Request For Proposal: Economic Impact of Moving a State Border

Move Oregon’s Border RFP:

Move Oregon’s Border has seed money available to fund a study of the economic impact on stakeholders of the annexation of rural counties by Idaho. We will assist the grantee in seeking economics research grant money from governments, corporations, and trade organizations that might benefit from this border relocation. Our contacts with Idaho state legislators, including state leadership, indicate that if we do well in the May 2021 Oregon county elections, state funding is very likely to be available. We do expect to do well in these elections because Oregon conservatives will be agitated by bills moving through the state legislative session at that time.

The study shall begin this winter or Spring and issue a conclusive report by November 31, 2021 in preparation for the 2022 sessions of the Idaho and Oregon legislatures.  This report may not have as much detail as subsequent reports, but the November report should contain an estimate of the total impact of the border change.  Contact us.

Objective: To determine the economic costs and benefits to stakeholders of moving the Idaho state line to annex areas of Oregon, Washington, and California shown on the forthcoming 2021 version of the Greater Idaho map.  Stakeholders are defined as: 1) citizens of the counties that switch states, 2) residents of the remainder of Oregon, and 3) citizens of Idaho. Although there will be interest in initial costs and benefits, the suggested focus is on the steady state impact vs. the counterfactual (eg. 10 years after the border relocation). How would state budgets (per capita) be affected?

Considerations: Achieving the objective above requires considering many factors. The scope of work of the final work must include estimates based on detailed research of several factors. For example:

  • Assume Idaho approves the Jordan Cove pipeline, and invests in other infrastructure at Coos Bay. And federal approvals remain in place.  Will Alberta export LNG from Coos Bay? Assume Coos Bay becomes a port for exporting Montanan and Wyoming coal to Asia. How does this improve the economy of the area, and tax receipts of the state?  Request data from studies done by the Pembina.
  • How does the difference between tax rates and regulatory environment in the two states impact the timber industry, mining, etc? How does the lower minimum wage and right-to-work laws help rural businesses survive and compete?
  • How does the difference in state prosecution of drug addicts and the difference in state benefit programs, (eg. state healthcare programs) affect the percentage of drug addicts and state dependents in the counties that switch states? Estimate how many addicts and dependents would move out initially.  Estimate in the longer term how these factors would reduce the annual inflow and increase the annual outflow.
  • Assume that migration to these counties would be altered as they would become more attractive to conservatives, and less attractive to leftists. What is the economic difference between these two kinds of migrants? How would immigration to the current counties of Idaho be affected? There would also be an initial migration in and out in the first 24 months in reaction to the border change.  Report how  housing prices and land prices would be affected over the first 10 years.  Describe whether cost of living in these counties would eventually lower due to the difference in state regulatory environment (including on house construction), minimum wage, right-to-work, and taxes? Red states have lower costs of living https://meric.mo.gov/data/cost-living-data-series
  • Oregon, Washington, and California are counting on their current population to pay the pensions for state employees that have already been obligated. Departing counties would need to agree on a scheme that would compensate Oregon and California for the loss of their population, by agreeing to pay into the pension fund according to a schedule.  Idaho would need to avoid forcing the new counties to pay for the portion of Idaho state pensions that were already earned before the counties joined Idaho.
  • The change would bring thousands of government jobs to Idaho’s capitol city, and to the locations of Idaho’s public universities and colleges. The state government would gain economies of scale, as the population would increase by 71% to 2.9 million, making it almost half the population of the average US state.  Assume the Idaho public university system would gain Oregon Institute of Technology – Klamath Falls, Eastern Oregon University, and Southern Oregon University.
  • Report how would wages be affected by the changes in the local economy, and by migration?
  • Assume Idaho begins allowing a slight amount of THC in hemp, and hemp farms are allowed by both DC and Idaho, but not marijuana farms.  Include impact of illegality of marijuana on overall economic impact.
  • Since the per capita debt of the state government of California is $11,680, and of Oregon is $7574, the government of each departing county would take on its per capita share of its state debt as a part of this deal.  However, because they would be as responsible as any other Idahoan for Idaho’s $3133 per capita debt in the future after joining Idaho, Idaho would compensate the government of each county $3133 per capita.  California counties would be left with a debt of $11680 – 3133 = $8547 per capita (Oregon counties $7574 – 3133 = $4441) which could be paid off with the issuance of county bonds, which could be paid off with a temporary county tax. 

  • Make a politically viable assumption about how Idaho acquires rural Oregon’s share of the government of Oregon’s assets and liabilities, including state land and state facilities such as prisons. Idaho might want to purchase somewhat more than this share. Make an assumption about how Oregon PERS would be affected. Some state employees might move to keep their jobs in Oregon/California, others would become employed by Idaho, and maybe some would have to find new employment. Consider issues of transferring seniority.
  • If Idaho requires fewer or simpler professional licenses, what benefit does that have to the economy? Assume some grandfathering in of professional licenses.
  • The counties switching states have a disproportionate amount of prisons.  After 10 years, how many of these facilities would be needed by the state and localities of Idaho? Would it make economic sense for the original state to still own or rent some of these facilities to avoid construction costs?  What kind of jobs would people do in prison towns if the prison were closed, or would they move elsewhere?
  • “per capita” should not include prisoners in counties or states that house prisoners from outside the area (over and above the number of prisoners that originate from the area). This makes prison towns seem poorer than the local free citizens are.  The prisoners are non-locals who are only temporarily housed in random locations. Although the prisoners don’t have an income, they bring a revenue stream to the area.  They are the financial responsibility of the locality that incarcerated them, not the town where the prison is located.

Deliverable: Reports. Databases will need to be provided as a deliverable for future work. If the databases are not a spreadsheet, Excel spreadsheets will need to be exported.  Calculations must be transparent and comprehensible for future analysis, revision, and development by third parties.