Next week, the Albuquerque Journal reports, the “state will take part in an expo in Los Angeles … that aims to highlight opportunities for foreign investment in the U.S. aerospace manufacturing sector.”
But does the Land of Enchantment even qualify as an “aerospace state”?
As determined by the U.S. Bureau of Labor statistics, 0.654 percent of the nation’s aerospace establishments are based here. They account for 0.195 percent of total employment in the sector.
Jobs in NAICS 336411, “Aerospace Product and Parts Manufacturing,” have been stagnant in recent years (data are for March):
And let’s not even discuss the ongoing disaster that is “Spaceport America.”
This all appears to be another example of the state’s “economic development” brain trust putting the cart before the horse. Shouldn’t fundamental policy reforms — a right-to-work law, lower and simpler taxes, a better education system — be implemented before marketing New Mexico to an industry that, at this point, just isn’t interested?
For some on the left, the idea that anyone could every oppose them on principle is just too much to handle. Many seem to prefer to blame “big money” outsiders for opposing them due to sheer greed and nefarious intent. That is of course the role of the Koch Brothers for many on the left these days including the folks at StreetsBlogUSA where a post recently claimed “Koch Brothers Tentacles Reach Out to Squelch Albuquerque Bus Rapid Transit.”
True, the Rio Grande Foundation hosted transportation expert Randal O’Toole who is employed by the Cato Institute, a think tank in which the Kochs have played a significant role, but in the world of conspiracies, it is hard to see how the Koch Brothers would benefit from opposing a bus system in Albuquerque, New Mexico.
Even more strange is the fact that the article states, “Even members of Urban ABQ (a local pro-transit group) have some concerns about the proposal, Majewski said. But they think the pros and cons should be discussed in an atmosphere that’s not tainted by O’Toole’s brand of propaganda.” So, it’s okay to oppose or bring up concerns, just not the kind O’Toole would bring up?
The good news is that, yet again, our enemies recognize the effectiveness of the Rio Grande Foundation. According to the article, “Despite the cartoonishness of O’Toole’s arguments, he and “Gussing” (a terrible mis-spelling of my name) are dominating the debate right now, says Dan Majewski of Urban ABQ, which represents downtown residents. A group of business owners along the corridor concerned with the removal of parking spaces and the disruption caused by construction are now aligning with the Rio Grande Foundation.”
It’s really funny because it is the government and the well-heeled development community that have been able to push this massive deformation of Central/Route 66 through the heart of Albuquerque to this point with little debate and no public votes on the plan’s merits while a small New Mexico think tank and a completely grassroots group of businesses located along the path of the planned project are fighting back.
Click the picture below to oppose this costly project.
And see the “scary” costumes that a liberal near you may be wearing on Halloween.
Most educated New Mexicans know that oil and gas production is largely based in the Northwest and Southeast corners of the state. That is reflected in the map below which was taken directly from Gov. Martinez’s recently-released energy plan. I thought the information was interesting enough to be posted online. Interestingly, Eddy and Lea County produce the most revenue from oil and gas, but traditionally-liberal Rio Arriba County trails San Juan County by just a little in terms of revenue.
Perhaps even more interesting is how the funds from the oil and gas industry are distributed around the State. As can be found in the chart below from the same publication, Bernalillo County receives the greatest total benefit from the oil and gas industry without producing a drop. All New Mexico counties share revenues generated by the Industry although it is certainly worth noting that producing counties see far less economic return from production than they receive.
Given the reality of the impact of oil and gas and how it benefits all New Mexicans, it will be interesting to see how Senators Heinrich and Udall vote on crude oil exports when the time comes. Exports would benefit the entire New Mexico economy as seen below. Rep. Lujan-Grisham voted to support the bill that recently passed the House.
The results of yet another report on New Mexico’s film subsidy program were recently released. This study was commissioned by the New Mexico Film Office and conducted by the Canadian accounting firm MNP. It included payroll data, industry interviews, and financial reports filed with the Film Office.
The report further casts doubt on the idea that New Mexico’s generous film subsidy program will ever lead to a permanent, sustainable film industry presence in the Land of Enchantment.
According to the report, “total statewide spending on goods and services by … film and television productions declined from 2011 through 2014, with $118.7 million being spent in the 2011 budget year and $82.8 million being spent in 2014.” In addition, direct employment fell between the 2010 and 2014 fiscal years.
The value and size of New Mexico’s film and television industry also declined from $276.7 million in 2011 to $162.1 million in 2014. New Mexico residents accounted for just 46 percent of performing artists, 35 percent of “key creative” employees, and 24 percent of post-production staffers.
This is a program that is authorized to spend up to $50 million annually (any unspent funds roll over to the subsequent year) with 25% of total costs of films and 30% of television show costs being reimbursed directly to production companies. In other words, the industry is spending $82.8 million annually at a cost to taxpayers of approximately $50 million. True, $80 million is bigger than $50 million, but this is a hugely expensive way for taxpayers to generate a relatively small amount of economic activity.
Notably, New Mexico’s poor performance occurred as other states are moving away from film subsidies. Alaska’s governor, staring down a state fiscal crisis, signed legislation that repealed that state’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.”
Michigan has also ended incentives for the film industry and phased out funding for the state’s film office. In response, 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.”
While these are relatively conservative states under Republican control, critics of film subsidies come from both sides of the political aisle and all political perspectives. A 2013 report by the liberal Citizens for Tax Justice noted, “Not only do film tax credits cost states more money than they generate, but they also fail to bring stable, long-term jobs to the state.”
This admonition is, of course, reflected in the recently-released study which found that despite ongoing and even growing subsidies, New Mexico’s film industry has shrunk in recent years.
The need for ongoing, generous subsidies is in part due to the nature of the industry. It is highly mobile and needs little in the way of permanent infrastructure. At least if a state throws money at a car company or another manufacturer (an endeavor we at the Rio Grande Foundation discourage), the company bears the expense of building a manufacturing facility and training local workers.
The film industry, on the other hand, goes where the subsidies are most generous and can pick up and leave as soon as they change. This mobility and rapid response to subsidy cuts is often cited by film industry supporters in their critiques of Gov. Martinez’s efforts to scale New Mexico’s incentive program back in 2011.
Gov. Martinez and the New Mexico Legislature should embrace sound economic principles and stop throwing money at Hollywood’s biggest and wealthiest business. Taxpayers in one of America’s poorest states shouldn’t be subsidizing Disney, Time-Warner, Fox, and other profitable corporations.
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
"Liberty on the Rocks" is a no-host happy hour discussion and information-sharing session.
In October Libery on the Rocks will take place on Monday, October 19th from 6:00 to 7:30PM. We'll be returning to a prior location at the Slate Street Cafe which is located at: 515 Slate Ave NW in Albuquerque. A private room has been reserved for this event.
There is no cost for this public event, but attendees are encouraged to have dinner or drinks. Registration is not required but is much appreciated. Click here to register online – it's quick and free!Come celebrate liberty with us!
Whatever one thinks about Barack Obama, unemployment has fallen during his administration. It peaked at 10.0 percent in October 2009, nine months after the 44th president was inaugurated. Since then, it’s declined slowly but steadily, to 5.1 percent.
For a time, it appeared that New Mexico was following suit. Unemployment in the Land of Enchantment peaked at 8.3 percent in July 2010, then tumbled to 5.9 percent in the first month of this year.
That’s when the progress stopped.
By August, New Mexico’s unemployment rate climbed back to 6.7 percent. In Albuquerque, the rate bottomed out at 5.4 percent in the final month of 2014, then increased to 6.6 percent in August. (If joblessness is rising during a national recovery, what’s going to happen to New Mexico when the next recession hits?)
Fewer employment opportunities help explain the state’s dismal employment-to-population ratio for 25-to-54-year-olds.
Errors of Enchantment has written it before, and we’ll write it again: New Mexico needs an effective and aggressive economic-development strategy, implemented yesterday.
It’s no secret that the folks at Bernalillo County (at least the Democrat majority on the Commission) want to break up with the City of Albuquerque. For a variety of reasons, they say, being “roomates” with the City at their shared downtown office building. The idea is to snap up one of the many available office buildings to be found around downtown.
I honestly don’t know whether new County headquarters would be a good thing or not, but there are concerns not the least of what is the County’s burgeoning real estate empire (a full list of the County’s holdings can be found here). Several vacant properties are included. Perhaps it is time for the County to sell off some of its land holdings to raise funds for the new headquarters? At least the public should be given an idea that some of the properties currently owned by the County will be sold off once the new headquarters comes online. That’s the way most families do it.
The second, added benefit of selling some County property is that it could collect taxes as those properties return to private hands. After all, whatever property the County winds up buying will likely be pulled off of the tax rolls. It would be great to see something added back elsewhere.
Either way, there’s no rush for the County to buy. The local real estate market remains relatively depressed with more than 25% of downtown office space vacant according to recent data.
The economist Milton Friedman famously said (as have other economists) that there’s no such thing as a “free” lunch. Apparently, Dr. Friedman never visited New Mexico.
According to the National Center for Education Statistics, New Mexico has a higher proportion of its students on the federal free and reduced lunch program than any other state besides (thank you Mississippi). As seen in the chart we put together below, New Mexico has seen rapid growth in the proportion of students on the federal program, the parameters of which are often used as a proxy for poverty. Perhaps this is related to yesterday’s post on the dramatic decline in the number of working age New Mexicans who actually work?
On a personal note, many New Mexico schools now also provide breakfast in the classroom to all students regardless of need on top of the “free” lunch. If you are one of those crazy “old-fashioned” parents who actually decide to feed your kids at home (like me), wouldn’t that second breakfast at school conflict with Michelle Obama’s crusade against childhood obesity? Nah….
Recently, a report from the Pew Center had what can only be described as extremely troubling news for New Mexico’s economy. While the politicians emphasize the few jobs that have been created or the recent boost in tourism, the reality of New Mexico’s struggling economy is clearly shown in the data.
The following chart really tells the story. According to this chart from the Pew Center, New Mexico’s employment rate for 25-54 year olds dropped more dramatically than did the rate of any other state in the nation between 2007 and 2015. Sadly, New Mexico is “number one” (or 50th) with a “bullet” as the decline in people working in New Mexico exceeded the rate of decline in the second-worst state (Georgia) by a jaw-dropping 33%.
A lack of jobs, an unprepared workforce, and an out-migration of talented workers to other more economically-free states could all be blamed, but the fact is that New Mexico has definitely not recovered from the economic downturn.
Failed mayoral candidate Pete Dinelli has an op-ed in the Albuquerque Journal today, gushing about the “real leadership and courage” displayed by the voters who hiked their city’s gross receipts tax last week.
Dinelli whines that there was “absolutely no support from the business community and lukewarm support from a few city councilors” for the GRT increase, but he ignores the massive lobbying effort mounted by the New Mexico BioPark Society. When a dedicated group pushes an initiative in the face of zero organized opposition, a big win is usually guaranteed, particularly in a municipal election. But opponents of the tax hike grabbed 43.5 percent of the vote — hardly a ringing endorsement.
In addition, as Dinelli admits, turnout was abysmal. The Journal reports that it was lower “than in any citywide election since 1974, when Albuquerque’s modern form of government started.” Is there a giant reservoir of support by Duke City voters for a higher GRT to fund the BioPark? The truth is, we don’t know. One things’s for sure: With locals leaving, it’s clear that whatever Albuquerque’s political establishment is doing to enhance “quality of life” isn’t working.
We didn’t need more evidence that New Mexico’s welfare-for-Hollywood is a disaster. But we just got some.
Today the Albuquerque Journal reported that a new study, “conducted by the Canadian accounting firm MNP and [relying] on payroll data, industry interviews and financial reports filed with the New Mexico Film Office,” found that “total statewide spending on goods and services by … film and television productions declined from 2011 through 2014, with $118.7 million being spent in the 2011 budget year and $82.8 million being spent in 2014.” In addition, direct employment fell between the 2010 and 2014 fiscal years.
Curiously — or maybe, not — MNP’s study is not available on the website of the New Mexico Film Office. Nor is it accessible via the New Mexico Economic Development Department. The Foundation has requested, via phone and email, a PDF of the study. Stay tuned….
Update: We’ve obtained the study. Some findings not covered in the Journal‘s story:
* Production spending in New Mexico declined from $276.7 million in 2011 to $162.1 million in 2014.
* New Mexico residents accounted for just 46 percent of performing artists, 35 percent of “key creative” employees, and 24 percent of post-production staffers.
* Production spending by region of the state was 5.3 percent in the northeast, 2.5 percent in the northwest, 0.3 percent in the southeast, and 0.5 percent in the southwest. Congrats, taxpayers in Raton, Farmington, Hobbs, and Deming!
In 2015, New Mexico became one of the first states to largely abolish civil asset forfeiture. The legislature unanimously passed and Gov. Susana Martinez signed a bill requiring that a person be convicted of a criminal offense before having his or her property seized. The reform was perhaps surprising given the state's record: Since 2008, New Mexico law enforcement agencies have spent $24.5 million in seized funds.
Despite facing serious opposition from federal, state, and local levels of law enforcement, New Mexico's civil forfeiture reform has signaled serious changes for the state's criminal justice system.
Can New Mexico policymakers use this momentum from enacting civil asset forfeiture reform not only to defend their hard-earned gains but to provide a springboard towards additional, meaningful criminal justice reforms in the state? What other areas of reform are necessary to increase public safety and reduce the high cost of both crime and incarceration? How can New Mexico's reform serve as a model for the rest of the United States?
Please join the Charles Koch Institute and the Rio Grande Foundation for dinner and a discussion on the future of justice in New Mexico, featuring remarks from those involved in the reform process.
About The Event:
Yesterday, Governor Martinez announced that “tourism in 2014 generated the largest economic impact in state history, injecting $6.1 billion into New Mexico’s economy and supporting nearly 89,000 jobs.”
It’s good news for a state that has yet to recover from the Great Recession. (The Land of Enchantment has fewer jobs today than it did in early 2008.)
But it’s also a reminder that taxpayers foot much of the bill to market the tourism industry. This fiscal year, the Tourism Department will spend $13.6 million, while the budget for the Department of Cultural Affairs tops $30 million.
Do all those millions represent a wise “public investment”? Probably not. Earlier this year, the Mackinac Center’s Michael J. Hicks and Michael D. LaFaive found that in Michigan, “while government marketing of tourism activities does generate value for some industries, the benefits were puny and outweighed by the costs to the state’s economy as a whole.”
Even without tourism promotion — be it funded by government or the private sector — New Mexico would draw plenty of visitors, from hikers to Ufologists, foodies to art aficionados. The governor and legislators should recognize that there is no legitimate role for government to play in bringing tourists to the state, and pursue privatization-oriented reforms. With the industry on the rebound in New Mexico, there’s no time like the present.
It’s Election Day in Albuquerque. Two city council races are contested, and voters will decided the fate of several bond issues and charter amendments.
But the big faceoff today is between supporters and opponents of a GRT increase for the BioPark.
Here’s the Foundation’s case against the tax hike, which appeared last month in Albuquerque Business First.
What if you learned your father was a tyrant, a megalomaniac, a mass murderer? Jay Nordlinger’s Children of Monsters: An Inquiry into the Sons and Daughters of Dictators is a fascinating and at times ghoulish study of evil that may make your skin crawl, but it is also a book about people and the highly unusual situation these individuals share in common.
Nordlinger is a senior editor of National Review, writing the “Impromptus” column, and music critic of The New Criterion. In his book he surveys 20 of the most horrific dictators: Stalin, Mao, Idi Amin, Pol Pot, Saddam Hussein, and so on, and investigates what kind of lives their offspring have made for themselves. Some were loyalists who admired their father. Some actually succeeded them as dictator. A few were critics, even defectors. What they all have in common, Nordlinger shows, is the prison house of tainted privilege and the legacy of dubious deference. And from this new book, we learn a little more about tyranny, freedom, fate, choice, and people.
“A magnetic page-turner that nonetheless is complex and deep.”
—Mark Helprin, author of Winter’s Tale, A Soldier of the Great War, etc.
“Nordlinger’s exceptional investigation into the children of 20 modern dictators grips and convinces.”
—Andrew Roberts, author of The Storm of War, Napoleon, etc.
Nordlinger will also discuss the current political scene.
Nordlinger’s previous book was: Peace, They Say, a history of the Nobel Peace Prize. In his journalism, Nordlinger writes about a variety of subjects, including politics, foreign affairs, and the arts. He writes a column called “Impromptus.” In 2011, he filmed The Human Parade, with JayNordlinger, a television series bringing hour-long interviews with various personalities. National Review Books published a collection of his writings, Here, There & Everywhere. A native Michigander, Nordlinger lives in New York.
While at a recent conference with fellow free market think tanks, I sat down with Caleb Brown of the Cato Institute to discuss New Mexico’s successful reform of the State’s civil asset asset forfeiture laws.
The podcast is just a few minutes in length and can be found below.
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 17,908 projected jobs, 12,274 — 71.9 percent — were slated for right-to-work (RTW) states:
Twelve domestic companies based in non-RTW states announced investments in RTW states. Just two announcements went the other way.
Foreign direct investment was also highly skewed. Eighteen projects are headed to RTW states, but only four are to to occur in non-RTW states.
Marquee RTW wins included the decision by Mercedes-Benz to spend $1.3 billion on a “major expansion” of its factory in Alabama, Boeing’s announcement of 200 new employees to “produce 747 fuselage panels” in Georgia, and Blue Origin’s pick of Florida for “launch, manufacturing and support facilities for its Orbital Launch Vehicle program.” (Ouch — another loss for “Spaceport America.”)
* 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.
Michael Dukakis famously claimed that the 1988 election “isn’t about ideology; it’s about competence.”
Taxpayers in Albuquerque might want to remember that line, as they vote in this year’s election. In the last few days, KRQE has reported that:
* The city, which “declined to go on camera but admits [it] messed up,” aligned an iron fence enclosing Sierra Sunset Park improperly. Since then, neighboring property owner Liz Alvarez built a brick wall to “separate me from the city park and the sidewalk.” Earlier this week, workers returned to fix their mistake, leaving “a piece of Alvarez’s wall … on city property.”
* “[D]ozens of blue … lights have gone dark” on the Bear Canyon Arroyo pedestrian bridge, necessitating replacements that will cost $210,000.
* “[A]nywhere from 100 to 200 bottles” of urine, covered with old newspapers, are littering an alley near I-25 and Coal. “I called a couple times with the city,” resident Richard Reycraft told KRQE’s Lysee Mitri. “They kept saying they’d get at it and get at it, but nothing.”
* The city has used “its own employees rather than use a professional construction company” for maintenance projects at the Biopark. “Building the elephant barn, for example, took three years and cost $4.4 million. [The mayor’s chief of staff Gilbert] Montano said estimates show private crews could have done the work in a year for almost a million less.”
The Albuquerque Journal has a solid editorial today on the EPA’s impending decision on tightening the standard for ozone. Writing for CNBC earlier this year, Sens. Jim Inhofe (R-OK) and John Thune (R-SD) averred that the regulatory ratcheting “could be the most expensive regulation in history and place undue burden on counties still working to comply with existing obligations, as well as impose costly regulations on new communities.” The Journal notes that “the state’s high elevation, where increased interaction of sunlight, heat and pollutants create excellent conditions for producing smog,” is sure to push many New Mexico counties into noncompliance.
The National Association of Manufacturers predicts that the tighter standard will hammer New Mexico’s gross state product, kill jobs, and cause a big drop in average annual household consumption. The benefits? Not much. In June, the Committee on Energy and Commerce of the U.S. House of Representatives pointed out that the EPA’s own data show that “ozone concentrations have declined over 30 percent since 1980 and will continue to do so under the 2008 standard.”
The new federal fiscal year starts October 1, and without a budget in place, D.C. “will officially run out of the legal authority to spend money.”
With an egregiously underdeveloped private sector, the Land of Enchantment is at particular risk when Congress and the president can’t agree on a spending plan. As the Tax Foundation documented earlier this year, 36.6 percent of the state’s revenue comes from Washington:
The feds are $18.2 trillion in debt, but that hasn’t kept the moolah from flowing. In the last few weeks:
* The U.S. Justice Department awarded the New Mexico Department of Public Safety a $561,000 grant “to combat methamphetamine trafficking and related violence.”
* The Centers for Disease Control and Prevention gave the New Mexico Department of Health $850,000 to “stop prescription drug overdoses.”
* The U.S. Department of Commerce handed $1.4 million to the Siete del Norte Community Development Corporation.
* The National Institute of General Medical Sciences wrote a $11.6 million check to UNM “to find new ways to help people recover from strokes and traumatic brain injuries.”
Without an aggressive economic-development strategy, implemented yesterday, New Mexico will remain dangerously exposed to federal budget shenanigans. Isn’t it time to break free from D.C. dependence?