Month: January 2014

School Choice Promotes Opportunities “Centered on the Future”

“I wish that the education system could understand that not every child fits into the same sized box, and everyone needs to do what is right for their family,” says Lisa, a Portland-area mother whose children receive tuition assistance from the Children’s Scholarship Fund-Portland.

When Cascade Policy Institute started this privately funded scholarship program in 1999, we learned “hands-on” that middle- and lower-income parents share the same interest in their children’s education as do parents of greater means, and they are motivated to seek the same kinds of opportunities on their behalf.

Parents know a solid education prepares students for life, and that path begins in grade school. But many children are trapped in neighborhood public schools assigned to them by their street addresses that, for many reasons, may not meet their needs or standards that are important to their families.

“Education reform” debates usually focus on how to get the maximum number of children minimally educated. But real-life parents want to get at least a minimum number of children (their own) maximally educated. These two goals shouldn’t be at odds. In fact, the second can drive the first―if more parents had the opportunity to make meaningful choices about their children’s education.

Fifteen years ago, the national Children’s Scholarship Fund (CSF) offered dollar-for-dollar matching grants to independent local partner programs that would provide partial tuition assistance to low-income grade school children to attend the schools of their choice. Cascade Policy Institute was among the nonprofit organizations which took up this unprecedented challenge, raising $1 million in local funds to start a $2 million local program, the Children’s Scholarship Fund-Portland. Since then, CSF and its partners have invested $568 million in private funding to help more than 139,000 children nationwide.

While they don’t have much discretionary income (the average CSF-Portland family income is $41,000), CSF families always must pay part of their tuition themselves (Portland parents pay $1,777 on average). This ensures that the scholarship remains a “hand up,” rather than a handout. Because they have “skin in the game,” CSF parents are motivated to choose schools carefully and to encourage their children to make the most of their opportunities.

The private schools CSF students attend typically spend one-third to one-half what neighboring public schools spend per student (the average tuition for CSF-Portland students is $3,578 this year), with better results in terms of graduation rates and college attendance. However, the point of the CSF program is not to prove that private schools are better than public schools. Rather, CSF believes that parents are the primary educators of their children and have their interests at heart. When empowered with a modest amount of financial help (the average Portland scholarship award is $1,458), parents will invest their own money, time, effort, and discipline to obtain the kind of education they want for their students.

CSF partner programs respect the decision-making processes of families and support parents in directing their children’s education. This family-centered element is what sets parent-focused school choice efforts apart from other ways of addressing the failures of today’s public education system. No one can design a school system that meets every child’s needs. No statistical data analysis or bureaucratic goal setting can ensure that any particular child makes it to high school graduation, succeeds in college, or excels in a career. No school can be all things to all children―nor should it. But most parents, including low-income ones, are keenly aware of their own students’ needs, aptitudes, strengths, and interests―and what it takes for them to learn.

“The children have grown in spades since attending [their] school,” says Lisa. “They have a school family that is very comforting to them. They feel safe every single day. They know that everything that is being done is centered on their lives and future….In their prior school they were pushed aside, never pushed into academically challenging areas. Here at this school every opportunity is given to them to succeed and become better students and better learners.”

Top-down education reform focuses on what is not working for large numbers of people―but keeps those students in the system while the problems are being “fixed.” School choice focuses on what is working across all kinds of schools―and empowers parents to choose the options that best help their children learn.

Top-down approaches pour more money into a broken system. School choice programs achieve more satisfactory results with more modest amounts of money because the dynamic is shifted in favor of parents. Government-focused education reform analyzes the forest; school choice promotes the best interest of the trees. School choice programs like CSF-Portland prove that good things happen when parents have opportunities to choose excellence for their own children.

Kathryn Hickok is Publications Director at Cascade Policy Institute and Director of the privately funded Children’s Scholarship Fund-Portland, which provides partial tuition scholarships to Oregon elementary students from lower-income families.

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Help Oregon’s Most Vulnerable Students Get School Choice in 2014

This is National School Choice Week. Families across the country are advocating for more educational freedom. It would be wonderful if all Kindergarten through 12th grade students had broad public and private school choices now, but political reality won’t let that happen any time soon. So, what is possible now, especially in Oregon?

In the upcoming February legislative session, Oregonians can give some of our most vulnerable kids real choices with passage of Senate Bill 1576, the Education Equity Emergency Act (E3). Modeled after a successful Arizona program, it will create Empowerment Scholarship Accounts to help kids with special needs, in foster care, or in low-income families.

Scholarship recipients can use ninety percent of their state education funding for approved expenses like private schools, tutoring, education therapy, textbooks, online education programs, and community colleges. Unused funds can be rolled over and eventually help students with college costs. And no district must let more than one half of one percent of its students participate.

Whether or not you have children who may qualify for this program, please urge your state legislators to support it. There’s no additional cost to taxpayers. So, even if we can’t get full school choice for all children now, we can get it for some of the most vulnerable ones, including special needs, foster, and low-income kids. It’s the right thing to do.

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

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Coming This January: The Largest-Ever Rally for School Choice Nationwide

Millions of Americans nationwide will voice their support for educational opportunity during the fourth-annual National School Choice Week, which begins January 26, 2014. The Week will include an unprecedented 5,500 events across all 50 states, with a goal of increasing public awareness of the importance of empowering parents with the freedom to choose the best educational environments for their children.

National School Choice Week events will be independently planned and independently funded by schools, organizations, individuals, and coalitions. Events—which include rallies, roundtable discussions, school fairs, parent information sessions, movie screenings, and more—will focus on a variety of school choice issues important to families in local communities, including open enrollment policies in traditional public schools, public charter and magnet schools, private school choice programs, online learning, and homeschooling.

“During National School Choice Week, millions of Americans will hear the uplifting and transformational stories of students, parents, teachers, and school leaders who are benefiting from a variety of different school choice programs and policies across America,” said Andrew Campanella, president of National School Choice Week. “Our hope is that by letting more people know about the successes of school choice where it exists, more parents will become aware of the educational opportunities available to their families.”

“During the Week, Americans from all backgrounds and ideologies will celebrate school choice where it exists and demand it where it does not,” Campanella said. “National School Choice Week will be the nation’s largest-ever series of education-related events, which is testament to the incredible levels of support that exist for educational opportunity in America.”

Cascade Policy Institute will host a National School Choice Week “Policy Picnic” on Wednesday, January 29, at noon. Cascade founder Steve Buckstein will discuss the Education Savings Account (ESA) bill being considered during Oregon’s 2014 legislative session and what Oregonians can do to promote greater educational opportunity in our state. Oregon’s 2014 Education Equity Emergency Act (“E3”) is modeled on Arizona’s highly successful ESA program. For details and to RSVP for this free event, visit cascadepolicy.org.

Students today have diverse talents, interests, and needs; and they learn in different ways. The landscape of educational options to meet those needs is far more expansive today than it was even a few years ago. Freedom in education is good for all children, not just for children who are “at risk” or “in failing schools.” Parents, not bureaucracies, should decide which learning environment is best for their children and be empowered to choose those schools. National School Choice Week provides a platform for all of us to demand greater educational opportunities for children, especially in areas which do not yet provide meaningful options to families.

For more information about National School Choice Week and to participate in events near you, visit schoolchoiceweek.com.

Kathryn Hickok is Publications Director at Cascade Policy Institute and Director of the privately funded Children’s Scholarship Fund-Portland, which provides partial tuition scholarships to Oregon elementary students from lower-income families.

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Reverse the Trend: Restore Oregon’s Economic Freedom

By William Newell

Our world is freer today than ever before. More people are free from war, poverty, and crime; and they are also more free to start a business, find a job, and join the middle class. Despite the recent recession, the world’s economy has grown 70 percent over the last 20 years (from $32 trillion to $54 trillion), in large part because of the expansion of markets into developing nations. Fortunately for more and more people, their governments are liberalizing markets and allowing competition, rather than enacting Soviet-style “five-year plans.”

But what about the champion of free enterprise, the United States; how are we doing in terms of economic freedom? Sadly, the former bastion of free markets is regressing in terms of economic freedom relative to other nations. According to the 2104 Index of Economic Freedom, released by the Heritage Foundation and the Wall Street Journal, the U.S. has fallen out of the top ten most economically free nations.

Many problems with the U.S. economy are mirrored at the local level. States have regressed economically, including Oregon, which had one of the largest reductions in economic freedom of any state over the last two years. If the U.S. and Oregon want to continue generating economic success, we need to remember what got us there in the first place: a free economy and a free society.

William Newell is a research associate at Cascade Policy Institute, Oregon’s free market public policy research organization. He is a graduate of Willamette University.

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Testimony to TriMet Board on Resolution 14-01-03

Cascade President John A. Charles, Jr. submitted the following testimony to the TriMet Board on January 21, 2014.

 

To the TriMet Board:

In Resolution 14-01-03, TriMet staff proposes to give away a land parcel valued at $570,000 to a developer on the grounds that the net present value of 30 years of increased transit fares generated by the development is estimated to be $648,732.

The staff has neglected to mention that $648,732 is the gross revenue associated with future boardings. Since TriMet loses money on every trip, the net value of future fares will be a negative number.

For example, the operations cost/boarding for light rail in FY 14 has averaged $1.87. The average originating fare for TriMet fixed route service is $1.47.

Last year all passenger revenue totaled $152,698,000 while operating expenses were $580,289,000, a 26% recovery ratio. So it doesn’t matter what assumptions you use about 30-year discount rates, rental occupancy rates, or rail usage by TOD residents; under all scenarios, TriMet loses substantial amounts of money servicing the proposed project. Therefore there is no “profit” to subsidize the $570,000  giveaway of a public asset.

Moreover, FTA has had a long-standing policy prohibiting such transactions, as noted in the following guidance document:

“Thus, locally preferred Plans for highest and best transit use may be acceptable even if they do not generate the highest possible level of financial return, although the transit system is expected to realize some financial return (i.e., not transfer the property for $1) in a development.”  (Innovative Financing Techniques for America’s Transit Systems, FTA, September 1998, p. 45, http://libraryarchives.metro.net/DPGTL/publications/1998_innovative_financing_techniques_americas_transit_system.pdf).

Elsewhere in the same document, FTA discusses exactly the type of Portland situation contemplated with the SE 17th Street proposal, and declares it impermissible:

“In one property, the highest and best use was considered to be a 9-unit, median income townhouse condominium, with built-in parking for all units. The metropolitan planning organization, Metro, had calculated that social, economic and environmental benefits in that area would be maximized by a rental apartment development, for low-to-moderate income residents, with structured parking for 40 percent of units. Developers maintained that, while the Metro plan could eventually prove economically viable, the current market would not support the higher density plan. The risk of substantial non-payments of rent, and resulting default on project financing, was considered too high. Thus, the value of the land would have to be reduced to reflect this risk. In discussions with Metro, FTA indicated that while the price of the land was to some degree negotiable, FTA would not accept a zero or negative valuation of property to make the project feasible.” 

Other subsidies: In the staff memo, it is also stated that TriMet has agreed to “assistance with permitting fees” for the developer. What, exactly, does this mean? Is TriMet proposing to subsidize the soft costs of development, and if so, why?

Alternative uses: The proposed land giveaway should be rejected and alternative uses considered. TriMet staff recommends against using the parcel as a parking lot, but offers no analysis. In fact, light rail depends on park-and-rides to attract riders and most TriMet parking lots exist to service light rail. If you don’t provide parking at this station, out-of-district riders will simply invade nearby residential neighborhoods, creating a nuisance.

Sincerely,

John A. Charles, Jr.

Cascade Policy Institute

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Book Forum: Clark Neily – Judicial Abdication vs. Judicial Engagement

Join Cascade Policy Institute as we welcome Clark M. Neily III

Judicial Abdication vs. Judicial Engagement
Is the Supreme Court shirking its obligation to uphold the Constitution?

Clark M. Neily III
Senior Attorney, Institute for Justice
Author, “Terms of Engagement: How Our Courts Should Enforce the Constitution’s Promise of Limited Government

5:30 PM
Guest Arrival

5:45 PM
Presentation and Q&A

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

Early-bird pricing: Prior to March 12th, $20.00/person.

After March 12th, registration increases to $25/person.


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

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

Neily has spent his career fighting against the unconstitutional expansion of government and a more properly engaged judiciary. He is the director of the Institute for Justice’s Center for Judicial Engagement, and he served as co-counsel for the plaintiffs in the watershed Second Amendment case,District of Columbia v. Heller.


Terms of Engagement has received enthusiastic accolades from constitutional scholars and leading luminaries of the limited government movement:

“Clark Neily’s elegant essay slays the idea that ‘judicial restraint’ is always a virtue. It often amounts to judicial abdication. Neily explains that judges must judge to defend the rights that government exists to secure.”
– George F. Will, political commentator

“Through the use of compelling real-world cases and remarkably clear, accessible and accurate explanations of current law, Clark Neily exposes the legal charade by which, in the name of ‘restraint,’ judges have stacked the deck in favor of those who use laws and regulations to line their own pockets. Required reading for all who care about their liberties and the Constitution that is supposed to protect them.”
– Randy Barnett, Professor at Georgetown Law School

“Provocative yet fair-minded, this book is essential reading for anyone who cares about our courts, our Constitution, or our country.”
– Kermit Roosevelt, Professor at the University of Pennsylvania Law School

“Clark Neily weaves constitutional analysis with anecdotes in service of large principle. His basic principle is that a squishy policy of judicial deference disserves his clients, the public at large, and the critical role of judicial oversight in a democracy. He is right on all counts. A great read for lawyers and nonlawyers interested in the real-world consequences of judicial decision making.”
– Richard Epstein, Professor at the New York University School of Law

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

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Cascade in the Capitol: Testimony in Favor of Education Equity Emergency Act

Testimony in Support of the Education Equity Emergency Bill

Kathryn Hickok

Director, Children’s Scholarship Fund-Portland

Portland, Oregon

January 16, 2014

Chair Hass and members of the committee, my name is Kathryn Hickok, and I am director of the Children’s Scholarship Fund-Portland. For 15 years our program has provided privately funded partial-tuition scholarships to children from lower-income Oregon families. The Children’s Scholarship Fund-Portland has helped nearly 650 Oregon Kindergarten through 12th grade students have access to diverse educational settings that meet their individual needs.

CSF-Portland is a partner program of the national Children’s Scholarship Fund, headquartered in New York. Our mission is to maximize educational opportunity by offering tuition assistance for children from needy families. We provide partial tuition scholarships based solely on income that are usable at any private school chosen by the students’ parents or guardians. To be eligible for a scholarship, families must demonstrate financial need.

Our experience with the educational choices made by the lower-income Oregon families participating in our program demonstrates several key points relevant to this bill:

First, lower-income parents want to take charge of their children’s futures through educational opportunity. Parents in our program value high-quality education as the way out of poverty for their children and make the commitment and sacrifice of paying, on average, more than half of their tuition out of their own pockets.

Second, demand for diverse educational opportunities in Oregon is real. When our program began in 1999, the parents of more than 6,600 children applied for only 550 available scholarships. Our waiting list continues to grow every week. The last thing parents who call me want to do is see their children not succeed in school.

Third, it does not take a lot of money to change a child’s life. Our scholarships average about $1,500 for a full school year, and that amount makes the difference in allowing children to attend schools they love, that motivate them to do their best and foster their individual talents. The average tuition of our elementary students this year is only about $3,600. So, a relatively small amount of money truly can make the deciding difference for families in where they send their children to school.

While they don’t have much discretionary income, CSF families always must pay part of their tuition themselves. Because they have “skin in the game,” CSF parents are motivated to choose schools carefully and to encourage their children to make the most of their opportunities. When empowered with a modest amount of financial help, parents will invest their own money, time, effort, and discipline to obtain the kind of education they want for their students.

A Portland-area mother named Lisa recently told me, “I wish that the education system could understand that not every child fits into the same sized box, and everyone needs to do what is right for their family.” I witness the lengths to which parents like Lisa go to choose the school they think is best for their kids. The Empowerment Scholarship Accounts in this legislation would empower parents like Lisa to make life-changing choices on behalf of their children’s education, just when they need it the most. I encourage you to support the Education Equity Emergency Bill. Thank you very much.

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

By Bob Clark

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

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

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

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

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

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

3. Investments for the Student Opportunity Fund may underperform.

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

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

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

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

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

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

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

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As TriMet Sinks, Should Portland Suburbs Go Down With the Ship?

Last week Cascade released a report encouraging cities and counties to consider leaving TriMet due to its financial mismanagement.

TriMet has long admitted that its labor costs are unsustainable. In addition, the agency’s addiction to costly rail construction has cannibalized bus service, which has been cut by 14% in the past five years.

Comparison with other local transit districts paints a stark picture. The cost per mile of operation for the TriMet commuter rail line is $43.74. TriMet’s flagship service, light rail, costs $11.96 per mile. Yet, the small city of Sandy runs its own bus service for $2.57 per mile.

TriMet predicts that additional service cuts will be required by 2017 and every year thereafter to balance the budget, which essentially would shut down the agency by 2025. TriMet’s only strategy has been to seek contract concessions from the bargaining unit representing most workers, but this is unlikely to succeed. The ongoing PERS crisis shows that once management agrees to expensive fringe benefits for unionized workers, it’s almost impossible to reduce them later.

TriMet is in a death spiral of its own making. Local jurisdictions might be hoping for the best, but they should plan for the worst. Leaving TriMet is an option that needs to be on the table.

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

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The Future of School Choice in Oregon: Education Savings Accounts

Please join us for Cascade’s monthly Policy Picnic led by Cascade Policy Institute Senior Policy Analyst and founder Steve Buckstein on Wednesday, January 29th, at noon.

Steve will discuss the history of school choice in Oregon: successes, challenges, and the future of the movement.

Emphasis will be placed on the Education Equity Emergency Act (E3), which is the first Education Savings Account bill submitted to the Oregon legislature. The bill will have an informational hearing on Thursday afternoon, January 16, before the Senate Education Committee and hopefully will be heard during the formal February legislative session.

Learn the benefits of ESAs, details of the E3 Act, and what you can do to help Oregon students receive their own Empowerment Scholarship Accounts.

Admission is free. Please bring your own lunch. Coffee and cookies will be served. Space is limited to sixteen guests on a first come, first served basis, so sign up early.

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