Searched : light rail

Testimony regarding HB 3605: Requires Oregon Governments to Fund OPEB Benefits

Testimony of John A. Charles, Jr., regarding HB 3605: Requires Oregon Governments to Fund OPEB
Before the House Rules Committee, May 9, 2011


My name is John Charles and I am President & CEO of Cascade Policy Institute, a non-profit policy research organization. Cascade supports HB 3605 and believes it can be one of the most significant bills of the session.

 

HB 3605 grew out of concern regarding the unfunded, long-term public sector liabilities associated with “Other Post-Employment Benefits”, or OPEB. These benefits include things other than pensions, such as dental, vision and medical coverage.

 

All across the country, state and local governments are discovering that many of the commitments made to public employees about retirement benefits require funding that those units of government don’t have. Consequently, most governments are failing to place adequate reserves in trust funds to pay for future obligations. Instead, they are paying only what they owe current retirees, while allowing future obligations to quietly grow.

 

Up until recently, taxpayers and even most elected officials had no way of knowing how bad the problem was. However, in 2004 the Governmental Accounting Standards Board (GASB) adopted Statement 45, which requires that all units of government undertake a valuation of their OPEB obligations and state those obligations in annual financial reports. Implementation of GASB 45 was phased in during 2007-2009, and all units of government must now comply.

 

OPEB audits must calculate liabilities for all current and future retirees, amortized over a period not to exceed 30 years. Based on these calculations, actuaries determine what the Annual Required Contribution (ARC) would be if each entity paid for current OPEB benefits as well as a pro-rated share of future obligations.

 

However, the ARC is not actually mandatory, despite use of the word “required”; governments must publish information about net OPEB liabilities, but are not required to create OPEB trust funds or pay anything into trust funds. That remains a policy choice of each individual government.

 

Additional background information about GASB 45 is attached on the yellow sheet.

 

The Oregon Problem

 

A review last year of audited financial statements for 100 randomly-chosen Oregon governments (green spreadsheet, attached) by Jacob Szeto of the Oregon Capitol News (an affiliate of Cascade Policy Institute) showed that there are more than $3 billion in OPEB liabilities. Of that total, only 7.8% is funded. Most governments have no money set aside in OPEB trust funds, as can be seen in the “Funded Ratio” column on the green spreadsheet (3rd column from the right).

 

By way of comparison, at December 31, 2010, Oregon PERS was funded at roughly an 88% level, plus the total obligations are known. For OPEB liabilities, the level of under-funding is much worse, and the total obligations are not known. If there are $3 billion in unfunded OPEB liabilities from 100 units of government, one can only speculate what the total is for the roughly 1,700 units of government in Oregon.

 

Reliance on a pay-as-you-go system means that long-term unfunded liabilities will likely grow, creating cash flow problems for future managers, especially as large numbers of baby boomers begin retiring.

 

The Policy Solution: HB 3605 takes a very simple approach to this problem by requiring that all units of government in Oregon make Annual Required Contributions (ARC) into OPEB trust funds, as determined by outside actuaries.

 

This is not a new concept. ORS 238.420 already requires an ARC for the Retirement Health Insurance Account (RHIA), which is a multi-employer OPEB system administered by PERS.  That law states in part:

“The Retirement Health Insurance Account shall be funded by employer contributions. Each public employer that is a member of the system shall transmit to the board such amounts as the board determines to be actuarially necessary to fund the liabilities of the account. The level of employer contributions shall be established by the board using the same actuarial assumptions it uses to determine employer contribution rates to the Public Employees Retirement Fund. The amounts shall be transmitted at the same time and in the same manner as contributions for pension benefits are transmitted under ORS 238.225.”

 

 

If you look on the green spreadsheet, you’ll notice that RHIA (listed as #2 on page one) has a funded ratio of 41.9%. It is one of the very few entities with any money in a trust fund. Although the agency has unfunded actuarial liabilities of $297 million, that amount represents only 3.5% of the covered payroll, so the risk is minor.

Some people may ask if this bill is an “attack” on organized labor, or government itself. The answer is “no.” It is simply an attempt to ensure that promises made to employees about retirement benefits are kept. If specific units of government will not have the money to keep those promises, then managers should have an adult conversation with their employees NOW, not at some unknown time in the future when the crisis explodes.

 

Note that HB 3506 does not tell governments how to respond to an OPEB funding problem; it simply requires them to comply with the ARC. If there is no way to make sufficient cash payments into OPEB trust fund accounts now, then that problem needs to be addressed, and there are probably thousands of ways that individual OPEB liabilities could be reduced.

 

One of the most common methods is to change the vesting period for post-employment benefits. If, for instance, employees now have only a two-year vesting period to receive retirement medical benefits, and the vesting period were changed to six years, the OPEB liability (as calculated by the actuaries) would go down, thus the ARC would go down.

 

For employees who actually work longer than six years, this would have no effect on their benefits, so it is a relatively painless way of addressing the OPEB funding problem.

 

Other potential solutions would depend on the specific nature of employee contracts at the various governments.

 

Poster Child for HB 3605: TriMet

 

A quick glance at the attached spreadsheet will show that TriMet is #1 in unfunded liabilities, by any measure. In fact, the agency is not just #1 – it is an outlier so extreme that it begs some form of explanation. A brief discussion may assist legislators in understanding the need for HB 3605.

 

In 1994 TriMet changed the basic template of its union contract, incrementally lowering the age of retirement and dramatically increasing post-employment benefits. The cost of these obligations steadily accrued each year, but TriMet did not create a trust fund to pay for them. Since GASB 45 did not yet exist, almost no one outside the agency knew about this ticking time bomb.

 

In 2008 TriMet adopted GASB 45, and the district’s outside audit showed, for the first time, a “schedule of funding progress” for OPEB. The Unfunded Actuarial Accrued Liability (UAAL) for OPEB as of January 1, 2008 was $ 632 million.

 

In the 2010 TriMet budget document, the narrative to the Board stated, “TriMet needs to begin to take steps to partially fund a retiree-medical trust to assure a funding source for retiree health benefits, which have already been accrued but are not yet funded.” That was a clear and concise statement of need — yet the adopted budget for that year (FY 10-11) included zero funding for the OPEB trust fund.

 

In the very back of that document, on page 241, TriMet presented a revealing 10-year financial forecast. A copy is attached (the blue page). In that forecast, TriMet predicted that it would finally begin funding the OPEB trust with a token payment of $1 million in 2012, followed by identical payments for the next four years (line U on the blue sheet). The agency did not anticipate getting serious until FY 2019, when it projected an OPEB payment of $10 million.

 

Five months later, TriMet’s 2010 audit was released. The audit showed that in just two years the OPEB liability had ballooned from $632 million to $817 million, and all of it was unfunded.

 

Last month, TriMet released its draft budget for FY 11-12. The narrative is now much more evasive about the subject of OPEB. On page six, it simply states, “The FY 12 proposed budget reflects pay as you go funding of OPEB costs for retirees, and an initial deposit to an OPEB trust to begin funding future retiree OPEB benefit.” It does not say how much.  Also, the 10-year financial forecast page has been deleted.

 

If you search long enough, however, you can finally find on page 45 that the promised payment of $1 million has been downgraded to $410,000. Meanwhile, the OPEB liability keeps rising by the month, and is now probably in the neighborhood of $900 million.

 

Like high school students who keep telling their parents that they will start on that big term paper “tomorrow”, the TriMet Board has been procrastinating for 17 consecutive years on OPEB. This is setting up both employees and future board members for a massive meltdown later this decade.

 

It is important to note that TriMet’s OPEB problem is not the result of declining revenues. To the contrary, TriMet has been one of the few units of government with rising revenues, thanks in part to the legislature.

 

In both 2003 and 2009 the legislature authorized increases in the regional payroll and self-employment tax for TriMet (and Lane County Transit). TriMet began implementing the tax rate hike in January 2005, and will continue to implement it by raising the rate by 1/100th of a percentage point every year through 2024.

 

The chart below shows that the payroll tax increase, combined with substantial increases in passenger fares and federal grants, has led to both operating and capital funding increases that most local governments could only dream of.

 

TriMet Financial Resources, 2004-2012[1]

(millions)

 

FY 04/05 FY 08/09 FY 09/10 FY 10/11 (est) FY 11/12 (budget) % Change 04/05-11/12
Passenger Fares $   59.49 $   90.10 $   93.73 $   97.97 $103.80 74.5%
Payroll tax revenue $171.23 $209.10 $207.10 $217.20 229.10 33.8%
Total operating resources $308.77 397.24 $423.50 $424.20 $443.21 43.6%
Total resources $493.72 $888.35 $809.75 $763.66 $1,004.44 103.44%

 

TriMet will likely respond by stating that the purpose of the payroll tax rate increase was to pay for the “operating cost of new service”, not OPEB liabilities, which is true; but as the chart below illustrates, the increased service never materialized. In fact, service has been steadily dropping for the past three years:

 

Service Trends for TriMet Since the Payroll Tax Rate Increased in 2005

Fixed Route Service – light rail, bus, commuter rail[2]

 

 

March 2004 March 2006 March 2008 March 2010 March 2011 % Change
Peak vehicles 620 602 611 627 599 -3.4%
Service hours 147,138 143,308 144,912 143,089 132,777 -9.8%
Vehicle miles 2,684,606 2,620,246 2,546,365 2,531,041 2,357,214 -12.2%

 

 

To summarize, the agency hit a gusher of cash in the past seven years, but proceeded to cut service by 12% while dramatically increasing its unfunded OPEB liability. This is a financial disappearing act that would make Penn & Teller envious.

 

While TriMet is an extreme form of the management problem HB 3605 attempts to address, the challenge is the same across the board: promises are being made at many governments for post-employment benefits that probably cannot be kept. The time to deal with fiscal reality is now. The legislature should step in to require that modest steps be taken based on a 25-year amortization schedule.

 

It is rare that legislators have a chance to enact laws that will demonstrably make a positive difference for future generations. This is one of those cases.

 

Thank you for your consideration.


[1] TriMet budget documents, various years, 2004-2011

[2] TriMet monthly performance reports, 2004-2011

 

Read Blog Detail

On the CRC Mega-Project: Differing Visions, Shared Sense

The two of us may be strange bedfellows. Over the past twenty years, we’ve disagreed about many issues, including transit investments, land use laws and the underlying role of government. But recently we were both in Salem criticizing HJM 22, a bill asking the federal government to spend over a billion dollars on the ill-conceived “Columbia River Crossing” mega-project.

We each bring decades of experience in transportation policy to the table. Among the hundreds of projects we’ve seen, the current CRC proposal stands out as a doozy, throwing staggering amounts of money at a wasteful, ineffective plan.

Others, including the project’s own Independent Review Panel, have written about the huge costs to the taxpayers and the state, about the risks of cost overruns in the hundreds of millions of dollars, and about the project not fixing congestion but merely moving it from Vancouver to the I-405/Rose Quarter area. Those are serious problems.

As transportation experts from very different perspectives, we diverge on other flaws of the project. However, we agree on several actions Oregon should take instead of building the highway departments’ current bloated plan:

– Build an additional bridge. Having only two road crossings of the Columbia in the greater Portland area doesn’t make long-term sense. Clark County is an integral part of the region. We should be increasing the number of crossings of the river, whether the new bridge be a local or highway bridge, and whether it includes light rail or not.

– Retain the existing bridges. The current pair of I-5 spans have decades of life left in them. Spending $74 million to demolish them and build something in their place is wasteful.

Use tolling. A well-designed tolling system could fully finance the cost of a properly designed and scaled new bridge.

– Increase the legislative oversight of mega-projects. ODOT and the Oregon Transportation Commission, rather than the Legislature, have historically guided and decided on projects. But the CRC mega-project’s bill of $450 million or more to Oregon taxpayers demands enhanced accountability measures.

– Strategically focus taxpayer investments in seismic upgrades. Oregon’s Bridge Inventory doesn’t list the I-5 bridges among those most threatened by earthquakes. We should be concerned about the impact of earthquakes. But we should examine all of Oregon’s infrastructure, from schools and bridges to water and sewer lines, and figure out which are the highest priority to reinforce or rebuild.

– Fix what we have before creating more money sinkholes. Our backlog of maintenance for existing roads and bridges is large and includes hundreds of structurally deficient bridges. We should make sure we can afford to maintain the infrastructure we have before building more.

Every independent review of the CRC mega-project has found major flaws. While some flaws can be fixed, the current plan to build five huge highway interchanges, tear down existing bridges, and build a new bridge is simply too costly and too risky. It won’t get us what we want, but it will stick us with a huge bill. The legislature should demand we do better.

The piece was co-authored by Bob Stacey. Bob Stacey is the former Executive Director of 1000 Friends of Oregon.

 

 

Read Blog Detail

Testimony of HJM 22: Regarding Columbia River Bridge Project

Testimony before the House Transportation and Economic Development Committee on March 30, 2011

I have followed the CRC process quite closely for the past decade. Based on this experience, I offer the following comments about HJM 22:

This is a random request for a random project. There is no evidence that the CRC is part of a strategic transportation vision for the Portland region. Unless and until ODOT comes up with a plan to address related congestion problems and the need for new capacity at the I-84/I-5 interchange, I-405, the Marquam Bridge, and the West Hills Tunnels, the CRC will just absorb vast resources while offering few public benefits.

There is no price tag listed and no specific amount requested. It’s difficult to see how anyone in Congress would take this seriously when the only message seems to be, “more, now.”

 

There needs to be a coherent rationale for the use of tolls and the setting of toll rates. I am not opposed to highway tolls per se; it’s a time-honored method of financing new infrastructure. In fact, I have no doubt that within the next 20 years much of Oregon’s highway system will be converted to an electronic tollway (with variable rates in dense urban centers), and I look forward to those changes.

But unfortunately the most obvious interest in tolling on the CRC has been to use toll revenue as a local match for federal funding, especially for the uneconomic light rail[1] portion. That is the wrong use of toll revenue and will generate a much-deserved rebellion among highway motorists. If the project is really cost-effective, it should be 100% financed by local user fees, and the toll rates should be set to generate adequate cash flow for debt service as well as to vary by time-of-day/direction-of-travel to ensure free-flow driving conditions at all times. I testified before the CRC tolling subcommittee on three different occasions last year making these points, but to this day the proponents of tolling cannot explicitly state a principled rationale for the use of tolls.

The light rail element is a total waste of money. Vancouver transit riders are express bus commuters and will have no interest in a slow train. At a capital cost of $321.27 million mile, this will be the most expensive transit project in the history of Oregon. By comparison, the earlier portion of the MAX Yellow Line (Interstate Avenue) was constructed for about $60 million per/mile. That project was also a mistake; there is no policy reason to magnify the error at 5 times the cost.

Moreover, neither C-TRAN nor TriMet is planning on putting any of their own money into construction of light rail; both agencies expect everyone else to pick up the tab[2]. One can reasonably conclude that if the two transit districts don’t think light rail is worth one dime of their own funds, it is worth even less to the rest of us.

The mega-bridge concept is doomed to fail under any scenario. The CRC project epitomizes the old-guard, “build up, not out” approach beloved by land-use planners. They oppose new bridges because they imagine that more bridges would encourage more driving. But reality is passing the Oregon system by. Between 1998 and 2006, even with no new highways, the percentage of jobs located within 3 miles of downtown decreased from 27% to 23%. The percentage of jobs located more than 10 miles from downtown increased from 24% to 29%. The future of employment and housing is on the periphery of Portland; thus a massive highway structure on Hayden Island will be irrelevant to many motorists and force them to drive out of their way to cross the river.

The more appropriate response would be to build multiple bridges, much smaller in scale, to accommodate the increasingly scattered travel patterns of the next three decades. It’s interesting that Portland has 10 bridge crossings over the Willamette River and only two are highways; the rest are arterials. Yet no one would seriously suggest that Portland rip out the eight smaller bridges in order contain “bridge sprawl”; everyone recognizes that with more bridges, people drive less because they have more direct avenues to travel on.

The City of Pittsburgh, comparable in size to Portland and located along three major rivers, has 29 bridge crossings, and only 5 are connected to Interstate Highways. The rest are small-scale, two- and four-lane bridges handling local traffic.  Since the I-5 Interstate Bridge is not structurally flawed, it seems evident that Oregon should leave the I-5 Bridge in place and look at adding 2-3 smaller bridges upriver and downriver on the Columbia. In particular, there needs to be a way to get Washington-bound traffic originating on the west side of Portland off of HW 26 by creating an alternative route north to HW 30 from Beaverton/Hillsboro, and then over the Columbia. That would reduce congestion problems on HW 26, I-405, the Fremont Bridge, and I-5 north – which the currently proposed CRC will never do.


[1] Consolidated Appropriations Act, 2010, Section 173 (H.R. 3288, December 9, 2009). “Hereafter, for interstate multi-modal projects which are in Interstate highway corridors, the Secretary shall base the rating under section 5309(d) of title 49, United States Code, of the non-New Starts share of the public transportation element of the project on the percentage of non-New Starts funds in the unified finance plan for the multi-modal project: Provided, that the Secretary shall base the accounting of local matching funds on the total amount of all local funds incorporated in the unified finance plan for the multi-modal project for the purposes of funding under chapter 53 of title 49, USC and title 23, USC.”

[2] CRC Finance Plan, September 2010: “The forecast assumes no TriMet funding of CRC capital costs”, p. 3-27.  “No linkage is required between the CRC LRT capital plan and the capital expenses included in the agency-wide systems plan because the capital finance plan for CRC LRT does not include any C-TRAN revenues”, p. 4-22.

Read Blog Detail

Take a Gamble on the Train

Steve BucksteinQuickPoint!

[audio:3-9-11SteveTakeaGamble.mp3]

Click the play button to hear the audio commentary

 
by Steve Buckstein

Download PDF

The Oregon state legislature has used the state lottery as an almost endless source of funds for various projects over the years. When gambling doesn’t generate enough revenue for current wish-lists, legislators can authorize the sale of bonds repayable from future lottery revenue. According to official state documents, principal and interest remaining to be paid on lottery bonds is $1.6 billion, and the bonding capacity is virtually stretched to its limit. If they borrow much more they may not be able to repay the bonds.
(more…)

Read Blog Detail

John Charles letter to the Oregon Transportation Commission

February 14, 2011

Oregon Transportation Commission

Salem, OR  97301

RE: Feb. 16th meeting, Agenda Item F – Flexible Fund Allocations

Dear Commissioners,

I am writing to express my opposition to the plan to appropriate $13 million of scarce flex funds to the Milwaukie Light Rail project. The reasons for my opposition are as follows:
(more…)

Read Blog Detail

TriMet Throws Bus Replacement Funding Under the Bus

UPDATE: Read the full letter below

FOR IMMEDIATE RELEASE  February 14, 2011

Contact: John A. Charles, Jr.
Cascade Policy Institute
Tel.: 503-242-0900
Fax: 503-242-3822
E-mail: john@cascadepolicy.org
Website: www.cascadepolicy.org

TriMet Throws Bus Replacement Funding Under the Bus

Portland, OR – Cascade President John A. Charles, Jr.  sent a letter to the Oregon Transportation Commission (OTC) today opposing TriMet’s request to allocate federal dollars away from bus replacement projects to the Milwaukie Light Rail Project. The plan is on the agenda for OTC approval at its February 16th meeting in Salem.

The Oregon Transportation Commission has created a new program called the Flexible Funds Program. This program will use federal surface transportation funds to support non-highway projects. Based on the stated OTC criteria, the maximum award available will be $2.1 million. The regional transit district for Portland, TriMet, is requesting $13 million in support of the Milwaukie light rail project. The request has been endorsed by the ODOT staff.

If the request is approved, TriMet would be barred from seeking any bus replacement funds from this fund for the next six years. TriMet has agreed to this condition even though the agency has one of the oldest bus fleets in America and the agency asked voters last November to approve a $125 million bond measure for the purpose of replacing buses and upgrading bus stops.
(more…)

Read Blog Detail

Lake Oswego Streetcar Proposal: John Charles Testifies in Favor of a Less Expensive Solution

John A. Charles, Jr.Cascade Commentary

Lake Oswego politicians want to spend more than $400 million in tax dollars to build a five-mile trolley line to service 1,900 transit riders. CPI President John A. Charles, Jr. testified before the Lake Oswego-Portland Transit Project Steering Committee on January 24th. In his testimony, he explained why a simple express-bus option would provide better commuting times at far lower cost. Read the whole testimony below.

(more…)

Read Blog Detail

The Rose Quarter: Failure by Design

Many commentators have expressed outrage at the possibility of a Costco being opened in the Rose Quarter. They point to the decades of public planning for that neighborhood and the multiple rail lines, and demand some form of transit-oriented development (TOD) as an alternative. (more…)

Read Blog Detail

Analysis of Measure 26-119

$125 Million in General Obligation Bonds for TriMet
By John A. Charles, Jr.
October 11, 2010

Measure 26-119 is being billed by TriMet as a bond measure to help improve bus service for handicapped riders and the elderly. Indeed, at the August meeting of the TriMet board, roughly a dozen handicapped individuals were brought in by the TriMet staff to testify in support of the measure. After a short discussion and virtually no due diligence, the TriMet board voted unanimously to place the measure on the November ballot.

However, a careful reading of the ballot title indicates that bond funds will not be restricted to bus improvements. TriMet management will have full discretion to spend the funds on any capital project. Moreover, the bus projects TriMet is promising to undertake with these funds will only cost $82 million at most, leaving $43 million leftover for undesignated uses.

Given that the TriMet staff announced in July that federal funding for the Milwaukie light rail project will only be 50%, rather than the hoped-for 60%, it’s clear why this ballot measure was rushed to the board for the August meeting. There is a high probability that bond revenues will be used to backfill any shortfall in local match money for both the Milwaukie light rail project and the Lake Oswego-to-Portland streetcar project.

(more…)

Read Blog Detail

Proposed Charges Stifle Growth

Ben Shelton
QuickPoint!

[audio:QuickPoint8-17-10.mp3]

Click the play button to hear the audio commentary

by Ben Shelton

Proposed Charges Stifle Growth

Download PDF

It’s fair to say growth should pay for itself. Yet, Portland city planners seem more and more willing to curtail development before it even begins.

Next year the city plans to impose two new transportation overlay charges in the Portland State University and Central Eastside districts. These new impact fees, which will be in addition to citywide transportation fees, will effectively double the transportation charges for development.

(more…)

Read Blog Detail

New TriMet Lines Expand Liabilities

Laura Lewis

QuickPoint!

[audio:QuickPoint6-30-10Laura.mp3]

Click the play button to hear the audio commentary

by Laura Lewis

New TriMet Lines Expand Liabilities

Download the PDF here

TriMet has doubled its transit police force from 29 to 58 officers during the past two and a half years. Despite these security increases, light rail continues to attract crime. The newly opened Green Line to Clackamas Town Center has experienced a 32% increase in reported crime and a 56% increase in calls for police service since the light rail opened in 2009. The addition of police forces will cost an added $140,000 per year per officer, or a total of $43 million for 58 officers over the next 5 years, adding to TriMet’s current $27 million budget shortfall.

(more…)

Read Blog Detail

Testimony before the CRC Independent Review Committee

John A. Charles, Jr.
Cascade Commentary

Testimony before the CRC Independent Review Committee

By John Charles

Download Full Testimony Here

June 17, 2010

I wish to make two basic points tonight, related to: (1) tolling; and (2) TriMet’s financial viability

Tolling, Variable Rates, and the Portland Highway Network

For the past several years, the CRC management team has considered tolling primarily as a means of partially financing the new bridge. While there has been some modest consideration of variable toll rates, project managers have never defined the purpose of those rates (in terms of anticipated driver benefits), nor have they analyzed variable pricing within the context of the broader Portland highway network.

(more…)

Read Blog Detail

Ending Highway Gridlock in Portland

randall_pozdena

by Randall Pozdena, Ph.D.

Click here to read the full report in PDF format

The Portland region is rated the 24th most congested metropolitan area in the country, but it does not have to be. Policymakers in Portland have focused on so-called “smart-growth” policies, limiting the geographic extent of development and developing light rail and streetcar infrastructure, while overlooking lower-cost, efficient and environmentally beneficial transit and roadway capacity solutions. In this report, Dr. Randall Pozdena presents the fundamental problems with the way Portland addresses roadway capacity issues, explains why systemic reform is needed, and proposes real recommendations for getting there.

Read Blog Detail

Free-Flow Driving over the New Columbia River Bridge

John A. Charles, Jr.QuickPoint!

[audio:QP3_11_09.mp3]

Click the play button to hear the audio commentary

Political leaders from Oregon and SW Washington agreed last week to build a 12-lane bridge over the Columbia River to replace the I-5 Interstate Bridge. The new facility will be financed in part through tolls, collected electronically at travel speeds via tolltags. (more…)

Read Blog Detail

Can Transit Agencies Learn to Embrace Car Ownership?

Sreya Sarkar Cascade Commentary

Summary

Cascade Policy Institute submitted an innovative proposal to TriMet to cancel TriMet’s lowest performing bus routes and to use some of the savings to capitalize a loan fund to help finance car ownership for transit-dependent riders displaced by the bus line cancellations. (more…)

Read Blog Detail

Westside MAX at 10: Measuring the Vision Against Implementation

John A. Charles, Jr.The Westside light rail line opened on September 12, 1998. Westside MAX was unlike any light rail line previously built in America: it was deliberately routed through vacant land in Washington County with the expectation that it would be a catalyst for so-called “Transit-Oriented Development” (TOD).

The total cost for the line was $963 million, of which federal taxpayers put up 73%. The Federal Transit Administration (FTA) recommended against full funding for the project, on the grounds that the population density along the planned route was so light that the line would not attract sufficient ridership to justify federal funds. In the early 1990s the running joke line at FTA was, “How many deer and cows will ride Westside MAX?” (more…)

Read Blog Detail

Carfree Dreaming in Portland

John A. Charles, Jr.QuickPoint!

In three weeks Portland State University will proudly host the annual “Towards Carfree Cities” conference. This is certainly appropriate, given that Portland plans to build a new bridge over the Willamette River for light rail, the streetcar, cyclists, pedestrians and skateboarders – but not motorists.

However, as seductive as pedestrian malls are in the abstract, they don’t work in the United States. For instance, in 1971 (more…)

Read Blog Detail

Sustainability is a State of Mind

John A. Charles, Jr.Cascade Commentary

Summary

Sustainability advocates believe that a free-market economy is “unsustainable,” but free societies have the “intangible capital” needed to create more wealth with less pollution and less consumption of natural resources. (more…)

Read Blog Detail

A Market-Based Approach to the Columbia River Crossing

John A. Charles, Jr.Cascade Commentary

Summary

Portland’s population is expanding, but our highway and bridge network is crumbling. Market-based road pricing and de-regulated transit are the only sustainable solution, financially and environmentally, to Portland’s transportation crisis. (more…)

Read Blog Detail

In Oregon, Words Matter, Results Don’t

Matt WingardQuickPoint!

Does planning have to work to be successful?

We Oregonians believe many myths about ourselves that just don’t happen to be true. As a visioning group created by the Governor put it not too long ago: We Love Dreamers!

For instance, presidential candidate Hillary Clinton recently came to town and congratulated Portland on reducing its carbon emissions to 1990 levels. Portland has asked for and received world-wide recognition for (more…)

Read Blog Detail

A Market-Based Solution to the MAX Security Crisis

Sreya SarkarJohn A. Charles, Jr.Cascade Commentary

Summary

While TriMet has agreed to some reforms in the wake of the MAX security crisis, a much better solution would be to allow consumers to have real choices in transit service. Here in Portland, privately operated automobiles formerly served successfully as unsubsidized, flexible, quasi-public transportation directly responsive to popular demand. (more…)

Read Blog Detail

A New Day for Portland Transportation: Spending Should Match Utilization

John A. Charles, Jr.QuickPoint!

Observers of Portland transportation have long criticized local politicians for spending billions of dollars on rail transit projects even though rail carries just a small fraction of all trips in the region.

Now the critics have a powerful new ally: Portland city commissioner and mayoral candidate Sam Adams. Commissioner Adams announced last week that he wants to (more…)

Read Blog Detail

Paying a High Price for "Fareless" Rides

Sreya SarkarQuickPoint!

TriMet has always taken credit for promoting economic development along light rail lines, yet it has been reluctant to take responsibility for the growing levels of unlawful behavior on MAX.

Repeated complaints of crimes on MAX from Gresham to Hillsboro fell on deaf ears until the recent incident of a 71-year-old man being beaten with a baseball bat at the Gresham Central Transit Center. This incident triggered a (more…)

Read Blog Detail

Response to TriMet comments on Cascade’s pilot project proposal

To: TPAC

We appreciated the time allocated by TPAC recently to consider our proposal. We would like to respond to the specific points made by Phil Selinger in his August 31, 2007 memo. (more…)

Read Blog Detail

Portlanders See Through the “Bike vs. Car” Racket

Debate Club poster

Debate club poster
(Photo: Garrett Downen/Bus Project)

The Wheels to Wealth program is finally communicating with an audience it always wanted to reach out to. Program Director Sreya Sarkar took part in a debate in SE Portland that attracted the biking community of Portland.

As part of their monthly Debate Club series, the Bus Project and the Portland Mercury hosted a (more…)

Read Blog Detail

Be wary of funding “Mess Transit”

Steve BucksteinTestimony before the Joint Ways and Means Subcommittee on Transportation and Economic Development on HB 2278 A authorizing lottery bonds for transportation projects

Chair Johnson and members of the Committee. My name is Steve Buckstein. I’m Senior Policy Analyst and founder of Cascade Policy Institute, a Portland-based think tank that promotes individual liberty, personal responsibility and economic opportunity in Oregon.
As the attached Sunday Oregonian article discusses, the kinds of public transit projects this bill may fund, especially in urban areas, are a poor use of scarce public transportation dollars.

Light rail, contrary to popular belief, carries relatively few (more…)

Read Blog Detail

Testimony before the House Transportation Committee on bills to ban cell phone usage while driving

Steve BucksteinGood afternoon Chair Beyer and members of the Committee. My name is Steve Buckstein. I’m Senior Policy Analyst and founder of Cascade Policy Institute, a Portland-based think tank that promotes individual liberty, personal responsibility and economic opportunity in Oregon.

I’m here to question the necessity and effectiveness of all the bills before you today that seek to ban certain uses of cell phones while driving.

I think everyone agrees that cell phones have opened up wonderful benefits to our society. Most of us also agree that they have also introduced some risks. Unfortunately, politics is not a very good tool for (more…)

Read Blog Detail

Testimony on SB 580

Steve BucksteinBefore the Senate Business, Transportation and Workforce Development Committee

on the establishment of signature research centers

Good afternoon Chair Metsger and members of the Committee. My name is Steve Buckstein. I’m Senior Policy Analyst and founder of Cascade Policy Institute, a public policy research organization based in Portland.

Directing the Oregon Innovation Council to establish signature research centers is poor public policy because (more…)

Read Blog Detail

Portland’s highway system: there is no there there

John A. Charles, Jr.QuickPoint!

The Federal Highway Administration has apparently reached its limit with Portland’s fantasy transportation planning. In comments filed recently on Metro’s so-called “Regional Transportation Plan”, the federal government noted that, “it’s difficult to find the transportation focus” in the plan.

Many motorists stuck in our worsening traffic would agree. Metro’s plan places little emphasis on (more…)

Read Blog Detail

Warning: “Sin Taxes” May Be Hazardous to the State

Cascade Commentary

Summary

Oregon’s cigarette tax has become an “essential” source of funding for government programs and services completely unrelated to smoking, a prime example of why a “sin tax” is bad public policy. (more…)

Read Blog Detail

Last Hand of the Game

John A. Charles, Jr.QuickPoint!

There may be hope for the Portland City Council yet.

After being thoroughly embarrassed by their own lack of due diligence on the OHSU aerial tram, Councilors are now being a bit more skeptical (more…)

Read Blog Detail

Job Seekers Need Wheels to Wealth

John A. Charles, Jr.Cascade Commentary

Summary

Many public policies are designed to “get people out of their cars,” but recent research has shown that owning a car greatly increases a poor person’s ability to find better-paying work. Over the next year, Cascade Policy Institute’s Wheels to Wealth project will study the travel patterns of low-income families in Portland and educate journalists and policymakers about the value of private car ownership. (more…)

Read Blog Detail

One Small Step for Property Rights

John A. Charles, Jr.QuickPoint!

Last week, the Portland City Council adopted a plan to build and finance the aerial tram that will run from OHSU to the North Macadam district down along the Willamette River. In a surprise move, the Council approved an amendment offered by Commissioner Dan Saltzman that requires the city to buy any properties below the tram’s right-of-way if the owners feel that the market value is threatened by the tram. The city will then re-sell the homes, either reaping the rewards of profit or bearing the risk of loss.

This is an important recognition by the (more…)

Read Blog Detail

Door to door transit for less

John A. Charles, Jr.QuickPoint!

On May 1, Portland’s North Interstate light rail line opened for business. The cost to taxpayers was $60 million per mile, or $350 million total. The train, which runs from downtown to the Expo Center, replaces TriMet’s bus line 5, which used to go all the way to Vancouver. Now Vancouver customers must leave the train at Kenton and transfer to a bus to cross the river—their daily commute takes longer.

Oddly enough, superior transit service could have (more…)

Read Blog Detail

Clueless in Portland

John A. Charles, Jr.QuickPoint!

Earlier this month, Portland was designated by Inc. magazine as the eighth worst city to do business in. Local politicians, long accustomed to fawning reviews by east coast media outlets, were stunned by this rebuke. Don Mazziotti, director of the Portland Development Commission, dismissed the ranking by saying, “If you use a screwy methodology, you get screwy results.”

Unfortunately for Portland, Inc. didn’t use (more…)

Read Blog Detail

The gridlocking of Portland

John A. Charles, Jr.QuickPoint!

Last week the Texas Transportation Institute released its annual congestion rankings, and named Portland the 8th-worst city in America for traffic. Portland officials, upset that even Seattle is now ranked more favorably (12th), complained vehemently that the survey was inaccurate and besmirched Portland’s reputation as the nation’s most livable city.

But it’s difficult to understand why (more…)

Read Blog Detail

The Mythical World of Transit-Oriented Development: Steele Park in Washington County, Oregon

Introduction

During the past decade, Portland-area planners have embraced Transit-Oriented Development (TOD) as the region’s dominant land use/transportation strategy. They assert that TOD, especially based on light rail, will reduce traffic congestion, increase transit use, and make neighborhoods more livable. Transit-oriented development is generally defined as compact, mixed-use development that concentrates retail, housing and jobs in neighborhoods well-served by public transit. TOD has become so important to local planners that it is now the primary justification for expansion of Portland’s light rail system. Rail advocates concede that light rail is not worth the cost if it is built only as a transit system. (more…)

Read Blog Detail

Stop the highway slaughter

John A. Charles, Jr.QuickPoint!

The tragic deaths of eight young firefighters this week on Highway 20 near the Idaho border was a grim reminder of how unsafe many of Oregon’s roads are. While other states have fully integrated networks of high-speed turnpikes or parkways, Oregon’s highway system — if one can call it that — is a hodgepodge of interstate highways, country roads, and urban arterials.

Impatient drivers treat these thru ways as if (more…)

Read Blog Detail

Metro Brew: More pork, less mobility

John A. Charles, Jr.QuickPoint!

On June 12 a powerful Metro committee, JPACT, will decide how to spend $53 million in federal gas tax money. This tax is paid by Oregon motorists, laundered through a bureaucracy back in Washington, D.C., then returned to Oregon as “flexible funds” to be spent on any transportation project Metro approves. Although motorists paid the taxes, they will receive almost no benefits.

JPACT is what’s known as a (more…)

Read Blog Detail

OHSU Tram: Forward into the Past!

John A. Charles, Jr.QuickPoint!

The recent decision by the Portland City Council to build a tram from Oregon Health Sciences University to the North Macadam district is reminiscent of the decision to fast- track the construction of light-rail to the Portland airport. In both cases, the transportation projects were deemed essential to the development of vacant land that would eventually create 10,000 new jobs.

Both projects were also “railroaded” through the political process in a (more…)

Read Blog Detail

I-5 Partnership locks in traffic

John A. Charles, Jr.QuickPoint!

The I-5 Partnership, representing the states of Oregon and Washington, will adopt final recommendations this week for alleviating traffic problems on Interstate 5 between Portland and Vancouver. The recommendations cost over $2 billion, but will do little to actually improve traffic flow.

The primary reason is that nearly half the money will (more…)

Read Blog Detail

Urban renewal gets another black eye

Angela EckhardtQuickPoint!

The Portland Development Commission has put 70 urban renewal projects on hold due to the recent Oregon Supreme Court decision in Shilo Inn v. Multnomah County. Amidst the collective hand wringing over the loss of funds, few are discussing the public financing sleight of hand that has been exposed thanks to Shilo.

The court determined that some property taxes dedicated to urban renewal projects were (more…)

Read Blog Detail

Ride-Hailing Could Give an Uber-Needed Lyft to TriMet Service

By Miranda Bonifield

TriMet’s ridership has been steadily declining in recent years, to the great concern of transit advocates and fiscally conscious citizens alike. Proposed solutions involve sending expensive new bus and rail lines to underserved locations. But what if TriMet could reach new customers at a fraction of that cost?

Cascade Policy Institute recently released a study by economist Dr. Eric Fruits which found one or more high-cost and low-ridership bus lines could be replaced by facilitating the use of ride-hailing services in partnership with transit. Riders within particular areas could call an Uber or Lyft, ride to the bus, and then take public transit the rest of the way—a much more efficient and comfortable method than walking or biking through the rain. It could cost 55% less than expensive proposed bus lines—saving TriMet money—and slightly less than current bus and Max fares—saving customers money.

This isn’t a new idea; transit companies across the country have taken advantage of ride-hailing services’ ability to complement public transit. Studies have found a small but significant increase in transit ridership in cities with large transit systems which chose to partner with ride-hailing services. TriMet should pursue this low-risk, high-benefit option with a one-year pilot project beneficial to taxpayers, riders, and TriMet alike.

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

Click here for PDF version:

1-9-19-Ride-Hailing_Could_Give_an_Uber-Needed_Lyft_to_TriMet_ServicePDF

Read Blog Detail

Ride Hailing as a Solution to TriMet’s High-Cost Bus Lines

A Proposal for a Pilot Project

By Eric Fruits, Ph.D.

Summary and recommendation

This report recommends TriMet pursue a one-year pilot project that replaces one or more of its high-cost bus lines with ride hailing services supported by a subsidy funded with the cost savings from eliminating the high-cost bus line.

  • A subsidy covering 75 percent of the fare to eligible riders would be straightforward and relatively easy to understand, implement, and use.
  • TriMet bus lines 97 (Tualatin-Sherwood Rd) and 63 (Washington Park/Arlington Hts) would be reasonable candidates for the pilot project. These lines provide the best combination of lower user costs and cost savings to TriMet.
  • The average rider’s cost would be slightly lower than current TriMet fares. Because the customer is paying a portion of the fare, riders would be more likely to weigh the benefits and costs of using the ride hail service as a connection to the TriMet system (first mile/last mile, a complement to TriMet service) versus door-to-door (a substitute for TriMet service).
  • The cost of the 75 percent subsidy on lines 97 and 63 would be approximately 55 percent lower than the current costs of operating the high-cost bus lines.

Each of the bus lines identified in this report intersects with other bus, MAX, and WES stops or overlaps TriMet transit centers. Uber found that nearly 25 percent of Uber trips in suburban Portland began or ended within one-quarter mile of a MAX or WES station, as shown in Figure 1 and Figure 2 of this report. To encourage use of ride hailing services as a complement to the TriMet system, proof of fare payment should also serve as a 2.5 hour TriMet pass.

More than a dozen cities in the United States have programs similar to the proposed pilot project. Many of these cities have developed procedures to accommodate users who do not have a smartphone and users with ADA-related needs. Several of the programs began as pilot programs that have been extended because of the success of the pilot.

TriMet faces a challenge of declining ridership in conjunction with rising costs. In addition, the agency operates a number of high-cost bus lines. At the same time, ride hailing services, such as Uber and Lyft have grown in popularity since their introduction to the Portland region in 2015, providing convenient, reliable, low-cost service to millions of riders.

Recent research finds that ride hailing services have the largest positive complementary effect on rail service in cities with large public transit systems already in place, such as Portland. For these cities, the researchers found a small, but statistically significant, complementary effect on bus ridership.

The pilot project recommended in this report would be a low-cost, low-risk test of potential synergies between public transit and private ride hailing. If successful, the lessons learned can and should be applied to additional high-cost transit lines.

READ THE FULL REPORT

 

Read Blog Detail

New Report: Transportation Funding Should Be a State and Local Responsibility

Study Finds That Transportation Funding Should Be a State and Local Responsibility

May 4, 2016 

FOR IMMEDIATE RELEASE

Media Contact:
John A. Charles, Jr.

503-242-0900

john@cascadepolicy.org

PORTLAND, Ore. –  In a study released today by Cascade Policy Institute, economist Randall Pozdena recommends that transportation regulation and finance devolve from the federal government to state and local governments. In addition, the study recommends that most transportation taxes be replaced with targeted user fees, to ensure that those who pay for services receive benefits commensurate with those payments.

For over 30 years, the federal government has assumed a disproportionately large role in the regulation and subsidization of transportation services. Yet, most travel is local. For instance, the Cascade research paper found: 

  • More than 50% of all household trips, by all modes, are less than five miles long
  • More than 90% are less than 20 miles
  • 92% of freight shipments are less than 500 miles, by weight

Despite the dominance of local travel, 32% of all transportation funding flows through federal processes.

Of the various transport modes, private freight, airline travel, and pipeline shipments are the least regulated and least subsidized. These modes benefit from high levels of private ownership and capital investment, subject to normal market discipline.

Highway travel and transit suffer from the most distortions and cross-subsidies through federal intervention. As a result, most urban areas face growing levels of traffic congestion, and large urban transit systems are seriously (and often tragically) under-maintained.

The transit industry, which has steadily become a government-sponsored enterprise since passage of the Urban Mass Transit Act of 1964, is the sector most in need of a new business model. According to Dr. Pozdena,

“By definition, transit trips are extremely short and not important parts of larger networks. Federal and state governments should be out of the transit sector altogether, and rely on fare box revenue to ensure that the cost of the service is worthwhile to the user.”

For comparison purposes, Dr. Pozdena calculates that it costs roughly $60,000 to recruit one new additional transit rider in Oregon, which is 10 times the cost of providing new highway capacity for one additional auto commuter.

The Portland region in particular suffers from a mode imbalance in which vast sums of federal and state dollars have been spent on lightly-used passenger rail lines, while new highways and bridges have been canceled or delayed. This problem can be solved by inviting private investors to build needed new facilities through toll-based payments, and implementing time-of-day pricing schemes to ensure free-flow travel conditions on the regional highway system.

Last week the Oregon legislature announced the formation of an 18-person task force to study transportation funding for the 2017 legislative session. According to John A. Charles, Jr., CEO of Cascade Policy Institute,

“The Oregon Legislature has struggled unsuccessfully for decades to devise a sustainable transportation funding system. As yet another task force prepares to scale the fortress wall with the same weapons used in previous assaults, members should consider a new approach including targeted user fees rather than broad-based taxes, electronic tolling and variable pricing, elimination of political mandates prohibiting new highway facilities, and market-based reforms including privatization.

“These principles work everywhere else in the economy; they would work in the transportation sector as well, if we allowed them.”

The full report, Devolution of Transportation: Reducing Big Government Involvement in Transportation Decision-Making, can be downloaded here.


Founded in 1991, Cascade Policy Institute is Oregon’s premier policy research center. Cascade’s mission is to explore and promote public policy alternatives that foster individual liberty, personal responsibility, and economic opportunity. To that end, the Institute publishes policy studies, provides public speakers, organizes community forums, and sponsors educational programs. Cascade Policy Institute is a tax-exempt educational organization as defined under IRS code 501(c)(3). Cascade neither solicits nor accepts government funding and is supported by individual, foundation, and business contributions. The views expressed in Cascade’s reports are the authors’ own.

 

Read Blog Detail

Oregon’s Minimum Wage Law Perverts Compassion into Coercion

Picture two Oregon workers. One, a highly skilled and educated woman named Kate, earns well over $40 per hour based on a 40-hour work week. The other—a younger, less skilled, and less educated woman also named Kate—has a job that pays her Oregon’s minimum wage rate of $9.25 per hour.

The first Kate happens to be the Governor of Oregon. She, along with some of her colleagues in the legislature and activists on the campaign trail, believe that the second Kate should be paid as much as $15.00 per hour by law, depending on where she lives.

Wanting our second Kate to earn more is commendable; but forcing Kate’s employer to pay her more than he or she can afford, or more than Kate may be worth to their business, is not commendable.

Some politicians may feel good by “giving” more money to the Kates of Oregon, but how should they feel for “taking” that money from someone else?

I join many policy analysts, economists, and business owners in pointing out the negative effects of raising Oregon’s minimum wage. Younger, less educated and lower-skilled workers may lose their jobs, or not gain jobs in the first place, if the law prices them out of the labor market. Some employers will be forced to hire fewer workers, let some workers go, and/or raise their prices to all the Kates of Oregon who will blame them, not the politicians, for their suddenly higher cost of living.

But, the practical effects of raising the minimum wage, good or bad, should not cause us to forget the moral aspects of a state policy that dictates what one adult is required to pay another. Voluntary transactions between workers and employers are moral; imposing wage floors from Salem or any other layer of government is not.

I have no illusions that Oregon’s Governor, legislature, and activists will now see the light and abandon their plans to impose yet another burden on employers while helping some workers at the expense of others. I simply want it on the record that I agree with the author who wrote:

“The minimum wage is the modern perversion of compassion into coercion: I believe there is a moral imperative for you to earn more, so I force someone else to pay more. I feel moral while sticking someone else with the bill.”*

So, rather than raise Oregon’s minimum wage rate, the legislature should do the moral thing and end the policy altogether. Then we can all work together with Oregon Governor Kate Brown to find better, moral ways to help all the other Kates of Oregon earn more money without perverting our compassion into coercion.

* Doug Bandow, Cato Institute, January 14, 2014, The Minimum Wage: Immoral and Inefficient.


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

 

Read Blog Detail

Testimony to TriMet Board About WES Expansion

John A. Charles, Jr. presented this testimony to the TriMet Board of Directors on May 28, 2014 with regard to their proposed expansion of the Westside Express Service.

 

Board members:

Below are my comments on Resolution 14-05-27, Adopting the Fiscal Year 2014-15 Annual Budget and Appropriating Funds, for your May 28 meeting:

Assumed cost of fringe benefits: According to the introductory narrative, the proposed FY 15 budget “assumes management’s initial offer for active and retiree health benefits.” This is consistent with the budget statements from previous years, which have tended to “assume away” unpleasant aspects of labor negotiations. It does not seem prudent to continue making these assumptions, based on the history of TM labor negotiations over the past 22 years. As much as I like seeing the proposed expansion of service, perhaps it would be better to scale back service enhancements and set aside more funds for a worst-case outcome on the cost of health benefits.

Plans for WES expansion: The staff recommends purchasing two additional vehicles for WES, at a cost of $8.5 million, or $13.2 million over 20 years of debt service. All of those costs will cannibalize other general fund programs. I’d suggest that this proposal be pulled from the budget and possibly added back later, after further public vetting.

WES is TriMet’s most expensive fixed-route service, but I’m not aware of any justification that has ever been offered. Fewer than 1,000 TriMet riders benefit from these subsidies each weekday. Why are WES riders so privileged?

To put the issue in context, below are the costs of WES compared with those of similar bus service offered by SMART of Wilsonville. While WES is undoubtedly a nicer and quicker ride for users, the cost premium is difficult to justify to non-riding taxpayers who have to make up the difference.

Express Service from Wilsonville Station to Beaverton Transit Center

Operating cost/mile Operating cost/hour
TriMet Express Rail $43.74 $949.84
SMART Express Bus $   1.30 $   83.17

In addition, WES is an energy hog. According to a new report by the Federal Railroad Administration, the average energy consumed by all commuter rail systems in America during 2010 was 2,923 British Thermal Units (BTU) per passenger-mile. WES was close to the bottom: It consumed 5,961 BTU per passenger-mile, more than twice the national average (by comparison the top performer was Stockton, CA: 1,907 BTU/passenger-mile).

Not only is WES inefficient compared with its peer group, it is wasteful compared with other modes of travel. The national average for all transit buses in 2010 was 4,240 BTU per passenger-mile; for light-duty cars, the average was 3,364.

WES has always been a planning mistake. Before the Board decides to double-down on failure, there should be careful consideration of an alternative action: terminating service. None of the current board members had anything to do with the original decision, so no one should feel a personal need to defend it. Certainly terminating service would result in some short-term costs because of likely re-payment penalties to the federal government, but at some point the lower operations would provide net benefits to taxpayers (including those outside of TriMet’s district in Wilsonville, who pay TriMet more than $25,000/month to subsidize train operations).

In a typical year, there are very few opportunities for the Board to actually express a clear policy choice for TriMet’s future; most decisions are made by the staff. This is a rare chance for the Board to isolate two distinct policy options, consider the long-term effects, and express an independent preference for one of those options. I strongly encourage you to defer action on the proposed purchase of additional WES vehicles for at least another 60-90 days in order to have that public conversation.

Sincerely,

John A. Charles

Cascade Policy Institute

Read Blog Detail

Time to Stop Throwing Money down the WES Sinkhole

In its proposed fiscal year 2015 budget, TriMet forecasts the purchase of two additional vehicles for the Wilsonville-to-Beaverton commuter rail line known as WES. The total cost will be $8.5 million in borrowed funds. None of those costs will be paid by WES riders; $600,000 annually in debt service will be paid by taxpayers for the next 20 years, for a total of $12 million.

This is a critical decision point for the TriMet board. Approving the proposed budget will expand the WES vehicle fleet from four to six and irrevocably commit the agency to commuter rail. But the five-year track record of WES suggests that another decision would be more defensible: shutting the train down completely.

There are at least three reasons to consider this option. First, WES is an energy hog. According to a new report by the Federal Railroad Administration, the average energy consumed by all commuter rail systems in America during 2010 was 2,923 British Thermal Units (BTU) per passenger-mile. WES was close to the bottom: It consumed 5,961 BTU per passenger-mile, more than twice the national average (by comparison the top performer was Stockton, CA: 1,907 BTU/passenger-mile).

Not only is WES inefficient compared with its peer group, it is wasteful compared with other modes of travel. The national average for all transit buses was 4,240 BTU per passenger-mile; for all light-duty cars, the average was 3,364.

In a state where most politicians are obsessed with energy conservation, it is difficult to justify expansion of a publicly subsidized line that is so wasteful.

Second, WES is TriMet’s most expensive fixed-route service, with an average per-ride cost of $12. Thus, even if ridership grows, it will not help TriMet, since the agency loses about $10 on every trip.

To see just how expensive WES is, we can compare it to an express bus route in the same corridor opened last year by the transit operator in Wilsonville, South Metro Area Rapid Transit (SMART). The costs of the bus are only 3% of WES: $1.30 per mile versus $43.74 for WES.

Transit Service from Wilsonville Station to Beaverton Transit Center

Operating cost/mile

Operating cost/hour

TriMet Express Rail

$43.74

$949.84

SMART Express Bus

$   1.30

$   83.17

Finally, WES ridership is tiny. WES now has about 940 daily riders who account for 1,880 average weekday “boardings.” This is still far below the forecast of 2,500 that was made for opening-year service (2009).

I’ve ridden WES at least 100 times in order to catch the express bus to Salem that picks up WES transfers in Wilsonville. For the privileged few on the train, it’s a nice trip. There are usually plenty of empty seats, free internet service, and lots of legroom. Plus, I feel like royalty as we shut down traffic temporarily on more than 20 east-west cross streets along the way. While this results in a net increase in regional congestion, it’s fun for the train riders.

But just because I personally enjoy WES, that doesn’t make it a good public investment. The bus alternative would move just as many riders at less cost and with lower fuel consumption.

Back in the 1990s, Westside politicians and rail boosters fell in love with the concept of a commuter train to Wilsonville. As with all such pork-barrel campaigns, the promises vastly exceeded eventual performance. But current TriMet board members can claim plausible deniability; none of them were on the Board back then, so it wasn’t their fault.

Now they have a chance to clean up the mess. It won’t be fun having to admit that mistakes were made; but if the Board is serious about re-setting TriMet on a path of financial sustainability, there will be many such decisions to be made. A long journey begins with the first step.

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

Read Blog Detail

In Defense of Liberty: Unions, Right-to-Work, and Majority Rule

By F. Vincent Vernuccio

“We are a democracy, we operate by majority rule. Therefore, we can force you to give us your money.” Such is the message from unions justifying forced dues and opposing laws that protect worker freedom.

It is liberty, not democracy, that is the highest form of society.

Make no mistake, democracies, direct or representational, are better than any other form of government. However, they are only as good as the extent to which they protect the liberty that individuals enjoy. These liberties exist in spite, rather than because, of government institutions.

Many opponents of right-to-work laws justify their ability to force workers to financially support unions because those workers are within a group whose members at one time voted to force everyone in the group to pay.

This is different from voluntarily joining an organization that requires all members to pay dues for the use of their facilities, such as a golf club or a gym. Joining or being associated with a union is not voluntary or a matter of choice. In most cases it is a condition of employment.

Workers do not take a job at Ford because they want to join the United Auto Workers union. They join the UAW because they took a job at Ford. Michigan became the 24th Right to Work state earlier this year so that such workers can keep their jobs without being forced to pay union dues. Likewise, Oregon public employees who are now forced to pay union “fair share” dues against their will may very well support IP9, an initiative petition that would allow Oregon public employees to totally opt out of paying such dues if they wish. Once the Oregon Supreme Court approves IP9’s ballot title and slightly more than 87,000 valid voter signatures are collected, it will appear on the November 2014 General Election Ballot.

The union defense of “we can do anything we want because we have majority rule and we are a democracy like the government” fails on many fronts.

The first and most glaring inaccurate comparison is that the United States is a direct democracy. With the exception of some very small towns and state and local ballot measures, our government is a republic.

Furthermore, we are not just a republic that elects representatives to make our laws, but rather we are a constitutional republic in which certain rights of the individual are protected against laws made by the “majority.”

Pure majority rule in our country has its necessary limits.

The Founding Fathers correctly worried about tyranny of the majority and created several protections against it. James Madison warned against taking liberty out of a democracy. In The Federalist Papers No. 10 he wrote, “Liberty is to faction what air is to fire, an aliment without which it instantly expires.”

That is where defenders of forced unionism fail. When liberty is taken out of democracy and the majority is given the ability to steal from the minority, that no longer is a good and noble form of government or representation. Thankfully, that is not, for the most part, the case in America.

Even if the majority of a small community in the United States with a town hall style democracy or a state with voter initiatives and referendum voted for a law that banned people from going to church, it would not stand because of the First Amendment to the Bill of Rights in the United States Constitution.

It would not matter if a majority of the voters supported the law, majority rule would not be allowed to infringe on the rights and liberties of the minority protected by our Constitution.

Finally, unions are not government. The First Amendment’s freedom of association itself protects workers’ rights to ban together and join unions.

The special privileges granted unions include acting as the monopoly exclusive representative for workers, compelling an employer to negotiate with them, and other collective bargaining abilities that come from the laws government made such as the National Labor Relations Act, National Railway Act, and various state labor laws among others.

Unions, on the other hand, do not provide for government. If someone breaks one of the government’s laws or threatens to harm its citizens, the government, because it has a judicial system, has the ability to arrest and even to incarcerate that person.

While unions in non-right-to-work states can get a worker fired for not paying them (again a privilege granted to them by government) they do not have the ability to create their own jail and incarcerate that worker.

The reason for these limitations is simple—unions are not government. They cannot have a police force, they cannot have jails, and most of all they were never formed to govern citizens.

As unions try to use the majority rule argument to justify their ability to compel others to pay them, they must be reminded that there are rights more fundamental than giving the many carte blanche authority over the few.

Purveyors of this argument must be reminded: When there is a conflict between liberty and democracy, we must always err on the side of liberty.

F. Vincent Vernuccio is director of labor policy at the Mackinac Center for Public Policy and a guest contributor at Cascade Policy Institute. He is a graduate of the Ave Maria School of Law in Ann Arbor, Michigan. A version of this article originally appeared in Michigan Capitol Confidential.

Read Blog Detail

Statement on the Columbia River Crossing Project

For Immediate Release

Media Contact
John A. Charles, Jr., john@cascadepolicy.org
503-459-3727
Sarah Ross Wolf, sarah@cascadepolicy.org
503-242-0900

Statement on the
Columbia River Crossing Project

PORTLAND, Ore. – In light of the decision by the governors of Washington and Oregon to shut down planning for the Columbia River Crossing (CRC) project, John A. Charles, Jr., President and CEO of Cascade Policy Institute, issued the following statement:

“The CRC was never a solution to any transportation problem, and the Washington State Legislature did the right thing by refusing to appropriate more money for it.

“As the two Northwest governors move forward, they should consider the following points:

  • The Interstate Bridge is not in any danger of imminent collapse and should be used for decades to come.
  • Expansion of rail transit between Vancouver and Portland should be taken off the table. Existing express bus service operated by C-TRAN is already providing excellent transit between the two cities.
  • Any new bridge should have a minimum river clearance of 144 feet, which matches the Glenn Jackson Bridge.
  • The governors should consider building at least two new Columbia River bridges in the region, one to the west of I-5 and one to the east of I-205. The reasons are to create redundancy in the case of an earthquake, and to provide better connectivity between the states. By dispersing traffic across four bridges, most congestion problems will disappear, making all classes of bridge users better off and reducing emissions caused by congestion.

“We have ten bridges across the Willamette River in Portland, and each serves an important purpose. There is no policy reason why we should restrict the number of Columbia River crossings to just two.”

###

Read Blog Detail

The Day We the People Stood Up

By Trent England

On April 19, 1775, a group of ordinary, small-town Americans stood up in defense of their property, their community, and their ideas. First at Lexington and then at Concord, they put their very lives in danger. A new online program called “We The People” offers basic information about American principles and the pivotal events that forged our nation at a time when reconnecting with those principles is once again essential. It begins with the Battle of Lexington….

 

Most people were sound asleep when the alarm came. Men and women roused themselves and heard the news: British soldiers were marching toward their town. Each man and woman faced a decision. They could ignore the alarm, perhaps pretending not to hear, and remain under warm blankets safe from the cold and uncertain night. Or they could rise up, make their preparations, and step out into the misty darkness.

 

In the town of Lexington, Massachusetts, men and women rose up. They lit candles with shaky fingers and tried not to wake their children. John Parker—a farmer and the elected captain of the Lexington militia—dressed quickly, took his flintlock musket from the wall, and went out. He was older than his 45 years, frail and sick, and still a trusted and resolute man. He walked in the darkness to the triangle-shaped field, the town green, which sat beside the road from Boston to Concord.

 

Anna Harrington sent her husband, Daniel, to the green. She knew that her father, Robert Munroe, a veteran of the war against the French and Indians, would be there as well. At least eight Munroes and nine Harringtons assembled on the Lexington green. By 2 a.m., as many as 130 men were standing in the dark in the wet grass on the green.

 

The odds were against them. The soldiers were well armed and well trained; many were hardened veterans. The townspeople were the opposite—mostly ordinary men and women with small farms or businesses and large families. By offering any opposition to the soldiers, the people risked their lives, possessions, families—everything. Yet, hundreds and later thousands would step away from ordinary lives and decide that they, too, were willing to stand, to fight, even to die.

 

The people of Lexington had hurried, and now they waited. With no sign of approaching troops, Captain Parker released his men to wait indoors. They gathered in nearby homes and at Buckman’s Tavern adjacent to the green. It was 4:30 a.m. when one of Captain Parker’s lookouts frantically rode into town yelling that the soldiers were just behind him. Young William Diamond beat his drum to summon back the militia. Sergeant William Munroe hastily lined up the returning men in two ranks.

 

British light infantry—troops selected for their strength and stamina—entered Lexington at a double-quick march. Each infantryman carried the five-foot-long “Brown Bess” musket. Each musket was loaded with gunpowder and a .75 caliber lead ball and topped with a 17-inch steel bayonet. The soldiers were miserable—tired of sitting around in Boston, wet after wading ashore from boats at the beginning of the night’s march, and cold. But they were professional soldiers ready for a fight and convinced of their superiority against this rabble of farmers.

 

Three British officers on horseback rode forward yelling orders at the men of Lexington: “Lay down your arms, you damned rebels, and disperse.” No more than 70 of Captain Parker’s men had reached the field; they faced several hundred red-coated light infantry with a thousand and more on the road behind them. Captain Parker decided it was futile to fight, but he and his men refused to surrender their arms. Just as the militia began to withdraw under a hail of British curses, there was a shot.

A few overeager British infantry fired randomly and to no effect. Then a massed volley of British fire ripped through the Lexington men. Jonas Parker, the Captain’s cousin, returned fire but he was already gravely wounded. He sank to his knees frantically trying to reload; before he could raise his musket a second time he was stabbed to death with a bayonet.

 

Other militiamen fired, others were hit. Jonathan Harrington was shot in the chest as his wife, Ruth, and their eight-year-old son looked on from their home. As Jonathan staggered toward his front door, his wife rushed out to him. He fell and died before she reached him.

 

Seven men were killed and nine wounded on the Lexington green that morning. At least one more would be killed in fighting later that day. This was a quarter of the men who stood there—who stood up for their community and for what they believed.

 

As the British marched away from the bloodied town green, the Lexington fight appeared purposeless and inconsequential. Yet, the sacrifice at Lexington changed everything; it delayed the British and forged in a moment the resolve that would become manifest at Concord. There the unthinkable would happen—the British would turn, flee back through Lexington into Boston, and within a year surrender the city altogether.

 

Once again we hear the call for America to “return to her Founding principles.” The ideas that forged our heritage―like limited government, federalism, and religious liberty―matter only to the extent that we understand them and apply them to today’s challenges. The American story is a gripping story with real heroes—people who made choices, took risks, made mistakes, and, in the end, set the stage for the American nation. Today, ordinary Americans―many of whom have never been involved in politics―are getting involved in their local governments, taking a stand in their communities, and joining with their neighbors to defend their rights as Americans. The “We the People” project hopes to assist today’s patriots in defending those principles for America’s next generation of citizens.

Read Blog Detail

Get Involved: National School Choice Week January 23-29

On January 23-29, school choice supporters across the U.S. will shine a spotlight on effective educational options for kids. This is an opportunity on a state and national scale to raise awareness of the need to reform public education and to build support for School Choice. There are many ways to get involved and to show your support!

1) On January 25, attend Cascade Policy Institute’s Policy Picnic about school choice. Cascade’s School Choice Project Director will talk about school choice and the research in favor of expanding educational options. Space is limited! Email deanne@cascadepolicy.org for more information and to RSVP.

2)  School boards play a pivotal role in expanding or restricting school choice in Oregon. On Saturday, January 29, attend the “You Can Be Superman” candidate call. Cascade’s Christina Martin will explain why school choice is important. Several speakers will address major school choice issues and talk about how to start and run a campaign for a school board position. Although this event is hosted by the Washington County Republican Party, ALL charter school supporters are welcome to attend this event regardless of party affiliation.

Full details and free registration are available at http://rescueoregon.com.

3) On Wednesday, January 26, join Americans for Prosperity for a viewing of The Cartel in Clackamas, Oregon. The Cartel is an award-winning documentary about corruption in public education and the promise of school choice. View the movie trailer. Find out more and RSVP by visiting http://schoolchoiceweek.com/Event/afp-oregon.

Read Blog Detail

Get Involved: National School Choice Week January 23-29

On January 23-29, school choice supporters across the U.S. will shine a spotlight on effective educational options for kids. This is an opportunity on a state and national scale to raise awareness of the need to reform public education and to build support for School Choice. There are many ways to get involved and to show your support!

1) On January 25, attend Cascade Policy Institute’s Policy Picnic about school choice. Cascade’s School Choice Project Director will talk about school choice and the research in favor of expanding educational options. Space is limited! Email deanne@cascadepolicy.org for more information and to RSVP.

2)  School boards play a pivotal role in expanding or restricting school choice in Oregon. On Saturday, January 29, attend the “You Can Be Superman” candidate call. Cascade’s Christina Martin will explain why school choice is important. Several speakers will address major school choice issues and talk about how to start and run a campaign for a school board position. ALL charter school supporters are welcome to attend this event regardless of party affiliation.

Full details and free registration are available at http://rescueoregon.com.

3) On Wednesday, January 26, join Americans for Prosperity for a viewing of The Cartel in Clackamas, Oregon. The Cartel is an award-winning documentary about corruption in public education and the promise of school choice. View the movie trailer. Find out more and RSVP by visiting http://schoolchoiceweek.com/Event/afp-oregon.

Read Blog Detail

Should We Be Worried, Very Worried?

By Gordon J. Fulks, Ph.D.

Download PDF

From near record-high to near record-low temperatures last November in the Pacific Northwest, from relatively warm ocean conditions and “dead zones” to relatively cold ocean conditions and fabulous salmon runs off our Pacific Coast, from an unusually cold winter to an unusually hot summer in Russia, from near record-low Arctic sea ice to near record-high Antarctic sea ice, our climate displays wide variability. But an army of psychologists, journalists and even scientists make sure that the warm swings they deem alarming get the greatest attention. These propagandists know that the selling of Global Warming is all about perception, not reality. (more…)

Read Blog Detail

Comments on the Discussion Draft Report of the City of Portland Peak Oil Task Force

John A. Charles, Jr.Speculation about “peak oil” is an intellectual fad that has been fashionable at various times throughout the past 120 years. Recently it has seized the spotlight again, and the Portland Peak Oil Task Force Report states that, “many experts predict global oil production will peak within five years, and few anticipate a peak later than 2020.”

This forecast is likely to be wrong, just as all previous forecasts of (more…)

Read Blog Detail

Forward into the Past

John A. Charles, Jr.QuickPoint!

This week TriMet began construction on its next light-rail project which will shut down the Portland transit mall for two years while tracks are laid from Union Station to Portland State University. This is viewed as a great leap forward by government planners, but it’s a step backwards for the rest of us.

The current transit mall is highly (more…)

Read Blog Detail

Prioritize police, privatize entertainment

QuickPoint!

For the 2004-05 city budget, Portland Mayor Vera Katz proposes hiring 20 police officers — part of a plan to fill 54 vacant positions at the Police Bureau. To pay for this, she allocates a mere $1 million out of the $370 million general-fund. Ahead of the police is (more…)

Read Blog Detail