Tuesday, January 12, 2010

More on Measures 66 and 67

Jeff in the comments section of my post of my Op-Ed, points to an excellent piece by Bill Jaeger in the Register-Guard (how nice it must be to be given an opportunity to write more than 500 words!). One open question for many people are the competing claims by economists about the true effect of the taxes and Jaeger ends thusly:

Professional standards in our field include a peer review process for quality control, and the backing of a well-established research institute, university or respected consulting firm. Research results always are made transparent, and data and methods are made available freely to other researchers who might want to examine them in detail.

Claims that 70,000 jobs will be lost due to the “job killing taxes” represented by Measures 66 and 67 are not based on estimates that conform to these standards of the economics profession. These estimates were not subjected to peer review — at least not voluntarily. When examined by nationally recognized experts on state and local public finance at the Brookings Institution, the result was a scathing report concluding that the analyses were “without merit.”

The economists behind these job-killing estimates have failed to fully explain their methods. Indeed, months after presenting to voters their estimate of 70,000 lost jobs, they are now backtracking on these “guesstimates.” They recently substituted a new paper that purports to come to the same conclusions but using completely new data and different statistical methods. However, they have refused to make their new data and new methods available to other economists or the public.

In addition, these economists have misrepresented the conclusions of scholarly publications and institutions (including statements in the Oregon Voters’ Pamphlet). Perhaps most tellingly, none of these economists is affiliated for purposes of this analysis with an institution with a reputation for unbiased research.

Voters should understand that there is no exact way to estimate the long-term effects of changes in taxes and public services on jobs and economic growth. The evidence from 30 years of economic research, however, reinforces common sense: When your taxes and public services are among the lowest in the country, the benefits from improving poor public services — especially education — are likely to outweigh the costs of modest increases in taxes.


Ralph said...

Great, let's properly fund education. Let's start with repealing measure 50 and bring everyone's property taxes current. I've never understood why anything other than oversight costs are a burden of the state government.

Ralph said...

Sorry, I meant measure 5. Doh!

Doug Gabbard said...

I grant that education is important to the national economy. But is local education important to the local economy? Because of labor mobility, maybe sub-national governments do not feel a strong incentive to invest in education. Should this be a federal matter?

M said...

Guesstimates is by far the best word to have come out of the 20th Century.

ericfruits said...

While education is important, data from the U.S. Department of Education shows that temporary spending cuts have no noticeable impact on high school graduation rates.

Patrick Emerson said...


Short term impacts on high school graduation rates are likely endogenous in the sense that high schools will lower their expecatations so as not to punish the students further. I woudl be more interested in data that tell us how much their learnign was impacted.

But I am not really worries about older students as younger and disadvantaged students for whom these disruptions appear to have a significant affect on.


This is a good and interesting point and I think it is probably correct to say that Oregon has benefited from the in-migration of highly educated individuals.

WJaeger said...

To say that Oregon has benefited from in-migration of highly educated Oregonians is to point to a problem with the logic in the current debate about M66/67. Many Oregonians are concerned about creating jobs (and thus want to keep taxes low) because they think those jobs will be for them, not for the in-migrants with superior education. To be more competitive for those jobs in the future, improving the quality of our education system is key -- as you pointed out in your Oregonian commentary.

Patrick Emerson said...


Yes, I was cut short in writing my comment, but I had intended to go on to make pretty much the same point.