Month: September 2016

Policy Picnic – October 26, 2016

Please join us for our monthly Policy Picnic led by

Cascade’s President and CEO, John A. Charles, Jr.


Watch Your Wallet November 8! Why You Should Vote No on Tigard Light Rail and Metro’s Open Space Levy

Metro is asking for a new tax levy despite the fact that it already has sufficient funds to operate all its parks. Since 1995, Metro has spent hundreds of millions of tax dollars buying up large tracts of lands far from where most people live. The Metro Council doesn’t want you (or your dog) to use most of these lands, but they do want you to pay for them. Metro’s Five-Year Operating Levy (Measure 26-178) is one more wallet-grab.

The proposed Tigard-Tualatin light rail project (Measure 34-255 in Tigard) would cost at least $240 million per mile to construct — the most expensive transit project in state history. Tigard will be required to fund part of that price tag, and increased taxes will be the result. This is what happened to the City of Milwaukie and Clackamas County when Metro forced through the Orange line.

John Charles will give you the inside story on these two ballot initiatives and tell you what their proponents don’t want you to know. He’ll explain what these measures really do and what they mean for you, your family, or your business. Bring your friends and coworkers!

Admission is free, but reservations are required due to space limitations. You are welcome to bring your own lunch; light refreshments will be served.

 

Cascade’s Policy Picnics are generously sponsored

by Dumas Law Group, LLC. 

Dumas Law Group
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“The Rent Is Too Damn High!” — Why Rent Control Won’t Help

Once again, Portland led the nation this July with its home prices rising 12.4 percent year-over-year versus the national average of just 5.0 percent. As of April, Portland remained the 12th most expensive rental market in the nation. These numbers are not unrelated. Housing prices are often related to what units can be built for, whether they are single-family homes or multifamily apartment houses.

Whatever the causes of rising rents in Portland and elsewhere, the political fix bubbling to the surface not only won’t help most people afford housing, it likely will make the situation worse. That political fix goes by the name of rent control.

Last year, Willamette Week published an informative and entertaining piece entitled “The Five Myths About Portland Apartments.” In response to Myth 3, which is that rent control is the answer, Jerry Johnson of Portland real-estate consulting firm Johnson Economics noted:

“Rent control is an Econ 101-level policy disaster. If you happen to get one of the rent-controlled units, good for you. But it’s basically a lottery of who wins and who loses.”

Apparently unaware of the policy disaster that rent control forebodes, Oregon Speaker of the House Tina Kotek recently proposed allowing localities to enact their own rent control programs. She also wants to end so-called “no-cause” evictions and to ban rent increases above a “reasonable” percentage “for the foreseeable future.” In her prepared remarks she said, “Our housing crisis is a man-made emergency that demands bold action,” and, “We have privileged the right to make a profit on property far above the universal human right to safe and stable housing.”

Our housing crisis may very well be a man-made emergency. If so, the Speaker has misdiagnosed the cause, which has more to do with Oregon’s “man-made” restrictive land use laws than it does greedy landlords. And, the “bold action” she proposes likely will make the situation worse.

Economists of virtually every political stripe reject rent control as a viable way to improve housing affordability. They recognize what too few of our political leaders and voters recognize: namely, that controlling the price of a commodity, in this case rental housing, actually harms the very people the policy is designed to help. They know from economic theory and observation over many decades The High Cost of Rent Control. They know that it misallocates housing resources, heightens tensions between landlords and tenants, stifles private investment in affordable housing, and leads to deterioration and eventual abandonment of the very housing stock that middle- and lower-income tenants wanted it to protect for them at affordable prices.

Three local economists were quick to respond to Speaker Kotek’s suggestions:

“Rent control just sends us a couple hundred miles closer to San Francisco in terms of housing policy,” said Gerard Mildner, director of the Center for Real Estate at Portland State University.

“It’s almost textbook that any form of rent control ultimately harms consumers, as well as landlords,” said Eric Fruits, an economist and editor of Portland State University’s Center for Real Estate quarterly reports. “It may benefit some in the short term, but in the longer term, there will be fewer units available to rent, which will only make matters worse.” Instead, Fruits said, the free market should be allowed to work, with higher prices sending signals to developers that more units are needed.

“The demand for urban living is increasing and cities are not increasing the supply nearly fast enough,” Portland economist Joe Cortright said. “The only solution is to build new housing.”

As an Oregonian editorial then pointed out:

“Among other things, limiting rent growth dampens future investment in housing, inflates rents for unregulated units and discourages residents who secure rent-controlled units from moving, even when it’s in their best interest.”

In a lively discussion on social media following Speaker Kotek’s pronouncements, one person responded to her call for an end to “no-cause” evictions:

“No cause eviction benefits good tenants. When the bad guys move in, they threaten the good tenants who are afraid to testify about their behavior. The good tenants become prisoners in their apartments while the bad guys run wild. A landlord’s only defense is to become more restrictive on who they will rent to, therefore decreasing options for all renters.”

Even self-proclaimed “progressive” Portland city commissioner, Steve Novick, notes:

“…most economists say rent control has unintended consequences, including a decline in the production of new rental housing.”

While this is true, in “progressive” Portland and in the state Capitol economic laws are often trumped by political laws that make people feel better for a while, until economic reality rears its ugly head. Of course by then those who passed the laws have often moved on.

Accountability is rarely a part of the political process, which may be why it so often leads to unintended consequences that harm the very people the politicians were trying to help. Unfortunately, we may be destined to repeat this process again as rent control lurches onto the 2017 legislative agenda.


* Political activist and frequent candidate Jimmy McMillan memorably used “The Rent Is Too Damn High!” as his main campaign issue, slogan, and the name of his political party during his campaigns, including the 2010 New York gubernatorial election.

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Will the PUC Make Oregon’s Solar Energy Incentives Equitable?

By Lydia White

In accordance with House Bill 2941, the Public Utilities Commission (PUC) is making recommendations to the Oregon State Legislature to ensure Oregon’s solar energy incentives are equitable, efficient, and effective.

One recommendation is to modify the compensation method for solar energy, net metering. Under net metering, solar owners consume energy their panels produce. When energy produced is insufficient, solar owners purchase additional energy from traditional sources. When excess energy is produced, solar owners sell energy. Solar owners are compensated at above-market rates and are exempt from paying their portion of incurred costs. Such costs include operation and maintenance of the grid and “spinning reserves,” the alternative power source utility companies run continuously in case solar produces less energy than projected. The state’s incentive structure shifts costs from solar owners to non-solar ratepayers. As the number of solar owners increases, ratepayers bear higher costs. The PUC is recommending these costs instead be shifted to taxpayers. While the PUC proposal’s efforts to alleviate inequity are commendable, their proposed recommendations still constrain Oregonians.

Although solar owners are double-dipping into the taxpayer pot—once when receiving heavily subsidized (and therefore low-cost) solar systems and again when receiving above-market compensation—the solar community is vehemently protesting. Despite the outcries, the PUC should pursue its recommendation to transition from net metering while also rejecting subsidies from ratepayers and taxpayers alike. By doing so, the PUC’s recommendations could relieve Oregon’s ratepayers from substantial burden.


Lydia White is a Research Associate at Cascade Policy Institute, Oregon’s free market public policy research organization.

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Freedom in Film: Won’t Back Down (2012)

With students everywhere heading to class, we hope you enjoy Part 3 of Cascade’s “virtual” back-to-school School Choice Film Fest.

Social problem films are not generally “feel-good” movies, in the sense that viewers feel comfortable with their feet up, eating popcorn, laughing with the heroes, and hoping for happily ever after. Won’t Back Down (2012) is a bit different. The film makes clear the near-impossibility of a desperate single mother getting her small daughter out of the worst public school in town; but it maintains a buoyant, upbeat vibe.

Here is what Cascade’s Steve Buckstein said about Won’t Back Down when it opened in theaters:

It’s not often that a Hollywood movie both entertains and helps parents learn about another option to improve their children’s education. The film Won’t Back Down…does both.

Inspired by actual events, it’s the story of a third-grade student trapped in a failing public school. Unable to afford a private education, her mother, played by actress Maggie Gyllenhaal, learns about parent trigger laws, now the reality in seven states, which allow parents to take control of such schools and institute improvements.

Gyllenhaal enlists the help of a dedicated teacher in her daughter’s school, played by actress Viola Davis, to jump through the myriad of hoops put in their way. Together, they learn how to fight not only the bureaucracy, but the powerful teachers union, personified by actress Holly Hunter.

The film explores the complex relationships among good teachers, bad teachers, and a union whose leader once famously said he’d represent the interests of schoolchildren when they started paying union dues. Poor parents who want the best for their children are given a glimpse of the educational choices that those with political power are able to make.

Surprisingly, the good guys aren’t all good, and the bad guys aren’t all bad, in this multi-layered drama….

Won’t Back Down was criticized by some as “anti-union” or even “anti-teacher.” But it is actually a relatively gentle take on union/parent/teacher conflicts. The film takes extra care to present the concerns and fears of lifelong public school teachers and union members with sympathy and understanding. The characters are lovable, and the drama is human.

The takeaway can be summed up by the school board member who, casting the decisive vote, says….Well, you’ll have to see the movie to find out.

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Freedom in Film: Waiting for “Superman” (2010)

With students everywhere heading to class, we hope you enjoy Part 2 of Cascade’s “virtual” back-to-school School Choice Film Fest.

The 2010 documentary film Waiting for “Superman” ignited new interest in the desperate desire of low-income parents to get their kids out of failing, one-size-fits-all public schools into better-performing charter schools. The five children poignantly profiled in the film faced barriers to their dreams in the form of too few charter school seats and a lottery acceptance process that made their futures dependent on a roll of the dice.

Charter schools have become a vital education option for thousands of students throughout the U.S. Moviegoers previously unfamiliar with charter schools (public schools with more freedom to be innovative than traditional district public schools) began to understand why parents―especially lower-income parents―want their kids so much to have a chance to attend charters.

Demand for charter schools far outstrips available seats, as Cascade’s 2011 study of Oregon charter school waiting lists found. Opening more charter schools is an important piece of the education reform puzzle. However, immediate, viable, successful alternatives to failing public schools have existed, often right in parents’ own neighborhoods, for decades. In much of the U.S., those options pre-date the American public school system itself.

Private and parochial schools have been a lifeline for low-income kids for generations, and today’s school choice movement seeks to maximize parents’ options for choosing the public, private, online, public charter, or home school that is the best fit for their children. Dozens of states and the District of Columbia have pioneered voucher programs, education tax credit laws, and Education Savings Accounts for parents. Private charity also plays a major role in helping children in need get a hand up early in life.

Education Savings Accounts, or ESAs, may be the most flexible way for states to help children learn in the ways that are best for them. ESAs are not a college savings plan. Rather, if families decide the public schools to which their children are assigned are not meeting their needs, they can leave those schools and instead receive money from the state to pay for approved alternative education options and expenses. Parents can spend the funds on private school tuition, individual courses at public schools, tutoring, online learning, textbooks, educational therapies, and other education-related services and products. They can use a combination of these services based on what they think would best meet their child’s learning needs.

Reforming our public education system is necessary, but low-income kids can’t wait for Superman. When the 2017 Oregon legislative session begins in January, ask your state legislators to empower Oregon children to succeed in whatever education setting works for them by supporting an Education Savings Account law.

And if you haven’t seen it yet, this is a great week to watch Waiting for “Superman.”

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Twenty-Five Years Litigating for Liberty

How many attorneys do you know who make their living defending liberty? Well, 43 attorneys work full-time at the national public interest law firm Institute for Justice. They protect school choice, economic liberty, the First Amendment, and private property. Supported by generous donors, the Institute for Justice never charges its clients.

Founded 25 years ago, the Institute for Justice has litigated over 200 cases, including five before the U.S. Supreme Court, where it won four times. The fifth case led to the infamous Kelo decision, where the Court unfortunately seemed to forget that private property cannot be taken through eminent domain for a “public purpose,” but only for a “public use.”

This year, Arizona Governor Doug Ducey appointed Institute for Justice co-founder Clint Bolick to the state Supreme Court, saying that “Clint is nationally renowned and respected as a constitutional law scholar and as a champion of liberty.”

It is fitting on this 25th Anniversary of Clint Bolick’s Institute for Justice that Oregon’s free-market think tank Cascade Policy Institute has chosen him as the Keynote Speaker at our 25th Anniversary Dinner on October 20. There, Justice Bolick will talk about how important defending personal and economic liberty has been—and still is in his new role on the Court. You won’t want to miss his inspiring talk.

For full details and to RSVP, go to CascadePolicy.org/25.

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Freedom in Film: To Sir, with Love (1967)

With students everywhere heading to class, we hope you enjoy Part 1 of Cascade’s “virtual” back-to-school School Choice Film Fest.

Nearing the end of his patience, a first-year teacher challenges his scarcely literate students to think seriously about the lives ahead of them. What will happen after high school graduation? One academically indifferent girl supposes she’ll get married, giggling that “everybody gets married.”

Such comfortable assumptions have disappeared since 1967; much else about the lives and troubles of at-risk teenagers hasn’t.

To Sir, with Love stars Sidney Poitier as Mark Thackeray, an engineer who takes a temporary teaching job. The kids are rough, uninterested in school, and oblivious to the possibility that they could become more than they are. The gentlemanly Mr. Thackeray, called “Sir” by his students, is as much a culture shock to them as they are to him.

To Sir, with Love is like a time capsule of the late 1960s: Sentimental optimism contrasts with the grittiness of poverty, illiteracy, teenage rebellion, and rapid social change. There is a sense that Mr. Thackeray’s class is careening wildly toward dead-end or delinquent adulthoods, and he has a few short weeks to reach at least some of his students before they are lost. His greatest asset as a teacher, though, has nothing to do with cutting-edge curriculum or teaching “best practices.”

It is culture. “Sir” is a living example of another world which his students could choose to enter, if only they could see themselves in it. Through him they experience, for the first time, what it is to have dignity. As the teenagers begin to awaken to their own self-worth, they start to grasp why people have manners, respect others, and behave in ways that draw respect in turn. They take interest in the written word and the process of intellectual inquiry.

Education is more than transmission of facts; it’s an invitation to explore the world of the soul, of human creative capacity, and of the physical universe. When students get in touch with their own dignity as human beings, they grasp the meaning of learning. They no longer mark time until school is out; they transform as students and as people.

Great teachers help students discover the grandeur of human existence, potential, and achievement and that they are made for more than superficial pleasures and “easy outs.” To Sir, with Love shows what can happen when the right adult comes into a teenager’s life at the right time―and why that’s so important.

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The Everyday Heroes of 9/11, Remembered

“The greatest thing I ever did with my life.”

The largest sea evacuation in history took place on September 11, 2001, when nearly 500,000 civilians were rescued from Manhattan by boat in less than nine hours. By comparison, during World War II, the evacuation after the Battle of Dunkirk saved 339,000 British and French soldiers over the course of nine days.

Many of the rescue boats were private watercraft whose owners volunteered to ferry thousands to safety.

“No training, just people doing what they had to do that day,” said a man who worked on one of the boats.

“Average people, they stepped up when they needed to,” said another.

This video narrated by Tom Hanks tells their unforgettable, moving story.

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Improve Education Outcomes Through Education Savings Accounts, Not Measure 97’s Hidden Sales Tax

On the third day of the new school year at Portland’s Madison High School, Governor Kate Brown spoke about her goal to improve educational outcomes for all students. She bemoaned the fact that at 74%, Oregon has one of the lowest high school graduation rates in the country, and then she noted that “For me this is a very personal issue”:

“My stepson blew out of one of the local area high schools a few years ago. We were very fortunate. We had the resources to provide him with another educational opportunity, but not all families do. That’s why it’s absolutely imperative that we work together to improve Oregon’s high school graduation rates.”*

So how does Governor Brown propose to assist families that don’t have the resources hers had to help their children achieve educational success? Apparently, by supporting Measure 97 on the November ballot, which would be the biggest tax increase in Oregon’s history.

In reality, Measure 97 is a sales tax hidden behind the façade of being a tax on big business. Its passage will actually make it harder for many of the families the Governor wants to help, in the questionable hope that the revenue it generates would be spent properly to give their kids a better chance at graduation from the same schools that have failed so many in the past.

Measure 97 will not only act as a consumption tax on many of the goods and services Oregon families buy every day, but it also will reduce private sector employment opportunities as more than $3 billion are siphoned out of the private sector into the state general fund each year. From there, all this money—which is about what a six-percent retail sales tax would produce—may or may not be spent in ways that would give struggling families the same opportunities that the Governor’s family had when her stepson needed help.

Rather than ask voters to take a $30 billion gamble over the next ten years on a tax measure that may not show any positive economic or educational results for Oregon families, the Governor and voters should consider another way to provide all families with the resources they need to give their children the educational opportunities they deserve. And, this other way will not raise anyone’s taxes, and it will not reduce anyone’s job prospects.

This other way is school choice. Governor Brown’s predecessor, John Kitzhaber, took a major step toward this other way when he signed Oregon’s public charter school law in 1999 that currently allows more than 30,000 students to attend some 127 charter schools for educational opportunities they otherwise would have been denied. All without costing taxpayers or the public school system one additional dime.

Oregon is one of forty-three states and the District of Columbia that offer public K-12 charter school opportunities to their families. Now, the newest wave in the school choice movement is offering Education Savings Accounts in five states, and that number is sure to grow.

Education Savings Accounts, or ESAs, are not a college savings plan. Rather, if families decide the public schools their children are assigned to are not meeting their needs, they can leave those schools and instead receive money from the state to pay for approved alternative education options and expenses. Parents can spend the funds on private school tuition, individual courses at public schools, tutoring, online learning, textbooks, educational therapies, and other education-related services and products. They can use a combination of these services based on what they think would best meet their child’s learning needs.

Each eligible child is able to draw from his or her own personal Education Savings Account maintained by the state and funded by most, but not all, of the money that otherwise would have been sent to the local school district. When properly structured, ESAs require no new taxes and are not a financial burden on the state or local public school districts. They simply allow money already allocated for public education to be used in ways individual families choose, instead of in ways dictated by the ZIP code students happen to live in.

In an improvement over earlier school choice programs such as vouchers, ESAs let families spend only what they want to each year, and save or rollover the balance toward future educational needs. If not all the money in an ESA is spent by the time a student graduates from high school, the remaining funds may be used to help cover his or her higher education costs.

So, let’s not ask taxpayers to gamble that our troubled public schools will somehow get it right this time if we simply give them enough new money out of our pockets with the hidden sales tax in Measure 97. Instead, let’s ask our legislators in Salem to explore a new, truly innovative way to improve educational outcomes for each individual student with personal Education Savings Accounts.


* Governor Brown’s complete remarks at Madison High School were recorded and can be heard on this KXL radio episode of Beyond the Headlines in the first segment of about seven minutes at https://soundcloud.com/kxl-beyond-the-headlines/week-of-8-28-16-episode-130

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MAX at 30: Portland Transit Needs a New Plan

September 5 marked the official 30th anniversary of the opening of TriMet’s light rail system. Like many Portland residents, I took a free ride that day and felt that this was a big step forward for transit service.

Unfortunately, actual performance never lived up to the hype. My hopes for “high-speed” transit were dashed when I discovered how many stops there were. The average train speed today is only 18 MPH.

My expectation that MAX would include five or six train cars was also incorrect. There are only two cars per train on MAX, and there will never be more than two cars because Portland has 200-foot blocks in downtown. Longer trains would block busy intersections.

The cost of construction also spiraled out of control. The Orange line to Milwaukie cost $210 million per mile, making it hundreds of times more costly than simple bus improvements.

In short, MAX is a low-speed, low-capacity, high-cost system, when what we really need is just the opposite—a higher-speed, higher-capacity, low-cost system.

Regional leaders should pull the plug on any more rail and start focusing on the future of transit, which will feature driverless vehicles, door-to-door delivery, and private car-sharing services such as Uber Technologies.

The passenger rail era died a hundred years ago. It’s time for Portland to get into the 21st century.

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