Year: 2017

Give Oregon Kids the Power of Educational Choice, Like Kids in Florida

By Kathryn Hickok

Denisha Merriweather failed third grade twice. Today, she is finishing her master’s degree, thanks to Florida’s Tax Credit Scholarship Program. The key to Denisha’s success was her godmother’s ability to remove Denisha from a school that was failing her, and to send her to the school that provided her with the support she needed.

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Taxpayers Aren’t at Fault for Oregon’s Abysmal Graduation Rate

Taxpayers Aren’t at Fault for Oregon’s Abysmal Graduation Rate

By Kathryn Hickok

Willamette Week recently reported that, sadly, Oregon has the third-lowest graduation rate in the country, according to the National Center for Education Statistics. Oregon’s four-year adjusted public high school graduation rate was 74.8% in 2015-16. Only Nevada and New Mexico have lower graduation rates.

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dont allow skimming of medicaid funds for unions

Don’t Allow the Skimming of Medicaid Funds for Unions

By Aaron Withe and Steve Buckstein

Each year, hundreds of millions of dollars are skimmed off the top of Medicaid payments intended for some of society’s most vulnerable citizens and used for purposes never envisioned by the program’s supporters. Most of us can agree this is wrong.

After all, the whole point of Medicaid is to help low-income individuals—particularly the elderly and disabled—whose lives, dignity and comfort all benefit from the program.

Unfortunately, many politicians don’t see it this way. Oregon is one of nine states that allow labor unions to get a slice of the Medicaid pie by skimming union dues from the Medicaid paychecks of home-based caregivers.

The home-care program allows Medicaid-eligible individuals to avoid institutionalization by receiving daily living assistance in their own homes. In Oregon, Medicaid clients employ approximately 30,000 home-care and personal-support workers (HC/PSWs)—often their own family members—who are compensated through the program for providing basic assistance.

In 2000, however, the Service Employees International Union (SEIU) successfully inserted itself into that arrangement.

It funded a ballot measure that allowed HC/PSWs to be unionized on the shaky logic that their Medicaid payments made them “public employees.” As a result, the state deducts an average of $500 per year in SEIU dues from each caregiver’s Medicaid payments and sends it to SEIU before the assistance money ever reaches the caregiver.

In states where this is happening, caregivers and their clients are understandably upset. Because unions have a limited role to play between family members in a home-based setting, many feel the idea of paying for traditional union services just doesn’t make sense.

Some have pursued legal action to prevent the worst of the dues-skimming abuses. In 2014, the U.S. Supreme Court took up the Harris family’s case and ruled that “partial-public employees” like HC/PSWs could no longer be forced to pay a union against their will.

But it hasn’t been enough. Although the Harris decision technically allows HC/PSWs to make their own choice about whether to pay union dues, Gov. Kate Brown’s complicit administration has continued skimming dues from the Medicaid payments, making it easy for SEIU to keep thousands of caregivers paying dues against their will.

Kyle Osburn, a Portland resident who cares for his disabled son, was one such caregiver. Kyle never signed up for SEIU membership, but the state confiscated dues from his Medicaid checks anyway. Others, like Diana Berman, tried to cancel their union payments after Harris but were told they weren’t allowed to resign until an arbitrary 15-day annual window.

Thousands of caregivers in Oregon remain victimized by the SEIU’s dues-skimming scheme.

And Oregon isn’t alone. At least eight other states deduct dues from Medicaid checks and divert the money into union bank accounts. This practice inevitably goes hand-in-hand with shocking reports of what unions will do to obtain “authorization” for such payments, including forging caregivers’ signatures and pressuring them to sign union cards.

It’s clear federal action is needed to protect the integrity of Medicaid, its beneficiaries and caregivers nationwide.

The U.S. Department of Health and Human Services should immediately adopt administrative rules to ensure that Medicaid dollars are not misdirected toward union dues. Congress could also make it illegal to skim Medicaid funds in this way.

Either move would protect caregivers’ freedom to join a union if they chose to. Preventing state governments from deducting dues from Medicaid checks would make it far easier for caregivers to exercise their rights under Harris, but would in no way prevent caregivers from joining a union and paying dues on their own.

Medicaid dollars should be preserved for improving the lives of disabled, elderly and other Americans in need. They shouldn’t be diverted to special interest groups that often use those dollars for political gain, like propping up the politicians who skim dues for them in the first place.

Federal policymakers should take action now.

Aaron Withe is the Oregon director of the Freedom Foundation, a think and action tank in Salem. Steve Buckstein is Senior Policy Analyst and Founder of Cascade Policy Institute, Oregon’s Portland-based free market public policy research organization. This article originally appeared in The Bend Bulletin on December 8, 2017.

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Winning Is Not the Only Thing That Matters

By John A. Charles, Jr.

Last Friday the Republican-controlled Senate passed a 479-page tax reform bill in the dark of night without holding any public hearings.

Moreover, the bill itself was not in final form during the floor debate. The legislation was amended on the fly with handwritten changes. The only way to know what the Senate did was to read the bill after it had been voted on.

The same tactic was used by Democrats in 2016, when the Oregon Legislature passed a complex energy bill that was drafted behind closed doors and passed with almost no public input, in the space of three weeks. Not a single legislator understood what the bill actually would do because many sections, including those dealing with billions of dollars of utility assets, were never discussed.

This kind of behavior is a disgrace. The process is more important than any particular bill. If we tolerate mob rule just because “our team” is in charge, it guarantees that we will be treated the same way when the “other team” has power.

Federal tax reform has been needed for decades. There is no crisis. Congress should slow down, invite public input, and make sure the legislation is actually worth passing.

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

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Oregon Ranks 8th Worst in Regulatory Burden on Lower-Income Occupations

Oregon Ranks 8th Worst in Regulatory Burden on Lower-Income Occupations

By Kathryn Hickok

Oregon ranks 8th in the nation in “burdensome” occupational licensing laws, according to the Institute for Justice’s new report License to Work. The report examines the regulatory burden of state licenses and fees on 102 lower-income occupations. Oregon is also the “8th most broadly and onerously licensed state,” requiring licenses for occupations that most other states don’t.

According to the authors of License to Work, “more Americans than ever must get a government permission slip before they can earn an honest living….Licensing laws now guard entry into hundreds of occupations, including jobs that offer upward mobility to those of modest means, such as cosmetologist, auctioneer, athletic trainer and landscape contractor. Yet research provides scant evidence that licensing does what it is supposed to do—raise the quality of services and protect consumers. Instead, licensing laws often protect those who already have licenses from competition, keeping newcomers out and prices high.”

The Wall Street Journal editorial board pointed out that “stiff licensing requirements are often prohibitive for America’s working poor, keeping them trapped in low-wage, low-skill jobs.” Oregon could make it much easier for job-seekers and potential entrepreneurs to make an honest living by reducing license and fee requirements for occupations that have little to no impact on public safety, and by replacing some occupational licenses with less restrictive credentialing options.

Kathryn Hickok is Publications Director and Director of the Children’s Scholarship Fund-Oregon program at Cascade Policy Institute, Oregon’s free market public policy research organization.

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Income

Straightforward policy reforms can reverse Oregon’s lower-than-average incomes and high cost of living

By Eric Fruits, Ph.D.

Oregon’s economy seems to be chugging along, yet many of us feel like we’re losing steam. Employment and incomes are up since last year, but when we compare Oregon with other states, things don’t look so good here.

Oregon’s median family income is about the same as the national average. But according to the Census Bureau, we are 14 percent below our northern neighbor. Oregon’s per capita personal income—another measure—is more than 8 percent lower than the national average. Oregon is not a rich state.

At the same time, according to one widely used survey, Oregon’s cost of living is about 25 percent higher than the national average and 17 percent higher than in Washington. Oregon’s Consumer Price Index has increased 20 percent since 2007, while prices nationwide only increased 16 percent. Much of this disparity is due to Oregon’s increased cost of housing. In addition, prices for food, gasoline, and health care are also higher here.

It’s expensive to live in our state. When adjusting incomes for the cost of living, Oregon goes from the middle of the pack to the bottom of the bunch. Accounting for purchasing power, Oregon’s median family income is 20 percent lower than the nation and 27 percent lower than Washington’s.

While our incomes are lower, they are more evenly distributed. By various measures, Oregon has less income inequality than most other states. Our top one percent of income earners has a smaller share of total incomes, and our poverty rate is lower than the national average.

On the one hand, our state does not have enough deep pockets to feed soak-the-rich tax policies. On the other hand, our below-average incomes mean we don’t have the resources to feed soak-the-middle-class tax policies like the health insurance and provider taxes that a “no” vote on Measure 101 in the upcoming January 23 election would repeal.

It also means we don’t have the resources to feed soak-the-poor tax policies like the carbon tax the legislature is almost certain to take up next February.

Regulations regarding paid time off, employee scheduling, and occupational licensing increase the cost of employing people without directly adding money to workers’ paychecks. The result is reduced employment and lower wages.

Oregon’s land use laws—as well as regulations regarding design review, historic preservation, and inclusionary zoning—have stifled residential development. Demand for housing is outpacing construction, driving up housing prices. The Oregon Office of Economic Analysis estimates that over the past 10 years, the Portland area has underbuilt by 27,000 units.

The application of Oregon’s land use laws has also limited commercial development. While local areas are supposed have a 20-year supply of vacant industrial land, too often much of that land is not development-ready. Modern companies operate in globally competitive markets and cannot wait for a years-long planning process. Instead of waiting, they locate and expand elsewhere, taking jobs with them.

Anyone who drives through the Portland area knows that congestion has worsened over the past few years. It affects more than just commuters. The Oregon Department of Transportation concludes that congestion is affecting freight traffic and businesses throughout the state, threatening their national and international competitiveness. Higher transportation costs result in higher prices for consumers.

With the decline in water traffic in the Port of Portland and increased railway congestion, highway traffic is a key transportation mode for freight. As highway conditions worsen, Oregon is more likely to get crossed off the list of places to do business, resulting in a loss of potential middle-income jobs.

A recent study of income and cost-of-living data between states concludes: “Cost of living is clearly impacted by state policies [such as those noted above].” Oregon can move from being a poor state to a rich state through straightforward policy reforms. These must address our high cost of living as well as our lower incomes. Reforms to speed up and expand real estate development will relieve housing price pressures and attract employers. Construction to relieve congestion will improve our competitiveness while reducing roadway accidents and alleviating commuter stress. Labor market reforms will increase employment and boost Oregonians’ paychecks.

Do these things, and Oregon can meet its promise to all of us.

Eric Fruits, Ph.D. is an Oregon-based economist, adjunct professor at Portland State University, and Academic Advisor for Cascade Policy Institute, Oregon’s free market public policy research organization. A version of this article was originally published by the Pamplin Media Group and appeared in the Gresham Outlook and The Portland Tribune.

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This Thanksgiving, Are You Part of the One Percent?

This Thanksgiving, Are You Part of the One Percent?

By Steve Buckstein

You may not have learned this in school, but prior to the 1623 Thanksgiving celebration in the Plymouth colony it had the equivalent of a modern-day socialist economy. Land and crops were held in common; and food was distributed based on need, not on production. Able young men were often unwilling to work hard for the benefit of other men’s families.

After several disastrous harvests, each household was given its own plot of land. They could keep what they produced, or trade their crops for things they needed. Private property and a free market economy resulted in a truly bountiful harvest in 1623 and beyond.

Today, most Americans are actually rich, thanks in large part to retaining those private property and free market traditions. Perhaps not rich in relation to other Americans, but rich in relation to people around the world.

If your family earns more than $32,400 per year, you are in the top one percent of all income earners worldwide. Recently, half of all American families earned more than $59,039, and the average family earned $73,298. Even the lowest family income group by race, African Americans, had a median income of $39,490. Looked at this way, most Americans are part of the world’s one percent.

Things are far from perfect, but most of us have a lot to be thankful for this Thanksgiving.

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

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Vote NO on Health Care Tax Measure 101

Vote NO on Health Care Tax Measure 101

By Steve Buckstein

Oregonians will have the opportunity in January to vote No on Ballot Measure 101, thus rejecting new taxes that the state legislature and the governor tried to impose on health insurance premiums and hospital services. While these and other taxes are meant to shore up state funding of Medicaid services to low-income Oregonians, it has become clear that the state has been misspending such funds for years.

Voters’ Pamphlet statements for and against Measure 101 were due by November 13, and Cascade Policy Institute submitted an Argument in Opposition which you can read below. In it, we noted three ways that the state has mismanaged over $650 million in health care funds entrusted to it by state and federal taxpayers. But, that may be far from the final number.

On November 17, four days after the Voters’ Pamphlet deadline, Oregonians learned that the state may have “erroneously paid, allocated, inaccurately recorded or over-claimed $112.4 million in health care funds, according to a letter Oregon Health Authority (OHA) Director Pat Allen sent to Oregon Gov. Kate Brown. Allen also told state legislators that “the state was likely to see more processing problems come out of the state’s health agency.”

These revelations were too late for Cascade, or anyone else, to include in our Voters’ Pamphlet statements. So voters will need to keep up with all the reasons to vote No on Measure 101. More reasons may emerge when the Secretary of State releases an expected audit of the OHA by early December.

An early version of the Voters’ Pamphlet for Measure 101, including the full text of the Measure and Arguments in Favor and in Opposition can be found at the Secretary of State’s website.

Here is Cascade’s Argument in Opposition:

STOP NEW SALES TAXES ON HEALTH INSURANCE PREMIUMS
AND HOSPITAL SERVICES

Vote No on Measure 101.

Oregon state government has a long history of mismanaging “other people’s health care dollars,” including:

  • Wasting $300 million federal tax dollars building a website, Cover Oregon, that wasn’t able to sign up a single person for health insurance.
  • Paying $280 million a year for nearly 55,000 Medicaid recipients recently found to no longer qualify or who failed to respond to an eligibility check.
  • Overpaying health care organizations $74 million over three years to provide expanded Medicaid coverage to some Oregonians. The state initially only asked for $10 million of those overpayments back, and under political pressure eventually asked for the rest.

As one Oregon economist notes about the taxes in Measure 101:

“The law explicitly allows the new taxes on health insurance providers to be passed on to consumers. With these new taxes, that Silver ACA plan will cost about $625 more in 2019 than in 2018. It’s not just 40-year-olds who will get hit with the insurance tax. Nearly 12,000 college students…will pay the tax. Small group employers…will pay the new tax.

“Taxes on hospitals will raise the costs of care across the board….The cost of these taxes also will be passed on in the form of higher deductibles and premiums. Even if you don’t go to the hospital, you will be paying the hospital tax through higher insurance prices.”*

The cost of health care is already too expensive for many Oregonians. Don’t let the state add even more taxes onto services that are expensive enough already, especially when it has such a poor track record spending the health care tax money it already gets from us.

Say No to these new health care sales taxes.

Vote No on Measure 101.

*source: Health Care Tax Would Hurt Middle Class
at: CascadePolicy.org/Health-Care

(This information furnished by Steve Buckstein, Cascade Policy Institute.)

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

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Tolling People on to Portland’s Highways

Tolling People on to Portland’s Highways

By John A. Charles, Jr.

Earlier this year the state legislature passed a bill requiring the Oregon Transportation Commission (OTC) to apply for federal authorization to implement “value pricing” on two regional highways: I-205, and I-5 from the Washington border to the intersection with I-205. The OTC must apply by December 31, 2018.

Although value pricing may sound vague or somewhat ominous, motorists should be happy with this new policy. It has the potential to eliminate traffic congestion and create a revenue stream that will allow us to build the new highways and bridges that we need.

First, some background. “Value pricing” is a bureaucratic term for electronic tolling of highways where the toll rates vary based on the density of traffic. Usually, the rates change based on time of day, direction of travel, and day of the week. The rates are set to ensure 45 MPH driving conditions at all times of the day, hence the “value” offered to motorists.

There are many possible variations on this theme. In most cases, value pricing is used on new highway lanes, allowing drivers the option of staying in the unpriced, general purpose lanes. That probably will not be feasible in the Portland region because there is no room for an entire new network of priced lanes on I-5.

In some ways this is a blessing, because variable tolling will make our current lanes more productive. If priced properly, it’s possible that new lanes will not even be needed, saving us the expense of construction.

Value pricing is necessary because our current system cannot address congestion. Our highway network is an open access system, where each trip appears to be “free.” Of course, it’s not free—it’s being paid for by various back-door mechanisms such as motor fuel taxes, vehicle registration fees, and random federal grants. But we think it’s free, so during peak hours we see a “stampede” effect.

When too many people try to get on at the same time, per-lane throughput drops substantially. The carrying capacity for most highways is roughly 1,800 vehicles per-hour in each lane. At times of hyper-congestion, this can drop to 900 vehicles or fewer.

By using variable pricing, we can clear up the stampede and get per-lane travel back to 1,600 or 1,800 vehicles per-hour. In essence, value pricing allows us to “toll on” more people than we “toll off.”

The effect of this was seen recently when tolls on the Port Mann Bridge in Canada were removed on September 1. The Port Mann is a 10-lane bridge over the Fraser River near Vancouver. After tolls were removed, the result was a huge increase in congestion. One driver saw her daily commute increase by 25 minutes each way. She told a news reporter, “Absolutely, it’s terrible. It’s selfish but I want those tolls back on.”

In addition to the benefits of free-flow driving conditions, variable tolling will also create the dedicated revenue stream we need for future highway expansion. There is no doubt that we need several new bridges over the Columbia River, plus additional highway lanes elsewhere. Value pricing will tell us where to build, when to build, and who is willing to pay.

Fortunately, the Oregon Constitution does not allow toll revenues to be siphoned off for non-highway uses such as light rail construction. Therefore, money paid by motorists will benefit them directly.

The new law mandates value pricing on two specific highways but also authorizes the OTC to implement pricing anywhere else. Since the Portland highway network is an integrated system including I-84, I-5, I-405, HW 26, HW 217, and I-205, it would be better to implement value pricing region-wide to ensure that motorists get what they want: free-flow driving conditions, at all times of the day.

Most new highways being built around the world are using electronic tolling with variable rates. The new Oregon law is an opportunity for us to learn from that experience and to implement a Portland highway pricing system that truly delivers “value” for motorists.

John A. Charles, Jr. is President and CEO of the Portland-based Cascade Policy Institute, Oregon’s free market public policy research organization. A version of this article was originally published by the Pamplin Media Group and appeared in the Wilsonville Spokesman and The Portland Tribune.

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QuickPoint! – Military Families Want Education Options for Their Kids

Military Families Want Flexible Education Options for Their Kids

By Kathryn Hickok

EdChoice recently conducted a groundbreaking survey of military-connected families seeking to understand their perspectives on K-12 education and school choice. EdChoice is a nonpartisan research organization that promotes expanded educational options for all children.

The survey found that families connected with the military highly value access to better educational environments for their children, want more freedom and flexibility in choosing their children’s schools, and overwhelmingly support school choice programs like Education Savings Accounts. Eighty percent of children in military households currently attend public schools, but only 34% of survey respondents said a public school would be their first choice. Military parents are much more likely than the national average to take “costly and inconvenient steps to secure and accommodate their children’s education.” That includes taking extra jobs, moving closer to schools, and taking out loans.

The military lifestyle presents unique challenges to families. The EdChoice report noted that “the quality of educational options available to military families can play a major role in whether a family accepts an assignment or even decides to leave military service altogether.” As a nation we should consider that providing military families with meaningful school choice programs could be a significant boost to the morale of service members by improving the well-being of their families. Making it easier for military kids to get their educational needs met is the right thing to do.

Kathryn Hickok is Publications Director and Director of the Children’s Scholarship Fund-Oregon program at Cascade Policy Institute, Oregon’s free market public policy research organization.

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