Month: October 2011

The President’s Tax Proposal Would Cripple Charities

President Obama proposed once again that Congress reduce the federal itemized tax deduction for charitable contributions. He argues that people don’t give to charity to get a tax deduction and increased revenue could pay for other things (in the latest instance, his Jobs Act).

“I’m assuming that that shouldn’t be a determining factor as to whether you’re giving that $100 to the homeless shelter down the street,” the president said in 2009.

A tax deduction is not the motivating factor for most people who give. But lower taxes are an empowering factor. How much you give has a lot to do with how much you can give. Charitable giving is discretionary. If you pay more in taxes, it stands to reason that that money will be made up somewhere else in your budget.

Brian Gallagher, president of United Way Worldwide, notes that Obama’s proposal would reduce charitable giving by $2.9 to $5.6 billion per year, according to one study.

“That equates to eliminating all of the private donations each year to the Red Cross, Goodwill, the YMCA, Habitat for Humanity, the Boys and Girls Clubs, Catholic Charities, and the American Cancer Society combined,” Gallagher said.

State budgets for social services and safety nets are stretched, charities are struggling, and needs are increasing. The Senate was wise to reject using the charitable tax deduction as a chance to raise taxes on Americans who are voluntarily and generously stepping up to meet those needs during a recession.

 

(Disclosure: Cascade Policy Institute is a charitable corporation that benefits from donors being able to deduct their contributions.)

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Report on Stabilizing Multnomah County Library Funding Released

FOR IMMEDIATE RELEASE

October 25, 2011

Contact:

John A. Charles, Jr.
President & CEO
Cascade Policy Institute
Office Phone: 503-242-0900
Cell Phone: 503-459-3727
E-Mail: john@cascadepolicy.org

Cascade Policy Institute Releases Report on Stabilizing Multnomah County Library Funding

Portland, OR – When Jackson County, Oregon faced millions of dollars in budget shortfalls in 2006, the county eliminated funding for public libraries and closed them. Shortly afterward, the county decided to reopen the libraries―accepting competitive bids for operations. The winning bid―by a Maryland-based firm―saved Jackson County several million dollars per year.

Now Multnomah County Library is at a crossroads in the way its future revenue will be generated. The County Commission is considering the formation of a library tax district. This would make the library an independent taxing entity.

However, a library tax district is not the only way to stabilize the budget. Cascade Policy Institute’s new report, Checking Out the Options: Creating stable funding and superior service at the Multnomah County Library, by Christopher Robinson, presents several ideas for funding libraries without raising taxes.

Other options include contracting out library operations as Jackson County did or generating revenue through small user fees rather than generalized taxation. Additionally, Multnomah County could reduce the operations cost to bring the system in line with comparable cities such as Denver and Seattle.

Click here to download the full report.

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About Cascade Policy Institute

Founded in 1991, Cascade Policy Institute is Oregon’s premier policy research center. Cascade’s mission is to explore and promote public policy alternatives that foster individual liberty, personal responsibility and economic opportunity. To that end, the Institute publishes policy studies, provides public speakers, organizes community forums and sponsors educational programs.

For more information or to schedule an interview, contact John A. Charles, Jr. at 503-459-3727 or john@cascadepolicy.org.

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Cascade Update Fall 2011

The fall edition of Cascade Update is here! Read about Oregon’s “Year of School Choice,” “Right to Work” laws, Cascade’s 20th Anniversary, and more. If you didn’t receive it in your mailbox, click here to read the pdf version.

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When Does Theft Turn into Taxation?

The Occupy Wall Street/Occupy Portland crowds are demanding that “rich people” pay their “fair share” of taxes. While it’s arguable that high-income taxpayers are paying well beyond their “fair share” already, perhaps we should take a step back and look at taxation in a different light.

I recently noted that a Portland City Hall staffer lists as his favorite quote a statement made by Atlas Shrugged author Ayn Rand:

“Everyone has the right to make his own decisions, but none has the right to force his decisions on others.”

So, do you have the right to take your neighbor’s car just because you decide that you want to drive it? No, most of us would call that theft.

What if you and three of your friends decide to take your neighbor’s car and drive it? Is that OK?

What if you and those same three friends decide to take your neighbor’s car and give it to a poor person who has no transportation? Does your noble intent make your actions OK?

What if you and three thousand people decide to take the car and give it to that poor person? How about thirty thousand people voting to making that decision?

So, at what point does the immoral act of theft become the moral act of taxation?

The occupiers, and all of us, might want to think about such questions before demanding that anyone give up something they own without their consent.

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PRESS RELEASE: National digital report card finds Oregon needs more online learning opportunities

FOR IMMEDIATE RELEASE

October 13, 2011

Contact:

Christina Martin
Policy Analyst, School Choice Project Director
Cascade Policy Institute
Phone: (503) 242-0900
E-Mail: christina@cascadepolicy.org

National digital report card finds Oregon needs more online learning opportunities

PORTLAND, Ore.- Today, Digital Learning Now! released the first Nation’s Digital Learning Report Card along with the Roadmap for Reform. Cascade Policy Institute joins those calling for policymakers to take bold action to bring education into the 21st century.

“Kids today learn how to use a computer or a video game system before they can even read or write,” said Christina Martin, policy analyst at the Cascade Policy Institute. “But the sad fact is that not even 10 percent of schools take advantage of this kind of technology in education.”

The new report provides a comprehensive guide to help governors, state education chiefs, state lawmakers and policymakers adopt bold reforms to transform education for the digital age.

“Digital learning provides unprecedented opportunity for delivering rigorous and personalized educational material,” said Martin. “With this report, policymakers across the nation will be better able to see how to incorporate this technology into their schools.”

Among the elements of high quality learning, Oregon received higher marks for its strong full-time online programs, primarily thanks to its online charter schools, and a 2011 bill that ended several enrollment restrictions.

However, it received many low marks for lacking opportunities for students to take online classes on a course-by-course basis. Many students across the state still do not have this opportunity.

“Cascade Policy Institute strongly supports increasing educational options for kids. Online learning is one very important option where we have seen great inroads. But there is still more work to be done, particularly to increase access for part-time online programs and blended learning,” said Steve Buckstein, who founded Cascade Policy Institute in 1991 to advocate for more school choice for Oregon’s students.

Released this afternoon at the National Summit on Education Reform 2011, held by the Foundation for Excellence in Education, the Roadmap for Reform provides the nuts-and-bolts policies that states need to transition to a student-centered education that prepares students with the knowledge and skills to succeed in college and careers.  Each state also received a report card that assesses current laws and policies and their alignment to the 10 Elements of High Quality Digital Learning.

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About Cascade Policy Institute

Founded in 1991, Cascade Policy Institute is Oregon’s premier policy research center. Cascade’s mission is to explore and promote public policy alternatives that foster individual liberty, personal responsibility and economic opportunity. To that end, the Institute publishes policy studies, provides public speakers, organizes community forums and sponsors educational programs.

For more information or to schedule an interview, contact Christina Martin at 503-242-0900 or christina@cascadepolicy.org.

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The Battle of the Book Worms: Who Should Pay for “Free” Public Libraries?

By Christopher Robinson, John A. Charles Jr., and Kathryn Hickok

When Jackson County, Oregon faced millions of dollars in budget shortfalls in 2006, the county eliminated funding for public libraries and closed them. Shortly afterward, the county decided to reopen the libraries―accepting competitive bids for operations.

Now Multnomah County Library is at a crossroads in the way its future revenue will be generated. The County Commissioners want to create a Multnomah County Library tax district. This would make the library an independent taxing entity.

A library tax district is not the only way to stabilize the budget. Contracting out library operations like Jackson County could reduce costs while improving services. It is also possible to generate revenue through small user fees rather than generalized taxation.

While many library purists argue that user fees conflict with the concept of “free” public libraries, it is important to remember that the service is not actually free, and property-tax-based levies hit lower-income people the hardest. Some group of people always pays, so the question is which group and on what basis? Small user fees could give library managers strong incentives to provide more services highly valued by patrons, generating more revenue. That would make library patrons and managers better off.

Multnomah County Library is a valuable community asset. Budget constraints do not have to mean reduced services. Competitive bidding and user fees could reduce costs and stabilize funding for the library system without raising taxes on residents.


Christopher Robinson is a research associate at Cascade Policy Institute, Oregon’s free market public policy research center. John A. Charles, Jr. is President and Kathryn Hickok is Publications Director at Cascade.

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Oregon's $392 Million Unemployment Mistake

According to the U.S. Department of Labor, almost $19 billion in state unemployment benefits were paid in error over the last three years. Oregon paid an estimated $392 million in error ― about 12.2% of all state unemployment benefits paid during that period.

The Labor Department’s report only examined the mispayments within state programs, which usually last up to 26 weeks. These figures do not include the federal unemployment benefit extensions that allow many workers to claim up to 99 weeks (almost two years) of unemployment benefits.

While Oregon’s Employment Department recovers some mispayments, quarterly statements show that the majority is not recovered. The current federal-state system provides little incentive to state agencies to reduce administrative costs, fraudulent claims, or other payments in error.

Unemployment insurance is not unique in its problems. Reports abound of fraud, waste, and abuse in most areas of government. Consider the $100 billion lost annually in Medicare and Medicaid fraud, the $600 million paid to deceased federal employees, and the expensive Solyndra scandal. No wonder a recent Gallup poll showed Americans believe that government wastes half of all tax dollars.

Government is a poor substitute for personal accountability. Individuals provide far better accountability to each other and to themselves than government programs can. That’s why markets bring us amazing and affordable products while government brings us mediocre to poor programs and high costs. Until we recognize that and alter government accordingly, we will continue to waste hard-earned money on programs with big costs and little payoff.

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“Real” Accountability for Charter Prep Should Extend to the Whole System

With the recent failure of the Portland-based REAL Prep Charter Academy to open its doors, even after spending $500,000 of federal grant development money, parents and taxpayers are demanding more “accountability” for Oregon’s charter schools. But who should hold these schools accountable?

Consider the case of the Willamette Education Service District (WESD), a public entity which provides services like special education to school districts. Despite “oversight” by the state and a board of governors, clear and compelling reports of misconduct delivered by a reputable ESD leader were ignored for years.

As far back as 2004, a neighboring ESD leader, Bob Nelson, alerted the Oregon Department of Education, the Secretary of State’s Office, state lawmakers, and local education officials to no avail. It took media intervention to make a real difference. A 16-month Statesman Journal investigation revealed mismanagement including awarding “no-bid contracts, questionable property deals and supposedly self-supporting ventures that failed, lost money or drew formal complaints and lawsuits.” These mistakes cost taxpayers millions.

Regarding the WESD scandal, the Statesman Journal concluded, “The problems have been compounded during the past 10 years by lax board and state oversight and quid pro quo arrangements with state officials who were operating within a similar culture of mismanagement — a culture that continues today. And in spite of recent improvements, some problems continue unabated.”

Problems with oversight are not limited to just the Willamette ESD episode. A cursory glance reveals a history of management or ethics problems in many school districts across the state. Even in the absence of shady practices, the fact that we are spending on average more than $11,000 per pupil and getting mediocre to poor results (Education Week ranks Oregon 43rd), should clearly indicate lack of accountability and poor management in the system. Within Portland Public Schools alone, mismanagement problems are not limited to the REAL Prep charter scenario, but extend to chronically failing schools (like Jefferson High, which reportedly moved a principal last year due to mismanaging funds), failed property management (consider Whitaker Junior High for an utter waste of resources), and a dismal on-time graduation rate of 53%.

It is tempting to imagine some dream team of “smart people” who can oversee operations of schools and ensure they operate efficiently to provide the best education possible with the public funding they have. But such dreams are just that: imaginary. In the real world, government oversight rarely ensures efficiency, thrift, or effectiveness.

In contrast, in the business world, financial mismanagement can persist only for a limited time before the operation goes out of business. That is exactly what is happening with REAL Prep. REAL Prep founders are facing the consequences of poor planning: Their dream of ensuring future income working in an industry they loved is gone, with little to show for it other than humiliation.

Wasting 500,000 tax dollars is terrible. But because charter schools face more realistic financial demands (demands from which regular public schools are frequently sheltered), poorly managed schools can’t operate indefinitely. An ineffective, inefficient, or unwanted public charter school either must shape up or close its doors. That is not a tragedy, in the grand scheme. It is an important form of accountability, one from which regular public schools have been sheltered for decades.

Such protection for public schools has not been a boon. Rather, it has enabled the sort of culture which allowed the WESD to waste millions, unimpeded for years. The same shelter keeps chronically underperforming schools from improving, and allows districts to continue sick practices like “passing the trash” (transferring the worst teachers and administrators to other positions or schools rather than firing them).

The key solution for the education system is the same as that for the WESD. Legislators passed a law this year that allows some districts to opt out of ESD services and to keep most of the dollars that otherwise would be given to an ESD. That means districts can hold WESD accountable because now it has to earn their patronage.

Likewise, districts and schools should be held accountable by forcing them to earn student attendance. This can be best accomplished by increasing students’ other educational options through open enrollment in public schools, more charter schools, and K-12 education tax credits and opportunity scholarships that allow more students to attend private schools.

As for REAL Prep, more accountability is the answer to prevent future failures from wasting tax dollars. But the accountability should be parents, not politics.

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Unemployment Accounts: A Better Way to Protect the Unemployed

Cascade is hosting this special invite-only event. If you have not received an invite yet, please contact Christina Martin at christina@cascadepolicy.org to request one. We chose to limit the numbers of attendees for the event in order to foster a better environment for discussion, but we also welcome your enthusiasm to participate and hope to allow as many interested parties, as is practical, to attend.

On October 25, while you enjoy a delicious lunch, international experts on unemployment insurance will give a presentation on unemployment insurance reform.

These economists will explain some of the expensive problems with our current unemployment insurance program and discuss what their research reveals about how we could improve it to help workers keep more of their hard-earned money while actually closing gaping holes in the safety-net.

Their conclusion compliments decades of research that show how personal savings is the key to getting ahead and ending cycles of poverty.

Come hear Stéphane Pallage and Christian Zimmermann propose a way forward for Oregon’s workers and our unemployment insurance system.

This event is INVITE only. So please contact Christina Martin at christina@cascadepolicy.org if you would like to request an invitation.

Three course luncheon included – salad, chicken entrée, dessert, plus beverage.

About the Speakers:

Stéphane Pallage is Professor and Chairman of the Department of Economics at the University of Quebec in Montreal (UQAM). He holds a Ph.D. in Economics from Carnegie Mellon’s Tepper School of Business. He has written extensively on the optimal design of unemployment insurance programs in many peer-reviewed academic journals.

Christian Zimmermann is Assistant Vice President at the Federal Reserve Bank of St. Louis. He holds a Ph.D. in Economics from Carnegie Mellon University. He previously worked at the University of Connecticut and the Bank of Canada. He has published articles in numerous peer-reviewed academic journals.

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