Author: Cascade Policy Institute

Is Metro’s Affordable Housing Plan Really That Affordable?

By Rachel Dawson

The Metro City Council voted June 7 to place a housing bond measure of more than $600 million dollars on the ballot this fall. The regional government estimates the cost of new projects will be around $253,000 per unit. There is no cap on cost per unit, so project costs could be much greater, and have proven to be with past bonds.

However, it is possible to decrease the costs of these projects. Rob Justus, with Home First Development, has built a total of 431 public units for an average cost of $90,000 since 2011. He offered to build the city 1,000 homes at $85,000 per unit in 2015, but Portland officials rejected his proposal.

The city could build cheaper apartments by using less expensive materials and contracting with private developers to decrease labor costs. Placing a cap on how much is spent per unit would ensure that the city held itself accountable on project costs. Doing so would decrease the size of the bond and the burden it places on taxpayers.

There is a way to make housing affordable to both taxpayers and renters, and following the lead of private developers like Rob Justus is a way Portland can do just that.

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

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Time to Stop the PERS Pac-Man from Eating Teachers’ Salaries and Taxpayers’ Pocketbooks

By Steve Buckstein

What do Pac-Man and public pensions have in common? An intriguing 2016 national study of pension debt and teacher salaries recently answered this question. Depending on what economic assumptions are made, it’s likely that unfunded public pension liabilities for all states and local governments exceeded $6 trillion in 2017. Based on the same assumptions, Oregon’s share of those liabilities likely approached $50 billion.

The study, The Pension Pac-Man: How Pension Debt Eats Away at Teacher Salaries, by Chad Aldeman of Bellweather Education Partners, concluded that unfunded public pension liabilities were eating away at teacher salaries in every state—just like the old arcade game Pac-Man. This happens because the school districts teachers work for have to pay an increasingly larger share of their budgets into retirement funds for teachers who are no longer teaching, at the expense of those currently in the classroom.

In effect, America’s public school teachers are being charged on average about $6,800 a year—money that could be boosting their paychecks—to preserve what are becoming increasingly inequitable public pension systems. The inequality stems from the shifting nature of state pension systems that compensate older (and currently retired) teachers at higher rates than they will younger ones.

So where do Oregon teachers stand? Compared to the national average of about $6,800 per teacher, Oregon basically has to charge our teachers $7,398 a year to cover our unfunded PERS liabilities. That’s more than in all but 14 other states.

One might conclude that Oregon teachers consequently have lower salaries than teachers around the country because of this large pension hit. Not true. The nation’s largest teachers union reported that the average Oregon teacher earned $61,862 a year in 2016-17, compared to the national average of $59,660. That put our teachers in thirteenth place for average teacher pay among the 50 states.

Then again, Oregon teachers might be expected to earn more because, again according to that recent union report, in 2017 Oregon had more revenue per student in its public school system than 30 other states. We had $14,827 per student in average daily attendance, compared to the national average of just $13,900.

So, even though Oregon teachers are being hurt by our large public pension debt, they still earn more than teachers nationwide, and even more relative to their Oregon neighbors who pay the taxes to fund those higher teacher salaries while earning less than the national average themselves. All-in-all, Oregonians compensate our public school teachers relatively well.

Even though the latest, so-called Tier 3 or OPSRP PERS system has a less generous defined-contribution element than Tier 1 PERS workers earned, taxpayers should not be on the hook for unknown, and unknowable, pension costs going forward. It’s unknowable costs like these that have led to the current, nearly $7,400 annual debt burden on our teachers, districts, and taxpayers.

If Oregon had no unfunded PERS liabilities, three things could happen. Teachers might argue they should see an average raise of almost $7,400 per year, while school districts might want to put that money toward other district expenses that benefit students. Taxpayers might expect to see their Oregon personal income tax bills reduced if the state managed its public pension funds responsibly.

But none of these outcomes will occur because Oregon hasn’t managed PERS responsibly. As long as this continues, the outcome will be what’s unfolding now: higher taxes and greater school district payments to fund pension liabilities that few saw coming—and that threaten to continue, like Pac-Man, to eat away at teacher salaries, school district budgets, and taxpayer pocketbooks.

To stop the PERS Pac-Man, our Governor and legislators need to get serious about PERS reform, specifically by ending the “defined-benefit” elements of PERS for all work done in the future, either by new employees or current ones. Instead, the legislature should move all public employees, including teachers, to 401(k)-style defined-contribution retirement plans, which are the only kind of plan available to most taxpayers. The costs to future teachers, schools, and taxpayers will only get worse if we don’t end the PERS Pac-Man once and for all.

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

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Stop Waiting for Superman—Be a Voice for Choice Instead

By Miranda Bonifield

Are we waiting for Superman? In 2010, a documentary by that name chronicled the struggles of five kids trying to get a quality education in the American public school system. Despite the $634 billion dollars Americans funnel into public education, these kids’ choices were between enrollment in an ill-fitting public school or winning the charter school lottery. Kids’ talents aren’t determined by their ZIP codes; and their educations shouldn’t be, either. Oregonians should take up Superman’s mantle ourselves and expand students’ horizons via school choice.

Education Savings Accounts, or ESAs, would put some of the funds that the state otherwise would spend to educate a student in a public school into accounts associated with the student’s family. The family could use the funds for approved educational expenses like tuition, tutors, online courses, and other services and materials. This would empower parents and give kids the freedom to thrive in the best educational program for them. Imagine kids with disabilities having more access to some of the best programs in the state, or gifted young artists with more access to the fine arts programs outside their home school district. ESA’s help make that happen. They could even save taxpayers thousands of dollars.

This year alone, 466,000 students were served by school choice programs in 29 states. Oregon should be among them. Stop waiting for Superman—he isn’t coming. Instead, be a voice for choice.

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

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How the PERS Pac-Man Eats Teacher Salaries

By Steve Buckstein and Kathryn Hickok

What do Pac-Man and public pensions have in common? An intriguing 2016 national study of pension debt and teacher salaries recently answered this question. Depending on what economic assumptions are made, it’s likely that unfunded public pension liabilities for all states and local governments exceeded $6 trillion last year. Based on the same assumptions, Oregon’s share of those liabilities likely approached $50 billion.

The study, The Pension Pac-Man: How Pension Debt Eats Away at Teacher Salaries, by Chad Aldeman of Bellweather Education Partners, concluded that unfunded public pension liabilities are eating away at teacher salaries in every state—just like the arcade game. This happens because the school districts teachers work for have to pay an increasingly larger share of their budgets into retirement funds for teachers who are no longer teaching, at the expense of those currently in the classroom.

To stop the PERS Pac-Man from eating teacher salaries, Oregon’s Governor and state legislators need to get serious about PERS reform. They should end the “defined-benefit” elements of PERS for all work done in the future. Instead, public employees, including teachers, should move to 401(k)-style retirement plans. The costs to future teachers, schools, and taxpayers will only get worse if we don’t end the PERS Pac-Man once and for all.

Steve Buckstein is Senior Policy Analyst and Founder of Cascade Policy Institute, Oregon’s free market public policy research organization. Kathryn Hickok is Executive Vice President at Cascade.

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Right to Try Goes National

By Steve Buckstein

Last week President Trump signed a national Right to Try law, allowing terminally ill patients the right to try drugs that have gone through part of the FDA testing process but are not yet approved.

In 2015 Cascade Policy Institute helped craft Oregon’s Right to Try law, but with two troubling restrictions. First, patients must be 18 years of age or older; and second, “in a physician’s reasonable medical judgment” patients will die within six months.

Neither of these restrictions is in the new federal law. One of the witnesses at the bill signing was Diego Morris of Arizona. Diagnosed with a deadly form of cancer when he was just 11 years old, Diego was denied a possible treatment because it was not approved in the U.S. It was, however, approved in other countries; so his family spent months in England where Diego was treated. Years later, he is still cancer-free.

Diego came to Oregon in 2015 to help us pass Oregon’s law. When someone asked him whether such laws offer false hope to desperate patients, this then-fourteen-year-old teenager answered: “There is no false hope, only hope.”

We hope that as legal issues are clarified, the new national law will “trump” Oregon’s law and offer all terminally ill Oregonians real hope for a better future.

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

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Children’s Scholarship Fund Gives Low-Income Parents Real Education Choices

By Kathryn Hickok

This spring, the Children’s Scholarship Fund-Oregon program sponsored by Cascade Policy Institute is celebrating twenty years of giving low-income parents more choices in education through partial-tuition grade school scholarships.

The Children’s Scholarship Fund was founded by the late Ted Forstmann and John Walton, who donated $100 million together and partnered with scholarship organizations across the country, raising money from supporters in each community, to award the initial 40,000 scholarships in 1999. Here in Oregon, the parents of more than 6,600 children applied for the first 550 scholarships.

Over the last two decades, CSF and CSF partner program scholarship alumni have gone on to higher education or career training and are pursuing jobs in fields as diverse as business and finance, law, advertising, computer science, and the arts.

An Oregon scholarship recipient once said: “What [the Children’s Scholarship Fund has] given me is so much more than money; you have given me opportunity, confidence, faith, and trust that life has meaning, and that I am meant to succeed no matter what obstacles come my way.”

Our founders often said, “If you save one life, you save the world.” By offering parents the opportunity to choose which school best fits their child’s needs, the Children’s Scholarship Fund puts the power of education back in the hands of parents, where it belongs.

Kathryn Hickok is Executive Vice President at Cascade Policy Institute, Oregon’s free market public policy research organization. She is also director of Cascade’s Children’s Scholarship Fund-Oregon program, which provides partial tuition scholarships to Oregon elementary students from lower-income families.

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New Transportation Tax Is on the Wrong Side of History

By John A. Charles, Jr.

Oregon employers began receiving notices this week regarding the new statewide transit tax that goes into effect on July 1. The law requires all employers to withhold, report, and remit one-tenth of one percent of wages paid to their employees to the Oregon Department of Revenue. The money will go into a Statewide Transportation Improvement Fund to subsidize public transit agencies.

The new tax is being imposed at exactly the wrong time in history. Transit ridership is declining across the country, and it’s not because transit agencies lack money. The problem is that their service models are obsolete.

The ride-hailing revolution brought about by Uber, Lyft, Sidecar, and other start-ups has raised the expectations of customers. People now want on-demand, door-to-door service that they can order through their phones. The coming revolution in driverless cars will only accelerate that change.

The traditional service offered by legacy transit agencies—fixed-route, limited-schedule service on slow buses—just isn’t good enough anymore.

Subsidizing transit with one more tax will simply delay the inevitable. The legislature should repeal this tax as soon as possible.

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

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Underestimating Public School Spending

By Steve Buckstein

A 2017 national poll on education issues found, among other things, that most Americans underestimate how much money is being spent to educate kids in their local public schools. College-educated whites, for example, underestimated school spending by a fourth, while less-educated whites underestimated spending by almost a third. Before finding out the real numbers, 55 percent of the more-educated group favored higher spending, while 46% of the less-educated did so.

But, when told the actual spending levels, support for higher spending dropped by 14% among the more-educated and by 12% among the less-educated.

While the poll didn’t break down results by state, we know the big cry in Oregon is that we aren’t funding schools adequately. In reality, we were recently spending $14,827 per student in average daily attendance, compared to the national average of just $13,900. We spend more than 30 other states.

When more Oregonians learn this surprising truth, their support for higher school spending may drop, hopefully to be replaced by support for policies that might actually make a difference. One such policy is a universal Education Savings Account program that offers a portion of current school spending to families interested in choosing between their local public schools, private, religious, online, and home schools. Such choices can save tax dollars and improve educational outcomes. Win, win.

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

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School Choice Leads to Student Success

By Kathryn Hickok

Parents know a solid education prepares their children for life, and that path begins in grade school. But many Oregon families are trapped in public schools that don’t meet their kids’ educational needs. While families with greater means can move to neighborhoods with public schools they like, or pay twice for education by opting for a private school, lower-income families often don’t have those options.

And those families’ children are at the greatest risk of not graduating from high school. According to the National Association of Education Progress, only 33% of Oregon fourth-graders tested “proficient” in reading in 2017. Our state continues to have the third-lowest graduation rate in the country. Nearly half the children born into poverty will stay in poverty as adults. Changing those outcomes requires a solid early education leading to graduation and employment.

This spring, the Children’s Scholarship Fund-Oregon program sponsored by Cascade Policy Institute is celebrating twenty years of giving low-income parents more choices in education, so their children can have a better chance. As director of the Children’s Scholarship Fund-Oregon, I’ve watched how partial tuition scholarships, funded by private donors in our community, have changed the trajectories of our students’ lives, sparking their passion for learning and helping them fulfill their potential.

One of the Children’s Scholarship Fund-Oregon’s first scholarship recipients described her experience this way: “My parents…wanted my brother and me to be placed in an environment where we would be academically challenged and be able to succeed….What [the Children’s Scholarship Fund has] given me is so much more than money; you have given me opportunity, confidence, faith, and trust that life has meaning, and that I am meant to succeed no matter what obstacles come my way.”

Every child should feel that way, and with school choice they can.

In 1998, philanthropists Ted Forstmann and John Walton wanted to jumpstart a national movement that would support low-income parents wanting alternatives to faltering government schools. Pledging $100 million of their own money, Forstmann and Walton challenged local donors across the U.S. to match their gift and help them offer 40,000 low-income children the chance to attend the tuition-based schools of their parents’ choice. That challenge became the Children’s Scholarship Fund and a national network of independently operating private scholarship programs for K-8 children.

But instead of 40,000 applicants, the Children’s Scholarship Fund heard from 1.25 million low-income parents nationwide. Here in Oregon, parents of more than 6,600 children in the Portland tri-county area applied for 500 available scholarships. Forstmann and Walton found out quickly that low-income parents were desperately seeking a quality education they couldn’t find in their local public schools.

They believed that if parents had meaningful choices among educational options, children would have a better chance at success in school. Twenty years of data have proven this true. Studies of college enrollment and graduation rates of scholarship alumni have shown that, despite coming from socioeconomic backgrounds associated with lower rates of college enrollment, Children’s Scholarship Fund students enroll in college at an average rate that is similar to or higher than the general population.

In other words, education in private grade schools is closing the achievement gap for kids from less advantaged backgrounds.

Ted Forstmann was known to say, “If you save one life, you save the world,” and “if you give parents a choice, you will give their children a chance.” Thanks to Forstmann, John Walton, and private donors in Oregon and 18 other states who have supported low-income parents in their quest for a quality education, more than 166,000 children have been a given that chance through scholarships worth more than $741 million. By offering parents the opportunity to choose which school best fits their child’s needs, the Children’s Scholarship Fund puts the power of education back in the hands of parents, where it belongs.

Kathryn Hickok is Executive Vice President at Cascade Policy Institute, Oregon’s free market public policy research organization. She is also director of Cascade’s Children’s Scholarship Fund-Oregon program, which provides partial tuition scholarships to Oregon elementary students from lower-income families. A version of this article was originally published by the Pamplin Media Group and appeared in The Gresham Outlook on April 24, 2018.

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Charters Schools Are a Laboratory for Innovation Within Public Education

By Kathryn Hickok

This is National Charter Schools Week. Did you know almost half of Washington, D.C.’s public school children attend tuition-free charter schools? In fact, our nation’s capital now has 120 charters, run by 66 nonprofit organizations.

President Bill Clinton signed the legislation authorizing D.C.’s charter schools more than twenty years ago. Since then, D.C. charter school students have made significant academic gains. A 2015 study on urban charter schools by the Center for Research on Education Outcomes at Stanford University found that D.C. charter students are learning the equivalent of 96 more days in math and 70 more days in reading than their peers in traditional public schools.

David Osborne, director of the project Reinventing America’s Schools at the Progressive Policy Institute, has called D.C. “the nation’s most interesting laboratory” for public education. In an article for U.S. News and World Report, Osborne compares the traditional public school system with a Model T trying to compete on a racetrack with 21st century cars. “…[F]or those with greater needs,” he writes, “schools need innovative designs and extraordinary commitment from their staffs.”

Charter schools’ entrepreneurial governance model allows them to innovate, adapt, and specialize to meet the particular needs of students. Their success in educating children who face the greatest challenges to academic achievement is fueling an even greater demand for the kind of choice in education that charter schools have come to represent.

Kathryn Hickok is Executive Vice President at Cascade Policy Institute, Oregon’s free market public policy research organization.

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