Month: April 2019

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There’s No Such Thing As a Free Government

By Miranda Bonifield

April 16 was the first day of 2019 where the money Americans have earned finally exceeded the portion of our income dedicated to the support of the government. Tax Freedom Day is an annual reminder of the real cost of expanding government’s power and responsibilities. The $5.2 trillion we spend on taxes in 2019—29% of our income—will outpace our spending on food, clothing, and shelter combined.

Unfortunately, this is only what we’ll pay this year—not what the government will spend. If annual federal borrowing were taken into account, Tax Freedom Day would fall on May 8, meaning we would work nearly half of this year to support government programs.

Americans have handed the government an ever-growing share of our money in exchange for the promise of a chicken in every pot and a roof over every head. But prosperity is not preserved and poverty is not prevented by government spending. Rather, it is the everyday Americans who work and innovate every day to create value for ourselves and our communities who are responsible for the opportunities we can all take hold of.

Next time you’re asked to approve a tax increase, ask yourself how many days you’re willing to work to fuel government programs, and how many you’d like to work to support your family.

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Testimony Before the Joint Subcommittee on Capital Construction HB 5005

By John A. Charles, Jr.

Members of the subcommittee, my name is John Charles and I am President and CEO of Cascade Policy Institute, a nonpartisan policy research organization.

Most witnesses ask you to spend money. I am here asking you to save money – by deleting the Governor’s request for $27.5 million in lottery-backed bonds for TriMet’s planned light rail line to Bridgeport Village mall near Tualatin.

It’s important to note that HB 5005 is actually the first part of a two-part request for this project. As Ms. Gabriel stated in her April 5 briefing, the Governor will be asking for an additional $125 million of bond revenue in the next biennium, so you should really think of this as an appropriation of $152.5 million.

I encourage you to reject the request because TriMet has a consistent record of over-promising and under-performing on all its capital construction projects, as detailed below. You should stop rewarding that kind of behavior.

Analysis of the SW Corridor Project

TriMet makes two primary claims regarding this light rail line. First, it will attract 43,000 average weekday riders by 2035. Second, it will provide a “reliable, fast travel option” between Bridgeport Village and Portland.

Neither of these claims is plausible.

TriMet Ridership projections are always inflated

TriMet has a 40-year track record of making ridership forecasts. They have been consistently wrong, and always on the high side. As Figure 1 shows, actual ridership has never even reached 60% of projected ridership on a specific rail line. In 2017 total average weekday ridership was less than half the predicted ridership for MAX in 2020. 

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SW Corridor Light Rail Project Joint Ways and Means Committee Testimony John Charles April 2019

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Road Widening, Congestion Pricing Can Improve Metro-Area Drive Times

By Eric Fruits, Ph.D.

I’ve got a big family, which means we do a lot of laundry. With our old appliances, we were doing a load a day and there was a backlog of dirty clothes.

When our old washer and dryer went kaput, we decided on an upgrade. I bought the biggest, most energy efficient washer and dryer I could afford. I figured with bigger loads, we’d be doing fewer loads. But in some ways, I was wrong. Sure, the new washer and dryer could hold a lot more laundry, but we were still doing about a load a day.

However, something changed: The backlog of dirty clothes disappeared, and our utility bills decreased. Even though we are still washing clothes every day, we are washing more clothes more cheaply than we were before. Where it used to take three hours for a complete wash-and-dry cycle, now it’s closer to two hours. Those new appliances made our day-to-day lives measurably better off.

In Portland, the Oregon Department of Transportation is in the process of widening I-5 through the Rose Quarter, which has been named one of the worst bottlenecks in the country by the American Transportation Research Institute. ODOT forecasts the improvements will save more than 2.5 million hours of travel time each year and reduce crashes by up to 50 percent. For example, the current “worst” stretch (I-5 southbound, from the Going on-ramp to I-84 eastbound off-ramp), will see travel times drop 15-30 percent. Over a typical work year, that would save a commuter more than 20 hours of time stuck in his or her vehicle. Many, if not most, commuters through the Rose Quarter will be measurably better off because of this project.

Despite these anticipated benefits for commuters, opponents of the I-5 project claim that increasing highway capacity will increase congestion. They invoke a concept they call “induced demand,” arguing that wider roads “induce” people to drive more, leading to more traffic and ultimately even worse congestion than before the improvements were made. It’s much like arguing that I’m worse off because my new washer and dryer can handle more laundry than my old klunkers.

Critics of the project tend to confound traffic with congestion. Traffic is the number of vehicles or vehicle miles travelled. Congestion involves speeds or travel time. A road can have a lot of traffic and little congestion. Similarly, a road with relatively little traffic can be highly congested—such as streets around a neighborhood school in a residential area during drop-off and pick-up times.

To be sure, improvements around the Rose Quarter will increase traffic on I-5 and I-84. Some of that traffic will come from more people driving. But some of that traffic will be the result of people choosing to use the highways instead of taking arterials or residential streets, which will reduce congestion on these increasingly clogged roads. If it’s cheaper in terms of time to take a highway rather than an arterial, people will choose the highway. That’s not “induced” demand, that’s plain old vanilla demand. Lower prices lead to higher quantity demanded.

The Rose Quarter highway improvements are to be combined with a congestion pricing program that will further improve traffic speeds and travel times. Done properly, such pricing discourages driving when congestion is most likely. Anyone who has used Uber or Lyft has experienced congestion pricing with the services’ “surge pricing,” in which fares increase when demand for rides exceeds the number of drivers at a particular time. Congestion pricing smooths the timing of trips to foster a faster flow of vehicles.

The benefits of road widening are readily visible here in Portland. Last year, a newly completed auxiliary lane on I-5 southbound from OR 217 to I-205 removed a frustrating bottleneck. According to ODOT, that stretch of road went from five hours of afternoon rush-hour congestion to one hour a day of congestion, during the afternoon commute. OR 217 went from four hours of congestion to zero hours of congestion. I’m sure no one is sitting in their car on I-5 or OR 217 saying, “I really miss all that congestion.”

The Portland region is adding more than 30,000 people each year. Our transportation system needs to keep up with the influx of new residents, workers, and business activity. It’s this growth that’s inducing the demand for more and better roads, and the region needs to meet that demand.

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

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House model in home insurance broker agent "u2018s hand or in salesman person. Real estate agent offer house, property insurance and security, affordable housing concepts

Portland’s Affordable Housing Bond: Nothing for Money

By Eric Fruits, Ph.D.

Remember that song about getting money for nothing? In Portland, it’s the opposite. We’re getting nothing for money.

This week, Portland’s City Council will get the first annual report on how the city is spending its affordable housing bond money. The four-page report—yes, it’s really only four pages—is colorful and has lots of pictures but nothing about actual results. So, I did some research.

Turns out, by the end of 2018, the city spent almost $38 million and built exactly zero new units of affordable housing. Sure, Portland bought two buildings. But, the buildings were already built or almost completely built, which means the money did nothing to actually add any new units.

Once the city spends millions more on the four other buildings in their pipeline, Portland might have only 250 additional units of affordable housing.

Last year, French President Emmanuel Macron announced plans to reform the country’s social welfare programs. He said, “We put a crazy amount of dough into our social benefits and poor people are still poor.”

The same can be said for Portland: We’re spending a crazy amount of money on affordable housing, but we’re not actually building much new affordable housing.

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

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Read My Lips: Metro’s Promises Are Doubtful at Best

By Miranda Bonifield

There’s nothing so permanent as a temporary government program, and nothing is quite as immortal as a temporary tax. Metro promised in 2006 that its parks bond would leave no need for new taxes until 2016. Instead, the money was sent to a general fund and additional taxpayer support was requested in both 2013 and 2016.

Now Metro is planning a new 400-million-dollar bond measure to support expansion of its parks and nature programs. The organization argues that tax rates wouldn’t be raised and that the funds would combat the challenges posed by population growth, climate change, and racial inequity.

What isn’t said is that your property taxes would go down without approval of the new 20-year bond measure. Metro can and probably will want to issue additional bonds and levies in future years, including a potential transportation bond in 2020—meaning that taxes would rise in the long term.

Metro’s auditor found in 2015 that Metro’s land acquisition often lacks clear connection to its long-term goals. This means that not only is Metro stretching for more money, it’s not even entirely sure what it accomplishes by spending it.

Read my lips: Metro’s version of no new taxes is doubtful at best.

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

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