Rio Grande Foundation submits comments to NM PRC in support of NM Gas Co. sale to TECO Energy

New Mexico Public Regulation Commission
PO Box 1269
Santa Fe, NM 87504-1269
Case number: 13-00231-UT
prc [dot] records [at] state [dot] nm [dot] us

Comments to the New Mexico Public Regulation Commission on the purchase of New Mexico Gas by TECO Energy

On behalf of the Rio Grande Foundation, utility customers, and advocates of freedom throughout New Mexico, I urge you to approve of the proposed TECO purchase of New Mexico Gas Co.

For starters, New Mexico Gas is currently owned by an equity or hedge fund. This was always expected to be a temporary situation. It would be far better for New Mexico Gas to be owned by TECO, a utility company with a 115 year track record of serving its customers.

For those who are concerned about rates and prices, TECO has proposed that NMGC customer rates will be frozen until at least July 2017. NMGC will retain its name, and its headquarters will remain in Albuquerque. While New Mexico’s economy has struggled mightily in recent years, TECO’s management is “bullish” on New Mexico. The company’s CEO John Ramil recently was quoted as saying, “The Company is looking at New Mexico to be a growing state, and New Mexico Gas Co. to continue its growth.
Given the onslaught of negative economic news from our state in recent years, it is wonderful to have a business that sees our state’s growth potential looking to come here and invest.

A positive attitude is an important factor, but the real potential for New Mexico lies in TECO’s willingness to replicate its successful Florida model of investing in filling stations for vehicles that use clean natural gas produced right here in New Mexico. Due to broader market forces and newly-discovered supplies, natural gas prices remain at historically-low levels, spurring calls for increased investments in fueling stations.

In fact, whether the fuel in question is gasoline, electricity, or natural gas, a large national network of filling stations is an absolute necessity in order for alternative fuels to become widespread.

TECO has a proven track record and stated interest in investing in infrastructure and the communities it serves. NMGC which is currently owned by a hedge fund with a business model that involves purchasing and “flipping” under-valued assets is unlikely to make such investments.

One final point on the importance of the NMGC sale is the need for government bodies to respect free markets and a business’ desire to sell a company that does business in New Mexico to another business. It is one thing for regulatory bodies to stand in the way of such transactions for tangible, specific reasons. It is another thing to stand in front of these business transactions out of abstract fears.

My organization has worked assiduously to research and explain how New Mexico can improve its economy. While there are myriad issues to overcome before our state becomes truly business-friendly, there is no easier way to become a pariah among investors and businesses than to be seen as a place where once you have invested resources, you are unable to sell those investments.

Venezuela and Argentina are just two nations whose economies have suffered greatly from such capricious state actions. New Mexico should not fall into that trap.

I urge the PRC to allow the proposed sale to go through.

Sincerely,

Paul J. Gessing
President
Rio Grande Foundation
PO Box 40336
Albuquerque, NM 87196
505-264-6090

Former Attorney General Hal Stratton to join Rio Grande Foundation Board: Co-Founded Rio Grande Foundation in 2000

(Albuquerque) Hal Stratton, co-founder of the Rio Grande Foundation, has joined the organization’s board of directors of New Mexico’s only free market think tank bringing decades of leadership as a voice for accountable and constitutionally-restrained government.

In 1978, at the age of 27, Stratton ran for a seat in the New Mexico House of Representatives in Albuquerque’s District 29 and defeated the House Majority Whip. He was served a total of four terms in the New Mexico House.

In 1986, Stratton was elected to the office of New Mexico Attorney General. He is the only Republican to be elected to that office in New Mexico since 1928. Stratton was limited to one term as New Mexico Attorney General by the New Mexico Constitution and served from 1987 through 1990.

In 2000, along with George Mason University Economist Harry Messenheimer, PhD, Stratton co-founded the Rio Grande Foundation which was and remains New Mexico’s only free market think tank.

In March, 2002, Stratton was nominated by President Bush to be Chairman of the U.S. Consumer Product Safety Commission (CPSC). He served in that position until resigning effective July 15, 2006.

During the course of his tenure at the CPSC the agency implemented the largest recall in U.S. history involving children’s vending machine jewelry and imposed the largest penalty on an industry stakeholder for failure to report the distribution of dangerous products. Nonetheless, the fiscally-conservative Stratton actually reduced the CPSC’s total budget during his time in office.

Said Rio Grande Foundation president Paul Gessing, “When it comes to New Mexico’s economy and politics, Hal Stratton is one of the most knowledgeable people around. We are thrilled to have him on the board of the organization he co-founded more than a decade ago.”

Of his officially re-joining the Rio Grande Foundation, Stratton said, “Since returning to New Mexico after leaving the CPSC, I have been extremely impressed with Paul Gessing’s leadership of the Rio Grande Foundation and the impact the organization has had on public policy in New Mexico. I hope to further the organization’s mission on behalf of limited government and free markets in the Land of Enchantment.”

Gessing and Stratton are the only New Mexico signatories of the Statement of Principles of “Right on Crime.” Signatories to the letter which also include Ed Meese, III, Jeb Bush, Newt Gingrich, and Grover Norquist, support common-sense, conservative criminal justice reforms.

Stephen Moore’s presentation on how to turn around both New Mexico’s and the US economies

Stephen Moore was, until recently, an editorial board member of the Wall Street Journal and is now Chief Economist at Heritage Foundation. He spoke to a luncheon sponsored by the Rio Grande Foundation about what needs to be done to turn New Mexico's economy around as well as what can be done to improve the United States economy.

Click here for Moore's slides. Video of Moore's presentation can be found below:

Stephen Moore discusses economic prescriptions for New Mexico and the United States on March 14, 2014 from Paul Gessing on Vimeo.

For even more information, check out the story Capitol Report New Mexico published on the event which included an interview with Moore.

Only in New Mexico: $166,000 for study that doesn't exist

Only in New Mexico and only under former Gov. Bill Richardson would the government hire consultants for a study that doesn't exist. I was interviewed by KRQE Channel 13 for a story relating to Richardson's efforts, specifically the commissioning of a $166,000 feasibility study, to determine whether New Mexico would be a likely location for an NFL team.

Now, I am a big NFL fan (Go Steelers!), but I could have outlined why New Mexico can't support a team for a tiny fraction of that cost. After all, the Metro population of Albuquerque is about 750,000, making it the smallest of any pro-sports town in the nation outside of Green Bay, a city located in a relatively populated, wealthy state, and not too far from Milwaukee. This is a list of the 10 smallest pro-sports cities by state.

See the report from KRQE below which ultimately came to the same conclusion (and was thus spiked without so much as a written report being issued) for about $165,975 more than I just spent to figure this out:

Apples-to-Apples, New Mexico’s Government Employees Already Make More: Gov. Martinez Should Consider Vetoing Wage Hike

(Albuquerque) Prior to the 2014 legislative session, the Legislative Finance Committee called for 1.5 percent pay hikes for all New Mexico government employees. Gov. Martinez proposed more modest pay increases. Rather than seeing pay increases for all state employees, Martinez planned to boost pay for about one-third of public workers. New teachers would have received higher pay.

In a “compromise” plan the likes of which are only found in government, the Legislature-passed- budget includes 3 percent cost-of-living salary increases for state agency workers and teachers.

Judges, district attorneys, state police and motor-transportation officers would receive 8 percent raises while prison guards, juvenile-justice officers, social workers handling child abuse cases and educational assistants in schools would get 6 percent pay increases.

In other words, the Legislature took its own proposed pay hikes and doubled them…or more.

Ironically, these proposed pay hikes come at a time of conflicting evidence over whether New Mexico’s government workers are overpaid or underpaid.

According to a recent report from New Mexico’s Personnel Office, “New Mexico’s average pay for 115 of 151 (government) job classifications trailed the average pay of the nearby states. Some workers’ average pay trailed the average pay in neighboring states by more than 20 percent including plumbers, biologists, engine mechanics, and chemists.”

The Rio Grande Foundation, on the other hand, analyzed data from the federal Bureau of Labor Statistics and Department of Labor to determine the earnings and compensation differences among employees of similar characteristics, skill sets, and occupations within the public and private sectors.

Using a mathematical tool called regression analysis to isolate relevant factors relating to employee pay including education levels, time of services, and more, the Foundation produced a careful analysis of data on both total compensation and benefits. The study finds that with benefits included, public workers in New Mexico make over 8 percent more in total compensation than a similar worker in the private sector.

Said Rio Grande Foundation president Paul Gessing of the differing approaches to government employee pay, “Gov. Martinez would be entirely justified in vetoing these pay hikes which went far beyond her original budget proposal and which unnecessarily increase the compensation disparity between government and private sector workers in New Mexico.”

Incredible 31 percent of NM budget derived from oil and gas

Thanks to the show Breaking Bad, many Americans now realize that they don’t need passports to visit New Mexico. We surely appreciate the publicity. But New Mexicans have reason to be even more grateful to another industry.

The New Mexico Tax Research Institute (NMTRI) recently released a study entitled Fiscal Impacts of Oil and Natural Gas Production in New Mexico. It’s impressively researched, including detailed county-level analyses. The results show that absent the tremendous financial impact of the oil and gas industries, New Mexico would be a far different, poorer state.

NMTRI found that 31.5% of the state’s General Fund revenues—the primary source of funding for state public schools and higher education—come from taxes paid by the oil and natural gas industries. The General Fund also pays for state public welfare programs, environmental protection, tourism advertising and support, road construction and maintenance, and many other functions of state government.

Growth best cure for Income Inequality

Income inequality is a popular discussion topic these days. President Obama made it a central talking point in his recent State of the Union address and policy initiatives – most notably minimum wage hikes – have been proposed as means of reducing such inequality. Unfortunately, while inequality has unquestionably grown in recent years, there are few proven solutions and a lot of heated rhetoric.

It is worth noting that growing inequality is not unique to the United States. According to The Economist, inequality around the world has been growing since the mid-1980s in all areas except impoverished sub-Saharan Africa and the former Soviet Union. In other words, to an extent, inequality is a sign of economic development and strength. There is truth to Franklin Roosevelt’s observation that “Capitalism is unequally divided riches while socialism is equally divided poverty.”

In other words, people are not equal. Their skills and work ethics differ greatly. In a free society, we will all be more prosperous overall, but some will be much more prosperous than others.

Legislative update interview: latest from the 2014 session

I sat down with Margaret Ortiz at TBN for a discussion of the issues moving through the 2014 legislative session. Things are happening fast at this point at the Roundhouse, but this interview remains relevant as it touches on the big, controversial issues facing legislators:

Issues and Legislation Facing the 2014 Legislation from Paul Gessing on Vimeo.

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