"Errors of Enchantment" Latest Blog Postings

Americans Are Moving — Just Not to New Mexico

Errors of Enchantment Blog Postings - Thu, 2015-07-02 10:41

Last week the Pew Research Center’s “Stateline” website noted some good news for U-Haul: “Americans are picking up and moving again as the recession fades, personal finances improve and housing markets recover. Counties in Nevada, Arizona, eastern California and Tennessee also saw some of the nation’s biggest growth in movers last year.”

We already knew that New Mexico was one of only six states to lose population between 2013 and 2014. But Pew’s granular analysis reveals the extent of the problem. Twenty-four of the state’s 33 counties lost population. Doña Ana County neither gained nor lost residents, so just eight counties saw positive migration. Growth in Bernalillo County, where about a third of New Mexicans live, was a dismal 0.1 percent.

Of Groceries, Ray Guns, and the Gross Receipts Tax

Errors of Enchantment Blog Postings - Wed, 2015-07-01 13:21

Happy New Fiscal Year. Ready for higher taxes?

Starting July 1, furniture, haircuts, toys, shoes, lawn care, and milkshakes will be more expensive for most New Mexicans. The gross receipts tax (GRT), the dominant source of local-government revenue, will rise in many communities, including Albuquerque, Rio Rancho, Las Cruces, Roswell, Las Vegas, Deming, and Silver City.

In Santa Fe, the rate is slated to increase from 8.1875 percent to 8.3125 percent. But not if the city has its way. A few weeks ago, the City Different filed a taxpayer-friendly lawsuit to block the GRT hike the county adopted in March. Citing state statutes, Santa Fe — as well as Española and several local businesses — allege that “within the boundaries” of incorporated Santa Fe County municipalities, the tax should not apply.

It’s up to the courts to decide the validity of the lawsuit. What’s not in dispute is that the the city-county faceoff would not exist were it not for governors’ and legislators’ never-ending tinkering with the GRT. When Santa Fe’s commissioners adopted the one-eight-of-a-cent tax increase three months ago, it was justified as a way to raise money to compensate for funds the state would no longer provide. The soon-to-be-ended subsidy was created to ease the fiscal pain of the 2005 removal of groceries from the GRT.

A bit confused? It’s understandable. The GRT is less a revenue-raising system than a political plaything, a mechanism for elected officials to perpetually penalize and reward behaviors, purchases, and investments in the Land of Enchantment. Boosting jobs, growing incomes, luring entrepreneurs, providing tax relief for the poor — it’s all achievable, we’re told, if visionary politicians make the proper adjustments to GRT rates, deductions, and exemptions.

Every New Mexican buys groceries, but very few of us acquire ray guns. The Pentagon does, and with growing interest in directed-energy weapons, the recently completed special legislative session produced a GRT deduction for receipts earned from producing armaments that use “the frequency spectrum, including radio waves, light and x-rays.” The perk will benefit defense contractors, and presumably, “attract new projects and employers to New Mexico and increase high-technology employment opportunities” — boilerplate language for the economic-development schemes frequently embraced by both political parties in New Mexico.

Directed-energy devices might be the future of defense. But perhaps they’ll prove to be of limited value to warfighters. Are state legislators qualified to make the right call? If history is any guide, the answer is no. Unintended consequences are inevitable when politicians fiddle with the tax code.

That brings us back to the GRT and groceries. In 2013, Dick Minzner, a former secretary of the New Mexico Taxation and Revenue Department, and Brian McDonald, a former director of UNM’s Bureau of Business and Economic Research, concluded that the effect of the food-tax exemption “has been the opposite of that intended,” because “by providing “only limited benefit to the poorest … of our households, combined with a tax increase on all other purchases, [it] probably made our tax system more regressive by most measures.”

The rates for New Mexico’s GRT are far too high. And the levy’s broadness induces pyramiding, which legislative analysts noted “occurs when the GRT is applied to business-to-business purchases of supplies, raw materials, equipment, creating an extra layer of taxation at each stage of production.” But as a policy brief written by the left-wing organization New Mexico Voices for Children advised more than a decade ago, “Piecemeal tax policy doesn’t work because tax systems are more than the sum of their parts.” Exactly. The GRT has been meddled with enough. It’s time for a simpler, more affordable, and pro-growth gross receipts tax.

D. Dowd Muska (dmuska@riograndefoundation.org) is research director of New Mexico’s Rio Grande Foundation, an independent, nonpartisan, tax-exempt research and educational organization dedicated to promoting prosperity for New Mexico based on principles of limited government, economic freedom and individual responsibility.

Freer trade would be good for New Mexico’s economy, oil and gas industries

Errors of Enchantment Blog Postings - Mon, 2015-06-29 16:15

No matter what one thinks about recent battles over Trade Promotion Authority and the Trans Pacific Partnership, freer trade would be good for New Mexico’s main private sector industry (oil and gas). In this case, as I argue below, freer trade would impact the industries from different angles.

When it comes to New Mexico’s economy, there are no bigger players than the oil and gas industries which, combined, contribute 31 percent of the general fund. Natural gas prices remain at historically-depressed levels. Since spiking during the winter of 2014 when the East Coast of the United States saw a series of cold snaps, the Henry Hub price has been on a steady decline. Throughout 2015, prices have been below the historically-low $3/mmbtu line.

Oil prices on the other hand, were elevated until July of 2014 when prices began a steep slide from $100/barrel to less than half that price by January of 2015.

Unfortunately for the industry and contrary to the beliefs of many Americans (at least when prices are elevated), oil and gas producers have little control over the price point at which they sell their product. Collectively, the oil and gas industries can (and have) cut production, but this is a painful and unappetizing process.

The best solution for the oil and gas industries (and New Mexico’s economy) is the opening of new markets for these products through freer trade. Expanded trade could add stability and economic health to the oil and gas industries in New Mexico.

The best long-term opportunity for natural gas producers involves a trade agreement with eleven other countries with ties to the Pacific Rim: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam known as the Trans-Pacific Partnership (TPP).

Interestingly, given what the TPP could mean for New Mexico’s economy, especially natural gas producers, New Mexico’s Congressional delegation did not support trade promotion authority (TPA) which allows presidents to negotiate an agreement with an up-or-down vote in Congress on approval. After being rejected once by the House, was narrowly approved. This approval came despite the fact that Republican Steve Pearce joined New Mexico’s liberal Democrats in the House in voting “no.”

TPP could have a significant, positive impact on American natural gas producers. Japan, for example, which is party to the TPP, is a huge potential market for producers. Natural gas prices are triple or more those in the United States.

“The TPP,” as the Sierra Club which is hostile to exporting liquefied natural gas notes, “would mean automatic approval of LNG export permits—without any review or analysis—to TPP countries. And many TPP countries would likely be quite interested in importing LNG from the United States…”

There are some philosophical arguments to be made even by staunch free market advocates against regional trade agreements, but when it comes to the long-term future of New Mexico’s natural gas producers, there are few better opportunities on the horizon than Japan. TPP is the best near-term entrée into that market.

New Mexico’s oil producers could gain access to lucrative new markets with nothing more than a stroke of President Obama’s pen.

As American oil production has skyrocketed in recent years, the prohibition on US exports of crude oil adopted in 1975 has become an anachronism. While the US oil market is complex, the new, “tight” oil being produced is lighter and sweeter [3] than what has previously been refined in American refineries. Those refiners now can’t find enough refiners to process it. Exports would allow the appropriate oil to reach the international market where it could be processed and sold.

According to the group Producers for American Crude Exports (PACE), allowing oil exports would generate nearly 1,000 new industry jobs in New Mexico by 2018 adding an additional $46 million annually to the State’s economy. Of course, while New Mexico is a significant oil producer, the US as a whole could see many times that amount in terms of economic benefits.

The arguments against exporting crude simply do not hold up under scrutiny. Even radical environmentalists should desire that scarce oil resources be put to their most efficient use. And, because of the disconnect between the grades of oil that are refined in the US relative to what is now being produced, the impact on American motorists in terms of higher prices would be minimal or non-existent.

Free trade is a good thing for America. The oil and gas industries are no exceptions.

Gessing is president of the Albuquerque-based Rio Grande Foundation

Article printed from Watchdog.org: http://watchdog.org

URL to article: http://watchdog.org/225287/freer-trade-help-new-mexico-oil-gas-industry/

Click here to print.

© 2014 Watchdog.org. All rights reserved.


© 2015 Watchdog.org. All rights reserved.


Steve McKee’s talk: How New Mexico Can Beat Texas for Real

Errors of Enchantment Blog Postings - Fri, 2015-06-26 09:10

New Mexico businessman and entrepreneur Steve McKee was the keynote speaker at a recent Rio Grande Foundation luncheon. He gave an optimistic and detailed talk about the ways in which New Mexico policymakers can turn our state around and even beat Texas in the process. Check out the informative and even inspirational talk below:

In Vino Taxitas

Errors of Enchantment Blog Postings - Thu, 2015-06-25 09:50

The invaluable Tax Foundation has released a map that exposes another disturbing policy reality about New Mexico.

The Land of Enchantment imposes a higher wine tax than four of its neighbors: Texas, Oklahoma, Arizona, and Colorado. (Utah, along with four other states, controls alcohol sales within its borders.)

But the full story is a bit more complex. New Mexico’s economic-development bureaucracy touts the “preferential tax rate” the state offers to winemakers. Converting from liters, New Mexico imposes a tax of 38¢ per gallon for its smallest vintners. Mid-range winemakers pay a tax of 76¢ per gallon. The largest enterprises — more than than 2.1 million gallons of crushed grapes produced annually — pay the full tax of $1.70.

The lesson: Vintners in the Land of Enchantment are welcome to be successful — just not too successful.

Supreme Court upholds ObamaCare based on Congressional “intent”

Errors of Enchantment Blog Postings - Thu, 2015-06-25 09:20

The Supreme Court today announced a 6-3 decision upholding the King v. Burwell case which revolved around whether Congress did or did not intend to give subsidies to residents of states that did not set up exchanges under the law.

The Rio Grande Foundation had previously outlined potential scenarios assuming a reversal by the Court. This was based on both the clear language of the law and statements like those from ObamaCare architect Jonathan Gruber:

In terms of the decision’s impact on American health care and our society in general, here are some initial reactions

Cons: The ObamaCare law remains largely intact with future dire consequences for American health care; the Supreme Court clearly ruled (again) on political expediency rather than the law as written driving another stake in the heart of the rule of law.

Pros: Obama and the Democrats truly “own” this law and all of its impacts now. They passed a poorly-written and ill-conceived law. It now stands largely intact. When/if the law is considered a failure, there will be a strong impetus for reforms in the opposite, hopefully free market direction.

Dr. Tom G. Palmer Luncheon: State Control vs. Self Control – Albuquerque

Errors of Enchantment Blog Postings - Wed, 2015-06-24 15:42
Rio Grande Foundation Speaker Series Event:

State Control vs. Self Control

Click here for registration form.

Fresh off his presentation at FreedomFest (described as the World’s Largest Gathering of Free Minds) in Las Vegas, Tom Palmer, the executive vice president for international programs at Atlas Network will be visiting Albuquerque to discuss the important differences between state control and self control at a Rio Grande Foundation-sponsored luncheon.

State Control or Self-Control?

When governments usurp our freedom they diminish personal responsibility for making good choices at the same time. And when they remove from us responsibility for our choices, they not only generate more bad choices, but they under-mine our freedom. Whether we call it the Nanny State or the Welfare State or the Prohibitionist State, big government is assaulting our freedom and undermining our responsibility. Dr. Palmer will show why freedom and responsibility go hand in hand at every level, from the theoretical to the legal to the very practical, with examples ranging from modern day prohibition of drugs and alcohol to the growing numbers of people on long-term welfare and disability support.

  • Location:  Marriott Pyramid 5151 San Francisco Rd NE, Albuquerque, NM 87109
  • When:  Monday, July 13, 2015, 12:00 noon to 1:00pm
  • Cost:  Seating is limited and can be purchased at the discounted price of $30 until Saturday, July 6, 2015; $40 after the 6th.

Dr. Tom G. Palmer is responsible for establishing operating programs in 14 languages and managing programs for a worldwide network of think tanks at Atlas Network. He is also a senior fellow at Cato Institute and director of Cato University. He frequently lectures in North America, Europe, Eurasia, Africa, Latin America, India, China and throughout Asia, as well as the Middle East on political science, public choice, civil society, and the moral, legal, and historical foundations of individual rights. He has published articles on politics and morality in scholarly journals such as the Harvard Journal of Law and Public Policy, Ethics, Critical Review, and Constitutional Political Economy, as well as in publications such as Slate, the Wall Street Journal, the New York Times, Die Welt, Al Hayat, and the Washington Post. He is the author of Realizing Freedom: Libertarian Theory, History, and Practice (expanded edition 2014), and the editor of the Morality of Capitalism (2011), After the Welfare State (2012), Why Liberty (2013), and Peace, Love & Liberty (2014). Palmer received his B.A. in liberal arts from St. Johns College in Annapolis, Maryland, his M.A. in philosophy from the Catholic University of America, Washington, D.C., and his doctorate in politics from Oxford University.

Click here for registration form.

New Mexico Underachieves in Manufacturing & Logistics

Errors of Enchantment Blog Postings - Tue, 2015-06-23 18:12

Ball State University’s Center for Business and Economic Research has more bad news for the Land of Enchantment.

The center’s “2015 Manufacturing & Logistics Report Card” analyzes “how each state ranks among its peers in several areas of the economy that underlie the success of manufacturing and logistics. These specific measures include the health of the manufacturing and logistics industries, the state of human capital, the cost of worker benefits, diversification of the industries, state-level productivity and innovation, expected fiscal liability, the state tax climate, and global reach.”

The report card’s metrics “were chosen as those most likely to be considered by site selection experts for manufacturing and logistics firms, and by the prevailing research on economic growth.” New Mexico flunked five of the nine categories:

Manufacturing Industry Health: F
Logistics Industry Health: F
Human Capital: F
Worker Benefit Costs: C
Tax Climate: C
Expected Liability Gap: D
Global Reach: F
Sector Diversification: F
Productivity and Innovation: D

Job-training “incentives,” increased spending on government schools, GRT deductions, and committing more severance-tax revenue to “critical community infrastructure”? The strategy isn’t working. It’s time for something different.

Slight problem with solar panels exposed by recent Albuquerque fire

Errors of Enchantment Blog Postings - Tue, 2015-06-23 11:34

Solar ranks right up there with mom and apple pie among many who believe that it is the power source of our future. Unfortunately, a recent incident right here in Albuquerque, highlighted an under-appreciated problem with solar panels: fire. In fact, the Taylor Ranch Community Center which is not far from my house had a fire on Friday that seems to have been caused by the panels on the building’s roof (per KOB TV below).

Although an exact understanding of the scope of solar panel fires was difficult to find, it is a relatively common problem caused by manufacturing flaws. Solar panel fires can be particularly challenging for first-responders because the panels may remain electrified even as they (or the building burns).

Thankfully, in the case of the Taylor Ranch fire, there is a fire house literally across the street and apparently the fire fighters were on the spot quickly, but the gym floor is likely ruined. I wonder how a fire like this impacts the net carbon situation when it comes to these solar panels?

Medicaid will boost the economy: Really Winthrop?

Errors of Enchantment Blog Postings - Mon, 2015-06-22 11:31

The ABQ Journal’s Winthrop Quigley has been on a real roll recently. After successive articles in support of bus rapid transit, he claims in his latest column that “Medicaid Could Boost New Mexico’s Economy.” Of course, rather than concerning himself with the additional burden that paying 10% of the program expansion’s costs ($120 million annually) starting in 2017, he simply concludes that Medicaid will make our work force healthier and economic growth will more than make up for the added expense. Really?

Apparently, Quigley hasn’t heard of the single most important study of Medicaid’s impact on health outcomes from Oregon. The study “represents the first use of a randomized controlled design to evaluate the impact of Medicaid in the United States.” According to the study’s authors:

1) Medicaid has no statistically significant effect on employment or earnings (there goes Quigley’s economoic argument right there);
Of course, Medicaid expansion did result in even more spending on other government programs:
2) Medicaid increases receipt of food stamps (SNAP);
3) Medicaid coverage increased use of the emergency department across a broad range of types of visits and subgroups.

These are all quotes taken directly from the “findings page.” There is healthy debate over what, if any health and mental wellness benefits Medicaid provides and whether those are worth the vast costs. What is not debatable (according to Oregon’s “gold standard” study) is the thesis that expanding Medicaid will not “boost the economy.” That thesis which Quigley never once mentions in his defense of Medicaid is completely unsubstantiated by real-world evidence to date.

Of course, basic logic would also call into question the idea that putting more people on government welfare will be a good thing for the economy. After all, those dollars aren’t created out of thin air, they are taxed and borrowed by government. That would be a whole different level of critical thinking about the Keynesian consensus.

Albuquerque to Job Growth: Drop Dead

Errors of Enchantment Blog Postings - Mon, 2015-06-22 11:27

Two Albuquerque city councilors have drafted the “Fair Workweek Act,” which would mandate that businesses offer nonsupervisory employees paid sick leave. It would also require the posting of schedules “three weeks in advance,” “modest compensation for last-minute schedule changes,” and “adequate rest time between shifts.”

Really? Are more regulations the answer to Albuquerque’s ailing economy?

The city has 17,100 fewer jobs today than when it reached its pre-Great Recession employment peak in March 2007. That’s not a misprint — it’s been more than eight years, and Albuquerque has yet to climb back to the number of jobs it had nearly two years before Barack Obama assumed the presidency.

Film Subsidies: Alaska and Michigan Opt Out

Errors of Enchantment Blog Postings - Fri, 2015-06-19 12:59

New Mexico’s political establishment continues to cling to entertainment-industry tax credits as critical “economic development.” (The evidence strongly suggests that subsidizing Hollywood doesn’t boost the state’s economy, but let’s leave that trifling fact aside for now.)

This week, two states decided that movie-and-television corporatism isn’t for them.

Alaska’s governor, staring down a state fiscal crisis, signed legislation that repealed the Last Frontier’s program. State Sen. Bill Stoltze (R-Chugiak) noted that the tax credits had “done some good things to different communities around Alaska,” but “had a pretty heavy cost to our treasury.”

On Thursday, the Detroit Free Press reported that “the state Senate voted … to end incentives for the film industry and phase out funding for the state’s film office and the House quickly concurred in the action.” In comments that surely enraged noted economist and public-policy analyst Mitch Albom, Rep. Dan Lauwers (R-Brockway Twp.) declared that it was time to “time to drop the curtain on this failed experiment,” in favor of “funding our transportation system.” It’s now up to the Wolverine State’s governor to decide whether to follow legislators’ lead.

New Mexico water: is there really a correlation with climate change?

Errors of Enchantment Blog Postings - Fri, 2015-06-19 10:59

Nothing symbolizes water in New Mexico like Elephant Butte lake. With a relatively wet May and June, I got to thinking both about the Butte and whether its water levels had rebounded much and I also was contemplating the supposed connection between climate change and the recent drought we experienced in New Mexico.

This is the kind of thing I think about sometimes when I’m out walking by the Rio Grande and see it so full and running as strong as it was recently.

So, I went online to find out how much Elephant Butte Lake had rebounded with the recent, relatively wet spring and early summer. The answer is available at this website, but is summed up in the chart below and the answer is that the lake has rebounded a little, but not much:

The really fascinating thing is to look back at historical Lake levels which have fluctuated dramatically over the years. As seen below, the Lake was quite full all the way from about 1980-2004. It is currently at a far lower level (18.6% full to be exact), but this is by no means a historically-low level even going back to the early 1920s.

What does this all mean? To me it seems to indicate that while droughts will happen — we live in a desert after all — using Elephant Butte Lake as a proxy for water supplies in New Mexico, it would seem that there is not a great correlation between climate change/global warming and water. I am not a scientist. If Elephant Butte Lake (which is of course managed) is not a reasonable proxy for water supplies in New Mexico, I’d be happy to know. The lake does receive water from a majority of New Mexico’s land area as seen below:

Quigley doubles down on bus rapid transit

Errors of Enchantment Blog Postings - Thu, 2015-06-18 15:09

The Albuquerque Journal’s Winthrop Quigley struck again this morning with a follow-up article on the City of Albuquerque’s proposed bus rapid transit system. Apparently I wasn’t the only reader who reacted negatively to his original piece, but rather than contemplating his point of view further, he simply doubled-down on his support.

Notably, after two columns, Quigley has still not even made the argument that BRT will improve mobility in the Central corridor. It’s all about “redevelopment” and making Albuquerque “hip” in order to attract young people. Contrary to Quigley’s point, spread out cities can be attractive to young people. I don’t hear Phoenix, Las Vegas, Dallas, or Houston complaining that they can’t attract young people. In fact people are leaving New Mexico to take well-paying JOBS in those cities. Quigley just doesn’t get it.

There’s a heaping helping of disinformation throughout the piece, but what really ticks me off is the last line when he rights “Berry, Benton, UNM, CNM and others are trying to create an environment in which a new economy can develop organically. If anyone else has a better idea, he or she has been awfully quiet.”

I’m not sure if Mr. Quigley reads his own newspaper, but the Rio Grande Foundation definitely has proposed alternative ideas to the failed liberal consensus that has controlled public policies in this state for most of its history. And, according to some liberals, we have done too good a job.

How New Mexico Taxes Tourists

Errors of Enchantment Blog Postings - Wed, 2015-06-17 15:54

The Land of Enchantment justifiably draws many visitors in search of fabulous weather, rich culture, fascinating history, and spectacular scenery. And the state’s politicians, similar to their counterparts elsewhere, see tourists as a means to boost government revenue.

For car rentals, the state imposes a tax of 5 percent, plus a surcharge of $2.00 per day. That’s generally higher than our five neighbors. (Utah’s tax is a flat 2.5 percent.)

There is no statewide hotel tax, but lawmakers permit local governments to levy their own, which “shall not exceed five percent of the gross taxable rent.” Big shock: The top rate is basically the standard. (Kudos to Moriarty, Logan, Hatch, and Corrales for going lower.)

Amazingly, New Mexico has no “meals tax.” But chowing down on green chile still costs tourists — like the locals, they pay the full gross receipts tax on all meals.

New Study: Sesame Street most affordable early childhood intervention ever

Errors of Enchantment Blog Postings - Wed, 2015-06-17 15:38

If there’s one thing liberals love it’s new government programs. More government spending leads to government agencies and employees, both of which are difficult to get rid of. Predominantly unionized government workers are even better because their dues can be used to elect politicians who further expand the size and scope of government.

These are some of the reasons why the left in New Mexico has rallied so strongly around universal pre-K.

Fortunately for taxpayers (albeit unfortunately for advocates of big-government), a new study has found that the television show “Sesame Street is one of the largest and most affordable early childhood interventions ever to take place.” See a shorter article on the new study from the Washington Post.

Among the study’s other findings:

• The introduction of Sesame Street to America’s preschoolers helped a generation of kids do better in school. When the show first aired in 1969, five million children watched a typical episode—the preschool equivalent of a Super Bowl every day.

• Boys and black, non-Hispanic children experienced the biggest improvements in school performance.

• Effects are largest for children living in economically disadvantaged areas.

Given annual expected costs (likely to rise dramatically) starting at $180 million annually, pre-k for all is a very expensive means of slightly (and temporarily) improving the educational outcomes of young children. Those are scarce dollars that could be used elsewhere, returned to overburdened taxpayers, or used elsewhere to improve educational outcomes. Obviously, Sesame Street is virtually free and even an educational campaign encouraging parents to expose their children to it could be introduced for pennies on the dollar of what a pre-k program would cost.

Unfortunately, many pre-k advocates want more government for reasons that have nothing to do with helping children. They are unlikely to be deterred by more cost-effective options.

NM Supreme Court wage decision will further drive up public construction costs, column

Errors of Enchantment Blog Postings - Wed, 2015-06-17 08:30

The price of roads and schools just went up in New Mexico. New Mexico is already a mini-“Davis-Bacon” state which means that taxpayers pay substantially more (or get 10-15% less) in the way of schools, roads, and other state-funded projects (like those funded in the recently-passed capital outlay bill). Under Gov. Bill Richardson, legislation was passed that increased the labor premium under “Davis-Bacon” for public works projects. The Martinez Administration had been attempting to soften the blow of that legislation, but the New Mexico Supreme Court ruled this week that her actions were illegal.

I recently wrote a column discussing New Mexico’s flawed capital funding process and how repeal of our “Davis-Bacon” law is key to improving our school buildings and roads. The article appeared at both Watchdog and NMPolitics.net.

Infrastructure and how to pay for it has been a topic of great interest recently. The Legislature returned to Santa Fe with the primary purpose of passing a capital outlay bill. Also, as David Abbey, Chair of the Public School Capital Outlay Council told legislators in testimony recently, New Mexico’s schools were facing serious funding problems.

Among Abbey’s concerns was the volatility of funding due to oil and gas prices. Abbey also said there are more needed projects than available funding. Abbey’s most newsworthy statement was that there are 16 schools that are in such poor shape they need to be torn down.

Notably, the problem is not inadequate spending. According to data from the National Education Association, New Mexico’s per-capita capital spending on K-12 schools was 7th-highest in the nation for the most recent school year on record.

There are immediate solutions to New Mexico’s infrastructure problems and they don’t require any more tax dollars. Unfortunately, liberal Democrats who, despite recent legislative losses, remain quite powerful would rather funnel tax dollars to supportive special-interest groups than adequately fund schools and other infrastructure needs.

The solution is for infrastructure to be built with labor paid at market rates. This is actually contrary to New Mexico law – known popularly as Davis-Bacon – which mandates that labor on such projects be paid a higher wage set by labor unions.

The Ohio Legislature actually repealed a similar law just on school construction. Now, instead of paying inflated wages on state-financed construction projects, schools in Ohio are built at market labor rates. The Legislature studied the impact that change had on school construction prices and found overall savings of 10.7 percent.

Other states are following Ohio’s footsteps. Nevada just eliminated prevailing wages on school construction while Indiana recently eliminated its entire “prevailing wage” law.

New Mexicans support paying market wages on construction projects. According to polling commissioned by the Rio Grande Foundation (carried out by Moore Information) earlier this year, 46 percent of New Mexicans want to get rid of the “prevailing wage” while only 35 percent support keeping the law in place.

Unfortunately, that 35 percent includes the Democrat-controlled New Mexico Senate, which failed to even vote on a bill – passed out of the House – reforming prevailing wage mandates on the books.

And then there is Santa Fe Mayor Javier Gonzales who, at a meeting in New York City, encountered anti-tax activist Grover Norquist, who happened to be talking about repealing Davis-Bacon laws. As reported by New Mexico Political Report, Gonzales took to the social networking site Twitter to express his outrage, saying: “Grover Norquist speaking now proposing killing Davis Bacon Act. Very hard to maintain composure and not YELL!” He followed that with: “Mind boggling to see the rhetoric up close!”

Of course, as is often the case with liberal opponents of commonsense reform ideas, Gonzales doesn’t bring up any cogent arguments in support of his position. That’s because it is extremely tough for anyone who views himself as a champion of the little guy to do the mental gymnastics necessary to support over-paying already well-paid construction workers at the expense of taxpayers and public school children.

New Mexico legislators had a real chance to improve conditions in our schools while also helping to improve conditions on roads throughout the state. Unfortunately, those who have controlled public policymaking in New Mexico for 60+ years, leading our state to the bottom of most good lists and the top of most bad ones, continue to hold veto power over much-needed reforms.

So, instead of making systemic policy changes that will make our precious tax dollars go further, benefiting more of our children, we get more of the same. Republicans and Democrats may have agreed to a special session, but that doesn’t mean that the session will really change anything for the better.

Gessing is the president of New Mexico’s Rio Grande Foundation, an independent, non-partisan, tax-exempt research and educational organization dedicated to promoting prosperity for New Mexico based on principles of limited government, economic freedom and individual responsibility.

New Mexico, the Region’s Growth Laggard — Again

Errors of Enchantment Blog Postings - Mon, 2015-06-15 16:33

Last week the U.S. Department of Commerce’s Bureau of Economic Analysis released another depressing finding for the Land of Enchantment. In 2014, growth in real gross state product lagged behind the performance of every one of our neighbors:

New Mexico’s 1.0 percent was less than half the rate for the nation as a whole.

It gets worse. In a new analysis, demographer Joel Kotkin puts Albuquerque at #86 of 93 medium-sized cities for “employment growth over the short-, medium- and long-term, going back to 2003,” as well as “momentum — whether growth is slowing or accelerating.” Of 258 small-sized cities, Farmington lands at a respectable #44, but Las Cruces (#184) and Santa Fe (#207) underperform.

Isn’t it time for an effective economic-development strategy for New Mexico?

Bus Rapid Transit: the latest “quick fix” for the local economy

Errors of Enchantment Blog Postings - Mon, 2015-06-15 09:54

Reliably, my old friend Winthrop Quigley was in the Albuquerque Journal helping sell the latest government scheme for “transforming” Albuquerque. There is so much nonsense contained in the article that it almost requires a point-by-point refutation. He starts with the canard that “Albuquerque has long worked to get businesses to move here, mostly by lowering the cost of doing business.” I’m not sure what Quigley means by that, but the gross receipts tax in Albuquerque has gone up by more than 20% since 2000. That is hardly going to lower the cost of business…

Anyway, Quigley shares a list of amazing things you will be able to do up and down Central once the BRT is in place. What he fails to mention is that the existing Rapid Ride bus (which in its current form is already a type of BRT) already serves much of the same area and can provide the exact same service.

And then Quigley talks up Cleveland and the wonderful things BRT has supposedly done for that town. Of course, famed urbanist Joel Kotkin has interestingly paired Cleveland and Baltimore as “Potemkin Villages” for their policies which divert tax revenue from one area of the city to another “redeveloped” tourist area. I’ve already discussed Cleveland’s myriad problems at some length.

The final point here is that, yet again, an advocate of the BRT makes every argument BUT the one you’d expect from an advocate of a new transit system…that the system will somehow make getting around easier and more efficient. In fact, Quigley doesn’t even argue that BRT would improve mobility, but he notes that “Motorists would have to be willing to tolerate slower speeds around Central.”

This project is right up there with the Rail Runner and Spaceport as a “more smoke than fire” economic development scheme. Rather than a clear path to success based on stated needs and goals, it is the scattershot “if you build it, they will come” approach. If you build a train or a spaceport you’ll generate prosperity. Unfortunately, in the real world, ballplayers don’t live in cornfields and the path to economic prosperity involves making New Mexico and Albuquerque an attractive place to do business.

Syndicate content