Month: March 2019

Mother-Helping-Son-With-Homework-Sitting-At-Desk-In-Bedroom

Free to Choose with Freedom Scholarships

By Miranda Bonifield

School choice made a splash in the headlines last month with the proposal of the Education Freedom Scholarships and Opportunity Act. The proposed legislation would create a federal income tax credit for donations to organizations which grant scholarships to school-aged children and create an efficient path forward for students in states which have yet to embrace educational choice.

Tax credit scholarship programs have already successfully assisted thousands of students in states like Florida, where 92% of families enrolled report satisfaction. 71% of the 108,000 students would otherwise be in a public school. But because of their option to choose, they are statistically more likely to attend a school which parents feel is positively shaping their character and to attend college after graduation. Tax credit scholarships have been encouragingly successful on the state level. Encouraging donations to scholarship-granting nonprofit organizations, while leaving states the flexibility to opt in or out of the program, is an optimal way to encourage school choice without federal overreach.

Closer to home, Senate Bill 668 is currently in the Oregon Senate Committee on Education. The bill would create Education Savings Accounts for Oregon students. ESAs direct a portion of the funds designated for a child’s education in a public school to an account which could fund the family’s choice of private, online, or homeschool options.

If implemented, both the federal and the state proposals would be real victories for American students.

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

Click here for PDF version:

3-27-19-Free_to_Choose_with_Freedom_ScholarshipsPDF

Read Blog Detail
sun-shining-in-a-forest

Oregon Taxpayers Can’t Celebrate $146 Million Debt Service on the Elliott State Forest

By John A. Charles, Jr.

This week our State Treasurer, Tobias Read, issued a press release bragging that investors around the country “stood in line” to loan Oregon $100 million so that Governor Kate Brown could buy part of the Elliott State Forest, which we already own.

According to Treasurer Read, “There was three times more demand than supply” of the bonds, which will be repaid to investors over 20 years at an interest rate of 3.83 percent.

While this may have been a great day for investors, Oregon taxpayers have no reason to celebrate. They will be paying roughly $146 million in debt service on the loan, while getting little in return.

The Elliott is an 82,500-acre forest in Coos and Douglas Counties. It is an asset of the Common School Fund, which means it must be managed for the financial benefit of K-12 public schools. It was once a thriving commercial forest, generating millions of dollars each year for schools. In 1994, it had an estimated market value of $850 million.

Timber harvesting started to decline in the late 1980s due to environmental litigation. By 2014, timber production was so minimal that the Elliott actually started losing money. This immediately caught the attention of the State Land Board, which owns it. Land Board members in 2015—Governor John Kitzhaber, Secretary of State Kate Brown, and Treasurer Ted Wheeler—feared they would be sued for breach of fiduciary trust if they continued to hold onto a money-losing asset.

Seeing no other options, the Board unanimously voted in August of that year to sell the forest and place the proceeds in the Common School Fund, where they could be profitably invested in stocks, bonds, and other financial instruments.

The Board set the market value of the forest at $220.8 million. After a lengthy outreach process, the Board received a bid for that amount in 2016 from a consortium of buyers led by Lone Rock Timber Co.

However, by the time the bid was evaluated in December, the composition of the Land Board had changed. Kate Brown had become Governor, Tobias Read was Treasurer, and Dennis Richardson was the new Secretary of State. At the first meeting of the board in February 2017, both Read and Richardson stated that they had a fiduciary duty to sell the forest so that $220.8 million could be invested in better-performing assets. Gov. Brown reversed her 2015 vote and urged the Board to reject the offer. The final vote was 2-1 in favor of selling the forest.

This infuriated Oregon’s environmental lobby, even though it was their own lawsuits that had turned the Elliott into a liability. After the vote, pressure mounted on Treasurer Read to change his mind.

Two months later, Read reversed himself. He and Gov. Brown decided that instead of selling the forest for $220.8 million, they would retain it and ask the legislature for permission to borrow $100 million to buy part of the Elliott so that it would no longer be required to make money. The $100 million would be placed in the Common School Fund to make up for the lost timber harvest receipts.

Unfortunately, the $100 million loan will require debt service payments of roughly $200 million, and all of it will have to be paid by Oregon taxpayers. Therefore, the benefits to schools of adding $100 million to the Common School Fund will be diluted or possibly exceeded by debt service.

Moreover, the Land Board had no clear idea of which part of the Elliott will be free of the obligation to produce revenue for schools. The $100 million certainly will not “buy” the entire forest; an unknown portion will still have to be managed for profit, if that’s even possible.

Ordinarily, one could expect the State Treasurer to be the adult in the room regarding a cash offer of $220.8 million and the Board’s fiduciary duty to schools, but this is Oregon. It’s so much easier to just borrow money and talk about something else. Tobias Read is giddy that several of the bond buyers were from “socially responsible investment funds.”

Perhaps if he talks long enough about green investing, taxpayers will forget about the $200 million they owe on the loan.

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

Click here for PDF version:

19-06-Oregon_Taxpayers_Can’t_Celebrate_-146_Million_Debt_Service_on_Elliott_State_Forest_LoanPDF

Read Blog Detail

What’s Causing Oregon’s “Housing Affordability Crisis”?

By Miranda Bonifield

Here’s a question for you: Why is housing so expensive in Oregon?

Government at all levels has attempted to address the issue of housing affordability for years with tax credits, occasional expansion of the urban growth boundary, multimillion dollar bond measures, and now statewide rent control in Oregon. But rather than making life easier for Americans, state and local policies play major roles in the affordability crisis.

Economist Dr. Randall Pozdena recently authored a report published by Cascade Policy Institute that analyzes the decline of housing affordability, with a particular focus on Oregon. His research confirms what any developer can already tell you: Housing is less affordable because land is less available.

Easy access to land up until the 1970s meant housing price increases roughly tracked increases in household income. But in the ’60s and ’70s, planners and environmentalists dreaming of European-style density began lobbying against automobile-driven suburban sprawl. These measures gained enough traction that by 2000, the Brookings Institution found, state ballots around the country contained 553 “anti-sprawl” measures. Supporters expected higher density to decrease the need for public spending, improve traffic conditions by facilitating the use of transit, and lower development costs.

Instead, housing is escalating further out of reach every year. Oregon, California, Hawaii, and Washington, D.C. have the worst affordability scores in the country. An expensive market might make sense in D.C. and Hawaii, as both have extremely limited land available for development. California’s problem is the bureaucratic state whose regulations keep developers from meeting demand. But it’s Oregon that has the worst score for affordability out of the fifty states: Our housing prices rose 32% faster than our incomes between 1992 and 2007. This puts housing affordability in Oregon behind every one of the other 49 states.

With some exceptions, Oregon’s income growth has generally kept pace with the rest of the nation. We have plenty of developable land and a capable, productive community. Our housing is unaffordable because we’ve embraced some of the most aggressive “anti-sprawl” policies in the country. Dr. Pozdena finds:

“The higher the rank of anti-sprawl policy in a state, the poorer is the affordability rank of the state and the lower has been the availability of additional development sites relative to population growth. The confidence that these associations are not random is 99.99 percent. This is strongly indicative of a causal relationship between implementation of anti-sprawl policy, land conservation, and the affordability problem.”

There is no market and no economic philosophy in which reducing supply while demand increases leads to lower prices. In reality, Oregon’s policies have increased public spending, damaged public service quality, made no sizable impact on the number of automobile commuters, and worsened congestion.

It’s encouraging to hear policymakers acknowledge that we need to expand urban growth boundaries and encourage more development; but until a fundamental shift occurs in the philosophy behind growth policy, these statements are all flash and no substance. Oregon’s land use regulations don’t align with the way Oregonians actually live. They worsen traffic, crowd cities, and decrease quality of life.

Oregon must address the true causes of housing affordability problems, not just the symptoms—or the crisis will never end.

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

Click here for PDF version:

19-05-What’s_Causing_Oregon’s_“Housing_Affordability_Crisis__PDF

Read Blog Detail

Cultivating Educational Choice with Education Savings Accounts

By Miranda Bonifield

A Portland public school made headlines last week for offering parents the chance to choose their child’s teacher for next year as part of a school fundraiser. Teachers cried “foul” because they thought the opportunity gave unfair advantage to students whose families were from higher income brackets.

Why not give the same opportunity to all students?

Senate Bill 668 would implement a universal Education Savings Account (ESA) program in Oregon. ESAs direct a percentage of the funds the state would otherwise spend to educate a student in a public school to the student’s family to spend on private school tuition and/or other approved educational expenses.

In other words, every family could choose their child’s teacher.

Florida implemented an Education Savings Account program for special needs students in 2014. Of the students enrolled during the first two years, 40% used the funds to customize (mix and match) aspects of their child’s education. About half of these families chose to educate their children outside of a brick-and-mortar private school. The more than 10,000 students enrolled are a tiny fraction of the 2.59 million students in Florida public schools, but their choices illustrate an important point: Families need and want options that the state does not provide in their district public schools.

Oregon’s education system perpetuates a disconnect between the interests of families seeking the best possible outcome for their children and of schools seeking the fairest possible outcome for all children. We can agree that Oregon’s teachers are overworked, that many of our schools are underperforming, and that something must change to give the best possible shot to each student. Education Savings Accounts are an efficient, compassionate, effective way to provide quality education to all Oregon’s students—regardless of income.

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

Click here for PDF version:

3-20-19-Cultivating_Educational_Choice_with_Education_Savings_AccountsPDF

Read Blog Detail

Local News Brings Accountability to Local Government

By Eric Fruits, Ph.D.

Fake news is bad, but no news is even worse. Across the world, across the country, across the state, and across our communities, we are witnessing an obliteration of local news media. In Oregon, local newspapers are struggling and shuttering while TV and radio outlets focus more and more on national news fed by wire services.

Research soon to be published by the Journal of Financial Economics finds that when a local newspaper closes, local government wages and employment increase, municipal borrowing costs go up, as do county deficits. The authors argue local newspapers hold their governments accountable. When a community loses a paper, it loses some of that accountability.

It’s easy to blame Google and Facebook and media mergers for decimating local news. But, we ourselves are also to blame. We’re more likely to click on a story about a Trump tweet, celebrity gossip, or cute cats than we are to read a researched investigation into steep tax hikes, onerous regulations, and municipal malfeasance.

A tweet from Trump has virtually zero impact on our day-to-day lives in Oregon. At the same time, our legislature is right now passing bills that will affect all Oregonians every day. Our local governments and school boards are making decisions that affect how we work, how we live, how we travel, and how our kids are taught.

We all need to support local media, but it’s more than just buying a paper. Listen to the local news on the radio. Watch the local news on TV. More importantly, be engaged in your local community. That’s where everyday people can make a big difference.

Eric Fruits, Ph.D. is Vice President of Research at Cascade Policy Institute, Oregon’s free market public policy research organization.

Click here for PDF version:

3-13-19-Local_News_Brings_Accountability_to_Local_GovernmentPDF

Read Blog Detail
City-Light-Rail-Car-cm

Testimony Before the Transportation and Economic Development Subcommittee of Ways and Means Regarding HB 5039

By John A. Charles, Jr.

Members of the Subcommittee, my name is John Charles and I am President of Cascade Policy Institute. Cascade is a non-partisan policy research organization working to promote public policies based on sound market principles. As a non-profit corporation we are supported by contributions from individuals, foundations and businesses, most of them based in Oregon.

Much of the proposed ODOT budget involves dedicated funding sources such as motor fuel taxes, which means the Subcommittee has limited discretion to move money around. However, there are some programs supported by the General Fund or lottery-backed bonds, and I would like to call your attention to several that appear to have questionable value:

Willamette Valley passenger rail, $9.86 million: This allocation provides operating support for the Portland-Eugene Cascades train that runs twice daily in each direction.

As noted in the budget documents, ridership for this line peaked in 2013 and has been flat for the past three years. Moreover, the ridership numbers provided to the Committee include the POINT bus service operated by ODOT. This significantly inflates the total number of riders attributed to the passenger rail program.

The POINT bus service includes five routes with stops at 42 locations, as shown below:

  1. Portland-Eugene, 7 trips/daily each way, 5 stops
  2. Bend-Ontario, 1 trip/daily each way, 11 stops
  3. Redmond-Chemult, 2 trips daily each way, 5 stops
  4. Portland-Astoria, 2 trips daily each way, 8 stops
  5. Klamath Falls-Brookings, 1 trip daily each way, 12 stops.

Click here for the PDF full document.

 

Read Blog Detail
Hispanic-girl-with-chin-on-books-cm

Education Savings Accounts: A “Ticket to the Future” Today

By Kathryn Hickok

Derrell Bradford has spent his adult life passionately advocating for education reform through parental choice. Derrell grew up in southwest Baltimore and received a scholarship to a private high school. Better than anyone, he knows the power of choice to unleash a child’s potential.

“A scholarship is not a five-year plan or a power point…,” Derrell explained recently. “It’s a ticket to the future, granted today, for a child trying to shape his or her own destiny in the here and now….”

Choices in education are widespread in America, unless you are poor. Affluent families can move to different neighborhoods, send their children to private schools, and supplement schooling with enrichment opportunities. Lower- and middle-income families, however, are too often trapped with one option: a school in need of improvement assigned to them based on their home addresses. Families deserve better.

It’s time Oregon took a serious look at the diversity of options parents now have in school choice programs across the country, including Education Savings Accounts. Oregon has a history of bold experimentation in other policy areas. It’s time to expand the role of parents choosing―and the market delivering―better education for Oregon’s children through educational choice, because every child deserves a ticket to a better future today.

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

Click here for PDF version:

3_6_19_Education_Savings_Accounts_A_Ticket_to_the_Future_TodayPre

Read Blog Detail