Month: February 2015

Proposed Tobacco Tax Increase Will Simply Encourage More Smuggling

State legislatures across the country have piled on the tobacco taxes over the past decade. Not surprisingly, this has created a growing problem of tobacco smuggling. As the tax rate rises, it encourages people to buy products from low-tax states and sell them illegally in high-tax states.

New York is the most obvious example of this problem. The Empire State has a tax rate of $4.35/pack, far higher than most other states. As a result, an estimated 57% of all cigarettes sold in New York are brought in by smugglers.

This creates multiple problems. Cigarette buyers are inconvenienced; state legislators lose the tax revenue they were hoping for; and smuggling increases the likelihood of violence, since there are no legal ways to settle disputes among competitors.

These lessons seem lost on Oregon legislators. The House Revenue committee will consider House Bill 2555 on February 25, which would raise the tobacco tax by $1.00/pack. Currently, only about 12.7% of Oregon cigarettes are smuggled. If the new tax passes, more sales will take place in the underground economy, and net revenue to the state could actually decline.

With smoking now banned in virtually all indoor environments, the non-smoking majority is completely protected from secondhand smoke. There is no reason for additional taxes just because smokers are in the minority.

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Media Release: The Case of the Disappearing Backyard

February 25, 2015

FOR IMMEDIATE RELEASE

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

PORTLAND, Ore. – Cascade Policy Institute today released a report investigating the disappearance of backyards throughout the Portland metropolitan region.

In 1995, the average lot size for a new home in Washington County was 15,000 square feet. Today, new residential housing projects in Washington County list 7,000 square foot lots as “executive housing,” an apparent luxury only for the rich. Has the American Dream disappeared in the Portland region?

The purpose of this research project was to see if the disappearance of backyards was real or an illusion. After examining the adopted land-use plans and accompanying zoning codes of the three metro counties and a cross-section of local cities, it became clear that private backyards in fact are being zoned out of existence, in order to comply with state and regional land-use mandates.

All new development projects on lands recently approved for urban growth boundary expansion in the Portland region have high-density overlays that prevent traditional backyards (roughly 4-5 units/acre), except for a small percentage of all units. In addition, many older neighborhoods with large lots are experiencing an epidemic of teardowns, due to the artificial shortage of buildable land. Homes with large yards are being purchased, demolished, and replaced with several homes or towering apartment complexes.

As a result of density mandates, homebuyers are increasingly paying more while getting less in the way of private open space.

According to report author John Glennon, “Local planners know that most people prefer lower-density neighborhoods; yet zoning codes have been written to take that option away.”

Cascade Policy Institute President and CEO John A. Charles, Jr. noted, “As Metro prepares for another round of possible growth boundary expansions, elected officials should think hard about the effects of land-use regulation on livability. In a state that is already 98% open space, there is no reason to create an artificial shortage of buildable land. The State Legislature should enact reforms this year to remove high-density mandates from local governments.”

The full report, Have Private Backyards Been Outlawed in the Portland Metropolitan Area?, can be downloaded here.

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Testimony Regarding SB 324-A, Low-Carbon Fuels Standards

The top legislative priority for most Democrats in Salem has passed the Senate and will be up for its first public hearing in the House on Tuesday, February 24th.

SB 324-A, the “low-carbon fuel standard” bill pushed so hard by Cylvia Hayes and former Gov. Kitzhaber, will be reviewed in the House Environment and Energy Committee at 3:00 p.m. on Tuesday. In prepared testimony sent to the committee today, Cascade President John A. Charles, Jr. points out that the “carbon intensity” of driving has dropped by 47% since 1975, making SB 324 redundant. Moreover, carbon dioxide is not a real “pollutant” anyway, so there would be no public health benefits to reducing emissions.

If SB 324 passes, it would raise the price of motor fuel by at least 19 cents/gallon, but none of the increase would benefit roads. Only an actual “motor fuel tax” raises money for roads, and Oregon already has a state gas tax of 30 cents/gallon. Legislative leaders hope to also increase that tax, meaning motorists would face two new taxes but receive less than half the benefits.

Cascade supporters are encouraged to contact their state Representative in opposition to this poorly-conceived bill.

Read full testimony here

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The Man Who Could Bring Down ObamaCare

Would you like to meet the man the media says could bring down ObamaCare? You’ll have that opportunity on Thursday evening, February 26, when Michael Cannon of the Cato Institute speaks in Portland.

Cannon is an architect of the legal strategy that could force the Obama Administration to follow the letter of its own Affordable Care Act and stop subsidizing insurance unless it is purchased through a state-established exchange. Cover Oregon was established by the state, but its website was so flawed that it couldn’t sign up a single person.

If Oregonians lose their subsidies because Cover Oregon failed, they will quickly find out just how unaffordable the Affordable Care Act really is.

To make this even more interesting, on the day Governor Kitzhaber resigned, the U.S. House Oversight Committee sent him a letter telling him not to destroy any documents that might shed light on the Cover Oregon fiasco.

And the U.S. Supreme Court will hear oral arguments in the case orchestrated by Michael Cannon on March 4.

Don’t miss your chance to meet The Man Who Could Bring Down ObamaCare on Thursday evening, February 26, in Portland.

For details and to RSVP, call Cascade Policy Institute at 503-242-0900, or visit cascadepolicy.org.

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When Is a Tax Not a Tax?

Governor Kitzhaber wants you to drive less, and he knows that the best way to discourage driving is to make it more expensive.

The simplest way to do this would be to raise the state gas tax, which is currently 30 cents per gallon. However, this would require approval by three-fifths of the state legislative assembly, rather than the simple majority necessary for non-tax measures. There might not be enough votes for a tax increase.

The other problem is that the Oregon Constitution directs all gas tax revenues to be used only for road maintenance and improvement. Since improving roads would actually benefit motorists and potentially encourage more driving, this would undercut the Governor’s objective.

Instead, he is backing a legislative proposal known as the “low-carbon fuel standard,” designed to reduce the carbon dioxide emissions from motor vehicles. Because this will be a very expensive requirement for gasoline refiners, it would cause the price of gasoline to rise by at least 19 cents per gallon, and possibly much more.

As a non-tax measure, this bill only needs a majority of votes in the legislature, and there will be no actual revenues created that might benefit motorists. They will simply pay more, and get nothing in return.

In the world of Oregon environmental policy, this is called a clever strategy. For motorists, it’s a scam. Legislators who go along with it should be ashamed of themselves.

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Cascade Report Exposes $2.6 Billion in Unfunded Liabilities

Cascade Policy Institute has released a new report showing that Oregon public employers have more than $2.6 billion in unfunded actuarially accrued liabilities associated with non-pension benefits promised to current and future retirees. Referred to as “Other Post-Employment Benefits,” or OPEB, these liabilities include various forms of deferred compensation.

The Governmental Accounting Standards Board mandates that public employers clearly state financial obligations for OPEB in their comprehensive annual financial reports. However, employers are not required to set up trust funds to pay for these promises. As a result, the Cascade review of 125 financial reports of state, regional, and local governments shows that most employers have no money set aside and are paying for OPEB obligations out of annual operating revenues. This cannibalizes funds needed for actual services.

The Cascade paper is a call to action for the legislature to impose some form of fiscal discipline on public employers by requiring them to make annual contributions to OPEB trust funds. Legislation to accomplish this has been considered in past sessions but never approved. The Cascade report can be viewed at cascadepolicy.org.

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Right to Try Is Right for Oregon: Let terminally ill patients try to save their own lives

If you or someone in your family had a terminal illness, would you want the right to try an experimental drug that might save a life? That’s what eleven-year-old Diego Morris of Phoenix wanted when he was diagnosed with a rare, deadly form of cancer. Traditional treatment didn’t work; and after an exhaustive search, his family found a “miracle drug” that was approved in much of the world but not in the United States. So, the whole family moved to England where Diego was successfully treated. Now back in Phoenix, Diego has been cancer-free for two years.

Now thirteen years old, Diego Morris was the Honorary Chairman of the campaign that saw 78 percent of Arizona voters approve a Right to Try referendum last November. It will give terminally ill patients the right to try to save their lives by allowing access to investigational medicines that have not yet been approved by the U.S. Food and Drug Administration (FDA). Diego supported the measure because he said “…hope was the most important thing to him and giving hope to others is what he thinks the right to try law will do.”

Oregon legislators are now being asked to approve Right to Try legislation here. HB 2300 in the House Health Care Committee would not compel physicians or drug companies to provide any treatment; it would simply allow terminally ill patients the right to try to get access to drugs or devices not yet approved by the FDA.

In addition to Arizona, Right to Try laws have been enacted overwhelmingly within the last year by legislatures in Colorado, Louisiana, Missouri, and Michigan. Legislatures in more than twenty states are now being asked to give their citizens this important right.

Designed by the Goldwater Institute in Arizona, the Right to Try concept addresses a growing dissatisfaction with the slow process of approving life-saving medications in America. Creating, developing, testing, and getting government approval to market a new drug here can take upwards of ten years and cost more than one billion dollars. While this process may keep unsafe or ineffective drugs off the market, it may also keep effective drugs away from critically ill patients for so long that they literally die waiting.

Only about three percent of the sickest Americans qualify for or have access to FDA-approved clinical drug trials, and even those who enter such trials cannot be sure whether they are receiving a potentially useful drug or a placebo. Some medical researchers worry that granting terminally ill patients the right to try investigational medicines may make it harder to recruit people for randomized controlled trials. However, more and more people now recognize that an individual’s right to try to save their own life should trump the need that researchers might have to control how those drugs are tested.

As Goldwater Institute president Darcy Olsen says, “Terminal patients shouldn’t have to ask the government for permission to try to save their own lives.”

While the FDA does allows people to request access to medicines that have not yet been approved, the process can require 100 hours of paperwork and months to complete, with no assurance that access will be granted. Currently, fewer than 1,000 individuals get such approval annually. Right to Try offers a better way.

Some legal scholars worry that the federal government will challenge state Right to Try laws under the Supremacy Clause of the U.S. Constitution, which says that when federal and state laws conflict it is federal law that should take precedence. While this is often the case, Oregon is in the forefront of what could be a very relevant exception.

Oregon voters twice approved the state’s controversial Death With Dignity Act, in 1994 and again in 1997. The law allows “terminally-ill Oregonians to end their lives through the voluntary self-administration of lethal medications, expressly prescribed by a physician for that purpose.” The medications, however, are deemed controlled substances by the FDA and not federally approved for such a purpose.

The U.S. Attorney General argued that because federal law prohibited controlled substances from being used to intentionally end life, the Courts should strike down the Oregon law. The U.S. Supreme Court disagreed. In Gonzales v. Oregon (2006), the Court upheld Oregon’s law. It found that states generally have wide discretion in regulating health and safety, including medical standards. Finding that the Bush Administration’s reading of the federal statute would mark “a radical shift of authority from the States to the Federal Government to define general standards of medical practice in every locality,” the Court ruled that Oregon could protect the rights of its citizens, at least in this specific instance.

If Oregon can protect the right of its citizens to end their own lives with controlled substances, it should be able to protect the right of its citizens to try to save their own lives with substances not yet approved by the federal government.

As thirteen-year-old cancer survivor Diego Morris believes, Right to Try can offer hope to people facing life-ending situations when federal law offers no hope. It’s a policy whose time has come, and Oregonians deserve.

Right to Try is right for Oregon.

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