Less State Money = Higher Tuition At Oregon State Universities. Not So Fast.


A group of University of Oregon students protested tuition hikes on May 25, 2017.

Here we go again.

Oregon’s state universities will be raising their tuition again next school year.

Oregon’s Higher Education Coordinating Commission recently approved a resident undergraduate in-state tuition increase of 8.37 percent at Portland State University (PSU)  for 2017-18, as well as increases at other Oregon state universities.

With the state’s fairly steady disinvestment in higher education over the years, it is commonly assumed that this has been the primary driver of tuition increases.

I even wrote an article a while ago blaming the Legislature for rising tuition at state universities. “Because of the Legislature’s calculated callousness or pure indifference in funding Oregon universities, young people across the state are facing soaring college loan debts and diminished opportunities for higher education,” I wrote.

But research indicates that declines in state support may not be the primary villain.

A Brookings Institute review of research on the disinvestment hypotheses revealed that a clear causal relationship between reductions in per-student state appropriations and increases in tuition has not been established. Moreover, there’s a “surprisingly thin” amount of research on the relationship.

Sure, higher education tuition has been rising as state support has been declining, but claims that changes in state appropriations are the biggest factor causing tuition increases are simplistic assertions based on nothing more than a comparison of two trends, a Brookings Institute paper said.

For example, in a recent article for FiveThirtyEight, Doug Webber, a professor at Temple University, put changes in tuition at public universities side-by-side with changes in state appropriations in a table, divided one column into the other, and then labeled the result, “share of tuition hike explained by cuts” [Emphasis added].

Brookings challenged this analysis. “..it does not explain how much of the funding cut caused the increase in tuition…Rather, it assumes that a causal relationship already exists, that it is dollar-for-dollar, and that no other factor could explain the changes in tuition,” Brookings said.

A study by the U.S. Department of Education’s National Center for Education Statistics found that changes in appropriations account for only between 19 percent and 28 percent of changes in published in-state tuition prices.

Another study published in a National Bureau of Economic Research volume examined a dozen factors that might be associated with changes in tuition, including changes in appropriations from state governments. This study, by Michael Rizzo and Ronald G. Ehrenberg, looked at these changes for 98 universities over a 10-year period.

The paper includes an important finding on the magnitude of the effect of a reduction in state appropriations on tuition. The effect, it concluded, is miniscule. The authors found that, “for the average institution in our sample, it would take an increase of $1,000 in state appropriations per student to generate an in-state tuition reduction of only $60.” That means six cents of every dollar in appropriations find their way into lower tuition.

A George Washington University study also has found that changes in appropriations have a very small effect on tuition at public universities. This study found that just ten cents of every dollar increase in appropriations would find their way into lower tuition, an effect similar in magnitude to what Rizzo and Ehrenberg found.

“If the relationship between state appropriations and tuition at public universities is as weak as the two studies show, the ubiquitous claim that cuts to state funding are the “primary driver” of changes in tuition are simply not supported by the research,” the Brookings Institute reported.

Equally, the research suggests that increased appropriations for public universities are unlikely to have an effect as large as advocates assume. “That makes increasing appropriations for public colleges and universities an ineffective—even wasteful—policy for keeping tuition low,” Brookings said. “It also implies that grant aid might deliver more bang for the buck than larger state appropriations.”

So why such an apparently weak link between appropriatio0ns and tuition? Brookings speculates that universities may be simply looking to exploit their pricing power in the market, leading them to raise tuition whether appropriations rise or fall.



Measure 97: don’t buy a pig in a poke


After months of waffling and so-called reflection, Oregon Gov. Kate Brown now says she supports a whopping increase in business taxes through Ballot Measure 97. Surprise!

What liberal Democrat wouldn’t salivate over the prospect of $6.1 billion of additional state revenue in the 2017-19 biennium?

What’s dismaying is that Brown seems to be on the voters’ side, according to a recent poll by Clout Research. That poll, released on July 27, concluded the following with respect to Measure 97:

  • Yes              39%
  • No               34%
  • Not Sure    27.1%

The only saving grace here is that, according to FiveThirtyEight, Clout Research isn’t too reliable, earning a lousy C- ranking. Of the 9 Clout polls FiveThirtyEight reviewed, Clout called only 3 correctly. This compares, for example, with the ABC News/Washington Post which polled 78 percent of 51 races reviewed correctly and earned an A+ rating.

 Opponents of Measure 97 can also take some solace in the fact that The Clout poll  found support for the measure is diminishing. About 39 percent of respondents to the Clout poll favored the measure, versus 44 percent who favored it in early May.

Still, Brown’s support for Measure 97 is hard to fathom given the real impacts and uncertainties associated with the measure.

For example, Democrats always like to position themselves as dedicated, empathetic protectors of the poor. But Measure 97, if approved, would be a significant burden on the poor.

“…the gross receipts tax is subject to the same equity concerns as the retail sales tax because under most circumstances it eventually leads to higher consumer prices,” said Oregon’s nonpartisan Legislative Revenue Office in a report. “Any tax that is based on general consumption will have a regressive impact on the distribution of the tax burden, meaning that lower income households will experience a higher tax burden as a percentage of their income than higher income households.”

According to the report, families earning up to $48,000 a year will see a 9 percent decrease in net household after-tax Income under Measure 97 after wages and prices have adjusted to the new tax policy. In contrast, families earning over $206,000 a year will see just a 4 percent decrease in net household after-tax Income.

In the same vein, Measure 97 would change the distribution of Oregon’s state and local tax burden to disadvantage low-income Oregonians. According to the report, families earning up to $48,000 a year would see their effective tax rate go up in the range of .51 percent-.80 percent. In contrast, the effective tax rate of families earning more than $206,000 would go up just .27 percent.

So much for the Democrat’s commitment to low-income families.

For a party that says so often that it wants fairness and equality in the economy, its support for Measure 97 is also inconsistent. That’s because Measure 97 could really cause the equality of Oregon’s corporate tax system to go seriously awry.

According to the Legislative Revenue Office report, gross receipts taxes, such as those proposed in Measure 97, can distort tax payments because of something called pyramiding. “Pyramiding occurs when the gross receipts tax is built in at the time each transaction occurs and then passed on to the next stage,” the report said. “Because industries vary greatly in the number of transactions that occur, the effective tax rates can be considerably higher for those industries with multiple transactions compared to those that have very few.”

A study by the Washington Legislature, cited in the Legislative Revenue Office report, backed up this conclusion. “Because the degree of pyramiding varies widely, this means that effective tax rates will vary widely among industries, thereby distorting market prices and decisions,” the report said.

With all their talk of fighting inequality, is that really what Democrats want, a flawed, unequal business tax system?

Democrats will also be relying on some very iffy revenue expectations if Measure 97 passes and they grow spending based on the Legislative Revenue Office’s revenue projections. The office’s report projects that the largest 274 corporations based on Oregon sales would see their annual Oregon taxes increase by over $2 billion, or most of the total tax revenue increase from Measure 97.

But the office emphasizes that this is a very dubious number. “Since these corporations are large, operate globally in many cases, and often have substantial market power; accurately predicting their behavioral response to a large tax increase presents numerous challenges. The individual behavioral response of these corporations will be a key factor in determining how the tax burden is ultimately distributed.”

Finally, Oregonians who support Measure 97 because they believe Democrats’ claims that the revenue would be committed to things like K-12 education and healthcare are tragically misinformed. On Aug. 1, 2016, the nonpartisan Office of the Legislative Counsel released an opinion saying, in essence, the Legislature can do anything it damn pleases with Measure 97 revenue.

“Section 3 would not bind a future legislature in its spending decisions,” wrote Chief Legislative Counsel Dexter Johnson in the opinion. “If Measure 97 becomes law, the Legislative Assembly may appropriate revenues generated by the measure in any way it chooses.”

In other words, don’t bet your sweet bippy on how this would all play out.

With all these negatives and uncertainties, do Oregonians really want to buy the Democrat’s and unions’ Measure 97 snake oil?



I just can’t keep up; who am I supposed to deplore now?

It’s just getting hard to keep up.

So many people with so many different points of view is proving to be a real conundrum.

Brandeis University recently invited Ayaan Hirsi Ali,

Ayaan Hirsi Ali

Ayaan Hirsi Ali

a visiting fellow at the conservative American Enterprise Institute , a campaigner for women’s rights and a critic of intolerance, to receive an honorary degree at the school’s commencement on May 18.

Some of her comments allege a link between Islam and mistreatment of women. “The connection between violence, particularly violence against women, and Islam is too clear to be ignored,” she said in a Wall Street Journal piece. “We do no favors to students, faculty, nonbelievers and people of faith when we shut our eyes to this link, when we excuse rather than reflect.”

An outcry of opposition to her appearance arose from some Brandeis students and The Council on American-Islamic Relations, a civil rights and advocacy group. “She is one of the worst of the worst of the Islam haters in America, not only in America, but worldwide,” Ibrahim Hooper, a spokesman for the Council, told the New York Times.

Unwilling to face the heat, Brandeis cancelled its invitation to Ayaan Hirsi Ali. “We cannot overlook that certain of her past statements are inconsistent with Brandeis University’s core values,” the university, that bastion of free speech and academic inquiry, said in a statement explaining its decision.

So, if Ayaan Hirsi Ali comes to Portland to speak, should I go and listen or publicly deplore her, start a social media campaign against her and urge that everybody boycott her appearance?

I’ve also been reading about how upset some people are with Chauncy Childs, the owner of a planned Moreland Farmers Pantry in Sellwood. When it was discovered that she’d posted comments on Facebook about her opposition to same-sex marriage, some folks went ballistic.

Chauncy Childs

Chauncy Childs

According to The Oregonian, the outrage even extended to people who came to Childs’ defense. “The idea of blacklisting and boycotting people for their thoughts and beliefs, as opposed to their actions leads to a world that is less tolerant, less caring and more segregated,” Nick Zukin, co-founder of Kenny and Zuke’s delis, told The Oregonian. Gay rights activist Byron Beck lambasted Zukin and urged people to boycott his businesses, too.

“They’re choosing to open a business in a very open-minded neighborhood,” Tom Brown, president of the Sellwood Westmoreland Business Alliance, said without apparent irony to The Oregonian. “I think their personal views are going to hurt.”

Given this situation, should I stop by the Moreland Farmers Pantry if I’m in the neighborhood or deplore its owner’s views and pass it by?

And, by the way, I’m debating whether to install the Firefox browser on my laptop, but I’m conflicted.

Not long ago it was discovered that Brendan Eich, the newly appointed CEO of Mozilla, developer of the open source browser, Firefox, donated $1,000 in 2008 to support the campaign for Proposition 8, a California ballot proposition that aimed to ban gay marriage in California.

Brendan Eich

Brendan Eich

The donation was uncovered in 2012 when Eich was Mozilla’s Chief Technology Officer, but it didn’t become a huge controversial public issue until he was appointed CEO in late March 2014.

At that point Eich came under heavy fire from some Mozilla employees, gay-rights activists, executives of companies active in the Firefox marketplace and others.

Will Oremus, senior technology writer at Slate, said Eich’s departure was a sign of the times.

“There was a time when supporting gay marriage made you a radical,” Oremus wrote. “Then there was a time when it made you a progressive. Now we’ve reached a point where not (emphasis in the original) supporting gay marriage makes you unfit to lead a major Silicon Valley organization.”

The National Organization for Marriage, initially created to support Proposition 8, has jumped into the fray, too. It has called for a boycott of Firefox “to protest the company forcing out its CEO over his support of Proposition 8.” A conservative website, TruthRevolt.org, has urged people to uninstall the Firefox browser in protest of “Mozilla’s decision to fire Eich.” (Note: Eich resigned)

Others took the anti-Eich crowd to task for attempting to quell free speech and silence those who hold dissenting views.

So, what do I do? Should I deplore Mozilla for giving in to the pressure of the crowd and intentionally get a Firefox browser or should I bond with the critics of Eich’s donation and boycott Mozilla products?

And while I’m thinking about it, what should I do about all the other companies whose employees, including some executives, made donations in support of Proposition 8?

FiveThirtyEight put together a table of thousands of dollars of Prop. 8 donations by major Silicon Valley companies that showed money coming from employees of firms such as Google, Apple, Intel, Oracle and Yahoo.

A further analysis of the data showed that 83 percent of the donations by Californians were in opposition to Proposition 8, but there was a lot of variation between companies. At one big tech company based in California 60 percent of employee donations were in support of Proposition 8.

Should I deplore that company, maybe boycott its products?

Oh, I almost forgot Chick-fil-A. You may remember how, in 2012, the chain’s president, Dan Cathy, was reported to have said, “”We are very much supportive of the family — the biblical definition of the family unit…We want to do anything we possibly can to strengthen families.” His comments spawned outrage among some gay rights activists and politicians and calls for a boycott of Chick-fil-A.

Dan Cathy

Dan Cathy

I know there aren’t any Chik-fil-A’s in Oregon, but if I come across one out of state can I stop for a bite to support free speech or am I still supposed to be deploring them?