Month: July 2015

Restore the Trust in State Trust Lands

By Anna Mae Kersey

When Oregon joined the Union, the U.S. Congress granted it control of State Trust Lands, public lands managed by the state to support public education in perpetuity through the Common School Fund.

Currently, 96 percent of Oregon’s remaining State Trust Lands show no signs of generating revenue within five to ten years. The primary reason for this is restrictions placed on the Elliott State Forest, transforming these lands from profit producing assets into deficit inducing liabilities.

The Common School Fund itself, which is invested by the State Treasurer and the Oregon Investment Council, consistently exceeds performance expectations. Over a three-year period ending in 2014, it earned a 13.25 percent average return on investment as opposed to the 0.1 percent earned by the State Trust Lands.

There can be no public trust in an agreement where one side fails to deliver. As such, there can be no trust in Oregon’s State Trust Lands. In the upcoming August State Land Board meeting, it is imperative that board members look to the past to prepare for the future.

There is already a precedent of transferring lands to private ownership in order to maintain the state’s fiduciary responsibility to the fund. The board needs to sell lands that are costing the fund and future generations, so that the trust in State Trust Lands can be restored.

Anna Mae Kersey is a research associate at Cascade Policy Institute, Oregon’s free market think tank. She recently graduated from Mercer University in Macon, Georgia with an Honors B.A. in Philosophy and is pursuing a Master’s of Liberal Arts at St. John’s College in Santa Fe, New Mexico.

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“Oregon Promise” Is Bad Policy

By Thomas Tullis

On July 17, Governor Kate Brown signed Senate Bill 81, the “Oregon Promise” legislation that allocates $10 million to a “free” community college tuition program for Oregon students.

As a current undergraduate at University of Oregon, I understand the importance of education and the problem of exponentially rising tuition costs. With college tuition increasing ten-fold over the last three decades, Oregon lawmakers likely have good intentions in implementing State Senator Mark Hass’s “Oregon Promise” idea. Good intentions, however, are not enough to make it good policy. Unfortunately, Oregon Promise will do little to solve the problem of tuition affordability. Rather, “free” tuition will actually hurt the cause because government subsidies are a major factor in the high cost of college tuition.

“Free” tuition is a “band-aid policy” because it ignores the real problem of rising costs of higher education. A basic understanding of economics leads to the conclusion that state-funded education encourages schools to raise tuition because they are guaranteed demand. Government subsidies (tax credits, loans, and grants) ensure that colleges can raise tuition and increase their spending, rather than cut costs. Even the government recognizes these unintended consequences: A recent Federal Reserve study showed that government grants and loans have caused a 65% increase in tuition. Oregon Promise won’t make college more affordable; instead, it will allow colleges to increase tuition.

Essentially, “free” education actually ends up costing more. It just doesn’t affect the student’s price directly. Tuition costs don’t go down; instead, the cost is diverted from the student to the taxpayers. Under the Oregon Promise law, it very well may be that Oregon college graduates who already have a burden of student debt will absorb the cost of the new “free” tuition.

As outlined in a recent article in The Oregonian, the legislation has already been criticized for its “last dollar” award calculation structure, by which low-income students eligible for other forms of aid could receive less Promise funding than higher-income students without as much aid. With a tuition rise inevitable, due to the guaranteed demand that these programs provide, those who are denied Oregon Promise money could end up paying even more in tuition.

The policy is negligent in other ways, also. While the opportunity to attend college is important, there are other routes to success for those who don’t fit into the traditional model of classroom higher education. College is not the only way for recent high school graduates to invest in their futures and acquire education and skills. The new Oregon policy encourages and supports only one method of education, while ignoring the importance and value of trade school, apprenticeships, and other paths to a career.

The Oregonian quotes national expert Dr. Sara Goldrick-Rab, a Wisconsin-Madison professor of educational policy studies and sociology, as claiming that “Oregon’s ahead of the whole rest of the country here, at No. 2” [with a free tuition program]. What she doesn’t recognize is that the only education statistic in which Oregon leads the nation is our #1 lowest high school graduation rate. The real solution to tuition affordability would be to free the education market from further government intrusion. Rather than conjuring up a government-funded 13th and 14th grade, Oregon needs to first look closely at our failing K-12 system. Lawmakers should focus on allowing a free market to exist for education providers at all levels, so they can compete on quality and price. A free market in education would help students be better prepared for college—and be able to afford it, too.

Thomas Tullis is a research associate at Cascade Policy Institute, Oregon’s free market think tank. He is a student at the University of Oregon, where he is studying Journalism and Political Science.

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Press Release: Cascade Policy Institute Urges TriMet to Cancel Proposed Tax Increase

July 23, 2015

FOR IMMEDIATE RELEASE

Media Contact:

John A. Charles, Jr.

503-242-0900

john@cascadepolicy.org

Cascade Policy Institute Urges TriMet to Cancel Proposed Tax Increase

PORTLAND, Ore. – At Wednesday’s TriMet board meeting, Cascade Policy Institute President John A. Charles, Jr. presented a detailed critique of TriMet’s proposed tax increase, and urged the Board to cancel public hearings on the tax proposal set for August and September.

Over the past several months, TriMet has been quietly meeting with business associations and large employers in efforts to gain political support to raise the rate of the regional payroll tax it imposes on most employers within the transit district. The current rate is 0.7237 percent. The proposal is to raise it by 1/10th of a percent, phased in over a ten-year period.

TriMet expects to have the first reading of the proposal on August 12, and a Board vote is scheduled for September 23. If approved, the rate increase will go into effect on January 1, 2016.

In his testimony, Charles pointed out that the last time TriMet increased the tax rate – the period of 2005-2014 – total operating revenues for TriMet increased by 80%, but actual service declined by nearly 14%. This was contrary to promises made by TriMet management in 2003 when the legislature authorized the tax rate increase.

Charles also reiterated that TriMet’s cost of employee benefits is unsustainable, with the cost of benefits equaling 149% of the cost of wages in 2014.

In addition to financial issues, the effectiveness of TriMet service is declining. According to TriMet records, ridership in 2014 was lower than it was in 2007, despite an increase in regional population. TriMet’s market share is also dropping. Portland commuters used transit for 12% of trips in 1997; in 2014, that number had dropped to 11%.

According to Charles, “TriMet thinks that the most recent labor agreement solves its employee compensation problem. It doesn’t. Until the cost of benefits drops below the cost of wages, TriMet has no moral authority to impose higher tax rates on local employers.”

The full critique of TriMet’s proposal can be viewed here.

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

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Economist Mark Skousen Reveals the "Hidden Forces" Leading to Economic Growth and a Higher Standard of Living

Cascade Policy Institute
presents

Professor Mark Skousen

named “one of the top 20 most influential living economists

as he reveals

What Hidden Forces Lead to Economic Growth
and a Higher Standard of Living?

and

Why are some countries rich and others poor?

 

Friday, August 14, 2015
11:30am – 1:00pm

Ernesto’s Italian Restaurant

8544 SW Apple Way (just off Beaverton-Hillsdale Hwy)
Portland, OR 97225 (directions)

Full Lunch Buffet and beverage

$18 complete cost including gratuity

Reservations and pre-payment required by August 12th

 

Mark Skousen grew up in Portland and is returning to talk with us before attending his 50th high school reunion at Sunset High School in Beaverton. His view of what leads to economic growth may surprise you—and dramatically alter your perception of how the world works. You can watch his 2005 talk for Cascade, “1776…The Triumph of an Idea,” here.

He earned his Ph.D. in economics from George Washington University and has taught economics and finance at five colleges and universities, including Columbia Business School and Columbia University. Currently, he is a Presidential Fellow at Chapman University in California. For the past 35 years, he has been editor of the award-winning investment newsletter “Forecasts & Strategies.”

Dr. Skousen has the unique distinction of having worked as an analyst for the Central Intelligence Agency, as President of the non-profit Foundation for Economic Education, and for several for-profit companies. As a former columnist for Forbes magazine, he interviewed some of the world’s top political and business leaders, including Warren Buffett, Bill Gates, and Presidents Clinton and Bush. He has authored over 25 books on economics and finance; and as a sixth-generation direct descendant of Benjamin Franklin, he finished Franklin’s Autobiography in 2006 with The Compleated Autobiography by Benjamin Franklin.

Mark Skousen may be best known currently for being the producer of the “the world’s largest gathering of free minds,” FreedomFest, held every July in Las Vegas. 2,500 people attended this year to watch columnist Paul Krugman debate Stephen Moore, the keynote speaker at Cascade Policy Institute’s 20th Anniversary dinner cruise in 2011.

Mark Skousen’s websites are: www.mskousen.com; www.markskousen.com; www.freedomfest.com.

Click here for the event flyer!

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Will “Free” Tuition Make College Cost More?

By Thomas Tullis

On July 17, Governor Kate Brown signed Senate Bill 81, the “Oregon Promise” legislation that allocates $10 million to a “free” community college tuition program for Oregon students. With college tuition having increased ten-fold over the last three decades, Oregon lawmakers clearly have good intentions, but that doesn’t make the Oregon Promise legislation good policy. Unfortunately, Oregon Promise will do little to solve the problem of tuition affordability. In the long run, it could actually cause education costs for students to increase because government-subsidized tuition is a major reason why tuition costs are so high in the first place.

Essentially, “free” education actually ends up costing more. It doesn’t just affect the student directly. Tuition costs don’t go down; instead, it only diverts the cost from the student to the taxpayers. Rather than making college more affordable, Oregon Promise will encourage colleges to increase tuition. Government loans and grants enable a guaranteed demand for services that ensures colleges can raise tuition and increase their spending. The government even admits to these unintended consequences with a recent Federal Reserve study that showed that government grants and loans have caused a 65% increase in tuition.

With Oregon boasting the lowest high school graduation rates in the country, lawmakers should focus on allowing a free market to exist for education providers to compete on quality and price. The real solution to tuition affordability would be freeing the education market from government intrusion.

Thomas Tullis is a research associate at Cascade Policy Institute, Oregon’s free market think tank. He is a student at the University of Oregon, where he is studying Journalism and Political Science.

 

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Portland Rideshare Drivers Praise “The Land of Opportunity”

Call it the smartphone/mobile app economy. Call it the Free World of Ridesharing. Call it the future. Whatever you call it, Uber, Lyft, and a host of smaller innovative companies are quickly transforming the century-long, highly government-regulated transportation market in Portland and around the world. And this is just a subset of a much broader technology-enabled transformation process that paints a vivid picture of what economist Joseph Schumpeter called the essential fact of capitalism: “creative destruction.”

By far the largest of the new ridesharing companies, Uber entered the Portland market uninvited in December 2014 and then stepped back to allow the city government time to revamp its antiquated taxi regulations. In April, the city enacted a four-month pilot program that basically let Uber and its smaller rival Lyft enter the Portland market and removed many regulations from the existing taxi companies.

Now, half-way through the pilot period, the City Council received an interim report on the program’s initial results and held a public hearing on July 15. Nearly 70 taxi and ridesharing drivers were given two minutes each to either praise their newfound opportunities to make a living, or bemoan the cuts in their incomes due to competition they felt was unfair.

While the interim report was full of statistics, it was the driver testimony that really personalized the issues before the Council. Time after time, rideshare drivers explained how upset their passengers had become with traditional taxi service, because of either long wait times or poor service.

Once seen as ridesharing’s staunchest opponent on the Council, Commissioner Steve Novick noted that he thought the report showed that “the experiment was working pretty well for consumers,” but that he wanted to hear more about the impact on drivers. He specifically asked drivers to say whether they preferred to be treated as employees subject to minimum wage law, workers compensation, and unemployment insurance—or do they prefer to be treated as independent contractors?

Novick’s question to drivers was in the context of a recent decision by the California Bureau of Labor that one specific Uber driver should be considered an employee even though ridesharing companies treat all their drivers as independent contractors who are able to set their own hours, use their own vehicles, etc. Uber has appealed the ruling, and has already prevailed in at least five other states in keeping its definition of drivers as independent contractors.

The way Novick phrased his question, it seemed he was hoping to hear many drivers testify that, sure, they would prefer all the guarantees and benefits afforded to employees over being independent contractors. Not one driver gave him that response. Time after time, rideshare drivers made obviously heartfelt statements about how thankful they were for the flexibility that being an independent contractor afforded them and their families.

Some drivers were caregivers for family members and so needed to be home when required. Others had been laid off elsewhere and appreciated the flexibility of driving while having time to seek other employment. Some had other jobs and used driving for Uber and/or Lyft as a way to generate extra income to pay their mortgages and other bills.

One woman told the Council how driving for Uber let her get off food stamps and become more independent. More than one noted that they had been entrepreneurs who had fallen on hard financial times and saw driving as simply one more entrepreneurial activity affording them much needed income.

One driver urged the Council to continue allowing ridesharing, noting that “this is the land of opportunity.” Another said, “I don’t work for Uber. I work for myself!” Still another noted, “We must all adapt to the world around us….Dinosaurs did not adapt!”

When one traditional taxi driver told Novick that he, too, preferred to be an independent contractor because of the flexible hours, the Commissioner told him that employees could be offered flexible hours also. Even with that information, the driver said he would be neutral as to his employee status. Not one driver at the hearing said they clearly preferred employee status over working for themselves as independent contractors.

There surely are individuals who prefer the benefits and safeguards afforded to formal employees. But obviously, many recognize and value the opportunities and the freedom of being independent contractors, now better enabled by smartphone technology. Let’s hope that Portland City Commissioners and Oregon’s Labor Commissioner all recognize these preferences and are willing to protect them. Otherwise, we risk going backward to the government-protected monopoly taxi industry that stopped working for many passengers long ago.

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Nevada’s Education Innovation

By Emma Newman

According to the U.S. Department of Education, Oregon’s 2013 graduation rate is the worst of all 49 states which reported data. Nevada, which held Oregon’s position at the bottom in 2012, has decided to do something truly bold and create a system that allows for unprecedented levels of accountability, opportunity, and individualization in education.

Next January, Nevada will start the most inclusive educational savings account program in the nation. Educational saving accounts, or ESAs, allow public school students to take 90 percent of the money the state would spend on them and put it on a restricted use debit card. Parents can spend this money on a wide variety of approved educational options, such as private school, individual tutoring, and distance learning. Any money not used is rolled over for parents to spend in the future.

By allowing parents to choose where they send their child to school, schools become more accountable. Families who currently can’t afford to pay taxes for the public school system plus tuition for private options will now have real opportunities to meet their kids’ individual needs, learning styles, and interests.

While Oregon responded to having the worst graduation rate in the nation by giving its failed Oregon Education Investment Board a new name, Nevada responded with innovation.

Emma Newman is a research associate at Cascade Policy Institute, Oregon’s free market think tank. She is a student at George Fox University, where she is studying Economics and Computer Science.

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“Right to Try” Is a Good First Step, Should Be Expanded

By Anna Mae Kersey

Oregon House Bill 2300 gives terminally ill patients access to potentially life-saving drugs or investigational products not yet approved by the FDA that they might otherwise die waiting for.

While the necessity of such a bill is largely uncontroversial, and since last year more than 20 states have passed similar legislation, restrictions are included in Oregon’s law that severely limit the types of terminally ill patients who would be eligible for this kind of treatment.

As passed unanimously by both the House and the Senate, HB 2300 leaves out children with fatal illnesses and patients in the early stages of cancer or progressive neurodegenerative diseases like ALS, and instead holds them subject to the same restrictions as those seeking “Death with Dignity” or assisted suicide. These patients, who have the possibility of living long and fulfilling lives during which their illnesses might be contained, if not eliminated, are denied this prospect, along with the fundamental human right to care for themselves.

HB 2300 is a good start in the direction of increasing medical autonomy for the terminally ill in Oregon. However, in future legislative sessions the law needs to be expanded so that terminally ill patients seeking to exercise their “Right to Try” are not subject to the same constraints as those seeking the “Right to Die.”

Anna Mae Kersey is a research associate at Cascade Policy Institute, Oregon’s free market think tank. She recently graduated from Mercer University in Macon, Georgia with an Honors B.A. in Philosophy and is pursuing a Master’s of Liberal Arts at St. John’s College in Santa Fe, New Mexico.

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Taking Leave of Sickness

By Maxford Nelsen

A version of this article by Freedom Foundation labor policy analyst Maxford Nelsen originally appeared in The American Spectator on July 1, 2015.

Oregon’s Legislature just passed a law requiring employers with 10 or more employees to offer five days of paid sick leave to their employees per year, making Oregon the fourth state to adopt sick leave mandates for employers, following Connecticut, California, and Massachusetts. Oregon employers with fewer than 10 employees must offer five days of unpaid sick leave per year.* At the federal level, President Obama called for a national paid sick leave law in his 2015 State of the Union address.

But while labor activists treat paid sick leave like a proxy war against Wall Street, the casualties are all on Main Street. In practice, paid sick leave mandates like Oregon’s fall short of supporters’ expectations and are startlingly ineffective at achieving their basic goal of keeping sick employees from coming to work.

Only about 10 studies have attempted to measure the impact of existing paid sick leave regulations, which took off after San Francisco adopted a sick leave ordinance in 2006. A Freedom Foundation report, which was informally reviewed by academic and professional economists, evaluated the existing research and came to some surprising conclusions.

First, while supporters argue that public health demands mandating paid sick leave, workers come to work sick just as often with a mandatory paid sick leave policy as they do without one. Of the five studies to examine the effect of mandatory paid sick leave laws on workplace illness, four found no reduction. One study for the Seattle City Auditor noted that the lack of any decline in workplace illness “seemingly contradicts the intent of the [Seattle] ordinance.”

Second, mandatory paid sick leave laws do nothing to reduce turnover. One methodologically questionable study of Connecticut’s paid sick leave law by a pro-sick leave advocacy group reported a slight decrease in turnover, while a more credible study of Seattle’s paid sick leave ordinance by the University of Washington reported effectively no changes in turnover.

The result should not come as a surprise. As one small business owner in San Francisco—who offered paid sick leave—explained, “Since the new ordinance, employees will have the same benefit no matter where they work. There’s less of an incentive to stay and work for me.”

Third, consumers, workers, and employers are all negatively affected by mandatory paid sick leave policies. Employer surveys indicate that affected businesses frequently respond to paid sick leave laws by increasing prices, decreasing employee benefits and hours, and limiting expansion. Even after taking steps to offset the additional expenses, many businesses report reduced profitability.

Fourth, studies tend to exaggerate employer support for mandatory paid sick leave laws. All four of the studies that asked employers whether they supported the mandate found a majority of employers were supportive. In each case, however, a majority of employers were already mostly or completely in compliance with the law and had to make few changes in response, with the rate ranging from 50 to 89 percent.

While it is hardly surprising that unaffected businesses support a mandate that places additional costs on their competitors, most businesses that had to create new or modify existing policies appear to be opposed to paid sick leave mandates. Many of these businesses also report significant difficulty implementing the mandates.

Lastly, some paid sick leave laws are designed to promote union organizing. Paid sick leave statutes in at least San Francisco, Seattle, Washington, D.C. and Oregon’s new law contain provisions that allow labor unions to waive sick leave requirements in collective bargaining.

Such statutes allow unions to approach non-union employers and offer to waive the sick leave requirements in exchange for the employer’s cooperation in unionizing employees. Studies of San Francisco and Seattle’s sick leave ordinances indicate the waivers are frequently used.

But if paid sick leave is a basic workers’ right, as labor activists contend, why should union workers be the only ones exempt?

Overall, the evidence indicates that requiring employers to provide paid sick leave benefits produces few appreciable benefits and even raises costs.

Oregon’s course may be set, but it’s not too late for other states and the federal government to take heed of the evidence and approach paid sick leave mandates with a healthy dose of skepticism.

* “Employers with Portland operations and who employ at least six employees anywhere in the state will similarly be required to provide up to 40 hours of paid sick leave benefits. Employers with fewer than 10 Oregon-based employees, and fewer than six employees, if operating in Portland, must provide up to 40 hours of unpaid sick leave per year.” Source:  http://www.natlawreview.com/article/oregon-enacts-paid-sick-leave

Maxford Nelsen is Labor Policy Analyst at the Freedom Foundation in Washington State and a guest contributor for Cascade Policy Institute, Oregon’s free market research organization. A version of this article originally appeared in The American Spectator on July 1, 2015.

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Press Release – Oregon Right to Try Bill Unanimously Passes the House and Senate

July 6, 2015

FOR IMMEDIATE RELEASE

Media Contact:

Steve Buckstein

503-242-0900

steven@cascadepolicy.org

Oregon Right to Try Bill Unanimously Passes the House and Senate

PORTLAND, Ore. – Oregon’s Right to Try bill, HB 2300 B, passed 29-0 in the Senate and was re-passed with some restrictive amendments in the House by 60-0 last week. It now goes to Governor Kate Brown’s desk for her signature. The law will give some terminally ill Oregonians the Right to Try experimental drugs and devices not yet approved by the FDA.

Cascade Policy Institute founder Steve Buckstein noted, “The final bill is more restrictive than similar statutes in 21 other states (with its 18-year-old minimum age limit and its six-months to expected death definition of terminal illness), but it’s a good start and hopefully can be expanded in the future to cover children and people who have terminal illnesses such as ALS where patients may live for a number of years.”

Buckstein thanked House Health Care Committee Chair Mitch Greenlick (D), committee member and work group leader Knute Buehler, MD (R), and Senate Health Care Committee Chair Laurie Monnes Anderson (D) for all their hard work on the bill. He noted that these three legislators started working on this legislation before the session even started, and stuck with it all the way to final unanimous passage in both houses.

Buckstein also thanked the Goldwater Institute of Arizona for pioneering the Right to Try concept around the country and for its help in Oregon. He also thanked Diego Morris, the Arizona teenager who had to move to London for treatment approved in Europe but not in the United States when he contracted terminal osteo sarcoma at age eleven. The treatment was successful and Diego is now cancer free. Diego and his mother Paulina visited the Oregon Capitol in February to make their case for allowing terminally ill Oregonians the right to try experimental drugs. When asked by a reporter what he would say to critics of the Oregon Right to Try bill, he looked up at her and said, “Wait until they find themselves in my situation, and then ask them.”

Buckstein concluded, “This truly bipartisan effort resulted in a bill that could literally mean the difference between life and death for some terminally ill Oregonians. I’m proud of the work Cascade Policy Institute did to promote the Right to Try concept and bill in Oregon, and look forward to Governor Brown signing the bill so it can take effect at the beginning of 2016.”

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

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