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Why is New Mexico not realizing its potential?
Updated: 32 min 49 sec ago

A ‘Fossil Fuel’ Nowhere Near Extinction Abroad

Tue, 2015-08-11 16:47

New Mexicans concerned about coal mining in the state — and throughout the nation — should consider attending an upcoming “listening session” in Farmington. On August 20, at the Courtyard Marriott, the Bureau of Land Managment will receive input on “how the BLM can best carry out its responsibility to ensure that American taxpayers receive a fair return on the coal resources managed by the federal government on their behalf.”

The eco-left’s war on coal is going quite well. Mining companies are filing for bankruptcy, layoffs are robust, and coal’s share of the fuels used to generate electricity is declining.

In New Mexico, coal production dropped from 25.8 million to 21 million short tons between 2009 and 2014. Employment fell by 6.1 percent. (The state ranks 11th among the states in coal production.)

The good news is that export opportunities are manifold. As the Institute for Energy Research recently noted, “The International Energy Agency’s coal forecast indicates that global demand for coal is expected to continue to increase, surpassing 9 billion tons by 2019.” China is a major consumer, as is India, and according to the U.S. Energy Information Administration, “PetroVietnam … is seeking to purchase 11 million tons of coal per year starting in 2017 to supply Vietnam’s domestic power industry.”

Free trade offers New Mexico new customers for its natural gas — and soon, one hopes, crude oil. But coal is another commodity with a promising export future. The rest of the world isn’t embracing anti-coal hysteria, and that’s a good thing for the Land of Enchantment’s economy.

Work requirements for food stamps are hardly onerous

Tue, 2015-08-11 11:01

The following article appeared in various news outlets throughout the State including the Las Cruces Sun-News.

Since 2009, New Mexico has waived federal work requirements tied to the Supplemental Nutrition Assistance Program (SNAP), commonly known as food stamps. Over 21 percent of all New Mexicans receive food stamps, leaving us behind only Mississippi.

Gov. Susana Martinez’ Administration has proposed to reinstate rules limiting able-bodied people – including parents of children older than six-years – to three months of SNAP benefits unless they work, do volunteer work, or attend job training classes at least 20 hours per week. Children and the myriad food programs targeted at them and those who simply cannot work are not up for changes.

New Mexico is not alone in re-instating these modest requirements. According to a September 2014 report from the Pew Center, no fewer than 17 states were working to re-instate work requirements on able-bodied adults.

In 2014 Maine re-imposed a three-month limit (out of every three-year period) on food stamps for able-bodied adults without minor dependents — unless they work 20 hours per week, take state job-training courses or volunteer for about six hours per week. The number of such people receiving food stamps in Maine has dropped nearly 80 percent since the rule kicked in, to 2,530 from about 12,000.

Maine’s work requirement has been in effect for about a year now without a reported increase in hunger. No reports of dire or exacerbated hunger exist for the decade-plus during which this policy was in effect nationwide from the time of the welfare reforms enacted by then-President Bill Clinton and a Republican Congress in the mid-1990s.

Seemingly, when presented with a set of requirements to in order to attain food stamps, able-bodied adults manage to find work attain food through working, moving to a places where work is more plentiful, or by some other means.

Food stamps were meant to provide a temporary bridge for people who are between jobs or have fallen on hard times. They were never meant to be a permanent way of life. The Administration’s proposal benefits recipients by increasing their opportunities to access gainful employment.

On the flip side, unlimited government benefits with no requirements allow people to completely remove themselves from the work or volunteer forces. Sitting at home watching television or waiting for the phone to ring is no way to look for work. Volunteering or improving one’s skills through enhanced education are great ways to find a job.

Indeed, while unemployment rates in New Mexico remain elevated, the economy in neighboring Texas is humming with unemployment at 4.2%. For generations Americans have moved to better their economic prospects. Should we really lure them to remain in economically-distressed states through government welfare?

The Martinez Administration’s proposal encourages self-reliance rather than dependency. What doesn’t work is forcing American taxpayers to spend $80 billion a year on a rapidly-expanding welfare program and imposing little or nothing in the way of requirements.

Democrats used to value an honest day’s work. As President Franklin Roosevelt said in 1935:

“Continued dependence upon relief induces a spiritual and moral disintegration fundamentally destructive to the national fibre. To dole out relief in this way is to administer a narcotic, a subtle destroyer of the human spirit.”

Requiring able-bodied adults without small children to work, get an education, or give back to their community is hardly too much to ask of those who wish to receive food stamps.

Gov. Martinez is wise to impose some form of requirements on able-bodied adults. It is a necessary first step towards ending New Mexico’s culture of dependency.

Paul Gessing is the President of New Mexico’s Rio Grande Foundation. The Rio Grande Foundation is 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

Keep New Mexico from being the Greece of North America

Mon, 2015-08-10 13:38

Despite (or perhaps because of) the latest bailout, Greece remains deeply-troubled. The crisis has manifested itself due to Europe’s single currency, the Euro. Greece cannot pay its bills, but because of the Euro, it cannot devalue its currency either. So a series of bailouts and “austerity” measures have been imposed.

This is a quick synopsis of the Greek situation, but what are the parallels for New Mexico?

In July of 2011, The Economist magazine noted one interesting parallel when an article “Greek Americans” noted which U.S. states are most reliant on transfers from Washington for fiscal support. According to the article, New Mexico was the most reliant U.S. state in the nation by far.

It is true that unlike Greece, the U.S. has a long-standing single fiscal policy and a culture (200+ years) of unified action. Greece could easily leave or be kicked out of the currency union after only a few decades of unity. That is not likely to happen to New Mexico.

Unfortunately, our state shares the Greek propensity to rely on outsiders for financial support along with a bloated government payroll and underdeveloped private sector.

According to Key Policy Data, New Mexico has the second-most state and local government workers per 100 private sector workers of any state in the nation — more than 25.

The proliferation of government employees has helped to create a bloated and under-funded government employee pension system. According to the Competitive Enterprise Institute, New Mexico’s government employee pension system is in the worst overall shape of any public employee pension system in the nation. This is a serious issue that makes New Mexico’s parallel to Greece quite direct.

What can be done? The Martinez Administration has been working hard to convince legislators to deregulate the New Mexico workforce and restrain the growth of government. These are good things, but New Mexico’s Senate needs to help, not hinder, efforts to spur private sector economic growth.

We need a healthy dose of transparency in terms of how much New Mexico relies on Washington dollars to keep our economy afloat. We know New Mexico is too reliant on Washington, but how reliant?

The federal debt is more than $17 trillion, yet there is no easy way for New Mexico policymakers or the public to answer such basic questions as: How many federal grants do our agencies utilize? How many state employees collect a paycheck that depends, in whole or in part, on a federal subsidy? And most importantly, what would happen if this federal money dried up?

Idaho is one state that has embraced the added transparency that we are calling “financial ready.” Simply put, Gov. Martinez should sign an executive order saying that state agencies need to delineate the federal dollars they receive so that lawmakers can be prepared for the next fiscal crisis from Washington.

We need to know today who will be impacted by the reduction or elimination of federal dollars tomorrow. Will it be seniors who depend on a home food service? Could it be law enforcement agencies who track down child predators using a federal grant? “Financial ready” would also include contingency plans to assist lawmakers in dealing with the unforeseen but rather inevitable consequences of Washington profligacy.

New Mexico has already had a close brush with real consequences from its reliance on Washington. When sequestration went into effect in Washington in 2013, New Mexico’s “payment in lieu of taxes” (PILT) money faced a dire threat. Rural communities unable to tax large swaths of federally-owned land faced a crisis situation.

Thankfully, our Senate delegation was able to get $34 million in PILT funding for New Mexico counties, but the consequences of blindly relying on Washington could have been dire.

Significant reforms to New Mexico’s economy are essential – as is tackling pension reform and funding. When it comes to relying on Washington, we should start with a healthy dose of transparency so policymakers and the public can better understand the full scope of our reliance.

Gessing is the president of the 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.

Liberty, Opportunity, and Prosperity on the Air

Mon, 2015-08-10 10:35

Every other Saturday, on KKOB, the Rio Grande Foundation hosts the “New Mexico Freedom Hour.” We discuss our latest public-policy research, interview guests, and offer our perspectives on issues at the local, state, and federal levels.

The Foundation’s website has an archive of past programs. Our August 1 broadcast, in which Paul Gessing and Dowd Muska explore the City of Albuquerque’s proposal for bus rapid transit, was just posted. Enjoy.

Government Employees: An Unimpressive Right-Sizing

Thu, 2015-08-06 17:29

According to the Center for State and Local Government Excellence, for the second year in row, “state and local governments are hiring.” The organization’s survey of HR managers found that 73 percent reported new hires in the past year, with 54 percent adding more employees than they did in 2013.

In an interview with the Pew Research Center’s website Stateline, Brian Sigritz of the National Association of State Budget Officers lamented that while employment is on the rise, he was “not expecting a surge in hiring. It’s definitely not back to where it was, and I wouldn’t be surprised if it never got back.”

In New Mexico, returning to “where it was” won’t be difficult. State employment peaked, not surprisingly, during Bill Richardson’s administration. The Great Recession imposed layoffs that reduce the workforce, from 2007 to 2012, by 13.5 percent. It stood at 45,250 in 2013, up just a bit from 2012.

At the local level, employment peaked at 81,798 in 2009. It fell to 78,559 — a drop of 4.0 percent — in 2012, and rose by a few hundred in 2013.

Source: U.S. Census Bureau

Note: Figures are for full-time equivalent positions

Even voluntary “minimum wage” hikes can be problematic

Thu, 2015-08-06 09:41

To be clear, the Rio Grande Foundation opposes and has ample data to illustrate the harms of government-mandated increases in the minimum wage. However, in recent years, some businesses have gotten into the act by increasing their own “minimum wage” rates.

Of course, the media naturally applauds such efforts, but increasingly, employers who enact arbitrary (as opposed to merit-based) wage hikes, are seeing unintended consequences. Take Wal-Mart for example which is in the midst of increasing all company wages to $10/hour by February.

According to a new article on the company’s wage hike, “Wal-Mart employees are calling the move unfair to senior workers who got no increase and now make the same or close to what newer, less experienced colleagues earn.”

“It is pitting people against each other,” said Charmaine Givens-Thomas, a 10-year veteran who makes $12 an hour at a store near Chicago and belongs to OUR Walmart, a union-backed group that has lobbied for better working conditions. “It hurts morale when people feel like they aren’t being appreciated. I hear people every day talking about looking for other jobs and wanting to remove themselves from Wal-Mart and a job that will make them feel like that.”

“Some workers also said they suspect their hours are being cut and annual raises reduced to cover the cost of the wage increase for newer workers.”

No surprise that an arbitrary, “across-the-board” wage hike isn’t pleasing workers who feel like they are harder working and better, more experienced workers than their peers.

An even more extreme example of a “minimum wage gone bad” is from a company called “Gravity,” the CEO of which slashed his own pay to $70,000 and raised all workers at the company to $70,000 annually. Immediately, according to the New York Times, “Two of Mr. Price’s most valued employees quit, spurred in part by their view that it was unfair to double the pay of some new hires while the longest-serving staff members got small or no raises.”

This only makes sense. If you are a highly-skilled employee working 60 hours a week, should you make the same as someone who works less than 40 hours a week or sweeps the floors? Wages are prices. As such they are powerful signals of supply and demand in our economy. A car dealer wouldn’t charge a “maximum price” in “fairness” to their customers that resulted in a 2015 BMW being sold for the same price as a 2000 Hyundai. That would be stupid, but for some reason wages are “different.”

I guess businesses will have to learn the hard way. Hopefully these mistakes can persuade economically-ignorant policymakers that government minimum wage policies are equally misguided.

Live television event in Las Cruces: The Disappearing Middle Class?

Wed, 2015-08-05 17:27

What state and federal policies are needed to boost the economy? In particular, with median household wages down and pay increases meager or non-existent, what can be done?

Join us in studio on Thursday, August 13, at 12:45pm to ask your questions of:

Steve Fischmann, former state legislator and co-chair of the New Mexico Fair Lending Coalition

Paul Gessing, President of the Rio Grande Foundation

The taping will conclude by 2pm.

You may print a parking pass by clicking here.

The program will air on KRWG-TV Thursday, August 20 at 7:00 p.m., Saturday, August 22 at 5:00 p.m., and Sunday, August 23 at 11:00 a.m.

Progress on Banning the Ban

Wed, 2015-08-05 13:31

Last week the U.S. Senate’s Energy Committee “narrowly passed a bill to lift a 40-year-old ban on the export of crude oil.”

It’s the depth of summer, so the vote didn’t get much press in New Mexico, or anywhere else. But it was a major victory for what The Washington Post called “a simple policy that would spur economic growth, lower gas prices and please international allies.”

The Wall Street Journal agrees, explaining that the majority of the nation’s refineries were “built to process heavy crude that the U.S. has long imported from the likes of Venezuela and Mexico. But most U.S. drillers are producing light, sweet crude. Refiners are slowly retooling to handle more U.S. crude, but record amounts of oil are still piling up in storage.”

Among the states, New Mexico ranks fifth in onshore petroleum production. The Land of Enchantment’s contribution to the nation’s oil supply has risen every year since 2007.

New Mexico’s two senators have been conspicuously silent about where they stand on oil exports. Rep. Steve Pearce is backing a similar ban-the-ban bill in the U.S. House of Representatives. The lower chamber’s measure has over 100 co-sponsors, including 13 Democrats, but Rep. Michelle Lujan Grisham and Rep. Ben Ray Luján are not on board.

With the price of crude sagging and layoffs occurring in New Mexico’s oilfields, lifting the export ban is key to preserving, and expanding, petroleum production in the state. It’s unfortunate that the congressional delegation can’t unify behind a policy that is unambiguously good for New Mexico’s economy.

RTW Prevails, for the Seventh Month in a Row

Tue, 2015-08-04 16:26

The Rio Grande Foundation is tracking announcements of expansions, relocations, and greenfield investments published on Area Development‘s website. Founded in 1965, the publication “is considered the leading executive magazine covering corporate site selection and relocation. … Area Development is published quarterly and has 60,000 mailed copies.” In an explanation to the Foundation, its editor wrote that items for Area Development‘s announcements listing are “culled from RSS feeds and press releases that are emailed to us from various sources, including economic development organizations, PR agencies, businesses, etc. We usually highlight ones that represent large numbers of new jobs and/or investment in industrial projects.”

Last month, of 13,526 projected jobs, 9,381 — 69.4 percent — were slated for right-to-work (RTW) states:

Fifteen domestic companies based in non-RTW states announced investments in RTW states. Just four announcements went the other way.

There were two domestic relocations from compulsory-union to RTW states, and two RTW-to-non-RTW moves.

Foreign direct investment was highly skewed. Seventeen projects headed to RTW states, but only one is to occur in a non-RTW state.

With nearly 30 percent of jobs projected for non-RTW states, July yielded compulsory unionism’s best performance of the year. But the results were greatly biased, due to California-based ZenPayroll’s decision to hire 1,750 employees in Colorado. (The Denver Post reported that Governor John Hickenlooper hailed “the news as perhaps the largest single jobs announcement in state history.”)

Marquee RTW wins included the decision by Connecticut-based United Technologies to build its “Center for Intelligent Buildings” in Florida, the relocation of California-based LiveOps, a cloud-computing form, to Texas, and the selection of Arizona to build a research-and-development facility for a partnership between General Electric and Aviation Industry Corporation of China.

Methodological specifics:

* All job estimates — “up to,” “as many as,” “about” — were taken at face value, for RTW and non-RTW states alike.

* If an announcement did not make an employment projection, efforts were made to obtain an estimate from newspaper articles and/or press releases by elected officials and economic-development bureaucracies.

* If no job figure could be found anywhere, the project was not counted, whether it was a RTW or non-RTW state.

* Intrastate relocations were not counted, interstate relocations were.

Share your concerns about Albuquerque’s proposed Fair Workweek Act

Mon, 2015-08-03 14:09

Albuquerque City Council’s Finance and Government Operations committee is expected to take up the Fair Workweek Act on Monday, August 10 at 5 p.m.

The anti-business proposal would require employers to:

• Set work schedules three weeks in advance or pay compensation in the form of predictability pay;
• Provide paid sick leave;
• Allow employees to decide via secret ballot on “alternate schedule” (such as four-10 hour shifts or three 12 hour shifts);
• Force employers to offer additional hours of work to existing employees before hiring additional employees or subcontractors;
• Allow employees to trade shifts regardless of job descriptions or skill sets.

We encourage you to express your opposition to the bill with an email to all city councilors.

We have several sample email messages below to facilitate this request. If one aligns with your sentiments, please select it (or customize to your individual needs/preferences) and send to all city councilors starting Monday.

For your convenience, the email addresses for all of the city councilors is as follows:trudyjones@cabq.gov; reygarduno@cabq.gov; kpena@cabq.gov; kensanchez@cabq.gov;ibenton@cabq.gov; dharris@cabq.gov; dgibson@cabq.gov; danlewis@cabq.gov;bwinter@cabq.gov

If you have questions, please don’t hesitate to contact us at: info@riograndefoundation.org

Dear Councilors,
I hope that you will reconsider your efforts to pass the Fair Workweek Act in its current or revised version. The Act is chock-full of terrible mandates for business and even as sponsoring councilors attempt to remedy the concerns of business, I don’t believe it’s enough to make this palatable for Albuquerque businesses. Please do what’s right for Albuquerque business people like me.

Dear Councilors,
Like many other small business owners, my family and I have sacrificed a lot for the dream of business ownership. We work long hours and have often gone without a paycheck so that our employees will have theirs. That’s part of the reason it’s so troubling to know that our city government would be so inconsiderate as to assume that small businesses like mine could integrate the mandates required by the Fair Workweek Act into their operations. Really? Do you truly realize the costs, not just financial, but managerial? This Act would take away much of my authority as a business owner and I ask you to vote against the adoption of this ordinance. Thank you.

Dear Councilors,
I’m writing to you today to express my opposition to the Fair Workweek Act. My industry requires that we have flexibility on our scheduling and if the Act is put into effect, a necessary piece of my business model will be compromised. This could effectively cause me to go out of business. I hope you will not adopt this ordinance.

Dear Councilors,
In a recent Albuquerque Business First article, Councilor Isaac Benton said, “I certainly agree with people who think it’s overly complicated,” when referring to the Fair Workweek Act. If Councilor Benton, the sponsor of the bill, agrees that the Act is overly complicated, how can you be sure that a few changes to the language in the bill can correct all concerns of business? You really can’t. The Act originally attempted to impose a set of one-size-fits-all mandates on business. Now that business has expressed concerns, there are efforts to mitigate those concerns. But the reality is that because the face of business reflects so many different sectors and an even greater diversity in business models, there is literally no way to make this bill palatable to business. I ask that you not modify it. I ask that you not study it. Simply stop it in its tracks. Thank you.

Dear Councilors,
The Fair Workweek Act isn’t fair at all! It’s harmful to business. Business is the economic engine of the community and if it passes, it will hurt Albuquerque businesses’ ability to be competitive. Please don’t pass it!

Dear Councilors,
I am writing in strong opposition against the Fair Workweek Act ordinance. This ordinance is not fair to Albuquerque businesses. This overreaching government regulation would do more harm than good. Please do not support this ordinance. Thank you.

Dear Councilors,
The Fair Workweek Act is an ordinance that has the ability to knock small businesses in Albuquerque to their knees. I am in strong opposition to this ordinance as a business owner, and I hope you are also against supporting this ordinance. Thank you.

Dear Councilors,
I am writing to express my concern over the Fair Workweek Act. This ordinance is not good for Albuquerque businesses. According to a study by Department of Numbers, Albuquerque has 17,100 fewer jobs today than when it reached its pre-Great Recession employment peak in 2007. We cannot afford another blow to businesses. Please do not support this ordinance.

Dear Councilors,
Please do not support the Fair Workweek Act. This ordinance only adds to the ongoing struggles for businesses in Albuquerque. It will only do more harm than good. Please vote against this ordinance.

Dear Councilors,
Businesses are already struggling to comply with many confusing and complex regulations. The city of Albuquerque should not create more problems like the mandates in the “Fair” Workweek Act. If businesses are forced into implementing all these new mandates, many employers will be forced to cut jobs and wages. Please do not put this burden on Albuquerque businesses.

Dear Councilors,
I am a business owner and I am strongly against the “Fair Workweek Act. With business costs on the rise, my business cannot afford additional costs and mandates. Please do not pass this ordinance.

Dear Councilors,
Councilor Isaac Benton said, “I agree. There were some things in there that were not reasonable,” when he was recently interviewed about the Fair Workweek Act that he and Councilor Klarissa Pena introduced to the City Council in June. If Councilor Benton believes that about his own bill, how can business owners be convinced that a few modifications will fix all that is unreasonable? We can’t. Please don’t entertain this Act in its original form or any attempt at a modified version. It’s not good for business owners or managers like me. There’s too much at risk for hasty bills and even hastier modifications. Thank you.

Rapid-transit plan would be too disruptive

Mon, 2015-08-03 10:22

Advocates of market-oriented public policy rarely have anything complimentary to say about transit systems.

Government-owned trains and buses are fiercely protected by politicians and powerful lobbying groups, despite  consistently unimpressive ridership numbers and runaway costs. But in Albuquerque, at least lately, transit is a different story.

In 2004, the city,s bus system began to add express routes along Central Avenue. “Rapid Ride” features “60-foot long, articulated buses that accommodate up to 86 passengers.” The service is “loaded with new technology,” including WiFi, automatic announcements, “a global positioning system to aid in the transit applications that help passengers locate their bus in real time,” and state-of-the art security cameras and microphones. In addition, most Rapid Ride stations have “a structure which allows passengers to wait in safety and comfort.”

Route 766, which runs from the Uptown Transit Center to the West Side, saw passenger growth of 25.8 percent since its introduction. Route 790, which links the University of New Mexico’s main campus to the Northwest Transit Center, experienced growth of 87.2 percent. Route 777, connecting Tramway Boulevard to downtown, saw growth of 135.6 percent.

In its “Futures 2040 Metropolitan Transportation Plan,” the Mid-Region Metropolitan Transportation Organization concluded that increased boardings on the Duke City’s overall bus system were “directly attributable” to the three “Rapid Ride” lines.

At least in terms of demand, express bus service appears to be working in Albuquerque. So why does the city want to scrap a good thing?

Transportation planners are seeking to replace Rapid Ride with “Albuquerque Rapid Transit” (ART), which combines “many features of rail transit with the flexibility of buses.” Next month, the city will request federal funding to cover 80 percent of the costs of Phase 1 of the project, which is slated to run between Louisiana and Coors.

ART would eliminate one lane, each way, in order to create a dedicated bus guideway. It’s a shift the Cato Institute’s Randal O’Toole believes is unwise: “Dedicating two entire traffic lanes on Central Avenue to buses and giving those buses priority at traffic signals will do far more to increase congestion than any relief provided by the few cars taken off the road by the bus. Why should a few hundred bus riders a day be given these privileges while tens of thousands of people in cars are forced to sit in traffic?”

Don Hancock, of the University Heights Neighborhood Association, believes ART’s plan to eliminate its route’s median strip will cause “bicycle/pedestrian safety problems … to increase dramatically.” Walkers and cyclists attempting to cross the guideway, Hancock said, are “continuous accidents just waiting to happen.”

Thus far, ART’s supporters have ignored questions about their project’s public-safety and congestion-creation issues, preferring to focus on transit’s alleged ability to attract professional Millennials. But polling data are beginning to show that young adults’ housing preferences resemble previous generations’ inclinations. Describing a recent survey, an economist for the National Association of Homebuilders wrote that two-thirds of Millennials “wanted to reside in a suburban neighborhood, compared to 10 percent wanting to own a home in a central city. Nearly a quarter of residents wanted to be outside large metropolitan areas entirely, preferring rural housing.” While recent college graduates continue to be drawn to places such as Washington, D.C., they are also flocking to “sprawling” metro areas such as Houston, Oklahoma City, Phoenix, Orlando, Salt Lake City, Las Vegas, and Nashville.

Will ART be affordable? Check the record. In the words of Veronique de Rugy, a researcher with the Mercatus Center, “Infrastructure spending tends to suffer from massive cost overruns, waste, fraud, and abuse.” And while ART is not a rail line, building it will nonetheless be a complex undertaking, involving ripping up median strips, improving sidewalks, constructing stations, and relocating utilities.

Citizens in Abilene, Anchorage, and Atlanta shouldn’t be taxed to support a project of dubious benefit to Albuquerque. The federal government should deny funding to ART.

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.

2015 New Mexico Friedman Day Celebration: Dr. Matt Ladner shares some scary demographic data & how educational choice can alleviate the problem

Fri, 2015-07-31 15:54

Dr. Matthew Ladner spoke at the Rio Grande Foundation’s “Milton Friedman Day” celebration on New Mexico’s Impending Demographic Challenges and How Policymakers Can Cope. His slides can be accessed here.  

Ladner, an optimist by nature, had some sobering words for the event attendees. As Ladner made clear, so many things in our society are improving and our economy is more productive than ever, but our education system has seen growth in employment without similar growth in productivity or improved outputs.

As Ladner notes, there are successful education reform models including the one implemented in New Orleans in the wake of Hurricane Katrina. The entire public school system was turned into charter schools with some significant, positive results:

Reforming and improving the education system, notes Ladner, is all the more important with New Mexico’s elderly population set to explode in the years ahead according to new demographic research by Ladner. According to Ladner. In fact, as Ladner notes New Mexico’s working age will shrink as a percentage of the total population, with the Land of Enchantment projected to have the highest total age dependency ratio in the nation in 2030.

In New Mexico’s case the increase in the total age dependency ratio projects to be entirely due to a near doubling of the elderly population between 2010 and 2030.

Dr. Ladner is Senior Advisor of Policy and Research with the Foundation for Educational Choice. He previously worked with the Rio Grande Foundation to bring the “Florida Model” for education reform to New Mexico.

Dr. Ladner has written numerous studies on school choice, charter schools and special education reform. Most recently, Dr. Ladner authored the groundbreaking, original research Turn and Face the Strain: Age Demographic Change and the Near Future of American Education, outlining the future funding crisis facing America’s K-12 public education funding.

Obama’s Economic Advisers Agree with Milton Friedman on government licensing

Fri, 2015-07-31 12:42

Today would have been Milton Friedman’s 103rd birthday. The Rio Grande Foundation celebrated this morning (look for details on that shortly), but I thought this story from earlier in the week was interesting as it shows that the issues Friedman discussed — in this case professional licensing — remain important today.

As the article notes, Obama’s Council of Economic Advisers has published a new report critiquing professional licensing:

Burdensome occupational licensing requirements can create barriers for workers and add costs to consumers, a White House report released Tuesday found.

The state-issued licenses required to carry out certain jobs should be used only to address legitimate public health and safety concerns, the report recommended.

Friedman was a strong opponent of government licensing including of medical professionals. Needless to say, he would have opposed the myriad regulations imposed by governments like New Mexico which places the 9th most onerous professional licensing regulations among the 50 states according to the Institute for Justice.

A White Elephant Stalks the Motherland’s Taxpayers

Wed, 2015-07-29 18:52

Model of launch complex for Soyuz-2 rocket in Vostochny Cosmodrome. Credit: Vitaly V. Kuzmin (http://vitalykuzmin.net).

It turns out, “spaceport” and “boondoggle” go together beyond New Mexico’s borders.

The Vostochny Cosmodrome, under construction in Russia’s Far East, is in trouble. The project’s purpose, according to Anatoly Medetsky of the The Moscow Times, is “to ease the country’s dependence on the Soviet-era Baikonur launch site, located in the wind-swept steppe of neighboring Kazakhstan and which Russia is leasing through 2050.”

But the cosmodore is behind schedule — manned flights are now projected to take place three years later than originally planned — and corruption at the site is rampant.

In June, The Siberian Times reported that a senior director “suspected of embezzling funds … has been arrested after going on the run. The 45-year-old Georgian national, whose name has not been disclosed, had fled Russia after being accused of taking four million roubles ($75,000). … Police in the Amur region put the shamed director on the international wanted list and he was located in Minsk, where he drove a luxury Mercedes car decorated with Swarovski diamonds. According to local media, it cost $300,000 (16 million roubles) to have the vehicle covered.”

A few days ago, Prosecutor General Yury Chaika announced that his probe of 250 cosmodrome contractors had uncovered “theft that caused 7.5 billion rubles in damages.”

It’s all an unfortunate mess for Russia’s taxpayers. But unlike “Spaceport America,” the “public investment” made in the cosmodrome could eventually produce significant revenue. Relations with Kazakhstan have been testy lately. And Russia has a long history of lofting payloads — launch vehicles in the R-7 and Proton families alone have flown over 2,000 times.

ABQ City Council’s Fair Workweek Act is Extreme, will kill local business

Tue, 2015-07-28 15:54

The Fair Workweek Act will be heard before Albuquerque’s City Council on August 10. The legislation, sponsored by Councilors Benton and Peña was written by outside organizations but that is not what makes it a bad idea. The proposal has a number of extreme provisions that would have tremendous, negative impacts on local businesses, especially small ones.

As written, the proposal would require employers to:

  • Set work schedules three weeks in advance or pay compensation (predictability pay);
  • Provide paid sick leave;
  • Allow for a secret ballot to be held among employees to decide on “alternate schedule” (such as four-10 hour shifts or three 12 hour shifts);
  • An employer must offer additional hours of work to existing employees before hiring additional employees or subcontractors;
  • Employees will be able to trade shifts regardless of job descriptions or skill sets.

Like arbitrary mandated minimum wages, but far more radical, this proposal is yet another intrusion into the relationship between workers and employers. All of the regulations seem well-intended, but they all are based on the premise that a bunch of city councilors know what is better for a worker than they do. After all, if I don’t like the requirements of a particular job, I can always go elsewhere….of course that is assuming that there are other jobs out there.

The proposal’s negative impacts would most likely be felt in construction, retail, and restaurants as well as customer-service-oriented industries, especially those that have to deal with weather issues.

Ultimately, because it is so new and so radical, we don’t know exactly how this proposal will impact our local economy. We do know that it will further drive up the cost of doing business and make Albuquerque a less attractive destination for business expansion. That will harm the very workers you say you want to help.

The Fair Workweek Act is the most ambitious and comprehensive that we’ve seen, but several cities/states demand paid sick leave. A full description of those laws can be found here.

Details on Seattle’s experience can be found below:

In September 2012, Seattle became the fourth U.S. city to require employers to provide paid leave to their employees as a condition of doing business in the city. Of the 301 service-industry businesses surveyed, 191 of them—or nearly two-thirds—had started providing paid sick leave to comply with the law. Another 67 businesses already provided the benefit. (Note that the law in Seattle exempts businesses with fewer than five employees.)

Survey results suggest that issues of sickness are overstated by activists/supporters. Among businesses that started providing leave, 83 percent—or more than 8 in 10 businesses—said that sickness in the workplace was “not serious at all” prior to the law taking effect. Just 10 percent described it as a serious problem.

Two thirds of those who started providing paid leave said that they did not anticipate the law would reduce turnover in their workplace. One-third of surveyed Seattle businesses also anticipated that the law would increase unscheduled absences in the workplace that may not be connected to an illness.

Among those service-industry businesses that started providing leave to comply with the law, roughly 56 percent said it would increase their cost of doing business in Seattle. More than one in four said it would cause a big increase in their business costs.

15.7 percent of employers raised prices in response to the new law. • 18.3 percent of employers reduced hours and staff in response to the new law. • 17.3 percent of employers either increased the cost to employees of their current benefits, or eliminated the benefits they used to offer.

New Mexico and Albuquerque economies face serious problems

In fact, in March of 2007 we had 399,400. That’s down to 382,300 as of May 2015, a decline of 4.28 percent. If we want to improve pay and benefits for workers, let’s have more jobs for them to choose from and more competition for those workers. What follows is a historical listing of Albuquerque’s April non-farm employment (thousands):

2008 398.6
2009 380.4
2010 373.9
2011 373.6
2012 369.6
2013 374.9
2014 375.4
2015 382.9

* May, the most recent data available: 382.3 (even lower)

* Albuquerque has lost 16,300 since the April 2008 peak

* No jobs recovery for more than seven years

New Mexico also ranks poorly on many indices of economic competitiveness/growth:
Federation of Tax Administrators; 9th highest in tax burden as percent of personal income
American Economic Development Institute: 35th
Institute for Justice (Occupational Licensing): 39th
John Locke Foundation “First in Freedom”: 42nd
Fraser-NCPA “Economic Freedom of North America”: 52nd (of 60)
Kauffman Foundation/Thumbtack.com Small Business Friendliness: D+

Working the Land in the Land of Enchantment

Tue, 2015-07-28 11:37

The New Mexico Farm & Livestock Bureau invited the Rio Grande Foundation to contribute to its summer conference, held in Taos last week. We participated in a panel discussion on how the agriculture community can more effectively communicate with state legislators.

It was clear, both during the panel and chatting with individuals afterward, that New Mexico’s agriculture community feels besieged. Radical environmentalists were a common complaint. Electricity costs, “renewable” fuels, and the EPA’s “Clean Water Rule” were specific concerns.

In 2013, cash receipts for New Mexico farms totaled $3.8 billion. Livestock products — primarily milk, cattle, and calves — represented the bulk of the sum. Contrary to common misconception, green chile isn’t the state’s biggest cash crop — that would be hay. Pecans landed in the second slot, with green chile in third and greenhouse/nursery products in fourth.

New Mexico desperately needs more manufacturing, IT, logistics, finance, energy, and biotech jobs. But agricultural operations remain an important part of the state’s economy. With the growth of the buy-local movement and the opening of foreign markets to U.S. farmers, the bureau’s members have new opportunities to expand their enterprises. In New Mexico, agriculture needs low taxes, reasonable regulations, and affordable energy as much as any industry.

Gessing and Rep. Bill McCamley discuss 2015 Legislative activities on KRWG TV

Tue, 2015-07-28 08:38

I was recently in Las Cruces and had a chance to sit down with Fred Martino of KRWG (the public television station in Las Cruces) to discuss what happened in the 2015 legislative session and special session. Las Cruces area state Representative Bill McCamley, a Democrat, was also on the air and, believe it or not, we found a few areas of agreement.

What makes a city attractive as a relocation destination?

Mon, 2015-07-27 09:35

As we have discussed on numerous occasions, New Mexico’s economy is struggling. That includes large numbers of people moving out of our state and our state’s largest city.

Some advocates for bus rapid transit believe that such a system will give Albuquerque the “cool factor” that makes at least New Mexico’s largest city attractive as a relocation destination for the young.

A Wall Street Journal article from Friday throws water on the concept that “amenities” (like transit or recreational activities) are what people look for when moving to a new place…and what is it people look for? No surprise: JOBS, JOBS, JOBS.

The article is full of some great quotes and charts.

“You don’t move just because some place is cool,” said Aaron Duke, a 39-year-old San Francisco transplant and CirrusMD employee. “You’ve also got to be able to earn a buck.”

Public improvements to lure millennials, such as building bike paths and revitalizing neighborhoods, can result in a nicer place to live, economists say, but for an economy to thrive, more fundamental investments are needed, including a well-connected airport, universities to train workers and a business base that attracts people from around the region, they note.

As the chart below taken directly from the WSJ piece shows, 9 of the top 10 cities to which Americans are flocking are in “Right to Work” states (only Denver is not). Also, none of the cities in the top 10 in growth are big on mass transit. Atlanta, the most transit-reliant, ranks 30th among US cities in transit usage. In fact, most of the fast-growing cities are, like Albuquerque, spread out auto-centric cities. Perhaps transit isn’t really high on the “cool-factor” list?

More Advocacy on Your Dime

Thu, 2015-07-23 11:13

Earlier this week, at the monthly meeting of the Albuquerque Tea Party, Johnny Luévano gave a presentation on how one left-wing group funds its activities with taxpayer subsidies.

The “Partnership for Community Action,” located in southwest Albuquerque, “focuses on critical community issues like education, economic sustainability, wellness and immigrant rights.” Founded it 1990, it raises “awareness” and pursues “advocacy opportunities.”

According to an IRS filing, in 2013, of the organization’s $1,144,450 revenue take, $1,055,053 — 92 percent — came from “government grants.”

Leaving Albuquerque

Wed, 2015-07-22 11:46

Once again, New Mexico ranks among the losers.

Bloomberg News analyzed U.S. Census Bureau data to determine “the 20 metropolitan areas that lost the greatest share of local people to other parts of the country between July 2013 and July 2014.”

You don’t have to sit down for this: Albuquerque was on the list. Ranking 19th, the region lost 0.38 percent of its residents during the period studied.

Nationally, losers were concentrated in the Rust Belt and Northeast, with Honolulu and Los Angeles also making the list. (Strangely, while most of Texas’s urban areas are booming, El Paso fared poorly, with a 1.02 percent decline.)

Great weather, friendly people, a rich history and culture — how can Albuquerque be losing population?

New Mexico needs aggressive and effective economic-development policies, implemented yesterday.