpayers received no green power, or power of any kind.

Individual consumers are free to spend their own money on worthless junk. Elected officials spending tax dollars should be held to a higher standard.


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

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Limiting Government: A Goal That’s Always Worthwhile

By Lydia White

As inauguration weekend unfolded, Republicans cheered with a gasp of relief, Democrats protested, and many broke down into tears and even violence.

The extremity of responses from people across the political spectrum reveals a troubling aspect of contemporary politics: Many are terrified the “wrong” party will come into the federal government’s vast powers.

If Americans feel their livelihood depends on one election cycle, the scope of government is far too big.

Since the 1990s, each party held control of the White House and both chambers of Congress for four years. Under their leadership, Republicans ballooned public debt by 32%, Democrats by 45%.

Every new administration, whether Republican or Democratic, brings more spending and less freedom. Yet, for some reason, Americans find this acceptable as long as the spending is on their party’s preferred programs, compensating for the other party’s inane spending. This never-ending cycle sets precedent for every subsequent administration to retaliate and further mushroom public debt.

Instead of continuing this trend of ever-growing government, self-declared limited-government advocates should live by their principles and scale back bureaucracy across the board.

Should they be tempted to engorge themselves by forcing “favorable” big government policies through Congress, conservatives must be ready to face the consequences. The powers amassed may very well land into the “wrong” hands yet again.


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

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Cascade Policy Institute Welcomes Oregon’s 2012 “Mother of the Year” to Celebrate National School Choice Week 2017

For Immediate Release

Media Contact:
Steve Buckstein

503-242-0900

steven@cascadepolicy.org

 

Portland, Oregon to play role in nation’s largest celebration of education reform

Portland, Ore. – Cascade Policy Institute will hold a special event in celebration of National School Choice Week 2017, organizers announced today. The event will shine a spotlight on the need to expand access to educational options for all children.

National School Choice Week 2017 (NSCW, January 22-28, 2016) will draw “millions of parents, teachers, students, citizens and community leaders” to support educational opportunity for every child, according to NSCW organizers.

In honor of National School Choice Week, Cascade Policy Institute is delighted to host guest speaker Bobbie Jager, Oregon’s 2012 “Mother of the Year” and energetic advocate for educational choice for all Oregon children. She will talk about how she got involved in education advocacy and what’s ahead for Oregon parents and students in 2017. Last year Jager wrote a Cascade Commentary in support of extending Oregon’s public school open enrollment law.

The event will take place at noon on Wednesday, January 25, at Cascade Policy Institute. Admission is free, but reservations are required due to space limitations. Light refreshments will be served.

Started in 2011, National School Choice Week has grown into the world’s largest celebration of opportunity in education. The Week is a nonpartisan, nonpolitical public awareness effort. Held every January, National School Choice Week shines a positive spotlight on effective educational options for every child. These options include traditional public schools, public charter schools, magnet schools, online learning, private schools, and homeschooling. “School choice” means empowering parents with the freedom to choose the educational options that are best for their children.

“The word ‘choice’ in our home means, ‘of high quality and carefully selected,’ as our children’s education and schools should be,” said Jager. “As parents, we need to be able to make these choices for each of our children.”

More than 21,392 independent events have been planned for National School Choice Week across all 50 states, including:

  • 16,758 hosted by schools of all types
  • 2,168 hosted by homeschool groups
  • 1,358 hosted by chambers of commerce
  • rallies and special events in more than 25 state capitals

“National School Choice Week provides a unique opportunity for Americans to join together on an issue that impacts all of us: educational opportunity,” said Andrew Campanella, National School Choice Week’s president.

By participating in National School Choice Week 2017, Cascade Policy Institute joins millions of Americans in raising awareness about the need to empower parents with the ability to choose the best educational environments for their children.

Founded in 1991, Cascade Policy Institute is Oregon’s premier 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 schoolchoiceweek.com and cascadepolicy.org.

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Policy Picnic – January 25, 2017

Please join us for our monthly Policy Picnic led by

special guest Bobbie Jager

 


 

From 2012 “Oregon Mother of the Year” to School Choice Activist

 

January 22-28, 2017 is National School Choice Week. Started in 2011, NSCW has grown into the world’s largest celebration of opportunity in education. The Week is a nonpartisan, nonpolitical public awareness effort.

Held every January, National School Choice Week shines a positive spotlight on effective education options for every child.

The goal of National School Choice Week is to raise public awareness of all types of education options for children. These options include traditional public schools, public charter schools, magnet schools, online learning, private schools, and homeschooling.

In honor of National School Choice Week, Cascade Policy Institute is delighted to host guest speaker Bobbie Jager, Oregon’s 2012 “Mother of the Year” and energetic advocate for educational choice for all Oregon children. She will talk about how she got involved in education advocacy and what’s ahead for parents and students in Oregon in 2017.

Last year Bobbie wrote a Cascade Commentary in support of extending Oregon’s public school open enrollment law.

Admission is free, but reservations are required due to space limitations. You are welcome to bring your own lunch; light refreshments will be served.

Reserve your free tickets here.

 

Cascade’s Policy Picnics are generously sponsored

by Dumas Law Group, LLC

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No Standing in Lines, Just Amazon Go

By Lydia White

Amazon has introduced its new line of physical stores: Amazon Go. Using a smartphone, consumers can swipe into the store, pick up their desired items, and exit—receiving an electronic receipt for their purchases and avoiding dreaded checkout lines. Many hail this new technology as promising and exciting, while others are concerned about the potential for job losses.

Such concerns overlook a fundamental aspect of free market economies: freedom of choice. While many will choose Amazon’s technology for convenience or cost, others may prefer not to out of regard for traditional retail job opportunities or other business or personal reasons. But regardless of these differences, freedom of choice serves everyone.

This holds true across industries. You can buy a BlackBerry or upgrade to an iPhone. You can hail a taxi or download Uber. The economy is not a zero-sum game.

Consumer decisions aren’t made in an ivory tower or executive board meetings, but by each of us in our daily lives. Businesses must cater to our needs to maintain mutually beneficial, voluntary transactions. No one is forced to shop in an Amazon Go store, and traditional shopping experiences will continue to exist as long as consumer demand for them exists.

So, whether or not you are enthusiastic about capitalism’s creative destruction, the choice remains yours.


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

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WES Is an Energy Hog

By Allison Coleman

In 2009 the regional transit agency, TriMet, opened a commuter rail line running from Wilsonville to Beaverton. The line is known as the Westside Express Service, or WES.

According to transit advocates, commuter rail would help reduce energy consumption in the Portland region because it was assumed that trains moved people more efficiently than private automobiles.

However, the energy efficiency claims about WES turned out to be wrong. WES uses 6,753 BTUs of energy per passenger mile, which is 4,000 more than the national average of all commuter rail lines. WES also uses more than twice the amount of energy as a car to move the same number of passengers. On average, automobiles consume only 3,122 BTUs per passenger mile, and that number has been dropping steadily since 1970.*

Many transit advocates have been so enthused about commuter rail that they have urged lawmakers to fund an expansion of WES to Salem. Not only would this be costly, it would be a step backwards for energy efficiency. Surprising as it may seem, the average automobile is now far more efficient than commuter rail.

*See http://cta.ornl.gov/data/tedb35/Edition35_Chapter02.pdf, page 2-20, table 2.15.


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

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Metro Should Dump the Garbage Tax

By Allison Coleman

Portland-area voters just approved Ballot Measure 26-178, which imposes a five-year property tax that will generate $80 million dollars for Metro to maintain parks owned by the agency.

On the surface, this seems like a wonderful thing; everyone likes parks, and they need to be maintained. However, local residents are already paying a Metro garbage tax of $2.50 per ton, originally intended for this very purpose.

In 2002 the Metro Council enacted a garbage tax to pay for the operating costs of parks. In 2004 the tax was raised from $1.50 per ton to $2.50 per ton. Between 2004 and 2015, this tax brought in $46.8 million dollars for Metro.

In 2006, Metro “undedicated” the tax, meaning it would still be collected but the money would be swept into the general fund for other purposes.

This year, the Metro Council claimed they needed the operating levy to maintain their parks, but they never told voters about the garbage tax.

Metro should do the honorable thing and repeal the garbage tax. Voters may not mind paying for parks, but there is no reason to tax them twice.


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

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Portland’s Zoning Policies Make the Housing Crisis Worse

By Lydia White

The masterminds behind Portland’s newest inclusionary zoning recommendations have proven once again to be economically illiterate.

The Portland Planning and Sustainability Commission unanimously recommended requiring developers with 20 units or more to make 20% of units “affordable” at 80% of median family income, or 10% “affordable” at 60% median family income.

This policy fails to accomplish the Portland Housing Bureau’s stated intentions to “harness the economic power of the private market to increase the supply of affordable housing.”

A simple economics lesson would show them their policies exacerbate the city’s affordable housing crisis.

Developers are indeed responsive to basic economic concepts like incentives and cost-benefit analyses. They will not, and cannot, eat 20% of their costs. As with any tax, costs are passed on to consumers. Developers must offset their losses by accepting taxpayer-funded subsidies, cutting costs (such as forgoing routine maintenance or major repairs), or raising the prices of remaining units. This makes housing even less affordable, forcing lower-income households out of the city and spurring gentrification.

Until such unintended consequences are seriously considered, Portland city leaders will continue to amplify the housing crisis. Only the most out-of-touch city planners believe they can defy the laws of economics and make a scarce commodity more affordable by decreasing its supply.


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

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Policy Picnic – November 16, 2016

Please join us for our monthly Policy Picnic led by

Cascade’s President and CEO, John A. Charles, Jr.


Innovations in Highway Finance

All over the world, new highways, bridges, and tunnels are being built, paid for with tolls. But these not your grandfather’s tolls, and there are no toll booths. These are collected electronically, with variable price rates to ensure traffic speeds of 45 MPH or better. This presentation will summarize the latest roadway projects and the implications for Oregon.

Admission is free, but reservations are required due to space limitations. You are welcome to bring your own lunch; light refreshments will be served.

 

Cascade’s Policy Picnics are generously sponsored

by Dumas Law Group, LLC. 

Dumas Law Group
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Portland’s 100% Renewable Energy Claim Is “Greenwashing”

By Allison Coleman

In 2001, the Portland City Council declared that by 2010, all electricity used by city agencies would come from renewable energy. However, by 2010, only 9 percent of Portland’s power was renewable.

Undeterred, in 2012 Portland leaders again declared that city agencies would achieve 100 percent renewable energy. This time around, the city managed to get up to 14 percent.

Today, Portland has magically declared victory, claiming that municipal electricity use is 100% renewable. However, this is a blatant case of greenwashing. Portland is currently generating only 9 percent of its electricity from city-owned biogas and solar facilities. Another 15 percent is claimed from “green power” sold by Portland General Electric.

The remaining 76 percent of city use comes from a conventional mix of coal, gas, nuclear, and hydro. Portland then pretends to offset this by purchasing so-called “Renewable Energy Certificates” (RECs).

Unfortunately for consumers, an individual REC is not a unit of electricity; it is simply is a certificate claiming to represent the “environmental amenities” associated with one megawatt-hour of electricity generated by sources such as wind and solar. You cannot charge your phone or cook dinner with a pile of RECs because they don’t actually exist.

Last year, Portland spent $104,539 purchasing 74,671 RECs to create the image of 100 percent green power consumption. Every dollar spent buying those RECs was wasted money. Portland taxpayers should demand an end to this green power charade.


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

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Uber Translated: Better Service for the Underserved

By Lydia White

It’s not news that free-market visionaries provide better service than their corrupt competitors, but big government advocates are reluctant to admit it, even when such enterprise benefits their causes.

Ride-hailing services like Uber and Lyft provide cheaper, timelier, and higher quality rides. They better serve those with lower incomes and disabilities. They give Portland residents a local source of income. They also better comply with city regulations.

Uber serves high- and low-income communities equally; taxis underserve poorer neighborhoods. Ride-hailing services connect the disabled with handicap-accessible cars; taxi companies force disabled users to wait and hope for one to eventually pass by.

The Portland City Auditor claims the Portland Bureau of Transportation (PBOT) isn’t doing enough to “monitor the quality of service by ride-for-hire companies” and ensure riders from low-income communities or with disabilities are fairly served. Yet PBOT found that while Uber and Lyft provide a plethora of data (too much, in fact, for PBOT to analyze), taxi companies fail to comply with the Bureau’s requirements. Moreover, Uber’s internal rating system provides its own system of accountability—including cleanliness and efficiency.

The free market is forging ahead with 21st-century technology. While cronyism befell taxi companies, Uber and Lyft created an innovative alternative.

Proponents of big government should embrace the free-market sharing economy, especially if they truly wish to help traditionally underserved minorities.


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

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New Report Highlights Civil Rights Implications of Oregon Land Use Laws, Urban Growth Boundaries

FOR IMMEDIATE RELEASE

Media Contact:
John A. Charles, Jr.

john@cascadepolicy.org

503-242-0900

PORTLAND, Ore. – A new report released today by Cascade Policy Institute demonstrates that Portland’s rapidly growing housing prices are a major hardship on newcomers, renters, and low-income families. The report claims the ultimate source of Portland’s crisis in housing affordability is the region’s urban growth boundary and that minorities suffer the most from the consequences of high housing prices.

The report, Using Disparate Impact to Restore Housing Affordability and Property Rights, is authored by Randal O’Toole, an adjunct scholar with Cascade Policy Institute, Oregon’s free market public policy research organization, and the author of The Vanishing Automobile and Other Urban Myths.

The report claims the ultimate source of Portland’s crisis in housing affordability is the region’s urban growth boundary:

“The Oregon legislature and various cities have applied band-aid solutions to this problem; but none of them will work and some, such as inclusionary zoning, will actually make housing less affordable. That is because none of these solutions address the real problem, which is that the urban growth boundaries and other land-use restrictions imposed by the Land Conservation and Development Commission, Metro, and city and county governments have made it impossible for builders to keep up with the demand for new housing.”

“Common sense says that restricting the supply of something for which demand is increasing will cause prices to go up,” says O’Toole, who cites the findings of economic studies from Harvard, the Federal Reserve Board, the University of California, and the University of Washington, among others, to conclude that strict land-use regulation is the main cause of unaffordable housing.

Other policies which make Portland-area housing less affordable, the report claims, include lengthy delays in the permitting process, onerous impact fees, and architectural design codes. But these policies would have little effect if developers could meet market demand by building homes in unregulated areas outside of existing cities. Urban growth boundaries not only limit supply, but they shield city governments from outside competition.

“These policies effectively discriminate against low-income blacks and other minorities,” says O’Toole. “Under the 2015 Supreme Court ruling, Texas Department of Housing v. Inclusive Communities Project, they also violate the Fair Housing Act just as much as if Portland put out a sign saying, ‘No blacks allowed.’”

O’Toole explains how this Court decision could have a profound impact on Portland’s housing market. He says the Supreme Court’s ruling said that land use policies that make housing more expensive can be legal under the Fair Housing Act only if they have a legitimate goal and there is no other way of accomplishing that goal without making housing less affordable.

According to Cascade Policy Institute CEO John A. Charles, Jr., “Policymakers think the solution to our housing shortage is to build more tax-subsidized apartments, but simply deregulating the land markets would result in far greater housing supply at lower cost.”

The report, Using Disparate Impact to Restore Housing Affordability and Property Rights, is available here.

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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Policy Picnic – October 26, 2016

Please join us for our monthly Policy Picnic led by

Cascade’s President and CEO, John A. Charles, Jr.


Watch Your Wallet November 8! Why You Should Vote No on Tigard Light Rail and Metro’s Open Space Levy

Metro is asking for a new tax levy despite the fact that it already has sufficient funds to operate all its parks. Since 1995, Metro has spent hundreds of millions of tax dollars buying up large tracts of lands far from where most people live. The Metro Council doesn’t want you (or your dog) to use most of these lands, but they do want you to pay for them. Metro’s Five-Year Operating Levy (Measure 26-178) is one more wallet-grab.

The proposed Tigard-Tualatin light rail project (Measure 34-255 in Tigard) would cost at least $240 million per mile to construct — the most expensive transit project in state history. Tigard will be required to fund part of that price tag, and increased taxes will be the result. This is what happened to the City of Milwaukie and Clackamas County when Metro forced through the Orange line.

John Charles will give you the inside story on these two ballot initiatives and tell you what their proponents don’t want you to know. He’ll explain what these measures really do and what they mean for you, your family, or your business. Bring your friends and coworkers!

Admission is free, but reservations are required due to space limitations. You are welcome to bring your own lunch; light refreshments will be served.

 

Cascade’s Policy Picnics are generously sponsored

by Dumas Law Group, LLC. 

Dumas Law Group
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Will the PUC Make Oregon’s Solar Energy Incentives Equitable?

By Lydia White

In accordance with House Bill 2941, the Public Utilities Commission (PUC) is making recommendations to the Oregon State Legislature to ensure Oregon’s solar energy incentives are equitable, efficient, and effective.

One recommendation is to modify the compensation method for solar energy, net metering. Under net metering, solar owners consume energy their panels produce. When energy produced is insufficient, solar owners purchase additional energy from traditional sources. When excess energy is produced, solar owners sell energy. Solar owners are compensated at above-market rates and are exempt from paying their portion of incurred costs. Such costs include operation and maintenance of the grid and “spinning reserves,” the alternative power source utility companies run continuously in case solar produces less energy than projected. The state’s incentive structure shifts costs from solar owners to non-solar ratepayers. As the number of solar owners increases, ratepayers bear higher costs. The PUC is recommending these costs instead be shifted to taxpayers. While the PUC proposal’s efforts to alleviate inequity are commendable, their proposed recommendations still constrain Oregonians.

Although solar owners are double-dipping into the taxpayer pot—once when receiving heavily subsidized (and therefore low-cost) solar systems and again when receiving above-market compensation—the solar community is vehemently protesting. Despite the outcries, the PUC should pursue its recommendation to transition from net metering while also rejecting subsidies from ratepayers and taxpayers alike. By doing so, the PUC’s recommendations could relieve Oregon’s ratepayers from substantial burden.


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

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Cascade Policy Institute Opposes Measure 97, the “Sales Tax on Steroids”

FOR IMMEDIATE RELEASE 

Media Contact:

Steve Buckstein
steven@cascadepolicy.org

503-242-0900

PORTLAND, Ore. – Cascade Policy Institute’s Board of Directors has voted to oppose Measure 97, the 2.5 percent gross receipts tax on C corporations with Oregon sales above $25 million. It would be the biggest tax increase in Oregon history.

Contrary to union claims, Measure 97 will not simply tax big out-of-state corporations. As the non-partisan Legislative Revenue Office Report has found, it will act primarily as a consumption tax on Oregonians. The estimated cost of this tax is $600 per year for every man, woman, and child, with lower-income households being hurt the most.

As the national Tax Foundation has noted, by seeking to raise more than $6 billion per biennium, Measure 97 will increase total state taxes by approximately 25 percent. It is an eight-times-larger tax increase than Measures 66 and 67, the tax increase measures that were on the 2010 ballot.

Following the Cascade Board vote, Cascade’s President and CEO John A. Charles, Jr. released this statement:

“All corporate taxes are paid by individuals, including consumers in the form of higher prices, employees in the form of lower compensation, and/or owners in the form of lower profits. The union backers of Measure 97 know this, but cynically claim that it will simply make corporations ‘pay their fair share.’ This tactic is not only misleading, but if successful will harm every Oregon taxpayer.”

“As the two most reputable studies (LRO and PSU) on the effects of Measure 97 to date conclude, it will act largely as a consumption tax on Oregonians. As the former State Economist and chief author of the PSU study noted in March, it will be ‘like a sales tax on steroids.’ That is because Measure 97 will tax multiple transactions from production, through processing, through distribution, through the ultimate retail sale.”

“Measure 97 is especially punitive because unlike retail sales taxes that often exempt necessities such as food, medicine, and housing, Measure 97 will tax everything. Consumers will see price increases that in many cases will be much more than the stated 2.5 percent rate, without having any idea that the cause is Measure 97.”

Two recent Cascade publications on the ballot initiative that is now Measure 97:
Like a Sales Tax on Steroids
A Sales Tax by Any Other Name

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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Hillsboro Entrepreneur Manuel Castañeda Joins Cascade Policy Institute Board of Directors

FOR IMMEDIATE RELEASE

Media Contact:
John A. Charles, Jr.

503-242-0900

john@cascadepolicy.org

Portland, OR – Manuel Castañeda is the newest board member of Cascade Policy Institute. Castañeda is CEO of PLI Systems, a Hillsboro-based company specializing in soil stabilization projects. The Cascade Board of Directors elected Castañeda on July 29.

CastañedManuelCastanedaa founded his firm, now known as PLI Systems, Inc., in 1986 after coming to America from Mexico where he grew up poor in a small village. Once here, he purchased a lawnmower and a pickup truck and began his entrepreneurial journey to achieve the American Dream. In 2003, he started PLI Systems to handle the increasing number of soil stabilization projects the company was receiving. PLI is now is a full-service landscape, design, building, and maintenance company.

Castañeda joins eight current Cascade board members, including Chairman William B. Conerly, Ph.D., Michael L. Barton, Ph.D., Pamela Morris, Larry W. Dennis, Sr., Gilion Dumas, Jon Egge, William Udy, and John A. Charles, Jr.

Cascade Board Chairman Bill Conerly stated, “Cascade Policy Institute is dedicated to promoting individual liberty and economic opportunity; Manuel Castañeda is the embodiment of those values. He came to America with nothing, built a successful business, and raised a family. He is an active volunteer in the community and a long-time supporter of Cascade. We are honored to have him join the Board.”

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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Cascade Policy Institute’s 25th Anniversary Gala Reception and Dinner

Thursday, October 20, 2016 – 6:30pm to 9:00pm
Tualatin Country Club
Justice Clint Bolick, Keynote Speaker

Reserve Now 60 percent

Justice Clint BolickPlease join Cascade Policy Institute’s staff and board, and many freedom-loving Oregonians, as we celebrate 25 years promoting individual liberty, personal responsibility, and economic opportunity in Oregon.

Our Keynote Speaker will be the newest Justice of the Arizona Supreme Court, Clint Bolick. When appointing him to the Court earlier this year, Arizona Governor Doug Ducey (R) said, “Clint is nationally renowned and respected as a constitutional law scholar and as a champion of liberty.”

Clint co-founded the libertarian public interest law firm Institute for Justice the same year we founded Cascade and has been a fierce defender of individual, economic, and educational liberty even longer. He successfully defended school choice programs in two state supreme courts, and his work led to victory  in a critical school choice case before the U.S. Supreme Court in 2002.

Clint came to Portland in 1990 to give notice to the ACLU and others that if the  school choice initiative Cascade founders helped run that November were to  pass, he would defend it all the way to the U.S. Supreme Court. The measure didn’t pass, but Cascade was founded two months later to keep educating Oregonians about school choice and other important issues. We have worked with Clint on a number of issues over the years, and he’s spoken in Oregon for Cascade several times. We are excited to have him join us in October as we celebrate 25 years fighting for freedom and liberty together in Oregon and America.

$100 ticket price ($125 after Oct. 14) includes no-host cocktail reception and a delicious full-course meal. (Ticket price is $125 beginning October 15.)

Doors open for the no-host cocktail reception at 6:30 pm.  Dinner begins at 7 pm.

Sponsorship packages at $5,000, $2,500, $1,000, and $500 are still available, including premium dinner seating and a private reception with Justice Clint Bolick. Contact Cascade for the full details of each sponsorship level: (503) 242-0900 or info@cascadepolicy.org

For more information and to purchase tickets, click here.Reserve Now 60 percent

 

Platinum Sponsors

 

Bryan Bickmore

The Bryan Family

John and Marlis Carson

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Gold Sponsor

MP_PlumbingTiny

 

Silver Sponsors

 

Mr. and Mrs. Lloyd Babler

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PLI Systems 90percent

Leslie Spencer and Jim Huffman

Thornton Family Fund

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Bronze Sponsors

 

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Freedom in Film: Captain America: Civil War (2016)

Have you taken your children to see Captain America: Civil War? There’s nothing like a summer superhero blockbuster to jumpstart a conversation about the meaning of freedom, the importance of personal responsibility, and how to know what’s right to do. The Acton Institute’s Jordan Ballor recently described Captain America’s themes of freedom and conscience this way:

The basic dynamic of the film focuses on conflict between authority and responsibility. The film could well be understood as an extended reflection on Edmund Burke’s observation: “Society cannot exist, unless a controlling power upon will and appetite be placed somewhere; and the less of it there is within, the more there must be without.”

[…]Captain America champions the rights of conscience and roots the legitimacy of the Avengers in their responsible autonomy.

In Civil War[…]we find an expression of the perennial conflict between individual conscience and communal coercion. Cap represents the best of the liberal tradition in his emphasis on virtue, responsibility, and well-formed moral action. By contrast, Stark represents the temptation to outsource moral government to others, effectively indenturing the Avengers in servitude to some impersonal, international governmental panel….

Captain America works from the assumption that such autonomy, once given up, is perhaps impossible to regain. In a display of incisive political insight, Cap also recognizes the public choice realities of all governmental regimes. The government “runs by people with agendas and agendas change.” He thus realizes the complexities of what might happen when partisans vie for power over the Avengers, and the dilemmas they would face when ordered to engage or to disengage when their own judgment would lead them to do otherwise. The truth that Captain America recognizes is that you can never really outsource the responsibility to obey your conscience. Or as the Dutch politician and theologian Abraham Kuyper put it toward the end of the nineteenth century, “The conscience marks a boundary that the state may never cross.”

(Jordan Ballor’s article “The Captain of Conscience” [spoiler alert] can be found here.)

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Policy Picnic – May 25, 2016

Please join us for our monthly Policy Picnic led by special guest speaker Adrian Moore, Ph.D., Vice President of Policy at Reason Foundation


Topic:  Government Worker Pension Reform – Honoring contracts and ending taxpayer debts

Description: Unfunded pension liabilities are a national problem. Oregon’s PERS system has unfunded liabilities (read taxpayer debt) of $21 billion. A number of states have overhauled their pension systems to provide sustainable retirement benefits to government workers while dramatically reducing taxpayer debts and risks. Arizona is the latest state to do so. Adrian Moore will talk about the reforms, how they happened, and what Oregon should be considering.

Adrian Moore, Ph.D., is vice president of policy at Reason Foundation, a nonprofit think tank advancing free minds and free markets. Moore leads Reason’s policy implementation efforts and conducts his own research on topics such as privatization, government and regulatory reform, air quality, transportation and urban growth, prisons and utilities.

Admission is free, but reservations are required due to space limitations. You are welcome to bring your own lunch; light refreshments will be served.

Please click here to reserve your free tickets.

Cascade’s Policy Picnics are generously sponsored by Dumas Law Group, LLC.

Dumas Law Group
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New Report: Transportation Funding Should Be a State and Local Responsibility

Study Finds That Transportation Funding Should Be a State and Local Responsibility

May 4, 2016 

FOR IMMEDIATE RELEASE

Media Contact:
John A. Charles, Jr.

503-242-0900

john@cascadepolicy.org

PORTLAND, Ore. –  In a study released today by Cascade Policy Institute, economist Randall Pozdena recommends that transportation regulation and finance devolve from the federal government to state and local governments. In addition, the study recommends that most transportation taxes be replaced with targeted user fees, to ensure that those who pay for services receive benefits commensurate with those payments.

For over 30 years, the federal government has assumed a disproportionately large role in the regulation and subsidization of transportation services. Yet, most travel is local. For instance, the Cascade research paper found: 

  • More than 50% of all household trips, by all modes, are less than five miles long
  • More than 90% are less than 20 miles
  • 92% of freight shipments are less than 500 miles, by weight

Despite the dominance of local travel, 32% of all transportation funding flows through federal processes.

Of the various transport modes, private freight, airline travel, and pipeline shipments are the least regulated and least subsidized. These modes benefit from high levels of private ownership and capital investment, subject to normal market discipline.

Highway travel and transit suffer from the most distortions and cross-subsidies through federal intervention. As a result, most urban areas face growing levels of traffic congestion, and large urban transit systems are seriously (and often tragically) under-maintained.

The transit industry, which has steadily become a government-sponsored enterprise since passage of the Urban Mass Transit Act of 1964, is the sector most in need of a new business model. According to Dr. Pozdena,

“By definition, transit trips are extremely short and not important parts of larger networks. Federal and state governments should be out of the transit sector altogether, and rely on fare box revenue to ensure that the cost of the service is worthwhile to the user.”

For comparison purposes, Dr. Pozdena calculates that it costs roughly $60,000 to recruit one new additional transit rider in Oregon, which is 10 times the cost of providing new highway capacity for one additional auto commuter.

The Portland region in particular suffers from a mode imbalance in which vast sums of federal and state dollars have been spent on lightly-used passenger rail lines, while new highways and bridges have been canceled or delayed. This problem can be solved by inviting private investors to build needed new facilities through toll-based payments, and implementing time-of-day pricing schemes to ensure free-flow travel conditions on the regional highway system.

Last week the Oregon legislature announced the formation of an 18-person task force to study transportation funding for the 2017 legislative session. According to John A. Charles, Jr., CEO of Cascade Policy Institute,

“The Oregon Legislature has struggled unsuccessfully for decades to devise a sustainable transportation funding system. As yet another task force prepares to scale the fortress wall with the same weapons used in previous assaults, members should consider a new approach including targeted user fees rather than broad-based taxes, electronic tolling and variable pricing, elimination of political mandates prohibiting new highway facilities, and market-based reforms including privatization.

“These principles work everywhere else in the economy; they would work in the transportation sector as well, if we allowed them.”

The full report, Devolution of Transportation: Reducing Big Government Involvement in Transportation Decision-Making, can be downloaded here.


Founded in 1991, Cascade Policy Institute is Oregon’s premier policy research center. Cascade’s mission is to explore and promote public policy alternatives that foster individual liberty, personal responsibility, and economic opportunity. To that end, the Institute publishes policy studies, provides public speakers, organizes community forums, and sponsors educational programs. Cascade Policy Institute is a tax-exempt educational organization as defined under IRS code 501(c)(3). Cascade neither solicits nor accepts government funding and is supported by individual, foundation, and business contributions. The views expressed in Cascade’s reports are the authors’ own.

 

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Policy Picnic – April 27, 2016

Please join us for our monthly Policy Picnic, led by special guest Adam Novick, MS


Topic: Let there be daylight: Politics, ecology, and the future of endangered species regulation 

Special guest Adam Novick will be at Cascade Policy Institute on Wednesday, April 27, for a special edition of Cascade’s Policy Picnic series.

Adam Novick, MS has won awards from the Oregon Department of Forestry, the Oregon Department of Fish and Wildlife, and the Oregon chapter of The Wildlife Society, for conservation and leadership in the conservation of the Willamette Valley’s oak savanna. He earned a master’s degree in Environmental Studies from the University of Oregon in 2013 and presently holds a courtesy faculty research appointment from the University. His views are not necessarily those of the University.

Admission to this event is free; but reservations are required, due to space limitations. You are welcome to bring your own lunch. Light refreshments will be served.

Click here to reserve your free tickets.

Cascade’s Policy Picnic series is generously sponsored by Dumas Law Group, LLC.

 
Sponsored by:
Dumas Law Group
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Policy Picnic – March 30, 2016

Catch the Aloha Spirit! Join us for a “Policy Luau” led by Tim Lussier, State Director at Western Liberty Network


Topic: “PURSUING HAPPINESS: Best Practices of Citizen-Led Public Policy in Oregon and Hawaii”

Description:  

Special guest Tim Lussier will be at Cascade Policy Institute on Wednesday, March 30, for a very special edition of Cascade’s Policy Picnic series.

Tim Lussier will share his experiences serving as Executive Director of the Grassroot Institute of Hawaii. He’ll share insights into community initiatives and best practices of limited-accountable-local organizations in Hawaii and other western states. He’ll talk about current public policy issues in the very diverse state of Hawaii and what Oregonians can learn from good citizen-led efforts in other states.

A public relations, digital, and community leader, Tim has served on many local, state, and national campaigns. In 2013 Lussier helped reboot Grassroot Institute of Hawaii and served successfully as its turn-around Executive Director. He holds a Master of Arts in Communication from Hawai‘i Pacific University, where he served as Student Body President. While he lived in Hawaii for many years, Tim hails from West Linn and is proud to be a son of Oregon.

Admission to this event is free; but reservations are absolutely required, due to space limitations. You are welcome to bring your own lunch. Light treats will be served.

Reserve your free tickets here.

Cascade’s Policy Picnic series is generously sponsored by Dumas Law Group, LLC.

 
Sponsored by:
Dumas Law Group
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Policy Picnic – February 25, 2016


Please join us for our monthly Policy Picnic led by Cascade President and CEO John A. Charles, Jr.


Topic: The 2016 Oregon Legislative Session

Description:  Every other year the Oregon Legislature meets for just one month. Come get the inside scoop on what happened in Salem this February and what it means for you, your family, or your business.

There is no charge for this event, but reservations are required as space is limited.  To reserve your free tickets, click here.

Admission is free. Please feel free to bring your own lunch.
Coffee and cookies will be served. 
 
Sponsored by:
Dumas Law Group
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Oregon Legislature Should Continue Open Enrollment in Public Schools

By Bobbie Jager

This week marks National School Choice Week, and states across the nation have much to celebrate. In the past decade, choice advocates across the political spectrum have worked to pass legislation including full funding for online and charter schools, education savings accounts, scholarship tax credits for children with disabilities, and open enrollment, which allows children to register freely beyond school district borders. School choice advocates in states like Indiana, Colorado, and Florida are also working to break down the walls between the K-12 education system and higher education so students not only earn a high school diploma, but are well on their way to earning an associate’s degree.

 

When our state decided to create a Common School Fund, it was with the belief that a successful society was dependent upon having a skilled and educated citizenry, and that it was in the public’s interest to pay for public education. But the Common School Fund was merely a funding mechanism. It was agnostic on the delivery mechanism.

 

In today’s society, we expect customization and personalization in every aspect of our life. Have you considered that maybe our education system is failing not because we lack funding, but, rather, because we’re still relying on a one-size-fits-all system for 550,000 students with little consideration for the needs of the individual student? Often, Oregon politicians talk about strengthening people’s rights to freely make choices about their lives, yet when it comes to school choice, families in Oregon are severely restricted. The resistance to school choice by education leaders in Oregon isn’t limited to simply expanding new options. Unfortunately, there is a constant effort to undo the few choice options available to Oregon families.

 

In 2011, a bipartisan Oregon legislature successfully increased options by expanding enrollment caps for online schools, creating a modified open enrollment option, and allowing colleges and universities to act as charter sponsors. Once caps were lifted, more Oregon students and their families chose online schooling. In turn, more public schools made online schooling an offering to stay competitive with their public charter school counterparts. The cap, however, is artificial. We should do away with it altogether and let parents have full access to that option.

 

When Oregon enacted open enrollment, hundreds of families across the state made the decision to leave their local school district for one that better suited the needs of their child. Unless the legislature acts in 2016, that choice will expire. Living in such a progressive state, doesn’t it make sense that we would continue to expand choices for parents instead of limit them?

 

Progressive Democrats from around the nation are moving in this direction. For example, former California Senate President Gloria Romero, a Democrat and an educator, passed the nation’s first parent trigger law. The law empowers parents whose children attend public schools that are in the bottom 20 percent of California’s system with one of three choices: implement a turn-around model with the district and new staff, transition the school into a charter school, or vote to shut the school down. Gloria understood empowering parents with choices would help children escape failing schools.

 

As a mother of 13 children, I quickly learned not every child fits into the same educational “box.” My children have attended public schools, including charter schools, private schools, experienced home schooling, and attended international schools when my family was stationed in Saudi Arabia. My kids fill the spectrum from special needs to children identified as talented and gifted. To assume each child is well-served by the exact same educational delivery formula is a recipe for disaster. We now see the results of that thinking in Oregon’s poor graduation rates.

 

My message to Oregon legislators is to look at what Democrats in other states are doing to end inequality in their education systems. Their efforts are based on choice and empowering parents to make necessary changes. Let’s end our practice of tying a child’s educational future to their ZIP code and their income. It’s time to give all Oregon school children the choice for a better future.


Bobbie Jager is the executive director of Building Excellent Schools Together (BEST), a nonpartisan organization committed to parent empowerment and increasing the options for education delivery in our public school system. She was named Oregon Mother of the Year in 2012. Ms. Jager is a guest contributor for Cascade Policy Institute, Oregon’s free market public policy research organization.

A version of this commentary was originally published in The Oregonian on January 24, 2016 as Oregon Legislature should preserve open enrollment in public schools.

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Press Release: Largest Celebration of Education Reform in U.S. History Begins January 24

January 22, 2016

For Immediate Release

Media Contact:
Steve Buckstein

503-242-0900 or steven@cascadepolicy.org

 

Cascade Policy Institute Plans Special Event to Celebrate National School Choice Week 2016

Portland, Oregon to play role in nation’s largest celebration of education reform

 

Portland, Ore. – Cascade Policy Institute will hold a special event in celebration of National School Choice Week 2016, organizers announced today. The event will shine a spotlight on the need to expand access to educational options for all children.

The event will take place at noon on Thursday, January 28, at Cascade Policy Institute. Cascade’s Founder and Senior Policy Analyst Steve Buckstein will discuss the latest school choice news and what’s happening in Oregon. The event is open to the public, but reservations are required.

“Oregon is behind the national school choice curve. It’s time we caught up, so all Oregon students can get the best education possible regardless of their zip code,” said Buckstein.

School choice means empowering parents with the freedom to choose the best educational environments for their children. The goal of National School Choice Week (NSCW) is to raise public awareness of all types of education options for children. These options include traditional public schools, public charter schools, magnet schools, online learning, private schools, and homeschooling.

Started in 2011, NSCW has grown into the world’s largest celebration of opportunity in education. The Week is a nonpartisan, nonpolitical public awareness effort and welcomes all Americans to get involved and to have their voices heard. Held every January, NSCW shines a positive spotlight on effective education options for every child.

National School Choice Week 2016 will be held January 24-30, 2016. The Week will be the largest series of education-related events in U.S. history:

  • 16,140 total events across all 50 states
  • 13,224 schools of all types are holding events
  • 808 homeschool groups are holding events
  • 1,012 chambers of commerce are holding events
  • 27 governors have issued proclamations recognizing School Choice Week in their states
  • More than 200 mayors and county leaders have issued School Choice Week proclamations
  • There will be rallies and special events at 20 state capitol buildings

“From 150 events in our inaugural year, 2011, to 5,500+ events in 2014, the impact of National School Choice Week has been nothing short of incredible,” said Andrew Campanella, National School Choice Week’s president.

“Thinking back to that first year, I am just overwhelmed at how much NSCW has grown, with so many different folks across the country shining in the positive spotlight of this effort. From students and parents and teachers to school leaders, elected officials, governors, mayors, state legislators, concerned citizens, education organizations and small businesses, National School Choice Week has truly brought people together to celebrate educational opportunity.”

By participating in National School Choice Week 2016, Cascade Policy Institute joins hundreds of organizations, thousands of groups, and millions of Americans in raising awareness about the need to empower parents with the ability to choose the best educational environments for their children.

Founded in 1991, Cascade Policy Institute is Oregon’s premier 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 www.schoolchoiceweek.com or visit cascadepolicy.org.

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Policy Picnic – January 28, 2016


Please join us for our monthly Policy Picnic led by Cascade Founder and Senior Policy Analyst Steve Buckstein


Topic: Celebrate National School Choice Week!

Description:  

Cascade will celebrate this year’s National School Choice Week (January 24-30) with our first Policy Picnic of the year on Thursday, January 28, from noon to 1:30 pm in our offices. Steve Buckstein will discuss the latest School Choice news and what’s happening in Oregon. Seating is limited, so RSVP today!

Part of Steve’s presentation will discuss public interest lawyer and school choice defender Clint Bolick’s visit to Portland in 1990 in support of that year’s school choice Measure 11, which Steve and the other Cascade founders helped to place on the ballot. Clint came here to defend the measure’s constitutionality all the way to the U.S. Supreme Court, had it been approved by voters.

On January 6, 2016, Clint Bolick was appointed to the Arizona Supreme Court. People are already speculating that he could be on the short list to fill a U.S. Supreme Court vacancy under a future President.

Clint Bolick was a cofounder of the libertarian public interest law firm Institute for Justice and most recently was Vice President for Litigation at Cascade’s sister organization in Arizona, the Goldwater Institute. Filing that position now will be another friend of Cascade and public interest attorney, Tim Sandefur of Pacific Legal Foundation. All in all, 2016 is starting out as a good year for Liberty Litigators and all liberty-minded Americans.

There is no charge for this event, but reservations are required as space is limited.  To reserve your free tickets, click here.

Admission is free. Please feel free to bring your own lunch.
Coffee and cookies will be served. 
 
Sponsored by:
Dumas Law Group
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Freedom in Fiction: The Groves of Academe

By Gilion Dumas

Student sit-ins, “safe spaces” (otherwise known as idea-free zones), demands for high-profile faculty resignations….  Think things are out of control on college campuses today? You might enjoy Mary McCarthy’s 1951 academic satire The Groves of Academe, reviewed here by Cascade board member Gilion Dumas.

White Russians, communists, atheists, Catholics, progressives, classicists, English professors, and visiting poets all roam the halls of Jocelyn College and the pages of Mary McCarthy’s 1951 campus novel classic, The Groves of Academe. Jocelyn is an experimental liberal arts college somewhere in New England and prides itself on the academic freedom enjoyed by its professors and students. But when Henry Mulcahy gets a letter from the college president informing him that his contract will not be renewed in the fall, he tries to twist the college’s liberal Zeitgeist to his own advantage.

Mulcahy starts the rumor that he was let go because he was a member of the Communist Party. In the era of McCarthy hearings and Hollywood blacklists, Mulcahy perversely figures that his fellow academics in the English department would rally to support him in his hour of prosecution, championing his cause for political freedom.

What follows is a series of closed-door conspiracies, petty intrigues, and shuffling alliances, as the English department debates Mulcahy’s future and tries to persuade the president to keep him on. Meanwhile, Jocelyn hosts its first-ever poetry conference, introducing a dozen new characters and opportunity for greater mischief.

Freedom is the underlying theme to all threads of the story. Debates rage (in the civilized, over-intellectual tones of college professors) around the idea of freedom: freedom in academics, politics, sex, ideology, religion, poetry, movement, and expression. Specific discussions address whether, in a supposed bastion of academic freedom, a card-carrying Communist can be intellectually free or must take orders from the Party? Are Catholics in the same position, bound by the dictates of Rome? Are the students of Jocelyn really academically free to choose their fields of study, as advertised, if the professors, anxious to reduce their own workload, steer the students towards a select syllabus? Are the students, in fact, better off with a little intellectual steering?

Often, McCarthy raises the idea of personal freedom more subtly, in the choices the characters make or descriptions of college life. For instance, the new-found freedom enjoyed by college students sparkles in this gem, describing the professor who always volunteered to chaperone student trips abroad in exchange for free travel:

Whenever, during the summer, he took a party of students abroad under his genial wing, catastrophic event attended him. As he sat sipping his vermouth and introducing himself to tourists at the Flore or the Deux Magots, the boys and girls under his guidance were being robbed, eloping to Italy, losing their passports, slipping off to Monte Carlo, seeking out an abortionist, deciding to turn queer, cabling the decision to their parents, while he took out his watch and wondered why they were late in meeting him for the expedition to Saint-Germain-en-Laye.

With that kind of wit and insight, the story plays out like the best drawing room drama. It is sneakily funny, both as subtle and biting as a gin gimlet. For example, McCarthy deftly captures the character of the college president:

Like all such official types, he specialized in being his own antithesis: strong but understanding, boisterous but grave, pragmatic but speculative when need be. The necessity of encompassing such opposites had left him with a little wobble of uncertainty in the center of his personality, which made other people…feel embarrassed by him.

McCarthy is credited with inventing the “academic novel” with The Groves of Academe. This is satire at its best, finding absurdity in the minutia that drive the characters rather than clownish humor in exaggeration. As Commentary Magazine wrote when Groves was first published, McCarthy annoyed the politically correct before the term was even invented: “There is a particular kind of ‘right-thinking’ mind that is reduced to a frantic rage not only by what she says, but by her tone, her metaphorical habits, the very shape of her sentences.” Many have followed McCarthy’s campus novel template, but no one has exceeded her achievement.

Gilion Dumas is on the board of Cascade Policy Institute. She practices law at her own firm, the Dumas Law Group, in Portland. When not practicing law, she blogs at Rose City Reader. (A version of this article was originally published August 10, 2013.)

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The Jayne Carroll Show Interviews Jared Meyer on Washington’s Betrayal of America’s Young People

Guest host Aaron Stevens interviewed the Manhattan Institute’s Jared Meyer on The Jayne Carroll Show (1360 AM KUIK) on October 21. In this 8-minute interview, Jared talks about how entitlement programs and the Affordable Care Act disadvantage young people to benefit those with much higher net worth. If you missed Jared’s fantastic presentation at Ernesto’s Italian Restaurant on Thursday night, you can hear his radio discussion with Aaron here.

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Washington’s War on Millennials

By Jared Meyer

Tens of millions of Americans are between the ages of 18 and 30, and achieving success will be more difficult for these so-called Millennials than it was for young people in the past. This is because politicians and bureaucrats in Washington have put in place policies that restrict economic opportunity for the young.

It does not have to be this way.

Washington’s expansion of entitlement benefits and other government services places a major future financial burden on the young—one that many did not even vote for. The federal government has a debt of $18 trillion, but this is only the tip of the iceberg. Unfunded liabilities driven by Social Security and Medicare push the total federal fiscal shortfall to more than $200 trillion.

As if this were not enough, the Affordable Care Act has raised health insurance premiums for the young in an effort to pay for older Americans’ health care. Now, even though people under 30 only spend an average of $600 a year on health care, young people cannot pay less than one-third of what older people pay.

In elementary and secondary school, ineffective teachers are protected from being fired. This serves the interests of older teachers and their unions, but it harms those who would benefit from high-quality teachers. Common-sense reforms to improve education outcomes such as vouchers and charter schools are consistently opposed by teachers unions.

In their college years, young people are encouraged to attend a university even though four in ten college freshmen fail to graduate within six years. The current system of excessive federal student aid raises the cost of college tuition, which forces students to take on mountains of debt.

As if this were not enough, after high school or college graduation, Washington and state governments prevent young people from entering the job market. Occupational licensing requirements are meant to protect public safety, but often they mostly protect established businesses and workers. This comes at the expense of everyday consumers, entrepreneurs, and young workers, as unnecessary licensing makes many promising career paths too prohibitively expensive or time-consuming to enter.

Minimum wage laws, though they may seem well intentioned, make it more difficult for young and low-skilled workers to acquire valuable experience. Again, the government is telling young people that they are not free to work. Destructive labor-market laws need to be scaled back so that the first step on the career ladder can again be within reach.

Some think that if government were larger and gave more handouts, and taxes were raised to pay for these programs, then young people would do better. However, this would only make matters worse. Government tends to pick winners and losers, and the politically unorganized young are ineffective at lobbying for their interests. The key to restoring Millennials’ lost economic opportunity is for government to get out of their way.

Washington is robbing America’s young. Our country is facing a crisis, and change is essential for young people to achieve the future they deserve.

Jared Meyer is a fellow at the Manhattan Institute for Policy Research and the coauthor with Diana Furchtgott-Roth of Disinherited: How Washington Is Betraying America’s Young (Encounter Books, May 2015). Cascade Policy Institute will host Meyer to speak on this topic in Portland on Thursday evening, October 22. This article was originally published by The Salem Statesman Journal.

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Economist Mark Skousen Reveals the "Hidden Forces" Leading to Economic Growth and a Higher Standard of Living

Cascade Policy Institute
presents

Professor Mark Skousen

named “one of the top 20 most influential living economists

as he reveals

What Hidden Forces Lead to Economic Growth
and a Higher Standard of Living?

and

Why are some countries rich and others poor?

 

Friday, August 14, 2015
11:30am – 1:00pm

Ernesto’s Italian Restaurant

8544 SW Apple Way (just off Beaverton-Hillsdale Hwy)
Portland, OR 97225 (directions)

Full Lunch Buffet and beverage

$18 complete cost including gratuity

Reservations and pre-payment required by August 12th

 

Mark Skousen grew up in Portland and is returning to talk with us before attending his 50th high school reunion at Sunset High School in Beaverton. His view of what leads to economic growth may surprise you—and dramatically alter your perception of how the world works. You can watch his 2005 talk for Cascade, “1776…The Triumph of an Idea,” here.

He earned his Ph.D. in economics from George Washington University and has taught economics and finance at five colleges and universities, including Columbia Business School and Columbia University. Currently, he is a Presidential Fellow at Chapman University in California. For the past 35 years, he has been editor of the award-winning investment newsletter “Forecasts & Strategies.”

Dr. Skousen has the unique distinction of having worked as an analyst for the Central Intelligence Agency, as President of the non-profit Foundation for Economic Education, and for several for-profit companies. As a former columnist for Forbes magazine, he interviewed some of the world’s top political and business leaders, including Warren Buffett, Bill Gates, and Presidents Clinton and Bush. He has authored over 25 books on economics and finance; and as a sixth-generation direct descendant of Benjamin Franklin, he finished Franklin’s Autobiography in 2006 with The Compleated Autobiography by Benjamin Franklin.

Mark Skousen may be best known currently for being the producer of the “the world’s largest gathering of free minds,” FreedomFest, held every July in Las Vegas. 2,500 people attended this year to watch columnist Paul Krugman debate Stephen Moore, the keynote speaker at Cascade Policy Institute’s 20th Anniversary dinner cruise in 2011.

Mark Skousen’s websites are: www.mskousen.com; www.markskousen.com; www.freedomfest.com.

Click here for the event flyer!

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Policy Picnic – May 20, 2015


Please join us for our monthly Policy Picnic led by Cascade board chair and economist Dr. Bill Conerly


Topic: Economic Inequality: Causes, Consequences, and Policy Implications

Description: Economic inequality has been the hottest topic in public policy in 2015. Please join us as Cascade board chair Dr. Bill Conerly discusses reasons for changes in inequality and possible policy responses to this controversial issue.

Although Dr. Conerly is best known for his work applying economics to business challenges, he studied income distribution under the top professor in the field (Martin Bronfenbrenner of Duke University) and has written on inequality for Forbes.com.

This free, informal event promises to be a lively, interactive discussion about one of the most debated topics in policy–and politics–today. RSVP soon, as space is limited. 

Admission is free. Please feel free to bring your own lunch.
Coffee and cookies will be served. 
 
Sponsored by:
Dumas Law Group

 

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Aging Roads? New Ideas!

Cascade Policy Institute

presents

Aging Roads? New Ideas!

 Adrian Moore

featuring

Adrian Moore, Ph.D.

Vice President of Policy at Reason Foundation

The City of Portland is grappling with ways to pay for the rising costs of maintaining and building roads. The Oregon Department of Transportation is facing a similar problem with the state highway system. Adrian Moore is Vice President of the Reason Foundation and an international expert in transportation finance policy. His presentation will feature the latest innovations in highway, tunnel, bridge and road finance from around the world, with commentary about how these ideas might be applicable to Oregon.

About Adrian Moore:

Moore has testified before Congress and regularly advises federal, state and local officials on policy initiatives.  He is a member of the Transportation Research Board, and in 2006 he was appointed by Congress to serve on the National Surface Transportation Infrastructure Finance Commission.  In 2009 he was appointed by Governor Schwarzenegger to California’s Public Infrastructure Advisory Commission.

Mr. Moore is co-author of the book Curb Rights: A Foundation for Free Enterprise in Urban Transit, published in 1997 by the Brookings Institution Press, which was runner up for the Sir Antony Fisher International Memorial Award, and of Mobility First: A New Vision for Transportation in a Globally Competitive 21st Century published in November 2008.  And he is author of dozens of policy studies and articles.  

Mr. Moore earned a Ph.D. in Economics from the University of California, Irvine. He holds a Master’s in Economics from the University of California, Irvine and a Master’s in History from California State University, Chico.

Dessert buffet

Complimentary coffee, tea, iced tea

No-host bar (cash only) 

$15 advance payment (April 27th) — $20 after April 27th and at the door (if seating available)

***

Cascade Policy Institute is a 501(c)(3) nonprofit organization. Donations are tax deductible and accepted with gratitude.


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Event Video – The Man Who Could Bring Down Obamacare

On February 26, 2015 at a co-sponsored event presented by Cascade Policy Institute and Washington Policy Center, Michael Cannon, Director of Health Policy Studies at the Cato Institute, spoke before a packed house at the Multnomah Athletic Club in Portland, OR.

After the passage of the Affordable Care Act (ObamaCare), critics noticed that subsidies for health insurance purchases would be available only through “an Exchange established by the State,” such as the ill-fated Cover Oregon. The IRS actively ignored this part of the law and offered subsidies to those using the federal exchange, healthcare.gov, as well. Four legal challenges were filed to stop those illegal subsidies – and the illegal taxes they trigger. One of those challenges, King v. Burwell, goes before the U.S. Supreme Court on March 4, 2015 with a ruling expected by June 2015.

Michael F. Cannon is considered “ObamaCare’s single most relentless antagonist” and an “intellectual father” of the legal strategy that would expose how ObamaCare doesn’t work simply by requiring the Obama administration to follow the letter of the law. He will speak in Portland just six days before the U.S. Supreme Court hears oral arguments in King v. Burwell. “The man who could bring down ObamaCare” will discuss the case, what it means for Oregonians and Washingtonians, and how Congress should reform health care after ObamaCare.

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Scaling Down: The Power of One

By Darla M. Romfo

Last fall I had the pleasure of attending the awards ceremony for the Broad Prize for Urban Education. In the ensuing days, many bloggers and journalists weighed in with criticism, including one who pointed out that “although recent winners of the Broad Prize show positive results compared to many large urban districts, their scores are largely flat—or worse—over the past several years.”

I am sure this must be both disappointing and frustrating to Mr. and Mrs. Broad who made the fortune they are giving away by innovating, adapting, and always getting better. They wanted this prize to inspire the same kind of actions in public education.

Teddy Forstmann, who, along with John Walton, founded the Children’s Scholarship Fund (CSF) in 1998, was a man cut from the same cloth as Mr. Broad. Ted hoped the demand demonstrated when parents of 1.25 million children applied for 40,000 partial scholarships to escape their assigned public school would get the ball rolling and bring about substantial educational improvement for all children within the four-year window for those first scholarships. In Ted’s experience, demand for a better product and a bit of competition led to an improved product. Ted was certainly frustrated with the snail’s pace of it all.

And by now everyone who has ever uttered the words “education reform” is a little frustrated. More than a decade later, billions more in taxpayer dollars, in addition to the billions heaped on by private philanthropy, has been spent to achieve largely mediocre to poor overall results. There are pockets of hope, and we do have much better data. Now we know there is not only an achievement gap between minorities and whites, but also between all U.S. students and children in other countries.

It’s not clear that if we had full blown school choice, the end of teacher tenure, higher standards, or whatever flavor of education reform you favor, that every child would have the opportunity to reach their full potential. Certainly, one or some combination of those things would help many children; but we would still have kids who live in poverty and very unsettled home situations coming to school every day with needs that are beyond what can be addressed by education reform alone.

One thing I have both experienced through relationships with students I’ve met through CSF and observed in the lives of others is that a caring adult who really invests in an authentic relationship with a child will bring enormous benefits to the child, to say nothing of the rewards to the adult. I know Ted and John both experienced this with children they helped directly apart from their education reform efforts. John once told me on a school visit in Omaha that giving the scholarships and meeting the kids and their parents grounded the whole effort of trying to reform the larger system. He knew no matter what happened with those efforts, he was having a direct impact on the lives of kids today.

We can’t stop trying to get education right in America, but maybe we will get further faster if every adult who can gets involved in the life of a child who has a couple of strikes against them. Whether it is through a mentoring program, a scholarship program, a school-based program, or some other means, it could make the ultimate difference in a child’s life, and you don’t have to be up to speed on the latest education reform idea to do it and make it work. Anyone who is willing to give of themselves to another human being will bring about change in that person and themselves. Isn’t that the real reason we are all here anyway?

(January 25-31, 2015 is National School Choice Week, an annual public awareness effort in support of effective education options for all children. A version of this Commentary was published in 2014.)

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Portland’s Streetcar Audit: What Went Wrong?

Last Thursday, auditors released a report questioning the Portland Streetcar’s performance. Ridership counts were inflated by 19%. Several additional metrics, including hourly vehicle operating costs and on-time performance, were either unreported or deemed not suitable for use. What went wrong?

First, too much data wasn’t reported. This includes measures for frequency of service, vehicle failure, and fare survey results. Other useful metrics, such as fare box recovery ratio, were simply incapable of being measured, due to a lack of data collection.

Second, when data existed, much was unreliable. Portland Streetcar uses surveying and self-reporting for many of its metrics, and these methods are prone to high error rates. Automatic passenger counters were recently installed to improve ridership accuracy. However, only six of the seventeen cars were outfitted, decreasing their overall effectiveness.

Finally, oversight was lacking. Performance reports were found to be incomplete with questionable results, an issue frequently overlooked by the Portland Bureau of Transportation. More troubling, the City does not have a systematic approach for using performance information to guide management decisions, leading to several missed opportunities for improvement.

Portland Streetcar has a long way to go before its metrics can be trusted again. While increased governmental supervision might sound enticing, there is a better way forward. Portland Streetcar should follow reproducible research principles and make its raw, unaggregated data easily available. This would allow anyone the ability to challenge their findings and methodology, the ultimate form of public oversight.

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Shop Online and Help Cascade Policy Institute!

Holiday $5 New Member Bonuses!

Subscribe yourself and send to friends so they can help Cascade Policy Institute for free.

Friends,

The holidays are here — time to share. When better to help Cascade Policy Institute. Sign up yourself and then send this page to tell your friends about iGive — where holiday shopping at 1,500+ stores means more.

Each person who joins iGive between 11/14/14 and 12/15/14 for the first time can mean $5 automatically donated to Cascade Policy Institute … no purchase necessary! And more if they shop. All they need to do is try the optional iGive Button through 2/15/15 for the free $5 donation.

It’s as easy, well, as forwarding this page.

Click here to start helping for free.

Once you sign up, then tell your friends about iGive. Why share with your friends? –

  1. When friends shop, they’ll help Cascade Policy Institute or their own favorite cause.  Why not let them take advantage of over 1,500 stores that want to help?
  2. The average shopper is raising over $30 – $100 a year for his or her cause … all for free.
  3. It’s simple and automatic – the Button, our iPad and Android apps all make sure of that.
  4. Five bucks free, just for trying iGive out.
  5. The more iGive members, the better the deals we can get from stores.
  6. It’s easy, it feels good, and you just send a link.  So, why not share?

Spread your iGive link everywhere (Facebook’s a great way, but Twitter, email, blogs, bulletin boards, and handouts all work).

Thanks for supporting Cascade Policy Institute!

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Portland’s “F” Doesn’t Stand for “Transportation Friendly”

R Street Institute, a D.C.-based think tank, released its Ridescore website last week. The site grades 50 large U.S. cities based on taxi, limo, and transportation network friendliness. Portland received an F, making it the second-most transportation-hostile city in the survey. Why did Portland rank so poorly?

For taxis, competition is restricted through the use of a fleet cap, which limits the number of vehicles each cab company can operate. A recent study by the Portland Bureau of Transportation shows demand for taxis far exceeds supply on weekends, a direct symptom of fleet caps which prohibit even one more cab unless consumer demand for that cab can be proven before it is even put on the street.

As for limos, Portland forces customers to wait a minimum of one hour before receiving service. On top of that, fares for limos must be at least 35% more than those for taxis, keeping prices artificially high.

Finally, Portland is so hostile to transportation network companies like Uber, Lyft, and Sidecar that they have not been able to enter the market at all.

Portland is known for having one of the best public transportation systems in the country. Despite this, our misregulated private transportation system is one of the worst. Until this changes, we’ll continue to be stuck in the transportation dark ages.

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“Gainful Employment” Regulations Will Hurt Private Colleges

Ever since John Kenneth Galbraith published The Affluent Society in 1958, American liberals have been striving to build a full-fledged European welfare state in America. President Lyndon Johnson’s Great Society program was inspired by the same ambitions to socially and economically engineer the United States. Inspired in good part by the vision of an ideologically remade America, governments have expanded enormously over the half century that has passed since then. From the federal level all the way down to school boards and town councils, governments have gained new taxation, spending, and regulatory powers in almost every conceivable direction.

Despite this massive growth, there are still areas where government in America has not yet reached European size. One of them has to do with general income security. We should be thankful for that, for reasons I explain in my book Remaking America: Welcome to the Dark Side of the Welfare State. However, liberals keep pushing the ideological idea that every man and woman in America has some kind of inherent right to a certain income. Inspired by such concoctions as government being some kind of employer of last resort, and the basic income guarantee idea, liberals have made significant political and legislative gains in establishing the notion that people have the right to a certain income regardless of their own choices and efforts.

This move away from personal responsibility has accelerated under the Obama Administration. A good example is the regulatory conglomerate known as “Gainful Employment.” In a nutshell, this is an effort by the federal government to dictate to the private sector how much a person “should” make at certain points in his or her career. The implication―obviously not spelled out in the regulations―is that if a person does not make as much as the federal government thinks he or she should make, then some private entity somewhere, other than the person in question, bears responsibility for the insufficient earnings.

On March 14, 2014, the U.S. Department of Education explained how these regulations can be applied:

“The Obama Administration announced today new steps to address growing concerns about burdensome student loan debt by requiring career colleges to do a better job of preparing students for gainful employment—or risk losing access to taxpayer-funded federal student aid. The proposed regulations released by the U.S. Department of Education will help to strengthen students’ options for higher education by giving all career training programs an opportunity to improve, while stopping the flow of federal funding to the lowest-performing ones that fail to do so.”

In order to determine how much a student “should” make after having attended a so-called career college, in 2012 the federal government produced an Excel spreadsheet with more than 7,900 rows of earnings guidelines. The guidelines specify the maximum share of a person’s income that should go to paying back student loans. While this sounds like a misguided but ultimately inconsequential bureaucratic product, in reality it becomes an instrument for dictating the income trajectory for college graduates.

The loans used in the regulations are federal; and since the federal government controls the rates, repayment requirements, and all other financial aspects of the loan, it is easy to use the “Gainful Employment” regulations to establish minimum salaries for people who owe the government on such loans. All the government has to do is, again, to determine the maximum share of a person’s income that can go to paying back loans. If a person pays a larger share, then according to the regulations, she is not making enough money.

But what can the federal government really do if someone does not make what she “should” make? Well, as the quote above indicates, these regulations can be used to go after the educational institutions that a person graduated from. Andrew Quinlan, president of the Center for Freedom and Prosperity, elaborates:

“The Obama administration has consistently sought to eliminate education choices and reduce opportunities, particularly for the poor. The president has repeatedly tried to eliminate funding for the D.C. Opportunity Scholarship Program, despite the fact that the limited school-choice program costs less per pupil than public schools and has seen positive results for poor students. His Justice Department has even misused and misapplied old or irrelevant laws to assault local school-choice programs. Now, the Department of Education is targeting private-sector colleges through so-called ‘Gainful Employment’ regulations. The rules not only punish an entire business model…but by closing one of the best avenues for working class adults to improve their education and increase employability, they also threaten jobs and the economy. The proposed rules would cut off federal loan and financial-aid eligibility for programs that fail to meet certain federal standards, such as graduates with high student-loan debt relative to their earnings in the first few years after graduation. This is a deeply flawed approach for reasons both practical and philosophical.”

Career colleges help millions of Americans advance or reinvent their careers. They are a private-sector invention, responding to a need by others in the private sector, and they operate entirely at the mercy of the free market. If a school provides inadequate education, its graduates make less money than graduates from other schools. Prospective students quickly pick up on such differences and make a free-market, independent choice to avoid low-performing schools.

It seems, however, that this application of the “Gainful Employment” regulations has created a perfect storm of statist intentions: The desire to regulate people’s incomes has merged with a deeply held negativism toward private education.

America has a proud, centuries-old private education tradition. We also have a centuries-old, well-working free-market economy where people can both fail and succeed. The very pursuit of happiness, prosperity and a satisfying career is often as rewarding as reaching the goal. The “Gainful Employment” regulations, and all other regulations aimed at socially and economically engineering our society, rob people of that very reward. Fewer people become productive, independent citizens and more people become dependent on government for their progress through life. The welfare state wins.

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Arizonans Gain the “Right to Try” to Save Their Lives

Amid last week’s election excitement, Arizonans overwhelmingly approved their “Right to Try” referendum, allowing terminally ill patients access to experimental drugs that have completed basic FDA safety testing but are still awaiting further approval. With seventy-eight percent of the vote, Arizona becomes the fifth state to pass Right to Try legislation this year. Momentum is building with wide bipartisan support. Is there any reason for opposition?

Opponents worry that Right to Try may harm the drug development process by pushing patients away from clinical trials. One way to deal with this concern is the Colorado approach, which requires patients be ineligible for trials in order to participate in Right to Try.

More troubling, critics fear that Right to Try takes advantage of vulnerable patients. They worry the terminally ill may choose options that are not in their best interest and that may ultimately lead to an early death.

Right to Try isn’t a magic bullet, though. It doesn’t guarantee a cure, nor is it free from risk. What it offers is a choice when all other options have failed. Oregon already offers terminally ill patients the choice to end their lives under the Death with Dignity Act. If you can choose to die, shouldn’t you be able to choose to fight to live?

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2014 Fall Newsletter

See what Cascade Policy Institute has been up to in the Fall of 2014 in our latest newsletter.

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Scaling Down: The Power of One

By Darla M. Romfo

Earlier this fall I had the pleasure of attending the awards ceremony for the Broad Prize for Urban Education. In the ensuing days, many bloggers and journalists weighed in with criticism, including one who pointed out that “although recent winners of the Broad Prize show positive results compared to many large urban districts, their scores are largely flat—or worse—over the past several years.”

I am sure this must be both disappointing and frustrating to Mr. and Mrs. Broad who made the fortune they are giving away by innovating, adapting, and always getting better. They wanted this prize to inspire the same kind of actions in public education.

Teddy Forstmann, who, along with John Walton, founded the Children’s Scholarship Fund (CSF) in 1998, was a man cut from the same cloth as Mr. Broad. Ted hoped the demand demonstrated when parents of 1.25 million children applied for 40,000 partial scholarships to escape their assigned public school would get the ball rolling and bring about substantial educational improvement for all children within the four-year window for those first scholarships. In Ted’s experience, demand for a better product and a bit of competition led to an improved product. Ted was certainly frustrated with the snail’s pace of it all.

And by now everyone who has ever uttered the words “education reform” is a little frustrated. More than a decade later, billions more in taxpayer dollars, in addition to the billions heaped on by private philanthropy, has been spent to achieve largely mediocre to poor overall results. There are pockets of hope, and we do have much better data. Now we know there is not only an achievement gap between minorities and whites, but also between all U.S. students and children in other countries.

It’s not clear that if we had full blown school choice, the end of teacher tenure, higher standards, or whatever flavor of education reform you favor, that every child would have the opportunity to reach their full potential. Certainly, one or some combination of those things would help many children; but we would still have kids who live in poverty and very unsettled home situations coming to school every day with needs that are beyond what can be addressed by education reform alone.

One thing I have both experienced through relationships with students I’ve met through CSF and observed in the lives of others is that a caring adult who really invests in an authentic relationship with a child will bring enormous benefits to the child, to say nothing of the rewards to the adult. I know Ted and John both experienced this with children they helped directly apart from their education reform efforts. John once told me on a school visit in Omaha that giving the scholarships and meeting the kids and their parents grounded the whole effort of trying to reform the larger system. He knew no matter what happened with those efforts, he was having a direct impact on the lives of kids today.

We can’t stop trying to get education right in America, but maybe we will get further faster if every adult who can gets involved in the life of a child who has a couple of strikes against them. Whether it is through a mentoring program, a scholarship program, a school-based program, or some other means, it could make the ultimate difference in a child’s life, and you don’t have to be up to speed on the latest education reform idea to do it and make it work. Anyone who is willing to give of themselves to another human being will bring about change in that person and themselves. Isn’t that the real reason we are all here anyway?

Darla M. Romfo is President and COO of Children’s Scholarship Fund, based in New York City. CSF has helped 139,000 low-income children nationwide attend the K-8 schools of their parents’ choice through privately funded scholarships worth $568 million. Cascade Policy Institute runs CSF’s Oregon partner program, Children’s Scholarship Fund-Portland.

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Shouldn’t the Terminally Ill Have the “Right to Try” to Save Their Lives?

By Matthew Hayes

Last Friday, Michigan approved Right to Try legislation with overwhelming bipartisan support. Colorado, Missouri, and Louisiana all passed similar measures this year, with Arizonans voting on the issue this November. What is Right to Try and why is it gaining steam?

Spearheaded by the Goldwater Institute, an Arizona-based public policy organization, Right to Try legislation allows terminally ill patients access to drugs, biotics, and implants that have completed basic FDA safety testing but are still awaiting further approval.

The FDA offers a similar program, known as Compassionate Use. Unfortunately, the process isn’t easy. Physicians typically face 100 hours of paperwork and research per applicant. The entire process can take several months, a luxury many terminally ill patients don’t have.

These costs are seen in the usage statistics. In 2011, fewer than 1200 patients received expanded access, while more than 1500 people died of cancer each day. Right to Try legislation removes many of these barriers, making the process easier and faster for patients. While it can’t be known how many lives these save, the number is undoubtedly greater than zero.

Since 1997, the Death with Dignity Act gives terminally ill Oregonians the right to end their lives. Bringing Right to Try to Oregon offers these citizens the chance to do more than just hasten death; it offers a chance to beat their illness.

If you have the right to die, shouldn’t you have the right to fight to live?

Matthew Hayes is a research associate at Cascade Policy Institute, Oregon’s free market public policy research organization.

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Kitzhaber’s “Clean Fuels Program” Is a Hidden Gas Tax

By Jon Egge

Many politicians on the West Coast have fallen in love with untested policies and programs they say will help solve global warming. Many of these policies are mind-bogglingly complicated. What, after all, is a low carbon fuel standard (LCFS), or clean fuels program? And how exactly do programs like “cap and trade” work? And, perhaps most importantly, how do these policies impact you, the consumer?

Here’s the dirty little secret the politicians don’t want to talk about: All of these policies are going to make it more costly to produce gasoline and diesel. In fact, that’s the intended purpose of so-called “market-based” schemes to reduce greenhouse gas emissions. By making the energy we need and use every day more costly to produce, other energy supplies—like wind, solar, biofuels, and hydrogen fuel cells—will become more competitive. And where these programs have been implemented—such as in California—they are also conveniently generating billions of dollars in new revenue for the state to spend however it pleases. That’s why climate-change policies like cap and trade and LCFS are becoming Trojan horses for hidden taxes. These revenue programs provide limited environmental benefits but generate big political paydays.

California has adopted the nation’s only LCFS, a program energy experts say is infeasible. Forcing manufacturers of gasoline and diesel fuels to meet a standard that can’t currently be met puts the state’s entire fuel supply in a very precarious position.

Now, politicians in Oregon are considering a LCFS that, if implemented, will become a new hidden gasoline tax designed to increase the cost of fuel and decrease the bank accounts of everyday motorists and businesses who rely on transportation. Hidden tax schemes increasing the costs of fuel are also regressive revenue-generating policies that hurt poor and middle-income families the most. These families spend a much larger portion of their income on transportation and fuel than wealthy families do, and hidden gas taxes therefore take a much bigger bite of their budgets. Unlike their wealthier counterparts, working families simply can’t trade their vehicles for expensive hybrids and electric cars. And because these policies aren’t transparent, consumers often have no idea why their fuel costs are rising.

We all want to improve our environment and ensure cleaner air. But punishing motorists by increasing fuel costs through hidden taxes is not the way to do it. Governor John Kitzhaber has made it clear he plans to move forward with a LCFS—even without the support of the state’s elected legislators. Last session, our Legislature, after careful consideration, declined to extend authorization for the LCFS. Under the governor’s unilateral direction, the Department of Environmental Quality is now adopting rules to push the LCFS forward.

The governor and agency bureaucrats need to be reminded, once again, that when gasoline and diesel costs go up, families and small businesses suffer. It’s time to put a stop to the hidden gas tax that is masquerading as climate change policy.

Jon Egge is a plumbing service contractor in Clackamas and serves on the Oregon Advisory Council of the National Federation of Independent Business. He is a board member of Cascade Policy Institute. This article originally appeared in The Oregonian.

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It’s Time to Change Our Failed Federal Lands Policy

By Ken Ivory

In 1976, Congress changed its “policy” regarding our public lands (Federal Lands Policy Management Act, or FLPMA). This “policy” change sought to retain public lands in federal ownership―ignoring the 200-year-old obligation of Congress to transfer title to our public lands.[1]

In 2009, the U.S. Supreme Court, in Hawaii v. OHA, unanimously declared that Congress does not have the authority to unilaterally change the “uniquely sovereign character of [a state’s] admission,” particularly where “virtually all of a state’s public lands are at stake.” This “policy” change has failed Western communities and schools, forest health, wildlife preservation, watershed management, and jobs and the economy―locally and nationally. The Supreme Court has also called these statehood Enabling Acts promises “solemn bilateral compacts between each State and the Federal Government” where both parties have rights, duties, and remedies for breach―even against the federal government if it fails to perform its duties, including its duty to transfer title of the public lands.

However, because Congress changed its “policy” regarding our public lands:

  • Western communities are dying;
  • Western communities have as little as 10% taxable lands to generate revenues for schools, roads, public safety, and public services for the sick and the poor;
  • Western communities are prevented from creating jobs through the responsible use of their abundant natural resources, which further diminishes tax revenues;
  • Western communities are prevented from harvesting even sick and dead trees (let alone our great renewable forest resources), which would create healthier forests less susceptible to catastrophic fires that kill millions of animals, destroy watershed for decades, and harm life and private property;
  • The FBI is now warning that our forests are weapons for al Qaeda jihad efforts instead of renewable resources for creating wealth, funding schools, and providing for healthier forests;
  • Hunters, fishers, campers, recreationists, and others are denied access to public lands as federal agencies arbitrarily close thousands of roads throughout the West;
  • Western states and local governments are dangerously dependent for funding on a broke federal government that is cutting promised funding, robbing revenues derived from Western lands, and even clawing back SRS monies already paid;
  • Western states get between 30-50% of their total revenues from this same broke federal government;
  • Eastern states are paying nearly $9 billion a year to inflict this harm on Western states;
  • As a nation, we are dependent on China for 95% of the rare earth minerals that are essential for national defense technology and modern electronics (including renewable energy technologies), even though an abundance of rare earth minerals is locked up in federally controlled Western lands;
  • As a nation, we are dependent on foreign sources of oil, gas, and minerals, despite having more than $150 trillion in oil, gas, and minerals (and tens of thousands of jobs) locked up in federally controlled lands.

We have the opportunity of our generation to leverage our voices, through local and state representatives, to compel Congress to change its failed “policy” that is killing Western communities, siphoning funds out of Western schools, closing off Western lands, destroying Western forests, locking up Western resources―and in the process destroying Western and national jobs, economic activity, and tax revenues.

It’s been done before. Did you know that the federal government controlled for decades as much as ninety percent of the lands in of Illinois, Missouri, Indiana, Arkansas, Louisiana, and Florida? Those states simply refused to be silent or take “no” for an answer. They banded together and leveraged their individual, community, and state voices and persistently called upon Congress to honor its obligation to transfer title of their public lands.

There is a solution big enough for the pressing problems of Western states, including Oregon. Congress must change its failed, community-killing “policy.” County and state representatives and their constituents should refuse to be silent or take “no” for an answer until it does. Jobs, school funding, better care for and access to our lands, and our economic future depend on it.

Ken Ivory is president of the American Lands Council and a member of the Utah House of Representatives. He has been a guest speaker on this issue for Cascade Policy Institute, Oregon’s free market think tank.

[1] See, A Legal Overview of Utah’s H.B. 148 – Transfer of Public Lands Act by Professor Donald Kochan, http://americanlandscouncil.org/downloads/Kochan%20Utah%20Public%20Lands%20WP.pdf

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Will Parent Rebellion Spell Doom for Common Core?

By Lance Izumi

If one asked most people a couple years ago about the Common Core national education standards, the response would have been a blank stare. Now, Common Core is a front-burner political issue because parents are discovering that their children are struggling under the new standards.

Common Core is a set of national math and English standards, which most states, including Oregon and California, have adopted because of the funding incentives and strong-arm tactics used by the Obama Administration. There have been many “big picture” criticisms of Common Core: the lack of transparency and public input when Common Core was developed, the middling quality of Common Core, the high cost of implementing Common Core, and nationalization of education under Common Core. Yet, these critiques are now being overshadowed by the anger of parents at how Common Core is negatively affecting the learning of their children.

Columnist and former Reagan speechwriter Peggy Noonan has written that Common Core’s Achilles heel is implementation: “implementation―how a thing is done day by day in the real world―is everything.” Take, for example, new Common Core-aligned curricula and associated teaching methods.

Core Connections is a Common Core-aligned math curriculum that is starting to be implemented in classrooms and which emphasizes the use of cooperative learning. The curriculum tells the student: “Learning math [through cooperative teamwork] has an advantage: as long as you actively participate, make sure everyone in your study team is involved, and ask good questions, you will find yourself understanding mathematics at a deeper level than ever before.” While such utopian pronouncements sound impressive, the reality is quite different.

Bryce is a sixth grader at a public school in Northern California. He is a very bright student, achieving several perfect scores on the state’s math exam and consistently receiving A+ grades in math. Yet, Core Connections has had a discernible negative impact on Bryce.

Under Core Connections, Bryce and his fellow students are organized into teams of three to four students. Bryce says that there is unequal participation among team members, with more advanced students being more involved and carrying more of the work.

Further, not all the groups finish at the same time. Those that finish early can’t go on to harder problems, but have to wait until other teams finish. Oddly, Bryce says that his teacher doesn’t want early finishers to read because that’s English language arts, and not math.

Since the teamwork method started, the class usually doesn’t finish math lessons in time, and sometime it cuts into their science time or the math is simply not completed. Bryce emphasized that this situation happens a lot. When asked if the class starts the next day where they left off the day before, he answers “no,” saying that the class simply goes on to the next new concept.

When asked his thoughts on the new teamwork method, Bryce said that he thought that working in teams was distracting: different ideas were talked about at the same time; there was too much noise from other groups; and, worst of all, much of the conversations were not about math.

Whereas his prior math curriculum allowed him to do math at his own pace, so he was doing eighth-grade math while still a fifth grader, now Bryce says he has to spend a lot of time explaining his answers and go at the same pace as his team.

Bryce’s frustrations with the new Common Core curriculum are having a negative impact on his achievement. According to his mother, for the first time Bryce’s grades are starting to falter, which is worrying her greatly.

Bryce’s problems with the new Common Core curriculum are not unique. Children and parents across the nation are up in arms over the confusion inherent in Common Core curricula. A recent PACE/University of Southern California poll found that 41 percent of Californians surveyed were opposed to Common Core, while only 32 percent supported it, a flip from the poll numbers recorded last year.

As Peggy Noonan observes: “Life isn’t lived in some abstract universe; it’s lived on the ground, in this case with harried parents trying, to the degree they can or are willing, to help the kids with homework and study for tests.” Parents seeing their children struggle under Common Core’s liberal teaching methods and philosophy are rebelling, and that rebellion likely spells eventual doom for Common Core.


 

Lance Izumi is Koret senior fellow and senior director of education studies at the Pacific Research Institute and a guest contributor for Cascade Policy Institute.

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Will the Supreme Court’s Ruling on Subsidies Be ObamaCare’s Downfall?

By Sally C. Pipes

The battle over ObamaCare has shifted to the courts. This time, the president is on the defensive. Last month, a three-judge panel of the U.S. Court of Appeals for the D.C. Circuit ruled 2-1 in Halbig v. Burwell that the federal government lacks the authority to provide subsidies to offset the cost of health insurance to folks shopping for coverage on HealthCare.gov, the federally run exchange. The federal government has since asked the full Circuit Court to hear the case.

The same day that the D.C. Circuit panel issued its ruling, the Court of Appeals for the Fourth Circuit, based in Richmond, Virginia, arrived at the opposite conclusion in a similar case, King v. Burwell, and upheld the federal subsidies as legal. The disagreement practically begs the U.S. Supreme Court to weigh in. The plaintiffs in King v. Burwell have petitioned the U.S. Supreme Court for cert. If granted, the case will go to the high court. It’s unlikely that the high court will hand down a decision until spring or fall 2015.

The D.C. Circuit panel has the law on its side. Should the Supremes agree with them, then ObamaCare could quickly unravel. And if it does, Congress should be ready with a replacement health care reform plan that empowers doctors and patients, not the federal government.

The Affordable Care Act’s text is unambiguous about how the insurance exchanges are supposed to work. According to the law, federal subsidies are available through exchanges “established by the State.” Thirty-six states didn’t set up exchanges. In some cases, their elected leaders decided not to. Other states tried to build their own. In many cases—among them Oregon, Maryland, Vermont, and Hawaii―they failed.

The law provided that the federal government would step in if the states did not. As a result, the federal government has found itself running an exchange that serves more than two-thirds of the states. And it’s decided, based on the counsel of the legal eagles at the IRS, to ignore those four words— “established by the State”—in order to dole out subsidies.

Even as it sided with the federal government, the Fourth Circuit observed, “If Congress did in fact intend to make the tax credits available to consumers on both state and federal Exchanges, it would have been easy to write in broader language, as it did in other places in the statute.” The court, which ruled for the government, went on to say that it “cannot ignore the common-sense appeal of the plaintiffs’ argument; a literal reading of the statute undoubtedly accords more closely with their position.”

ObamaCare’s supporters argue that “congressional intent” justifies direct federal subsidies. But they’ll have a tough time proving that before the Supreme Court. An early version of the health care reform bill did include an explicit authorization to distribute subsidies through a federal exchange. But it was absent from the final version.

That’s a problem for the Obama Administration, as U.S. Supreme Court precedent holds “that Congress does not intend sub silentio to enact statutory language that was earlier discarded in favor of other language.” Or as another Supreme Court decision put it, “the starting point for interpreting a statute is the language of the statute itself. Absent a clearly expressed legislative intention to the contrary, that language must ordinarily be regarded as conclusive.”

If the Supremes forbid the Obama Administration from distributing subsidies through the federal exchange, the law will crumble. That’s because many, if not most, exchange shoppers will be unable to afford policies without subsidies. As more and more people go without insurance, the exchange pool will skew sicker and premiums will head higher.

Already, average monthly premiums for a mid-level silver plan are $324. They’ll rise 8 percent next year, according to Avalere, a consulting firm. Eighty-seven percent of the people in the 36 states that rely on the federal exchange are receiving subsidies. Without those subsidies, premiums for some 5 million people will spike dramatically. The disappearance of subsidies would also destroy the employer mandate, which requires employers with more than 50 full-time workers to provide insurance coverage.

Fortunately, there are other ways to expand access to affordable insurance. Subsidizing insurance does little to encourage insurers to rein in premiums. In fact, if distributed as a percentage of premiums, subsidies can reward them for hiking prices. Expanding competition among insurers, by contrast, can make insurance more affordable and drive down costs. Creating a truly national marketplace—where Americans could purchase health insurance across state lines—would do just that. There’s no reason insurance should cost 2.5 times more in Rhode Island than in Alabama.

Allowing individuals to purchase health insurance tax-free—just as those who have employer-sponsored insurance through their work can—would also make coverage more affordable. Most Americans get health insurance through their place of work. So they have little incentive to consume care judiciously. After all, they’re not paying the bill. Increased usage of the health care system leads to higher overall premiums.

Two years ago, ObamaCare’s individual mandate survived before the U.S. Supreme Court. The law’s exchange subsidies may not be so lucky.

Sally C. Pipes is President, CEO, and Taube Fellow in Health Care Studies at the Pacific Research Institute in San Francisco. She is a guest contributor for Cascade Policy Institute. A version of this article was originally published by Forbes.

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Is There a More Flexible Way for Students to Invest in Themselves?

By Joel Grey

State Treasurer Ted Wheeler has proposed a new program intended to help Oregon students go to college in spite of the quickly ballooning cost of tuition. Under the proposed “Oregon Opportunity Initiative,” the state of Oregon could borrow money by selling general obligation bonds and then invest the proceeds. Students could receive grants or other subsidies from the earnings on this investment each year, while taxpayers would be responsible for paying back the bonds. The state must use all discretionary spending necessary to pay back bondholders with interest over thirty years. Bonds issued for this purpose likely would reduce the opportunity to bond for other critical needs of the state such as roads and bridges.

This proposal is potentially a costly mistake for Oregon and fails to prevent the inflated cost of education from growing even faster.

Even with the increased cost of college, higher education can still be a good investment for individual students. People with bachelor’s degrees likely will see their incomes increase by more than the cost of attendance over their careers. Because of this, it is unwise to eliminate part of the cost to the student by having taxpayers help fund their education. Students should pay for their own education, even if they are not paying at the time they are enrolled.

If the cost of college to the student is reduced, it creates a third-party payer problem: Because they are not directly affected by cost increases, students will worry less about the price of college, allowing it to inflate more over time. Conversely, if students are expected to pay for their education, they are more cautious about expenses and debt.

Even traditional loans have a third-party payer problem because costs are externalized to the future. Students have to pay eventually, but they don’t necessarily fully consider this because it is a long-term issue. While traditional loans lead to problematic student debt, there are other ways of financing education that don’t lead to third-party payer problems.

One viable solution to student debt was proposed almost sixty years ago by Milton Friedman: human capital contracts. A private person or institution, such as a bank or investment firm, pays for a student’s education. In exchange, the student pays a fixed percentage of income over a certain period of time. Human capital contracts would be more flexible than traditional loans. As a percentage of income rather than a fixed dollar amount, they would be less likely to be financially burdensome to the borrower and would thereby lower the rate of default.

Human capital contracts are also more flexible for the lender. Current federal loans treat all students equally in rates and borrowing limits. Private institutions could offer lower or higher rates based on an individual student’s career path or academic performance, allowing certain students to receive lower rates while riskier students are given higher rates.

Human capital contracts are likely to benefit lower-income students the most. It is very unlikely that those students could afford to pay for college up front, but they would have the same earning potential as anyone else in their field upon graduating. Human capital contracts would allow them to use these future earnings to make college attainable in the present.

While human capital contracts are also a third-party payer system, the private nature of the funding gives lenders an incentive to control their costs. They will need to ensure that students can pay back what they borrowed. The federal government doesn’t have the same incentive with its student loans because it doesn’t need to earn a profit.

Human capital contracts are not a silver bullet; nothing is. For example, they likely wouldn’t be useful for students who only intend to work part time or to become stay-at-home parents because lenders couldn’t recoup their investments. However, human capital contracts are a better choice overall for students and Oregonians when compared with the taxpayer-funded Oregon Opportunity Initiative. They would eliminate many problems of current loans, provide an incentive to view education as an investment, and control costs. All of this would help manage the expense of college long-term while still allowing students from any income bracket to attend college.

Joel Grey is a research associate at Cascade Policy Institute, Oregon’s free market public policy research organization.

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The Portland Seed Fund: Lots of Fertilizer, Little Growth

By Joel Grey

The Portland Seed Fund (PSF) started in 2011 as a joint public-private venture intended to close a funding gap for entrepreneurs attempting to start a business. It invests $25,000 in each selected startup and reserves money for follow-up investments. The City of Portland, the City of Hillsboro, and the State of Oregon diverted tax dollars to underwrite the majority of the cost for the first Seed Fund and a significant portion of the second Seed Fund. This totaled $3.4 million through 2014.

Another $100,000 was proposed in the requested budget for the Portland Development Commission (PDC) this year. The 2014-2015 budget has been adopted but does not specify whether funding for the PSF is included. The PDC has ignored multiple requests for comment. The City of Portland and the Oregon Growth Account are the two biggest sponsors, both putting in $1.5 million or more.

Portland obtains its money from taxpayers directly; the Oregon Growth Account is a state-run venture capital fund using dollars appropriated from the Oregon Lottery.

The Seed Fund was promoted as a way for public entities to help private companies get started, with the expectation that the Fund would eventually earn money. However, it is not possible to determine whether the Seed Fund is earning a positive rate of return, or even what is being done with its money, despite the fact that it utilizes public funds.

The Seed Fund does not publicize which businesses are still open, and even when contacted did not respond to requests for its return on investment (ROI). The public entities were unable to provide the Fund’s ROI as well. The City of Hillsboro communicated that it was not able to invest directly, but had used an intermediary that would also receive any ROI. Various people at the City of Portland, including several at the City Budget Office and the PDC, were also unable to supply an ROI; some did not know what the ROI was and others have simply not responded to information requests.

Out of the 46 companies funded, most appear to still be open; but one has closed, another has moved to California, and two more appear to have closed, lacking corporation status, websites, and offices.

Regarding the funds spent by Hillsboro and Portland, Article XI Section 9 of the Oregon Constitution states: “[n]o county, city, town or other municipal corporation, by vote of its citizens, or otherwise, shall become a stockholder in any joint company, corporation or association, whatever, or raise money for, or loan its credit to, or in aid of, any such company, corporation or association.” Portland and Hillsboro got around this provision by giving their initial offerings to the Oregon Entrepreneurs Network, which then gave the money to the Seed Fund.

For the second Seed Fund, the City of Portland created its own intermediary, the Portland Economic Investment Corporation, which will be the group that handles the investment.

When asked, the City of Hillsboro said that it is not an investor; but by any standard of common sense it is. The city appropriated money for the Seed Fund, and the intermediary is just a screen. The money was always intended for the Seed Fund.

The managers of the Fund have admitted “[t]he Seed Fund could exist without public money.” This begs the obvious question: Then why is public money involved? If a private enterprise can exist without public money, for what reason is the public money involved?

The Portland Seed Fund is an example of “mission creep” in government. The three jurisdictions that launched this Fund have important work to do in such areas as law enforcement and protection of property. There is no reason to spend public money on non-essential and highly risky tasks such as equity investing in new private companies. The Portland Seed Fund should be shut down, and a full accounting of its spending should be provided to taxpayers.

Joel Grey is a research associate at Cascade Policy Institute, Oregon’s free market public policy research organization.

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A Prescription for Affordable Housing in Portland

A new issue faces Portland. City Hall is considering waiving development fees for developers of market-rate housing in the Old Town Chinatown district. Chinatown is Portland’s oldest neighborhood and has earned an unpleasant reputation. City Hall claims that waiving these fees, which cover a project’s impact on urban infrastructure, can stimulate building in Chinatown. In the past, only developers of so-called “affordable housing” have been granted this waiver.

Critics argue that this is an expensive subsidy for big businesses which aren’t providing affordable housing. However, they assume that market-rate rent is permanent, no matter how much housing is built. This may not be true. As the supply of market-rate apartments increases in Chinatown, the market rate can be expected to decrease. Essentially, housing is made affordable by supplying more of it.

Waiving fees deprives certain city bureaus of funds; but perhaps these funds could be better spent, in this case, by private developers. If the City wishes to revitalize Chinatown, it needs to encourage more people to live there, and the best encouragement is lower rent. This can be accomplished by decreasing development fees and encouraging construction. More housing and lower rents could be good for Portland.

Everet Rummel is a research associate at Cascade Policy Institute, Oregon’s free market public policy research organization.

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Leave Lodging Alone

By Everet Rummel

On July 2, the Portland City Council held a hearing on proposed amendments to the Zoning Code concerning short-term rentals. The council chambers were packed with citizens who support legalizing renting one or two bedrooms from a primary residence.

An emerging sector of many local economies is “homesharing,” or renting space in your home to strangers on a short-term basis, usually for a few nights. Smartphone apps such as Airbnb allow owners to list their homes for renters to see. Homesharing is controversial because it remains informal in most places and presents a challenge to the status quo of residential living and conventional hotels.

In Portland, homesharing falls under traditional bed and breakfast regulations. These may be too expensive for the typical homeowner short on cash, so many homesharers operate illicitly.

In an effort to regulate homesharing and make compliance cheaper, the City Council has taken testimony from citizens. Sharers say renting provides them with supplementary income, allowing them to keep their homes or enjoy their retirement years. Renters benefit from low prices and a more authentic atmosphere compared with hotel rooms. Opponents of homesharing fear increased noise, diminished neighborhood safety, and that lucrative short-term rental prices would attract landlords to the market, making long-term rentals less affordable.

However, noise and safety issues probably can be solved by talking to your neighbors and complaining to the police if things get out of hand. A study by the Rosen Consulting Group shows that short-term rentals make up a small fraction of the total rental housing stock in San Francisco, so they are unlikely to affect rents.

With many benefits and low costs, the City should embrace homesharing and interfere with it as little as possible. Council members are infatuated with the idea of requiring sharers to have their homes inspected and licensed and to display their license numbers if they post an ad on Airbnb. But maintaining a listing of high-quality rentals is in the best interest of Airbnb. The site already offers refunds to guests who cancel due to rentals that fail to meet health, safety, and legal standards. Online branding is a powerful tool that may be preferable to city codes for promoting high standards among homesharers.

 

The hotel industry has expressed a desire for “fairness.” It wants short-term rentals to face the same tax and regulatory burdens as conventional hotels. However, hotels are in a better position to comply with taxes and regulations, which will disadvantage cash-strapped homesharers. A truly fairer route would be to reduce the burden on both hotels and homesharers alike.

The City’s discussions so far have ignored the fact that many short-term rentals include entire homes; and no one is sure how to address the question of rentals in apartments or condos, either. Portland is instead leaning toward working out these crucial details later. Given the enormous costs of regulating such a diverse and informal industry as homesharing, Portland should step back from over-regulating it.

Everet Rummel is a research associate at Cascade Policy Institute, Oregon’s free market public policy research organization.

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Portland Public Schools’ New Ombudsman Should Be Independent

By Joel Grey

In response to parent complaints, Portland Public Schools will create a new ombudsman position. An ombudsman is a person within an organization who provides accountability and investigates complaints.

It’s a good thing for public schools to have an ombudsman. An ombudsman is dedicated to listening to parents’ concerns and preventing abuses within the system. Accountability is important because people will often get away with whatever they are able to, and an ombudsman makes it harder to escape independent oversight.

The problem here is that the school district has placed the ombudsman within the public relations department, reporting directly to chief of community involvement and public affairs, rather than to the superintendent. The job of public relations isn’t to investigate and stop abuses within the system; it’s to improve the public’s view of the schools. Placing an ombudsman in a PR department makes it appear to parents that the position is just for show.

An ombudsman should be as independent as possible and report to the highest level of an organization―in this case, directly to the superintendent. This is what Newark Public Schools does, and it is a common practice. Without independence, the ombudsman may appear to parents to be simply a tool to placate their criticisms without effecting real reform.

Joel Grey is a research associate at Cascade Policy Institute, Oregon’s free market public policy research organization.

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Milton Friedman’s Education Savings Accounts: The Future of Oregon Education?

By Stephanie Linn

“So that the record of history is absolutely crystal clear, that there is no alternative way so far discovered of improving the lot of the ordinary people that can hold a candle to the productive activities that are unleashed by the free-enterprise system.”

Milton Friedman

That quote from Dr. Friedman speaks to how evidence and inquisitiveness truly drove the Nobel laureate’s work—and how open he was to change, even if it involved an idea he supported…or created.

The “father of school choice” accurately predicted the modern voucher programs in Ohio and Wisconsin would spread to other states as vouchers demonstrated their effectiveness. Evidence, anecdotal and empirical, from such programs have ignited the interest of parents nationwide to demand similar opportunities for their children. Two decades after Friedman’s prediction, there are 51 school choice programs in 24 states and Washington, D.C.

Historically, vouchers have been the “face” of school choice and the most effective means of delivering education “so far discovered.” But with the advent of a new type of school choice—which might not even involve actual schools—that could change. And, for Friedman, that would be okay.

“Vouchers are not an end in themselves,” Friedman wrote. “The purpose of vouchers is to enable parents to have free choice, and the purpose of having free choice is to provide competition and allow the educational industry to get out of the 17th century and get into the 21st century.”

“Why not add partial vouchers?” Friedman asked. “Why not let (parents) spend part of a voucher for math in one place and English or science somewhere else.”

Education savings accounts (ESAs) do exactly that—and more—which is why the newly discovered ESAs best represent and drive Dr. Friedman’s vision for American education.

ESAs came into existence in 2011, when Arizona policymakers, with the help of the Goldwater Institute, enacted what are called Empowerment Scholarship Accounts. The ESA program allows parents to purchase a range of educational services, including therapies, tutoring, books, curriculum, and online learning programs for their child, using a portion of the funds that would have been spent on his or her public schooling.

Thanks to that policy in Arizona, we now have a customizable education system similar to what Dr. Friedman proposed toward the end of his life. Take, for example, Dr. Friedman’s thinking on how students could be using computers and the internet for academic purposes, which, at the time, was relatively an outside-the-box—more like outside-the-school—approach:

“The availability of computers has changed the situation, but not fundamentally,” Friedman said. “Computers are being added to public schools, but they are typically not being used in an imaginative and innovative way.…Innovative uses of computers and the internet would offer new paths to learning.”

Arizona’s ESAs are doing exactly that: Using data from the Arizona Department of Education, Lindsey Burke found that 34.5 percent of Arizona parents use ESAs to purchase multiple educational services to accommodate their children’s’ diverse needs. That is, they did not limit their children’s education to a traditional school building. Parents purchased online learning programs, tutors, therapies, and more. In their current form, vouchers and tax-credit scholarships, although valuable and effective for many families, do not allow such customization.

And Arizona parents have reported they are grateful for the flexibility ESAs afford them and the resulting improvement in their children’s lives. In fact, 90 percent of families reported they are “highly satisfied” or “satisfied” with the program (the remaining 10 percent were “somewhat satisfied”; none were dissatisfied). That is significant, considering 49 percent of families using ESAs were not happy with the services and educational opportunities afforded to their children in public school before they started using the ESA program.

 

Given the success of Arizona’s ESAs, it should come as no surprise more states are considering similar programs. It’s Dr. Friedman’s voucher prediction all over again: As such programs demonstrate their effectiveness, they spread.

In 2014, Oregon―along with eight other states―introduced ESA proposals. The most significant news this year came out of Florida, which last month became the second state in the nation to adopt ESAs. The Florida Personal Learning Savings Accounts will give children with special needs the opportunity to receive educational services outside of a traditional public or private schoolhouse setting. Florida families may soon experience the transformational power of customizable school choice programs in the same way ESAs have changed the lives of one Arizona family, the McMurrays.

Lynn and Tim McMurray’s youngest daughter, Alecia, now receives occupational therapy and other educational services using an ESA. Alecia’s sister, Valerie, has a mild form of cerebral palsy, which Lynn and Tim are able to treat via one-on-one tutoring, made possible by an ESA. Valerie has become so enthusiastic about her education that she will stop people on the street and tell them what she is learning, for which her mom is incredibly grateful.

“The freedom ESAs give our family is the biggest blessing ever,” Lynn said.

Oregon’s proposed ESA program could offer that same opportunity by giving parentsthe ability to find new ways to meet their children’s needs. That is why ESAs so effectively speak to Milton Friedman’s vision for education and its future: the freedom to choose and discover, both of which, together, improve the lot of everyday people.


 

Stephanie Linn is State Programs and Government Relations Director at the Friedman Foundation for Educational Choice. She is a guest contributor at Cascade Policy Institute, Oregon’s free market public policy research organization.

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The “Sharing Economy” Benefits Homeowners, Guests

By Everet Rummel

An emerging sector of many local economies is “homesharing,” or renting space in your home to strangers for a short term, usually a few nights. Smartphone apps such as Airbnb allow owners to list their homes for renters to see. Homesharing is controversial because it remains informal in most places and challenges the status quo of residential living and conventional hotels.

In Portland, homesharing falls under traditional bed and breakfast regulations. These may be too expensive for the typical homeowner, so many homesharers operate illicitly.

In an effort to regulate homesharing and make compliance cheaper, the Portland City Council has taken testimony from citizens. Sharers say that renting provides them with supplementary income, allowing them to keep their homes or enjoy their retirement years. Renters benefit from low prices and a more authentic atmosphere compared with hotel rooms. Opponents of homesharing fear increased noise, diminished neighborhood safety, and that lucrative short-term rental prices would attract landlords to the market, making long-term rentals less affordable.

However, noise and safety issues can probably be resolved by talking to your neighbors and complaining to police if things get out of hand. A study by the Rosen Consulting Group shows that short-term rentals make up a small fraction of the total rental housing stock in San Francisco, so they are unlikely to affect rents. With many benefits and low costs, Portland should embrace homesharing and interfere with it less.

Everet Rummel is a research associate at Cascade Policy Institute, Oregon’s free market public policy research organization.

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Seattle’s Giant Job Killer

By Erin Shannon

The city of Seattle made history last month with an ordinance that will force every employer in the city to pay every worker a $15 per hour minimum wage, which is the highest in the nation. But before progressives in Portland try to hold up Seattle as a model, they should watch what happens to workers there. The controversial wage mandate passed by Seattle’s City Council has not even been enacted yet, but it is already having a chilling effect on jobs.

Small business owners are expressing deep worry over the coming super-high minimum wage. Many of these job creators say they are holding off on opening new ventures or expanding their current business in Seattle, while others say they are delaying plans to hire new workers. A commercial property landlord says several of her tenant business owners may not renew their leases if the $15 wage becomes law.

As she puts it, “It’s just too expensive to operate in the city.”

Even business owners who have supported a higher minimum wage are having a change of heart. Jody Hall, owner of Cupcake Royale and respected progressive activist, initially supported a $15 minimum wage. But now she says the proposed policy is “keeping me up at night like nothing ever has.”

Hall told KUOW/NPR radio she now has “serious second thoughts” about a $15 minimum wage, especially since Seattle would be “going it alone” with a wage that is significantly higher than any other minimum wage in the nation.

Her second thoughts about a $15 minimum wage mandate have led to second thoughts about expanding her business. She had planned to open a new business in Seattle this year but has tabled the idea for now. Hall says if she considers any new locations in the near future, they will be outside the city limits.

That is one way a high minimum wage often kills job opportunities, by eliminating them even before they are created.

A city-commissioned study says a $15 minimum wage would help low-wage workers and reduce poverty. But the mandate can help only people who have jobs; this study omitted any estimations of the impact on employment. A subsequent study by a Seattle economist predicted significant job losses.

 

It would seem the Seattle economist has been proved right early. The $15 wage is not yet in effect, and it is already pushing businesses into neighboring cities and killing jobs in Seattle, as business owners stop growing their companies and hiring new workers.

Employers cannot pay workers more than the value of their output. If an employer must pay a worker $15 per hour, he must ensure the worker produces at least that amount in economic value, or the employer will be forced to reduce the cost of labor in the only legal way remaining, by cutting benefits or hiring fewer people.

That’s what is happening in SeaTac.

Northwest Asian Weekly reports employees subject to the narrowly passed $15 minimum wage law in that Seattle suburb say they have lost benefits such as 401(k) plans, paid holidays, paid vacation, free food, free parking and overtime hours. One hotel waitress said she is earning less now because tips have decreased since the high wage law. In many cases these benefits, plus the previous minimum wage, added up to more than workers receive under the $15 wage law.

As one SeaTac worker put it, “It sounds good, but it’s not good.”

SeaTac’s $15 minimum wage has been in effect less than six months, and workers in that city are discovering the high-wage mandate comes with a steep cost. In Seattle, a minimum wage has not even gone into effect, and employers are already adjusting by canceling plans to expand and hire new workers. We can expect many Seattle businesses to cut benefits as SeaTac employers had to. Others, especially small businesses, will be forced to lay off workers.

“$15 Now!” is the battle cry of activists in Seattle. A more accurate slogan would be, “It sounds good, but it’s not good for workers.”

The last thing workers need is fewer jobs.


 

Erin Shannon is Director of the Center for Small Business at Washington Policy Center in Olympia, Washington. She is a guest contributor at Cascade Policy Institute, Oregon’s free market public policy research organization. A version of this article originally appeared in the Puget Sound Business Journal.

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The Portland Seed Fund: Boom or Bust?

By Joel Grey

The Portland Seed Fund started as a public-private venture intended to close a funding gap for small loans to entrepreneurs. The City of Portland, the City of Hillsboro, and the State of Oregon provided a majority of the funds for the first Seed Fund and a significant portion of the second Seed Fund. It was sold as a way for public entities to help private companies begin, with the expectation that the Fund would earn money.

At this time, it is impossible to say whether the Fund has earned a profit because that information is not publicly available, and none of the public entities involved could give an answer when asked what the return on investment had been. The first person I contacted at the Portland Development Commission said the Seed Fund didn’t sound familiar. The City Budget Office also didn’t initially recognize the name of the Seed Fund, but a budget analyst eventually contacted someone at the PDC. However, that person has not responded.

The conclusion from all of these conversations is that there is little or no accountability in place to ensure that taxpayer money is being well spent, nor is there a way for taxpayers to see how their money is being spent.

Ultimately, there are professionals who risk private money in venture capital firms. Government entities shouldn’t play venture capitalists with taxpayer funds.

Joel Grey is a research associate at Cascade Policy Institute, Oregon’s free market public policy research organization.

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Private Lenders Could “Pay-It-Forward” in Oregon

By Everet Rummel

The Oregon Higher Education Coordinating Commission is proposing a pilot program called “Pay-It-Forward.” Oregon residents could attend an in-state public university or community college tuition-free in exchange for paying a portion of their income annually for 20 years after graduation. The program, set to cover 1,000 students, is projected to cost the state between $5 million and $20 million per year for the next 20 years before becoming self-sustaining.

Proponents of “Pay-It-Forward” want to alleviate the problem of overwhelming student debt loads and make a college education more affordable. But should taxpayers cover students’ tuition when they are already directly funding public universities and student aid programs? Instead of microscopic pilot programs that throw more public money at the problem of rapidly rising tuition, there is a potential private solution to help finance higher education.

Milton Friedman originally proposed the concept of human capital contracts (HCCs) for the purpose of financing higher education. HCCs are privately funded financial instruments through which students receive funding for their tuition. In exchange, they pledge to pay a set percentage of their income annually for a set period of time after graduation. If they are ever unemployed or unable to pay, then they pay nothing until they have an income. If the payback period ends before the student has paid back the entirety of the sum loaned, the rest of the debt is forgiven. HCCs would go far beyond publicly funded “Pay-It-Forward”-type programs and traditional student loans by incentivizing informed educational decisions, forcing institutions to compete by controlling costs, and transferring financial risk to those who are better able to bear it.

HCC rates, the percentage of income that students must pay annually, and funds loaned would vary by the school attended, program of study, and academic achievement. Students attending schools and programs whose graduates tend to do poorly in the labor market would face lower rates but fewer funds. Students with lower academic achievement may have access to less funding. Those attending more expensive schools would receive more funds and higher rates only if their expected earnings are high relative to the costs of the education. Thus, rates and funds would incentivize students to seek more bang for their buck. Institutions, no longer reliant on seemingly unlimited government (taxpayer-funded) aid, would have to rein in costs and focus on improving academic quality. In sum, the availability of HCCs alone would tell consumers a lot about the economic value of various degree programs.

Most importantly, risk and financial burden would be borne by borrowers and lenders, not the state and taxpayers. The majority of the risk would be transferred to lenders, who are in a better position than student borrowers to bear it. Meanwhile, students would be free to pursue their chosen career paths without worrying about fixed monthly payments that could ruin their future financial prospects. The risk of default would be arguably lower than what we face now. These points should be remembered as policymakers in Oregon and across the country consider the crisis of higher education debt. Perhaps the market―not the government―has  solutions. Human capital contracts may be one of them.


 

Everet Rummel is a research associate at Cascade Policy Institute, Oregon’s free market public policy research organization.

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Portland Should Be Fair to Taxis by Setting Them Free

By Everet Rummel

This issue affects almost all city-dwellers, and cities around the world are taking action. Some view it as their own livelihoods being at stake. It has even sparked mass protests in Europe. The issue? Whether or not cities should allow Uber, and other GPS-based ridesharing services, to operate within their jurisdictions.

Ridesharing apps like Uber and Lyft connect commuters with certified drivers willing to offer rides for a fare. The idea sounds innocent enough, but Portland and other cities strictly limit the number of taxis and for-profit drivers who are allowed to operate, how small each cab company can be, and how much or little they can charge.

Across the U.S., governments have rushed to regulate ridesharing and sometimes ban it altogether. California has warned ridesharing companies to stay clear of the airports. Virginia and Austin, Texas have banned them completely.

The European protesters claim it isn’t fair that ridesharing services can operate unregulated, while taxis are heavily regulated; the playing field isn’t level. And they’re right. But rather than cooking up expensive regulations and restricting taxis and ride-sharers in cities, which hurts customers, let’s make taxi and ridesharing drivers free to operate and earn a living. Let’s deregulate so more drivers are on the road and more customers are getting rides. As Portland and other cities consider allowing Uber to operate legally, we should keep these points in mind.


 

Everet Rummel is a research associate at Cascade Policy Institute, Oregon’s free market public policy research organization.

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“Pay-It-Forward” Is a Step Back

By Joel Grey

The Oregon Higher Education Coordinating Commission is considering a proposal called “Pay-It-Forward.” This pilot program would give free tuition at a state university to one thousand high school graduates each year, beginning in 2016. In exchange for free tuition, students would cede 3-5% of their paychecks over a twenty-year period. Although the program is intended to become self-sustaining, it would cost between $6.5 and $20 million each year for the first twenty years until that happened.

This is an example of a government proposal that is not well thought out. Yale tried a similar experiment in the 1970s and eventually forgave much of the debt years later. Many students overpaid for their education, while 20% defaulted. Oregon shouldn’t repeat Yale’s mistake.

Furthermore, having a third-party payer for college reduces students’ incentive to decide whether to attend college or to pursue other options, like technical schools. It also makes students less sensitive to the prices of institutions, likely increasing the cost of college over the long run.

Education should be an investment, but students and their families should invest and then reap the benefits. That way, talented students can succeed based on merit, rather than government funding students at great cost to taxpayers, with no guarantee a pilot program like “Pay-It-Forward” will work as intended.

Government simply can’t make decisions as well as the individuals who are affected by those decisions.

Joel Grey is a research associate at Cascade Policy Institute, Oregon’s free market public policy research organization.

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Seattle’s $15 Minimum Wage: A Wolf in Sheep’s Clothing

By Erin Shannon

On June 2 the Seattle City Council made Seattle the first city in the nation to mandate a $15 minimum wage for all workers. But far from being a victory for workers, a super-high minimum wage is likely to cause more harm than good by destroying businesses and reducing workers’ options.

Effective April 1, 2015, all businesses must pay $10-$11 per hour, with the remainder of the $15 wage phased in over seven years for small businesses (those with less than 500 employees), and three years for large businesses (those with 500 or more employees).

While supporters of the $15 wage say it will have no negative impact on the city’s employment or economy, the reality is it is already killing jobs. Some business owners in Seattle say they are holding off on opening new business or expanding their current business, delaying plans to hire new workers and even moving into neighboring cities. In SeaTac, where some employers have been paying a mandated $15 minimum wage for six months, the benefits workers used to receive have been reduced or eliminated and prices have increased for consumers.

Restaurants, in particular, will be hit hard by Seattle’s new wage. The Puget Sound Business Journal reports that one restaurant owner calls the $15 wage a “mortal threat” and has halted plans to open another location. The CEO of a restaurant chain says his company is also holding off opening new locations in Seattle, and will likely be forced to reduce employees’ health benefits. The company currently offers health care coverage to employees who work at least 25 hours per week, but that may now be increased to 30 hours per week. That company will also likely eliminate tips for servers, and instead automatically charge customers a service charge or gratuity that would be split between servers and other restaurant staff, such as kitchen workers.

And it is not just Seattle workers who are losing potential jobs and reduced benefits. In a twist, the $15 wage is impacting job creation and worker benefits in other cities.

A pizza franchise with 11 locations, six of which are in Seattle, that employs 430 workers has tabled plans to open another location in Lynnwood over concerns the new location and its new jobs would bump the company into the “big business” category. Under the new law, “big businesses” have a shorter phase-in of the high wage; they must begin paying all workers $15 over the course of three years. By

staying under the 500-employee threshold, the company remains a “small business” and has up to seven years to phase in and adjust to the new wage for its six Seattle stores. That is 70-plus jobs workers in the city of Lynnwood just lost.

The company that says it may reduce health benefits in response to the $15 wage would have to do so for all of its workers, even those outside Seattle. Federal law requires companies to offer the same health benefits to all employees. So if the company is forced to increase the threshold to qualify for health benefits in order to offset the new high wage of employees in Seattle, it must increase the benefit threshold for all employees, including those earning a lower minimum wage in other cities.

The CEO of the chain restaurant warns that many small, mom-and-pop businesses will go out of business as a result of the increased labor costs: “Successful downtown restaurants will find a way to make it work, but smaller restaurants will die.”

This sentiment is echoed by the CEO of CKE Restaurants, which owns Carl’s Jr. and Hardee’s. Andy Puzder, author of the book Job Creation, says the push for a higher minimum wage is the one of the greatest threats facing restaurants: “I think you’ll see a lot of restaurants closing. I don’t think that restaurants can operate profitably if they’re paying a $15-an-hour minimum wage.”

Some of Portland’s leaders want to imitate Seattle, but they should think again. Those who support higher minimum wages may not have bad motives, but good motives in support of bad policy still result in driving job creators out of our communities and hurting the very people they want to help.


 

Erin Shannon is Director of the Center for Small Business at Washington Policy Center in Olympia, Washington. She is a guest contributor at Cascade Policy Institute, Oregon’s free market public policy research organization.

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ObamaCare Inflates Enrollment—And Premiums

By Sally C. Pipes

HealthCare.gov has officially closed and, despite months of technical hiccups, enrollment appears to have finished strong.

The Obama Administration estimates that 8 million people have signed up for coverage through the marketplaces. The president cited the figure as proof that “this law has made our health care system a lot better.”

Hardly. His enrollment numbers are artificially inflated. And the real rate of coverage may decline even further once consumers find out how much they’ll have to pay for insurance thanks to ObamaCare.

For starters, the administration’s 8 million enrollees include everyone who picked a plan—not just those who have actually paid for their coverage.

Insurers are reporting that 15% to 20% of those who have signed up haven’t paid their first premium. In other words, about 1.5 million people that the Administration counts as “enrolled” may still be uninsured.

Just because a consumer pays his first premium doesn’t mean he’ll make his second payment.

Insurance industry consultant Bob Laszewski has reported that 2% to 5% of enrollees haven’t paid their second month’s premium. If that sort of attrition continues, thousands of “enrollees” could end up uninsured before summer.

Further, many of ObamaCare’s 8 million enrollees previously had insurance—they just swapped out their existing policies for ones issued through the exchanges.

A recent RAND Corp. survey found that only one-third of exchange enrollees were previously uninsured.

The Congressional Budget Office reports that ObamaCare will spend $17 billion on exchange subsidies this year. A big chunk of that money will no doubt go to the two-thirds of exchange customers who previously secured coverage on their own.

Not exactly the wisest stewardship of taxpayer dollars.

Meanwhile, about a million of the 5 million people whose policies were canceled because they did not meet ObamaCare’s new rules remain uninsured.

The demographic composition of the exchange population also presents a problem.

Because the law forbids insurance companies from charging the old and sick more than three times what they charge the young and healthy, insurers must attract enough young, low-cost people to keep premiums down.

That hasn’t happened. Just 28% are between the ages of 18 and 34—well below the 40% the Administration said would be needed to keep ObamaCare’s exchange pools financially stable. It’s already clear that the exchange population is sicker than average.

According to a report from pharmacy benefit manager Express Scripts, exchange enrollees use 47% more specialty medications than the general insured population.

Demand for HIV meds is four times higher in the ObamaCare pool than in the existing commercial pool. Anti-seizure medication prescription rates are 27% higher.

Those drugs are more expensive. As Express Scripts puts it, “Increased volume for higher cost specialty drugs can have a significant impact on the cost burden for both plan sponsors and patients.”

Insurers will adjust to this reality by raising premiums. WellPoint predicts “double-digit-plus” rate increases across the country. In some areas premiums could go up 100%.

Cigna CEO David Cordani says his company has already brought up the coming “rate shock” with the Administration—and is pushing for changes to mitigate it.

ObamaCare’s exchanges appear to have survived their first enrollment period. But the government health-insurance platforms are far less healthy than the administration claims—and may crumble when they next open for business this fall.

Sally C. Pipes is President, CEO, and Taube Fellow in Health Care Studies at the Pacific Research Institute in San Francisco. She is a guest contributor for Cascade Policy Institute. A version of this article was originally published by Investors Business Daily.

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Four Years of ObamaCare Failures Is Long Enough

By Sally C. Pipes

President Obama marked the fourth anniversary of the passage of ObamaCare this week by promising to spend the next year “working to implement and improve on it.” He has his work cut out for him. Four years on, the Affordable Care Act has failed to deliver what its name formally promised—and is shaping up to be decidedly unaffordable for taxpayers. Consumers ought to hope that ObamaCare doesn’t make it to the age of five—and that lawmakers enshrine market-friendly, patient-centered reforms in its place.

Four years after passage—and six months after they were supposed to be fully operational—ObamaCare’s insurance exchanges are still malfunctioning. Last week, just days before the end of the open-enrollment period, the Philadelphia Inquirer discovered that the federal exchange website, HealthCare.gov, was displaying incorrect information about the subsidies for which shoppers should qualify.

The trillion dollars the Administration has earmarked for subsidies won’t make insurance more affordable if consumers can’t actually claim them. Online insurance marketplace eHealthInsurance estimated last week that ObamaCare had pushed premiums in the individual market up by as much as 59 percent this year, thanks to its myriad and costly new benefit mandates, taxes, and fees. Industry officials now say that rates could double in many areas of the country next year.

With the cost of coverage skyrocketing, it’s no wonder that enrollment has lagged the Obama Administration’s goals. One-fifth of those whom the Administration has counted as “enrolled” don’t appear to have paid their premiums. So they don’t actually have coverage.

Further, despite millions of dollars in advertisements, endless stumping by the president, and promotion by the likes of NBA stars Kobe Bryant and LeBron James, the exchanges have failed to attract anywhere near enough young people. Without sufficient premium income from these young, largely healthy individuals, the marketplaces will not be able to shoulder the costs associated with treating older, less healthy folks. Officials originally estimated that 40 percent of enrollees would need to be between the ages of 18 and 34 for the exchanges to be solvent. Thus far, this coveted demographic has accounted for just 25 percent of enrollment. If the exchanges flop, taxpayers could be forced to bail them out.

Small businesses that had been promised repeatedly by Obama that they’d save money learned in late February that two-thirds of them would see their premiums climb because of the law.

ObamaCare is even failing to expand coverage to the uninsured. A McKinsey study found that only a fraction of those who enrolled in the exchanges had previously been uninsured. The same study found that half of those who did not enroll pointed to “affordability”—or a lack thereof—as their main reason for choosing not to purchase coverage.

With the exchanges foundering and several directors of state exchanges resigning (The Oregonian dubbed Cover Oregon’s leadership changes “a major managerial house-cleaning”), the Administration has taken to rewriting the law to try to avoid open revolt. The over 5 million consumers whose plans were previously canceled because they didn’t meet ObamaCare’s stringent benefit requirements can now keep them through 2017, three years longer than the law originally prescribed. The Administration has also given people whose plans were canceled a “hardship exemption” so that they can dodge the individual mandate through 2016.

Many of those who have chosen to buy ObamaCare-approved coverage have been outraged to find that their policies permit them to visit only a handful of doctors and hospitals. So much for the President’s oft-repeated promise, “If you like your plan, you can keep it.” The Administration has responded by forcing plans to expand their provider lists in 2015. That decision may only hike rates further come next year. And recent media stories have been confirming as much.

By tweaking the law on the fly, the Administration is punting its problems down the road. Industry officials specifically point to the Administration’s various delays and changes as the main culprit for rate hikes. One insurance company representative told The Hill that his firm’s rates would triple on the exchange next year.

It doesn’t have to be this way. We can expand access to coverage for those with preexisting conditions, reduce costs, and lower the uninsured rate without disrupting Americans’ coverage and increasing their premiums. The president chose to cover those with pre-existing conditions in the most expensive way possible—by requiring insurers to offer policies to all comers and forbidding them from charging anyone more than three times what they charged anyone else. So insurers just hiked rates for everyone.

A more cost-effective way to minister to those with pre-existing conditions is by expanding federal funding for state-level high-risk pools. Many such pools were functioning well before ObamaCare, furnishing coverage to those who couldn’t get it on the open market without jacking up premiums for the rest of the population.

Meanwhile, the chief obstacle to covering the uninsured is affordability. Market forces could break that barrier down. Letting consumers buy across state lines, for instance, would increase competition among insurers and encourage state regulators to limit unnecessarily costly benefit mandates. Expanding health savings accounts (HSAs), where people can save money pre-tax for health care services, would give patients control over their health care dollars and encourage them to spend wisely. The explosive growth of HSAs in the employer market is one reason that health costs have been growing more slowly than the historical average in recent years.

Another way to make health insurance more affordable? Allow individuals to purchase coverage with pre-tax dollars, just as businesses can. Such a move would grant consumers the opportunity to choose coverage that suits their needs and budget—not their employer’s. And to ensure that low-income individuals could take advantage, the government could offer a refundable tax credit toward the purchase of health insurance.

As ObamaCare turns four, a clear majority of Americans stands opposed to it. Here’s to hoping that this anniversary is among the law’s last.

Sally C. Pipes is President, CEO, and Taube Fellow in Health Care Studies at the Pacific Research Institute in San Francisco. She is a guest contributor for Cascade Policy Institute. A version of this article was originally published by Forbes.

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As the Affordable Care Act Turns Four, Cascade’s Predictions Were on the Mark

Sunday, March 23, was the fourth anniversary of the passage of the Patient Protection and Affordable Care Act (“ObamaCare”). Cascade founder and senior policy analyst Steve Buckstein predicted then that ObamaCare would “represent much more a violation of individual liberty than an improvement in American health care.”

Four years later, the law remains mired in controversy, confusion, and dysfunction. The ACA has been challenged from numerous constitutional, philosophical, and moral angles; and the Supreme Court will hear a case this week challenging the ACA on First Amendment grounds.

Buckstein wrote in 2010:

When we founded Cascade Policy Institute in 1991, our mission was, and still is, to promote public policy alternatives that foster individual liberty, personal responsibility and economic opportunity. This bill threatens to set us back in all three areas:

Individual liberty will be violated as the federal government takes away even more of our options regarding what insurance, if any, we choose to purchase and how we purchase it.

Personal responsibility will be decimated as the federal government tells us “don’t worry about taking care of yourself; we’ll do that collectively from now on.”

Economic opportunity will be stifled as the tax burden on individual workers, employers and investors go up, not down. Without meaningful cost controls, health care costs will spiral, leading to higher federal deficits and to even more government involvement in the economy.

When the bill’s supporters tell us that every other industrialized country has national health insurance, our response should be, “America is not every country; America is supposed to be the land of the free.”

We now see that most of these predictions are coming all too true. Not even considering the HealthCare.gov website disaster, and the totally dysfunctional Cover Oregon website debacle, it appears that more people may be losing their health insurance coverage than have gained new coverage under this deeply flawed law. The Congressional Budget Office now estimates the law will cause the equivalent of two million jobs to be lost by 2017. The 2013 PolitiFact Lie of the Year was President Obama’s oft-told fib, “If you like your health care plan you can keep it.” Only a fraction of those who have signed up under ObamaCare exchanges are the “young and healthy” the scheme needs to pay higher premiums to subsidize the “old and sick.” It seems that younger people would vote for Obama, but they won’t follow him off a health care cost spiral cliff.

With the first ObamaCare open enrollment period ending on March 31, its flaws will certainly be hard to gloss over.* Rather than carve out even more exemptions to the law, the administration should admit that they got it wrong. Then we can have an honest discussion about how to move toward real insurance reform using market principles that offer true affordable alternatives to the Affordable Care Act, which has proven anything but.

* The administration is now expected on March 26th to announce an extension of the March 31st open enrollment deadline for certain individuals.

 

 

 

 

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In Oregon and Nationally, ObamaCare’s Exchanges Don’t Play Well with the Young

By Sally C. Pipes

Young people appear to have abandoned President Obama less than two years after sending him back to the White House. Only 41 percent of Americans 18 to 29 approve of his job performance, according to a recent poll from Harvard’s Institute of Politics.

Even more—56 percent—disapprove of ObamaCare, his chief domestic policy achievement. Many of these “young invincibles”—folks between the ages of 18 and 34―are expressing their disapproval by refusing to enroll in the law’s health insurance exchanges. If this trend keeps up, the exchanges could collapse.

The Congressional Budget Office (CBO) estimates that 40 percent of enrollees must be young and healthy for the exchanges’ finances to work. Here’s the logic behind that conclusion. Young people, while not quite invincible, are far less likely to get sick—and thus to use their coverage. So many will pay premiums without claiming much in benefits in return. Those premiums are supposed to go toward subsidizing the cost of coverage for older, sicker adults.

It doesn’t look like exchange enrollment will meet the administration’s target. Colorado just reported that a scant 7 percent of its exchange enrollees are between 18 and 24. More than four times as many are between the ages of 55 and 64. Sixteen percent are between 25 and 34.

Despite Cover Oregon’s $21-million, youth-friendly marketing campaign, Oregon is tied with West Virginia for last place in young sign-ups. As of March, Oregon remains the only state with an exchange in which people can’t self-enroll online in one sitting, and the manual application backup process may further discourage young adult enrollment.

Nationwide, as of late February, about 27 percent of the four million people who have signed up for coverage through the marketplaces are young adults. That’s only a slight improvement over January, when 24 percent of enrollees were young.

At the outset, the Obama Administration estimated that 1.6 million of enrollees in February would be young people. Their guess was a bit off—just over 800,000 had signed up by the beginning of the month. According to the New York Times, the Obama Administration hasn’t been able to translate the “get-out-the-vote” prowess it displayed in the 2008 and 2012 presidential elections into the health insurance realm. Only 9 percent of those who have purchased policies are aged 18 to 25. The 26 to 34 band accounts for 16 percent of enrollees.

And the situation isn’t likely to improve. A study from NerdWallet, a personal finance website, predicts that young adults who opt for the financial penalty associated with remaining uninsured, which goes into effect on April 1 and amounts to $95 or 1 percent of income this year, could save more than $1,000 compared to someone who buys insurance. That savings even includes the cost of visits to the doctor’s office. If that hypothetical young person has to visit the emergency room, he still could be better off uninsured—$700 better, according to the study.

The enrollment problem may even go beyond the young invincibles. Twenty to 30 percent of people whom the administration counts as having “purchased” insurance via the exchanges have yet to actually make a payment to cover the premium. So they don’t actually have insurance. These folks could be in for a rude awakening if they don’t find out that they’re uncovered until they’re at the doctor’s office or hospital.

The government’s enrollment numbers even demonstrate that the program is failing to accomplish its core goal of providing coverage for the uninsured. According to McKinsey and Co., only 11 percent of the 2.2 million people enrolled through December were previously uninsured.

Nowhere are the failures of the exchanges more apparent than in the Latino community. Nearly one-third of Latinos are uninsured—almost twice the national average. Latinos also skew younger than other ethnic groups. And they were staunch supporters of President Obama in 2012; the president took Hispanics by a 2.6 to one margin. Yet in California, only 20 percent of enrollees are Latino—even though the group accounts for 46 percent of all folks eligible for premium subsidies in the state.

State and federal officials are paying an awful lot for these subpar enrollment numbers. The cost per enrollee ranges from $1,500 in California to nearly $57,000 in Hawaii. The government has invested $205 million in the president’s birthplace to enroll just 3,614 people. Washington, D.C. has signed up just over 5,000 people on its exchange—despite taking in more than $133 million in federal money. Those 5,000 folks put the District 12 percent of the way toward its enrollment goal.

If enrollment continues to skew older and sicker, insurance companies will have to raise premiums. As that happens, fewer people will sign up. Others will drop their coverage. Both outcomes will drive costs for individuals and taxpayers up even further.

The White House has essentially given up on its initial goals of 40 percent young invincibles in a crowd of seven million enrollees by the end of March. Moving the enrollment goalposts may mute some of the political blowback from the exchanges’ failures. But it won’t change the math that underpins the exchanges. That could spell trouble for patients expecting affordable coverage—and taxpayers who may be called upon to shell out more to give it to them.

Sally C. Pipes is President, CEO, and Taube Fellow in Health Care Studies at the Pacific Research Institute in San Francisco. She is a guest contributor for Cascade Policy Institute. A version of this article was originally published by Forbes.

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Wanted: Less Judicial Activism, More Judicial Engagement

By Clark M. Neily III

Does America have an “activist” judiciary that constantly involves itself in policy disputes best left to the other branches? Several Supreme Court justices have publicly expressed that view recently, but they are dead wrong.

Indeed, given the breathtaking abuses of power we have seen by other branches lately, the prospect of judges becoming even less vigilant about protecting citizens from overweening government should be deeply troubling.

As I explain in my new book, Terms of Engagement: How Our Courts Should Enforce the Constitution’s Promise of Limited Government, the very institution of limited government has become imperiled by an epidemic of judicial abdication. What America needs is judicial engagement: consistent, conscientious judging in all cases, without bent or bias in favor of government. Unfortunately, we’re not getting it.

Take the Supreme Court’s decision to uphold the greatest expansion of federal power since the New Deal by rewriting the Affordable Care Act (aka “ObamaCare”) to transform the requirement that Americans purchase government-approved health insurance from a mandate enforced by a financial penalty, into an option with an additional tax payment for those who choose not to exercise it.

Never mind that the Affordable Care Act refers to this payment as a “penalty” 18 times; and never mind Chief Justice Roberts’s recognition of the fact that the “[t]he most straightforward reading of the mandate is that it commands individuals to purchase insurance.” According to Roberts’s understanding, the justices’ role was not to strike down or uphold the law based on “the most natural interpretation of the mandate,” but instead to bring their own creativity to bear in rationalizing a constitutional basis for the law if possible.

But that’s not judging; it’s advocacy. Judges are supposed to remain strictly neutral in all cases, including ones challenging the constitutionality of a law. Recall how Roberts compared judges to umpires in his confirmation hearing to be Chief Justice. Umpires, of course, do not bend over backwards to avoid calling outs or strikes against the home team the way Roberts did in changing ObamaCare’s insurance provision from a mandate to an option in order to uphold the law.

For those who take seriously James Madison’s assurance that the powers of the federal government would be “few and defined,” that decision was a travesty. Unfortunately, it was not an anomaly. Instead, it reflects a judicial mindset much in vogue among conservatives (and sophisticated liberals who understand its power to clear the way for even more government) that calls for reflexive deference toward the other branches in most areas of law―from the allocation of power between federal and state governments, to economic and business regulations, to property rights and the use of tax policy to manipulate individual behavior.

Compare the absence of meaningful judicial review in those areas with Justice Ruth Bader Ginsburg’s recent lament in The New York Times that the current Supreme Court is “one of the most activist courts in history,” or Justice Antonin Scalia’s characterization of activist judges as “Mullahs of the West.” Even Justice Anthony Kennedy has jumped on the bandwagon, arguing that “[a]ny society that relies on nine unelected judges to resolve the most serious issues of the day is not a functioning democracy.”

But America is not a democracy. It is a constitutional republic in which majorities are forbidden from pursuing a host of policies, including ones that violate individual rights or enable legislators and bureaucrats to exercise powers they do not lawfully possess. Preventing those things from happening is not judicial activism; it’s judicial engagement. And as recent events involving the IRS, the NSA, the Department of Justice, and countless other misbehaving agencies make plain, we need a lot more of it.

*This article originally appeared on FoxNews.com.

Clark M. Neily III is a senior attorney at the Institute for Justice and director of the Institute’s Center for Judicial Engagement. He is the author of Terms of Engagement: How Our Courts Should Enforce the Constitution’s Promise of Limited Government. Neily will be a guest speaker for Cascade Policy Institute in Portland in March 2014.

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Engagement, Activism, or Deference: What’s the Role of the Judiciary?

Supreme Court Justice Louis Brandeis once remarked that “the reason why the public thinks so much of the Justices is that they are almost the only people in Washington who do their own work.” However, according to Clark M. Neily III, judges at all levels still might be doing their own work, but are abdicating their responsibility, as James Madison put it, to serve as an “impenetrable bulwark against every assumption of power in the legislative or executive.”

In his book, Terms of Engagement: How Our Courts Should Enforce the Constitution’s Promise of Limited Government, Neily argues that the judiciary’s knee-jerk deference to the other branches has resulted in an explosion in the size, cost, and intrusiveness of government. In any given year, the Supreme Court strikes down just three of the five thousand laws passed by federal and state governments. Unfortunately, this reflexive restraint toward other branches led to the Affordable Care Act being upheld last year and the approval of eminent domain for economic development purposes in Kelo v. City of New London in 2005.

Clark Neily has spent his career fighting against the unconstitutional expansion of government and for a more properly engaged judiciary. The director of the Institute for Justice’s Center for Judicial Engagement, Neily will speak in Portland on March 18. Visit cascadepolicy.org for details and to RSVP for this special event.

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Oregon Medicaid Study Doesn’t Love Big Brother

By Dr. Jonathan Witt

If a large Oregon study is any indication, the Affordable Care Act may drive up frivolous emergency room visits and do little to improve people’s physical or economic health.

The Oregon Health Insurance Experiment began after Oregon budgeted to add several thousand people to their Medicaid rolls and held a lottery to fill the slots, giving researchers a randomized pool to test the effects of having health insurance. Winners were more likely to report being in good health and were less likely to default on medical bills. But there were also some surprising findings. For the lottery winners, getting free health insurance had no measurable effect on their incomes or on three objective health markers followed in the study: cholesterol, blood pressure, and diabetic blood sugar control.

One can only guess why it had no measurable effect on these health markers; but my physician brother-in-law, Bruce Woodall, a family physician with wide-ranging medical experience on three continents, shared with me some thoughts that suggest one possible reason. As he puts it, much of American medical care has become a sickness management industry, with the lion’s share of the industry’s resources spent treating not the elderly but chronically sick middle-aged patients, most of whom are sick primarily because of lifestyle choices.

In essence, the health care industry becomes the enabler in a lucrative game in which patients put off needed lifestyle reform, opting instead for prescription pills, surgeries, and conversations about “genetic predispositions.” None of this gets at the root problem, and indeed exacerbates the root problem. People face a moral challenge to accept responsibility as stewards of their bodies to live a healthy lifestyle. The system, instead of spurring them on to do the responsible thing, all too often invites them to believe they are not responsible and should entrust their genetically hopeless selves into the hands of the medical/pharmaceutical industrial complex.

If the health care market weren’t subsidized and hyper-regulated, the patient would bear more of the economic costs for living an unhealthy lifestyle, which at least would give the patient a strong economic incentive to do the right thing by his body. But thanks to various nanny state interventions, the patient is shielded from many of the economic costs of inaction. Meanwhile, the health care industry goes right on making money, never mind that it’s ostensibly being paid to heal.

Understand, it isn’t just that the health care industry continues making money off the customer even if he remains chronically ill. It’s that the gravy train keeps on rolling only if he remains chronically ill, and insured.

In fairness to ObamaCare, it does contain provisions allowing employers to charge higher premiums to employees who don’t meet certain wellness benchmarks. But applauding the government for this is a bit like applauding your kidnapper for finally allowing you to go to the restroom when you feel like it.

The government never should have been in the business of preventing or allowing insurers to decide what they could and couldn’t charge for health insurance. The process of competing for customers would have sorted this out, provided government had restricted itself to such core tasks as enforcing contracts, promoting contract transparency, and punishing fraud.

For instance, with healthy competition and choice, an insurer who tried to overcharge a physically fit pack-a-day smoker would likely lose the customer to an insurer whose rate more accurately reflected the actual risks of insuring such a person. Instead, because the whole system is fastidiously managed from the top down, with healthy market competition largely squeezed out of the game, ObamaCare’s provisions to boost economic incentives for healthy living have a fussy, nanny-state quality about them, with red tape and unintended consequences likely to come as thick and fast as the Affordable Care Act itself.

The most recent finding of the Oregon Health Insurance Experiment contradicts another ObamaCare selling point. Among those who won the Medicaid lottery, investigators found “increases in emergency-department visits across a broad range of types of visits, conditions, and subgroups, including increases in visits for conditions that may be most readily treatable in primary care settings.” In other words, the free health insurance encouraged patients to visit the ER instead of the more-affordable doctor’s office.

Washington Post article by Sarah Kliff quotes one researcher on the topic:

“I would view it as part of a broader set of evidence that covering people with health insurance doesn’t save money,” says Jonathan Gruber, a health economist at the Massachusetts Institute of Technology, who has also studied Oregon’s Medicaid expansion but is not affiliated with this study. “That was sometimes a misleading motivator for the Affordable Care Act. The law isn’t designed to save money. It’s designed to improve health, and that’s going to cost money.”

Gruber seems to be offering straight talk here, but look closer. Gruber was one of the architects of ObamaCare and, as Kyle Wingfield noted at the Atlanta Journal-Constitution, Gruber was singing a very different tune in October. “The Affordable Care Act is already working: Intense price competition among health plans in the marketplaces for individuals has lowered premiums below projected levels,” Gruber said then. “As a result of these lower premiums, the federal government will save about $190 billion over the next 10 years, according to our estimates.”

More immediately, even Gruber’s newfound straight talk about ObamaCare veers away from the grim reality uncovered by the Oregon study. Yes, the Affordable Care Act won’t be particularly affordable. But while it may improve people’s sense of being in good health, it may do far less to improve the actual health of America—at least if the clinical health markers of 10,000 lottery winners in Oregon are any indication.

Jonathan Witt, Ph.D. is a research fellow and writer at the Acton Institute. He is the lead writer for the PovertyCure initiative and associate producer and lead scriptwriter for the PovertyCure DVD Series. He has written three documentary scripts, including The Call of the Entrepreneur and The Birth of Freedom; and his academic and opinion essays have been widely published. He is a guest contributor for Cascade Policy Institute.

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Five Reasons to Oppose the State Treasurer’s 2014 Opportunity Initiative

By Bob Clark

The 2013 Oregon legislative session approved State Treasurer Ted Wheeler’s Oregon Opportunity Initiative for referral to voters, with a vote scheduled in November 2014. If passed by voters, this measure would have the State of Oregon issue General Obligation bonds, give all borrowed money to a newly created Student Opportunity Fund, and obligate State taxpayers to repay the bonds with interest. The Student Opportunity Fund would be invested primarily in stocks, bonds, and other securities. Theoretically, earnings from these financial investments would be used to provide college scholarships (assistance) to a select number of students who met certain qualifications.

Here are five good reasons to oppose the Opportunity Initiative. Another critique of the Opportunity Initiative is “Mining Fool’s Gold” by Nigel Jaquiss (Willamette Week, September 4, 2013).

1. The State’s General Obligation Bond indebtedness would surge.

The Opportunity Initiative begins by having the State borrow $500 million, with additional borrowing expected thereafter. $500 million represents roughly a ten percent increase in the State’s current total outstanding General Obligation debt. But just as importantly, at its extreme the Initiative could result in a doubling of the State’s General Obligation debt.

2. The interest cost to the State would be relatively expensive.

The State is expected to pay 4.5% in interest costs per year on Opportunity Initiative borrowings, with higher interest costs very possible. Currently, college students with similar qualifications to those likely targeted by the Opportunity Initiative have access to federal government loans bearing an interest rate of less than 4% per year. Furthermore, federal government-sponsored student loans are increasingly becoming deferrable and even partially forgivable. The Opportunity Initiative, therefore, fails to take full advantage of less costly federal government college assistance resources.

3. Investments for the Student Opportunity Fund may underperform.

Opportunity Initiative documentation assumes the Student Opportunity Fund will earn a 7% annual rate of return. The State Treasurer suggests 7% is a conservative assumption. In fact, the Treasurer touts an 8.7% annual rate of return on Public Employee Retirement System (PERS) investments as a proxy. However, this 8.7% rate of return likely overstates long-term investment performance, as it is calculated over a ten-year period in which the stock market had only one down year. The stock market normally posts two to three down years in a ten-year period. Even more daunting are the audited actuarial reports posted on the PERS website, which cover investment returns dating back to the year 2000 and extending through 2012, the last year audited. These PERS reports suggest that for the time period 2000-2012, the actual compound annual rate of return was only about 4.5% per year, a rate no higher than the expected state borrowing cost.

4. College assistance and education are advancing without the Opportunity Initiative.

The Opportunity Initiative is being pitched as a way to (1) make up for the stagnating allocation of State general funds to the Oregon University System and (2) support the “40-40-20” goal. (The 40-40-20 goal seeks to have 40% of adult Oregonians hold a bachelor or advanced degree, 40% hold an associate degree, and the remaining 20% hold a high school diploma.) But this pitch is wrong because (1) it ignores the fuller picture of college financial assistance by government, and (2) the 40-40-20 goal itself is inappropriate. First, total college financial assistance which includes all forms of assistance, not just that from the State legislature, is growing sharply at nearly 15% per year since the year 2000-01 (per Oregon University System Fact Books). Also, complementing this increase in government assistance is the Oregon College Savings Plan which allows families to save toward college tax-free. Second, with regard to 40-40-20, the last page of the full Opportunity Initiative documentation shows fewer than 45% of all occupations in the year 2020 are projected to require an associate or higher level degree, not the 80% implied by the 40-40-20 goal.

5. A non-taxpayer-funded alternative to the Opportunity Initiative called “Pay Forward, Pay Back” is under consideration by the Legislature.

The State Treasurer, Governor Kitzhaber, and invited parties brainstormed and hatched the Opportunity Initiative in 2011. But college students championed a different way forward for college financing called “Pay Forward, Pay Back.” Following suit, the Oregon Legislative session of 2013 passed House Bill 3472, which takes the first step in establishing and authorizing a pilot program for students to attend college “tuition-free” if they sign a binding contract to pay a percentage of their wages/salaries for a stipulated period of time following graduation. In the case of “Pay Forward, Pay Back,” colleges could leverage student contract commitments by issuing revenue bonds, or even by incorporating and selling shares, so as to initiate the financing of free tuition pathways. What’s more, Oregonians at large would not be on the hook via taxation or reduced public services for interest costs, principal repayment, or failed investment returns.

The five reasons above to oppose the Opportunity Initiative should be more than enough for informed voters to vote “No” on this ill-conceived measure in November.

Bob Clark holds a Master of Science degree in economics from Portland State University. He has worked as a Senior Economist for the Public Utility Commission of Oregon and as an economist for the Bonneville Power Administration. Mr. Clark is a guest contributor for Cascade Policy Institute, Oregon’s free market public policy research organization.

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ObamaCare’s Employer Mandate Already Costs Employees

By Sally C. Pipes

Some 60 percent of Americans—nearly 160 million people—get insurance through their jobs. Thanks to ObamaCare, that number is about to nosedive. The president’s signature law is hiking the cost of health insurance for American businesses of all sizes. They’re responding by dumping coverage for workers, spouses, and retirees.

Even though the employer mandate, which requires all firms with 50 or more full-time staffers to provide health coverage or pay a fine, has been delayed by one year, the employer health insurance market is slowly bleeding out.

Recently, 30,000 grocery workers in Washington State threatened to go on strike after several supermarket chains announced plans to drop health benefits for part-time workers. Today, workers who put in as few as 16 hours are eligible for health coverage. But the stores say that they won’t be able to afford coverage for part-timers once the employer mandate kicks in on January 1, 2015.

That’s not surprising. Average annual employer-sponsored individual health insurance premiums are up 5 percent this year compared to 2012—to more than $5,800. The average employer premium for a family of four is north of $16,000.

In September, Home Depot announced plans to drop coverage for roughly 20,000 part-time workers. They’ll have to shop for insurance in ObamaCare’s exchanges—which are barely operational despite officially opening for business October 1. Part-timers at Trader Joe’s will have to do the same. They won’t be alone. A National Business Group on Health survey found that one-fifth of big companies think their currently covered part-time workers could end up in the exchanges next year.

ObamaCare is even taking away the benefits of full-time workers—by encouraging their employers to cut their hours and rechristen them as part-timers. The law defines “full-time” as working 30 or more hours per week. So many firms are carefully watching their employees’ hours to ensure that they don’t cross that threshold. A survey conducted by the nonprofit International Foundation of Employee Benefit Plans found that 15 percent of employers subject to the mandate planned to cut hours to reduce their coverage burden.

Spouses also are learning firsthand how ObamaCare will destabilize their families’ benefits. In August, shipping giant UPS said that it would drop coverage for about 15,000 spouses who have access to benefits at their own jobs. The reason? “Costs associated with the Affordable Care Act,” the company said. According to a Towers Watson survey, 12 percent of employers plan to drop coverage for spouses next year, up from 4 percent this year.

Retirees, too, will increasingly find themselves pushed into ObamaCare’s exchanges. Consulting firm Aon Hewitt found that nearly two-thirds of the companies it surveyed plan to “review their retiree health care strategy in light of health care reform.”

To fight back against ObamaCare-fueled cost increases, many companies are turning to consumer-directed health plans, which typically pair low-premium, high-deductible policies with tax-advantaged Health Savings Accounts (HSAs). These plans empower patients to take control of their care. They can save money tax-free in their HSAs and use the proceeds for copayments and other out-of-pocket costs. The high-deductible policy, meanwhile, protects them in the event of a medical catastrophe. And because patients actually own their health care dollars, they have strong incentives to spend wisely.

That dose of market discipline helps lower overall health costs. About one in five workers was enrolled in an HSA plan this year, according to the Kaiser Family Foundation, up from zero in 2005. HSAs are now the second-most popular employer-provided plan. Aon Hewitt says that they could be the leader within three to five years.

Unfortunately, ObamaCare attempts to squash this consumer-directed approach by capping deductibles and requiring all policies to cover a wide array of expensive benefits. The law’s supporters claim its rules will ensure patients get quality coverage. But as the turmoil in the employer-sponsored insurance market demonstrates, ObamaCare may instead ensure that Americans get no coverage at all.

Sally C. Pipes is President, CEO, and Taube Fellow in Health Care Studies at the Pacific Research Institute in San Francisco. She is a guest contributor for Cascade Policy Institute. A version of this article was originally published by The Detroit News.

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How the Environmental Left Became the New Climate Deniers

By Todd Myers

“The UN’s Intergovernmental Panel on Climate Change raises the level of alarm….Global warming deniers are now on a par with Holocaust deniers…” Ellen Goodman, The Boston Globe, 2007

When the United Nation’s Intergovernmental Panel on Climate Change (IPCC) released its report in 2007, the response of the environmental left was close to hysterical. The IPCC’s international mandate was so clear, the left called its findings the “climate consensus.” People who questioned the IPCC’s authority, some said, had the mentality of Holocaust deniers.

Recently, the IPCC released a new assessment, with improved calculations of global temperature increases and associated impacts. The new predictions are less dire and the IPCC’s old fans have become the new climate deniers, dismissing the new report as “political.”

Rather than follow the science, liberal politicians and environmental activists are denying today what they said was undeniable yesterday.

For example, writing in The Wall Street Journal just before the release of the new report, actress Darryl Hannah, who frequently protests with climate scientist James Hansen, says action is needed “urgently, if we are to avoid a 4-degree Celsius raise.” Her claim, however, was wrong before the new report was released and is more so now.

The latest projection of the IPCC for temperature increase under the most likely scenario is 1.8 degrees Celsius by the year 2100―less than half what Hannah claims. In fact, her claim is beyond the median projection for the most extreme scenario of 3.7 degrees C.

Claims about sea level are similarly inaccurate. The Sightline Institute claimed “the world’s leading climate scientists warn of the sea level rising by three feet by 2100.” On Twitter, Northwest NPR was even more extreme, asking how Seattle “would be affected if sea levels rise 1 foot by 2020.”

Under the most likely emissions scenario, sea levels will increase about 18 inches by 2100. The most extreme scenario projects an upper limit of sea level rise of 32 inches―less than the three feet claimed by Sightline. NPR’s 2020 estimate is wildly exaggerated, more than ten times the IPCC’s estimate.

Finally, Washington Governor Jay Inslee repeatedly mentions ocean acidification as a reason to take action on carbon emissions. Pointing to shellfish mortality in Washington’s waters, he claims, “We know that two of the most challenging threats we face to our environment are climate change and ocean acidification.” The pH of our waters, he notes, has recently acidified at the rate of about 0.1 per year.

Less than one percent of that trend, however, can be attributed to CO2 emissions. The IPCC reports, “The pH of ocean surface water has decreased by 0.1 since the beginning of the industrial era.” The acidification the Governor attributes to carbon emissions annually is actually the amount that occurred over more than 100 years.

Some realize their cataclysmic projections are no longer in line with consensus science. Instead of adjusting their claims, they turned to undermining the IPCC instead.

One New York Times columnist accused the IPCC of “bending over backward to be scientifically conservative,” claiming it was intentionally low-balling projections for political reasons.

Another left-wing environmental activist was even blunter, arguing “the IPCC report is more of a political document than a scientific one.” That is exactly the view of the best-known climate “denier,” Oklahoma Senator James Inhofe, who told an audience prior to the last IPCC report, “This is a political document, not a scientific report.”

The left has abandoned the IPCC, after years of touting the agency’s unshakable standard of excellence. What changed were not the IPCC’s standards but its conclusions. New science has sparked the left’s new denial.

Real solutions to any risks associated with carbon emissions will come only when policies are consistent with the latest science. The new, left-wing science deniers have made it clear they are more interested in trimming the science to suit their pre-determined politics. As a result, they don’t just deny the science, they deny the solutions for a cleaner Earth, too.

Todd Myers is director of the Center for the Environment at Washington Policy Center and a guest contributor at Cascade Policy Institute. He is the author of the book Eco-Fads: How the Rise of Trendy Environmentalism Is Harming the Environment and is designated a Wall Street Journal Expert panelist for energy and the environment.

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Knowledge and Courage: What the West Needs to Take Back Our Public Lands

By Ken Ivory

The federal government continues to control more than 50% of all lands in the western United States. Locked up in these federally controlled lands are more than $150 trillion in mineral values and more recoverable oil―in Utah, Colorado, and Wyoming alone―than in the rest of the world combined. Failed federal forest policies prevent harvesting timber, which would improve forest conditions and wildfire resilience, provide useful consumer products and renewable energy feedstock, and revitalize rural schools and communities. FBI criminal activity alerts now warn that terrorists are encouraging the use of wildfire in fuel-laden federal forests as weapons for jihad.

There is no good reason for the federal government to retain control over these lands and resources in states like Oregon. We in the West have, in good faith, simply tolerated the federal government’s delay in honoring its more than 200-year-old obligation to transfer title to these lands for so long that now most people assume there must be some valid reason the federal government controls our lands and resources.

But there is none. At a recent Continuing Legal Education seminar to several dozen lawyers, a law professor (who is frequently quoted as saying it is “clearly unconstitutional” for states to take action to secure the transfer of title to their public lands) displayed an annual average precipitation map indicating that the federal government retains control of western lands because they are “arid.”

The second reason he gave was that the founders of the western states simply gave up their lands as a sort of ransom for the privilege of statehood, citing half a sentence in the statehood enabling acts: “… forever disclaim all right and title….” The funny thing is, this same half sentence is word-for-word the same in the statehood enabling acts of almost all states east of Colorado, where the federal government did dispose of their public lands.

In fact, for decades, as much as 90% of the lands in Illinois, Missouri, Arkansas, Indiana, Louisiana, Alabama, Mississippi, and Florida were kept under federal control. Then, one man had the knowledge and courage to rally citizens to compel Congress to transfer title to their public lands. His name was Thomas Hart Benton, a Democratic U.S. Senator from Missouri featured in President John F. Kennedy’s best-selling book Profiles in Courage.

The statehood enabling acts promising to transfer title to the public lands are the same for all states west and east of Colorado. It’s been done before―repeatedly and recently. And, returning these lands to state control is the only solution big enough to fund education; better care for our lands and forests; protect access; create jobs; and grow local, state, and national economies and tax base.

If we fail to stand up and take action to secure state and local control of our lands and abundant resources, it will not be because it is illegal, unconstitutional, or impossible. It will only be because we―and the local, state, and national leaders we “hire”―lack the knowledge and the courage to do what has been successfully done before.

Do your local, state, and national leaders know why there is a difference between the way the federal government has handled eastern and western lands? Have you inquired what specifically they are doing to compel Congress to honor the same statehood promise for our children and our future that Congress already kept with Hawaii and all states east of Colorado? Have you asked them what groups or influential individuals they will bring to the effort? Have you asked them what specifically you can do to help?

Now is the time to let our representatives know how transferring federally controlled lands back to the state can vastly benefit Oregon’s economy while preserving and using wisely our wealth of natural resources.

Ken Ivory is president of the American Lands Council and a member of the Utah House of Representatives. He was a guest speaker on this issue for Cascade Policy Institute in November 2013.

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Cascade Update Fall 2013

Want to know the latest happenings at Cascade Policy Institute? Click here to see our Fall newsletter!

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Press Release: Cascade Policy Institute Responds to Challenges from the Center for Media and Democracy

November 14, 2013

For immediate release

Contact: John A. Charles, Jr.

(503) 242-0900

 Cascade Policy Institute Responds to Challenges from the Center for Media and Democracy

PORTLAND, ORE. – A self-described “progressive watchdog group” has launched a questionable campaign to discredit limited government, free-market oriented public policy research groups across the country, including Oregon’s own Cascade Policy Institute.

Taking a page out of the late Chicago community organizer Saul Alinsky’s book, Rules for Radicals, the Center for Media and Democracy (CMD) is personally attacking both those who work for and those who help fund these organizations.

Two of the Rules for Radicals state: “Ridicule is man’s most potent weapon” and “Pick the target, freeze it, personalize it, and polarize it.” CMD is following both these rules by posting supposedly inflammatory information and accusations on its derisively named website, www.StinkTanks.org.

Oregonian senior political reporter Jeff Mapes wrote a story yesterday about CMD’s claim that Cascade Policy Institute “…and dozens of like-minded think tanks around the country receive major funding from secretive national donors to push a conservative agenda.”

Cascade’s president, John A. Charles, Jr. responded, saying, “It is ludicrous to think that Cascade is operating in lockstep with other organizations to promote any specific policy agenda. As a free-market think tank, we don’t believe in central planning, either in government or in the non-profit sector.”

Charles continued, “We set our own research agenda, approved by an Oregon-based board of trustees, which promotes individual liberty, economic opportunity, and personal responsibility.”

As to the charge that some of Cascade’s funding comes from a group of “secretive donors,” Charles notes that the IRS allows anonymity for donors to non-profit 501(c)(3) organizations, including charities, schools, churches, think tanks, and others.

“We respect the privacy of our donors, whether they are large national funders or the individual Oregonians that make up the bulk of Cascade’s supporters. Contrary to the mistaken belief of CMD, we don’t promote the agenda of our donors; they voluntarily choose to support our agenda of personal and economic freedom.”

Charles noted in conclusion, “The timing of this attack is almost comical given the disastrous rollout of ObamaCare. Now more than ever, the country needs public policies that respect the dignity of individuals to run their own lives. Cascade will continue to be the leading voice for self-governance in Oregon, and we welcome financial support from donors regardless of where they live.”

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ObamaCare Unraveling―And It Gets Worse in 2014

By Sally C. Pipes

With ObamaCare’s health insurance exchanges unraveling (especially HealthCare.gov, the federally run portal for the 36 states that decided not to set up their own exchanges), it’s safe to say that President Obama’s effort to expand coverage isn’t going well.

It’s about to get worse. Once the calendar flips to 2014, ObamaCare intends to expand Medicaid—the joint federal-state health insurance program for low-income Americans—to an additional 8.7 million people. But Medicaid isn’t working for the 62 million Americans it currently covers.

Taxpayers are struggling to shoulder the program’s $400-billion-plus price tag. Beneficiaries, meanwhile, are finding that doctors won’t accept their coverage. Expanding the program will only exacerbate both problems. Fortunately, some states are experimenting with reforms that inject private-sector discipline into Medicaid, thereby improving access to care and reducing costs. Other states should take note and adopt similar reforms.

At present, states largely determine who qualifies for Medicaid. Next year, ObamaCare will instruct them to cover everyone earning less than 138% of the poverty level. To entice states to follow through, the feds will cover the cost of the expansion for new enrollees for the first three years. States will have to share in the cost thereafter. Nevertheless, over half the states are refusing to follow ObamaCare’s dictates and not taking federal funds, exercising the right the U.S. Supreme Court gave them in June 2012 to do so.

Many states are wary of expanding Medicaid because those already in the program struggle to secure care. Between 2011 and 2012, about a third of primary care physicians weren’t accepting new Medicaid patients. A study from 2011 found that two-thirds of children on Medicaid couldn’t get an appointment with a specialist.

Doctors are reluctant to accept Medicaid because the program pays them so little. The entitlement reimburses physicians a little more than half the amount that private insurers do. In some cases, Medicaid’s reimbursements don’t cover the costs doctors incur seeing beneficiaries.

It’s no surprise, then, that the program fails to improve its beneficiaries’ health. A randomized study of Oregon’s Medicaid program published earlier this year in the New England Journal of Medicine concluded that “Medicaid coverage generated no significant improvements in measured physical health outcomes.”

For a failing program, Medicaid costs a lot. States spend more on Medicaid than anything else in their budgets—and collectively shoulder approximately one-third of the program’s more than $400 billion in annual costs.

ObamaCare’s Medicaid expansion will only add to these costs. A new survey of state Medicaid offices shows that, in 2014, spending on the program will increase by 13% in states that have agreed to broaden eligibility in accordance with the law. It’s no wonder that many state leaders are looking to buck the Medicaid status quo.

In September 2013, Arkansas Gov. Mike Beebe secured a waiver enabling his state to use federal funds set aside for Medicaid to provide private coverage to 218,000 residents. The state’s Department of Health reports that more than 56,000 people have asked to participate in the Arkansas Healthcare Independence Program.

Arkansas officials believe they’ll save $670 million over 10 years, thanks to the waiver. Leaders in Indiana, Ohio, Pennsylvania, Iowa, and Tennessee have expressed interest in creating similar “private options.” Arkansas’s approach empowers individuals to shop for insurance that suits their needs, rather than settling for one-size-fits-all policies.

Privately delivered Medicaid also permits state officials and patients to expand the availability of tax-advantaged health savings accounts (HSAs) to low-income families. These accounts give families the ability to shop around for care—and to save tax-free for the future whatever they don’t spend now. Encouraging such consumer-driven behavior in the health care marketplace will be crucial to reducing overall costs.

North Carolina Gov. Pat McCrory has adopted a different approach, proposing that private managed-care firms administer his state’s Medicaid program. Dubbed “Comprehensive Care Entities,” these companies would be tasked with overseeing patient care in a way that improves health outcomes while keeping costs down. They’d also compete against one another, creating an incentive to improve customer service, economic efficiency, and quality of care.

More state leaders should look for ways to use choice and competition to move past Medicaid’s status quo. If they don’t, they’ll simply perpetuate ObamaCare’s strategy of expanding failed programs and calling it progress.

Sally C. Pipes is President, CEO, and Taube Fellow in Health Care Studies at the Pacific Research Institute in San Francisco. She is a guest contributor for Cascade Policy Institute. A version of this article was originally published by Investors Business Daily.

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The ObamaCare Exchanges: Nowhere Near As Competent As the Post Office

By Sally C. Pipes

What was the worst product launch in history? New Coke, perhaps? How about Colgate’s Dinner Entrees, the frozen food packages with a label mimicking that company’s brand of toothpaste? The Santa Dreidel? They’re all marketing masterpieces compared to the rollout of ObamaCare’s health insurance exchanges—particularly those accessible through HealthCare.gov, the portal operated by the federal government that “serves” 36 states. Though these online marketplaces officially opened October 1, they’ve thus far proven abject failures in their stated mission of expanding the availability of health insurance.

As of October 19, federal officials claimed that 476,000 people had applied online for health coverage. But there’s a big difference between the number of folks who have begun applications—and the number of people who have actually enrolled. According to insurance industry consultant Robert Laszewski, that enrollment figure could be less than five figures. Through its first week, the federal system, which was supposed to work for millions of Americans, had reportedly enrolled about 5,000 people in the 36 states it covers.
Insurers estimate that just one percent of applications submitted through the federal exchange contain sufficient information to actually enroll a person in a health plan. It’s no wonder that the Obama Administration has been mum about official enrollment figures. Visitors have often found that they can’t even log in. A CNN reporter, for instance, couldn’t do so for a whole week. A New York Times researcher failed to log in over 40 separate attempts covering 12 days.

The disastrous rollout of the federal exchange has caused even champions of ObamaCare to train their fire on the president’s team. Washington Post columnist Ezra Klein has said that the Affordable Care Act’s launch this fall has been not been “troubled” or “glitchy” but a “failure.” Robert Gibbs, President Obama’s former press secretary, wants heads to roll, saying, “I hope they fire some people that were in charge of making sure that this thing was supposed to work.”

The Administration has asked the contractors hired to build the system to perform necessary repairs in hopes of re-launching the exchange November 1. But that’s unrealistic, according to the contractors as well as outside experts. One told the New York Times that as many as five million lines of code may need to be rewritten.

Fourteen states and the District of Columbia have set up their own online exchanges. They’re faring little better than the federal exchange. Take Vermont. In the Green Mountain State, 4,300 residents created state insurance accounts. But only 700 were able to apply for insurance—and just 115 of these folks were able to enroll. In Maryland just 1,121 of the 25,781 people who created accounts were able to finish their online applications and get enrolled. That’s less than 5 percent. And the exchanges in Vermont and Maryland are among the better-working ones.

Nine of the 14 states and Washington, D.C. won’t release enrollment data. Oregon admits that its system isn’t fully operational. Hawaii’s exchange launched October 1 but couldn’t enroll anyone for two weeks. Idaho’s and New Mexico’s systems were so hopeless that the states had to turn operations over to the troubled federal system.

Meanwhile, a wide range of experts say that ObamaCare’s online systems are lacking in cyber-security measures and thus invite identity theft. The site’s designers appear not to have included ordinary protections against automated attempts by rogue hackers to falsely log into the system. So cyber criminals can potentially see a user’s social security number, where he lives, how much he makes, and so forth. According to the founder of the McAfee cyber-security company, the exchanges have “no safeguards” and their lack of protection is “outrageous.”

Then there’s the possibility of fraud. The Department of Health and Human Services will not verify the self-reported incomes of all applicants—just those of a sample. Consequently, the federal government could end up doling out millions in unmerited subsidies.

The cause of this mess is not a lack of money. The federal government has spent $634 million on its system—more than the combined cost to design and build LinkedIn and Spotify. That’s nearly seven times the original projected cost. The Obama Administration should have seen this debacle coming. A principal designer of the system, CGI Federal, was fired by the provincial government of Ontario in Canada in September 2012 for botching the province’s online medical registry. The contractor had missed three years of deadlines.

But CGI may have had an impossible task. According to the New York Times, the firm did not begin writing code for the exchange website until the spring of 2013—because the government had been so slow to issue specifications.

One month in, it’s clear that ObamaCare’s exchanges were not ready for primetime, even though Health and Human Services Secretary Kathleen Sebelius repeatedly assured the American public that the marketplaces would launch—and work—as planned. These online marketplaces must function properly if the law is to expand coverage as it promises—and if Americans are to be able to comply with its requirement that they obtain insurance. With each passing day, both are looking less likely.

Sally C. Pipes is President, CEO, and Taube Fellow in Health Care Studies at the Pacific Research Institute in San Francisco. She is a guest contributor for Cascade Policy Institute. A version of this article was originally published by Forbes.

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Ken Ivory to Speak on Transferring Public Lands

Join Cascade Policy Institute as we welcome Utah’s Ken Ivory to share his insights on how to solve many of the western states’ problems through the transfer of public lands.

Ken Ivory (R-UT, District 47) was elected to the Utah House of Representatives in November of 2010. Ken campaigned as a candidate of the “Dad Party.” Ken and his wife, Becky are the parents of four children. Given the daunting challenges that face the state and the nation, Ken took time from his business, mediation, and estate planning law practice to “secure the blessings of liberty” to his posterity.

Ken Ivory will explain why the Transfer of Public Lands is a solution big enough to fund education; to better care for the lands; to protect access; to create jobs; and to grow local, state, and national economies. If we fail to secure our state’s rights to transfer public lands, it will not be because doing so is illegal, unconstitutional, or impossible. If we fail to enforce this “solemn compact” of statehood, it will be because our leaders lack the knowledge or the courage to do what has already been done before.

As the current president of the American Lands Council, Ken educates legislators and community leaders throughout the country about their jurisdictional rights and duties to manage, protect, and care for the lands within our borders. Ken is the author of Where’s the Line? How States Protect the Constitution.

Hors d’oeuvres, a dessert buffet, and a no-host bar will be provided.

Sponsored By

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Does a Higher Minimum Wage Always Benefit Workers?

By Erin Shannon

The debate over raising the minimum wage is everywhere. Fast food workers around the country have been striking for higher pay, Oregon’s minimum wage is set to increase to $9.10 per hour in January, and Seattle Mayor Mike McGinn is demanding that Whole Foods pay workers there more than the company’s current average wage of $16.15 per hour. But while Oregon’s neighbors to the north already have the highest minimum wage in the country at $9.19, a dramatic minimum wage battle is set to take place in SeaTac, Washington. Voters there will decide in November whether the city will increase the minimum wage for workers in SeaTac’s hospitality and transportation industries to $15 per hour.

Proponents of SeaTac’s Proposition 1 argue a mandated higher minimum wage than the state’s current minimum of $9.19 per hour is necessary to help lift low-wage workers out of poverty. Plenty of research shows that forcing a big increase in the minimum wage would have the opposite effect, hurting small businesses and pricing many low-wage workers out of their jobs.

But the most compelling arguments against a super-high minimum wage come from homegrown Washington businesses with real-world experience.

Take, for instance, some of Seattle’s most popular restaurants. Restaurant owner Tom Douglas voluntarily raised the wages of the employees of his 14 restaurants to $15 an hour last month. Douglas says the wage increase was a personal and business decision that he can afford after years of profitable success with his restaurants.

But Douglas readily points out that if he were forced to pay the equivalent of such high wages when he opened for business in 1989, he would be out of business today: “You know, if I were to try and do what I’m doing now when I first started out 24 years ago, I would be bankrupt. I couldn’t have done it. So I think there is a time and place for this and I think there is a sense that in my mind that, you know, you have to be the business owner that wants to do it. I’m not a big believer in the whole government mandate.”

Seattle fast-food favorite, Dick’s Drive-In, provides another convincing argument. Dick’s has made the choice to reward its 180 fast-food employees with reasonable pay and great benefits. The Seattle Times reported that Dick’s offers workers a starting wage of $10 per hour, as well as merit raises, employer-paid insurance, up to $8,000 for child care or college tuition, a 401(k) retirement program with employer match, paid time for volunteer service, and up to three weeks paid vacation.

Government has not forced Dick’s to provide generous wages and benefits; the company does it because it chose a business philosophy that works for them. Dick’s Drive-In founder Dick Spady ran his business according to two rules: “The No. 1 job of a business is to make a profit. If you don’t, it’s not worth anything. No. 2 thing is to take care of your people. They’re the key to success.”

These two rules continue to drive Dick’s business model. But the company’s vice president and the founder’s son, Jim Spady, recently told The Seattle Times that forcing businesses to pay a high minimum wage, such as the proposed $15 per hour, will hurt small businesses, especially new ones. These businesses rely on less experienced or low-skill workers and do not have the profit margin to withstand a massive forced wage increase.

Spady points out that many minimum- or low-wage companies, like Dick’s, are “transitional employers,” where the vast majority of workers start with no experience, develop valuable work skills, and end up moving on to somewhere else. “The way to improve the wages of the poorest people is to encourage them to upgrade their skills, not to pass a law that requires we pay X dollars an hour….So if you force law-abiding businesses to pay more, they will—or they will automate their processes so they use way less labor….So what these high minimum wage laws do is they help a few people get better wages, but a lot of current people will lose their jobs.”

Forcing employers to pay starting workers $15 per hour may make some people feel good, but it will have consequences. It may force many employers out of business, or reduce the number of jobs and hours available. In the case of Dick’s, it may result in the loss of many of that company’s popular employee benefits. Or it may result in young or inexperienced workers being squeezed out of the market by their more experienced counterparts. These workers don’t earn $15 an hour; they get zero.

The real-world consequences of minimum wage increases may vary, but they will happen. And none of them will help low-wage workers. No matter what happens in SeaTac this November, Oregon lawmakers should keep that in mind.

Erin Shannon is Director of the Center for Small Business at Washington Policy Center in Olympia, Washington. She is a guest contributor at Cascade Policy Institute, Oregon’s free market public policy research organization. A version of this article originally appeared in the Puget Sound Business Journal.

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Seven Steps to Replace ObamaCare with Something That Works

By Sally C. Pipes

Under the Affordable Care Act, state health insurance exchanges open for business October 1 (although the executive director of Cover Oregon has admitted Oregon’s exchange will experience some delays). While ObamaCare remains a controversial―as well as logistically catastrophic―law, President Obama took a shot at its opponents recently, saying, “There’s not even a pretense now that they’re going to replace it with something better.”

Au contraire. Ideas for “something better” abound—but the president hasn’t shown interest in them. He has instead remained devoted to his eponymous law, which promises higher costs and worse care. At this point, ObamaCare’s critics have to play the long game―and press for delays in the law’s implementation, whether by rolling back certain parts of the law or defunding it through a continuing resolution, until the White House has a new occupant.

Here are seven provisions that should be part of a replacement agenda that would ensure that all Americans have affordable, accessible, quality health care.

First, change the federal tax code so that individuals can purchase insurance with pre-tax dollars, just like businesses can. Most Americans don’t realize the full cost of their health care because they get employer-subsidized insurance. Consequently, they over-consume health care. That drives up costs. To offset the cost of insurance for those who don’t get coverage through work, Congress could institute a refundable tax credit.

Second, it’s long past time to expand the availability of health savings accounts, where patients can save pretax dollars for health services. And, HSAs must be combined with catastrophic coverage. Doing so would encourage Americans to shop smartly for their care, as they’d be spending their own money.

Third, Congress should allow the purchase of insurance across state lines. Insurance policies issued in Rhode Island cost 2.5 times what they do in Alabama. People should be able to purchase a plan that suits their needs. Such a move would increase competition and lower costs.

Fourth, policymakers need to increase funding for high-risk pools. Such pools were functioning well in many states before ObamaCare―providing affordable coverage to those with pre-existing conditions without raising premiums for everyone else.

Fifth, federal electronic health records (EHR) mandates have to go. The average initial cost of an EHR system is $44,000 per physician, with ongoing maintenance estimated at $8,500 annually. Those costs are passed on to patients. Instead, let providers implement EHR systems when it makes financial sense for them to do so on their own.

Sixth, Congress should scrap the essential health benefits mandates that require all policies to cover a battery of health services. Such mandates can raise the cost of insurance anywhere from 10 to 50 percent.

And seventh, state-level medical malpractice reform is long overdue. Each year, more than $100 billion in health care expenditures are driven by doctors’ and hospitals’ worries about medical liability. Common sense tort reform that immunizes providers from frivolous lawsuits would usher in lower costs for patients.

Of course, all these reforms are contingent on repealing ObamaCare. The House of Representatives has certainly tried to move that effort forward, voting 40 times to do so.

Death by a thousand cuts may be more realistic, at least in the short term. In June, the House voted to repeal ObamaCare’s medical device tax, with 37 Democrats joining Republicans to pass the bill.

And in the past three months, 22 House Democrats have signed onto legislation repealing the Independent Payment Advisory Board (IPAB)―ObamaCare’s doomed plan to have 15 unelected bureaucrats dictate Medicare spending with no real congressional oversight or control.

Public opinion and legislative momentum favor ObamaCare’s delay, if not its outright repeal. And contrary to the president’s assertion, there is a plan to replace ObamaCare with something better. Once the president is no longer standing in the way, Congress should implement that plan―and fix American health care for real.

But if lawmakers allow ObamaCare to stand, the next stop will be a single-payer system, where government controls the health care system entirely. Senate Majority Leader Harry Reid has admitted as much. When asked in August if he felt the United States should abandon insurance as a means of accessing the health care system, Reid replied, “Yes, yes. Absolutely yes.” This will put America on the road to serfdom, and there will be no off-ramp.

Sally C. Pipes is President, CEO, and Taube Fellow in Health Care Studies at the Pacific Research Institute in San Francisco. She is a guest contributor for Cascade Policy Institute. A version of this article was originally published by The Washington Examiner.

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As the Expense of ObamaCare Sets In, Companies Cut Health Benefits

By Sally C. Pipes

Implementation of the Affordable Care Act continues this fall and winter, and employees of shipping giant United Parcel Service recently got an unexpected delivery. The company announced that it would stop offering health coverage to the spouses of 15,000 workers.

UPS’s workers and their families can thank ObamaCare for this special delivery. And UPS isn’t alone. American businesses are discovering that the president’s signature law will raise health costs for them and their employees in short order.

In a memo explaining the decision to employees, UPS stated that increasing medical costs “combined with the costs associated with the Affordable Care Act, have made it increasingly difficult to continue providing the same level of health care benefits to our employees at an affordable cost.”

One day before UPS’s big announcement, the University of Virginia announced that it would cut benefits for spouses who have access to health care through jobs of their own. The rationale was similar. Delta Airlines recently revealed that ObamaCare will increase its direct health costs by $38 million next year. After taking into account the indirect costs of the law, the company is looking at a 2014 health bill that’s $100 million higher.

Increasingly, large employers who aren’t dropping spousal health benefits are requiring their employees to pay monthly surcharges in the neighborhood of $100 per spouse. Many small businesses are dropping family coverage altogether because they expect that ObamaCare’s new tax on insurers will be passed on to them in the form of higher premiums. One Colorado-based business received notice from its insurer that the tax would increase premiums more than 20 percent.

The story is similar in Massachusetts. One new report concludes that over 45,000 small businesses in the Bay State will see premium increases in excess of 30 percent. In all, more than 60 percent of firms in the state will see their premiums go up.

Last month in California, the largest insurer for small businesses, Anthem, declared that it would not participate in the state’s small-business health insurance “marketplace,” Covered California. Only two years ago, Anthem covered one-third of small businesses in California. Anthem’s exit represents one less choice for consumers—and a sign that competition may not be as robust in the exchanges as the Obama Administration promised.

Small businesses are responding to these higher premiums by trimming their labor costs in other ways. That’s not good news for workers. Seventy-four percent of small employers plan to have fewer staff because of ObamaCare, according to a recent U.S. Chamber of Commerce survey. Twenty-seven percent are looking to cut full-time employees’ hours, 24 percent to reduce hiring, and 23 percent to replace full-time with part-time employees.

One in four small companies say that ObamaCare was the single biggest reason not to hire new workers. For almost half, it’s the biggest business challenge they face. These findings are consistent with a recent Gallup Poll showing that 41 percent of small businesses have already stopped hiring because of ObamaCare. Another 19 percent intend to make job cuts because of the law.

All this tumult in the labor market is fueled by more than the increase in premiums engendered by ObamaCare. The law effectively encourages companies to cut full-time jobs. ObamaCare requires employers with 50 or more workers to provide health insurance to all who are on the job for 30 or more hours per week. The law originally called for this “employer mandate” to take effect in 2014, but the Administration decided in July to delay enforcement of the mandate until 2015.

Employers are responding by doing just enough to avoid ObamaCare’s dictates. Administrators at Youngstown State University in Ohio recently told adjunct instructors, “[Y]ou cannot go beyond twenty-nine work hours a week….If you exceed the maximum hours, YSU will not employ you the following year.” A week prior the Community College of Allegheny County in Pittsburgh made a similar announcement.

Hundreds of employees at Wendy’s franchises have seen their hours reduced for the same reason. And part-time employees of Trader Joe’s, which has eight locations in the Portland area, are losing their company-sponsored health insurance. Trader Joe’s has offered health and dental coverage for years, but now part-time workers are being directed to the state health insurance exchanges.

Meanwhile, companies with fewer than 50 employees are thinking twice about expanding—and thus being ensnared by ObamaCare’s requirement that they provide health insurance. The cost of each additional employee could be staggering. A firm with 51 employees that declined to provide health coverage would face $42,000 in new taxes every year—and an additional $2,000 tax for with each new hire. Providing coverage, of course, would be even more expensive.

As private firms large and small grapple with ObamaCare-fueled cost increases, one large employer—the federal government—has been quietly exempting itself from portions of the law. Top congressional staffers like their current benefits under the Federal Employee Health Benefits Plan (FEHBP), wherein the government pays up to 75 percent of the premiums. But the law requires those who work in lawmakers’ personal offices to enter the exchanges. And in many cases, staffers make too much to qualify for health insurance subsidies through the exchanges. So they’d be facing a hefty cut in their compensation.

Fearing a mass exodus of congressional staffers from Capitol Hill, the Obama Administration fudged the law to permit lawmakers’ employees to receive special taxpayer-funded subsidies of $4,900 per person and $10,000 per family. Yet only three months ago, Senate Majority Leader Harry Reid (D-Nev.) claimed that Congress wouldn’t make exceptions for itself.

President Obama no doubt knows that these congressional favors won’t go over well with ordinary Americans. So he’s called on his most popular deputy—former President Bill Clinton—to try to sell the law to the public once again. But unless the former president can lower employer health costs with little more than the power of his words, his sales pitch will likely fall flat.

Sally C. Pipes is President, CEO, and Taube Fellow in Health Care Studies at the Pacific Research Institute in San Francisco. She is a guest contributor for Cascade Policy Institute. A version of this article was originally published byForbes.

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Surprise! Mandatory Paid Sick Leave Has Real Costs

By Erin Shannon

In March, Portland’s City Council unanimously voted to enact mandatory paid sick leave for Portland businesses. While the law sounds well intentioned, it is poised to hurt the very employees it’s meant to help and may damage the businesses that employ them. A recent survey by the Employment Policies Institute (EPI) reveals that Seattle’s 2012 paid sick leave ordinance is increasing the cost of doing business there. Our law could have similar results in Oregon when it takes effect in January.

The Seattle survey targeted service industry employers, such as restaurant and retail businesses that would be newly providing paid sick leave to employees as a direct result of the new law. More than 56% of these employers said the new mandate would increase their cost of doing business, with over one quarter of those saying the increase would be “big.”

Proponents of paid sick leave argue employers will offset those increased costs through reduced employee turnover. But the EPI survey shows two-thirds of Seattle employers who have started providing paid sick leave do not believe the law will reduce turnover, and one third of Seattle employers think the law will increase unscheduled absences among employees taking advantage of the benefit even though they are not sick.

These employers are likely not off the mark. A survey by the Urban Institute in San Francisco found few employers reported reduced employee turnover as a result of that city’s paid sick leave law. As one business owner noted in that survey, if every employer is required to provide the benefit of paid sick leave, turnover becomes a moot point because that benefit is no longer an incentive for an employee to remain with one employer over another.

Regardless, many employers are not relying on offsetting increased business costs with reduced employee turnover, because they are offsetting those costs in other ways. In Seattle, employers reported that in response to the new paid sick leave mandate they had taken one of the following cost-cutting measures:

  • 15.7% of employers raised prices in response to the paid sick leave law.
  • 18.3% of employers reduced hours and staff.
  • 17.3% increased the cost to employees of current benefits, or eliminated benefits they used to offer.

These survey results are not unusual. Surveys in San Francisco and Connecticut, which both mandate paid sick leave, revealed similar results.  A survey of San Francisco employees by the Institute for Women’s Policy Research found nearly 30% of the lowest-wage employees were laid off or given reduced hours after passage of that city’s paid sick leave mandate. The Urban Institute survey similarly found some San Francisco employers had cut back employee bonuses, vacation time, and part-time help to absorb the new costs. In Connecticut, employers reported that state’s paid sick leave law forced them to raise prices, reduce hours and wages, and sometimes eliminate jobs.

There is no arguing that mandatory paid sick leave increases the cost of doing business. It is a fact. Employers are forced to pay the wages of the worker who has called in sick, while paying another worker to fill in for the sick worker. Alternatively, the employer can opt to let the sick employee’s work go unfinished and sacrifice service, productivity and sales (while still paying the sick worker). Either way, it is a cost to the employer.

Some employers, especially the larger ones, can absorb the increased cost. Others, like restaurants, already allowed employees to trade shifts with sick workers without the law, thereby costing no one. But many employers, especially those running small businesses, operate on a shoestring profit margin. When the costs to run their business go up, they simply cannot afford to absorb them. They have no other choice than to pass those costs on to consumers, or to the very workers paid sick leave is designed to protect.

Erin Shannon is Director of the Center for Small Business at Washington Policy Center in Olympia, Washington. She is a guest contributor at Cascade Policy Institute, Oregon’s free market public policy research organization.

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Northwest Employee Freedom One Night Event

On Thursday, September 5 Cascade Policy Institute will be partnering with the Freedom Foundation to host the Northwest Employee Freedom One Night Event. National labor policy expert Vincent Vernuccio of the Mackinac Center for Public Policy will share the story of how Michigan passed historic labor reform last year, becoming the 24th right-to-work state. Join us with other labor experts to learn more about the local efforts to increase employee freedom in Washington and Oregon.

In Oregon, signatures may soon be solicited to place Initiative Petition 9 (the Public Employee Choice Act) on the November 2014 General Election Ballot. It would allow anyone to become or remain a public employee without being required to join a labor union or pay dues or “fair share” fees.

F. Vincent Vernuccio

Vernuccio is director of labor policy at the Mackinac Center for Public Policy. He is a graduate
of the Ave Maria School of Law in Ann Arbor, Mich. Under President George W. Bush he served as special assistant to the assistant secretary for administration and management in the Department of Labor. Vernuccio has published articles and op-eds in such newspapers and magazines as Investor’s Business Daily, The New York Times, The Washington Times, National Review, Forbes and The American Spectator. He has been cited in several books, and he is a frequent contributor on national television and radio shows, such as “Your World” with Neil Cavuto and Varney and Company. Vernuccio is a sought-after voice on labor panels nationally and in Washington, D.C. A regular guest on Fox News channels, Vernuccio has been described by Stuart Varney as a “top union watchdog.” He has advised senators and congressmen on a multitude of labor-related issues. He testified before the United States House of Representatives Subcommittee on Federal Workforce, Postal Service and Labor Policy. Vernuccio lives in Ann Arbor, Mich.
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Can We Correct Oregon’s High Corrections Costs?

By Brandon Maxwell

Behind Oregon’s cultural mystique lies a troubling truth: Compared with similar-sized states, we have one of the fastest growing prison populations in the nation and spend 7.5 percent more per inmate than the national average. Of the fourteen states with populations between two and five million people, ten of them spend less per inmate than Oregon. Where is the money going?

According to the Legislative Fiscal Office, entry-level correctional officers in Oregon take home 24 percent more annually than surrounding states. Likewise, Oregon is the only state that doesn’t require union correctional workers to contribute to their own health plan premiums. As a result, taxpayers carry the burden.

Union wages and benefits aren’t the only things rising―so is the average age of inmates. $21,000 in outside health care costs can be attributed annually to the average inmate over 46. Oregon taxpayers are not only footing the health care bills for aging union members, but for aging prisoners.

Making Oregon a right-to-work state would open the door to performance-based pay through competition, and medical parole reform would curtail Oregon’s aging inmate population. Both could save taxpayers money while arguably improving efficiency in the correctional system.

Oregon taxpayers have a right to be concerned about high prison costs. But until we confront and remedy the causes behind the costs, Oregon’s financial burden will only continue to rise.

 Brandon Loran Maxwell is a research associate at Cascade Policy Institute, Oregon’s free market public policy research organization.

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More Money, Same Problems for Oregon Schools

By William Newell

Oregon’s 2013 legislative session ended with the passage of the largest education budget the state of Oregon has ever seen. At nearly $6.75 billion, the budget has been hailed both as a renewed effort to prioritize education and as a weak attempt to reinvest in a lagging school system. The purported decade of underinvestment looks confirmed by the fact that Oregon’s school system was given a “C” by Education Week and a “D-” by Students First, two respected education research institutions. But is it true Oregon’s government has spent too little and thus neglected its duty to provide a quality education system? The answer might surprise you.

Instead of investing too little, Oregon schools have failed to invest their scarce resources in the right places, namely students and teachers. A major part of the problem lies in the hiring of an ever-increasing number of administrators and non-teaching support staff who are soaking up highly valuable but limited funding. A report released by the Friedman Foundation for Educational Choice shows that Oregon had a 47.3 percent increase in the number of administrators and non-teaching support staff from 1992 to 2009. This astounding growth more than triples that of students and teachers, which only grew by 15.4 percent and 12.7 percent respectively. Oregon schools now employ more administrators and non-teaching support staff than they do teachers.

At the same time, student achievement has stagnated with small increases and even decreases in national reading and mathematics scores. Looking at statistics from the National Assessment of Educational Progress, Oregon fourth-grade students have improved their scores in mathematics by 14 points but have fallen below the national average score at the same time. Eighth graders, once well above the national average in math, have regressed back down to the national average. In reading, fourth graders are below the national average and have only seen a two-point score increase. For eighth graders, their reading scores have fallen by two points and have also regressed to the national average. All in all, Oregon students have not reaped the benefits of additional administrators and support staff.

If the growth of administrators and support staff had risen in line with that of students, Oregon could have saved $302,612,947 per year according to the same Friedman Foundation report. These savings could have meant reducing taxes or employing new teachers and keeping young teachers from being fired due to district cuts. A little math shows that if Oregon spent that $300 million on employing teachers compensated at $80,000 (salary plus benefits), the state could have employed almost 3,782 more teachers than it does now.* Instead, Oregon maintains the third largest class sizes in the entire U.S., according to the National Education Association, with a 20.2 student-to-teacher ratio. Instead of creating a larger, more inefficient education bureaucracy with its new money, Oregon schools should refocus on those who matter most: students and their teachers.

*Teacher compensation was calculated by taking the average Oregon K-12 teacher salary of $57,000 plus 40% for benefits.

William Newell is a research associate at Cascade Policy Institute, Oregon’s free market public policy research organization. He is a graduate of Willamette University.

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“Friedman Legacy Day” Inspires Advocates for Freedom

Everybody can recall that one teacher who made a life-changing impression on them. For some it happened in grade school; for others, college. One individual, however, managed to influence individuals not only in the halls of academe, but in magazines, newspapers, television channels, the U.S. Congress, and even the White House. And still, after his passing, he is changing the world. On July 31, people across the world are celebrating “Friedman Legacy Day” on what would have been Milton Friedman’s 101st birthday. 144 local events have been planned, including 90 in the U.S. and 54 in 25 countries.

Milton Friedman is considered by many to be the most influential economist of the 20th century. His contributions have had a lasting impact on monetary policies, taxing models, government spending, and education reforms. Yet, even with the proven effectiveness of Dr. Friedman’s ideas, public policies have moved away from them in favor of a more centralized decision-making system. The case for individual freedom must be made again―and as strongly as Dr. Friedman did.

“Many people want the government to protect the consumer,” Friedman said. “A much more urgent problem is to protect the consumer from the government….The great tragedy of the drive to centralization, as of the drive to extend the scope of government in general, is that it is mostly led by men of good will who will be the first to rue its consequences.”

Nowhere is this more on display than in the current controversies concerning the IRS and NSA. Or take last year’s historic cheating scandal in Atlanta Public Schools. Government is becoming so big it is forgetting its boundaries and failing to do what it’s meant for: serving and protecting the individual.

That is precisely why Dr. Friedman, along with his wife, Rose, devoted his legacy to education reform, specifically to school choice. The Nobel laureate saw the grave ills a centralized, government-run system was having on our nation’s children, particularly on minority families, and determined that freedom of choice in education was the best alternative. And indeed it is.

States’ experiences, empirical research, and parental satisfaction are proving that a market-based approach to education is far better than a monopolistic structure. By focusing our efforts on education, just as Dr. Friedman did, we can reignite the drive toward individual freedom that has served our country so well.

Milton Friedman said that maintaining a free society “requires a willingness to put up with temporary evils on the basis of the subtle and sophisticated understanding that if you step in to do something about them you not only may make them worse, you will spread your tentacles and get bad results elsewhere.”

That is happening far too often today, as evidenced by our high unemployment rate, surging gas prices, ballooning health care costs, high food-stamp reliance, and unacceptable educational outcomes. And still, the reaction to such ills typically focuses on government doing more.

We remember Milton Friedman for his principled stance against government overreach. And we will continue to keep his voice alive. “Milton 101” is a lesson more Americans need to learn. Its teachings are simple, but its effects are profound. Those who learn them will be today’s Milton Friedmans—advocates for freedom, teachers of liberty.

Cascade Policy Institute is participating in the 2013 “Friedman Legacy Day,” a worldwide day of remembrance for Milton Friedman on what would have been his 101st birthday.

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Choosing a Quick Flight to Safety

By Kevin Sharp

Last week, a private helicopter airlifted an injured Texas woman from Mount St. Helens. In her words, the $1,300 bill was a “no-brainer” compared to the seven hours it would have taken for normal search and rescue crews to transport her down the mountain.

While some criticized her decision, it’s clear she valued her safety more than she valued money in her pocket, which is a perfectly reasonable choice. Instead of relying on government assistance, she took the situation into her own hands.

While it is important to have a public safety net to help people in potentially dangerous situations, there is no reason why people should be denied the ability to hire private assistance when they feel the need; and they certainly shouldn’t be criticized for doing so. She paid more, and she received better and more immediate service as a result. Instead of accepting the one-size-fits-all solution provided by the government, she chose the option that worked best for her.

We need to work on adopting that mentality on a broader scale in relation to government services. If we don’t like the schools, we should be free to pick better ones without penalty. If we are unhappy with the public transportation options, we should be able to hire a better contractor. Freedom of choice is an extremely important liberty; we should be able to exercise it more. 

Kevin Sharp is a research associate at Cascade Policy Institute, Oregon’s free-market think tank.

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Tip of the Education Iceberg

By William Newell

When you think of a school, you probably imagine classrooms filled with students and teachers, not employee offices. The reality is that highly compensated administrators and non-teaching support staff outnumber Oregon’s K-12 teachers.

The growth of administrative and non-teaching support staff has more than tripled that of students and teachers since 1992. In the last 21 years, the student population has grown by only 15.4 percent and teachers by only 12.7 percent. At the same time, the ranks of administrators and non-teaching support staff have grown by a staggering 47.3 percent.

The growth in staff hasn’t improved student achievement. Oregon fourth and eighth grade National Assessment of Educational Progress test scores in math and reading have regressed to or fallen below the national average. In 2013, Oregon received a “C” from Education Week and a “D-” from StudentsFirst, two respected education research organizations.

Rudy Crew, Oregon’s recently departed chief education officer, abused his spending privileges and did little to improve Oregon schools, ultimately showing the top-heavy system’s main flaws. Sadly, the top education bureaucrat’s $280,000 salary and gold-plated benefits package are just the tip of the education iceberg.

If administrative and support employment had grown in line with students, Oregon could have saved more than $300 million annually or hired almost 3,782 teachers compensated at $80,000 each.* Going forward, schools must refocus their priorities back on the classroom and away from the education bureaucracy.

*Teacher compensation was calculated by taking the average Oregon K-12 teacher salary of $57,000 plus 40% for benefits.

William Newell is a research associate at Cascade Policy Institute, Oregon’s free-market think tank.

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Blame Unions for High Prison Costs

By Brandon Loran Maxwell

What’s not to love about Oregon? It’s green. It’s hip. It’s weird. Yet, behind the cultural mystique of Oregon lies a troubling truth: Compared to similar-sized states, it has one of the fastest growing prison populations in the nation and spends 7.5 percent more per inmate than the national average—$84.81 each day.

To put $84.81 in perspective, Mississippi spends $39.56 a day—merely half of what Oregon spends. In fact, of the nation’s 14 states with populations ranging between two and five million people, ten of them spend less per inmate than Oregon. Only Iowa, Connecticut, and New Mexico spend more. So where is the money going?

Interestingly enough, of the ten states that spend less than Oregon per inmate, nine are right-to-work states. Of the four states that spend equal to or more than Oregon per inmate, three are forced-union states.

According to the Oregon Legislative Fiscal Office, entry-level correctional officers take home 24 percent more annually than surrounding states. The study also found Oregon was the only state that “did not require the employees to contribute to their health plan premiums.”

Currently, more than a dozen national and local prison employee unions operate within the United States, including Service Employees International Union (SEIU), American Federation of Government Employees (AFGE), and the American Federation of State, County and Municipal Employees (AFSCME) which boasts over 1.5 million members, 25,000 in Oregon alone.

Over the years, AFSCME has lobbied dozens of proposals with little to no regard for Oregon taxpayers, including a 25 percent pay raise which would have increased the salaries of prison health specialists to more than $80,000 a year. Likewise, AFSCME has aggressively opposed sentencing reforms aimed at reducing prison costs, and in other states even sued to keep prisons open and thriving.

In 2000, AFSCME’s international executive board condemned the privatization of prisons, saying, “Prison privatization only benefits corporations….” Newsflash: Prisons are already a business. The California Correctional Peace Officers Association spent over $1 million in 2008 to fight Proposition 5, which would have placed non-violent drug offenders in drug treatment programs instead of prisons. Why? Because it was bad for business. Union business.

Over the past decade, Oregon’s prison population has grown by more than 3,000 inmates, bringing the total number of inmates to over 14,000, spanning 14 prisons―including the $120 million Dear Ridge Correctional Institute which, despite 60 percent vacancy, still operates. On the bright side, union members still have their jobs.

Similarly, Multnomah County’s Wapato Jail has operated 100 percent vacant for almost 10 years, costing Oregon taxpayers between $300,000 and $400,000 annually.

In addition to mounting union wages and benefits, the age of the average inmate has dramatically increased over the past 15 years. Older inmates mean higher health care costs. According to a recent study by Americans for Prosperity-Oregon and Cascade Policy Institute, $21,000 in outside health care costs can be attributed annually to the average inmate older than 46. In other words, Oregon taxpayers are not only footing the health care bills for aging union members, but aging inmates as well. Who are the real prisoners?

Oregon taxpayers have a right to be upset over Oregon’s high prison costs. But until they hold the unions at least partly accountable, costs will only continue to rise.

Brandon Loran Maxwell is a research associate at Cascade Policy Institute, Oregon’s free market public policy research organization.

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