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Portland vs. Detroit

July 31, 2013 --


By Josh Lehner
Oregon Office of Economic Analysis Blog.

Two important events occurred in recent weeks. There was the great new research on economic mobility that examined different cities and regions across the country (official website here, good NYT summary here) and there was also the Detroit bankruptcy. Given the close proximity in timing of these, a lot of the econ blogosphere discussions tied the two together, at least roughly. See Krugman on Detroit and on economic mobility. See Wonkblog on Detroit here and here. See Yglesias on mobility. To list but a few.

Part of the national narrative that everybody knows is that Detroit has been in decline for quite some time. Lost jobs, lost population, automakers struggling in recent decades, etc. What wasn’t as well known was that Detroit proper was in much worse shape than the suburbs (see the Wonkblog links in particular). Even as the auto industry stabilized and rebounded some, these jobs were nearly all in the suburbs and not Detroit itself. So, combining this with the economic mobility and sprawl research, why do we care?

A couple of different reasons. First, we know that strong urban cores and the agglomeration effects are great for economic growth (knowledge spillovers, cluster development, etc). However along with the urban benefits come urban problems. You have more density, more congestion, more crime, higher housing costs and the like. Not to mention you also have more usage and stress on the infrastructure, which requires money to maintain and hopefully upgrade. If you have all these things but no tax base, it becomes very difficult to successfully run and fund a city. Or if the demographic and economic trends turn against you, like in Detroit, it creates solvency issues given that today’s population and tax base is smaller than both the built environment was designed for and paying for retirees.

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State Treasurer honors town founded by his great-grandfather

July 30, 2013 --

Treasurer-state-oregonTreasurer Wheeler helps to mark centennial of Wheeler, the coastal town founded by his great-grandfather
By Oregon State Treasurer

A century ago, lumberman Coleman H. Wheeler founded a town alongside the Nehalem Bay on the northern Oregon Coast.

The city of Wheeler was then home to the Wheeler Lumber Company sawmill and also fish-packing plants, and a newly competed railroad helped connect wood and seafood to markets inland.

Today, the mill and food processors are gone. Now the idyllic village, population 415, invites visitors to browse colorful storefronts perched along U.S. Highway 101 and the bayfront. The community bills itself as “the little town with the million-dollar view.”

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Does Oregon Need a Mileage Tax?

July 29, 2013 --

By Fred Thompson:
Oregon Economics Blog

Oregon’s State Highway Trust Fund is broke. Options addressed by the Oregon Transportation Commission, the Governor’s Office, and the Legislature aimed at fixing this state of affairs include raising DMV fees to recover the full cost of the products/services it delivers to Oregonians. By state law most of the division’s services are supposed to recover their costs; the remainder are supposed to make substantial contributions to the Highway Trust Fund. But, because the legislature has repeatedly failed to authorize DMV to increase its user fees, the DMV is instead costing the Highway Trust Fund over $100 million per annum. ODOT has also been looking at alternatives to replace the gas tax, now the main support for the Highway Trust fund, among these are a fee for studded tires, a leading cause of road wear, and a weight-use-per-mile tax for personal vehicles. Cars are becoming more fuel-efficient. Consequently, the gas tax isn’t keeping up our needs for highway construction and maintenance. A car that gets 60 miles-per-gallon is great for the environment, but it contributes substantially fewer tax dollars and as much highway wear-and-tear and congestion as any other car.

Oregon is a leader in the study of mileage-based taxes. It has long relied on a weight-use mile tax for commercial vehicles. And it began to develop a mileage tax for personal vehicles as early as 2001. The pilot programs it has conducted since then have garnered national attention in transportation circles. As Governing Magazine reports: “Many view the state as being on the cutting edge of transportation funding. A Congressional Budget Office report published in 2011 suggested a miles-driven fee as a viable alternative to the gas tax, and many national transportation experts have endorsed the idea too.” These pilot projects have looked at outfitting cars with a special-purpose GPS device that would tell them where they have been. The latest iterations rely on commercial GPS devices (like phones or navigation devices) or more simply a wireless device that would report mileage back to ODOT HQ on a daily or weekly basis.
 
A lot of folks don’t like mileage-based taxes. Blue Oregon’s Keri Chisholm calls them a “terrible, horrible, no-good, very bad idea that just won’t die.” Keri grants that more money is needed to maintain Oregon’s transportation infrastructure, but, like a lot of people (although not a majority of the state legislature), he would prefer to increase the gas tax, 15 to 20 cents per gallon.
 

I like mileage taxes. Most people do as long as they remember that the tax is a charge for highway use, not primarily a means of deterring driving or harmful emissions. A good mileage tax would reflect axle weight and miles travelled, which, together with vehicle speed, constitute the main determinants of highway wear and tear. Ultimately, it would probably be advantageous to incorporate operating speed into the mileage rate. This would allow the tax to be calibrated to the damage a car causes to the State’s streets and roads, but would require something more than a simple report of miles traveled. Installing a system based on GPS data on highway usage, would also make it easier for ODOT to figure out when and how much maintenance state highways need and to allocate funds to municipalities and counties based upon the actual use of their streets and roads.

Of course, the critical advantage of a GPS-based mileage tax is that: “You can potentially calibrate the level of the tax to the degree of congestion on the particular road at the particular time of day, so the tax better reflects the changing externality associated with driving.” In the longer run, congestion pricing would also be useful for planning for future highway needs. In my opinion, its potential use in congestion pricing is the best possible argument for building a GPS system.

Several reasonable objections have been raised against mileage taxes. The first is that vehicles licensed in other states would be exempt from the system. That is not now the case with commercial vehicles and occasional visitors to the state could simply be included in system by which we collect taxes on commercial vehicles. More frequent visitors would undoubtedly find it more convenient to plug into the state’s GPS system.

Second, “removing financial advantages of low carbon impact driving is antithetical to the health of our ecology and the direction our economy needs to go.” I have a lot of sympathy with this argument, but Oregon’s current gas tax is too low to have significant effect on carbon emissions, the state is the wrong entity to impose a carbon tax (although in the absence of national action, better than nothing), and abating greenhouse gases calls for taxing all sources at the same rate, proportional to the harms they produce, not just motor fuels. Moreover, there are substantial federal and state incentives aimed at persuading folks to substitute high mileage vehicles for gas guzzlers.

Third, giving ODOT the means to monitor our cars’ movements throughout the state would infringe upon personal privacy. Putting a GPS device in everyone’s car is evidently upsetting to a lot of people. This seems silly to me. Most new cars already have such devices and many of us carry cellphones around on a regular basis. Is it safe for Verizon or GM to have access to the information produced thereby, but not ODOT? OK, I think we are a bit nuts about privacy in any case: that personal and corporate tax returns, information on children and families, and personal heath records are all private makes the formulation of coherent public policy nearly impossible. By my opinion here doesn’t matter. The fact is that it would be a simple matter to allow folks with serious concerns about their privacy to buy their way out of the system. 

There is one objection to this proposal, however, that really doesn’t make sense, that road use is the wrong tax base: “even people who don’t drive are road users. Any type of commerce or business depends on our road network; every product we buy is shipped via roads at least partially. The idea that the cost of roads must be paid through a ‘user fee’ is silly. We are all road users.” That we are all road users whether we drive on them or not is absolutely true, but it is equally true that insofar as paying a road tax is a cost of doing business, the tax will be shifted to those of us who ultimately benefit from their use. But, in fact, this argument is irrelevant to the proposal under consideration, which is concerned exclusively with the use of personal vehicles. Oregon already applies a mileage tax to commercial vehicles.

Read the full article and discuss it »

Blazers line up three big sponsors

July 27, 2013 --

blazersLONGTIME “HERITAGE PARTNERS” TIP-OFF RENEWALS OF TRAIL BLAZERS SPONSORSHIP AGREEMENTS FOR 2013-14 SEASON
Airefco, Spirit Mountain Casino, Standard TV & Appliance Sign Multi-Year Deals
By Portland Trail Blazers Communications Dept.,

Longevity and loyalty have special meaning for Portland Trail Blazers fans and that same spirit carries over with corporate sponsors. Three long-standing “Heritage Partners” with the Trail Blazers – Airefco, Inc., Spirit Mountain Casino and Standard TV & Appliance – have signed new sponsorship marketing agreements to continue their relationships with the team beginning with the 2013-14 season. Financial terms of deals were not disclosed, but each agreement is for two years.

“Heritage Partners” are Trail Blazers sponsors holding tenure with the team greater than five years. With these latest renewals, Airefco will enter its 22nd season in partnership of the Trail Blazers; Spirit Mountain Casino marks its 19th year; and Standard TV & Appliance comes aboard for its 15th year.

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Medical Device Tax tops $1 billion from health companies

July 26, 2013 --

Chamber-of-commerce
U.S. Chamber of Commerce

Obamacare’s medical device tax, in effect for over seven months, has raked in $1 billion according to the Medical Imaging & Technology Alliance (MITA), the Advanced Medical Technology Association (AdvaMed) and the Medical Device Manufacturers Association (MDMA):

“The $1 billion threshold is frightening as every dollar spent paying for this medical device tax threatens medical innovation and American jobs,” said Gail Rodriguez, executive director of the Medical Imaging and Technology Alliance.

$1 billion is a lot of pacemakers and defibrillators and stethoscopes and thermometers and tongue depressors and …

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Ore. snack business soars, adding 250

July 25, 2013 --

McMinville is home to a rising small business star in Betty Lou. Her processing plant helps to produce over 60 different labels. Watch the KGW-TV News profile of this great Oregon success story.

Read the full article and discuss it »

Oregon recovery spreading across state

July 24, 2013 --

QCEW13q1


By Josh Lehner
Oregon Office of Economic Analysis Blog.

Just as last quarter (also HERE) we saw that job growth had returned to more regions of the state, the latest QCEW for 2013q1 finds that this is continuing and even strengthening. While the Portland MSA returned first to job growth, even as the other regions continued to shed jobs at the start of the technical recovery, the other regions are starting to gain ground in terms of job growth. Thankfully Portland is losing its dominant share of overall growth due to strength in other regions, not becauxse Portland has slowed down. As seen below, Portland continues to add about 20,000 private sector jobs on a year-over-year basis, or at about a 2.6% rate. The state has gone from adding 20,000 jobs on a year-over-year basis two years ago to closer to 35,000 jobs in recent months. This coincides with an improvement in job growth rates from about 2.0% to 2.5% today. Not great from a historical perspective but a good improvement nonetheless for the private sector. Overall employment growth is at 1.9% in March due to continued public sector declines (-1.2% in Q1).

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Chart: Oregon PERS vs. Washington

July 23, 2013 --

Prosperity-project
By Oregon Prosperity Project

chart-prs-13-opp

Source:Pew 2012and BEA;*All three states deliver pensions to state and local public employees primarily through state ‐ sponsored plans (that is,98% of membership in OR and 95% in WA and CO).In each state, a number of separate,local government plans exist and are not reported here.

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Petition: Politicians lose water power, creates new elected board

July 22, 2013 --

Portland water ratepayers formed a coalition to remove water politics and control away from Portland City Commissioner and instead create an independent Water Board elected by voters. See the KATU-TV news clip below.

Read the full article and discuss it »

Google, Microsoft lead Tech drop

July 20, 2013 --

chartggl13d

Google, Microsoft lead Tech drop

– Google saw a 6% drop in click-ads, while over at Microsoft it saw a $490 million loss. But there is some good news to report.

Below is a video from Wall Street Journal reflecting some notable news on these two tech giants and their bad week.

.

Read the full article and discuss it »
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