Recently, site-selection expert John Boyd was interviewed about New Mexico’s chances for getting the Tesla “gigafactory.” His comments were very enlightening. He said that manufacturing companies seek reasons to eliminate states when considering where to build major facilities, and the lack of a right to work law is at the top of the list. In the interview, Boyd again reiterated the need for right to work stating, “I can’t underscore how critical right to work status is.”
Unfortunately, despite polling data (recently released by Rio Grande Foundation) showing that nearly 85 percent of New Mexicans support such laws, they are controversial. In reality, such laws merely prohibit unions and employers teaming up to force new employees to join a union as a condition of employment.
While most people see voluntary association as an American birthright, many unions see it as a dire threat to their funding and political power. So they kill it every year in its first committee in Santa Fe.
Equally problematic is the “go-along” attitude of so many of New Mexico’s business leaders. With 6,000 Tesla jobs hanging in the balance, the need for our legislature to pass a right-to-work law should have been a centerpiece of the recent “Reinventing Our City” conference on Albuquerque’s economy, but it was hardly mentioned by the business and community leaders who spoke at the meeting. To be fair, Mayor Berry has repeatedly noted the importance of right to work in other venues.
Any serious discussion of how to turn around New Mexico’s economy must focus on big, difficult issues like right to work, serious tax reform and a dramatic rethinking of the way in which we educate our children and prepare them for the competitive 21 st century workforce.
The following article appeared in the Las Cruces Sun-News on July 20, 2014. Although legislation has passed the House (and will likely pass the Senate soon) to temporarily prop up the highway program and avoid an immediate crisis, the need for fundamental change in how America builds and maintains its infrastructure remains.
The next manufactured crisis coming from Washington, DC involves the federal highway program. According to news reports, the Federal Highway Trust Fund is on the cusp of insolvency, with a cash shortage looming before the end of July. Despite the deadline, lawmakers are at an impasse over how to replenish an account that funds the nation’s highway projects.
U.S. Transportation Secretary Anthony Foxx is warning states would, on average, see a 28 percent reduction in federal dollars to cover the costs of current needs if additional funding is not found. One potential source of funding is a hike in the federal gas tax.
In its current form, the federal highway program is financed through an 18.4 cent-per-gallon tax on gasoline and a 24.4 cent tax on diesel fuel. Unfortunately, while the gas tax more closely resembles a user fee than other taxes charged by Washington, it isn’t. If it were a user-fee, gas taxes would finance roads, bridges and other items that benefit motorists who pay the tax. Instead, over the past decade, Congress has diverted well over $55 billion of gas taxes to non-highway projects, most notably mass transit.
Whether you want more mass transit or less, the fact is that transit riders don’t pay the gas tax, rather motorists subsidize these systems nationwide. Ideally, Congress would create transportation policy under the principal of “user pays.”
Carl Graham recently sat down and talked with Fred Martino of KRWG TV in Las Cruces. The video of Graham's interview can be seen below. Feel free to fast-forward through the valentine to heavily-subsidized so-called "renewable" industry to the 5:25 mark when Graham's interview starts. After Graham's interview, there is an interesting (albeit one-sided) discussion of the land the State of New Mexico could receive due to the Organ Mountains Monument land grab.
Ride-share companies Uber and Lyft continue to face opposition at the Public Regulation Commission. Representatives of incumbent taxi cab companies have led lobbying efforts against the ride-share companies having published articles in various newspapers decrying the new companies’ plans to enter the New Mexico market.
Two articles, both written by taxi drivers, have appeared in the Albuquerque Journal alone. Concerns supposedly include “an uneven playing field” that gives ride-share drivers an “unfair” advantage.
Complying with complicated and arcane government regulations is expensive. Business models that avoid those regulations (often through the innovative application of new technologies) can provide better customer service at a lower cost. This is good, not bad for consumers.
The Rio Grande Foundation has requested 2013 payroll information for New Mexico’s 16 institutes of higher education (universities, junior colleges, and community colleges). The Foundation has posted this information online in order to make information that is technically “public” (available upon request) more readily-available than before.
The Foundation was able to access records for 15 of New Mexico’s 16 institutes with only New Mexico Institute of Mining and Technology (New Mexico Tech) failing to comply with the Foundation’s requests.
One institute, New Mexico Tech, failed to comply. A representative of New Mexico Tech stated that employee payroll information was available only in printed format at significant cost.
On the flip side, Rio Grande Foundation President Paul Gessing noted with appreciation that “University of New Mexico and Central New Mexico Community College both post payroll on a publicly-accessible website. This should be the model pursed by all schools”
Gessing continued, saying “New Mexico’s taxpayers support each of these institutes of higher learning. In this day and age with the modern Internet now 20 years old, important public information should be proactively published online for the public to access. While the Rio Grande Foundation is happy to request public records on the public’s behalf, it is unacceptable to not have such basic information readily-available or to not respond to repeated and varied requests.”
Click on the name of each school to access the 2013 payroll of that institute.
New Mexico State University (also includes Doña Ana Community College)
New Mexico Institute of Mining and Technology: “cannot comply”
There is no question that New Mexico faces significant economic challenges. Our overreliance on Washington's largesse combined with business-unfriendly tax and regulatory structures have finally caught up with us. This has led to New Mexico bleeding jobs and people to other states, particularly our economically freer neighbors.
This has led to desperation among some quarters. Democrat Sens. Tim Keller and Jacob Candelaria seem to have even proposed a special legislative session for the sole purpose of offering subsidies and incentives to the Tesla car company. The hope is to attract a proposed battery factory to the state despite no concrete indicators from Tesla as to where they wish to locate said factory or what their criterion are.
Unfortunately, these Democrat legislators are not the only ones willing to engage in bad economic policies for a short-term political benefit in the form of "jobs." The Doña Ana County Commission recently voted 5-0 to grant an industrial revenue bond (IRB) to a Turkish wire company to encourage the company to come to Santa Teresa. While this financing mechanism is somewhat complicated as a means of giving special advantages to recipients, the basic effect of an IRB is that it exempts the recipient, for up to 30 years, from property taxes on land, buildings, the useful life of equipment purchased with bond proceeds and an exemption from applicable gross receipts taxes on the purchase of project equipment.
The following letter appeared in the Albuquerque Journal Business Outlook section on Monday, June 30.
Another month and another sorry set of job “growth” data for New Mexico right there on page 2. In fact, this is the most important information that appears in the Business Journal. For those of you who missed it, New Mexico is the only of nine Western states that lost jobs year-over year from April 2013 to April 2014.
Nevada led the region with 3.7 percent job growth while Texas grew by 3.2 percent. These states’ economies are quite different. Nevada boomed during the 2000s and was hammered by the recession while Texas’ economy held relatively firm during the recession and has absolutely boomed since then. Both, however, are right to work states (no forced-unionism) and lack personal income taxes at the state level.
In a recent analysis of New Mexico’s performance on a variety of “business friendly” or economic freedom rankings, New Mexico’s average ranking was 33rd while Texas’ average ranking was six and Nevada’s 18. Utah, Colorado, Arizona, and Oklahoma also scored consistently and substantially better than did New Mexico.
New Mexico has a unique and wonderful history, but it also has a history of anti-freedom economic policies, poverty, and dependency. Until that mentality changes in Santa Fe and the Legislature and PRC adopt policies that unleash rather than constrict markets, New Mexico’s economy will underperform, poverty will be high, and our most-educated young people will leave the state.
Paul J. Gessing
Rio Grande Foundation
PO Box 40336
Albuquerque, NM 87196
"Liberty on the Rocks" is a no-host happy hour discussion and information-sharing session.
We recently changed locations for this event. From now on, Liberty on the Rocks will be held at Scalo Northern Italian Grill which is located in Nob Hill at 3500 Central Avenue SE in Albuquerque. A private room has been reserved for this event.
To assure that we have our own private room, Liberty on the Rocks is moving to the third Thursday of each month. In July, this means it will take place on Thursday, July 17th from 6:00 to 7:30PM.
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 fast and it's free!