Category: Economic Opportunity

By Rachel Dawson

Oregon is home to NuScale Power, the nation’s leading small modular nuclear reactor (SMR) developer. However, our state isn’t able to take advantage of NuScale’s innovative technology because it is illegal to site a nuclear plant in Oregon. Three bills being considered in Oregon’s current legislative session could change that.

HB 2332 would repeal current legal provisions requiring that there be a permanent storage site for waste and that voters approve the proposal before a nuclear power plant could be issued a site certificate.

Instead of repealing these provisions, HB 2692 would carve out an exemption for SMRs and would require the Oregon Department of Energy to develop a program to educate the public about the new technology.

SB 360 would also offer an exemption for SMRs. However, cities or counties first would have to approve the siting of SMRs in their jurisdiction before they could be located there.

While HB 2332 would grant the most amount of freedom for siting nuclear plants, any of these three bills would be a step in the right direction for our state.

Recent blackouts in California and Texas demonstrate that the grid needs baseload energy resources capable of backing up renewables when they fail to produce power. If Oregon officials are serious about operating the grid with 100% renewable power, they need to bring SMRs into the discussion. Legislators should vote in favor of these three bills to bring reliable power to Oregon.

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

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By Rachel Dawson

Should governments use taxpayer dollars to support select companies of their choice? The recent closure of SolarWorld’s Portland area solar panel factory and the failure of the government-backed SoloPower Systems show why public dollars shouldn’t be spent to subsidize private firms.

SolarWorld opened the nation’s largest solar panel factory in Hillsboro in 2008.^[1] It was a major facility in Oregon, employing as many as 1,000 Oregonians in 2010. However, the company soon filed for bankruptcy for the first time in May 2017, and again in March 2018. SolarWorld was then acquired by SunPower Corporation in 2018. The company shrank in size and sold the property in Hillsboro, choosing to lease around 200,000 square feet for just more than 200 workers.

But things did not improve for the solar panel manufacturer. With 170 workers, SolarWorld officially closed its doors for good earlier this year.^[2] This is an unfortunate end for the factory’s workers—and for taxpayers. SolarWorld received 19 subsidies from the state, amounting to around $30,385,602 in the form of property tax abatements and tax credits.^[3]

This is not the first time a local solar manufacturer has shut down in recent years. The SolarWorld plant closure is reminiscent of SoloPower Systems’ failure in 2017.

SoloPower Systems, a firm that specialized in a thin-film solar power technology, used a large amount of local and state taxes to build a solar panel plant in the city of Portland. It first opened in 2012, but soon closed its doors when the solar market was in upheaval. It opened and shut down again in 2014 “with little evidence that it had ever gained market share or even produced much product,” according to Portland Business Journal.^[4] Despite the company’s inability to stay afloat, efforts by federal, state, and local agencies kept SoloPower functioning.

In 2010, the state agency Business Oregon granted SoloPower $20 million in tax credits, and the U.S. Department of Energy loaned SoloPower $10 million. At the same time, the City of Portland agreed to cover half of SoloPower’s debt to the state if it built its factory within Portland city limits. Multnomah County “declared the company’s North Portland factory site to be within an enterprise zone”^[5] so it would not have to pay property taxes as long as it met certain job requirements.

One year later in 2011, the federal government offered the company $197 million in loan guarantees, and the California Energy Commission loaned just under $5 million.

SoloPower was not able to break through the market despite the millions of taxpayer dollars government agencies gave it.

The federal government quickly withdrew all $197 million in loan guarantees. Multiple lawsuits were brought against SoloPower: the first from California in 2013 after SoloPower defaulted on its loans, and the second in 2017 by Multnomah County to recuperate back taxes after the company “failed to create the minimum number of jobs needed to qualify for tax breaks.”^[6]

However, the Oregon Department of Energy and the City of Portland were not so prudent. SoloPower claimed it simply needed more time and promised to restart successfully at the end of 2017. The Oregon Department of Energy bought the story and paid $640,000 in rent so that Multnomah County could not seize the company’s equipment. A DOE spokesperson told The Portland Tribune that the state did this because “they are banking on the company’s ability to raise the capital that they need to be successful.”^[7] The state received no collateral for the payments, and this capital was never raised.

SoloPower’s Portland plant was shut down in 2017, and the City of Portland began paying $119,000 every month to cover its debt to the state. Portland covered the company’s debt until October 2020. Because of Portland’s mistake, the city was wasting $119,000 per month during a pandemic and a recession.

The mistakes made in these two cases are not new. Oregon’s failed Business Energy Tax Credit (BETC) was found to be chock full of similar examples, a third of which were deemed to be “suspicious and worthy of further investigation.”^[8]

For example, Cascade Grain Products built an ethanol plant for around $190 million in 2008 with the help of Oregon’s BETC.^[9] The plant only operated for about six months before shutting down. In 2009 the company filed for Chapter 11 bankruptcy and was sold for $15 million.^[10] The BETC was frequently abused and was eventually terminated by the Oregon legislature due to mounting controversy. Both Democrat and Republican legislators admit that “taxpayer dollars were being wasted in many cases.”^[11]

Governments should not be picking winners and losers in the market, and especially should not underwrite debt for a company with a poor financial track record. Agencies should cease all funding of private companies now and in the future and instead allow the marketplace to determine who is successful. This would ensure that Portland and Oregon taxpayers are not on the hook for poorly performing companies.

[1] https://www.bizjournals.com/portland/news/2020/02/06/former-solarworld-site-to-get-a-1-million-square.html

[2] https://pamplinmedia.com/fgnt/37-opinion/494300-396705-our-opinion-a-sad-end-to-solar-manufacturing

[3] https://subsidytracker.goodjobsfirst.org/parent/solarworld

[4] https://www.bizjournals.com/portland/news/2017/09/06/why-oregons-latest-solopower-bet-was-likely-its.html

[5] https://www.oregonlive.com/business/2018/08/state_agency_kept_shoveling_mo.html

[6] https://www.oregonlive.com/business/2018/08/state_agency_kept_shoveling_mo.html

[7] https://pamplinmedia.com/pt/9-news/369884-252601-state-county-at-odds-over-solopower-taxes

[8] https://www.oregonlive.com/business/2018/08/state_agency_kept_shoveling_mo.html

[9] http://ethanolproducer.com/articles/7516/oregon-ethanol-plant-prepares-to-restart-idled-2-years

[10] https://www.bizjournals.com/portland/stories/2009/12/07/daily27.html

[11] https://www.oregonlive.com/business/2014/07/oregons_business_energy_tax_cr.html
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Rachel Dawson is a Policy Analyst at Cascade Policy Institute, Oregon’s free market public policy research organization.

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By Eric Fruits, Ph.D.

Oregonians blame Californians for many of our state’s woes. They drive up our housing prices, crowd our roads, and import nanny-state policies like banning plastic bags, plastic straws, and styrofoam cups. Many Oregonians wish they’d just go back home.

But what if the Golden State stopped sending us their residents?

The short answer: We’re toast. Over the past two years, Californians accounted for about half of Oregon’s population growth. Their college degrees hide Oregon’s dismal public education system. The business they bring with them fuels employment growth. And, their incomes provide the tax revenues for Salem’s never-ending expansion.

If all that stopped, Oregon would be done for. But will it stop? It might. Oregon’s a nice place to live, but nice only gets you so far. They’re moving here because California has gotten so bad. If Oregon continues to fall into Golden State levels of dysfunction, Californians looking to leave may decide Texas, Arizona, or Nevada are better places to raise their families and grow their businesses.

I fear that day may come sooner than we’d like. Oregon taxes have skyrocketed, our public schools have stagnated, and the public sector has rolled back crucial services. Oregon lawmakers should enact public policies that promote economic opportunity at all income levels, increase choices in education for Oregon parents, and foster a robust culture of entrepreneurship. That will make our state a great place to visit, live, and work for our current and future residents. If we don’t make Oregon the opportunity state, we’re toast.

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

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By Vlad Yurlov

Since 2015, Portland City Council has declared continuous housing emergencies. We’re now into the sixth year, and the City’s housing and homelessness crises are still in full swing. Yet, nobody even knows where or how many shelter beds are available in the metro area. Cascade Policy Institute released a new report that offers straightforward solutions to the growing number of unsheltered homeless in the Portland region. It’s time to get back to the basics. And what is more basic than knowing where homeless people can go?

This means tracking where shelter beds are available and distributing this information to outreach workers and officers. If there really isn’t space, we need to know. But if there are available beds, we must offer every homeless individual a roof over their head.

Cities in both Washington and California use tracking systems to help more people get shelter. Meanwhile, Portland is behind the curve and paying for it. Instead of using shelter space more efficiently, the City Council pushed a housing bond that calls spending nearly $300 thousand per unit “affordable.”

We can’t keep extending emergency declarations and borrowing forever. A shelter tracking system would allow Portland to finally take account of the homelessness crisis.

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

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By Eric Fruits, Ph.D.

A recent column published in Forbes has caused quite a stir. The editorial, by Oregon economist Bill Conerly, asks whether Portland is experiencing the death of a city. For months, the Oregonian, Willamette Week, and the Mercury have run articles reporting on business closures, vandalism, and rising violence. Yet, when Cascade Policy Institute’s chairman comments on these same things, the local media change their tune to “it’s all good, nothing to see here.”

Sure, it’s true much of Portland’s recent malaise was brought on by a worldwide pandemic. But it’s also revealed so much of our town’s failures to live up to its motto as the “City That Works.” We have a city council that views business as a parasite to be managed with new and higher taxes and ever-increasing regulations. We have city policies more focused on avenging past wrongs than in preparing for a future where businesses can prosper and people can flourish. Rather than serving the voters, more and more politicians behave as if we serve them. As if it’s our job to make them look good.

Portland isn’t dying, but it’s got a disease. We’ve got to treat the symptoms, shake the illness, and bring our city back to its status as one of the world’s most livable cities.

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

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By Vlad Yurlov

Portland values its “green” projects; but local policymakers are attempting to address the region’s homelessness crisis by creating new facilities, rather than repurposing properties that already exist. Cascade Policy Institute has released a new report offering straightforward solutions to aid the unsheltered homeless by using public resources more effectively. Publicly owned and operated buildings should serve as emergency homeless shelters to eliminate the need for illegal camping. Homeless individuals need shelter, and vacant buildings like the Portland Expo Center have the space.

The Expo Center has never generated much revenue, and the property has capital needs that are not in its budget. This makes it a great candidate for Metro’s recent Supportive Housing Services funds, which could redevelop the Expo Center into a shelter. This 330,000-square-foot building sits on 53 acres of land. At 100 square feet per person, the exhibition space alone could shelter thousands of people. The kitchen, restaurant, meeting rooms, and other flexible space could provide the services emergency shelters need. Finally, the massive parking areas could serve as outdoor shelters for tents or vehicles.

To solve Oregon’s homelessness crisis, readily available public buildings, like the Expo Center, should be repurposed as shelter space. Using taxpayer-funded resources more efficiently would both provide emergency relief for the homeless and be a win for the local communities that have already paid for them.

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

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Some straightforward solutions to a complex problem

By Eric Fruits, Ph.D. and Vlad Yurlov

Executive Summary

Every city in the United States has homeless individuals and families. Coastal cities, especially on the West Coast, have numbers of homeless that have hit crisis levels. In addition to the personal toll homelessness takes on the individuals and their families, the spread of unsheltered homeless populations and homeless camps imposes enormous social costs in the form of public health, public safety, and livability for the community at-large.

After decades of attempts to address homelessness—and unknown, but large, amounts of money spent—the crisis seems to have worsened in many places, especially in Portland, Oregon. Since the mid-1980s the region has launched long-range plans to “end” homelessness. All of the plans failed to reach their goals, for many reasons: insufficient funding, political headwinds, legal barriers, and the seeming intractability of solving the problem.

In 2020, the region’s voters approved two new income taxes to provide “supportive housing services” to the homeless and those at risk of becoming homeless. The taxes are anticipated to bring in approximately $250 million a year. During the campaign, proponents claimed, “We know what works, it’s just a matter of scale.” That’s not correct.

To be blunt, we don’t know what works, and there appear to be no economies of scale. For more than two decades, the “Housing First” approach has been heralded as the best solution. The approach focuses first on providing housing to individuals and families, then addressing issues that led participants to homelessness and are keeping them from being housed. These “wrap around” services are expensive and require individuals to have the ability and will to fully use them.

While the approach has improved outcomes regarding the transmission of HIV and the survival of those with HIV/AIDS and has had some success in reducing alcohol abuse, the National Academies of Sciences, Engineering, and Medicine concluded that there is no substantial published evidence to demonstrate improved health outcomes or reduced health care costs. Moreover, there is no evidence that Housing First approaches have had any effect on reducing overall homelessness or the number of unsheltered homeless.

For the community at large, the unsheltered population is the biggest concern. These are the people seen sleeping on the streets, in parks, in tents, in cars, or in abandoned buildings. This population is most quickly associated with filth left in doorways, needles scattered in parks, car prowls, and property theft. While a majority of Portland area voters have compassion for the homeless, they also want an end to overnight camping. They want to feel safe walking down the street or in their parks. They want their city’s businesses to flourish.

Many cities are bound by the Ninth Circuit Court’s decision in Martin v. City of Boise. This ruling prohibits city anti-camping ordinances from being enforced if there is no shelter space available. In addition, the City of Portland is bound by a settlement agreement requiring 24-hour notice before homeless camps can be cleared. The delays associated with the notice requirement means once a camp is reported, it can take the city a week or more to clear a camp.

One way to enforce a camping ban, while complying with Martin, is to develop a database of vacant and available shelter space. If the database indicates space is available, broad laws that prohibit public camping may be enforced. For example, after the Martin decision, Modesto, California implemented a straightforward inventory/vacancy system. Each day, county staff contact emergency homeless shelter providers in the county to track the availability of shelter beds. The information is then distributed to outreach workers and law enforcement officers. Police officers are then able to offer people who are camping illegally a more stable place to stay. As simple as this may seem, neither the City of Portland nor the State of Oregon has such a system.

Because of the COVID-19 pandemic, Portland has increased temporary emergency shelter beds to allow shelters to practice socially distancing. Among other locations, sites have been set up at the Oregon Convention Center, three community centers, a recently abandoned Greyhound bus station, and vacant outdoor land. Cascade Policy Institute proposes the city should continue to pursue making permanent some of these low-cost emergency shelters and camping sites.

In October 2020, Bybee Lakes Hope Center opened its doors as a supportive transitional housing facility for the homeless at the site of the never-opened Wapato Jail in Portland. Along the way, the project faced opposition from local politicians who claim solving homelessness is their main priority. Opponents argued housing people in a former jail was undignified, saying it amounted to merely “warehousing” the homeless. They claimed local zoning laws—which they control—didn’t allow for housing. But, the owner and operator of Bybee Lakes overcame these objections and now the site provides a template for repurposing surplus public land and buildings into facilities to serve the homeless.

Toward that end, Cascade Policy Institute urges Metro, the regional government, to convert into emergency housing the now-shuttered Portland Expo Center. The Expo Center is a 330,000-square-foot exposition facility sitting on 53 acres of land. It has easy access to public transit as a light rail line terminates at the front of the Expo Center and provides frequent service to downtown Portland. The facility needs significant capital investment to remain competitive in the exposition market, but has no identified funding source to meet these needs.

At 100 square feet per person, the site’s exhibition space alone could serve 2,000 to 3,000 individuals. Its 2,500 vehicle parking lot provides ample space for individuals who prefer to camp or sleep in vehicles. Converting the Expo Center could bring immediate relief to thousands of homeless individuals and families while providing a much better return on investment than current plans to remodel the site for low-attendance expositions. In addition, the massive increase in shelter capacity from converting the Expo Center would provide local jurisdictions the opportunity to reduce overnight camping and to clear camps, while remaining in compliance with the Ninth Circuit’s Martin v. Boise ruling.

None of Cascade’s proposals “solve” or “end” homelessness. Instead, they take some big steps toward a coherent framework for addressing homelessness: reach out to those who want help, be firm with those who don’t, and create an environment where residents feel safe and businesses can flourish.

READ THE FULL REPORT HERE.

Eric Fruits, Ph.D. is Vice President of Research at Cascade Policy Institute. He is also an adjunct professor at Portland State University, where he teaches course in urban economics and real estate.

Vlad Yurlov is a Policy Analyst at Cascade, specializing in homeless, transportation, and regional land-use planning. He has a Bachelor of Science in Quantitative Economics from Portland State University.

Research assistance was provided by Rachel Dawson and Helen Doran.

By Eric Fruits, Ph.D.

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

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

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

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

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

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

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

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

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

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

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

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By Vlad Yurlov

When businesses fail, they shut down. But when the government shuts down businesses, it simply increases taxes. More than 85% of Oregon businesses will pay higher unemployment insurance rates in 2021. This is after lockdowns and restrictions forced their workers to use unemployment benefits in the first place. Most businesses pay unemployment insurance taxes into Oregon’s Unemployment Insurance Trust Fund, which the state distributes to employees that are laid off without cause.

Oregon’s pandemic response shut down hundreds of businesses, but its effects will continue to dampen economic recovery. Higher unemployment insurance tax rates mean that fewer people can go back to work. And any delay in employment furthers economic instability.

Oregon boasts “one of the healthiest [trust funds] in the nation.” The reserves are meant to supply benefits for 18 months and there is $4.1 billion in the fund today. So why should businesses have to increase their unemployment taxes? If it were up to employers, they would gladly hire their workers back instead! As revenues struggle above break-even, businesses should not be responsible for government restrictions that increase the use of unemployment benefits.

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

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Shelter space can be used effectively by tracking and reporting vacancies

If a homeless person asks you to find them shelter space, could you do it? It’s harder than you think. That’s because Portland lacks a key piece of a shelter system. No one knows which shelters have space or how much space is available. The first step in sheltering people is knowing where space exists. Without a tracking system, campsites spiral out of control, while their residents suffer. People with mental health problems and drug addictions are effectively cut off from recovery options.

If a homeless person were to ask an outreach worker for a place to stay, the best they could do would be to call each shelter individually. Oregon Housing and Community Services says agencies and local partners rely on 211, an information hotline which can provide only the location and contact information of shelters. Operators do not regularly maintain contact with shelters or receive vacancy updates, so they can’t report actual availability. This leaves people on public streets and away from resources. To solve these problems, Portland should implement a shelter tracking system that would allow outreach workers and officers to house homeless people quickly.

Shelter tracking systems have already helped other western states battle homelessness. Modesto, California successfully implemented a basic tracking system. It takes one person up to two hours each day to contact and receive information from emergency shelter providers in Stanislaus County. After the data is collected, it’s given to outreach workers and law enforcement officers who use it to find shelter for homeless people. Spokane, Washington goes a step further and tracks shelter capacity by having homeless shelters report their availability to a dispatcher. The city is also working on a public website that would allow easy data entry and near-real-time tracking. These examples show that a shelter tracking system is not only a possibility, but it is vital to optimizing local public resources.

Portland should implement a manual tracking system and make use of our local Homeless Management Information System. Effective tools are currently available. The Environmental Systems Research Institute (ESRI) has online applications which track homelessness resources through geographic information systems. The City of Portland already uses ESRI products to report and visualize campsite locations. Proper use of these resources would allow access to near-real-time data on shelter vacancies. By using available and familiar technologies, Portland could target its homelessness outreach and use shelters effectively.

A tracking system also would allow Portland to comply with the Ninth Circuit Court of Appeals ruling Martin v. City of Boise. In 2018, the Court ruled that local ordinances can’t ban sitting or sleeping in public spaces if there is no available shelter space. But if officers can show that nearby shelters have open beds, they could help people get access to life-saving resources and minimize the risks associated with camping outside. Both Modesto and Spokane have maintained compliance with the Martin ruling through their use of shelter tracking systems.

The bottom line is that people are needlessly sleeping on the streets in Portland, while shelters have vacancies that are difficult to find. Over the past few years, Portland and Multnomah County have opened many emergency shelters. Throughout the COVID-19 pandemic, six motels have housed people to help traditional shelters with social distancing. In order to effectively house individuals who have been left in the streets, we need to know what resources are available. By creating a shelter tracking system, Portland would be able to comply with the Martin ruling while providing outreach workers and officers with the right information to connect homeless people with housing. The worst thing someone seeking shelter can hear is, “We don’t know if there is space.” It’s time for answers.

Vlad Yurlov is a policy analyst at Cascade Policy Institute, Oregon’s free market public policy research organization. He co-authored a forthcoming report on Portland’s homelessness crisis.

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By Eric Fruits, Ph.D.

This week, the U.K. became the first western nation to vaccinate its residents against COVID-19. The recipient, a 91-year-old retired shop clerk, voiced relief, “I can finally look forward to spending time with my family and friends in the New Year.” Despite the fanfare greeting the vaccine rollout, authorities warned that the vaccination campaign would take many months. They warned the tough restrictions that have rattled daily life and cratered the economy are likely to go on into spring.

While many of us dream the vaccine will bring a return to normal life, for many people post-pandemic life will be a nightmare. The end of pauses, freezes, shutdowns, and lockdowns will mean the end of moratoriums on housing evictions, utility shutoffs, and student loan payments. During COVID-19, millions of Americans have racked up thousands—maybe tens of thousands—of dollars in unpaid rent, utilities, and student loans. For example, information presented to the Oregon Governor’s Council of Economic Advisors estimates unpaid rent in the state is between $250 million and $300 million. When the emergency ends, those bills will come due.

Elected officials have put themselves in an impossible position. If they allow masses of evictions and utility shutoffs, they will face torches and pitchforks from their constituents. If they try to pass laws wiping out the debt, they will face a revolt from some of their biggest donors. And, even worse, they will face years of constitutional challenges.

Both the U.S. and the Oregon constitutions forbid any laws “impairing the obligation of contracts.” Rental agreements are contracts. So are arrangements with utilities and student loan providers. Neither the federal government nor state or local governments can simply “wipe out” the payment provisions of these contracts. Our politicians are in a bind, but it gets even worse.

One way to work around the constitutions’ contracts clauses would be to establish a voluntary program of debt forgiveness. But for a program to be truly voluntary, the state must provide a compelling incentive for debt holders to forgive the debt.

An option promoted by Rep. Jule Fahey (D-Eugene) would provide state grants to certain property owners who forgive 80 percent or more of their tenants’ past due rent. It has been reported the proposed legislation would set aside $100 million for grants to renters and property owners. On the one hand, $100 million is a lot of taxpayer money. On the other hand, $100 million is less than half the total amount of unpaid rent in the state.

If such a fund is established, it will be an admission that the governor’s emergency orders have caused enormous damage to households and businesses. If the state is willing to admit it’s caused at least $100 million in damage to rental properties, how much damage has it done to restaurants, bars, retailers, manufacturers, nonprofits, and families?

In September, Portland attorney John DiLorenzo sent a letter to Governor Kate Brown demanding the state compensate several businesses for losses associated with her pandemic-related executive orders. Under Oregon law people are “entitled to reasonable compensation from the state” if their property is “taken” under the emergency powers Brown invoked to shut down most of the state. According to DiLorenzo, “What’s happened here is the governor has basically destroyed property for the purpose of furthering the policy behind the executive order.” Rep. Fahey’s draft bill would be the first piece of legislation to attach a dollar figure to the value that has been taken as a result of the executive orders.

It’s easy for politicians and policy makers to mindlessly remind us, “We’re all in this together.” But, too often they face no meaningful consequences for their decisions that affect millions of people. Oregon’s law requiring reasonable compensation for property taken under the governor’s emergency orders was designed to impose a consequence on the government. If the government has to pay a price for its emergency orders, then the government is more likely to make decisions that account for the costs it imposes on everyone else.

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

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By Rachel Dawson

Do you want to enjoy a drink but don’t feel safe sitting in a bar?

If you live in one of the many states that have allowed “cocktails to-go” since the beginning of the pandemic (including our neighbors in California, Washington, and Idaho), you’re in luck! Oregon restaurants and bars, however, aren’t so fortunate, as our state legislators have thus far failed to similarly update our liquor laws.

In Oregon, restaurants may sell beer, cider, and wine for delivery and take-out orders; and distilleries can sell bottled liquor and cocktail-kits to-go. However, bars and restaurants are barred from selling pre-mixed, to-go cocktails in closed containers for offsite consumption.

Oregon lags behind other states across the nation in this regard. Since the beginning of the coronavirus pandemic, at least 33 states have allowed cocktails to-go. Florida and Mississippi authorized the sale of to-go cocktails on a limited basis before the pandemic began. While Texas restaurants can deliver coolers full of jello shots, Oregon restaurants can’t even include tequila with orders for margarita mix.

Restaurant and bar owners across the state have asserted cocktails to-go sales would be a lifeline for them, given that on-site capacity remains limited and many Oregonians are dining at home. In desperation, the Botanist House, a Portland restaurant, threatened to sell cocktails to-go in defiance of the law. In a public letter, the owner, Matt Davidson, explained his reasoning:

“The COVID-19 Pandemic has simplified our business priorities down to a single word, survival. Our protest is not about increasing our top line revenue, driving more dollars to the bottom line, or expanding our market share. It is simply about doing what 70% of the country is already doing to help struggling businesses survive.”

Ultimately, the protest never took place due to the possibility of a resolution in an anticipated emergency session of the Oregon legislature. State Representative Rob Nosse from the Southeast Portland area has drafted a bill legalizing the sale of to-go mixed drinks. Rep. Nosse’s bill would limit orders to two cocktails and require that cocktails be sealed and purchased in conjunction with food.

Those opposed to a change in legislation argue that this bill could harm people recovering from alcohol abuse and who are susceptible to relapse, or that it could lead to drinking and driving. Rep. Nosse responded that, if this is a concern, “why do we allow people to buy beer at Plaid Pantry and screw-top wine?” Further, 72% of Oregon adults said they would support a proposal allowing cocktails to-go, according to a survey conducted by the National Restaurant Association.

Although many states are allowing cocktails to-go temporarily through emergency orders, some—like Iowa—are taking steps to make them permanent. Iowa’s governor signed a bill legalizing cocktails to-go after it passed through the House with unanimous support back in June.

Oregonians are capable of safely enjoying cocktails to-go with their take-out orders even after pandemic restrictions are eased and restaurants open back up to full capacity. Oregon legislators can learn from Iowa and come together during the next session to pass a bill that will allow restaurants and bars to sell cocktails to-go for both immediate relief of their businesses and their patrons’ future enjoyment.

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

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By John A Charles, Jr. and Rachel Dawson

EXECUTIVE SUMMARY

The Oregon Public Purpose Charge (PPC) is a tax enacted by the Oregon Legislature in 1999, as part of SB 1149. The tax applies to ratepayers of Portland General Electric and PacifiCorp and is set at 3% of utility revenue.

The original reason for the tax was to create a revenue stream that could be used to subsidize energy conservation and renewable power projects within the service territories of the two electric utilities. Specifically, the PPC money was allocated as follows: 56% for energy conservation; 17% for funding the above-market costs of renewable energy; 12% for low-income weatherization; and 10% for energy conservation in schools. For political reasons, 5% of the PPC revenue was designated for construction of low-income housing, although this has nothing to do with energy conservation.

SB 1149 directed the two electric utilities to collect money from ratepayers and turn it over to various organizations to administer the required programs. The Public School Program is administered and overseen by the Oregon Department of Energy, with project implementation handled by school districts. The Oregon Housing and Community Services (OHCS) administers PPC funds for low-income weatherization and subsidized housing.

Almost 74% of PPC funds are designated for energy efficiency projects in homes and businesses, and the above-market costs of certain renewable energy projects. In 1999, no organization existed to administer such programs, so in November 2001 the Oregon Public Utility Commission (PUC) signed a grant agreement with a new  nonprofit, the Energy Trust of Oregon (ETO). The Trust opened for business on March 1, 2002, and began receiving Public Purpose funds through the Oregon PUC.

Natural gas utilities were not affected by SB 1149. However, they were later brought into the fold by PUC stipulation.

During the 1999 legislative session, drafters of SB 1149 made it clear that this would be a temporary tax. The law stated that the PPC would go into effect in March 2002 and would end 10 years later in March 2012.

However, in 2007 a different group of legislators moved the sunset date for the PPC from 2012 to 2026, as part of SB 838. In addition, the new law authorized ETO to negotiate with the private utilities for an additional add-on tax that would pay for more energy efficiency work. The result was a combined energy tax (SB 1149/SB 838) that has grown to over 10% for many ratepayers who use both electricity and natural gas.

Total PPC Rates, 2016-2020*

            *Includes assessments for schools, low-income and Energy Trust for electric utilities

From its inception in 2002 through July 2019, the original PPC collected roughly $1.33 billionfrom ratepayers for the “public purposes” laid out in the statute.However, the most cost-effective projects were done in the early years – exactly as the authors of SB 1149 envisioned. In the 2003-04 biennium, PPC administrators spent $91.4 million to acquire 1.7 million BTU of saved or generated energy. During the 2017-19 biennium, PPC costs had gone up to $159 million, but the energy savings were still 1.7 million BTU.

Trends in Cost-Effectiveness for PPC Expenditures by Energy Trust, OHCS and Public Schools

The costs per unit of energy saved or generated in the most recent biennium were 73.03% higher than in 2003-04.

Moreover, the numbers above are heavily skewed by the fact that the Energy Trust claims 100% of the credit for any renewable energy or conservation project it subsidizes, even if the PPC funding is just a tiny part of the overall cost. If ETO took credit in proportion to its investment of PPC funding, the reported savings (or generation of electricity from renewable energy projects) would be much smaller.

Warning lights about PPC expenditures have been flashing for some time. In 2012, Oregon Secretary of State Kate Brown released an audit of PPC spending in schools, showing that almost $40 million of savings had been missed and that 70% more energy could have been conserved if school districts had implemented the measures identified by energy audits as having the highest payback.

In some cases, PPC money had been used for projects that would never pay for themselves. For instance, Newberg School District installed insulated roofing panels at an elementary school in 2005 that had an estimated simple payback of 110.5 years and an expected life of 25 years. The measure was estimated to lose $65,150 over its lifetime.

The peak years for energy conservation in schools were 2007-2008, when 604 energy-saving measures were implemented. For the most recent biennium, there were only 123 measures implemented – the lowest number since the program began.

The Oregon Housing and Community Services (OHCS) department is required to ensure that they maintain a 1:1 ratio of PPC expenditures to energy saved for installed conservation measures. From 2002-12, the agency was able to do that six out of ten years. Since 2012, OHCS has never met the required standard.

The Energy Trust of Oregon receives 74% of PPC funds. In ETO’s flagship program – electricity savings – the Trust spent $14.7 million in 2003 and achieved savings at a cost of $0.11 per kWh. In 2017, ETO spent $157 million, but savings had a cost of $0.26 per kWh – an increase of 136%.

ETO’s renewable energy program was severely affected by the passage of SB 838 in 2007, which prohibited the organization from spending any more PPC money on utility-scale projects. Confined to small projects, ETO’s cost per megawatt of renewable energy has gone up by more than 1,400% since then.

By legislative design, the Energy Trust of Oregon was incorporated as a  nonprofit charity under section 501(c)(3) of the IRS code. However, it is not actually a charitable organization. Roughly 99% of ETO’s annual revenue comes from the PPC, which is mandatory.

Nonetheless, over the five-year period of 2014-2018, ETO reported PPC revenue to the IRS totaling $847 million under the category of “gifts, grants, contributions, and membership fees.”

If PPC payments by utility customers are considered charitable gifts by the IRS, then ratepayers should be receiving receipts and deducting the cost of the PPC from their federal tax filings. In fact, this was anticipated by the founders of Energy Trust. Article IV of ETO’s Articles of Incorporation states, “It is intended that the Corporation qualify as an organization which is exempt from federal income taxation under Code section 501(c)(3), contributions to which are deductible for federal income, estate, and gift tax purposes….”

We are not aware of Energy Trust or any other administrator of the Public Purpose Charge ever issuing receipts to utility ratepayers for their $1.33 billion dollars of “donations.”

Most energy activists believe that the PPC should become permanent, and PPC administrators tend to agree. In fact, the 2020-2024 strategic plan for ETO explicitly assumes that the PPC will be extended past 2025. A legislative bill for that purpose was introduced in the state legislature during 2019, but did not pass out of committee. It will likely be introduced again in 2021.

The time has come for legislators to decide whether the original mission of the PPC has been accomplished, or if it should be expanded. Based on nearly a decade of research, this paper makes the following recommendations:

• The Public Purpose Charge has fulfilled its original, 10-year mission, and should be ended as soon as possible. The Oregon economy is reeling from COVID-19. PGE reports that customer accounts in arrears (31 days or more past due) are up 41% this year. There is no reason to maintain a costly energy tax of 6-10% for a program that has already served its purpose.

• If the PPC continues through 2025 or longer, the SB 1149 mandate related to small-scale renewable energy projects should be repealed. ETO’s renewables program has been made obsolete by multiple laws passed since 1999, including several “green power” mandates and a new solar subsidy program.
  
  More than 99% of all ETO renewable projects have been solar electric. Since the installation costs of those projects have dropped by roughly 76% since the passage of SB 1149, the original intent of helping renewables transition to market-competitiveness has been met.

• The SB 1149 mandate for market transformation should also be repealed. There is no way to adequately define or measure the term “market transformation.” Moreover, the preeminent market transformation organization is the Northwest Energy Efficiency Alliance (NEEA), which already has its own funding from over 100 utilities.

• Between now and 2026, ETO should switch its more costly program offerings from cash grants to no-interest loans. The best way to ensure that a project is worth doing is to require significant “skin in the game” by recipients of public assistance.
  
  A loan program would provide the up-front cash often needed to start a project, while imposing much-needed fiscal discipline. A loan program would also mean that any ongoing public purpose charge could drop over time to zero, because debt service payments would eventually make the fund self-supporting.

• ETO should utilize its tax status as a  nonprofit institution regulated under Section 501(c)(3) of the IRS code to seek foundation grants and individual contributions. ETO claims that its various programs have saved ratepayers more than $7 billion dollars. If that is true, it should not be difficult to persuade many of them to donate to the Trust.

• The legislature should examine why Energy Trust of Oregon lists all revenue on its federal tax filings as “gifts, grants, contributions, and membership fees received,” yet ratepayers receive no gift receipts for PPC payments. The legislature has created a service delivery model that provides tax-exempt status to only one entity: the Energy Trust of Oregon. Ratepayers receive no such treatment. That contradiction should be addressed by the legislature in 2021.

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By Vlad Yurlov

Oregon’s government is finally feeling the pain of lockdowns. Last April, an executive order banned the eviction of tenants based on non-payment until June 30, 2020. This action has been extended twice and currently ends January 1st.

Now that the year is coming to a close, the Legislature is deciding whether to extend the moratorium for another six months or let it sunset. But this time, constituents have guided the current proposals to send $100 million from the state’s general fund to renters and property owners to relieve back rent.

Kate Brown initiated the moratorium because many people have lost jobs and are likely to miss rent. But it is largely due to lockdown mandates that have directly limited the ability of people to earn a living.

But it’s not only property owners that deserve compensation for the damages associated with government mandates. Lockdowns have restricted restaurants, cinemas, and offices all over Oregon from earning a living. To align the interests of the public and private sector, everyone damaged by government mandated lockdowns strategies should receive reimbursement for their losses. The politicians who say, “We’re all in this together” should put their money where their mouths are and face the financial consequences of their decisions.

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

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By Helen Doran

The Oregonian reported that an estimated 51,000 more Oregonians are expected to lose their jobs because of Governor Brown’s new state-wide freeze. To make matters worse, almost 70,000 Oregonians could lose their unemployment benefits the day after Christmas when the program for self-employed workers and an extended benefit program expire.

There is hope for small businesses. According to an Adobe survey, small businesses in the United States could expect a +107% boost in revenue for the season. In fact, 51% of shoppers plan to support small and local businesses on Small Business Saturday, and 38% of shoppers “will make a deliberate effort to shop at smaller retailers throughout the holiday season.”

Despite the governor’s freeze on many activities, entrepreneurs have found creative ways to provide support for Oregon businesses during the holiday season. Small businesses that are not equipped to make a profit online are provided an outlet through such non-profits as Built Oregon, which provides vendors a shared online marketplace to showcase their products. In true Oregonian spirit, you can buy anything from Willamette Valley wines to bamboo toothbrushes and leather toolkits.

Gyms have been shut down entirely during the governor’s winter freeze. But that hasn’t stopped gyms like Fulcrum Fitness, which has gone completely virtual with its workouts for customers.

Restaurants have suffered extraordinarily from the pandemic, and with the new freeze, some restaurants and bars are planning to close temporarily rather than switch to delivery and takeout. Others are hoping the holiday spirit will provide them a much needed boost. Andina’s in Portland offered a take-out Thanksgiving dinner for those not partial to imitating Gordan Ramsey in the kitchen. Bars like the Botanist House also provided beer, wine, and cider to-go the day before Thanksgiving.

Even the local arts community has found creative ways to share its passion. The youth orchestra, Metropolitan Youth Symphony, will be celebrating holiday music from around the world through a creative use of online tickets and YouTube. The local ballet company, Oregon Ballet Theatre, is reimagining its annual Nutcracker through a televised format on OBTV. Clearly, in the middle of a turbulent year, Oregon businesses’ innovation and creativity shine through, despite the heavy weight of lockdowns and restrictions. Even so, the next few months will be critical for many local businesses. Oregonians should rally behind their local businesses this holiday season. That might be the Christmas miracle we all need.

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

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By Rachel Dawson

Governor Kate Brown recently decided to take her Coronavirus “two-week pause” one step further by issuing an aggressive statewide “two-week freeze” running from November 18th through December 2nd (with an additional two weeks for Multnomah County).

Among its many restrictions, the freeze forces restaurants and bars to offer take-out only, and gyms, museums, and many indoor entertainment activities will be required to close once again.

The freeze comes at a time when more Oregon restaurants and bars are permanently shutting their doors due to lost revenue from the pandemic. Unfortunately, they will feel some of the hardest effects of the freeze even though health officials found that restaurants are not to blame for the recent rise in covid cases. Oregon health officials stated that social gatherings, including at least five Halloween events and parties, are the main culprits for the case increase over the past few weeks.

According to the president of the Oregon Restaurant & Lodging Association, “Few cases of the virus have been linked to the state’s food and drink establishments, which provide a needed refuge.” Placing stricter rules on restaurants and bars may very well backfire on officials as Oregonians shift their outings elsewhere, increasing the number of private gatherings where social distancing is less likely than in a formal restaurant setting. Restaurants represent many Oregonians’ livelihoods and should not be used as a scapegoat for the state. Governor Brown should rescind her restriction on restaurants.

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

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October 19, 2020

FOR IMMEDIATE RELEASE

Media Contact:

Rachel Dawson

(503) 242-0900

rachel@cascadepolicy.org

PORTLAND, Ore. – At 11:56 am on Thursday, October 15, Portland General Electric (PGE) pulled the plug on the Boardman Coal Plant, PGE’s largest power plant. Boardman had a nameplate capacity of 550 firm megawatts of power and was decommissioned 20 years prematurely.

While environmentalists celebrate the plant’s closure, utility executives are still trying to figure out how they will keep the lights on in our region.

That’s because the more coal plants our region removes from the grid, the more likely we are to experience future blackouts. The Northwest Power and Conservation Council is tasked with running models to determine whether there is enough electricity supply to meet demand in the future during a “worst case scenario.” The Council considers the supply adequate if the Loss of Load Probability (LOLP) is 5% or less. In late 2019, the Council found the LOLP by 2026 to be 26%. This means that more than one out of every four simulations run by the Council shows the region facing a shortage of electricity.

To put that percentage into perspective, the LOLP during the 2001 energy crisis was predicted by the Council to be 24%. During this crisis, the Pacific Northwest experienced a prolonged drought that resulted in the loss of 4,000 megawatts of hydropower compared to the average year. To balance the grid, Bonneville Power Administration took back electricity previously sold to the aluminum industry, effectively putting 5,000 aluminum employees out of work.

Since natural gas emits 60% fewer emissions than coal, it would make sense to replace a firm baseload resource with another, cleaner firm resource. However, that’s not what PGE and PacifiCorp plan on doing. Both Investor Owned Utilities (IOUs) plan on replacing lost coal plant megawatts with market purchases, wind, solar, and batteries.

While other utilities have succumbed to criticisms of any and all fossil fuels, the Benton Public Utility District released a report calling out its peers for engaging in virtue signaling and not taking steps to protect the electrical grid. Benton says what others are afraid to: Investing only in wind, solar, and batteries won’t work. For example, Benton found that wind output during the coldest night will only reach around 7%, which won’t provide sufficient electricity when people need to heat their homes. Instead, Benton PUD recommends using natural gas as a transition fuel to nuclear power.

The recent California blackouts should prompt officials to hit pause on their plans to overhaul the electrical grid with intermittent wind and solar resources. Officials charged with managing the California grid admitted the blackouts were due to poor planning. California leaned too heavily on imports and didn’t have enough of its own firm power. Between 2014 and 2018, California reduced natural gas consumption by 21% while increasing renewable energy capacity by 54%. When the sun went down and the wind stopped blowing during the August heatwave, it was clear the ever-decreasing portfolio of firm power wouldn’t make the cut.

Cascade Policy Institute policy analyst Rachel Dawson says, “As more Oregonians work and learn online, it’s critical we take actions that avoid devastating blackouts. Officials know we have a problem; and utilities know that with current technology, intermittent resources alone can’t solve it. Now is the time for them to reverse course and protect the reliability and affordability of the grid.”

To avoid California’s fate, Oregon utilities and officials need to acknowledge that an intermittent resource powered grid is not a reliable or an affordable grid. Instead of celebrating Boardman’s closure, they should take a page from Benton PUD’s book and invest in natural gas and nuclear power.

Contact Rachel Dawson by email at rachel@cascadepolicy.org for more information or to schedule an interview. 

About Cascade Policy Institute: 

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

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By Vlad Yurlov

On October 2, Helping Hands unveiled its latest transitional housing facility. After Wapato Jail collected dust for 14 years, Jordan Schnitzer bought the facility to create a homeless shelter. Allen Evans, someone who spent years battling homelessness, was eventually tapped to lead the effort. During months-long negotiations and media coverage, many public officials denounced the plan to house homeless people in what they still thought of as a jail. If a deal had not been made, the whole building would have been demolished.

All of their concerns were addressed by Helping Hands, the data-driven nonprofit organization that is now set to offer transitional housing to the homeless population. Under the leadership of Allen Evans, Helping Hands worked with many organizations to supply the Bybee Lakes Hope Center with education, internet access, and transportation.

At the grand opening, Portland Mayor Ted Wheeler admitted, “Government couldn’t do it alone.” Even when a solution was presented, the government didn’t back the shelter for months. The philanthropic community and private businesses banded together to solve a problem in an innovative way without the need for public money. To solve homelessness, Portland should embrace public-private partnerships that are led by people who know how to get things done.

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

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October 4, 2020

FOR IMMEDIATE RELEASE

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

PORTLAND, Ore. – On Thursday, October 1, Cascade Policy Institute’s Vice President of Research, Dr. Eric Fruits, testified before the Metro Council, urging them to reject Ordinance 20-1449. The ordinance would authorize the sale of up to $28 million in revenue bonds. The funds would be used to implement, impose, and collect Metro’s new personal and business income taxes.

Fruits also pressed the Council to delay implementation of Metro’s Supportive Housing Services income taxes scheduled to go into effect January 1, 2021.

“Metro has completely misplaced its priorities,” Fruits says. “Instead of focusing on its core obligations, it has spent the last two years expanding its mission by chasing expensive new programs funded with new and increasing tax burdens on its constituents.

“The Council must step back from the messes it has made for itself and Metro as a whole. It should spend the next two years recovering from the pandemic’s financial hit and focusing on the organization’s mission, not its mission creep.”

Cascade Policy Institute’s Vice President of Research, Dr. Eric Fruits, testified before the Metro Council

Click here to read Eric Fruits’ full testimony.

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

About Cascade Policy Institute:

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

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By Rachel Dawson

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

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

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

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

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

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By Cooper Conway

Joe Rogan, the outspoken commenter, comedian, and host, announced on a recent episode of his popular podcast, “The Joe Rogan Experience,” that he would be moving to Texas in search of less homelessness, less taxes, and a little bit more freedom.

Rogan will be bringing his business that recently signed a 100-million-dollar deal with Spotify, too. The move to the Lone Star state will save Rogan and his company over $13 million in taxes and provide more economic growth for the state that is the perennial winner of the Governor’s Cup for economic growth and job creation.

Unlike California, Texas has no income tax and frequently poaches businesses from the West Coast, such as Tesla, Charles Schwab, and McKesson.

Oregon, whose top income tax rate is slightly under California’s at 10 percent, should note the multiple businesses fleeing California for Texas and follow Texas’s tax policy lead instead of California’s.

Amid a pandemic, now more than ever is the time for economic development and job creation to flood Oregon, allowing Oregonians to succeed. The implementation of free-market solutions such as lower-income taxes will alleviate local business owners from the damage that COVID has done while allowing more Oregonians to rejoin the workforce.

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

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By Rachel Dawson

Based on the passage of a 10% cap on commission fees collected by third-party food delivery services from Portland restaurants, it’s unclear if Portland City Councilors understand the basic principles of economics.

This new rule also bars food delivery companies from making up the lost revenue from delivery drivers and will end 90 days after Portland ends its state of emergency order.

However, there’s no such thing as a free lunch; someone will have to make up the difference. And that someone is the customer. UberEats has already added a $3 fee to all customer receipts from Portland businesses.

This fee isn’t applied to restaurants outside Portland city limits, so customers can simply avoid the added cost by ordering meals from businesses in surrounding cities. This likely will make Portland restaurants worse off, as many area residents will purchase food from neighboring cities or forego using food delivery apps entirely.

No one requires restaurants to use third-party apps like UberEats or Postmates; such services didn’t even exist more than 5 years ago. The fact that businesses use them demonstrates the value the apps provide to restaurants who no longer have to maintain their own delivery services. That value was reflected in the delivery fee previously charged to restaurants.

Portland officials should support economic activity, not make it more difficult or more expensive. They can do just that by rescinding this 10% commission fee cap.

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

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By Eric Fruits, Ph.D.

This is a terrible time to own and run a business. While the past three months have been dismal, the next few months could be even worse. Worse because no one knows what’s coming next. Even though many businesses have been allowed to reopen, many others have hesitated out of fear for the health of themselves, their employees, and their customers—and the fear of overbearing regulators and overeager plaintiff attorneys. No one should be surprised that so many businesses have decided to close permanently.

Reopening “the economy,” or even a single business, is a tough decision that can’t be boiled down to a FOX News or MSNBC talking point. It’s not as simple as, “We gotta open now!” or “You’re gonna kill grandma!” The world is much more complicated; and the coronavirus spread is so complex and uncertain that, put simply, no one knows what’s next. Anyone who says the science is settled one way or the other is gaslighting themselves and others.

Aside from the health and liability risks, CARES Act policies designed to protect family finances have made it especially challenging for firms to get back to work. Businesses that want to reopen have found it difficult to bring back their furloughed employees. Those employees who have successfully obtained unemployment benefits have also received a $600-a-week bonus provided by the CARES Act. When public health risks point to a policy of keeping people away from work, a government-funded bonus provides a financial incentive to stay away from work. That’s good policy, but there are side effects.

For millions of out-of-work Americans, the bonus has been a lifeline, allowing them to safely distance themselves without falling into destitution. For others, however, the bonus has been a windfall. For example, Portland Public Schools carefully structured its furlough program so that nearly every furloughed employee made more money being furloughed than they would if they continued working full time. Research from University of Chicago economists estimates 68% of unemployed workers eligible for CARES Act benefits would have lower incomes if they return to work.

This isn’t just theory or wild-brained economics estimates. Portland restaurateur Kurt Huffman has said he doesn’t plan on opening his restaurants any sooner than August 1, because the bonus payments have made it so difficult to bring back and hire employees. Kyle Freres, vice president of operations at Freres Lumber, says his company has 30 job openings that cannot be filled because of the pandemic and the CARES Act’s incentives to stay away from work. At Cascade Policy Institute, an intern turned down our summer job offer in part because she would make more money collecting unemployment.

The CARES Act’s $600-a-week bonus runs out at the end of July, and Congress is considering an extension to the program. Senate Majority Leader Mitch McConnell predicted, “If there’s another [stimulus package], it will come together in July.” Some members want the extra benefits to expire as scheduled. Others want to extend the current provisions through the end of the year. A proposal from Sen. Rob Portman (R-Ohio) would pay people who return to work an extra $450-a-week “back-to-work” bonus.

Hoover Institution economist John Cochrane suggests Congress tighten restrictions on who qualifies for bonus payments. For example, if a laid-off employee is called back by her former employer, then the bonus payments dry up. Or, if a county or metro area has a sufficient number of job vacancies, then workers in that area would no longer qualify for bonus payments. Proposals such as these allow flexibility across regions roughly in line with how well those regions are recovering.

Every policy has its problems or unintended consequences. That’s a big reason why we should limit the number of government regulations, policies, and programs we have in place. It’s like squeezing Jello. Squeeze it one place, and it squirts out another. A lifeline to help out-of-work employees can squeeze the life out of struggling employers. Any unemployment benefits must be tied to incentives to return to work safely as soon as possible.

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

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By Vlad Yurlov

Alcohol-lovers may have a reason for a toast. Oregon’s Liquor Control Commission is taking steps to decrease regulations on sellers, thereby expanding economic opportunity in the food and beverage industry, which was hit particularly hard by the COVID-19 crisis.

Alcohol sales are tightly controlled by the OLCC, which imposes stringent rules on individuals and businesses before, during, and after alcohol purchases. When restaurants and bars had to close their doors to on-site service due to Oregon’s coronavirus response, the OLCC temporarily relaxed some rules regarding alcohol delivery. Because these rules are temporary, though, Oregonians’ easier access to wine and microbrews could once again be limited before this fall.

Recently, the OLCC has begun a process to make the temporary relaxation permanent. These changes would allow increased flexibility in how alcohol can be delivered to customers and increase the hours during which alcohol may be purchased. The changes raise the question of why such burdensome restrictions were imposed in the first place.

When Oregon has to close a door, we can open a window. Let’s keep economic freedom for Oregon businesses and customers at the forefront of Oregon’s rule-making process.

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

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By Eric Fruits, Ph.D.

The 2020 we’re living in is very different from the 2020 we rang in at the beginning of the year.

In January, there were about a dozen Democrats seeking the nomination for President. Medicare for All, the Green New Deal, free college tuition, and universal basic income were seriously debated as potential policies for a Democratic President.

State and local politicians in Oregon were eagerly awaiting the first payments from the billion-dollars-a-year Corporate Activities Tax (CAT), the money earmarked to finally pull Oregon out of its near-last in the nation ratings of K-12 achievement. Cap-and-trade would end climate change. More bike paths, sidewalks, and light rail—always more light rail—would put an end to traffic congestion. A booming stock market meant we’d never have to reform PERS.

Today, schools are shuttered, businesses are crushed by the CAT, and TriMet ridership has evaporated and may never come back. Climate change is the least of our worries, and PERS will likely sink the state.

We began the year with an illusion of permanent prosperity, a game of musical chairs in which the music never ends. There wasn’t a single problem that couldn’t be solved with more spending. Tax increases were sold as equal to the cost of a latte a day. But, there were a lot of lattes.

Little did we know the music would stop so soon. Never mind buying a latte a day, today half the state can’t get a haircut even if they could afford one. Not only is the state’s education system deeply flawed, we learned our unemployment system is completely broken and our health care system is way more fragile than we thought. Rather than ramping up testing, the state simply tells us to “Stay home. Save lives.” The myth of permanent prosperity has given way to a reality of endemic dysfunction.

The latest revenue forecast for the state should be a wakeup call for the governor and the legislature. With anticipated revenues down $2.7 billion from pre-COVID projections, there is no way to avoid big budget cuts. Tax increases must be ruled out—struggling households and businesses need the cash to pay their own bills. We can’t turn the public sector’s budget problems into a private sector bankruptcy crisis. It’s going to take strong political leadership.

Three program areas make up nearly 90% of the state budget: education, human services, and public safety. Employee compensation—salaries, PERS, and other benefits—are a huge portion of these costs. There is no way to balance the budget without cuts in these areas.

PERS must be reformed. The first step should be to move all new employees to a 401(k)-type defined contribution program. This small move won’t solve the impending pension catastrophe; it’s simply a crucial first step toward more meaningful reforms. The most meaningful would be an amendment to the state’s constitution specifying public sector employment agreements are not contracts.

Public school spending must be cut. Construction projects should be shelved, and the money used for planning these projects should be shifted to the classroom. Introducing an education savings account program could save the state money by encouraging students to pursue schooling outside of the public sector, thereby reducing public school enrollment and expenditures. The state’s university system must be streamlined. This means closing smaller, struggling public institutions that have demonstrated a low return on investment for their students.

The legislature should reconsider Oregon’s participation in Medicaid expansion. While the feds pick up 90% of the costs for the expansion population, the cost to the state for the other 10% is eye-popping. In the last budget cycle, the state faced a $1.7 billion budget shortfall. At the time, Governor Kate Brown claimed, “Three-fifths of this deficit is the cost of expanding health care to all Oregonians.” That was when the economy was going gangbusters. Today, Medicaid expansion is a luxury the state cannot afford.

The cynic says, “Never let a crisis go to waste.” Nevertheless, a crisis is a time to re-evaluate priorities, and the best measure of politicians’ priorities are the budgets they pass. The era of permanent prosperity has ended, and we have entered an age where rational realism must rule.

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

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By Eric Fruits, Ph.D.

Many Oregon businesses are looking forward toward May 15. That’s the day the state expects to ease some of Governor Kate Brown’s COVID-19 “Stay Home, Stay Safe” order.

But, many businesses are considering whether they should they re-open at all. Dakine is closing its Hood River office and moving the outdoor gear company’s headquarters to Southern California. Nordstrom announced it is closing its Clackamas Town Center store. World of Speed motorsport museum in Wilsonville is permanently shutting down and sending its exhibits to schools and other museums.

As the state slowly re-opens, some businesses will be facing a seemingly insurmountable debt burden: delayed rent and utility payments will come due, Paycheck Protection Program loans may have to be repaid, lines of credit will have to be restored, and deferred taxes will have to be paid.

Coronavirus is only one of many new challenges facing Oregon businesses. Leading up to the pandemic, Oregon business owners were sweating the state’s new Corporate Activities Tax. Last year, in anticipation of the CAT and other new taxes, Stimson Lumber laid off 40% of its workforce in Forest Grove and moved some of the operations to Idaho and Montana.

While the rules governing this new gross receipts tax won’t be finalized until sometime in June, the first quarterly payments were due on April 30. Because it’s a tax on sales, the tax is due even if the business is losing money.

Portland’s Chown Hardware claims its first quarterly payment was approximately $30,000. Because of the combination of coronavirus and the new tax, the owner laid off 25 of his 100 employees. Facing a $10,000 quarterly tax bill, a pharmacist in the small town of Banks shut down his pharmacy and laid off his six employees.

In the middle of the pandemic, Multnomah County commissioners approved a steep increase in the county’s Business Income Tax, from 1.45% to 2%. The county expects the hike to increase business income tax revenues by one-third, or $900-$1,000 per affected business. These new taxes are on top of Portland’s 1% tax on the sales of large retailers which went into effect last year, with the money earmarked for so-called “clean energy” projects.

As if that’s not enough, the May 2020 ballot has Metro Measure 26-210. This measure imposes two new income taxes: one on businesses with more than $5 million in sales, and another on households with more than $125,000 in income ($200,000 if filing jointly). Business owners who earn pass-through income—many small and medium sized businesses—will be taxed twice under Metro’s measure.

Consider a pass-through business with income of $150,000 on just over $5 million in sales (that’s a 3% profit rate). The owner will be looking at more than $17,000 in new taxes this year:

That’s the increase in taxes relative to last year, and it amounts to more than one month’s work—just to pay the new taxes.

As the economy slowly re-opens, business owners are going to go through the same calculus as Chown and the Banks pharmacist and ask themselves: “What’s the point?” Their businesses have been wiped out, they’ve racked up debt with unpaid rent and other bills, and to make matters worse they’re staring down steep new tax bills.

State and local politicians blandly remind us, “We’re all in this together.” But we’re not. You’re on your own. For business owners, your job is to toe the line on the state’s shutdown orders and cut checks to feed the government bureaucracies that got bloated during the boom times. No matter how much your taxes increase, they’ll keep saying your business doesn’t pay its fair share.

Someday, and that day may come soon, business owners will look at their financials and come to the conclusion that it’s easier to run a bookstore in Boise, open a restaurant in Reno, or a be financial adviser in Vancouver. Portland doesn’t have a monopoly on livability.

COVID is already killing the economy. We cannot let tax increases bayonet the wounded.

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

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By Eric Fruits, Ph.D.

Many Oregon businesses are looking forward toward May 15. That’s the day the state expects to ease some of Governor Kate Brown’s COVID-19 “Stay Home, Stay Safe” order.

But, many businesses are considering whether they should re-open at all. And coronavirus is only one of many new challenges facing Oregon businesses.

Leading up to the pandemic, Oregon business owners were sweating the state’s new Corporate Activities Tax. While the rules governing this new gross receipts tax won’t be finalized until sometime in June, the first quarterly payments were due on April 30. Because it’s a tax on sales, the tax is due even if the business is losing money.

On top of that, in the middle of this pandemic, Multnomah County commissioners approved a steep increase in the county’s Business Income Tax.

As if that’s not enough, the May 2020 ballot has Metro Measure 26-210. This measure imposes two new income taxes: one on businesses with more than $5 million in sales, and another on households with more than $125,000 in income ($200,000 if filing jointly). Business owners who earn pass-through income—many small and medium sized businesses—will be taxed twice under Metro’s measure.

No matter how much your taxes increase, they’ll keep saying your business doesn’t pay its fair share.

COVID is already killing the economy. We cannot let tax increases bayonet the wounded.

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

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By Rachel Dawson

The Oregon nonprofit Cascadia Clusters understands the value of providing Oregon’s growing homeless population with a “hand-up” by helping individuals gain the skills needed to construct affordable transitional housing. Cascadia Clusters is a nonprofit charity that receives no government funding. Instead, it relies on donations.

The organization provides meaningful skills training for homeless individuals along with a daily stipend. These skills include framing, roofing, insulation, and finish carpentry. The “tiny homes” they build make up the units at Hazelnut Grove in North Portland and Agape Village in Southeast. Each tiny home is about 200 square feet and costs $18,000 to build. Each has a basic kitchen, a sleeping loft, and a composting toilet. The people who take part in Cascadia Clusters’ construction training gain both a safe home and the skills to lift themselves out of poverty.

The work being done by Cascadia Clusters differs dramatically from Metro’s “Supportive Housing Services” Measure 26-210 on the May ballot. Unlike Metro’s poorly planned and unclear measure, Cascadia Clusters has a straightforward plan for what the organization wants to accomplish and how, when, and where all donated money will be used. Its “hand-up” philosophy can be imitated by other groups wanting to help people leave the cycle of homelessness for good. Voters who want to assist the homeless should consider donating to one of the many Portland nonprofits with a track record of helping those in need, and vote no on Metro’s bureaucratic money grab.

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

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By Eric Fruits, Ph.D. 

Oregon is nearing the end of the first month of Governor Kate Brown’s state-at-home order. The order is just one of many ways in which the COVID-19 pandemic is changing the way consumers shop and the way businesses sell. These shifts in behavior, designed to “flatten the curve” of infection through social distancing, are happening across many (if not all) markets. Even so, in many cases it’s impossible to know now whether these new habits are achieving—or will achieve—the intended effect.

Take a seemingly silly example from Oregon. We are one of only two states in the U.S. that prohibits self-serve gas. In response to COVID-19, the state fire marshal announced it would temporarily suspend its enforcement of the self-service ban. In the wake of the announcement, public opinion fell into two broad groups.

• Those who want the option to pump their own gas argue that self-serve reduces the interaction between station attendants and consumers, thereby potentially reducing the spread of coronavirus.
• On the other hand, those who support the prohibition on self-serve have blasted the fire marshal’s announcement, arguing that all those dirty fingers pressing keypads and all those grubby hands on fuel pumps would likely increase the spread of the virus.

Both groups may be right, but no one yet knows the net effect. We can only speculate. Policymakers often claim their decisions are guided by science. In the real world, however, science does not provide simple or quick guidance. Politicians and bureaucrats are simply guessing, just like the rest of us. The difference, of course, is that the guessers in government have the power of the state to back up their decisions.

The guesswork of COVID-19 response is a timely reminder of Hayek’s knowledge problem. Even well-meaning policymakers don’t have adequate knowledge of alternatives and preferences facing firms and consumers. They also don’t understand all the risks or consequences of their decisions. In many, if not most, cases firms and consumers are in a better position to assess the risks they face and the ways to mitigate that risk. Allowing firms to experiment and iteratively find solutions that work for their consumers and employees (potentially adjusting prices and wages in the process) may be better than a top-down determination of which businesses and products are “essential” or “non-essential.”

Consumers want to purchase goods without getting contaminated. Employees want to work in safe environments. Firms need to attract both consumers and employees, while minimizing potential liability. These (partially) aligned incentives will almost certainly induce individuals to take at least some steps that mitigate the spread of COVID-19. This might notably explain why many firms imposed social distancing measures well before governments started to take notice.

For example, one effect of COVID-19 is that it has become more expensive for firms to hire warehouse workers. Not only have firms moved up along the supply curve (by hiring more workers), but the curve itself has likely shifted upwards reflecting the increased opportunity cost of warehouse work. Predictably, this has resulted in higher wages for workers. For example, Amazon and Walmart recently increased the wages they were paying warehouse workers, as have brick and mortar retailers, such as Kroger, who have implemented similar policies.

In addition, some companies have found ways to reduce risk while continuing operations:

• CNBC reports Tyson Foods is using walk-through infrared body temperature scanners to check employees’ temperatures as they enter three of the company’s meat processing plants. Other companies planning to use scanners include Goldman Sachs, UPS, Ford, and Carnival Cruise Lines.
• Fred Meyer is limiting the number of customers in each of its stores to half the occupancy allowed under international building codes. Kroger will use infrared sensors and predictive analytics to monitor the new capacity limits. The policy will be somewhat straightforward to implement as Fred Meyer already uses the technology to estimate how many checkout lanes are needed at any given time.
• Trader Joe’s limits occupancy in its stores. Customers waiting to enter are asked to stand six feet apart using marked off Trader Joe’s logos on the sidewalk. Shopping carts are separated into groups of “sanitized” and “to be cleaned.” Each cart is thoroughly sprayed with disinfectant and wiped down with a clean cloth.
• In Portland, a small paint-your-own ceramics shop, Mimosa Studios, had to stop offering painting parties because of government mandated social distancing. One way it’s stanching the loss of business is with a paint-at-home package. Customers place an order online, and the studio delivers the ceramic piece, paints, and loaner brushes. When the customer is finished painting, Mimosa picks up the piece, fires it, and delivers the finished product. The approach doesn’t solve the problem, but it helps mitigate the losses.

In some cases, however, there is no simple or straightforward way to balance the economic and health risks. These businesses are thus left with no option other than temporarily suspending their activities. For example, in Portland, ChefStable a restaurant group behind some of the city’s best-known restaurants, closed all 20 of its bars and restaurants for at least four weeks. In what he called a “crisis of conscience,” owner Kurt Huffman concluded it would be impossible to maintain safe social distancing for customers and staff. McMenamins made a similar decision early in the coronavirus crisis.

Many businesses and consumers are working within the broad outlines of lockdowns deemed necessary by policymakers. As Oregon emerges from the crisis, the best policy would allow properly motivated firms and households themselves to balance the benefits, costs, and risks of transitioning to “business as usual.” Government may have a monopoly on power, but it doesn’t have a monopoly on knowledge.

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

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By Rachel Dawson

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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By Rachel Dawson

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

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

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

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

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

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

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

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

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

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

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

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

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

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By Rachel Dawson

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

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

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

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

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

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

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By John A. Charles, Jr.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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By Miranda Bonifield

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

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

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

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

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

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

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By Eric Fruits, Ph.D.

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

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

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

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

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

Wait, there’s more.

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

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

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

Wait, there’s one more.

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

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

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

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By Rachel Dawson

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

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

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

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

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

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

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December 30, 2019

FOR IMMEDIATE RELEASE

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

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

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

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

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

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

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

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

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

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

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

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

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

About Cascade Policy Institute:

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

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By Rachel Dawson

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

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

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

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

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

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By Eric Fruits, Ph.D.

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

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

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

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

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

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

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

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

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

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By Rachel Dawson

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

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

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

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

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

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By Eric Fruits, Ph.D.

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

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

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

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

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

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

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

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

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By Miranda Bonifield

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

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

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

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

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

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By Helen Cook

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

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

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

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

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

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

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

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

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

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

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

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

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

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By Eric Fruits, Ph.D.

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

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

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

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

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By Eric Fruits, Ph.D.

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

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

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

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

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

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

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By Vlad Yurlov

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

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

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

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

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

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

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By Micah Perry

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

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

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

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

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

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

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By Helen Cook

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

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

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

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

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

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

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By Vlad Yurlov

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

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

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

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

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

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

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

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By Micah Perry

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

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

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

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

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

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

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

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By Eric Fruits, Ph.D.

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

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

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

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

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

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

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By Eric Fruits, Ph.D.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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FOR IMMEDIATE RELEASE

Media Contact:
John A. Charles, Jr.

503-242-0900

john@cascadepolicy.org

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

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

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

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

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

About Cascade Policy Institute:

Founded in 1991, Cascade Policy Institute is a nonprofit, nonpartisan public policy research and educational organization that focuses on state and local issues in Oregon. Cascade’s mission is to develop and promote public policy alternatives that foster individual liberty, personal responsibility, and economic opportunity. For more information, visit cascadepolicy.org.

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FOR IMMEDIATE RELEASE

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

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

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

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

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

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

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

About Cascade Policy Institute:

Founded in 1991, Cascade Policy Institute is a nonprofit, nonpartisan public policy research and educational organization that focuses on state and local issues in Oregon. Cascade’s mission is to develop and promote public policy alternatives that foster individual liberty, personal responsibility, and economic opportunity. For more information, visit cascadepolicy.org.

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By Justus Armstrong

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

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

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

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

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

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

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

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

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By Kathryn Hickok

The quintessential American holiday, Thanksgiving evolved from the Pilgrims’ celebrations to thank God for the harvests that saved Plymouth Colony. What most people didn’t learn in school is that nearly half the Mayflower Pilgrims died of starvation because many refused to work in the fields.

Plymouth Colony originally had a socialist economy. Land and crops were held in common. In the words of Governor William Bradford, “the young men who were most able objected to being forced to spend their time and strength working for other men’s wives and children without any recompense.” Collectivism incentivized colonists needlessly to rely on the efforts of others. Realizing this, Governor Bradford assigned each household its own plot of land. Families could keep what they produced or trade for things they needed. The result was a bountiful harvest in 1623.

Instituting private property and respecting the autonomy of the family unit caused Plymouth to survive. Collectivism and central planning produce scarcity. Private property, free markets, and personal responsibility lead to prosperity and plenty. A healthy economy, with strong and independent families, enables a community to help those who genuinely need assistance. All are important lessons for America today from William Bradford’s first Thanksgiving.

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

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By Rachel Dawson

Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime. This age-old saying seems to be lost on Portland Mayor Ted Wheeler, who just announced a $12 million pilot program to fund 50 units paired with mental health services and addiction treatment for the chronically homeless.

However, this program will have little effect on the homeless crisis in Multnomah County, where 4,177 people are homeless. At 50 units, only 0.01% of them will be helped.

This program may give the chronically homeless a roof over their heads, but it will not lift them from poverty. They will remain dependent on that unit and treatment indefinitely.

So, if throwing money at the homeless problem won’t solve it, what will?

A New York private charity known as the Doe Fund may have the answer. This organization gives food and shelter to the homeless in exchange for work at partnering profit-generating businesses like street cleaning and pest control. The Doe Fund teaches the homeless to fish rather than just giving them one.

This Portland pilot program will not help make the homeless independent or increase their economic mobility. Instead, we should be giving them “a hand up, not a hand out.”

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

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By Justus Armstrong

Portland’s Metro Council plans to award grants for its Investment and Innovation program this fall. The program seeks to strengthen the local infrastructure for waste reduction; but with a combination of corporate welfare and vague performance measures, its methods are murky at best and unethical at worst.

With $9 million in funding over three years, Metro’s program offers grants of up to $500,000 to both non-profit and for-profit organizations for projects in line with Metro’s waste reduction goals. The grants are limited to costs tied to waste reduction projects; but padding companies’ expenses to benefit these projects goes outside the scope of Metro’s stated goals and undermines the competitive marketplace. Most citizens, and Oregon’s Constitution, would oppose tax funding for privately owned corporations. Apart from its good intentions and “green” packaging, what makes this project any different?

Metro’s Investment and Innovation program lacks clear direction and accountability to taxpayers for results. Since the grants outsource waste reduction to third parties, Metro can offer no estimates of the program’s ability to actually reduce waste. Metro is handing out taxpayer money for hypothetical benefits that are unlikely to match the price tag.

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

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SALEM, Ore. – Top Oregon Democrats, including Gov. Kate Brown and Sen. Jeff Merkley, joined union officials Wednesday in expressing disappointment in a U.S. Supreme Court ruling that struck down an Illinois law allowing unions to assess fees against non-members to help fund collective bargaining efforts.

In reaction to the U.S. Supreme Court’s decision in Janus v. AFSCME, Governor Kate Brown, Tom Chamberlain (president of Oregon AFL-CIO), John Larson (president of the Oregon Education Association), Melissa Unger (executive director of SEIU Local 503), and Stacy Chamberlain (executive director of Oregon AFSCME), released the following joint statement:

“Oregon’s economy is thriving, but the rising economic tide is leaving too many behind. Every day, we hear from families struggling to make ends meet, single parents working two jobs to get by, young people buried by student loans, and seniors who’ve spent down their life savings to keep up with the rising cost of living.

“Today, Oregon families face new challenges, but unions are on the forefront, fighting for working families, fair pay, and more affordable housing. Our union members have led the fights to raise the minimum wage, ensure that women and …

Read full article here

PORTLAND, Ore. (KOIN) — Unions, and the people that make them up, headed to Portland City Hall on Wednesday night to rally against a Wednesday ruling by the U.S. Supreme Court that ended mandatory union fees that support government employees working in collective bargaining agreements.

Those people say they will not be beaten by the Supreme Court’s 5-4 decision in Janus v. AFSCME Council 31, a decision they say threatens organized labor.

“Our members know what is at stake,” said Stacy Chamberlain, the ex-director of AFSCME. “They know they need to stand together if we are going to be strong and negotiate good contracts and fight against privatization, some of the other things that we know that these anti worker groups are going to try to do.”

Gov. Kate Brown, along with other union leaders, issued a statement, calling the ruling …

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By Steve Buckstein

While most Americans are reaping the benefits of the recent federal income tax cut, the Oregon legislature has just passed SB 1528 on a partisan vote that could deny several hundred thousand Oregon small businesses an equivalent state income tax cut they should expect.

Proponents of the bill argue that some of these businesses already got a state income tax break in 2013 and therefore shouldn’t benefit any further. But fewer than ten percent of the businesses the bill will hurt got that break. More than 90 percent won’t get any state break if Governor Kate Brown signs the bill.

Oregon is a small business state. Many are family businesses that depend on their business income to support their households.

Governor Brown says of the bill, “We’re looking at the implications for Oregon’s small businesses and Oregon’s economy.” She has until mid-April to sign it into law. Small business groups like NFIB are urging her to veto it.

If she does sign the bill, opponents might gather signatures referring it to voters in November. And hundreds of thousands of those voters will be the very people the bill impacts.

Oregon doesn’t need more tax revenue from small businesses to balance its budget, and giving them a tax break should be good for our economy. If you agree, call the Governor at 503-378-4582 and ask her to veto SB 1528.

Steve Buckstein is Senior Policy Analyst and Founder of Cascade Policy Institute, Oregon’s free market public policy research organization.

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By Kathryn Hickok

Governor Kate Brown opened this month’s legislative session with her State of the State speech February 5. She focused on the need for better education and workforce training for young Oregonians, so they can achieve the American Dream and raise families. To close the “skills gap” between workers and employment opportunities, she proposed a new job-training initiative called “Future Ready Oregon.” 

The governor’s vision is laudable, but what young Oregonians need most isn’t another state program. What often stands between young workers and moderate-income jobs is government red tape in the form of burdensome occupational licensing requirements and fees that can be significant barriers to entry. 

According to the Institute for Justice, “[l]icensing laws now guard entry into hundreds of occupations, including jobs that offer upward mobility to those of modest means….” In fact, Oregon ranks 8^th in the nation in the number and expense of regulatory burdens and restricts numerous occupations licensed in few other states, such as farm labor contractors, bartenders, and locksmiths. 

Oregon could make it easier for job-seekers by reducing license and fee requirements for jobs that have little or no impact on public safety and by replacing some occupational licenses with less restrictive credentialing options. Reducing government red tape that stands between Oregonians and the jobs and training they need to climb the economic ladder would truly help young adults become “future ready.”

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

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By Steve Buckstein

To eventually end cigarette use in America, rather than rely on tobacco taxes, public service announcements, and restrictions on cigarette use, we might look toward innovation. New technologies hold out the promise of ending deadly cigarette use altogether. The biggest impediment standing in the way is the federal government.

That might soon change, however, as the Federal Food and Drug Administration (FDA) is considering approval of a tobacco product that relies on battery-powered heat, instead of fire, to deliver aerosolized nicotine-containing vapor. The distinction is important because, as the late Professor Michael Russell wrote, “people smoke for the nicotine but they die from the tar.”

Traditional options for quitting tobacco use have included nicotine patches, lozenges, and gum, which have relatively low success rates. New “heat-not-burn” technology is proving promising at getting smokers around the world to quit cigarettes in favor of heated tobacco products known as IQOS, sometimes referred to as “I Quit Ordinary Cigarettes.” Using an electronic device to heat a small piece of tobacco without fire or combustion is the purest form of an electronic cigarette. Currently available in nearly three-dozen countries—including Italy, Switzerland, Japan, Germany, and Canada—these products have helped nearly four million adults quit smoking.

According to a recent article in The Economist, “Britain’s Committee on Toxicity recently found that people using heat-not-burn products are exposed to between 50% and 90% fewer ‘harmful and potentially harmful’ compounds compared with conventional cigarettes.”

Such harm reduction could save not only many American lives, but billions of American tax dollars. Between Medicaid, Medicare, and Veterans Affairs, conventional cigarette use may cost American taxpayers more than $100 billion per year.

The Oregon Health Authority (OHA) estimates that some 7,000 people die annually from cigarette use; and harm reduction could help reduce the costs associated with our growing Medicaid program, known as The Oregon Health Plan. Thirty-eight percent of adults on Medicaid smoke cigarettes—more than three times the percentage of Oregonians insured by other providers who smoke. Also, the OHA believes the cost to taxpayers for tobacco-related Medicaid health care is substantial.

If Oregon smokers transitioned to less harmful alternatives, whether by quitting entirely or by switching to a product like IQOS, that would be a win for both public health and public tax expenditures.

In 2009, President Obama signed the Family Smoking Prevention and Tobacco Control Act, a law that gave the FDA authority to regulate tobacco products in the United States. It went further and created a process for introducing new tobacco products that might be less harmful than cigarettes and even created a process for obtaining FDA approval to market those products as such. Permission to sell IQOS and market it as less harmful to adults is what the product’s makers are currently seeking from the FDA.

The FDA has noted that modified-risk tobacco product provisions “may be valuable tools in the effort to promote public health by reducing the morbidity and mortality associated with tobacco use, particularly if companies take advantage of these provisions by making bold, innovative product changes that substantially reduce, or even eliminate altogether, either the toxicity or addictiveness of tobacco products, or both.”

The Tobacco Products Scientific Advisory Committee will meet January 24 to discuss IQOS and make a recommendation to the FDA regarding approval of the product. It should examine the science and consider the importance of providing adult smokers with an alternative to cigarettes, because innovation and consumer choice may prove to be a great incentive to finally quit. The rest of the world has already embraced this technology, and the FDA should also.

Steve Buckstein is Senior Policy Analyst and Founder at Cascade Policy Institute, Oregon’s free market public policy research organization. A version of this article originally appeared in The Bend Bulletin on January 17, 2018.

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By Kathryn Hickok

Oregon ranks 8th in the nation in “burdensome” occupational licensing laws, according to the Institute for Justice’s new report License to Work. The report examines the regulatory burden of state licenses and fees on 102 lower-income occupations. Oregon is also the “8^th most broadly and onerously licensed state,” requiring licenses for occupations that most other states don’t.

According to the authors of License to Work, “more Americans than ever must get a government permission slip before they can earn an honest living….Licensing laws now guard entry into hundreds of occupations, including jobs that offer upward mobility to those of modest means, such as cosmetologist, auctioneer, athletic trainer and landscape contractor. Yet research provides scant evidence that licensing does what it is supposed to do—raise the quality of services and protect consumers. Instead, licensing laws often protect those who already have licenses from competition, keeping newcomers out and prices high.”

The Wall Street Journal editorial board pointed out that “stiff licensing requirements are often prohibitive for America’s working poor, keeping them trapped in low-wage, low-skill jobs.” Oregon could make it much easier for job-seekers and potential entrepreneurs to make an honest living by reducing license and fee requirements for occupations that have little to no impact on public safety, and by replacing some occupational licenses with less restrictive credentialing options.

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

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By Eric Fruits, Ph.D.

Oregon’s economy seems to be chugging along, yet many of us feel like we’re losing steam. Employment and incomes are up since last year, but when we compare Oregon with other states, things don’t look so good here.

Oregon’s median family income is about the same as the national average. But according to the Census Bureau, we are 14 percent below our northern neighbor. Oregon’s per capita personal income—another measure—is more than 8 percent lower than the national average. Oregon is not a rich state.

At the same time, according to one widely used survey, Oregon’s cost of living is about 25 percent higher than the national average and 17 percent higher than in Washington. Oregon’s Consumer Price Index has increased 20 percent since 2007, while prices nationwide only increased 16 percent. Much of this disparity is due to Oregon’s increased cost of housing. In addition, prices for food, gasoline, and health care are also higher here.

It’s expensive to live in our state. When adjusting incomes for the cost of living, Oregon goes from the middle of the pack to the bottom of the bunch. Accounting for purchasing power, Oregon’s median family income is 20 percent lower than the nation and 27 percent lower than Washington’s.

While our incomes are lower, they are more evenly distributed. By various measures, Oregon has less income inequality than most other states. Our top one percent of income earners has a smaller share of total incomes, and our poverty rate is lower than the national average.

On the one hand, our state does not have enough deep pockets to feed soak-the-rich tax policies. On the other hand, our below-average incomes mean we don’t have the resources to feed soak-the-middle-class tax policies like the health insurance and provider taxes that a “no” vote on Measure 101 in the upcoming January 23 election would repeal.

It also means we don’t have the resources to feed soak-the-poor tax policies like the carbon tax the legislature is almost certain to take up next February.

Regulations regarding paid time off, employee scheduling, and occupational licensing increase the cost of employing people without directly adding money to workers’ paychecks. The result is reduced employment and lower wages.

Oregon’s land use laws—as well as regulations regarding design review, historic preservation, and inclusionary zoning—have stifled residential development. Demand for housing is outpacing construction, driving up housing prices. The Oregon Office of Economic Analysis estimates that over the past 10 years, the Portland area has underbuilt by 27,000 units.

The application of Oregon’s land use laws has also limited commercial development. While local areas are supposed have a 20-year supply of vacant industrial land, too often much of that land is not development-ready. Modern companies operate in globally competitive markets and cannot wait for a years-long planning process. Instead of waiting, they locate and expand elsewhere, taking jobs with them.

Anyone who drives through the Portland area knows that congestion has worsened over the past few years. It affects more than just commuters. The Oregon Department of Transportation concludes that congestion is affecting freight traffic and businesses throughout the state, threatening their national and international competitiveness. Higher transportation costs result in higher prices for consumers.

With the decline in water traffic in the Port of Portland and increased railway congestion, highway traffic is a key transportation mode for freight. As highway conditions worsen, Oregon is more likely to get crossed off the list of places to do business, resulting in a loss of potential middle-income jobs.

A recent study of income and cost-of-living data between states concludes: “Cost of living is clearly impacted by state policies [such as those noted above].” Oregon can move from being a poor state to a rich state through straightforward policy reforms. These must address our high cost of living as well as our lower incomes. Reforms to speed up and expand real estate development will relieve housing price pressures and attract employers. Construction to relieve congestion will improve our competitiveness while reducing roadway accidents and alleviating commuter stress. Labor market reforms will increase employment and boost Oregonians’ paychecks.

Do these things, and Oregon can meet its promise to all of us.

Eric Fruits, Ph.D. is an Oregon-based economist, adjunct professor at Portland State University, and Academic Advisor for Cascade Policy Institute, Oregon’s free market public policy research organization. A version of this article was originally published by the Pamplin Media Group and appeared in the Gresham Outlook and The Portland Tribune.

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By Steve Buckstein

You may not have learned this in school, but prior to the 1623 Thanksgiving celebration in the Plymouth colony it had the equivalent of a modern-day socialist economy. Land and crops were held in common; and food was distributed based on need, not on production. Able young men were often unwilling to work hard for the benefit of other men’s families.

After several disastrous harvests, each household was given its own plot of land. They could keep what they produced, or trade their crops for things they needed. Private property and a free market economy resulted in a truly bountiful harvest in 1623 and beyond.

Today, most Americans are actually rich, thanks in large part to retaining those private property and free market traditions. Perhaps not rich in relation to other Americans, but rich in relation to people around the world.

If your family earns more than $32,400 per year, you are in the top one percent of all income earners worldwide. Recently, half of all American families earned more than $59,039, and the average family earned $73,298. Even the lowest family income group by race, African Americans, had a median income of $39,490. Looked at this way, most Americans are part of the world’s one percent.

Things are far from perfect, but most of us have a lot to be thankful for this Thanksgiving.

Steve Buckstein is Senior Policy Analyst and Founder of Cascade Policy Institute, Oregon’s free market public policy research organization.

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By Steve Buckstein

For a variety of reasons, many Americans are becoming addicted to both legal and illegal opioid drugs, risking overdose and death.*

Oregon just made it easier for friends and family members of those at risk to save their lives by administering what is known as the “overdose drug” naloxone. It “counteracts the potentially lethal effects of heroin, oxycodone and other abused narcotics.” It has become relatively easy to use in the form of a nasal mist and does not require a physician prescription.

Passed overwhelmingly in both the Oregon House and Senate, House Bill 3440 was signed into law by the Governor last week. Among other provisions, the law shields persons “acting in good faith, if the act does not constitute wanton misconduct” from “civil liability for any act or omission of an act committed during the course of distributing and administering naloxone….”

Adoption of such so-called “good Samaritan” laws in a number of states has been found to reduce opioid-related deaths.

Some critics believe that such laws encourage drug use and hamper law enforcement efforts. But, if fighting the drug war comes at the expense of lives that could readily be saved, Oregonians should reject that war, and celebrate laws that make it easier to help those harmed by dangerous drugs.

* The Wall Street Journal just editorialized on the opioid epidemic on August 15, noting that overdose deaths are rising much faster in certain states like Oregon that opted into ObamaCare’s Medicaid expansion.

Steve Buckstein is Senior Policy Analyst and Founder of Cascade Policy Institute, Oregon’s free market public policy research organization.

By John A. Charles, Jr.

Last week Governor Kate Brown gave a speech to Portland activists promising to secure carbon-pricing legislation in next year’s one-month legislative session. A few days later, she met with Interior Secretary Ryan Zinke and urged him to maintain or expand the Cascade-Siskiyou National Monument in Southern Oregon.

Clearly, the Governor is getting bad advice about environmental priorities. Carbon dioxide is not a pollutant; it’s a beneficial gas that is essential for plant growth. If the Governor continues Oregon’s “war on carbon,” she will impose great costs on the economy with no offsetting benefits.

Similarly, there was no need for the Governor to lobby on behalf of national monument expansion when Oregon already has plenty of federal land in protected status. She should have used her time with Secretary Zinke to argue for improved management of BLM lands in Oregon, including forest thinning and increased timber harvesting. Without active management, all public lands—including parks, wilderness areas and national monuments—will continue to be threatened by Oregon’s top environmental risk: catastrophic wildfires.

Holding photo ops to tell her supporters exactly what they want to hear is not leadership. The Governor needs to get serious about environmental problems.

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

By Steve Buckstein

Two hundred and forty-one years ago this July 4, the world was gifted with one of the most significant political documents ever written. When Thomas Jefferson authored the Declaration of Independence, he boldly stated:

“We hold these truths to be self-evident; that all men are created equal, that they are endowed by their Creator with certain inalienable rights, among these are Life, Liberty and the pursuit of Happiness. That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed.”

Jefferson realized that government and society are not synonymous. He argued that government’s purpose is to protect the inalienable rights of the individuals that make up society. He understood that such rights are not granted by government; and that any rights government does claim to grant are really claims on someone else’s right to life, liberty, or property. What would he think of today’s politicians in Washington, D.C. and Salem, Oregon who propose law after law ordaining right after right?

Jefferson also understood that he wasn’t elected President in 1801 to “run the country.” He was elected President to run the executive branch of a limited, constitutional government that coincidentally he helped to create. To reinforce these concepts, why not read the Declaration again this Independence Day and consider the power it had—and still has—to change our world for the better.

Steve Buckstein is Founder and Senior Policy Analyst at Cascade Policy Institute, Oregon’s free market public policy research organization. He was the 2016 recipient of the Thomas Jefferson Award by the Taxpayer Association of Oregon and the Oregon Executive Club.

By Steve Buckstein

To hear some teachers talk, you would think before smartphones became ubiquitous in their classrooms that every student sat politely and paid attention every minute of the day. Of course, anyone who was ever a student knows the messy truth about this assertion. So, a little perspective may be in order, both about the evolution of the telephone and what should be the evolution of our educational system.

It wasn’t too long ago that if our parents or grandparents wanted to make a phone call from home, they would pick up the receiver and ask the monopoly “phone company” operator to place their calls. Later, how glorious it was that we could use our rotary phones to spin out our own calls, even long-distance ones if we could afford the high per-minute costs. Then came digital phones, and finally cell phones became affordable to the masses. But even the early cell phones had limited uses.

You may not remember, but none of us had any cell phone apps before 2008, because there weren’t any. None. Imagine: All you could do on your cell phone before 2008 was make calls, maybe text, and maybe connect to the World Wide Web on a slow Internet connection.
Just nine years later, more than two billion people worldwide use apps on their smartphones. You may have dozens of apps on your phone today and, even if you only use a handful of them regularly, that’s a world away from what it was like before 2008. Lots of things are a world away from what they were like before 2008—except for public education.

Consider the children in our schools today. Many of them have never known a world without smartphones and their apps. Rotary telephones, even landlines, are likely just historical oddities to them. Much of their world is new, except the way we adults try to educate them. First, we assign them to a school based on their ZIP code; then we sit them down in rows, in a classroom with kids their same age, all in front of one teacher lecturing about some subject they may or may not find interesting and relevant to their lives.

We say that we want our kids to learn how to take advantage of technology, take STEM courses, and be prepared for the new careers awaiting them. So why do we see their use of that technology every day in school as a problem? They’re not paying attention to the teacher! They’re watching their screens instead of sitting politely in rows listening to the math lesson at 10 am, or the history lesson at 2 pm. The very technology that we want them to be able to use in their careers is enabling them to tune out the lessons we think they need to learn now before entering those careers.

We know that they’ll likely find value in many of these subjects later in life; but if they can’t learn those lessons in ways that are relevant to them now, they may never learn them at all; or they may learn them too late to avoid painful life experiences between now and then.

As the nation’s largest teachers union recently documented, taxpayers pay nearly $15,000 every year for all the costs associated with each student attending Oregon public schools—more than in 33 other states. Rather than let a smartphone costing a few hundred dollars get in the way of any student’s $15,000 education, we need to find ways to let it supplement or enhance their learning experience.

As one high school teacher put it in an Atlantic magazine article on this subject last year,

“If educators do not find ways to leverage mobile technology in all learning environments, for all students, then we are failing our kids by not adequately preparing them to make the connection between their world outside of school and their world inside school.”

One systemic way to think about how smartphone technology can enhance learning is through Education Savings Accounts. Unlike school vouchers that act more like the rotary telephones of the school choice world, ESAs act more like the smartphones of that world, complete with countless apps that can help students learn virtually any subject, often at a fraction of the cost associated with traditional brick and mortar schools.*

While vouchers only let parents pay for private school tuition, ESA funds may also be used for other approved educational expenses, such as online learning programs, private tutoring, community college costs, and other customized learning services and materials.

Also, while voucher funds all go to private school tuition or are lost to the families, funds remaining in ESA accounts each year may be “rolled over” for use in subsequent years, even into college. This creates incentives for families to “shop” for the best educational experiences at the lowest cost, as well as incentives for schools and educational programs to price their services as low as possible, not as high as possible as might be done under a voucher program.

The bottom line is that, while smartphones in school can be a distraction, they can also pave the way to better, more efficient use of educational resources. It is up to us as adults to harness their power for good instead of just bemoaning their power to distract.

* To see how Oregon’s former State Treasurer sees smartphones undercutting the entire economic model of higher education (and by inference K-12 education), watch this 59-second video.

Steve Buckstein is Senior Policy Analyst and Founder of Cascade Policy Institute, Oregon’s free market public policy research organization. This Commentary is adapted from a portion of the author’s written and oral testimony at the Oregon State Senate Education Committee’s Informational Hearing on Education Savings Account bill SB 437 on June 13, 2017.

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.

By Kathryn Hickok

“That’s the trouble with this country. There ain’t a marshal within a hundred-mile ride.”

Considered by many to be the greatest Western of all time, Shane (1953) is a Father’s Day-worthy classic about a young boy’s relationships with his father and a mysterious gunslinger. A tale of the era of cattle drivers, the open range, and gunfighters settling disputes, the visually stunning Shane was filmed on location near Jackson Hole, Wyoming.

Alan Ladd plays Shane, a man with a past who works as a farm hand for Joe Starrett (Van Heflin) and his wife Marian (Jean Arthur). Starrett is the unofficial leader of seven homesteading families, who want to put down roots and create something bigger than themselves―a future built from hard work and devotion to each other. They want to build a town, with “a church and a school,” a place where people can come and raise families.

The settlers’ vision of civilization conflicts with the desires of the cattle barons, who want to keep the range open. The barons reject the settlers’ claims to private property, stampeding through plowed fields and fences to terrorize people into giving up and leaving. When the barons resort to lawless violence, the homesteaders’ last chance of winning is Shane.

Starrett and Shane are each men of courage, self-restraint, and high ideals. They seek prudent, honorable solutions to the settlers’ problems; and in different ways they need to work together to survive. Shane celebrates individual initiative, creativity, free enterprise, and the classic opportunity of the American West.

But it is also clear that no one succeeds alone. Joe and Marian Starrett are a team. Their farm is only possible because they have each other, as Joe points out with loving pride. Their family also needs neighbors. The farmers rely on each other for moral and physical support and protection. The rights of individuals are only secure as long as honest people defend them. And the whole community needs the act of selfless courage that only Shane can pull off.

The lawless days gradually give way to civilization; but only through the courage of homesteading families determined to turn the Wild West into a peaceful, self-sufficient, hard-working community. The Starretts’ young son Joey idolizes Shane, but Shane steers him away from the false glamour of the lone ranger. When Shane rides off into the sunset, he tells Joey, “You go home to your mother and father and grow up to be strong and straight.” As Shane exits, the day of the gunfighter is over. The family now guards the range.

Kathryn Hickok is Publications Director and Director of the Children’s Scholarship Fund-Oregon program at Cascade Policy Institute, Oregon’s free market public policy research organization. A version of this article was originally published in August 2013.

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.

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.

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.

By John A. Charles, Jr.

A bill has been introduced in the state legislature that would impose a $1,000 ownership tax every five years on automobiles more than 20 years old.

Fortunately, leaders of the Republican Party quickly denounced it; and without bipartisan support the bill has no chance of passage. The chair of the House Revenue Committee, Rep. Phil Barnhart of Eugene, has announced that the bill is dead.

The fact that this legislation was even introduced points to a conceptual problem shared by many lawmakers: They think that owning a vehicle is undesirable and should be taxed.

But owning a car imposes no cost on the public; it’s the use of the vehicle that we should be concerned with.

As one legislator told me many years ago, “I own four cars—but I only drive one at a time!”

Since we do need money for improved roads, any transportation tax should focus on road use. One option would be to lower the cost of vehicle registration in exchange for a small increase in the gas tax.

Motorists deserve all the roads they are willing to pay for. Raising the gas tax would give drivers a chance to vote with their tires for a better road system.

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

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

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.

By John A. Charles, Jr.

For the past 18 months, the Oregon Land Board has been working to sell the Elliott State Forest. The decision to seek buyers was based on the fact that the Elliott is losing money, and it is supposed to be making money for Oregon schools.

At its December meeting, the Board was presented with a firm offer of $221 million from a private buyer. Instead of accepting the offer, the Board did nothing. Governor Kate Brown said she wants to sell bonds to buy the Elliott so that it remains in public ownership.

The only problem is that the public already owns it. Selling bonds to buy ourselves out makes no sense.

Land Board members have a fiduciary obligation to maximize revenues from the Elliott for the benefit of students. Increasing taxes on the parents of those students to pay off bonds would be a breach of fiduciary trust.

The only way to ensure that taxpayers benefit is to sell the Elliott to private parties and place the proceeds in the Common School Fund, where the investment earnings are shared with school districts.

The two new Land Board members—Treasurer Tobias Read and Secretary of State Dennis Richardson—should work with the Governor to accept the private offer and move on.

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

By Steve Buckstein

Decades of research and experience tell us that raising the government-imposed minimum wage results in fewer younger and lower-skilled individuals being hired, and in some of them losing jobs they previously held at lower wages.*

Decades of research and experience also tell us that requiring landlords to charge lower rent than market conditions dictate results in fewer housing units being built, making housing shortages worse and raising housing costs in areas not subject to rent controls.**

During last year’s minimum wage debate in Oregon, pointing out the negative consequences was not enough to stop the legislature from imposing significant wage increases. Likewise, this year the legislature may allow local jurisdictions to impose rent controls even though opponents will surely point out the negative consequences of this policy also.

It now seems obvious what is happening. Supporters of minimum wage increases and rent control aren’t blind to their negative consequences; they simply refuse to acknowledge them because the political benefits outweigh the real costs imposed on those forced to endure them.

The harm done by minimum wage increases and rent control is so obvious that we should probably stop saying that their negative consequences are “unintended.”  Rather, we should say that their negative consequences are “unacknowledged” because their supporters refuse to admit that they exist.

* Making Youth Unemployment Worse, Randall Pozdena and Steve Buckstein, Cascade Policy Institute, December 2016

** The Rent Is Too Damn High! — Why Rent Control Won’t Help, Steve Buckstein, Cascade Policy Institute, September 2016

Steve Buckstein is Founder and Senior Policy Analyst at Cascade Policy Institute, Oregon’s free market public policy research organization.

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

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.

By Steve Buckstein

Here at Cascade Policy Institute, as a nonprofit, nonpartisan think tank we don’t support or oppose political candidates. But we aren’t shy about telling candidates and elected officials what we think about their policies.

Now that this especially contentious election is finally over, you’re probably happy about some of the results and unhappy about others. But even if you got what, or whom, you wanted, you might think about some timeless insights from two discerning historical figures.

The first insight comes from Eric Hoffer, known as the longshoreman philosopher. In his 1951 book The True Believer, Hoffer noted:

“A man is likely to mind his own business when it is worth minding. When it is not, he takes his mind off his own meaningless affairs by minding other people’s business.”

The second insight comes from American statesman Daniel Webster, who in the early 1800’s said:

“There are men in all ages who mean to govern well, but they mean to govern. They promise to be good masters, but they mean to be masters.”

Even if the worst happened on election night in your opinion, remember that America has survived as a free and strong nation since declaring our Independence in 1776. In those 240 years we’ve benefited from some great public servants, and suffered some terrible ones. But we’ve always survived and generally prospered, and odds are that we will this time too.

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. 

By Randall O’Toole

Executive Summary

Portland, Bend, Medford, and to a lesser degree other Oregon cities are in the midst of a housing crisis. Median home prices have rapidly grown and are now four or more times greater than median family incomes. As recently as 1990, median prices were only twice median incomes; housing starts to become unaffordable when median prices are more than three times median incomes.

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.

Growth boundaries and similar restrictions have three negative effects on low-income minorities. First, they make housing more expensive. Second, they make housing prices more volatile, which makes buying a home riskier than in places that do not have such restrictions. Third, they are a major—if not the major—contributor to growing wealth inequality as barriers to homeownership have dramatically increased the share of families who cannot afford or must go deeply into debt to buy their own homes.

Fortunately, a June 2015 Supreme Court decision offers a legal remedy to this problem. This decision authorized the use of disparate-impact considerations in judging whether government agencies are following the Fair Housing Act. That act specifically forbids the disparate treatment of minorities—that is, intentional discrimination in housing sales and rentals. The disparate-impact doctrine asserts that policies such as zoning and land-use regulation that make it more difficult for minorities to obtain housing—even if the policies are not intended to do so—are equally in violation of the law unless the policies can be “justified by a legitimate rationale.”

According to disparate-impact regulations published by the Department of Housing and Urban Development in February 2013, prohibited conduct includes “enacting or implementing land-use rules, ordinances, policies, or procedures that restrict or deny housing opportunities or otherwise make unavailable or deny dwellings to persons because of race, color, religion, sex, handicap, familial status, or national origin.” Numerous land-use rules, ordinances, and policies increase housing costs. Since some protected minorities, such as blacks, are more likely to have lower-than-average incomes, any such rules or policies reduce their housing opportunities and therefore potentially violate the Fair Housing Act.

HUD’s implementation, known as Affirmatively Furthering Fair Housing, focuses on ending income segregation of communities as a means of ending racial segregation. However, this will be a costly policy that will do little to make housing more affordable to most low-income minority families.

As an alternative, fair-housing advocates should question policies that increase housing costs by intruding on private property rights. These include growth-management tools such as urban growth boundaries, the use of eminent domain for economic development, rent control, inclusionary zoning, and excessive impact fees, all of which benefit a few at everyone else’s expense. In approving the disparate-impact doctrine, the Supreme Court has offered a tool to both affordable-housing advocates and property-rights advocates for undoing these rules and policies that make housing less affordable.

READ FULL REPORT HERE

By Randal O’Toole

The housing affordability crisis is turning Portland, already one of the whitest cities in America, into one that is even whiter. Census data indicate that, between 2010 and 2014, the number of whites living in the city of Portland grew by 30,500, or 6.8 percent, but the number of blacks shrank by 4,500, or 11.5 percent.

Some of those blacks moved to Portland suburbs, but most moved out of the Portland area completely. While the number of whites in the Portland urban area grew by 94,000, the number of blacks shrank by 3,400.

Even before 2010, Portland’s high housing prices were negatively affecting blacks and other low-income groups. Census data show that, between 2000 and 2010, the share of households headed by whites living in single-family detached homes declined by 3.3 percent, but the share of households headed by blacks living in such homes declined 16.1 percent.

Housing prices also affected homeownership. Between 2000 and 2010, the share of whites living in their own homes fell by 2.2 percent, but the share of blacks (which was already well below the white share) fell by 12.6 percent.

In short, Portland’s housing affordability crisis forced some low-income people to leave the region and others into lower-quality housing. This process has led some to charge the region with “economic apartheid.” Yet, planners defend the region’s housing prices, one saying, “This is capitalism; how do you fight it?”

In fact, Portland’s high housing prices aren’t a result of capitalism; they are due to government land use restrictions. Portland planners celebrate the fact that the region’s urban growth boundary has forced the population to “grow up, not out,” as the region’s population density has grown by 20 percent since the boundary was first drawn in 1979.

Such increased densities are a prescription for increased land and housing costs. In 1990, an acre of land suitable for home construction inside the growth boundary cost about $25,000. Today, a similar acre, if you can find it, would generally cost about $300,000.

Higher land prices are accompanied by increased regulation as Portland-area governments know that homebuyers have few alternatives if they don’t want to endure long commutes. In 1999, the Portland City Council approved a comprehensive design ordinance despite warnings from the Home Builders Association of Metropolitan Portland that the new rules would make housing more expensive.

Portland and other Oregon cities also have stiff system development charges that can add $20,000 to $40,000 to the cost of a new home. By comparison, similar charges in Houston, one of the nation’s most affordable housing markets, are less than $2,000 for homes of up to 3,000 square feet.

In 1990, the median value of owner-occupied homes in the Portland area was twice median family incomes, which was very affordable. Today, thanks to the growth boundary and regulation within the boundary, it is nearly five times median family incomes, which is very unaffordable.

These policies effectively discriminate against low-income blacks and other minorities; and under a 2015 Supreme Court ruling, they violate the Fair Housing Act just as much as if Portland put out a sign saying, “No blacks allowed.” The 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.

For example, requiring sewer hookups makes housing more expensive but has a legitimate goal of protecting public health. The goals of the urban growth boundary and densification, however, are either not legitimate or could be achieved without creating a housing crisis.

Boundary advocates often claim the growth boundary is needed to preserve farms and open space. But all of the urban developments in Oregon only occupy 1.5 percent of the state; and if there were no boundaries, it still would be less than 2 percent. Urbanization is no threat to Oregon farms, forests, or open space.

Advocates also claim that densification will lead people to drive less, saving energy and reducing greenhouse gas emissions. However, the effects of density on driving are tiny, especially when compared with the huge costs; and there are much better ways of saving energy and reducing emissions that don’t make housing unaffordable.

To end discrimination against blacks and other low-income minorities, the Oregon legislature must repeal the state’s land use laws that authorize growth boundaries and other regulations that make housing unaffordable.

Randal O’Toole is an adjunct scholar with Cascade Policy Institute, Oregon’s free market public policy research organization. He is the author of Cascade’s new report, Using Disparate Impact to Restore Housing Affordability and Property Rights.

By Randal O’Toole

A recent Supreme Court decision found that government policies that make housing expensive may violate fair housing laws. This decision could have a profound impact on Portland’s housing market.

Portland’s rapidly growing housing prices are a major hardship on newcomers, renters, and low-income families. Particularly hard hit are blacks, whose per capita incomes remain only about 60 percent of whites’.

The housing crisis has actually forced many blacks to move outside of the region. According to Census Bureau estimates, between 2010 and 2014, white numbers grew by 6.8 percent in the city of Portland and 6.5 percent in the Portland urban area, while black populations fell by 11.5 percent in the city and 5.3 percent in the urban area, thus reaffirming the claim that Portland is “the whitest city in America.”

Though many urban planners deny it, there is no doubt that the ultimate source of Portland’s housing crisis is the region’s urban growth boundary. Common sense says that restricting the supply of something for which demand is increasing will cause prices to go up. This is confirmed by economic studies from Harvard, the Federal Reserve Board, the University of California, and the University of Washington, among other places, concluding that strict land-use regulation is the main cause of unaffordable housing.

Other policies also make housing less affordable, including lengthy delays in the permitting process, onerous impact fees, and gaudy 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.

In 1857, Oregon’s first constitution banned blacks from moving to the state. This was rendered unconstitutional by the 14^th Amendment to the U.S. Constitution in 1868. But in June 2015, the Supreme Court ruled that governments that impose land-use restrictions that make housing less affordable can be just as guilty of violating the Fair Housing Act as if they put up a sign on their borders saying, “No blacks allowed.”

A rule written by the Department of Housing and Urban Development says that “land-use rules, ordinances, policies, or procedures” that make housing more expensive are allowable only if they are needed to achieve a “legitimate” goal and there were no other way of reaching that goal that wouldn’t increase housing costs. None of the reasons used to justify Oregon’s urban growth boundaries meet these tests.

For example, planning advocates say boundaries are needed to protect farms, forests, and open space. But more than 98 percent of Oregon is rural, and urbanization is no threat to the state’s agricultural or timber production.

Planning advocates also say boundaries help save energy and reduce greenhouse gas emissions. But research has shown that the effect of growth boundaries on these things is tiny, and there are far better ways of saving energy and reducing emissions that don’t make housing more expensive.

Many Portland planners argue that housing can be made more affordable by growing up, not out, that is, by increasing urban densities rather than allowing the region to “sprawl” across the landscape. But this has never worked anywhere.

Recent census data clearly reveal a strong correlation between urban densities and unaffordability. Moreover, fifty years of census data also show a strong correlation between increases in urban densities and declines in housing affordability.

For example, in 1969, the San Francisco Bay Area was very affordable, with median housing prices a little more than twice median family incomes. Since then, urban growth boundaries adopted by Bay Area counties have increased densities by 65 percent, while median housing prices have grown to seven times median family incomes.

When comparing urban areas across the country, it is clear that the key to housing affordability is to keep land outside of city limits relatively unregulated so that developers and builders can meet demand. For social justice, Oregon must repeal the laws allowing urban growth boundaries and regulation of unincorporated lands.

Randal O’Toole is an adjunct scholar with Cascade Policy Institute, Oregon’s free market public policy research organization. He is the author of Cascade’s new report, Using Disparate Impact to Restore Housing Affordability and Property Rights.

— Why You Should Vote Down Metro’s Natural Area Levy

By John A. Charles, Jr. and Allison Coleman

In 2006, the Metro Council submitted to the voters a general obligation bond measure in the amount of $227.4 million to fund natural area acquisition. The measure was approved.

In a little-noticed appendix to Resolution No. 06-367A, the Metro Council stated that greenway lands acquired with bond funds would be land-banked with limited maintenance beyond initial site stabilization and possible habitat restoration. The Council noted that it had the financial means to carry out this promise:

“Once the 2006 Natural Areas Bond Measure is approved by voters, Metro will commit existing excise taxes to this basic level of maintenance, with Metro having sufficient resources currently to manage the newly acquired properties in this manner for a period of approximately ten (10) years.”

If the phrase “existing excise taxes” seems puzzling, there’s a reason; almost no one remembers that in 2002, the Metro Council enacted a garbage tax of one dollar/ton for the specific purpose of funding operations and maintenance (O&M) of parks. That amount was raised to $2.50/ton in 2004. Between 2002 and 2015, the garbage tax brought in $46,789,044 for Metro parks.

Metro Solid Waste Excise Tax

Dedicated to natural area maintenance

Given that Metro raised all this money for parks, and promised no new taxes before 2016, why did Metro place an operating levy on the ballot in 2013 for parks maintenance (which passed); and why is Metro asking for voter approval of another $80 million parks levy in the upcoming November election? Where did the $46.8 million in garbage tax money go?

The answer can be found in a bait-and-switch ordinance adopted by Metro just a few weeks after the bond measure was referred out to voters in March 2006. The Council amended Metro Code Section 7.01.023 to retain the $2.50/ton excise tax, but “undedicate” its use so that revenues would be swept into the Metro General Fund.

Since 2006, regional taxpayers have paid more than $32 million in garbage taxes that should have gone to parks O&M, but instead went to other purposes.

Instead of owning up to this chicanery and restoring the garbage tax as a dedicated revenue source, Metro officials continue to make the case for a new property tax. In a 2011 publication, Metro claimed, “…the existing financial model is not sustainable. Metro’s portfolio of land continues to grow, while the general fund resources needed to support it are decreasing.”

In a more recent document, Metro asserted, “In Metro’s general fund, which pays for many primary programs and support services, costs continue to rise faster than revenues.”

Both of these claims are false. In 2011 Metro was already taking in more than $3 million annually in garbage tax revenue for parks. By the end of 2015 it was nearly $4 million.

Meanwhile, Metro was swimming in a sea of new revenue. The Metro Auditor found that during the 10-year period of 2003-2013, total annual revenue went up 22% in real terms, while total expenses went up only 16%. Annual revenue per capita for the Metro region went up 7%; expenses per capita increased by only 4%.

Metro Councilors now state that if voters refuse to approve a new tax levy in November, the agency will “have to ramp back pretty much everywhere.”

We’ve heard the scare stories before, but it’s time to call Metro’s bluff. Voters should reject the Metro tax levy (Measure 26-178 on your ballot) and demand that all money from the $2.50/ton garbage tax be rededicated to parks maintenance, as promised 14 years ago.

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

Trying to sell voters on the largest tax increase in Oregon history, Measure 97 proponents claim that “Oregon ranks dead last in corporate taxes.” But the nation’s leading independent tax policy research organization, The Tax Foundation, says this claim is misleading. It looked at three ways to rate corporate taxes and found:

• Oregon’s top marginal corporate income tax rate is the 18th highest in the nation.
• On a revenue per capita basis, Oregon’s corporate income tax is the 28th highest.
• The Foundation’s State Business Tax Climate Index ranks Oregon 37th nationally for overall corporate income tax structure.

The dead last corporate tax claim relies on two national reports (AEG, COST) that look at total business tax burdens, not just the tax burdens of large C corporations; the only entities directly targeted by Measure 97. Even so, both these reports make clear that they rate Oregon’s business tax burden low not because corporate taxes are low, but rather because Oregon doesn’t have a sales tax.

As the COST report notes, “If sales tax revenue is excluded…[Oregon] moves from the lowest…to the 20th-lowest rate.”

Misleading voters about Oregon’s corporate tax structure may simply be a tactic to keep us from focusing on the fact that Measure 97 is really a hidden sales tax on steroids that will hit every Oregonian. When we realize that, Measure 97 should suffer the same fate as every other statewide sales tax measure – defeat.

Read much more about Measure 97 and why you should vote against it on
Cascade’s Measure 97 webpage.

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. 

How many attorneys do you know who make their living defending liberty? Well, 43 attorneys work full-time at the national public interest law firm Institute for Justice. They protect school choice, economic liberty, the First Amendment, and private property. Supported by generous donors, the Institute for Justice never charges its clients.

Founded 25 years ago, the Institute for Justice has litigated over 200 cases, including five before the U.S. Supreme Court, where it won four times. The fifth case led to the infamous Kelo decision, where the Court unfortunately seemed to forget that private property cannot be taken through eminent domain for a “public purpose,” but only for a “public use.”

This year, Arizona Governor Doug Ducey appointed Institute for Justice co-founder Clint Bolick to the state Supreme Court, saying that “Clint is nationally renowned and respected as a constitutional law scholar and as a champion of liberty.”

It is fitting on this 25^th Anniversary of Clint Bolick’s Institute for Justice that Oregon’s free-market think tank Cascade Policy Institute has chosen him as the Keynote Speaker at our 25^th Anniversary Dinner on October 20. There, Justice Bolick will talk about how important defending personal and economic liberty has been—and still is in his new role on the Court. You won’t want to miss his inspiring talk.

For full details and to RSVP, go to CascadePolicy.org/25.

“The greatest thing I ever did with my life.”

The largest sea evacuation in history took place on September 11, 2001, when nearly 500,000 civilians were rescued from Manhattan by boat in less than nine hours. By comparison, during World War II, the evacuation after the Battle of Dunkirk saved 339,000 British and French soldiers over the course of nine days.

Many of the rescue boats were private watercraft whose owners volunteered to ferry thousands to safety.

“No training, just people doing what they had to do that day,” said a man who worked on one of the boats.

“Average people, they stepped up when they needed to,” said another.

This video narrated by Tom Hanks tells their unforgettable, moving story.

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

Topic:  Measure 97 – A Hidden Sales Tax on Steroids

Description:

Measure 97 on Oregon’s November 2016 ballot would impose the biggest tax increase in Oregon history: a sales tax on steroids, hidden behind the facade of being a $3 billion annual Gross Receipts Tax on business. It will raise taxes by $600 per capita.

Contrary to claims that it is only a tax on big corporations, the nonpartisan Legislative Revenue Office found that it will act largely as a consumption tax on Oregonians, with lower-income households being hurt the most. Prior to receiving its ballot measure number, Measure 97 was known as Initiative Petition 28.

Steve Buckstein will explain what the measure really does and what it means 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.

Please click here to reserve your free tickets.

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

Every July much is said about the blessings of liberty, the meaning of the American Experiment, and the price of freedom. But this year we also mark the 240^th anniversary of the signing of the Declaration of Independence and, on August 10, of the arrival of the news of this world-altering decision in London.

Benjamin Franklin is said to have advised his fellow patriots of the potential consequences of challenging the British Empire and its king: “We must all hang together, or most assuredly we shall all hang separately.” While each of the 56 British subjects who affixed their names to the Declaration risked life, fortune, and sacred honor, none may have risked as much as the delegate from Maryland, Charles Carroll of Carrollton.

At the time of the signing, Charles Carroll was the wealthiest man in the American colonies. The risk he took in siding with the cause of independence was acknowledged to be substantial, both in material terms and in his social standing as one of the most prominent citizens of Maryland. In his book, Charles Carroll of Carrollton: Faithful Revolutionary, biographer Scott McDermott recounts that when John Hancock asked Carroll to sign―and Carroll responded, “Most willingly”―a bystander commented, “There go a few millions.”

And just to make sure that everyone, including King George III, knew which of Maryland’s many Charles Carrolls was the signer, he proudly added the words “of Carrollton” (his Frederick County estate). Thus, history remembers him as “Charles Carroll of Carrollton.”

Carroll is unique among the signers for more than just his wealth. He was, in fact, ineligible to vote or to hold public office when he was chosen by the Maryland Convention as a delegate to Congress to approve the Declaration on its behalf. Maryland’s early Toleration Act granting religious freedom had been overturned in 1692, so Catholics could not vote, hold public office, worship in public, or freely educate their children in their faith.

Carroll’s participation in the War of Independence was motivated by his firm belief in natural law and rights, government by consent of the citizens, and freedom of religion. The Catholic minority in the British American colonies recognized in the cause of liberty the path to equality under law.

Carroll strongly supported and collaborated with George Washington during the war, influenced the crafting of the Maryland and the U.S. Constitutions, and served as the first senator from the new state of Maryland. His public life was long, and he was a giant figure through the early decades of the 19^th century. Looked up to as an elder statesman and symbol of national unity, at his death in 1832, the Baltimore American called him “the last of the Romans”―a reference to the classical prototype of the generation who built the new but maturing Republic.

Charles Carroll’s brief testament to the America he would leave behind was written on a parchment copy of the Declaration, dated July 4, 1826. He wrote in the style of a man educated in the 18^th century, but behind the formality is a stark humility and a simple message intended for today:

“Grateful to Almighty God for the blessing which, through Jesus Christ our Lord, he has conferred upon my beloved country, in her emancipation, and upon myself, in permitting me, under circumstances of mercy,…to survive the fiftieth year of American Independence, and certifying by my present signature my approbation of the Declaration of Independence adopted by Congress…, and of which I am now the last surviving signer, I do hereby recommend to the present and future generations the principles of that important document as the best earthly inheritance their ancestors could bequeath to them, and pray that the civil and religious liberties they have secured to my country may be perpetuated to the remotest posterity and extended to the whole family of man.”

As we celebrate many historic anniversaries of our freedom this year, and the legacy of each of America’s founders, let us also “remember Carroll’s sacred trust…and all [who slumber] with the just.”

Every July much is said about the blessings of liberty, the meaning of the American Experiment, and the price of freedom. But this year we also mark the 240^th anniversary of the signing of the Declaration of Independence and, on August 10, of the arrival of the news of this world-altering decision in London.

Benjamin Franklin is said to have advised his fellow patriots of the potential consequences of challenging the British Empire and its king: “We must all hang together, or most assuredly we shall all hang separately.” While each of the 56 British subjects who affixed their names to the Declaration risked life, fortune, and sacred honor, none may have risked as much as the delegate from Maryland, Charles Carroll of Carrollton.

At the time of the signing, Charles Carroll was the wealthiest man in the American colonies. The risk he took in siding with the cause of independence was acknowledged to be substantial, both in material terms and in his social standing as one of the most prominent citizens of Maryland. In his book, Charles Carroll of Carrollton: Faithful Revolutionary, biographer Scott McDermott recounts that when John Hancock asked Carroll to sign―and Carroll responded, “Most willingly”―a bystander commented, “There go a few millions.”

And just to make sure that everyone, including King George III, knew which of Maryland’s many Charles Carrolls was the signer, he proudly added the words “of Carrollton” (his Frederick County estate). Thus, history remembers him as “Charles Carroll of Carrollton.”

Carroll is unique among the signers for more than just his wealth. He was, in fact, ineligible to vote or to hold public office when he was chosen by the Maryland Convention as a delegate to Congress to approve the Declaration on its behalf. Maryland’s early Toleration Act granting religious freedom had been overturned in 1692, so Catholics could not vote, hold public office, worship in public, or freely educate their children in their faith.

Carroll’s participation in the War of Independence was motivated by his firm belief in natural law and rights, government by consent of the citizens, and freedom of religion. The Catholic minority in the British American colonies recognized in the cause of liberty the path to equality under law.

Carroll strongly supported and collaborated with George Washington during the war, influenced the crafting of the Maryland and the U.S. Constitutions, and served as the first senator from the new state of Maryland. His public life was long, and he was a giant figure through the early decades of the 19^th century. Looked up to as an elder statesman and symbol of national unity, at his death in 1832, the Baltimore American called him “the last of the Romans”―a reference to the classical prototype of the generation who built the new but maturing Republic.

Charles Carroll’s brief testament to the America he would leave behind was written on a parchment copy of the Declaration, dated July 4, 1826. He wrote in the style of a man educated in the 18^th century, but behind the formality is a stark humility and a simple message intended for today:

“Grateful to Almighty God for the blessing which, through Jesus Christ our Lord, he has conferred upon my beloved country, in her emancipation, and upon myself, in permitting me, under circumstances of mercy,…to survive the fiftieth year of American Independence, and certifying by my present signature my approbation of the Declaration of Independence adopted by Congress…, and of which I am now the last surviving signer, I do hereby recommend to the present and future generations the principles of that important document as the best earthly inheritance their ancestors could bequeath to them, and pray that the civil and religious liberties they have secured to my country may be perpetuated to the remotest posterity and extended to the whole family of man.”

As we celebrate many historic anniversaries of our freedom this year, and the legacy of each of America’s founders, let us also “remember Carroll’s sacred trust…and all [who slumber] with the just.”

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.

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

Please 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.

Platinum Sponsors

Bryan Bickmore

The Bryan Family

John and Marlis Carson

Gold Sponsor

Silver Sponsors

Mr. and Mrs. Lloyd Babler

Leslie Spencer and Jim Huffman

Thornton Family Fund

Bronze Sponsors

What may be the funniest movie about personal initiative and limited government? Look no further than Follow That Dream (1962), a rollicking pro-freedom comedy starring Arthur O’Connell and Elvis Presley.

Elvis plays Toby Kwimper, the young adult son in a family that gets just about every possible government entitlement benefit; and his dad (O’Connell) is proud of it. When overbearing bureaucrats make them angry, what does the Kwimper family do? They swear off their benefit checks, build a homestead on an empty beach in Florida, and start a small business. With several subplots, Follow That Dream shows off Elvis’s deadpan comic ability. He outwits the mafia, cunning social workers, and (most) adolescent girls with equal aplomb.

Suitable for family viewing, the movie delivers a victory for ordinary folks over the powers that be. It’s full of jokes about welfare-state attitudes, zoning laws, and government “looking out for you.” In the climactic courtroom scene, a judge praises the American spirit of enterprise, initiative, and voluntary community.

As Pop Kwimper puts it, sometimes there just gets to be too much government, and a person wants to move someplace without all those regulations. If you’ve ever felt that way after a frustrating encounter with bureaucracy, Follow That Dream will have you in stitches.

Your average high school students may not be able to explain a fictional company’s dividends to a lecture hall full of adults from the business world. But after five days at Young Entrepreneurs Business Week, they could.

YEBW is a nonprofit annual summer camp founded in 2005 by young Oregon entrepreneurs Nick and Maurissa Fisher, hosted on the campuses of the University of Portland, Oregon State University, and University of Oregon. From 75 students on one campus during its first year, YEBW has grown to more than 400 participants on three campuses in 2016.

YEBW’s founders shared a concern that young people of all educational and economic backgrounds often leave high school with no practical business knowledge, hindering their ability to innovate, create, and produce the kinds of goods and services key to Oregon communities’ growth and success. They sought to fill the gap by drawing together curriculum developers, business professionals, educators, and successful youth-focused program leaders to launch an innovative educational program for high school students.

Participants spend one week on the UP, OSU, or UO campus and are exposed to a challenging curriculum designed to teach students that business can be fun and exciting, not to mention understandable and interesting. Students leave the camp possessing relevant, basic financial and business skills to apply to whatever goals they set for themselves. YEBW board chair Jeff Gaus says, “For some, YEBW is that lightbulb moment when they realize who they are and what they want to do in life.”

During the program, students are divided into student-led companies, guided by volunteers from the business community who share their knowledge and expertise throughout the week. The curriculum provides students with the financial literacy, business fundamentals, and confidence they need to be self-sufficient and successful.

During the first-year program, Business Week, students form mock companies where they create management teams, develop mission statements, invent a product, and conduct actual operation of their own business by competing in business simulations. Designed to broaden the practical skill sets of each student, the program incorporates professional speakers and other interactive learning exercises like mock interviews and networking events.

For returning students, Investing Week gives students the opportunity to learn about basic investment vehicles, the principles of evaluating a potential investment, and understanding the personal and business effects of the financial market system. Entrepreneur Week provides the chance to learn what it is like to start and run a business. Students prepare a full business plan, run an on-campus business as a team, and present their individual work to a panel of judges acting as potential company “investors.”

It’s not all “head knowledge,” either. YEBW fosters professional interpersonal skills. Students learn the art of the handshake, eye contact, introductions, proper business and evening attire, and table manners, so they can navigate job interviews and networking events with confidence.

Young Entrepreneurs Business Week teaches teens that “there is a business side to every occupation.” Likewise, every Oregon occupation would benefit from having more business-savvy graduates of YEBW. The young people who attend the first-year program mostly come with no prior business knowledge or experience, but they leave with well-earned confidence in their abilities and potential as tomorrow’s successful professional adults. A nonprofit program like YEBW, spearheaded by enthusiastic young business leaders, is truly a bright light for the future of the entrepreneurial spirit in Oregon.

If you are looking for an uplifting summer movie for the teenage girls in your life, Ever After: A Cinderella Story (1998) provides a thought-provoking twist on the classic fairytale. While director Andy Tennant’s plot follows the traditional story, Ever After also explores themes of family loyalty, economic interdependence, social justice, and the rewards of hard work.

In a refreshing departure from predictable Hollywood storylines, Drew Barrymore’s tough and brave Cinderella (“Danielle”) combines a loving respect for her family’s heritage with a can-do approach to solving problems. A hard-working, educated girl―homeschooled by her father―she wants more than anything to restore the just order of her “economy” (in the ancient Greek sense of “managing the home”).

Orphaned young, Danielle does not dream of escaping work. Rather, she defines “happily ever after” as the restoration of her family’s estate to the prosperity it enjoyed under her parents. Like them, she takes pride in the farm and regrets it can’t reach its potential under her stepmother (Anjelica Huston), who has no interest in running what is essentially the family business. Danielle tries to be a good steward of the patrimony she should have inherited, even though her freedom to act independently is limited.

In Danielle’s world, the feudal agrarian society of the Middle Ages begins to meet the mercantile economy of the Renaissance. Forward-thinking Danielle masters the business acumen needed to keep the estate financially afloat; but her primary motivations are rooted in the medieval values of family loyalty, mutual obligation to others, and fulfilling one’s duty. Danielle considers “family” to include servants with multigenerational ties to the household. She wants to succeed for the sake of those whose livelihoods depend on her, as well as for herself.

An admirer of the English humanist Sir Thomas More, Danielle’s father bequeathed to her an inquiring mind and a social conscience. While Danielle’s Utopia-inspired prescriptions for the improvement of society have a fairytale simplicity, her instincts are basically good. She lives the Golden Rule with humility and charm. Her interactions with others show she believes in behaving with dignity and respect toward all whose various roles in society together make the world go ’round.

Of course, Ever After is a fairytale, so while it’s set in 16^th-century France, the film isn’t without anachronisms and fictionalized historical events. (Obviously, the son of King Francis I didn’t marry a girl named Danielle, sorry to say.) But if you are looking for a delightful story about filial love, the blessing of honest work, and the ability of virtue to attract the right man, Ever After offers positive lessons, while entertaining the whole family.