Month: July 2018

High Costs and Low Ridership Are Nothing New for Southwest Corridor Project

By Rachel Dawson

Decreasing ridership paired with increasing costs makes for a bad business decision for TriMet’s proposed Southwest Corridor plan. The TriMet proposal would add an additional light rail line stretching from downtown Portland to Bridgeport Village in Tigard. The project’s draft environmental impact statement predicts what TriMet thinks will happen, without taking into consideration what has occurred with past projects.

The plan estimates that rides on every current light rail line will more than double, and the total weekday rides will nearly triple by the year 2035. However, in recent years light rail rides have been decreasing or plateauing across the board.

But overpredicting ridership isn’t anything new: Every single past TriMet light rail plan overestimated the number of rides it would have.

Additionally, the capital costs of light rail projects historically have been underestimated, meaning projects have proven to be more expensive than what TriMet had predicted. This has already become evident with the Southwest Corridor plan: In 2016 the capital costs were predicted to be $1.8 billion dollars, which increased to $2.8 billion in 2018.

Increasing prices plus decreasing ridership sounds more like a recipe for economic disaster than a successful project. You have the opportunity to voice your opinion at the southwest corridor public hearing on Thursday, July 19 at the Tigard City Hall.

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

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Metro’s Waste Reduction Program Lacks Direction and Accountability

By Justus Armstrong

This October, the Portland-area Metro Council will award the first round of grants for its Investment and Innovation program. The program’s goals include strengthening local waste reduction efforts and fostering economic benefits for those from marginalized communities; but with a combination of corporate welfare and vague performance measures, the means by which Metro hopes to obtain these goals are murky at best and unethical at worst.

The program, which sets aside $3 million a year from Metro’s solid waste reserve fund over a three-year pilot period, offers two tiers of grants—one tier ranging from $10,000 to $50,000, the other from $50,000 to $500,000—to nonprofit organizations and for-profit businesses alike. Metro directs the larger capital grants toward “investments in equipment, machinery and/or buildings” for projects in line with its waste reduction goals. In awarding capital to businesses, Metro seeks to improve regional recycling and disposal infrastructure, but seems to have no regard for the program’s marketplace consequences.

By matching assets with public funding, Metro grants an unfair advantage to businesses that follow its environmental agenda. While the grants program limits funding to costs tied to waste reduction projects, padding companies’ overhead and capital costs to benefit these projects goes outside the scope of Metro’s stated goals and undermines the competitive marketplace. Businesses should earn investment capital such as buildings and equipment by themselves, not through taxpayer handouts. Most citizens would oppose the use of their tax dollars to prop up privately owned corporations. Apart from good intentions and “green” packaging, what makes this project demonstrably different? How does it fit into Article XI, Section 9 of Oregon’s Constitution, which states that no municipality shall “raise money for, or loan its credit to, or in aid of, any such company, corporation or association?” Many questions have yet to be addressed.

Even for measuring success, the program’s standards are unclear; and Metro has been down this road before. Metro’s Community Planning and Development Grants program awarded around $19 million from 2006-2015 to help local governments prepare land for development. Like the Investment and Innovation program, these grants were intended to advance Metro’s long-term vision, but a 2016 report from Metro auditor Brian Evans found problems with clear direction. “The program has become less aligned with certain regional planning priorities over time,” Evans wrote. “Changes to the program reduced clarity about what was intended to be achieved and there was no process in place to evaluate the program’s outcomes.”

The Investment and Innovation program faces similar risks. Since the grants outsource waste reduction goals to third parties, Metro can only guess at their potential effectiveness. In a pre-proposal workshop for prospective applicants, Program Manager Suzanne Piluso could offer no estimate of the program’s effect on waste, saying it would take until after the pilot period to “determine if it’s moved the needle.” To be clear, that’s $9 million for a waste reduction program that can’t promise to actually reduce waste. Metro is handing out taxpayer money for hypothetical benefits that are unlikely to match the price tag.

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

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Gov. Brown, lawmakers, unions decry court ruling / Published in News Channel KTVZ

SALEM, Ore. – Top Oregon Democrats, including Gov. Kate Brown and Sen. Jeff Merkley, joined union officials Wednesday in expressing disappointment in a U.S. Supreme Court ruling that struck down an Illinois law allowing unions to assess fees against non-members to help fund collective bargaining efforts.

In reaction to the U.S. Supreme Court’s decision in Janus v. AFSCME, Governor Kate Brown, Tom Chamberlain (president of Oregon AFL-CIO), John Larson (president of the Oregon Education Association), Melissa Unger (executive director of SEIU Local 503), and Stacy Chamberlain (executive director of Oregon AFSCME), released the following joint statement:

“Oregon’s economy is thriving, but the rising economic tide is leaving too many behind. Every day, we hear from families struggling to make ends meet, single parents working two jobs to get by, young people buried by student loans, and seniors who’ve spent down their life savings to keep up with the rising cost of living.

“Today, Oregon families face new challenges, but unions are on the forefront, fighting for working families, fair pay, and more affordable housing. Our union members have led the fights to raise the minimum wage, ensure that women and …

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Local unions rally against SCOTUS union decision / Published in KOIN

PORTLAND, Ore. (KOIN) — Unions, and the people that make them up, headed to Portland City Hall on Wednesday night to rally against a Wednesday ruling by the U.S. Supreme Court that ended mandatory union fees that support government employees working in collective bargaining agreements.

Those people say they will not be beaten by the Supreme Court’s 5-4 decision in Janus v. AFSCME Council 31, a decision they say threatens organized labor.

“Our members know what is at stake,” said Stacy Chamberlain, the ex-director of AFSCME. “They know they need to stand together if we are going to be strong and negotiate good contracts and fight against privatization, some of the other things that we know that these anti worker groups are going to try to do.”

Gov. Kate Brown, along with other union leaders, issued a statement, calling the ruling …

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Supreme Court deals big setback to labor unions, local groups gather in Portland / Published in KATU

The Supreme Court issued a ruling in an Illinois labor case Wednesday that said public employees can’t be forced to pay fees to labor unions that represent them in collective bargaining.

Union organizers in the Portland area are expected to gather around 5:30 p.m. Wednesday in front of Portland City Hall.

Those in favor of the decision say it’s a victory for freedom of choice and speech for workers who may disagree with a union position and decide not to support the organization financially.

Others like Oregon Senator Jeff Merkley say it is a blow to workers represented by unions.

“This is another movement away from a nation that …

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Local unions react the ruling by the Supreme Court / Published in KVAL Eugene Oregon

EUGENE, Ore. – Top public employee unions in Oregon are less than pleased with the big decision on Wednesday when the U.S. Supreme Court ruled on union dues.

The case is called Janus versus AFSCME, and the high court’s ruling on Wednesday is causing a lot of reaction. Supporters of the ruling say that it’s a boost for first amendment rights, but detractors say it’s a big setback for working families.

The Supreme Court ruled that government workers cannot be compelled to contribute fees to labor unions that represent them in collective bargaining. It’s considered a significant financial blow to organized labor.

One of the chief free-market think-tanks in Oregon says that this decision was the right one.

“Public employees, as of today in Oregon and 22 other states that are not right-to-work states, do not have to pay dues to a union that they disagree with,” said Steve Buckstein, the Director of the Cascade Policy Institute.

Some local labor and management agencies refused to go …

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Supreme Court Decisions Deals Blow to Labor Unions / Published in KAST 1370AM

The Supreme Court ruled Wednesday that government workers can’t be forced to contribute to labor unions that represent them in collective bargaining, dealing a serious financial blow to organized labor.

The justices are scrapping a 41-year-old decision that had allowed states to require that public employees pay some fees to unions that represent them, even if the workers choose not to join.

The 5-4 decision fulfills a longtime wish of conservatives to get rid of the so-called fair share fees that non-members pay to unions in roughly two dozen states. The court ruled that the laws violate the First Amendment by compelling workers to support unions they may disagree with.

“States and public-sector unions may no longer extract agency fees from nonconsenting employees,” Justice Samuel Alito said in his majority opinion for the court’s five conservative justices.

President Donald Trump weighed in minutes after the decision was handed down, while Alito …

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Metro’s November Bond Measure Would Make All Housing More Costly

By John A. Charles, Jr.

Metro recently decided to refer a $652.8 million bond measure to the November ballot. If approved by voters, it would authorize Metro to borrow money either to purchase existing housing units or to subsidize the construction of new ones. The loans would be paid off by higher taxes on every property owner in the region for the next 30 years.

Unfortunately, of all the things Metro could do to reduce the price of housing, borrowing money is likely to be the least effective.

For one thing, new construction is expensive. Many public housing projects in recent years have cost more than $250,000 per unit. If Metro is lucky, the bond measure might pay for a total of 2,400-3,000 new apartments. Since the Portland region produces over 10,000 units of new housing every year, Metro’s intervention would not even be noticed.

In addition, borrowing $652.8 million and paying it back with interest (for a total of over $1 billion in debt service) would make every current home and apartment more expensive. We can’t tax ourselves to prosperity.

The basic weakness in the Metro bond measure is that it misdiagnoses the problem. When the Metro Council adopted its long-range growth management plan in 1995, it made a conscious decision to limit the physical size of the urbanized metropolitan region. That limit is imposed through Metro’s control of the Urban Growth Boundary. The planning goal was to “grow up, not out,” in order to prevent rural development and create the population density needed for light rail.

While that vision may sound appealing to some, there is a tradeoff: It limits the supply of new housing. Metro has always known this. As the agency’s economists wrote in 1994, “…the data suggest a public welfare tradeoff for increased density, more transit use, and reduced vehicle miles traveled. The downside of pursuing such objectives appears to be higher housing prices and reduced housing output.”

Metro controls the regional land supply and doesn’t want lots of cheap land for housing. Metro actually needs land to be scarce and expensive, because that’s the only way to justify its vision of high-density housing projects and light rail transit. Inevitably, this will be self-defeating; higher home prices will push more and more people out of Portland, where they will become even more auto-dependent.

In addition to its control of the regional land supply, Metro also imposes a tax of 0.12 percent on all new housing construction, with the exception of projects where the value of land improvements is less than $100,000. The tax revenues are used to pay for planning required on lands that might be used for housing in the future. The City of Portland also imposes its own tax for a similar purpose, at a much higher rate. It should be obvious that taxing new construction makes the housing problem worse.

The only way to significantly reduce the price of all homes in the region—both current units and new ones—is to make it easier to increase the supply. The best thing Metro could do would be to systematically inventory every artificial barrier to housing production, such as zoning ordinances, planning requirements, building codes, system development charges, and hidden taxes—and figure out a way to reduce or eliminate them.

In other sectors of the economy where supply is unregulated, the market does a wonderful job of providing us with the products we want at reasonable prices. The same thing will happen in housing, if we allow it.

John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free market public policy research organization. A version of this article appeared in The Portland Tribune on July 3, 2018.

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Direct Primary Care Puts Patients First, Lowers Health Care Costs

By Justus Armstrong

Could forgoing health insurance make health care more affordable? That’s the approach taken by many physicians practicing direct primary care, or DPC, an emerging medical movement that seeks to cut out the middleman and put patients first. Instead of billing insurance for individual services, physicians charge a regular fee as low as $60 a month directly to patients, increasing patient access and letting doctors focus on quality of office visits over quantity. Under a direct primary care model, your doctor is more available, with easier appointment scheduling and direct access to medical advice via phone, text, or email. A better doctor-patient relationship allows more personalized care, and research into DPC has yet to find a single instance of malpractice.

Health care without a third party brings entrepreneurship to medicine and saves patients money. While most direct primary care providers recommend patients carry a high-deductible insurance plan to protect against emergencies, taking insurance out of the equation for regular medical expenses allows physicians to reduce their overhead and provide better quality at a lower price.

Oregon is home to many direct care facilities; but current law requires direct providers to obtain a separate license through the state insurance agency, making direct primary care unnecessarily difficult. Let’s get rid of the red tape and take health care in a new direction.

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

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Supreme Court Janus Decision Upholds Public Employees’ First Amendment Rights

By Jakob Puckett

When’s the last time you went to a store, and the store forced you to buy something you didn’t want? That’s ridiculous, you might think. Sure, someone else might want it, but they can’t spend my money for me on something I’m not looking to buy.

For the past 40 years, this is how public sector unions had been operating, having the legal right to collect what are called “agency fees” (or union dues) for any employees they wish to bargain for, even if that person didn’t want to join the union.

But thanks to the recent Supreme Court decision in Janus v. AFSCME, workers now have the right to choose whether they want to pay union dues. Mark Janus successfully argued that since public sector unions operate by interacting with public officials, everything they do is inherently political, and forcing employees to be a part of it would violate their First Amendment rights of free speech and association.

Now, instead of involuntarily funding a union they don’t agree with, workers are finally empowered to make their own decisions with their own money for their own purposes.

Like the grocery store example, nothing in this ruling prevents unions from existing and continuing to offer their services. We’re just free to choose whether or not to purchase them.

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

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