The lab-engineered triumph of the demagogic presidential candidate – buoyed by racist appeals, racist voter suppression laws, unapologetically racist supporters, and a fundamentally racist electoral college scheme that has been (and can no longer be) justified by the founders as a means to prevent election of a demagogue – throws into doubt the future of America. Or even whether it’s worth thinking in terms of a future at all, since there really is no alternative to having one.
No, rather than whether we have a future, the question becomes only how brutal the service and how awful the food will be in our “banquet of consequences” and whether the nation formerly known as America shatters into pieces, lashes out violently against our fate, or simply shuffles out of front and center position on the world stage.
The fact of the lead-brained loser – by millions of votes – being transmogrified by the Electoral College alchemy into the golden “winner” of the White House derby only serves to show that Marx was right when he said that history does indeed repeat itself, first as tragedy, then as farce.
First came the tragic selection of George W. Bush — later shown to have lost Florida — by the Supreme Court , the great wounding of America that propelled the even greater tragedies of 9/11 and the foolish swan-dives into the quagmires of Afghanistan and Iraq. Now comes the farce, the election of a crass Clown Prince of the Great Void where normal people have empathy and ethics, two qualities entirely absent from the nation’s new Sociopathic Narcissist in Chief.
There are myriad causes for our plight, far too many to count or enumerate here. None of which were individually sufficient, and not all of which were necessary to produce this absurd result: a president-elect created from a content-free TV huckster so devoid of presidential qualities that even the genius of Paddy Chayefsky could not foresee that it would come to this. Recall that, unlike our current pending affliction, Chayefsky made Howard Beale, his crazed demagogue in “Network,” a jaded TV news broadcaster driven mad by the ratings chase and the idea that the only thing that mattered was “winning.” The stunning reversal – that America’s last reel can start with the demagogic madman instead of a serious figure – just goes to show that there is nothing in the country that hasn’t been corrupted and degraded by six decades of television dominance.
Lily Tomlin said it best: “No matter how cynical you become, it’s never enough to keep up.”
But cynicism is armor that only protects against the threat of surprise, such as astonishment at the worship of cupidity and evil by the new administration. And cynicism is such heavy armor that the wearer is eventually overcome by the burden, which ultimately causes the cynic to quit the struggle, letting the racists and know-nothings proceed along their insane path.
So while cynicism is useful in small doses, it is important not to rely on that as the sole antidote to the looming problem. Instead of cynicism, the strongest antidote to the incoming kakistocracy the work of repair and restoration, banding together with others who are working on the deep structural problems that caused the festering orange-hued boil to break the surface.
But it’s not necessarily easy to know where to devote your energy and resources. For, as Thoreau noted, “There are a thousand hacking at the branches of evil to one who is striking at the root.” Thus, this issue of OregonPEN, published a few days before the recently named “Giving Tuesday,” is the first installment of three that will use 12 especially worthy organizations’ own words to introduce OregonPEN readers to those worthy “Best Investment” groups, groups that deserve a huge new bloom of support in the wake of the national electoral miscarriage.
The first four organizations that deserve all the support you can offer are Fairvote, Tax Fairness Oregon, Oregon Center for Public Policy, and the Rural Organizing Project.
FairVote is the nation’s leader in seeking to make every vote and every voice count in every election through structural electoral reforms. We were founded in 1992 in Cincinnati, Ohio by scholars, advocates and former elected officials committed to finding practical ways to advance ranked choice voting and American forms of proportional representation. In 1993, we opened a Washington, D.C. office, with John B. Anderson (1980 presidential candidate) as head of our national advisory board, and became the Center for Voting and Democracy.
Reflecting our commitment to a broader platform of research and advocacy around American elections we became an important news resource, engaged in influential research and helped dramatically expand use of ranked choice voting and forms of proportional representation in local elections.In 2004, we changed our name to FairVote and embraced additional reform innovations like the national popular vote plan for president elections and a right to vote in the Constitution. Through collaborative partnerships, influential research and strategic advocacy, our impact has far outstripped our budget.
As Americans, we elect representatives at all levels of government, from local school boards and state assemblies to Congress and the presidency. With government depending on the consent of the governed, we have the right to expect our voices to be heard, our views to be respected, and our votes to truly count.
But American democracy today is not working. Our national government is trapped in gridlock, leading to historic levels of dissatisfaction and lower turnout every year, with turnout in 2014 the lowest since 1942. And turnout in primaries and local elections is even lower than the historically low turnout for national, general elections.
Our diverse political views are shoehorned into one of two fiercely partisan camps, too often silencing needed debate and making it hard for elected officials to work across party lines. With new voices constantly shunned as spoilers and noncompetitive districts locking down most elections for one party, too many of us lack meaningful choice between two candidates, let alone three. Because of these and other flaws, government fails to fully reflect many in the American electorate – from women and racial minorities to urban conservatives and rural liberals.
It’s easy to see that something is broken in American politics. It’s harder to figure out why – or how to move forward.
At FairVote, we think structurally. We look beyond the short-term actions of parties and power-seekers and into the systems that shape their behavior – the rules that govern our government. When it comes to how our elected leaders behave, the way we elect them is the most important system of all. To fix American politics, we need to fix how we choose our politicians.
We believe there are simple, common sense ways to strengthen our democracy and ensure all voices are heard, all views are respected, and every vote really counts. That’s why we work to study these problems, develop practical solutions, and work with national, state and local partners to advance reforms that result in fairer elections.
These reform ideas have come out of our focusing our research, outreach, advocacy and reform work on structural solutions to three core principles of a fair vote:
- Fair Representation: Respect for the principle of representation for all;
- Fair Elections: Elections with real choices in which every vote counts;
- Fair Access: The right to go to the polls and have a voice that will be heard.
We believe that a healthy and long-lasting democracy relies on every citizen having a right to a vote that can truly contribute to meaningful representation. Working together to address barriers to truly democratic elections, we can bring power back to our vote and make our democracy work better for everyone.
Ranked Choice Voting: More choices and more power for voters in a single election.
- Over two million people use ranked choice voting (RCV, or “instant runoff voting”) to elect their local officials, up from less than 100,000 in 2003. With FairVote’s help, RCV has passed as a ballot measure in at least one city in eight of the past 12 years, including Memphis (TN), Oakland (CA) and Minneapolis (MN). RCV is heading to statewide consideration in Maine in 2016.
- Acting on a FairVote proposal, Alabama, Arkansas, Mississippi and South Carolina used RCV for overseas voters in congressional primary elections in 2014. Overseas voters in Louisiana cast RCV ballots in all of their November elections for U.S. Senate and U.S. House that had more than two candidates.
- More than 55 colleges and universities with a combined enrollment of over 700,000 students use RCV for student elections, a huge increase from the year 2000 due in large part to outreach and support from FairVote.
National Popular Vote: Every vote equal in the election of the United States president.
- FairVote staff coauthored Every Vote Equal, the book detailing the National Popular Vote plan to reform the Electoral College. FairVote has been the research arm of the movement since its origin in 2005.
- The National Popular Vote plan has been enacted by 11 jurisdictions possessing 165 electoral votes – 61% of the 270 necessary for the legislation to take effect. The legislation has passed 32 legislative chambers in 22 jurisdictions. More than 2,110 state legislators have voted for or sponsored NPV legislation. FairVote has provided intellectual and research support to advocates throughout this process.
A Constitutional Right to Vote: Universal voter registration and a local movement to inspire participation and secure access to the polls for all qualified voters.
· FairVote helped draft two amendments for an explicit right to vote in the United States Constitution, including one introduced in Congress in 2001-2003 and one in 2013-2014; such legislation has earned the sponsorship of more than 70 Members of Congress.
· Over two million people are impacted by Promote Our Vote Resolutions in support of a constitutional right to vote and local reforms to boost participation.
· Since 2004, when we first advanced voter pre-registration for 16-year-olds, seven states and the District of Columbia have enacted it; two more states have adopted 17-year-old pre-registration.
· National organizations responded to our leadership in calling for systematic changes to achieving the goal of 100% voter registration with an “opt-out” instead of an “opt-in” approach. Such legislation passed in Louisiana in June 2015.
Fair Representation Voting: American, candidate-based forms of proportional representation.
· In the United States, more than three and a half million people use fair representation voting to elect their local officials in nearly one hundred local governments. Through legal and voter education work, FairVote has played an important role in this progress in dozens of jurisdictions, including new wins in 2014.
· For nearly two decades we have published Monopoly Politics and Dubious Democracy reports every two years, changing the national conversation about noncompetitive elections to focus on structural reform. On November 6, 2014, we called the winners in nearly nine out of ten House elections set to take place more than two years later in 2016 – as we simultaneously build support for an Act of Congress to allow every voter to participate in meaningful elections.
· Our Representation 2020 project distributed more than 2,000 State of Women’s Representation 2014 reports that feature the positive impact fair representation voting can have on women’s representation.
FairVote Donation link: https://fairvote.nationbuilder.com/donate
Our goal is to promote a tax code that is fair, progressive, serves the common good, and is fully enforced.
Since 2003, Tax Fairness Oregon has helped save the state budget hundreds of millions of dollars by working towards an equitable tax system.
In some cases that means killing tax breaks like the BETC, or winning changes to enterprise zones such as the Rural SIP. In other cases its means supporting bills that rein in wage theft (which also always means tax theft) or advance tax enforcement.
From helping to retain the Oregon Estate Tax to helping to pass Measures 66 and 67, Tax Fairness Oregon has been a critical force in state government.
Tax Fairness Oregon works to reform our tax code so that it serves the common good, not special interests.
We help shape the debate about tax policy in Oregon:
· We work to reform Oregon’s tax code by monitoring and evaluating tax concepts.
· We identify, research, and analyze critical bills.
· We testify at legislative hearings and meet with legislators.
· We bring public attention to tax issues through Facebook and eblasts, speakers, media outreach, workshops, and public relations.
· We build coalitions with partner organizations.
We engage in legislative action, grassroots organizing, education, and coalition building to promote a revenue system that is more progressive, sustainable, and adequate.
It was New York Times reporter David Cay Johnston’s 2003 book, Perfectly Legal: The Covert Campaign to Rig Our Tax System to Benefit the Super Rich And Cheat Everybody Else, that got Tax Fairness Oregon started. After reading a synopsis, we invited Johnston to speak in Portland. During his presentation we collected contact information for people who wanted to work on tax loophole and enforcement issues.
That group became Tax Fairness Oregon. Johnston has spoken in Oregon nine times, most recently in April of 2008. He has met informally with state legislators and other leaders. He provided some of the stimulus, not only for our group, but also for new tax enforcement legislation to close Oregon tax loopholes.
In 2016 the property tax discussion got realBecause of measures 5, 47 and 50, which were passed 20-25 years ago, Oregon’s property taxes are a mess. Unfairness reigns. Homes sold for the same $250,000 can pay as little as $1000 and as much as $4000 in property taxes. Increasingly, the costs of local property taxes have shifted from businesses to homeowners.
But finally, in the 2016 session, a bill was introduced to change property taxes without tying that change to a cut in capital gains tax or the introduction of a sales tax. SJR 201 was worth discussing, and we’ll be working with Senator Hass and others to improve on its basic ideas. Here’s our testimony on SJR 201.
2015 Legislative Agenda
Return the Rural SIP to Rural Oregon
The Strategic Investment Program, an enterprise zone-like program that reduces a business’ property taxes, exists in two versions, urban and rural. The rural program expects 75% less of a business both in investment and in taxes due, and was designed to draw major investments to rural Oregon. Recently, the Rural SIP has been wrongly, though legally, employed by urban communities, which have hundreds of industrial acres eligible for the Rural SIP. The fix returns the Rural SIP to Rural Oregon to work, and grow investments, as intended.
The original SIP legislation is now over 20 years old. The required tax payments have never been indexed for inflation. Further, K-12, Community Colleges and Education Service Districts are left out of the decision making, despite the fact that they lose their funding. The legislation puts them back in the decision-making process and assures that all local revenue collected from a business, be it as property taxes or as fees, is distributed the way local voters have voted that property taxes will be distributed.
Aviation Funding Fix
Unlike highways and roads, airports in Oregon have been relying on public funding rather than user funding for a hunk of the cost of maintenance and improvements. This public funding at the expense of education and human services isn’t necessary, because Oregon’s aviation fuel taxes are among the lowest in the country. While Oregon road users pay 30 cents a gallon in fuel taxes, Oregon taxes jet fuel at only 1 cent a gallon, and avgas at only 9 cents a gallon. Clearly a fix is in order.
ConnectOregon funds multi-modal transportation projects. The legislation creates a ConnectOregon Infrastructure Bank that allows the state to continue to partner with local communities and businesses, without burdening the state’s future generations with debt. Other provisions increase transparency.
Gain Share’s Demise
Gain Share was a 2007 legislative mistake. The cost—based on returning to the counties half the income taxes of employees working at SIP properties—is projected at $95 m in 2015-17, unless the legislature acts now. This giveaway is not fair to the rest of the state. Other communities have huge employers (the State, colleges, hospitals, theaters, and businesses in enterprise zones) who pay nothing in property taxes—yet they have never asked for GainShare. Washington County, on the other hand, does get property taxes from their SIP businesses, Intel and Genentech—$41 m last year. And the state gave them $38 m in Gain Share revenue. This has to end, HB 2070 is the right bill. Learn more here.
Taxpayer Return on Investment Act-TRIA
Tax Fairness Oregon is a member of the Taxpayer Return on Investment Coalition which will have a revised Act proposed for the 2015 session. The goal of TRIA is to achieve transparency and accountability when state and local public agencies provide economic development assistance to private entities, and to build a rational relationship between benefits given to an entity and benefits received by the public. LC 1835 REVISIONS 2.1.15
- Gain Share Testimony for Senate Finance & Review
- HB 2114 – Tax Credit for Employer Provision of Dependent Care
- SB 48 – Tax Credit for Employer Provision of Dependent Care
- HB 2752 – Expansion of R&D Tax Credit
- SB 658 – Reducing Property Taxes for the Landed Wealthy
- Allowing increases in property tax outside compression as this decreases tax equity
- Property tax reset on sale as this decreases tax equity
- Kicker distributed per capita as this will make it harder to fix the kicker in the future
- Increases in funding for ConnectOregon unless changed to predominantly a loan program
OTHER ISSUES WE ARE WATCHING:
- Capital Gains Haircut with funds to Rainy Day–Take the top off the extra high years, and put it into a rainy day fund so as to reduce volatility, increase savings, and reduce the likelihood of a kicker. Also Estate tax? (Read 2011 HB 2412, included reduction to CapGains)
- IDA sunset
- NMTC sunset
- Sunsets: Child Care (OCPP), Rural Medical (Steiner Hayward/OCPP)
- Pay for extending good tax credits by ending Grand Bargain breaks for business
- Hair cut to itemized deductions in various forms to increase revenue
- Retirement Security with tax credits
- Increase tax rates for corporate and high income taxpayers to top Measure 66/67 levels
- Cap the amount of deductible executive compensation
Tax Fairness Oregon Donations Link:
The Oregon Center for Public Policy (OCPP) does in-depth research and analysis on budget, tax, and economic issues. Our goal is to improve decision making and generate more opportunities for all Oregonians.
Use research and analysis to advance policies and practices that improve the economic and social opportunities of all Oregonians.
OCPP’s Core Values
Economic justice. Economic justice is found in a progressive tax system and the equitable distribution of the economy’s benefits.
Stand with the poor. Our solutions must benefit all Oregonians, but always with a special focus on the interests of low income Oregonians.
Good government works. Government can play a necessary and positive role, and we are vigilant and critical in pursuit of improved effectiveness and efficiency of our public structures.
How OCPP Works
Credibility. Our effectiveness demands independence, rigor, and transparent reasoning.
Usefulness. Our work is timely, accessible, and relevant.
Cooperation. We work in concert with others to share information, build consensus, and achieve results.
Involvement. In all decisions we are considerate of those who are affected by our work.
The Center’s Accomplishments
We believe in an economically prosperous Oregon where Oregonians at all income levels have a meaningful opportunity to thrive.
This vision won’t be achieved by accident or by chance. Good public policy is essential.
It will take a just tax system that produces sufficient revenue to pay for needed public investments.
It will take economic policy that ensures that all workers, not just the wealthy few, enjoy the benefits of a growing economy.
It will take smart budgets that prioritize investments in education, health care and other vital public services that protect the vulnerable and create opportunity for all.
We reject the notion that “you’re on your own.” We believe “we’re in this together” when it comes to protecting the vulnerable, educating our children and steering the state’s economy
We have a long track record of success. Among the highlights:
· In 2000, The Oregonian editorialized, “what makes the Center valuable is not rhetoric, but economic analysis that adds up to a powerful argument.” On our 10th anniversary, The Oregonian added, “the Oregon Center for Public Policy can claim to have improved public debate in Oregon — and the situation of thousands of Oregonians.”
· Our research improved Oregon’s Working Family Child Care and Earned Income Tax Credits, putting more money into the pockets of low-income working families with children. This wasn’t just the “right” thing to do. Investments in their well-being help children succeed academically, creating a foundation for a brighter future for them and our state.
· Our research has helped defeat ballot measures and other proposals that would have reduced tax revenues while skewing the tax system to benefit the wealthy at the expense of all other Oregonians. As a result, we helped prevent deep cuts in spending on education, health care, and other services essential to the economic security of Oregonians.
· Our research made the case for Oregon’s ballot measure that boosted the minimum wage and promised annual cost-of-living adjustments. Increasing the minimum wage is one of the most important things a state can do to lift working people out of poverty.
· Our research explained the positive impacts of ballot measures that raised income taxes on high-income Oregonians, set a new corporate minimum tax and new tax rate for the most profitable corporations. These measures prevented deep budget cuts without dampening Oregon’s economic performance.
· Our research has created momentum for a Basic Health Program. This could help Oregon move even closer to the goal of extending affordable, quality health coverage to all Oregonians.
· Our research and analysis about hunger and food stamp policies led to Oregon implementing a food stamp outreach effort and adopting policies so more Oregonians could qualify for food stamps.
Donation link: https://donatenow.networkforgood.org/OCPP
A Living Legacy: Carrying Marcy’s Work Forward
By ROP Staff and Board
So many of us have been inspired and changed by Marcy Westerling and Rural Organizing Project.
The tributes in these pages describe how Marcy has brought so many to justice work: mentoring, cheerleading, nagging, nudging and inspiring us into action. The best way to honor Marcy is to make her work a living legacy, to carry forward that work and the vision of ROP.
From that first Rural Caucus and Strategy Session in 1992 that marked the beginning of ROP, Marcy and ROP organizers have reached out to small-town organizers, growing the network from 20 human dignity groups to 60, and extending to almost every county in Oregon. ROP staff organizers connect, support and inspire the many local people who form a statewide progressive rural movement. The impact they make given minimal resources is astounding.
It is our hope that we can continue to build and strengthen the progressive infrastructure it takes to promote a vision for truly inclusive democracy and sustainable communities and to resist right-wing extremism.
ROP was formed with three core notions at its heart:
Every person counts no matter where you live. We believe in the equal worth of all people, the need for equal access to justice and the right to self-determination. Every place counts, including very rural communities. Rural people can and should be a part of organizing for change in their own communities and shaping progressive organizing.
All issues are connected. Communities aren’t single issue and neither are people. None of us identify with being only a woman or white or gay or rural or working class – we can be all of these parts of ourselves and so much more. ROP believes that the issues that matter to our lives intersect and therefore our organizing must do the same. We organize for justice for all of us, for all the parts of us, and for our whole communities. We seek racial, gender and economic justice, and our work is prodemocracy and anti-fascist.
Only through transformational organizing can we expect to change the rules of this world. ROP exists to build and support local organizers to advance democracy and human dignity through local, autonomous human dignity groups. Grassroots organizing is how we envision leadership. Organizing is not left to paid professionals from campaigns but is the work of everyday people transforming our communities. To share our stories, to struggle with new issues and their connections to complex social realities, to truly own our organizations through grassroots leadership – these actions transform us so we can better transform the world.
Just after her diagnosis in 2010, Marcy tested out writing her own obituary:
Marcy Westerling: A kickass community organizer dedicated to the notion that small town Americana is filled with justice seeking souls that deserve support as well as have the power to bridge the false cultural divides of our times. Derailed by Stage IV Ovarian Cancer in Spring of 2010. I trust others to continue moving rural inclusive progressive organizing forwards.
We invite all of you to join us as we carry forward the work of rural inclusive progressive organizing. — ROP Staff and Board
Our History: the Evolution of the Rural Organizing Project 1991-2004 –
Rural Organizing Project – by Marcy Westerling
According to conventional wisdom, the Left fails to talk values with voters, particularly voters in rural (now “red”) communities. Beneath this popular story line is a more complex reality. Rural voters care about values, yes – but those values are not necessarily conservative. For over twelve years, the Rural Organizing Project has used values-based organizing to advance a progressive vision of democracy in Oregon, the 10th largest state in the country where all 36 counties have a rural profile.
Roots of Reaction
In the early 90’s Oregon became a battleground in the “culture wars”. An organized conservative Christian social movement seemed to emerge full-blown from nowhere to put an alternative world view on the public agenda. In 1992 the Oregon Citizens Alliance launched a state-wide Constitutional ballot measure to define homosexuality as “abnormal and perverse” and enjoin state agencies from doing anything to “promote the homosexual agenda”.
To most Oregonians, it is safe to say, this political thrust appeared like a bizarre bolt out of the blue. But the religious right-wing movement had been developing under the radar for over a decade in a state known to the rest of the nation as a model of forward-looking progressive policies. The political base of this new conservative insurgency was rural Oregon.
It was no accident that rural Oregon had turned sharply to the right by 1992. Beginning in the late 1970’s, the rural economy entered a tailspin that it has not emerged from to this day. The recession of the early 80’s was a depression in timber-dependent communities. Tens of thousands of high-paying union jobs disappeared as lumber and paper mills closed and logging operations shut down.
Small businesses went bankrupt and main streets began to atrophy. The timber economy had supported a prosperous small-town lifestyle since the end of World War II. The crash was caused by over-logging and long-term timber industry planning to replace older Pacific Northwest timber stands with newer forests in the Southeast United States. The economic pain in rural Oregon was neither adequately explained to the victims, nor planned for by industry and government. Instead, convenient scapegoats stepped right onto the stage in the form of environmental lawsuits to halt old-growth logging in the late 1980’s.
Environmental lawsuits to protect the last stands of ancient forest and defend endangered species like the spotted owl were, in truth, efforts to preserve the ecologically sensitive remains of the national forests. But to out-of-work loggers and mill workers watching the rest of the state and nation gear back up for economic expansion while they remained stuck, the environmentalist organizations seemed like malicious interlopers. The first reaction was a coalition of timber corporations, chambers of commerce, conservative politicians, and unions that organized log truck convoys and rallies to protest Federal Court rulings on the spotted owl, and environmentalist meddling. The greens were portrayed as city-based, latte-drinking elitists who “preferred animals and bugs to people”. The pro-timber, anti-forest protection movement was a rapid groundswell, but it was not able to restore the timber economy whose real-world, material base had been destroyed by corporate forces beyond local control.
The character of rural and small-town Oregon was changing radically. The years of timber prosperity had generated a live-and-let-live social culture that was the base of Oregon’s nationally famous moderate progressive political reputation, exemplified by liberal Republicans such as former Governor Tom McCall , Senator Mark Hatfield, and pro-choice Republican Bob Packwood. On the ground, the main street leadership was also essentially moderate, pro-government and pro-environment. In the late sixties and seventies, rural Oregon accepted an influx of counter-cultural new comers: organic gardeners, craftspeople and builders, and later in the decade, telecommuting professionals. But when the economy crashed, the social fault-lines appeared.
Alongside and in reaction to the counter-cultural changes of the seventies, another alternative culture had developed – the growth of fundamentalist religious communities. Hard-hit timber workers and small business people, whose own anti-environmental movement was going nowhere, began to be attracted into the orbit of the new, growing “non-denominational” churches that offered a combination of caring community on a personal level, and a paranoid political world view. The movement identified forces such as feminism, gay liberation, and “liberalism” as the causes behind the social stresses that economically strapped families were experiencing. These were “molecular changes”, happening beneath the veneer of conventional, business-as-usual politics. Eventually, this grassroots socially conservative movement linked up with national “New Right” institutions. The resultant launch of politically sophisticated campaigns in favor of primitive social goals took both the political establishment and the progressive movement by surprise.
Progressive Response – Columbia County Citizens
Progressive rural Oregonians did not yet know the names of Richard Viguerie or Pat Robertson or that the growth of a reactionary right was a national phenomenon, but we did know that our communities were under siege. Awareness grew in the late 80s and early 90s as people watched hiccups of small town conservatism erupt into harsh community divisions. Books were being censored with increased regularity. Creationism was debated at 7-hour school board meetings. Anti-gay policymaking was on the ballot again and again, in both state-wide and local initiatives. Many fair minded people did not have the words to describe what was happening in their towns but they did know that there was an escalating trend that had everyone on edge. One bizarre sign of the times during a heated anti-gay ballot measure were the 8 ½” by 11” placards in car windows portraying two male silhouettes engaged in anal sex with the international stop slash through the image. These same cars boasted bumper stickers supporting family values. There was little room for dialogue.
To cope, progressive small town community members started congregating. And this led to the organizing of human rights groups. It was an organic response that many small town progressives arrived at simultaneously – we needed progressive infrastructure in order to push back.
The story of the formation of one ‘human dignity group’ narrates a process that was replicated across the state. In the early nineties Columbia County, in the northwest corner of Oregon, was home to 37,000 people, seven small towns, the state’s only nuclear reactor (soon to be defunct), a shrinking paper and timber industry, unemployment at over 10% and rising, and a growing struggle over who would define the community: right wing Christians and other organized bigots… Or those who believed in democracy for all. Like other rural parts of the Northwest, Columbia County seemed an ideal haven for Christian warriors who hoped to turn the clock back to a time before the great social justice movements of the 20th century.
At the same time, many others in Columbia County had watched the growth of the right wing with alarm from our silent corners of the community. Occasionally we gathered, such as at the school board meeting in the spring of 1991 where 300 people debated whether creationism should be taught in our public schools. But even when we gathered together in our common concern, we assembled as individuals rather than members of an organized response. At the end of any given meeting we each went home in despair, feeling as if we were losing control of our community… And we were.
In August of 1991, a hopeful development occurred. A group of community leaders and everyday citizens (often one and the same) met over a potluck to name what was happening to our community. As elsewhere in the state, the impetus came from the local feminist rape and domestic violence program, the Columbia County Women’s Resource Center (CCWRC). With its long history in the community of opposing oppression-based violence, challenging dominant social norms and organizing among targeted groups, the CCWRC was able to provide clear analysis of the present danger and the need to develop counter-strategies.
The most immediate cause of alarm was a campaign to amend the Oregon constitution to require discrimination on the basis of sexual orientation. Passage of the initiative would have marked the first time a state constitution had been amended to take away the rights of a group of people. People in Columbia County were concerned about the implications: we were not so ready to allow democracy to be weakened.
For the first time we talked about what each of us saw: homophobia, social control, Christian authoritarianism and disinformation. We all shared our clear commitment to reclaim our community as a place that did not tolerate bigotry, as a place that actively protected the minority voice – a community of democracy. The power of this initial meeting gave us tremendous energy to move forward together into action.
Our immediate strategy was to gather a strong base of support. Our strength would come not only from sheer numbers but also from the diversity that would truly represent our community. We took on the task of meeting with neighbors, co-workers, family members and friends who had a history of leadership and ethics.
Such criteria led us to approach fundamentalist Christians, loggers and other individuals not traditionally seen as aligned with the progressive community. The common ground was the concern over erosion of civil rights and the immediate targeting of the gay and lesbian community. Soon our base of support included people of color, Christians, pagans, Jews, laborers, office workers, a few gays and lesbians and a lot of committed heterosexuals.
We talked with people about what we were seeing and presented them with the hopeful prospect that a group was organizing to unite our voices. Most people we approached asked to join the project and also sought out a role for themselves. We found it critical to have some ready tasks for each new member, even if the task was as ‘small’ as approaching five others. None of us could remember a time where people were so ready to move into action.
Once we had a base of support of almost 50 people clearly signed on to reclaim our community, we felt we had a credible and safe starting point for formalizing our group. We drafted a mission statement. This was an invaluable tool as we set out to attract additional folks. We struggled to come up with a name that would represent our group perfectly, compromising on a name that offended none in our group. We acquired papers from the county clerk to establish Columbia County Citizens for Human Dignity as an official organization, which enabled us to generate money (we knew that we would need some money). We elected officers.
By now we were learning how to work with one another. When we had elected our “official” steering committee, designed our letterhead and agreed upon our decision making process we were truly ready to move outward into our community.
Selecting an initial strategy for outreach with the community was hard. By then we
had encountered the Oregon Citizens Alliance, the religious right-wing group seeking to place the anti-gay Measure 9 on the ballot through the public initiative process. We had peacefully attended a few of their meetings and observed them taking over the super-market and post office in one of our towns to gather signatures for the ballot measure. It hurt and almost immobilized us to witness our neighbors advancing bigotry. Our initial response was confusion: for a week we struggled to find a direction for action. Again our high standards slowed us down as we sought the “perfect” strategy. It took a few discussions before we recognized that moving forward with plans that were ethically sound was more realistic that waiting for the perfect campaign plan.
We finally took some simple steps. We designed a signature form to gather the names of “friends and neighbors” who would publicly affiliate themselves with us in future education efforts. More immediately, the signature form would serve as a tool to start discussions. We placed a press release announcing our formation in our local papers. We compiled 100 “organizer’s packets” that described what our group was about and provided tips on how to move into action. Small group discussions were set up with potential allies, providing each participant with accurate information and an opportunity to sign on to the campaign. We began to attend local candidate forums to ask where each candidate stood on civil rights. We’ve moved down the roster of churches and community groups and met with them group by group. The local papers printed editorials, articles and letters reflecting our views and activities.
Throughout all these projects we kept our meetings minimal and fun. Food and casual settings were incorporated. Whenever possible we tried to anticipate possible barriers to participating, finding rides for those without cars, and making sure children were included in meetings.
Today, Columbia County Citizens is still a work in progress. We interweave our strategies into our everyday lives in the community. Our most effective strategies are very simple. Most accomplish the immediate task of breaking down the isolation of rural progressive people and broadening our campaign to provide information to decent, often conservative, people who have rarely needed to challenge their perceptions. By demonstrating our diversity and strength of numbers, we inspire many to take their first public stands for social justice, and to re-commit others who had long ago given up hope and action. Again and again we’ve found that a decade of repressive politics has made many people eager to grab hold of the opportunity to belong to a group that stands for human dignity.
The value of our organizing to date is that we have restored hope to people that had almost given up believing in the power of the progressive social justice vision. We began by opposing the anti-gay bigotry of the Oregon Citizens Alliance but we have gone on to other projects that demonstrate our core vision of inclusion, fairness, and justice for the community in a time of severe challenge.
The Rural Organizing Project
The same process of reaction and response happening in Columbia County in 1991-93 was happening across rural Oregon, and for the same reason. All across the region, the Christian right was mobilizing – behind the OCA’s state-wide ballot measure, behind campaigns for local anti-gay ordinances, and behind right-wing primary election challenges to moderate Republican state legislators. And where ever these conservative challenges emerged, local progressives responded by creating human rights and human dignity groups.
The people who joined human dignity groups fit into certain categories. As high percentage were self-employed, often in newer information industries, crafts, as well as more traditional trades. Many folks cobbled together several employment sources. Another large percentage was employed in ‘caring professions’ such as teachers, and public employees involved in social services. People tended to be middle income, with at least some college, confronting the economic problems of the middle class in a depressed rural economy.
As a trained community organizer (courtesy of ACORN in the 80s) who had since developed strong relationships in the women’s movement while running a rural crisis center, I could appreciate the dramatic ease with which groups like Columbia County Citizens formed but could also predict that as the overt crisis of the moment abated, the basic business of life would exert disintegrating pressure on organizations. It was clear that rural progressives were up against powerful, divisive opponents, with only a limited progressive infrastructure at their back. It was logical to craft an organization run by rural progressives to provide ongoing behind the scenes support to rural groups. Such an organization could ensure that triumphs were shared during boom times and collapse was avoided during inevitable ebb moments.
The timing was right. Folks in community after community were concluding that traditional liberal politics run from the city would not work in these new times. The leaders of the culture war had declared that their constituents were rural America. For rural voters to navigate the hot button wedge issues of God, gays and guns, of immigration and collapsing safety nets, their progressive neighbors were best positioned to develop the language of compassionate communication. A support system was vital if this was to happen.
Because of the national attention that Oregon attracted around the OCA’s anti-gay campaigns, I was able to make connections that were critical to the emerging vision for a rural progressive organization. In1992 Susanne Pharr came to Oregon from the Women’s Project in Arkansas, in order to help create resistance to the right-wing mobilization. Her presence in the state was sponsored by the Oregon Coalition Against Domestic and Sexual Violence. Working together, we combined conscious-raising from the women’s movement, and the multi-issue, anti-racist approach of the Women’s Project’s anti-poverty work and put it on the road in rural Oregon.
Setting up meetings in the rural communities that had fought battles around OCA’s local anti-gay campaigns, we brought people together to share experiences and discuss strategy. Scott Nakagawa of the Coalition for Human Dignity helped us with an analysis of the national and international structure of the right-wing movement, and the links between the Christian social conservatives and the racist right. We discovered that groups which experienced this type of conscious-raising process were far more able to engage in long term organizing than groups that rose up around a particular crisis or outrage, without the benefit of seeing the big picture.
In 1993, we held the first Rural Caucus and Strategy Session, bringing together activists from around the state. At this session we decided to create a permanent state-wide organization, the Rural Organizing Project, consisting of a network of over 40 human dignity groups, and a permanent staff to facilitate local organizing, communication, and political analysis. Voting membership in the organization was relegated entirely to local, autonomous Human Dignity Groups, and board members were required to be rural residents.
Rural Organizing Project was created to allow local activists to control the terms of our own activism. We formed around some fairly basic notions: that every person mattered, that every issue was interconnected, and that transformation needed to be the goal. We took our scarce resources (a budget of $18,000 in the first year and yet to exceed $200,000/year) and created a different type of organization. One that valued being lean and mean, saw the value of local autonomy, and measured success in the number of people we reached out to.
The Human Dignity Group proved to be an enduring form for local organizing. Meeting in living rooms, church basements, and libraries, people came together to support each other, and to do basic political activism such as letter writing, planning educational events and community canvasses. When concerned people meet face to face on a regular basis this opens space for neighbors to break their isolation and take concrete, small steps to further social justice.
ROP developed an analysis that merged consciousness raising about oppression with broader political education. This analysis assisted groups understand the wedge issues used by the right wing to divide communities. We tried to re-frame issues in terms of a real, functioning democracy. We used a four-point definition of democracy from the World Book Encyclopedia : a true democracy requires
1) Majority rule
2) Minority Rights
3) An informed and educated public
4) An adequate standard of living.
From this we created a Democracy Grid that allowed people to judge any political initiative against the tenets of democracy.
ROP helped each group use external projects to build internal capacity. The focus was on ensuring that each group had a functional leadership team, a communication system (used and updated with regularity) and an action plan with a race, class, gender analysis. Since ROP was working with over 50 groups at any one moment we relied on a combination of constant traveling meetings to create organizational work plans and regular, standardized check- ins via phone and e-mail.
Every group could count on contacts from the office that combined cheerleading for successes as well as honest nagging as we reviewed what might have fallen off the organizational to-do list.
In 1995 Oregon’s farm worker union PCUN (Pineros y Campesinos Unidos del Noroeste) called a ten year anniversary strawberry harvest job action, to win improved wages and job conditions for Oregon’s farm workers. ROP was able to mobilize human dignity group support throughout the region, taking shifts on the picket lines, providing logistical support, and creating favorable local public opinion in support of the job action. In 1992, PCUN had provided highly visible solidarity to the gay and lesbian community in the struggle against the OCA’s anti-gay ballot measure, helping to blunt the right wing attempt to drive a wedge between the embattled communities. The strawberry actions were an opportunity to repay a debt and cement an alliance. Later in the year, ROP worked with CAUSA, the newly formed immigrant-rights group, to derail an attempt to float anti-immigrant ballot measures modeled on California’s infamous Measure 187.
Over the years ROP has worked with CAUSA and PCUN to back off the INS’s brutal immigrant busts in 1997. In 2001 we worked together to derail a plan by Oregon Senators Gordon Smith R, and Ron Wyden D for a ‘guest-worker program’ based on the infamous ‘bracero program’ of the 1940’s, that would have created a sub-class of immigrant workers at the complete mercy of their employers.
The groups have worked together at every legislative session to oppose anti-immigrant and anti-worker legislation, defend the increased minimum wage and fight for the social safety net.
The human dignity groups have been able to “get” the need to work with the Latino community through principled, militant groups like PCUN and CAUSA. From the beginning we have tried to raise consciousness about race, gender, and class issues, exposing the roots of social conservatism in racist movements like the 1968 George Wallace campaign for president, and pointing out the ways that the political base built around anti-gay and anti-abortion movements has been used to advance anti-union policies and efforts to wreck the social safety net. But no doubt the circumstances under which the ROP was formed, in struggle against discriminatory legislation that targeted gay and lesbians, provided the shock that allowed people with ‘white skin’ privilege to experience a little bit of what communities of color have undergone for generations. (Ethnography available Spring 2005)
An Evolving Struggle
The ROP was created in a moment of crisis, in the face of an insurgent right wing movement. That insurgent movement has changed in the last thirteen years. While particular state-wide anti-gay initiatives were defeated at the polls, and in-your-face organizations like the Oregon Citizens Alliance lost credibility, a powerful conservative political base was created through these battles, and the more strategic leaders of the movement used this new political power to transform the Oregon Republican Party. Between 1994 and the present, the right has targeted virtually every moderate Republican in the state legislature, taking advantage of the low voter turn out in primaries to install hard-right conservatives in Republican rural districts. Social conservatives have made common-cause with anti-tax activists, promoting a phony anti-government populism that has captured the economic anger in districts that have experienced over two decades of recession.
For its part, the ROP’s network maintained itself and grew over this period. The human dignity group has provided structure for people to coalesce around, and the type of intimate community that conservatives find in the church environment. The ROP network has continually sought to evolve a political program around the values of inclusion for all, and democracy. As the battle with the right shifted to the economic sphere ROP tried to fit issues such as tax justice, and the need for social programs into its values-based language.
But the ROP is a minority within the liberal and progressive movement, and that movement, by and large, has been hesitant, fearful, slow-footed, and defensive in fighting the conservative assault on social programs. Consequently, the progressive Oregon of the early 1970’s has lost every economic battle to conservative forces, unable to counter fake right-wing populism with an effective reply.
— by Marcy Westerling
ROP Donation LINK: http://www.rop.org/get-involved/support-rop/
Mr. Paul Mather: [39:52] Madame Chair, members of the committee. Paul Mather, Highway Division Administrator for ODOT. I’m going to try to move through the life cycle of a project from its inception to our completion of the project, and give you some of the high points of how a project proceeds.
[40:29] As you’ve been on your tour, and I’ve been on the tour with you, you’ve seen various stages of these projects. As people have talked to you about projects they want, projects that are in design, projects that you’ve seen in construction, I’m going to try to connect those dots for you tonight to show you how things are put together.
[40:44] This is that project life cycle I’ll talk about. I’ll talk about policy needs and selection, and so forth as we go through.
[40:53] We start with policy planning and sometimes statute. As you put projects into statute, whether it’s with JTA, or whether with a capital construction program, but traditionally they start in the policy planning arena. From ODOT’s standpoint, and the commission’s standpoint, we have the Oregon transportation plan.
[41:13] The Oregon Transportation Plan sets out policies, and then we have some local plans. On the local government side, which is the land use agencies, they have the comp plans, and they have their transportation system plans that bring those things together from a state level and a local level, and knit those together where those projects are identified in those transportation system plans.
[41:32] That’s really the birthplace for the majority of our enhanced or modernization projects. Not on the Fix‑It pavement, bridge, I’ll get to that here shortly. But that’s where you see many of the projects you see on the tour. That’s where they’ve originated from.
[41:49] The next step in the process is we talk about funding. Travis just went through and talked about where we are, funding‑wise, but we put the financial constraints lens over those projects that have been identified through the planning process.
[42:03] Again, legislatively, you’ve passed bills such as the Jobs and Transportation Act, which puts projects into statutes and funds those projects, but the federal funds that Travis was just talking about, our transportation commission goes through a process to select projects in two major categories that we talk about.
[42:21] You’ll hear us talk about enhanced projects. Those are projects that expand the system. There are additional lands, additional interchanges, or what we call Fix‑It projects, and those are just taking care of what we have, pavements, bridges, those types of things.
[42:33] In our transportation plan, it specifies that we need to take care of what we have first before we expand. It’s illustrated here in the dollar amounts in our commission’s actions to put as much money as they can towards Fix‑It. This amount that we have in Fix‑It doesn’t take care entirely of our asset.
[42:49] When I’m in front of you in the future, I’ll be talking about our bridge needs and pavement needs. This does not fully fund that, but they do recognize we have to spend some money on the enhance side just to provide some operational improvements and enhancement to the system.
[43:13] The selection process. Enhanced process, if you’ve met with the various area commissions of transportation around the state, they’re very involved in that process.
[43:12] As you’ve heard them talk about their needs and their involvement in selecting those projects, they are directly created by the Transportation Commission. They’re chartered by them, and they report their results and recommendations back to the commission through our enhanced process.
[43:27] On the Fix‑It side, we use our asset management systems. Travis talked a little bit about the All Roads Safety Program, but it’s really a data‑driven process for our safety programs. We’re aimed at those areas with fatal and serious accidents, both from a reactive and a proactive standpoint.
[43:48] We target those areas where we have high crash rates, but we also apply things like cable barriers, rumble strips, other things in a proactive way to prevent those things from happening in the first place. We have a pavement management system that tries to target when a pavement is going through its decline, or its failure.
[44:04] We try to pick those points in its life where we can add a chip seal, we can add an overlay, before we get to a very costly total rebuild of the project. Our bridge inventory, local bridge culverts.
[44:17] Operations is really kind of a catchall. We put rockfalls in there, we put signal enhancements in there, illumination. There’s a variety of things that go into our operation category.
[44:29] All those things are folded together into our STIP that Travis talked about. That’s our capital improvement program. Our commission there is the one that approves that. It’s a federal document. All federal funds have to be in there, and we also include…Our major state projects are also included in that document.
[44:46] Once we have an approved STIP, we really go into some intense product management, program management processes that we have in the department. Each project has a project charter and in that charter, we document coming out of that selection process.
[45:01] We have a scope. It has a schedule and it has a budget. We make sure that if it’s a pavement project, it stays a pavement project, and doesn’t expand into a new interchange, or a new lane, or so forth. We have a schedule for that project and we have, obviously, a budget for that project.
[45:16] We have a change management process because we know life change. Life happens. We get public input, and we discover things as we go through the design process, but it’s a conscious decision. If we’re going to add scope, change schedule, change budget, we’ve got to go back and understand the impacts that may have to another project on the list that may suffer the consequences of that. We may have to go back to our commission and so forth, to make those adjustments to the STIP.
[45:43] The next thing we think about is several different things. One is just the size of the project, and how we approach it, the type of contracting that we’re going to use on the project.
[45:54] First of all, I’ll talk about size. We try to do a couple things. One is, we try to size projects small enough that we can get new contractors into the business, that we continue to develop new contractors to make sure that we have a stable of contractors here in Oregon that keeps competition high, and keeps that contracting environment healthy.
[46:14] We also try to phase projects in a way that we can size projects for Oregon firms to be highly competitive. As you’ve gone around and seen various projects around, you’ve seen evidence of this where we try to hit that sweet spot of about $40‑$80 million, we have found keeps Oregon firms very competitive in that market.
[46:35] It helps us from a competitive standpoint and obviously helps the economy of Oregon by keeping those Oregon firms involved in projects.
[46:42] At this point, we also talk about the type of contracting that we want to use. Our traditional way is what we call “design, bid, build,” where a design is done either in‑house, or by a consultant. We bid those projects out based on low bid, select a contractor, and build the project.
[46:58] That’s our traditional way, but even in that methodology, we have some flexibility. I was in the Senate this morning, briefing the Senate Committee on a project that we have outside of Sweet Home on Highway 20, we call Sheep Creek Bridge. We actually put incentive, disincentives into that contract where the contractor had a $14,000 a day bonus, or a $14,000 a day penalty if they went before or after that.
[47:24] In this case, the contractor finished two weeks early and got almost a $200,000 bonus for completing that project and opening that road. We had the road closed while that work was going on early.
[47:39] We also look at other contracting methods. Design‑build is one, where we go out and do a solicitation through a best value. It’s not a low bid process. It’s a best value where a team of construction, contractor, and a design firm team up and give proposals to us, which we evaluate based on best value.
[47:58] CMGC is a process we used on the Willamette River Bridge in Eugene, where we stayed in the middle of the relationship. We go ahead and we hire a design firm and a contractor together, but we have the contract with the design firm, and we have the contract with the contractor.
[48:19] As an owner, we stay in the middle of that relationship to help guide more risky projects, such as the project in Eugene.
[48:29] We’ve explored public‑private partnerships. It’s another method that we have not used in Oregon. We’ve explored three or four projects, but we haven’t found a project that pencils out with that, but that’s another tool that’s available to us.
[48:40] On the design side, today we do about half of the work in‑house in ODOT, and we do about half of the work through consultants. That number varies, and has varied over the last decade to as much as 30 percent outsourced, to as high as 70 percent outsourced.
[48:57] I will tell you, that’s the range we probably should be in. If we go lower than that, and we have ODOT staff doing 100 percent of the work, I would say that puts us in too risky of a place, and vice versa. If we go to almost all outsourced, we need to keep some technical competency as an owner to understand bridges, understand pavements, to be able to manage consultants doing that same work.
[49:21] Anywhere in that 30 to 70 percent range, we’ve been over the last decade and, I think, proven we can be successful. Just is a rule of thumb for you, as we talk about how much staff we need to deliver projects. About for every million dollars in program volume that we talk about, we need about two positions to deliver that, both in the design and construction phase of that.
[49:42] The next phase we go into is what we call preliminary design, and this is really where we outreach to the public, to really understand now that we have a concept of a project we really pull out to the communities for it to get their engagement.
[49:59] Some of our complex projects, we’ll do what we call design charrettes. We’ll involve them in exploring different interchanges, and different designs of that. It’s really, at this point, kind of a “pay me now or pay me later.”
[50:14] I’ve been doing this for a long time, and I can’t tell you how many times where we’ve skipped or skimped on this step, and found later on as we got under contract or under permit for a project, that we paid the consequences of not involving the public.
[50:31] We’ve learned this lesson in many hard ways, but it’s an important step, especially here in Oregon, which has a high value for public involvement, that we reach out to them and involve them in the process. This stage can take a while to go through. It depends on your project. If you’re talking about a project such as a Sunrise Corridor, or a Newberg‑Dundee, it can take a long time to get through this process.
[50:52] When we get to this phase, it’s almost a chicken‑and‑egg sometimes when we get into these complex projects. We don’t really understand the costs until we involve the public, and really understand what this project is going to look like so we can assign a cost to it.
[51:08] There’ll be projects that sit in this piece, as we understand the project, before we actually go apply either here or to our commission, for funding. I will tell you, when we were in the ’09 session and talking about the Jobs and Transportation Act,
we had a lot of projects idling in this stage in our process.
[51:26] Those projects that you’ve seen on Highway 62, Newberg‑Dundee, Sunrise Corridor, all those projects were idling, waiting for funding. Woodburn Interchange was another example, waiting for funding. Today, we don’t have a lot of projects in here.
[51:47] We have a few projects in here but not like we had in ’09 because of the financial situation Travis was laying out to you. Our commission has put more of our resources into the Fix‑It side of our program and other projects.
[52:00] Once we have what we call the design‑accepting package ‑‑ that’s about that 30 percent design ‑‑ or we’ve done that preliminary engineering work, we now have a footprint of our project and we can move into final design. The critical path here is typically right‑of‑way.
[52:13] We need to know enough about the project that we can establish lines on people’s property, go out to them, and negotiate with them the purchase of their property and final design. In this stage, we moved out of that creative public process and really moved into more of a production mode, and moving now as rapidly as we can from that design‑accepting package to a contract and we get a contractor moving forward.
[52:41] As we exit this process, there’s several things that we work on. The various permits that we need, whether they’re environmental permits, land use permits. Often, we do a constructability review. We’d bring in several contractors that come in and help us understand how we’re going to stage this project or how we are going to approach this project to make sure it’s as buildable or constructible as possible.
[53:05] We look at mobility constraints or concerns. We have many commitments out there that we’ve made to minimize delays, to allow over‑dimensional loads through our project. There’s also commitments we’ve made, paired routes for these over‑dimensional loads to make sure that we’ve accommodated all of the mobility commitments.
[53:27] Work zone strategies. We’re committed to having a safe work zone for motorists and workers, and trying to provide a positive barrier between traffic and workers, if at all possible.
[53:35] DBE goals are set in the stage. Typically, the first thing you’ll see on a project is when utilities are out there starting to move, leverage utilities. Again, a critical path for us, to get the information to the various utilities so they can do their work before we let our contractor.
[53:53] We then move into construction administration of the project. We continue to do outreach to the community. Obviously, our projects have, in many cases, a significant impact on driveways, people with properties, and people’s daily lives as they commute. We need to continue to communicate with them, listen to them and their concerns, adjust our projects, and so forth.
[54:15] One of the things I’d like to point out in this slide, if you look at the construction equipment there, you’ll see the automated features that it has on it. Those receptacles that you see on the either end of the blade of that bulldozer is taking information from a satellite and designing that project. There are no stakes you see in the picture or stakes in that project. It’s part of the technology that we now see in our construction world.
[54:40] The two inspectors that you see out there from the ODOT standpoint, you’ll notice they have tablets in their hands. We’re rapidly moving to a paperless environment where we can do all the documentation that we need to do on the project in real time and have electronic file cabinets and so forth.
[54:57] One of the examples of how this helps from an efficiency standpoint is we’re able to process change order on a contract, not in a matter of weeks, but a matter of days. That time means money to contractors and to our staffs, enables to keep things moving. Just an overall automation.
[55:14] We’ve seen a decrease in costs of four to six percent of our projects and probably, as or more importantly, we’ve seen construction time reduced by 20 or 30 percent.
[55:26] One of the things I just wanted to touch on in here, there’s been some article in the media talking or questioning about our processes that we use for quality control on our projects. I will point out, in that article it does raise questions about the processes that we use. It doesn’t raise questions about our projects, that there is actual material concerns that we have.
[55:52] In fact, we continue to compare very favorably with other states when you look at things like smoothness of pavements with other states neighboring us around the country. But we’ve taken those things seriously. We’ve asked federal highway administration to follow up on their investigation or audit that they do of us periodically. We’ve asked them to accelerate their next review of our practices that we have, and they will be doing that.
[56:23] We will be using automation as well. We’ve made a decision, starting next summer, to require in our major paving projects that we use what we call automated compaction. On the rollers you see behind the pavers, there’ll be data receptacles that will not only ensure that we have the density of pavements, but also we have the roller patterns, or the compaction from the rollers behind the pavement.
[56:51] We’ll have, in that, real data that will be collected, that we’ll be able to document whether that contractor has done what they were supposed to do in our specifications. Madame Chair, I plan to follow up on this topic later. It’s a matter of time that I want to stay on schedule.
[57:18] The next stage, obviously, we get to celebrate a project, and opening that project, and cut a ribbon on that project. I don’t want us to forget that we’re not done with that at that point. We still have to maintain and operate that. There’s a big part of ODOT’s budget, as you saw that Travis was talking about, that it takes just to maintain and operate our system.
[57:36] Just in closing, I just want to run through a couple examples for you, so you can see what I’ve just outlined from a process standpoint, what that may look like in a project.
[57:50] The Woodburn Interchange, I’ve referred to that several times, about an $80 million project. That cost included a right‑of‑way and construction. That’s the complete cost of that project.
[57:57] Obviously, it’s a major involvement from a public standpoint. It was in that preliminary design stage, I say plus or minus five years. It’s hard to actually draw that line of when we started into that because, again, we were waiting for that funding to really get some of the details around what the preliminary design of that project would look like.
[58:18] Right‑of‑way took a considerable amount of time on this project. We had a number of files. We were touching gas stations, HAZMAT issues, other things that we needed to work through on the final design, the right‑of‑way. Then construction, we planned on construction taking three years in this project. The contractor was able to do it in two years.
[58:35] Another example project in Eastern Oregon. This is a preservation project, or a pavement project that we had just outside of La Grande. We had on the interstate, I‑84, we’ve had this plan, had this in the queue. The legislature passed, you passed the Jobs and Transportation Act, which included a climbing lane in this section.
[58:52] We were able to marry, up here, an enhanced project and the Fix‑It projects that have some efficiencies. Even in this project, we had some public outreach we needed to do. This had major impacts for trucks, over‑dimensional trucks that go in through this corridor. We essentially restricted, as we were doing the concrete pavement work.
[59:11] We restricted over‑dimensional loads. Now, loads, for example, that were originating out of Portland had to go up over Mt. Hood, through Redmond, Highway 20, on to Ontario. We needed to coordinate that, live up to our commitments to make sure that route was open for those over‑dimensional loads, as we did work.
[59:30] We’re also constrained, obviously, by snow and weather in this environment that we’re only able to work during the summer months in doing that pavement and that earthwork, which really led to why the construction took three years on this project.
[59:46] Another example, Ross Island Bridge, a project that’s going underway now, a $40 million project to repaint that bridge. We had some public involvement. We actually had some conversation about what color to paint the bridge. That’s something that’s an important issue to a lot of people, and we know we need to have that conversation with them.
[60:04] We ended up painting it the same color that it is today, but we had that conversation with them. We have some preliminary designs, some final design, moves through those stages very rapidly, but construction takes a while. This is a very labor‑intensive, expensive process that will take two or three years to go through, and repaint that bridge.
[60:24] Another smaller scale project. This is a safety project on Highway 34. We’re putting a median barrier down. This was actually funded in the capital construction budget the legislature passed last session, to put a barrier on Highway 34. We’ve had some head‑on collisions in this corridor.
[60:41] Some public involvement, just because we’re affecting accesses, even farm access. Representative Olson and I have had conversations on this, but it moves through that process, again, relatively quickly. Construction happens relatively quickly on a project of that size and scale.
[60:57] Culverts. Those of you who were in Newport heard me and Vivian talk about our needs on culverts, another example of a culvert project. Again, minor involvement from the public, moves through the process fairly quickly. The permitting process takes the longest time here. Then construction, we’re limited by [indecipherable] work periods typically when we can be doing the work.
[61:17] I end with this chart to give you that array of whichever project. There is not really a typical project. They all have different dimensions to them, but they all go through these same phases that I tried to describe here. It has a preliminary design phase, a final design phase and through to a construction phase.
[61:36] Hopefully that gives you some grounding as you go out and touch projects, receive projects, see what the process is and how a project was created, how it goes through the process, and where we end up at a ribbon‑cutting.
As with all Ponzi schemes, the Oregon Department of Transportation faces a rude crackup as the supply of new suckers willing to keep pouring money into new roadway miles is about tapped out. The first speaker for the 22 September meeting of the “Joint Interim Committee on Transportation and Modernization” outlined the fear gripping ODOT about the end of the gravy train:
Mr. Travis Brouwer: [17:11] Madam Chair, members of the committee, I’m Travis Brouwer, the assistant director for ODOT. I have to apologize at the beginning for this nagging cold and cough I’ve got. It’s actually going to be good for you because it will encourage me to say less. Good for me because if you ask any questions I can’t answer, I’ll just engage in a coughing fit.
Hopefully, that will keep us on track. I was asked today to give you a funding overview of how Oregon funds the transportation system. I’m going to go through this at a fairly high clip, not in a great level of detail. There will be plenty of time, hopefully, for you to ask questions tonight, and in the future for us to dig in some of these topics.
For some of you this will be old hat. For others, this maybe a little bit new. I’m going to try to keep it at fairly high level. I’m going to start by talking to you about the major funding sources we received in the State of Oregon, and how we use them on the service transportation system.
[18:02] The first area of transportation funding I’d like to talk about is the federal government’s provision of funds to the State of Oregon. Each year, Oregon receives about $600 million in federal formula funds from the Federal Highway Administration, the Federal Transit Administration, as well as some additional discretionary grants on top of that.
[18:23] Most of that money from the formula grants comes from the federal gas tax, which is 18.4 cents per gallon. It has been 18.4 cents per gallon since 1993. That’s put into the Highway Trust Fund, and then flows down to the states and local governments. A lot of money though, in addition to gas tax, is now being placed in the Highway Trust Fund from the general fund because that has not been increased in recent years.
Let’s start talking about federal highway funding. Each year, ODOT receives about half a billion dollars, about $500 million in federal highway funding. That was flat or declining for years. Between 2010 and 2015, we actually lost significant ground, even before accounting for inflation.
Then in the end of 2015, Congress passed the FAST Act, which provides a slight increase in funding. Very exciting when you get a slight increase in funding after years of declines. What we see for the next four years, through 2020, we have certainty around the amount of funding that’s coming to Oregon, and we get a slight increase. Two cheers for the FAST Act.
The nice thing about the federal funding that comes to the state is it’s essentially a formula block grant. All that money flows to ODOT, and then it flows out to local governments as well in some cases. The state and local governments are able to select projects so long as they’re eligible. We have to follow all the federal processes, however.
There’s a lot of strings attached, from environmental rules, procurement rules, design rules, etc. Sometimes you’ll hear complaints that help increase the cost of projects. As I mentioned, a lot of that money ends up flowing to local governments. About a third of the federal highway funding that ODOT receives then flows out to local governments under a number of programs.
[20:01] One of the largest is the Surface Transportation Program, which provides, by federal formula, a block of grants to the large urban areas in Oregon. Salem‑Keizer, Eugene‑Springfield, and the Portland Metro region. Then through an agreement between ODOT cities and counties, provides money to all 36 counties, as well as all the cities that are with a population of 5,000 or more.
[20:22] There’s also an enhanced discretionary program that is including our Statewide Transportation Improvement Program or STIP. There’s a local bridge program that provides funding for local bridge repairs. We, in recent years, have started sharing more safety money with local governments because a significant portion of the fatalities and serious injuries are on local roads.
[20:39] We want that money to flow to the most important, highest priority, safety projects. Local governments get about half of that safety funding through the All Roads Transportation Safety Program. There’s also a program called CMAQ. Congestion, Mitigation, Air Quality Improvement that funds projects in a small number of eligible areas that have air quality challenges.
[21:01] That includes the Portland Metro region as well as the Rogue Valley. Klamath Falls, Lakeview, Oakridge, as well as now Salem‑Keizer and Eugene‑Springfield have been added by decision of the Federal Highway Administration this year.
[21:13] There’s also a Federal Lands Access Program that provides an additional allocation of funds, that ODOT and local governments share for projects on any road that provides access to, or is on federal lands. In Oregon we get one of the largest allocations of [inaudible] in the nation under that program.
[21:29] As I said, about a third of the funding flows to local governments. That’s actually increased. Under the FAST Act, local governments are receiving a larger share of funding from the federal government. That’s largely because the larger urban areas in the state are now receiving a larger amount of money under the formula set by Congress.
[21:52] There’s also an allocation of federal transit funding that comes to Oregon. Each year Oregon gets about $100 million in formula grants. We’ve been successful, particularly in the Lane County area and then the Portland Metro region, in also securing significant federal grants for building out light rail and bus rapid transit.
[22:10] Each year, we get a base, about $100 million, that comes to the state in formula grants, primarily to urban areas. As you can imagine, most of the transit is in urban areas. For example, the Portland Metro region gets a little over half the money. Then the other urban areas get funding as well. That money goes directly from the Federal Transit Administration to those urban areas.
[22:30] ODOT receives the funding for rural areas, and distributes that to some of those smaller town transit services, anything in an area under 50,000.
[22:39] Let me shift now to the State Highway Fund. There’s a pretty important distinction in recent years between how we use our federal funds versus how we use our State Highway Funds. Federal funds have to be used for capital expenditures.
[22:52] We take all those federal funds, we put it into our Statewide Transportation Improvement Program, and they’re used for projects.
[The] State Highway Fund though is, at this point, largely used for basic day‑to‑day maintenance. That’s picking up dead deer, fixing potholes, plowing snow, etc. It is also now to a significant extent used for debt service, which I’ll show you a little bit later in the presentation, as well as for the agency operations.
[23:18] A relatively little amount is left, after those needs are met, for using for capital programs in the STIP. Other than, of course, the JTA projects. The Jobs and Transportation Act projects that are currently under construction, although most of those are now complete. It is essentially fully committed to those debt service, maintenance and agency operations.
[23:40] One of the key features of the State Highway Fund is that it is dedicated by the Oregon Constitution, Article 9 Section 3. Any revenue from motor fuels, as well as any revenue from the ownership, operation or use of motor vehicles, is automatically placed into the State Highway Fund, and can only be used for highway projects and uses, which includes bicycle and pedestrian infrastructure that is located within the highway right of way.
[24:11] The State Highway Fund, in Oregon we have a very well‑balanced revenue portfolio. We have three major sources of funds. The first and largest is the motor fuel tax, which is just a little under half, 44 percent in the last fiscal year, about $530 million a year in total. Then we also have DMV fees, which would largely be title, registration, and driver licenses that account for about $336 million or 28 percent.
[24:41] The third area is the motor carrier taxes and fees. This is the larger, the weight -mile taxes, as well as truck registration fees. Under the Oregon Constitution we have a requirement for cost responsibility between heavy and light vehicles.
[24:54] As a result, when those amounts that passenger vehicles are increased, those amounts that the trucking industry pay are adjusted upward to account for the disproportionate wear and tear the large trucks have on the transportation system. Again, a very well‑balanced revenue portfolio with a variety of sources.
[25:15] Now, in terms of how that money goes out the door, there are a number of things that come off the top of the State Highway Fund. For example, there are the costs of collections. The cost of collecting money at the DMV, the cost of administering the fuel tax program. That comes off the top, as does a number of transfers that go out to other agencies.
[25:35] For example, recreational vehicle administration fees go to state parks, under the constitution. Motor fuel taxes that are used by boats go to the Marine Board, etc. After taking those things out, and then covering debt service, the State Highway Funds is apportioned by formulas and state law. There’s actually a number of them.
[25:56] What it amounts to though generally, after taking these things out, ODOT gets about half. Then counties get about 30 percent, and cities get about 20 percent. It is a very even split between the state and local governments in terms of how that money goes out the door.
[26:14] In terms of how that money is distributed among counties and cities, as I said, 30 percent of the State Highway Fund and particularly 30 percent of any new revenue that is raised typically goes to counties.
[26:25] That in ’15, ’16 amounted to $243 million in that year. It’s distributed among the 36 counties based on the number of vehicles registered in the county. As you can see, that leads to some significant differentials in what each county gets. $41.4 million for Multnomah County. About a $140,000 for Wheeler County.
[26:47] This is not based in any measure of need, road mileage, or anything like that, just on the number of motor vehicles. There are a program for small counties that does help address some of those differentials. That does provide a little bit of money to the small counties. It’s a very small amount.
[27:06] Cities are similar. They receive about 20 percent of the State Highway Fund, and then 20 percent of any new revenue typically goes there, for about a $164 million. That’s distributed over 200 cities, based on population. For example, the little town of Lone Rock received $1,186 last year. The City of Portland receives a little bit more than that.
As for the counties, there is a small cities program that is half the funding provided by ODOT, half the funding provided by cities. That then is distributed in grants for small cities, to ensure they have at least some funding opportunities available to them. The third major category funds, after federal funds and the State Highway Fund, is the ConnectOregon Program of Lottery Backed Bonds.
[27:57] This is created by the legislation in 2005 and since then has provided $427 million in Lottery Backed Bonds. That fund is not highway infrastructure. Transit, rail, marine infrastructure, aviation, as well as bicycle and pedestrian infrastructure, was added back in 2013. That is focused on integrating the modes, and improving the efficient flow of goods and people.
[28:20] That has been a very important funding source in recent years for those non‑highway modes, that otherwise cannot receive any of the funding from the State Highway Fund. When you look at these refunding sources, what you see is between the three of them, we’re able to cover all the modes of transportation, but some of them we have a much more difficult time.
[28:40] For example, highways, bicycle and pedestrian are relatively easy to fund out of federal and state funds. There are more limited opportunities for rail ports and aviation. Particularly, we find transit operations and rail operations are where there’s oftentimes a big hole in the funding that is available from these various sources.
[28:57] None of them are necessarily adequate, but we at least do have opportunities to fund different types of projects. There are a number of other miscellaneous revenue sources I thought I would mention. Most of these float to non‑highway purposes, because they’re not subject to the constitutional dedication.
[29:10] Custom license plates, because you’re paying a surcharge. That goes into the Passenger Rail Program. The Transportation Operations Fund. We affectionately call that the lawn mower fund because if you fill up your lawn mower with gas, you’re technically using an off‑road. I hope you’re using it off‑road.
[29:27] You’re entitled to a refund on that gas tax you paid, but very few people fill out that paperwork. That money then flows into that Transportation Operations Fund, largely used for passenger rail, as well as for senior and disabled transit. Identification cards, again, that goes to senior and disabled transit. A small amount of cigarette tax, about $6.6 million [inaudible] , goes into senior and disabled transportation. There’s also a little bit of general fund money.
[29:54] I thought I’d also mention, there are a number of local resources for transportation. Although the local governments do depend in Oregon fairly heavily on the federal transportation funding and the State Highway Fund for roads. There are also 26 cities and two counties that levy a local gas tax. We’re seeing that number increase recently.
Street utility fees are often used as an add‑on to utility bills the city send out to increase transportation funding. Some cities use a portion of the property tax for transportation. Multnomah County has a vehicle registration fee that’s paying for a portion of the Sellwood Bridge.
[30:29] Then oftentimes, cities in particular will use system development charges for paying for the cost of growth that new housing and other infrastructure imposes on the system. That was the whirlwind tour through how we fund transportation. Now I’ll walk you through pretty quickly about some of the trends and issues we see here in these funding sources.
[30:50] This is our famous mountain chart, which shows you the construction programs that ODOT has, including the Statewide Transportation Improvement Program, or STIP, as well as the OTIA, the Jobs and Transportation Act, the Recovery Act, and the ConnectOregon program.
[31:04] As you can see, we’ve come over the tall part of the mountain, and we’re now on the downward coast down that hill. By 2021, we’re actually going to be at a lower level in terms of absolute dollars, not even accounting for inflation, than we were back in 2000/2001 before the legislature passed the OTIA program.
[31:23] A lot of people wonder how that is. There’s really a number of factors in transit, and issues that we’re dealing with right now. Let me walk you through some of those.
[31:35] The first off is simply that a lot of these one‑time programs are coming to an end. We’ve completed the OTIA program. The Jobs and Transportation Act program is now largely behind us. We have a number of programs still out there. There’s also a lot of uncertainty around federal funding in the long‑term, and I’ll walk you through that as well.
[31:48] Our debt service obligations that have been issued as a result of many of the funding packages in recent years continue out for the next couple decades, so that will limit the funding we have in free cash for new projects. We also see that construction cost increases have really eroded the purchasing power of our revenue streams due to inflation.
[32:08] A recent trend that we’re seeing is fuel efficiency is increasing, and that as a gesture toward non‑highway funding, particularly from the state level, is fairly minimal. It’s not adequate in a lot of cases to cover some of the needs that are out there. Let me walk you through those.
[32:25] As I mentioned, federal funding is uncertain. The FAST Act goes through 2020, so near to the end of the current statewide transportation program we’re working through, but in 2021, it goes negative. The reason is that the federal gas tax has not been raised since 1993, and so its revenue has been flat‑out declining for years.
[32:44] In order to keep funding at a high level…As you can see in this chart, expenditures are well above the revenues and interest. That means that the Congress has had to shovel a significant amount of money into the Highway Trust Fund from the General Fund.
[33:02] Since a number of our leading transportation officials have said it, including Congressman DeFazio, to a significant extent, there were budget gimmicks used to transfer the money in the Highway Trust Fund. In 2021, that cash runs out, and all of a sudden we’re faced with a major hole of about a third.
[33:18] If Congress does nothing in 2021 to provide additional revenue, we’ll see our federal transportation funding fall by about a third. As you can imagine, since in the transportation world we work on 5, 10‑year development cycles, that makes it really hard to plan for the long‑term.
[33:34] The other challenge we’ve seen in recent years is really debt service increasing to fund many of our important programs. Now, in 2001 we were largely a pay‑as‑you‑go state but we’ve moved more toward a debt financing model. There’s nothing wrong with that. Most of us in this room probably have or have had a mortgage at some point.
[33:56] Bonding’s a lot like a mortgage. You take out a mortgage in order to buy a house a lot faster than you could if you had to pay cash up front. In this case, we took out a mortgage essentially through bonding to buy a lot more highway projects than we would have been able to if we just did them on a cash flow basis.
[34:11] Over the last decade, or over the last 15 years, we’ve built a lot of highway projects. A lot of really important projects, and a lot of other projects as well. We’ve gotten good value out of that. We’ve had very low‑interest rates, and our debt at ODOT, we have a very prudent rating, a very prudent debt management program.
[34:30] We have only about a third of our revenues are dedicated towards debt service, and that’s a good revenue. We wouldn’t recommend going a lot above that because that has a lot of stuff. Good interest rates, we have a AAA rating from one bond rating agency, and generally are able to get a very good deal on this debt.
[34:48] What it means is that as you can see, we have a lot of money going out the door toward debt service over the next couple of decades that isn’t available for new projects. It’s just paying for the projects that are already done.
[34:58] Another major factor is that the transportation fees and taxes are not, in any way, adjusted for inflation. With most taxes, as property taxes rise, as property values go up, income taxes increase, total collections increase as incomes go up, sales taxes with prices, etc., gas taxes, vehicle registration fees are set at a flat level, so over time they’re eaten away by inflation.
[35:25] We looked at what the federal gas tax would have to be today to have the same purchasing power, just in absolute terms of the consumer price index. In 1993, it was 18.4 cents per gallon. Today, to have that same purchasing power, it would have to be over 30 cents a gallon.
[35:41] The same with the state gas tax. Even though the state legislature raised that in 2009 in the JTA, it has not kept pace with inflation since 1993. To have that same purchasing power today, it would have to be about 40 cents per gallon, as opposed to the 30 cents that it is today.
[35:55] We put that into infographic form to help people understand this, in part because we don’t just face the consumer price index at ODOT. We actually face price increases that are higher because we buy construction commodities, which have seen very rapid increases.
[36:09] Everybody knows that household good prices go up. You can buy a lot less of bread, or coffee, or milk for the same amount of money in 2014 than you could in 1993, the last time the federal gas tax was raised. It’s the same thing for our construction commodities, except worse.
[36:27] For the amount we paid for 2,000 pounds of rebar in ’93, we can only buy 900 pounds today. 10 yards of concrete in 1993, we can only buy 5 yards today. 10 tons of asphalt in 1993, we can only buy three and a half tons today. That means that in all those cases, the price of all those commodities have at least doubled, and in the case of asphalt, about tripled.
[36:50] What that means is that for every mile of road we could build for a given amount in 1993, we can build half as much today, which is obviously a significant challenge for us. In the last couple of years, we’ve also had one whammy in terms of the inflation. Now we have the double whammy of fuel efficiency increasing.
[37:14] For years, fuel efficiency stayed about the same, but then in 2009, the federal government imposed new corporate average fuel economy standards that are increasing the fuel efficiency of the fleet significantly. In the last few years, since 2008, fuel efficiency of the entire Oregon fleet increased by about seven and a half percent. Last year alone, it was one and a half percent.
[37:33] We’re seeing that expected into the future, for the foreseeable future. What that means is that the number of gallons of gasoline used by the vehicle fleet is going to peak in a couple of years, and then began a long, inexorable decline.
[37:45] That’s good for consumers. That’s good for the environment, but it’s not so good when your main funding source, that’s about half of your state funding, and most of your federal funding is based on how many gallons of gasoline you sell. This is going to be a major challenge as we look to the future and our fuels tax revenue starts to decline, and continues to decline going into the future.
[38:10] What was really interesting, when we took a look at what this means overall, when you factor in inflation and fuel efficiency and all the other factors here, what we’re seeing is there’s really a double whammy. That means the amount that Oregonians contribute to the State Highway Fund is actually falling over time, unless and until the legislature increases any of the taxes and fees.
[38:35] Our economists calculated that in 1971, the average Oregonian, per capita, paid $52.70 into the state highway fund in 1971 dollars. In 2016, the average Oregonian, on a per capita basis, will pay $42.80. That’s essentially close to a 20 percent tax cut in terms of what your bill to the state highway fund is over that period of time.
[38:56] Now, one of the reasons for this is that compared to many Western states, Oregon actually has relatively low automobile related taxes. That’s not to say our gas tax is particularly low because it is right in the middle of the pack among the Western states. 30 cents per gallon, most of the other Western states are somewhere in that range.
[39:17] What we have in Oregon though, is the lowest driver and motor vehicle fees of any state in the nation. When you buy a motor vehicle in Oregon, you pay for a title for $77, and registration is $43 a year, so 120 bucks for your first year of ownership.
[39:32] Most states, you pay a sales tax, or an ad valorem tax, or some sort of tax, a registration piece sometimes based on size or weight. Most of those are much lower. Even our combined title and registration are literally the lowest of any state in the nation. With that, I will wrap up my presentation.
The new administration’s oft-touted plans to “drain the swamp” signal only that ordinary Americans’ basements and crawlspaces are soon to be filled with oceans of toxic financial sludge.
The Swamp on Steroids:
Trump’s Plan to Repeal Dodd-Frank Will Enable Corruption
By Paul Bland for Public Justice
Donald Trump’s Presidential campaign was filled with a lot of bold talk about “draining the swamp” and fighting against lobbyists. He attacked Hillary Clinton for her supposed cozy relationship with banks, and talked about how he’d stand up to Wall Street on behalf of the little guy.
That was then.
Now, he wants to grant banking lobbyists’ every wish. While the first few days after the election have brought little clarity on most topics (maybe he won’t repeal the Affordable Care Act after all, or maybe he will), Trump has made one very specific promise – to repeal the Dodd-Frank Act. While this is a terrible idea for many, many reasons, one of the most prominent is that it will take us back to a system that enables banks to get exactly what they want: federal protection from their own customers and a ‘get out of jail free’ card from a completely co-opted regulatory agency (the Office of the Comptroller of the Currency, or OCC) with a long history of kowtowing to banking lobbyists.
One of the most important provisions of Dodd-Frank is that it protects state consumer protection laws against being wiped away (“preempted”) by federal law. When Congress passed Dodd-Frank in 2010, the extensive hearings held by lawmakers left no mistake that one of the principal causes of the 2008 financial crisis was the difficulty consumers had in holding lenders accountable when they engaged in deceptive practices. Before Dodd-Frank, federal laws didn’t do anything to protect those consumers. Prior to the law’s passage, the agency that had the principal power to regulate banks kept acting, instead, to preempt state consumer protection laws, which tend to be much stronger and more protective of consumers who are being cheated.
Simply put, before 2008, a federal agency was enabling banks to cheat consumers, and blocking those banks’ customers from fighting back. And that’s why Dodd-Frank included numerous provisions designed to make it much harder for federal regulators to wipe away state laws.
The rampant fraud that cost people their homes, and also cheated millions of investors from their savings, was encouraged and abetted by a corrupt system where government regulators worked hand-in-hand with banks.
That’s the model the Trump Administration is poised to take us all back to.
It is a sickening prospect. The federal regulatory agencies that existed prior to Dodd-Frank didn’t do much regulating. Not surprisingly, the banks loved them. The reality for consumers, however, was a dysfunctional and disastrous dynamic in federal banking regulation. Essentially, under the system before Dodd-Frank, the banks got to pick who was going to regulate them. If a bank called itself a “federal thrift,” for example, it could be regulated by the notoriously inept Office of Thrift Supervision. If it decided to call itself a state chartered bank, it could be regulated by state banking agencies. Or, if it preferred to call itself a “national bank,” it would be regulated by the industry-friendly regulator at the OCC.
The catastrophic subprime hell that led to millions of foreclosures beginning in 2008 was enabled, and in part caused by, terrible decisions made by the people who ran the OCC during the George W. Bush administration.
If you saw the excellent film The Big Short, you can understand why returning to this model is downright frightening. (And if you didn’t see the film, you should.)
Now, if they get their way, the banks will want to go back to that exact same ‘Wild West’ system where they pick their own regulator. But giving the banks’ lobbyists what they want is not really consistent with Mr. Trump’s claim that he will be the one to “drain the swamp.” You simply can’t do that and keep the banks honest.
“Who cares who they picked?” you might say. Well, the regulators cared, because the regulators’ budgets came from user fees paid by the banks. As a result, one large bank could have immense power over its chosen regulator.
As the financial crisis of 2008 approached, user fees from Bank of America, for example, constituted 12 percent of the OCC’s budget. So if Bank of America had decided to pick another regulator, the OCC’s bottom line would have been impacted so significantly that it would have had to fire one out of every eight people in the building! So, not surprisingly, OCC had a huge incentive to side with the banks rather than be a fierce lion for consumers.
Was the resulting system on the up and up, or did it start to become corrupt? The data shows the real answer: The OCC weighed in on 60 court cases between 1994 and 2006 where consumers who felt they had been cheated were suing banks. The OCC (dependent on bankers’ good will for its budget) sided with the banks in 58 out of the 60 cases.
But wait; the OCC did even more for big banks. The agency issued regulations erasing state consumer protection laws, and replaced them with . . . nothing. Talk about a sweet deal for the banks. Under federal law, there is really nothing that prohibits banks from deceiving or misleading consumers. Many state laws, however, are great at it. So when the federal regulators engaged in this energetic race to the bottom, that made it much easier for banks to confuse and mislead consumers.
By the time Dodd-Frank was passed, the majority of Americans were confused about the terms of many of the loans they entered into. People got credit cards expecting 6% interest (based on ads making a big deal out of teaser rates), and ended up paying 18% or, sometimes, over 30% interest. People got sucked into mortgages promising low rates in the early years, and then wound up quickly paying far more. The principal enabler of that misleading advertising by banks — a practice that played a huge role in leading to millions of Americans losing their homes, when the bubble burst — was crappy regulators wiping away protective state laws.
Dodd-Frank did a ton to clean this up. Instead of regulators who existed to serve the banks, it created a new regulatory body that existed only to protect consumers – the Consumer Financial Protect Bureau. In just one example of the CFPB’s enormous impact, it subsequently caught, and stopped, Wells Fargo in the middle of creating two million fraudulent accounts for consumers who didn’t want them. As a result, the agency has recovered more than $11 billion for cheated consumers.
Now, all of this hard work and success on behalf of consumers is in real jeopardy. If a Trump Administration moves forward with its plan to repeal Dodd-Frank, the country will move backwards, to a time when there were few protections for consumers, and the rules were all written by banks.
Less than one week after the election, Mr. Trump appears to be siding with big banks in their campaign to resurrect a corrupt system that crash the economy in 2008. Instead of “draining the swamp,” Trump’s proposal would rebuild it.
That hardly seems like the way to make America great again.