Month: June 2013

The Opportunity to Protect Our Rights and Our Children

By William Newell

Medical technology has miraculously saved millions of lives. Our constitutionally limited, representative government is just as miraculous. Both are designed to improve the human condition. Sometimes though medicine and government clash. The ongoing debate in Oregon concerning religious exemptions from vaccinations exemplifies this conflict.

Over 90 percent of Oregon parents currently vaccinate their children, but the state legislature still passed Senate Bill 132 which requires proof that parents seeking a religious exemption have been notified of the benefits and risks of vaccines. The legislation targets religious individuals because of their beliefs and burdens those individuals with complying to state desires. The Constitution of Oregon makes clear the state’s duty to protect religious liberty under Article 1, Section 3, which reads: “no law shall in any case whatever control the free exercise, and enjoyment of religeous (sic) opinions, or interfere with the rights of conscience.”

Additionally, placing informed consent stipulations on religious parents serves little purpose because  such information is widely accessible from doctors and government websites. Mandating parents watch a video or see a doctor is not going to change people’s minds. While vaccinating children is worthwhile, this legislation will not be very effective and undermines our precious constitutional rights.

William Newell is a research associate at Cascade Policy Institute, Oregon’s free-market think tank.

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More than thirty percent of Oregon union households want out

Right to Work policies in 24 states allow workers the freedom to join or not join a union. Oregon, however, is one of the 26 states without such employee freedom. Here, if a workplace is organized by a union, workers must either join the union and pay dues, or opt out of membership but still pay what are called “fair share” dues, supposedly to cover the cost of negotiating and upholding their employment contracts.

Why might workers like the opportunity to opt out of union membership? Some believe they can make better use of their own money rather than giving it to a union. Others “vote with their feet” against what they perceive to be poor union service or negotiating results. Still others leave because they oppose their unions’ political positions. They simply don’t want to support any organization that doesn’t share their political beliefs, whatever those might be.

Last year, Cascade Policy Institute conducted ground-breaking research on the economic benefits of allowing Oregon workers to opt out of union membership and “fair share” dues. Our February 2012 report concluded that, upon enactment of a full Right to Work policy, Oregon would have:

  • 50,000 more people working in five years; 110,000 more working in ten years.
  • $2.7 billion more in wage and salary income in five years; $7.0 billion more in ten years.
  • 14 percent more taxpaying families per year moving here from non-right-to-work states.

All these economic benefits would occur without spending one dime of taxpayer money.

So, how many workers might completely opt out of their union if they could? To answer that question, beginning in mid-May 2013 a coalition of non-profit groups across the country conducted a series of union household Google Consumer Surveys, including some 500 valid respondents throughout Oregon. Survey results were released at the beginning of National Employee Freedom Week (June 23-29).

All survey respondents were asked:

If it were possible to opt out of membership in a labor union
without losing your job or any other penalty, would you do it?”

Nationally, 33.4% of respondents answered Yes.

In Oregon, 31.2% of respondents answered Yes.

These results are bolstered by the fact that last year only 70% of workers in bargaining units represented by Oregon’s largest public employee union chose to be union members. According to SEIU’s Local 503 annual report submitted to the federal Department of Labor, the other 30% had opted out of membership but were still required to pay “fair share” dues. If Oregon were a Right to Work state, these workers could opt out entirely. Soon, they may be able to do just that.

A citizens’ initiative known as IP9 is awaiting final ballot title approval from the Oregon Supreme Court before collecting signatures for placement on the November 2014 ballot. It would allow Oregon public employees to opt out of membership and any dues payments to a union they don’t wish to support.

The Right to Work without third-party interference is more than an economic issue; it is a profoundly moral one as well. In America, no one should be compelled to join a union or to pay union dues in order to hold a job. Hopefully, before long Oregon will grant true employee freedom to every public and private worker in the state.

Steve Buckstein is the founder of Cascade Policy Institute, a free-market think tank based in Portland.

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Testimony on Beaverton Economic Development Project Grant

Cascade President and CEO John A. Charles, Jr. testified regarding a proposed economic development grant in Beaverton before the Oregon Transportation Commission.

Testimony of John A. Charles, Jr.

President & CEO

Before the Oregon Transportation Commission

June 19, 2013

My name is John Charles and I am President of Cascade Policy Institute. Cascade is a non-partisan policy research center, working to promote economic opportunity, individual liberty, and personal responsibility.

I have analyzed the staff report for Agenda item C1, along with related documents provided by Metro and the City of Beaverton. I have also visited the .8 mile stretch of HW 8 that is being considered for a retrofit, and walked the area on both sides of the highway. In addition, I have conducted extensive field research since 1996 on the nearby Beaverton Round light rail station.

I urge the Commission to reject the IOF grant request, for the following reasons:

 

This is not an economic development project. The primary objective of project advocates is to lower the design speed on HW 8 from 45 MPH to 30 MPH. There is no evidence that such action would incentivize additional capital investment in the region. Indeed, the sad experience of the nearby Beaverton Round district suggests that just the opposite will occur. Deliberately slowing traffic and encouraging more density in the region will make it less attractive.

The series of photos below are instructive on this point. Notwithstanding the seductive architectural rendering that advertised the future project back in 1996 – in which many pedestrians were envisioned relaxing near light rail and no parking was necessary – the reality proved to be quite different. The project went bankrupt twice. Retailers have struggled. And oddly enough, the site is covered with parking, including surface lots, gated private parking, and the tallest single building in Beaverton – a parking garage.

Unfortunately, local planners have learned nothing from the experience. On two different occasions, Metro appropriated $2 million of public money to Beaverton so that the adjacent Westgate theatre could be purchased and bulldozed. The apparent goal was to build more “transit-oriented development” that would improve the neighborhood. The site is still vacant after nearly a decade.

 

The proposed “tie-ins” of the HW 8 project to a low-stress bike route are a waste of money because sensible cyclists are already riding on nearby parallel streets. One of the selling points of the Beaverton proposal is that “traffic calming” on HW 8 will make it easier for cyclists. But low-stress cycling options already exist, as shown below.

 

Attempting to turn a state highway into a boutique “Downtown Main Street” is a nostalgic trip to the past that has no relevance. Metro has encouraged most local governments to subsidize downtown investments based on a “Main Street” model. Tigard has done this, but not by trying to re-invent nearby HW 99w; the city has simply created a faux-downtown that benefits a few businesses while being largely ignored by most Tigard residents.

 

There is no need for a new traffic light at the Rose Biggi/HW 8 intersection. The proposed Canyon Road retrofit project would add another traffic light at Rose Biggi Drive, even though there are already 5 traffic lights on HW 8 in the .8 miles of project territory. The fact that the Beaverton City Council is moving the entire City Hall staff to the Round is no reason to add another light; there are already two traffic lights serving the Round, on either side of Biggi Drive.

 

Conclusion: Stripping away the political window dressing, the real point of this project is to degrade the state highway system by reducing the design speed from 45 MPH to 30 MPH on HW 8. The OTC should resist this effort. Local planners have been waging a political campaign against auto-mobility for over 25 years, on such routes as HW 43, HW 97, and HW 26. Planners and the cycling/pedestrian/transit advocacy groups will never be satisfied, and will be emboldened to ask for even more if you keep giving away the mobility functions of the state highway system.

 

Click here to see the full testimony with photos.

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Cascade in the Capitol: Tax Reform Testimony Presented to the Senate Finance Committee

Senior Policy Analyst Steve Buckstein testified on Thursday before the Senate Committee on Finance and Revenue about a series of tax reform proposals. Below is his testimony to the panel of legislators.

Testimony before the Senate Committee
on Finance and Revenue
regarding Tax Bill HB 2456
by Steve Buckstein

Good afternoon, Chair Burdick, Vice-Chair George, and members of the Committee. My name is Steve Buckstein. I’m Senior Policy Analyst and founder of Cascade Policy Institute, which is a non-profit, non-partisan think tank based in Portland. Cascade’s mission is to develop and promote public policy alternatives that foster individual liberty, personal responsibility, and economic opportunity.

I’m here to express my support for amending HB 2456 to include a new, lower income tax rate for most small businesses in the state. Small businesses, including start-ups and individual entrepreneurs, are a significant source of job creation. I have it on good authority that all state legislators would like to take credit for creating more jobs in this state. Here’s your chance.

I cannot support other changes in the bill which would jack up tax rates on C corporations and in effect raise taxes on high-income individuals. Such provisions will simply reinforce Oregon’s reputation as business-unfriendly.

In this modern world, people and capital are mobile. Investors and businesspeople change their behavior based on the incentives and disincentives they face. Oregon’s high tax rates shine like a big STOP sign at the border, warning high-income people and most businesses that the cost of coming here may be too high compared to other states.

So, by all means lower tax rates where you can, especially for small businesses. And rather than rely on taxing others more to generate revenue, rely on the fact that making Oregon more business friendly will in itself generate revenue–and jobs.

Thank you.

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Do You Still Trust the Government?

By John Glennon

President Obama said it himself: “If people cannot trust the government to do the job for which it exists…all else is lost.” With the IRS scandal, federal surveillance issues, and corruption cases in Portland City Hall, do you still trust the government?

The Oregonian recently reported that Jack Graham, Portland’s chief administrative officer, tried to “divert nearly $200,000 in water and sewer ratepayer money to the city’s general fund last year.” This and countless other cases where public officials have abused their power show how important it is to have strong constraints on government. Just like everyone else, government officials pursue their own self-interest. The difference between government officials and everyone else is that they control public resources, sometimes have the ability to change laws, and are often unaccountable to market forces.

Government officials do not want to cut their programs or reduce staff, compensation, or services. In the private sector, people also want to protect themselves and their employees. But private employers do not have the luxury of spending public funds, and they must downsize when necessary for their businesses to remain profitable. Government officials should be fiscally accountable just like private businesses, and their decisions should be brought more in line with the interests of the citizens they serve.

John Glennon is a research associate at Cascade Policy Institute, Oregon’s free-market think tank.

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Open Letter to Federal Transit Administration Regarding TriMet

 On June 14th, John Charles sent this letter to the Federal Transit Administration regarding TriMet and C-TRAN proposals for the CRC light rail project.

June 14, 2013

 

Richard F. Krochalis

Regional Administrator, FTA

Jackson Federal Building
915 Second Avenue, Suite 3142
Seattle, WA 98174

            Re: FTA requirements for operating funds on New Starts projects

Dear Mr. Krochalis,

I was in the audience on May 15th when you discussed the CRC light rail proposal with the C-TRAN board. I heard you say repeatedly that the application for a FFGA could not proceed until C-TRAN had a firm commitment of adequate funding to operate the new train line.

However, those statements are at variance with how FTA is handling the same issue for federally funded LRT projects in Portland. As I outlined to you in a detailed letter two years ago, TriMet has been in violation of its FFGA for the Green Line since the day it opened, and FTA has done nothing about it.

Service hours for the Green Line were reduced by 33% before it ever opened in September 2009.[1] Service has continued to decline since then. Weekly revenue hours have dropped from 692.4 in the opening year to 686.3 in the fall of 2012, a loss of 1%.[2]

TriMet is also in violation of its FFGA for the Yellow MAX line. That line opened in 2004 with 605.4 weekly revenue service hours. By the fall of 2012, service had dropped to 568.4 weekly revenue hours, a loss of 6%.[3]

Peak-hour service on the Yellow Line was supposed to operate at headways of 10 minutes in the opening year, improving to 7.5 minutes by 2020[4]. Instead, peak-hour headways are currently 15 minutes.[5]

As I pointed out to you in 2011, TriMet has a dedicated revenue source that was supposed to be used to fulfill the obligations of the respective FFGAs. That source, the regional payroll tax, was enhanced by the state legislature in both 2003 and 2009, allowing TriMet to raise the tax rate. The first tax increase was implemented effective January 2005, and has raised a cumulative total of $122.6 million in new revenue through FY 13.[6]

The combined net operating costs of the Green and Yellow lines in 2011 were $10.2 million.[7] Clearly the new revenues generated by the payroll tax rate increase were adequate to pay for all promised new service on the two new MAX lines, if such service had been a priority for TriMet – which it isn’t.

Not only has TriMet failed to provide promised service on federally-funded light rail lines, the agency’s  total fixed route service has dropped by 14% since 2005 — despite the fact that the agency’s all-funds budget has gone up by 125% over that same period, as displayed below:

TriMet Financial Resources, 2004-2013 (000s) 

 

FY 04/05

FY 08/09

FY 10/11

FY 11/12 (est)

FY 12/13 (budget)

% Change 04/05-12/13

Passenger fares

$  59,487

$  90,016

$  96,889

$  104,032

$117,166

+97%

Payroll tax revenue

$171,227

$209,089

$224,858

$232,832

244,457

+43%

Total operating resources

$308,766

397,240

$399,641

$476,364

$465,056

+51%

Total Resources

$493,722

$888,346

$920,044

$971,613

$1,111,384

+125%

 

Annual Fixed Route Service Trends, 2004-2012 

FY 04

FY 06

FY 08

FY 10

FY 12

Change

Veh. revenue hours

1,698,492

1,653,180

1,712,724

1,682,180

1,561,242

-8.1%

Veh. revenue miles

27,548,927

26,830,124

26,448,873

25,781,480

23,625,960

-14.2

In its most recent long-term financial forecast, TriMet admits that the agency’s current service problems are “not caused by TriMet’s revenue base.” According to the agency, TriMet’s operating revenues per capita “are 70% higher than its peer comparators.”[8]

Nonetheless, TriMet service is in a death spiral.

TriMet General Manager told his board in February that the forecast for TriMet service shows that by 2030, the agency will have a “revenue-expenditure imbalance” of some $200 million. Therefore, TriMet clearly does not expect to meet its light rail service obligations to FTA at any time during the life of the two relevant FFGAs.

In your response to me on June 20, 2011, you noted that many transit agencies experience temporary service declines due to various economic factors. Such conditions were “not typically viewed by FTA as a breach of contract.”  You pointed out that Section 19(a) of the FTA FFGA discusses “default” in terms of “…substantial failure of the Grantee to complete the Project in accordance with the Application” for federal funding.

It is clear that TriMet has failed and will continue to fail to meet its contractual obligations to operate federally-financed light rail lines as promised.

Given these facts, I can only conclude that either you misinformed the C-TRAN board about the importance of local operating revenues, or you will soon be requiring TriMet to begin fulfilling its FFGAs for the Green and Yellow lines. Which of these things is true?

Please advise at your earliest convenience.

Sincerely,

 

John A. Charles, Jr.

President & CEO

 

CC:       C-TRAN Board of Directors

TriMet Board of Directors

Interested parties



[1] TriMet, Fall 2010 Financial Forecast, p. 39.

[2] TriMet finance office, personal communication with the author, September 18, 2012.

[3] Ibid

[4] TriMet, Before and After Study, Yellow MAX Line, 2009, p. 2-2.

[5] TriMet website as of June 14, 2013, http://www.trimet.org/schedules/w/t1190_1.htm.

 

[6] TriMet, CRC August 2011 New Starts Submittal, Table 1.

[7] TriMet, FY11 Operating Statistics

[8] TriMet, Long Term Fiscal Sustainability Plan, December 2012, p. 7.

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Startup Businesses Are America’s Best Job Creators

By Benjamin Zycher

“Small business” is the recipient of much official love (as well as heavy regulatory intrusion), but it receives its loudest applause as the supposed source of most employment growth.

Alas, that conventional wisdom is incorrect: The modern scholarly literature finds that it is new (not small) businesses—startups—that contribute disproportionately to job creation.

Job creation obviously is important, but ultimately it is economic growth that is of central concern; it is a growing economy that yields the increased wealth from which we derive higher living standards, upward mobility, and improved health and life expectancy.

And so the job creation driven by startup businesses—while crucial—underscores a larger question: What is the effect of employment by startups on economic growth?

A new Pacific Research Institute paper provides an answer: Based upon a dataset of 49 states for 1977-2010, each job created by startup firms is estimated to increase state gross product by almost $1.2 million in a given year. In short, the creation and survival of startups is crucial for job creation, and that job creation is an important component of economic growth.

These findings combined with the existing scholarly literature on the effect of startup firms on job creation suggest that policymakers should focus on both the ability of startup firms to establish themselves and to succeed, and the ability of startup firms to expand their hiring.

Such policy initiatives as the Kauffman Foundation Startup Act can be predicted to increase the ease with which startup firms can be established; this would strengthen the ability of the startup sector to create employment opportunities.

But it is clear that further policy reform is necessary if U.S. startup firms are to achieve more of their potential in terms of actual hiring and the attendant benefits in terms of aggregate output. Such reforms might include the following:

  • An overhaul of such recent government policies as the Dodd-Frank financial services reform legislation, which has had the effect of increasing the competitive advantages of large banking institutions over smaller banks, the latter of which traditionally have specialized in providing capital for new and small businesses.
  • The Affordable Care Act (“ObamaCare”) clearly has introduced rigidities, constraints, and incentives in the labor market that will lead to higher costs for labor force expansion, a substitution of part-time in place of full-time work, and other perversities. The severe ACA implementation difficulties now emerging provide a good opportunity for Congress to reform the law so as to remove the disincentives for job expansion, even abstracting from the opportunity to avoid the prospective adverse effects of the ACA on the health care sector.
  • Increases in the (real) minimum wage, whether mandated by federal or state legislation, will increase disincentives to hire.
  • Current policies on immigration and work permits for foreigners have introduced serious rigidities into the labor market generally and for smaller businesses, startups, and specific sectors in particular. A reform that expands the pool of available high-skilled workers, allows available laborers into the formal work force, and removes artificial rigidities that hinder hiring would strengthen economic growth.

These and other policy reforms would take advantage of the empirical reality that it is startup firms that are responsible for almost all job creation, and would facilitate that hiring and the increased economic output that would result.

Benjamin Zycher is a senior fellow at the Pacific Research Institute in San Francisco, a visiting scholar at the American Enterprise Institute, and a guest contributor for Cascade Policy Institute, Oregon’s free market public policy research organization. This article originally appeared in Investor’s Business Daily.

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Expanding the Chance to Earn an Honest Living in Oregon

How free are you to engage in the occupation of your choice? In Oregon the answer appears to be—not so much. No one is quite sure how many occupations actually require a license, but The Oregon License Directory currently contains 1,190 entries by 113 agencies. While items like drivers’ licenses and concealed carry handgun permits are included, many are occupational licenses, and those often take significant time and money to obtain. Also, the site warns that not all jurisdictions are even in the directory yet, so “adding these additional licenses may take years.”

Recently, one lobbyist told a legislative committee why he thought the state requires such licensing. He said:

“The only reason that the state of Oregon through the Oregon legislature licenses any individual profession or industry is to
protect the public health, safety and welfare. That’s it.”
*

But that’s not the only reason. All too often, existing practitioners ask government to impose requirements that keep competitors and newcomers out of their markets, effectively denying them the right to earn an honest living. As one academic notes, “Occupational regulation has served to limit consumer choice, raise consumer costs…deprive the poor of adequate services, and restrict job opportunities for minorities—all without demonstrated improvement in quality or safety of the licensed activities.”

Cascade has been instrumental in reducing license requirements in the home moving and natural hair braiding fields.

It’s time to greatly expand the right to earn an honest living in Oregon.

* Jim Markee, lobbyist for the Oregon Association of Cosmetology Colleges, testifying on HB 3409 (which reduced licensing requirements on natural hair braiders) before the Senate General Government, Consumer and Small Business Protection Committee, May 17, 2013. The quote starts at the 37:18 mark in the hearing audio archive.

Oregon Licensed Occupations 2006

 

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

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The Principles of Economics You Did Not Learn in 'Principles of Economics'

Please join us for Cascade’s monthly Policy Picnic, led by our Chairman of the Board, Dr. Bill Conerly, on Wednesday, June 19th, at noon.

Bill is a former college professor turned corporate economist and consultant. He will lead a discussion on some fundamental economic principles that are seldom discussed in classrooms and textbooks, even by friends of the free market.

Admission is free. Please bring your own lunch. Coffee and cookies will be served. Space is limited to ten guests on a first come, first served basis, so sign up early. To RSVP, email Patrick Schmitt at patrick@cascadepolicy.org or call 503-242-0900.

Sponsored By

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Cascade Update Spring 2013

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

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