As I blogged recently, New Mexico's government employees are suing the state in an attempt to head-off reduced pension benefits and longer work requirements prior to retirement. The Rio Grande Foundation has previously exposed New Mexico's bloated state and local government bureaucracy. I pull the items together in this new opinion piece.
Rio Grande Foundation board member and commercial real estate expert Vic Bruno recently presented his thoughts on the intersection of public policy and the Albuquerque commercial real estate market. His presentation focused on the current economic situation as it is affecting Albuquerque and how past events and policy decisions led us to where we are today. He also addressed how we move forward and ways that policymakers and individuals acting in the commercial real estate market can thrive in this new paradigm.
The slides used in Bruno's presenation can be found here
Video of the presentation is posted below:
The Rio Grande Foundation's investigative journalist, Jim Scarantino, continues to uncover problems at New Mexico's State Investment Council. The tale of Earthstone and the SIC's $9 million investment in that company -- in part the taxpayer investment was supposed to be used to build a factory in Santa Theresa, New Mexico that was never built (Scarantino reported on this here).
The unique aspect of Scarantino's latest article, "Friends in High Places," Anatomy of the SIC’s Bad Investment in Earthstone International" (which is available here) is that the SIC's analysts actually tried to stop this investment from happening, but they were overruled by the Governor who had a strong desire to get the owners of Earthstone (well-heeled political donors to the Governor) some significant funding. As Scarantino reports:
The SIC knew that Earthstone was a bad bet. But only two months later, on January 27, 2004, the SIC announced that it would extend Earthstone $9 million in a convertible loan. What happened?Documents in the SIC’s files reveal that promptly after being turned down by the SIC, Earthstone’s representatives began contacting other members of Richardson’s administration, particularly Rick Homans, who was then Richardson’s Economic Development Secretary. So, Governor Richardson, who exerts total control over the SIC, an entity that manages billions of New Mexicans’ taxpayer dollars, forced the SIC to go along with the Earthstone investment.
Unfortunately, as Scarantino reports, the story does not end with the loss of 9 million taxpayer dollars. Despite having not built its factory and not providing any new jobs for New Mexicans, Earthstone recently received another $3.5 million from the SIC.
Tune in to AM 1550 -- New Mexico's newest talk radio station which now has the call letters KIVA -- from 9am to 10am this Saturday morning. Jim and I will be interviewing Richard Romero and discussing his run for Mayor of Albuquerque. Read a recent op-ed from Richard that appeared in the Albuquerque Journal.
Not surprisingly, much of the so-called federal "stimulus" is being allocated towards "green" projects. One such item here in New Mexico is the replacement of traditional road lighting with energy-efficient LED lights. Reporter Kate Nash of the Santa Fe New Mexican asked me about the merits of this plan and quoted me extensively in her recent article on the topic. Feel free to post your own comments here.
The most recent episode of "Speaking Freely" has been uploaded. This week, Jim interviews RGF Board member Vic Bruno regarding his upcoming event on June 24. For the rest of the show, Jim interviews District 5 City Council candidate Dan Lewis.
Lewis who is running against Councilor Michael Cadigan discusses why he is running to represent District 5 and his overall vision for the city.
When I picked up this morning's Albuquerque Journal, I was stunned to see the headline, "Workers Sue over 'Wage Tax.'" The story detailed a lawsuit being brought against the state by AFSCME, the American Federation of TEachers, the NEA, and other uniions who apparently feel that their members should be exempted from both economic reality and state law.
Certainly, New Mexico's budget faces cuts given the tough economic times and the Legislature, aware of this fact and not wanting to raise taxes or lay off large numbers of government workers, decided to increase the amount government workers must contribute to their pensions. Certainly, this would not raise any eyebrows were similar cuts made in the private sector. After all, businesses have limited resources and when the economy goes south, layoffs, wage freezes, and benefit reductions are part of life.
But unionized government workers don't live in the real world. Rather, they know that governments can be influenced politically -- making it doubly impressive that the Legislature chose to place part of the burden for tough economic times on this politically-powerful lobby. Unfortunately, while it seems doubtful that the unions have much of a case, it would seem that their suit is designed to raise the costs, both political and financial, of such legislative actions by fighting the battle in court.
We at the Rio Grande Foundation have done a great deal of work on the issue of New Mexico's bloated and overpaid government work force. Studies can be found here and here. Hopefully legislators stick to their guns, and realize that New Mexico's bureaucracy remains bloated and a prime target for future cuts. There can be no doubt that well-financed unions -- financed with New Mexicans' taxpayer dollars -- will fight to avoid any cuts and will do so every step of the way because they don't live by the same rules we do.
(Albuquerque) – Victor Bruno is one of the best-known and most respected commercial real estate brokers in Albuquerque and the entire state of New Mexico. He has been involved in commercial real estate in Albuquerque since 1973. Bruno will be discussing the local real estate marketplace and how national and global events are impacting the industry. A member of the Rio Grande Foundation’s board of directors, Bruno will especially emphasize the public policy decisions that have led us to the current situation.
• What: Discussion of current and future issues facing Albuquerque’s commercial real estate market with Victor Bruno
• When: Wednesday, June 24 from 7am to 8:15am;
• Where: The Albuquerque Museum located at 2000 Mountain Road, NW at the edge of Old Town Albuquerque;
• Cost is $10 payable at the door or at the Rio Grande Foundation website, continental breakfast will be provided.
Bruno’s presentation, “Don’t worry, be wary,” will help the general public and the practitioner alike learn the answers to the following questions.
• Who Are the Players? .... A description of who the many players in real estate are and what roles they play. (this will include government and politicians as players);
• What Happened? .... A reflection on the bubble years and how we got there;
• Where Are We Now? .... An update on present conditions (to include not only economic stats on real estate but a brief run down on local government overreach – issues like impact fees, smart growth, downtown revitalization, west side mess, Mesa del Sol and Suncal);
• Where Are We Headed? .... Nearly everyone says commercial real estate is about to tank and if so, why?
• What should we do next?
To attend this event, please reserve your seat for $10 at our website at http://www.riograndefoundation.org/pg_di.html. If you’d like to pay at the door, email us at rsvp@riograndefoundation.org or call us at 505-264-6090.
The Albuquerque Journal has done some excellent reporting on the state's supercomputer and an excellent new study by the Legislative Finance Committee. Unfortunately, such detailed reporting has not been seen on a statewide basis.
So, in an effort to explain the economics of the supercomputer and just how little sense it makes, I wrote an op-ed that appeared in the Las Cruces Sun-News. In summarizing the case against the supercomputer, I wrote:
The fact is that businesses and universities that expect to benefit from such projects should form their own privately-financed consortiums if a supercomputer is indeed a worthwhile enterprise.One reason for this philosophy is that private businesses putting up "real" money -- whether that is $13.8 million or millions more -- have a very real incentive to make such a costly investment only if it is absolutely necessary and will lead to real productivity gains.
Jim Scarantino and I sat down this weekend with RJ Berry to discuss his candidacy for Mayor of Albuquerque. The interview is available on the Foundation's website.
If you haven't already seen today's Albuquerque Journal, check out my column on the State Investment Council. While we have certainly critiqued the SIC's investment practices in the past, this column focuses on reforms moving forward and how New Mexicans would best benefit from these massive pools of money.
Reform ideas range from simply removing the SIC from the control of one politician (The Governor) to the more radical option of returning significant portions of the money to the citizens of New Mexico as is done in Alaska. Regardless of what is done, something needs to be done. Because this money seems to come from nowhere -- it comes mostly from oil and gas -- the average citizen and even politician seems to treat it as being "easy come, easy go." That attitude needs to change and some systematic changes will stop the waste and abuse that has taken place recently.
Yesterday, Tom Bowles, Chairman of the N.M. Computer Applications Center Board had an opinion piece in the Albuquerque Journal. In his piece, he criticized the Legislative Finance Committees recent studies of the Supercomputer. The LFC study can be found here.
The problem with Bowles's article is that he never really addresses the core issues with this supercomputer, that is it's high cost (a total of $36 million over six years)relative to its relatively small benefit as previously pointed out in the Journal:
• The supercomputer unveiled in January 2008 hasn't produced the kind of revenue projected. Including the purchase price, the operation has cost the state $13.8 million, but has taken in only about $300,000 in cash;
• The project's ability to raise enough money to operate indefinitely is in question. Three research universities, two national laboratories and one nonprofit have used the supercomputer at no cost since July 2008, and the supercomputer isn't currently generating any revenue.
Bowles claims that the supercomputer will be self-sustaining once taxpayers have coughed up $36 million, but he never explains just how taxpayers will experience any real benefit from this costly project. That is the first thing that any government program should be justified upon, not an afterthought.
Back in early March, the Albuquerque Journal published a glowing editorial about New Mexico's supercomputer. I responded to this with a blog posting saying, in essence, that the jobs produced by the computer were minimal and that taxpayers are still getting ripped off.
How quickly times change! On Sunday, the Journal changed its tune completely with this front-page, above-the-fold story which detailed how the computer is "living on state handouts" and explaining that "$115 million will be required over a seven-year period for recurring and nonrecurring costs." Yesterday, the Journal continued its full-court-press against the supercomputer with this editorial which argued that the state needs to "do better" when it comes to this deal or we might have to "pull the plug."
For the record, we first criticized the supercomputer back in 2007 and included it among the porky items in our 2008 Piglet Book. Too bad no one consulted us before embarking upon this boondoggle.
If you've been reading this blog over the last week, you are probably aware that the guys from "Motorhome Diaries" were in town over the weekend. I sat down and discussed the Rio Grande Foundation's successes and the overall state of liberty in New Mexico. Check out the interview below:
No, this is not a sales pitch for anything -- except my writing I suppose. The Examiner is a website that aggregates locally-focused content and allows users to choose the content that interests them. There are "left-liberal", "libertarian," and "immigration" Examiners so that you can look for the content on local topics of interest that you want. I am the Albuquerque "conservative" Examiner.
Some of you may even consider yourself an expert on particular issues may want to consider writing as an Examiner on a particular topic for the site. Check here to find potential openings. They do pay, but only if people actually read what you write. Anyway, it is yet another way to access local content and I'm sure the site will only grow and improve over time.
With New Mexico's State Investment Council (SIC) mired in scandal and under attack from the Rio Grande Foundation, the media, and others concerned about rampant mis-steps and improprieties, Governor Bill Richardson has taken a first step by firing a private equity adviser under scrutiny in a kickback probe of New York state’s pension fund. This is a good start and a victory for the Rio Grande Foundation, but firing one investment is not going to solve the systemic problems inherent in the SIC.
Sen. Steve Neville's legislation (SB 460) that would have expanded the SIC and taken it from under the thumb of the Governor was, not surprisingly, vetoed by Governor Richardson. Of course, expanding the SIC will have some positive impact, but restricting the Council's discretion to invest for job creation is also an important change that could be made. Ultimately, rather than letting government bureaucrats control massive pools of money, we need to ask ourselves whether these resources would be better managed by individual New Mexicans making decisions in the broader economy.
Along with gubernatorial candidate Greg Zanetti and others, Peter St. Cyr interviewed me about the Tea Party movement and what it means, particularly moving forward. Check out Peter's thoughts and interviews w/ Zanetti and I here.
If you didn't make it out to one of the tea parties around New Mexico, you missed out on an incredible experience. First and foremost, regardless of media reports, turnout in Albuquerque -- where Jim Scarantino and I broadcast for four hours on AM 1550 -- was between 5,000 and 10,000. In fact, according to the Albuquerque Tea Party group which organized the event, 7,000 people signed up for the group's mailing list.
Here's a good report from Albuquerque (including a photo of us at the radio table). According to news reports from Santa Fe, Roswell, Las Cruces, and Farmington attendance was heavy all over the state.
Hopefully, this is the start of some real grassroots action in New Mexico, a state that has not had enough non-partisan pro-taxpayer activism for too long. Participants in the tea parties who want to get some great training in how to build a sustained grassroots, pro-taxpayer movement should consider attending the National Taxpayers Union conference in Washington in June. Contact us at 505-264-6090 or info@riograndefoundation.org if you would like to receive this training.
See you today in Albuquerque. I look forward to continuing to work on issues of limited government and personal responsibility with tea party activists statewide.
ALBUQUERQUE
April 15, 2009
4-7 p.m.
Independence Grill (Montgomery one block west of Louisiana)
Please bring a can of pork and beans, a box of red or green tea, and a home-made sign.
www.albuquerqueteaparty.com
ALAMOGORDO
April 15, 2009
11:00- 1 p.m. and 4:00- 6 p.m.
10th and White Sands Ave. NW corner
Contact: edomey31@yahoo.com
ARTESIA
April 15, 2009
5:30 p.m.
Elks and Ritter Parking lot on South Roselawn Ave.
Contact: dorothy@tberryweb.com
AZTEC
April 15, 2009
12:00 p.m.
100 S. Oliver at the County Complex
Speaker: Rep. Paul Bandy
Contact: reidabaca@aol.com
CARLSBAD
April 15, 2009
5:00 p.m.
Courthouse lawn
Contact: tak555@yahoo.com
CLOVIS
April 15, 2009
12:00 p.m.
Curry County Courthouse (Main Street between 7th and 8th)
Tea will be provided, please bring your own lunch.
www.clovisteaparty.com
Contact: pennyandjd@aol.com or timlashley@msn.com
FARMINGTON
April 15, 2009—2 events
12-6 p.m. (speakers from 12-1:30)
Farmington Gateway Museum (3041 E. Main St. East side of parking area)
Please bring a non-perishable food item to be donated to ECHO food bank and a homemade sign.
4-6 p.m.
Southwest Shooting Authority
1301 W. Main Street
Speaker (at both): Congressman Steve Pearce
Contact: Farmington.tea.party@hotmail.com
HOBBS/LOVINGTON
April 15, 2009
4:00 p.m.
Lea County Event Center
Contact: taxpayersforjustice@gmail.com
LAS CRUCES
April 15, 2009
4:30-8 p.m.
Loretto Mall (Main St. and Lohman)
Group will be marching to Johnson Park at 5:00 p.m., down Church St., past City Hall and Post Office. Rally in Johnson Park by Brannigan Library will begin at 6:00 p.m.
Please bring tea bags and wear red, white and blue. Food will be for sale.
Contact: lcnmteaparty@yahoo.com
LAS VEGAS
April 15, 2009
11:55
City Hall
Speaker: Naomi R. Montoya
Group will go to VFW after marching at City Hall.
VFW Post 1545 Building on 146 Mills Ave.
Contact: paulmaes7@hotmail.com
MAYHILL
April 15, 2009
12:00- 2 p.m.
Storefront’s Mayhill Café and Feed Store
Parking at the Mayhill Baptist Church & Community Center
Speakers: R.L. Posey and Patt Patterson
Contact: pattnpat@gmail.com or (575) 687-3035
RATON
April 15, 2009
12:00- 1 p.m.
Ripley Park
Hot dogs will be served, please bring non perishables to share.
Contact: myspace21@hotmail.com or www.nmyouth.zoomshare.com
ROSWELL
April 15, 2009
6:00 p.m.
Courthouse on North Main
Contact: jnrothschild@hotmail.comor (575) 347-9935
SANTA FE
April 15, 2009
5:00-6:30
On the Plaza
Bring friends, signs and canned goods to be donated to the food bank. There will be live music and fun for the kids.
Speaker: Governor Gary E. Johnson
Contact: www.santafeteaparty.blogspot.com or santafevictory@live.com
SILVER CITY
April 15, 2009
12:00- 7 p.m.
Gough Park
Please bring tea bags, flags, posters, chairs, water and friends.
Contact: silvercityteaparty@hotmail.com or (575) 534-8285
TAOS
April 15, 2009
11:30 a.m.- 1:30 p.m.
Taos Plaza
Bring tea bags and canned goods; these will be donated to the Taos food bank.
Contact: dobbsiemg@aol.com
TRUTH OR CONSEQUENCES
April 15, 2009
12:00 p.m. – 1 p.m.
Triangle Park at Date and Broadway
Contact: 894-0747
RUIDOSO
April 15, 2009
4:00 pm - 7 p.m.
Wingfield Park
Contact: ruidosoteaparty@windstream.net
The 2009 legislative session is in the books and -- particularly compared to recent sessions -- this one was relatively successful for both doing good (improved transparency and reforming government pensions) and not doing bad (like raising taxes). I discussed the accomplishments and shortcomings of the session w/ Rep. Janice Arnold-Jones and hosts Nicole Brady and Dennis Domrzalski on Eye on New Mexico this Sunday morning. Check out the 15 minute video here.
Here at this site, we have been tracking whether or not our New Mexico state and local political leaders have come to grips with the ongoing fiscal crisis. The answer, repeatedly (here, here, and here) is "no." Of course, that is because politicians live in an alternate reality where unlimited quantities of money comes from the work of others and debt is almost unlimited.
Anyway, the most recent example of this "what, me worry?" mentality is the City of Albuquerque's replacement of perfectly good street signs. I have noticed this in particular on Coors Blvd. where the usual green signs are being replaced by blue signs with Mayor Marty's beloved "Q" in black in the background. I have no idea how much this is costing Albuquerque taxpayers, but according to this bill from City Council, the city was proposing to spend $2.5 million on street sign replacement.
Obviously, we're talking about real money here and in difficult economic times, when City Council is considering extending (without voter approval) a 1/4-cent transportation tax, it would seem that this is money that could be better spent elsewhere.
If you took a close look at the Rio Grande Foundation's 2008 Piglet Book on wasteful government spending, you would have seen on page 6 our critique of New Mexico's supercomputer at a cost to taxpayers of $11 million.
Well, a few weeks ago, the Albuquerque Journal editorialized in glowing terms about the jobs supposedly being created by the State's $39 million supercomputer. It made me wonder whether the State got ripped off for their computer or whether, as is so often the case, the government officials allowed taxpayers to get ripped off. Well, it turns out that it was basically the latter. After poking around and asking some questions, I discovered that the computer really cost taxpayers $42 million because the State had to "fund the creation of a permanent office, build more college gateways, and hire staff...and design a planned central office for the project and to buy equipment for the gateways on college campuses."
So, the computer will actually cost taxpayers about 4 times the advertised price. No surprise there; this is government we are talking about. Which leads me to the Journal's aforementioned endorsement of the project. According to the editorial: "Gov. Bill Richardson announced two deals centered on Encanto and its New Mexico Computer Application Center that could add 100 jobs and a home base for DreamWorks Animation. Insigniam Innovation Discovery Center, a health care consulting firm that recently moved from San Francisco, will use the supercomputer to develop solutions for improving health care quality and value."
100 jobs may sound like great news in today's economy, but when you look at the unseen, that being the jobs that would have been created in the private sector had the $42 million been left in the economy in the form of lower taxes, it is hard to believe that New Mexico's economy would not have been better had New Mexico not purchased this expensive toy. After all 100 people making $50,000 a year would have to work for 8 years just to earn back the investment. That assumes of course that these people, obviously all educated in high-end computers, would have had nothing better to do in the economy without the computer.
More likely, what will happen is that for a few years there will be a few highly-publicized jobs created and after 4 or 5 years when this is no longer the latest and greatest, those jobs will disappear and the taxpayers will have a white elephant on their hands. So it goes in the Land of Enchantment.
If you didn't already see it in today's paper, check out the editorial which cites New Mexico's bloated and overpaid government bureaucracy and mentions our study, "The Government Gravy Train," on the topic.
Thanks to the Journal for noticing our work and for realizing that in tough times, government needs to sacrifice at least as much as the rest of us do. Of course, the Journal deserves kudos for speaking out on the issue and has done its own excellent work in exposing the exorbitant salaries of some of New Mexico's "exempt" politically-appointed government workers. Check that site out here.
To say the state is going through tough economic times is a bit trite at this point, but as I've written recently, it seems like many of our leaders in Santa Fe just haven't gotten the memo. Another example of this was brought to my attention by Santa Fe New Mexican reporter Kate Nash who has been looking at efforts moving forward in the current legislative session that would create two new cabinet-level agencies. One would take all vehicle-related functions from the Motor Transportation Division of the Department of Public Safety and the Motor Vehicle Division of the Taxation and Revenue Department and roll them into one agency called the Department of Motor Vehicles.
The other, which the Senate approved over the weekend, would create an Hispanic Affairs Department. As I discuss in Nash's article, "This isn’t the time to create more layers of government. During tough economic times and with a massive $600 million deficit facing the state, the last thing we need is to hire more highly-paid cabinet-level state bureaucrats.”
Rather, the state should eliminate “race-specific departments, agencies, and programs, not creating more of them. Besides, we already have a Cultural Affairs secretary.”
Creating two new cabinet-level agencies may not immediately increase the size of the hole in New Mexico's budget, but they will inevitably increase spending as bureaucrats inevitably receive raises as they move up the state salary pecking order. Hopefully, the sponsors of these efforts realize that their pet projects are simply not pressing matters in the best of economic times and should be pushed to the side without much need for debate in these difficult budgetary times.
Recently, our investigative journalist Jim Scarantino reported on the State Investment Council's misguided investment in the Small Smiles dental chain. I also published on op-ed on the subject.
In his follow-on report on the State's investment in Small Smiles, Scarantino dug deeper and even requested emails from New Mexico's top investment officers in which these highly-compensated officials express complete ignorance of how they are investing taxpayers' money. This is just the tip of the iceberg. The SIC has not adequately tracked its investments on behalf of New Mexicans' and the problems are beginning to bubble up. Stay tuned!
A few weeks ago, in the wake of Governor Richardson's "pay-for-play" scandal, the Wall Street Journal contained an article outlining some of the political scandals facing New Mexico and discussing ways in which the state's open political process has created problems for the state's political culture.
As part of the Rio Grande Foundation ongoing efforts to promote transparency in New Mexico government, I point out in a letter to the editor, published today, that New Mexico suffers from a lack of transparency moreso than a lack of ethics and that legislators have successfully kept the entire system opaque and citizens' ignorant through a lack of information.
Perhaps you missed it in all the hoopla over President Obama's Inauguration on Tuesday, but Governor Bill Richardson delivered his State of the State address on Tuesday as well. You can read the text of that address here.
While admitting that the state faces hard times financially and laying out a few ways to resolve those problems, Richardson laid out an extremely ambitious agenda which, if adopted, would result in massive tax increases and higher energy prices for New Mexicans.
I discussed the Governor's address on Artesia's KSVP 990AM. Listen here.
Recently, the Rio Grande Foundation took a close look at the investment practices of New Mexico's State Investment Council (SIC). This work turned in to an opinion piece that was subsequently published in the Las Cruces Sun-News.
Not surprisingly, when called to the carpet, the bureaucrats in charge of the SIC responded not with contrition or explanation of their practices, but instead by lashing out at those who criticize their practices. You can read Gary Bland's response here. In his response, Bland makes a number of personal attacks, but fails to adequately respond to the arguments in our original discussion of the SIC's shortcomings.
I've posted a brief response to Bland's attack below:
Gary Bland’s defense of the State Investment Council (1/15/09) shows even more why the Legislature and the public need to pay attention to what is being done with their money.In a January 8, article in the Sun-News, the Rio Grande Foundation exposed an investment of over half a million dollars in an Arabian owned chain of scandal-plagued low income dental clinics. That business, Small Smiles, had been touted by the State Investment Council as a New Mexico company when in fact it is owned by a bank in the oil-rich nation of Bahrain. We also reported on the allegations of child abuse, Medicaid fraud and unethical medical practices that have been leveled against this company into which the State Investment Council has allowed the public’s money to be invested. Since we issued our report we have learned that of the 19 states where Small Smiles has clinics, it is being investigated by 16 State Attorneys General.
Mr. Bland, who is the state’s investment officer, had no response whatsoever to these revelations. The chance that taxpayers will ever seen any positive return on this investment are about zero, as has been the case with many of the other investments made under Mr. Bland’s leadership. Mr. Bland is a defendant is a whistleblower lawsuit as the result of that imprudent investment of our money.
Mr. Bland misleads in his effort to shine a positive light on the State Investment Council’s venture capital risk-taking. He touts a 7.2% five-year return for the Land Grant Fund investment. Problem is, the Small Smiles investment, and the other high-risk New Mexico venture capital investments have been made our of the Severance Tax Permanent Fund, not the Land Grant Fund. The Severance Tax Permanent Fund—based on the same report from which Mr. Bland obtained his figures—has a lower rate of return over the past five years. It comes in at 6.9% as of September 2008, well behind other indexes such as the S&P 400 returned (8.7%), the Russell 1000 (7.1%) and the Russell 2000 (9.4%). This underperformance raises the question whether New Mexico would be better off scrapping its expensive investment advisor relationships and simply investing its money in low cost and very low risk indexes. This would virtually eliminate the potential for kickbacks and pay-to-play that has corrupted the world of New Mexico’s money management.
The investment returns cited by Mr. Bland are entirely worthless in judging the performance of the New Mexico venture capital program. Mr. Bland focuses only on claims of job creation. Giving away money to favored businesses will, until those businesses collapse, certainly create some jobs. In terms of investment returns like capital gains and dividends, however, the program continues to run in the red to the tune of tens of millions of dollars.
Lastly, Mr. Bland failed to mention that the 7.2% five year return he brags about comes from reports issued before the market collapse of 2009. Failing to mention this rather significant fact falls short of the candor New Mexicans deserve from the man responsible for managing their money.
Ya gotta love Governor Richardson. A few months ago, as we have discussed here in the past, the Arrowhead Center at New Mexico State University studied the economic impact New Mexico's film industry incentives were having on New Mexico's economy. The study is available here. Advocates for spending taxpayer money on the film industry were not amused when the Arrowhead Center analyst found that the program returned only 14 cents for every dollar spent.
So, what was the Governor to do? After all, he has been one of the primary supporters of the film industry? Simple...just pay for a new study and make sure the results come out the way you want. That seems to be the case with the latest study by the consulting firm Ernst & Young which was just released and has been discussed in the media.
The study which is available here found that the film program returns $1.50 to the state for every dollar spent by taxpayers. This study was just released, so I can't verify that the numbers are inflated, but the claims seem quite inflated. Check back soon for a deeper analysis and comparison of the studies, but, as we saw with recently published arena studies the data can easily be manipulated to make such projects appear economically viable even when they clearly aren't.
If you caught KOB News last night, you saw a report on the release of our Piglet Book. Check out this article which includes some great footage of our pig frolicking in the Santa Fe plaza and handing out copies of our report. The report itself is available here.
Now that Eclipse Aviation has filed for Chapter 11 bankruptcy protection, New Mexico taxpayers have officially lost their $20 million investment in the company. As Rio Grande Foundation investigative journalist Jim Scarantino points out in his newest piece, New Mexico taxpayers face mounting losses and well-below-market returns through the State Investment Council.
If you left your house, watched tv, listened to the radio, or read the newspaper in the months prior to the last election, you probably saw a political ad that you paid for. No, I'm not just referring to donors to the Obama or McCain campaigns, but involuntary campaign "donations" that were taken in the form of taxes. How can this happen?
As I explained recently in the pages of the Albuquerque Journal, taxpayers funded the "yes" campaigns on behalf of the RailRunner and other statewide bond measures that increased property taxes statewide in an extremely tough economic time. This represents an extremely unfair advantage over grassroots and community groups like the Rio Grande Foundation that are concerned with out-of-control taxes and spending.
While government agencies looking for more money will always have the advantage of having many employees that get their paychecks from said agency, cutting off advertising money would at least create a fair election in which taxpayers' own money are not used against them.
Lobo football fans awoke this morning to find that their head football coach of the past 11 seasons, Rocky Long, had resigned. While the losing 2008 season was definitely tough on the coach, he made a point of stating that New Mexico football will never flourish until the fans decide to turn out in greater numbers to support the program. What does this have to do with public policy in New Mexico?
Well, Albuquerque's political establishment is considering the construction of a brand new taxpayer-financed arena in downtown Albuquerque. Possible anchor tenants include an arena football team and a WNBA franchise. While studies are done with an eye towards justifying the expenditure, despite difficult economic times, the real question is "If you build it, will they come?" After all, Lobo Football is a Division I, "major league" product. If fans won't support them, will they support women's professional basketball?
The record is mixed. Fans turn out for the Isotopes and Lobo basketball, but not for the Thunderbirds minor league basketball, not for Lobo Football (at least not enough to make the team as successful as its /">Mountain West peers, and not for the Scorpions hockey team.
It is hard to say what makes the teams that succeed do so and why other teams lack fan support, but I don't trust our City Council and Mayor to spend a bunch of our money to figure it out, do you?
According to KOAT TV:
The Albuquerque Downs are moving to Moriarty, and the city's major hopes extra funding will come with it.Mayor Adan Encinias is asking the state for $4.5 million to help cover infrastructure costs for the new racino. Plans for the track are complete, and this is the only issue standing in the way of breaking ground. The Downs president hopes to begin racing by the summer of 2010.
While I am completely agnostic as to whether or not the Downs should move, I find it hard to believe that Moriarty deserves $4.5 million of our tax dollars for the privilege of hosting the Downs. After all, isn't state-sanctioned legalized gambling and horse racing supposed to be an economic boon for the area?
Rather than asking taxpayers in the rest of New Mexico to foot the bill for Moriarty's infrastructure, perhaps they could leverage some of those future tax revenues in the form of bonds in order to pay for the needed roads etc. In the best of economic times, Moriarty's case for $4.5 million of our tax dollars would be on shaky footing at best. In current, tough times when cutbacks are being made across the state, Moriarty should be asked to come up with something a bit more creative than fleecing the rest of us for their Racino.
In what has to be considered the least surprising news story of the day, one of the myriad studies from consultants hired to sell er...study the downtown arena has been released. The study, done by a firm called Conventions, Sports, and Leisure, found that the market characteristics for the proposed $400 million arena are "very favorable." I did some googling on this firm and (not surprisingly) found that they are a rubber stamp or cheerleader for taxpayer-financed development.
By no means are they an objective source of information. Check out this report on the proposed Durango convention center. Among other red herrings and factual mis-steps the document states that "the overall convention and trade show industry reflects stability and annual growth." This is simply not accurate. As this study from the Brookings Institute points out "The overall convention marketplace is declining in a manner that suggests that a recovery or turnaround is unlikely to yield much increased business for any given community, contrary to repeated industry projections." Conventions, Sports, and Leisure is papering over this inconvenient truth.
The Albuquerque study, the executive summary of which can be found here has its share of red herrings as well. My favorite is that the proposed event center's location near the Rail Runner station would help make it a success. Downtown Albuquerque is such a night spot that according to the schedule available on the Rail Runner website there are no evening Rail Runner trains currently in operation. In fact, the last trains leave at 6:30pm.
Since most sporting events don't start until 7pm or 7:30, this will have to change. One way or the other, taxpayers will be footing the bill both for the events center and for the Rail Runner to run late into the night. Of course, since the trains only run at one-hour intervals, if you miss your train, you'll have plenty of time to hang out. The whole thing is a boondoggle on top of another boondoggle!
I have written previously in this space about our new legislative tracking website, NewMexicoVotes.org. Recently, we released our "missed votes study" which simply tallies up which legislators are showing up to vote when they are supposed to.
Certainly, there are often legitimate excuses (illness being one example) for legislators to miss votes, but nonetheless, we feel that voters should have some idea if their elected officials are doing their jobs or not. One story from the Santa Fe New Mexican is available here. The Associated Press also picked up the story which can be found here.
The missed votes study itself can be found here.
There's no doubt that New Mexico government is sorely lacking in transparency. That is one reason that improving transparency has become a central focus of our work. See our legislative tracking site: www.newmexicovotes.org. Of course, nothing is more basic to transparency than knowing what is on the ballot. Thus, it is all the more disappointing that it is so hard for voters to find out exactly what they'll be voting on in five weeks.
The only information I could find in my internet search of 2008 ballot measures turned up this site from ballotpedia. Unfortunately, the Secretary of State's website had no information available. Bernalillo County claims to have a "sample ballot," but the information presented at this link is less than optimal.
Colorado too is ahead of New Mexico. This handy site has links to a list of candidates and ballot measures.
This is not the way things are done in other states. Check out Arizona's Secretary of State website has ballot measures online in both Spanish and English. New Mexico needs to get its act together by publishing all ballot measures and candidate lists on the Secretary of State website. Contact her here.
While there have been several postings on this site about Jonah Goldberg, I thought the readers might enjoy reading Jonah's comments about his visit to New Mexico. I think I made the mistake of saying something nice about Bill Richardson in front of him though...
New Mexico is just one of dozens of states nationwide with massively funded state pension systems. According to this article, "by 2020, coverage will no longer be considered solvent." Also, "the authority has an unfunded liability of about $4.1 billion but that has dropped from about $5 billion." This improvement is the result of rate increases in recent years.
Surprisingly, despite the massive shortfall, New Mexico is actually in relatively good shape, at least according to this analysis.
There seems to be several major problems here:
1) Politicians have an incentive to over-promise what they pay state workers in the future relative to what they are paid right away. This is a means of cost-shifting onto future politicians and generations;
2) The inevitable tax increases hurt taxpayers even though they are largely unaware of the future massive burden they will be faced with;
3) From a pensioners standpoint, it is tough to be on a fixed income when fees and rates keep rising.
The single most important solution to this problem is to move away from defined benefit pension plans and give employees greater control over and responsibility for their own retirements.
As the Albuquerque Journal reported on Wednesday, New Mexico Treasurer James Lewis travels as a part of his job -- a lot. The Journal followed up with an editorial questioning who is paying for Lewis's flights around the globe and to what extent those who pay for Lewis's flights might be doing so to curry favor with the man that -- as The Journal points out, "is the elected official in charge of billions of dollars in New Mexico's investment portfolio."
While it is hard not to read about Lewis's inflated airfare costs -- $3,600 first class to Atlanta, business to Brazil -- and $2,200 in hotel charges, my question is why the State of New Mexico should be investing billions of dollars. I know it is in the Constitution, but wouldn't the permanent fund money be better off in the hands of New Mexicans' instead of politicians? Isn't it the very definition of socialism to have governments to own and control businesses?
It may be impossible to abolish the office as a whole, but shouldn't we as individual New Mexicans control whatever revenue is generated by taxes on extractive industries? Aside from that, government really shouldn't be in the business of investing. Instead, New Mexico should adopt the Alaska model and return oil and gas money to taxpayers. This would serve another positive function by creating a constituency for ongoing mining/drilling.
During the recently-completed special session, the New Mexico Legislature passed a tax "rebate" program. As has been discussed here and elsewhere, the "rebates" weren't so much designed to give money back to taxpayers, but to redistribute money from those who paid taxes to those who do not.
The following information underscores just who pays and does not pay taxes. Remember that rebates are only being given to those who make less than $70,000 annually.
What is the number of returns in each bracket? What is the percentage breakdown in each of those ranges of returns with payments?
Thus, those who pay 75% or New Mexico's income taxes get nothing while large numbers of taxpayers who paid no taxes get the largest checks from the state. Not much of a "rebate" was it.
HT: Matt Kennicott
I was down in Alamogordo over the weekend and had the opportunity to stop by and visit with Mike Haymes and the gang over at AM 1230. Check out the podcast from August 15 (at the bottom of the top-most list) at this page. We discuss the proposed Spaceport tax increase for Otero County, the special session, and an array of other topics.
If you follow what happens in New Mexico politics, you are probably aware that Governor Richardson has called a special session which is set to begin in about a week. Although the session was called, at least in theory, to work on health care, the Governor has proposed a tax rebate package (which also contains some new spending) in order to return some of the State's excess oil and gas tax revenue to taxpayers.
While we at the Rio Grande Foundation support any effort to return money to taxpayers, as I point out in this opinion piece from the Las Cruces Sun-News, there should be no new permanent spending in the special session, in part due to the volatility of oil and gas revenues. On the flip side, legislators should study ways to stimulate New Mexico's economy and ensure the State's long-term success, such as by permanently reducing income tax rates.
Recently at the Rio Grande Foundation, we have been working harder than ever to get our message out in the community and around the state. A particular emphasis of our work is to reach out to those in areas, like Deming, that are often forgotten by denizens of Albuquerque and Santa Fe. Recently, I had the pleasure of visiting Deming to speak to the Deming Rotary Club and talk to a reporter with the Deming Headlight You can read the interview here.
If your group needs a speaker, please contact us at 505-264-6090 or email info@riograndefoundation.org.
As I just discussed in a blog posting, Albuquerque's leaders are overly focused on downtown at the expense of taxpayers and other areas of the City. The schedule for the New Mexico First discussion at which I'll be a panelist can now be found online. A background report (including comments from the Rio Grande Foundation) is available here.
Apparently, Albuquerque's City Council has been listening to too much Petula Clark recently, because their obsession with downtown is approaching fever pitch. First and foremost, the recent decision to allocate a whopping $700,000 to study an arena and events center has seemingly placed this latest redevelopment issue on the fast-track with New Mexico First set to hold a meeting on the issue on Thursday, the 17th (I'll be a panelist).
Then there's the $28-million-a-mile streetcar that consultants recently recommended should be built from San Mateo to Downtown. The presentation can be found here. The presentation is full of platitudes and happy talk about the supposedly tremendous impact the streetcar will have in the form of additional residents and employers moving into the areas served by the system. But it is never stated why Albuquerque's system will cost $28 million a mile while a "peer system" in Little Rock cost a mere $7.8 million per mile. Also, while anecdotal evidence that the streetcar will draw additional riders over the current bus system is presented, specific service improvements over the current Rapid Ride buses which run in the same area for far less money are nowhere to be found.
The fact is that the streetcar has support primarily among those who believe that other areas of the city exist primarily to support downtown. If a streetcar and events center are important to the public and are financially viable they will be built with private money when and where it makes sense to do so. Politicians shouldn't force the issue on taxpayers.
Today's headline in the Albuquerque Journal says it all: Tesla will be making its electrically-powered roadsters in California, not New Mexico. According to the San Francisco Chronicle:
California's offer includes the state's purchase of $100 million in manufacturing equipment, which it will then lease to Tesla. The company will have the option to buy the equipment at the end of the lease term tax-free, for an estimated savings of $9 million. California will also make job training grants to Tesla of up to $1.5 million.
The Rio Grande Foundation has been critical of such payouts in the past for the very fact that companies like Tesla are simply playing governments against each other to extract the largest payout possible. This certainly seems to be the case with Tesla.
While the loss of Tesla will undoubtedly be portrayed as a major loss for New Mexico, the reality is that Tesla's cars are based on unproven technologies and the company needs a sweetheart deal because no private investor -- at least one who is concerned about earning a reasonable return on his investment -- would consider making such a significant investment.
As the Wall Street Journal points out, California Governor Arnold Schwarzenegger has a terrible economic record and faces extreme economic difficulty. While the payouts to Tesla will be extremely small relative to California's overall economy, New Mexicans shouldn't lose any sleep over losing Tesla to Arnold and his big payoff.
A few weeks ago I blogged about the importance of candidate surveys from Project Vote Smart. With the primary election on Tuesday, the Rio Grande Foundation and several other New Mexico-based non-profits surveyed candidates on several issues of interest to each group.
The results of the House Candidate surveys can be found here and the Senate surveys can be found here. The questions that we chose were number 3 and number 9, but each of the questions is relevant in its own way to voters hoping to make an informed decision. If candidates in your area chose not to fill their survey out, make sure to tell them that voters need to make an informed decision and they can only do so if candidates are willing to take firm positions on the issues.
If you missed the luncheon hosted by the Rio Grande Foundation and the New Mexico Prosperity Project last Wednesday, you missed out on a really outstanding event. The folks over at AWOL Civilization were kind enough to blog about the event here.
Recently, I praised Albuquerque Mayor Martin Chavez for his relative budget restraint. While I stand behind that praise, the ongoing debacle involving the City's efforts to buy 22 acres of land near Vista del Norte, ostensibly for a balloon-landing site (but really to keep Wal Mart from building a store there) undermines efforts to strengthen the City's economy.
After all, if businesses are to locate here, they need to know that the carpet will not be pulled from underneath them for political reasons. The City, (specifically taxpayers) is now paying the price for abrogating property rights in the area that is now ABQ Uptown. Rather than buying the land, the City should encourage the developer to go ahead with plans to put a Wal Mart or whatever they want to do with it. If landing balloons is really an issue, perhaps the City can work with the developers to develop the land in a way that allows balloons to land in the area? We can't simply stop growing as a City in order to be balloon-friendly.
The issue of "corporate welfare" has taken on greater importance over the years on both the left and right sides of the political spectrum. And, although it is hard to have corporate welfare in the absence of large corporations with giant lobbying budgets, a recent article by Barry Massey of the Associated Press illustrates an example right here in New Mexico.
In fact, an Albuquerque-based company called Blast-N-Clean received $162,500 to demonstrate its cleaning system to nearly a dozen cities and counties. Legislators earmarked money for the work although local governments didn't ask for the pilot projects in some instances. As I point out in the article, this "Certainly sounds like this is something that should come out of the company's own marketing budget, not the state budget." I also argue (as I have done before) that we need to reform the capital outlay process. Better still, this money should be returned to taxpayers.
Nothing against Blast-N-Clean or any other company, but they should live or die based on the quality and innovative nature of their product, not their ability to suck money from taxpayers.
According to the New Mexico Business Weekly, there is a new initiative afoot among some business groups to attract educated New Mexicans who have moved out of state, back to the state. Mark Lautman, director of economic development for the master-planned, mixed-use community of Mesa del Sol, is just one local leader who believes that the demand for labor will outstrip the supply in the next 25 years and get more out of our native population.
Initiatives being promoted by the business coalition include creating an online database where companies can post work force needs and job opportunities. A $400,000 grant from the US Department of Labor will pay for much of the program.
While this is by no means a massive expenditure of public money, it would seem that the program is going to do very little to alleviate the perceived "shortage" of highly skilled workers in the state. While there are no quick fixes when it comes to attracting talent, it would seem that two things could be done by policymakers:
1) Let workers keep more of their money by cutting taxes. States that lack an income tax -- Washington, Florida, Texas, Nevada, and New Hampshire to name just a few of the nine -- grow faster economically and have higher income levels than their peers. Further cutting New Mexico's income tax rate (or eliminating the tax entirely) would attract high-end jobs and workers.
2) Produce more highly-educated workers. The fact that New Mexico needs to improve its education system is no secret. New Mexico's drop-out rate hovers near 50 percent and by almost any measure, New Mexico's educational system is among the worst in the nation. If we want to fill skilled jobs we need an education system that produces more of them.
More than two years ago, Juan Dominguez of Rio Arriba County entered into a leasing agreement with T-Mobile, allowing them to place a cell tower on his property. The tower gives reception to many cell users in the Chimayo area.
Some citizens in the area have banded together to form the Chimayo Council on Wireless Technology. The Council feels that the appearance of the cell tower desecrates sacred sites within eyeshot, such as the Plaza del Cerro (an original colonial Spanish plaza) and a commonly used pilgrimage route to the Santuario de Chimayo. They also say that the tower defiles the hills around Chimayo, which are venerated by the Tewa people. In fact, the town is named after one of these hills, Tsi-Mayoh.
Unfortunately for the Council, Mr. Dominguez owns the property on which the tower is located, not the citizens of Chimayo, nor any body of religious people or historic preservationists. He has given his consent for placement of the tower. Nonetheless, the Council has correctly asserted, according to the State Historic Preservation Office, that T-Mobile had some errors in its application to the county government, including incorrect coordinates for its location.
SHPO is requiring T-Mobile to resubmit a corrected application, after which state officers will evaluate the tower’s level of historical malevolence. If they deem that the tower is violating the visual pleasance of historical sites, the state office will escalate the case to the Federal Advisory Council on Historic Preservation, which, under authority granted to it by the National Historic Preservation Act of 1966, may “make recommendations regarding historic preservation to the… heads of… federal agencies.” The federal agency involved in this case would be the Federal Communications Commission, which will make the final determination should the matter remain unresolved.
Sound like a bureaucratic nightmare? And all poor Mr. Dominguez wanted was to make some extra cash. T-Mobile has said that they cannot relocate the tower and keep their service effective. Not only are multiple levels of government involvement encroaching on Mr. Dominguez’ property rights, but they may also be hindering T-Mobile’s ability to run its company successfully in the area.
If the folks at the Chimayo Council on Wireless Technology have as much support from the community as they claim, they should consider buying Mr. Dominguez’s property or at least they could purchase the right not to have a tower built on the property.
Current Secretary of State Mary Herrera has disclosed information from a federal investigation being conducted by the Elections Assistance Commission accusing the former holder of her office, Rebecca Vigil-Giron, of using $6.4 million of federal money for her own publicity. The federal funds, provided under mandates of the Help America Vote Act of 2002, were supposed to be used to plan and run the 2004 and 2006 federal elections, but according to Trip Jennings of the Albuquerque Journal (Former Official Faulted for Ads, Feb. 19, 2008), Herrera has suggested that Vigil-Giron used the funds for public service announcements “often featuring herself.” Vigil-Giron is now running to represent the Albuquerque district in Congress.
The fact of the matter is neither Secretary of State has a very positive record when it comes to running elections. During the state’s recent democratic caucus, scores of hopeful voters were incorrectly told that they were not registered and were forced to fill out provisional ballots so their registration status could be confirmed before their votes were counted. Mary Herrera’s spokesperson “defended the [voter] database prepared by [Election Systems and Software], one of the nation’s large private election vendors,” even though it was apparent that the list was rife with mistakes.
After the 2004 presidential elections, representatives from all eight political parties united to file a lawsuit against Rebecca Vigil-Giron and the State of New Mexico (Lopategui et al versus the State of New Mexico), alleging that thousands of votes were miscounted by electronic voting machines statewide and hoping to provide measures that would prevent similar failures of democracy in the future. Among stories of voting machine malfunctions, “One poll worker described watching 141 voters come to the precinct, enter the polling booth where a voting machine awaited, stay for a short period, and leave. At the end of the day, there was only one vote counted for president.” While plaintiffs and defendants collected evidence for the lawsuit, Ms. Vigil-Giron motioned to dismiss the case, which was denied by Judge Eugenio Mathis.
It is obviously inappropriate for officials to use public money to boost their name recognition. Even though Ms. Vigil-Giron did appear in the public service announcements, they did their job of educating potential voters on the registration process. On the other hand, Ms. Herrera’s office was responsible for the voter list that butchered the democratic caucus. Public concerns like voter registration lists are one of a handful of public services that should be the responsibility of public officials, not private companies. New Mexicans apparently need to work harder to find competent officials to serve in the Secretary of State’s office.
Anyone who regularly reads this blog knows that we do not engage in personal attacks. We may have policy disagreements, but we don't generally go after people as individuals. That said, I'm not really sure Governor Richardson has been on an even keel since he return from the campaign trail. First was the statement that doctors were being "greedy" for not going along with his health care plan. While I think this statement is false on its face, it is hard to see the political wisdom of publicly attacking the very health care professionals whose mission it is to make us well. Besides, doctors are people we all deal with personally and, while we may associate their presence with both physical and financial pain, they are certainly viewed more favorably than the nameless and faceless insurance companies.
Of course, attacking doctors was only the start for Richardson. Today he essentially told the Legislature -- both houses of which are dominated by his fellow Democrats -- "bring it on" (subscription required) when some lawmakers suggested he's entered his lame duck phase as governor.
As if this belligerent attitude were not enough, the Governor topped his rhetoric off by publicly disagreeing with his Attorney General (also a Democrat) regarding what should be a relatively minor bill deadline and then challenging his Lieutenant Governor over whether she is deserving of security or not.
Something is just not right. While it is to be expected that the Governor would disagree with Republicans and veto their projects from the just-signed budget, he seems to be lashing out at anyone and everyone who crosses him, possibly due to his frustrations on the campaign trail.
While we at the Rio Grande Foundation don't agree with him very often on policy matters, it would seem that the "wounded bear" routine won't do much for his efforts to pass his health care agenda and other items. Perhaps he'll shake it off, but until he does, he isn't doing himself any favors...and that's probably a good thing for taxpayers.
Regular readers of this blog are undoubtedly aware that we have no love for the unelected bureaucrats over at the Albuquerque-Bernalillo Water Authority. We tangled with them over their outrageous attempt to use eminent domain to take over a privately-owned water utility, New Mexico Utilities Inc. That case is still tied up in court.
Now, Councilor Michael Cadigan has succeeded in allocating even more power to the un-elected bureaucrats at the Authority by giving them tremendous power over building and planning activities. Just over a month ago, Cadigan had been quoted as saying the Authority should have these powers and recently the Authority granted themselves the power -- notice how that's done!
The Albuquerque Journal had the right take on things in this morning's paper, saying "the authority's board should rescind its vote and forward its ideas to the City Council and County Commission, where public policy can be hammered out in a more democratic process."
It is unfortunate that we have allowed water, the lifeblood of our city (not to mention development and individual property rights), to be controlled by an unelected group of bullies. Instead of putting a government agency in control, we should privatize the authority and make it accountable to its customers.
The Albuquerque Tribune editorialized in favor of Albuquerque Mayor Marty Chavez challenging the City's term limits law by running for a third term, saying it "did no harm." This may be true, but how about Albuquerque voters, more than 70 percent of whom supported term limits back in 1994?
When the Constitution doesn't address an issue, as is the case with term limits for city officials, shouldn't the default be to obey what the citizens say unless there is an issue of direct harm or a minority is being unjustly attacked? Sure, Mayor Marty can run for another term and he may get elected, but that doesn't mean it is best for the City or that it's the right thing to do.
Bill Richardson has dropped his bid for President. While we certainly are not shy about criticizing Richardson's policies here in New Mexico, the reasons for Richardson's failure to gain traction are only partially his fault. A big part of Richardson's difficulties stems from the process itself.
First and foremost, Richardson did not run a great campaign. He made too many gaffes and tried to have it both ways on policy issues that required an obvious stance. This recent discussion between Richardson and Barack Obama on the issue of carbon caps and whether or not it would increase prices for consumers is a perfect example.
As for the reasons that were not necessarily his fault, except for the Iraq War, Richardson was a "centrist" relative to his fellow Democrats. On taxes, guns, and trade, Richardson was to the right of his fellow Democrats.
Unfortunately for Richardson, Democratic primaries tend to reward those on the left and penalize centrists. Only in the general election do centrists have the advantage. Even though we at the Rio Grande Foundation weren't overly enthusiastic about Richardson as a President, his run did bring great attention to New Mexico. From that perspective, we are sad to see him drop out.
Rio Grande Foundation president Paul Gessing appeared on Channel 5's "In Focus" public affairs show a few weeks ago to discuss , the Rail Runner, transportation, and other important topics. The show can be accessed at the following link. There are three windows that you may click on and my appearance is in the third (bottom) window. The first two windows were a prelude to the show with a discussion between Transportation Commission Chair Johnny Cope and Rep. Patricia Lundstrom, Vice Chair of the Transportation committee. Neither of these two individuals inspire much confidence in those who believe that innovative thinking is necessary to solve New Mexico's transportation problems. Enjoy the show!
Guess what? You as a New Mexico taxpayer are now part owner (subscription required) of an $11 million supercomputer with a total cost of $42 million to get it up and running. Another free article is available here.
So, what use might you have for such a computer? None as I pointed out recently in the NM Business Weekly. Most of us will do just fine with our PC's and Mac's which are getting more powerful and better all the time. The computer is nothing more than corporate welfare with a side of inflated ego.
With roads and bridges in dire need of money and taxpayers in Bernalillo facing tax hikes to pay for the jail and other needs, it seems hard to believe that a supercomputer is the greatest priority for New Mexicans. It will be interesting to see if any claims of economic impact/business attraction are made or if the whole thing is merely swept under the carpet.
Recently, I wrote in the Albuquerque Tribune about the impending lab cuts and whether they might be a good thing in the long run for New Mexico's economy. I argued in part that it is the private sector, not the government that creates wealth and I stand by my point.
Nonetheless, I was attacked in a letter to the letter by a reader who argued that government does indeed create wealth. He argues that, "His (Gessing's) condemnation of government as not producing wealth is baseless," and that "I equate profit with wealth."
Unfortunately for the letter writer, what government does is simply take money from productive citizens and use it for something that people may or may not really want. With government, it is not easy to tell because there is no pricing mechanism. Sure, roads are important, but the government also shifts money away from roads to build the Rail Runner. That is sucking wealth out of society.
The public schools, particularly APS, may be better than nothing (although that's debatable), but are they creating wealth for our society in an efficient manner? Might it be better for the private sector (not necessarily for-profit) to take over?
The fact is that government may create wealth for you if you happen to want what the government is providing, but real wealth is provided when government is small and doesn't interfere with the rest of us who are producing real wealth in the marketplace.
Los Alamos and Sandia Labs are on the chopping block in Congress. That is a fact and it has many of the Labs' employees and local economic officials in a panic. But is it such a bad thing for New Mexico's long-term economic future? In a recent opinion piece in the Albuquerque Tribune, I argue that cuts at the Labs might be an opportunity to ween New Mexico's economy from the federal teat and adjust our tax policies in ways that will generate long-term economic growth.
After all, New Mexico has long received more federal largesse relative to what its taxpayers pay than any other state, but it hasn't done much to improve our economic picture or poverty levels. As the economic impact of these layoffs is felt, our political leaders would be wise to enact some pro-growth reforms (like cutting the income tax or reducing the regulatory burden) in an effort to bring businesses to the state.
For the average politically-unconnected Albuquerque-area developer, dealing with local governments is a nightmare of red tape. Anti-development politicians and anti-“sprawl” and/or “not in my backyard” citizens have passed numerous laws that make it a wonder anything is built. Out-of-control impact fees, high taxes, opaque zoning laws, capricious government officials (see Wal Mart’s experience in Vista del Norte), and onerous “green” building codes all make the process difficult and time-consuming.
On one hand we now have policies that stifle new development and contribute to the decline of existing areas? But, on the other hand we have Tax Increment Financing (TIF) laws here known as TIDD which are targeted at massive new developments that seem designed to help Albuquerque area to grow as rapidly as possible. In these seemingly-conflicting issues seems to be control. Massive new developments are okay, but only if they are acceptable to politicians. New legislation introduced by supposed foe of TIDD, Michael Cadigan, is a perfect example. It's okay...if you do things my way.
Unfortunately, TIF or TIDD is all about political control as development expert Randal O'Toole points out in this podcast. Opponents of TIDD should remain principled in their opposition and work to make Albuquerque an easier place to build rather than extending political control even further. Unfortunately, that is not the tendency of politicians.
With the news that Doña Ana County is delaying its implementation of a gross receipts tax increase to fund the Spaceport, one might wonder if that project, like the Rail Runner extension to Santa Fe, is in trouble. We can only hope.
The problems are twofold: First and foremost, as discussed in the Las Cruces Sun article above, other counties are not jumping on board the project by passing their own tax hikes as quickly as Doña Ana did. Also, as with the Rail Runner, Spaceport management is asking for more money than originally estimated.
With all of the Foundation's complaining about the Rail Runner and Spaceport, one might mistakenly believe that we have something against "economic development." That actually couldn't be further from the truth. Rather, we believe that individuals, not governments, drive economic development and will allocate resources far more efficiently than governments do. Both the Rail Runner and Spaceport seem to be bearing this out.
By now, most readers of this blog have heard that Senator Pete Domenici is not running for re-election in 2008. This is big news not just in New Mexico, but nationwide, since this makes it increasingly certain that Democrats will retain control of the US Senate. That said, what does Domenici's retirement mean? Well, Heather Wilson has already jumped in to the race, but that was almost a certainty as she was going to be redistricted out of her seat soon anyway.
It is also quite possible that Reps. Steve Pearce or Tom Udall may jump into the race as well. My hunch is that Wilson has the best chance of winning a statewide race among these three because she is the "not too hot, not too cold candidate." (Pearce may be too conservative for the north and Udall may be too liberal for the south)
Of course, some are saying that Richardson will jump into the race which means he'd have to be considered the front-runner. Personally, I'd like to see former-governor Gary Johnson jump into the race....
RailRunner rides that same old line.
It’s good! It’s good! You’ll see, in time.
Ne’er mind the costs, we’re going to town!
What? How many more die till we shut it down?
Bill’s ok. He’s at his station.
“Let’s just have an investigation”
Our schools are crumbling. That’s ok!
We’ll hold classes, anyway!
Learn to drive!
Avoid Railrunner! Stay alive!
Engineers wasted. Families too.
What’s all the fuss? All the ado?
Ne’er mind the costs, we’re going to town.
What? How many more die till we shut it down?
We’ll spend more, make it safer!
Money from oil and gas and oh, the taxpayer!
We can afford it. Yes we can!
What’s the matter with you, man?
Education be damned! RailRunner is mighty!
Ne’er mind those kids, we know they’re flighty.
We’re doing things right. They’ll ride the rails.
One day it will all be just a tale.
RailRunner, RailRunner we long for more.
And, Sister SpacePort is at the fore.
Legislators of sense not common.
Let’s say a prayer. Amen.
-- Vic Bruno
They say newspapers are a dying industry. Yes, there is no doubt that people have more ways to get information than ever before and some would even argue that blogs like the one you are reading now are helping to kill the industry. All of this may be true and, with the Albuquerque Tribune up for sale with a very real possibility of closure, the point is driven home.
That said, newspapers actually generate healthy revenues and are still a profitable business to be in. The fact is that the sale of the left-leaning Tribune represents a great opportunity for an entrepreneurial, market-friendly, wealthy individual to take over the newspaper and turn it around, preferably while focusing its journalism on investigating the wide range of abuses of power that go on in this state.
Newspapers may not have the circulation they once did, but their impact cannot be denied because people who read newspapers tend to be the best-educated and best-informed members of the population. Regardless of who buys the newspaper, I hope the Tribune survives, but I do think ownership of media outlets represents a unique opportunity for believers in the free market to reach out to the population as a whole.
We have certainly had our differences with Greg Payne and the Albuquerque Transit Department (about the Mayor's proposed trolley in particular), but I've got to give them credit for their recent deal to add about 100 new bus shelters (subscription required) at no cost to taxpayers.
The key to making this happen is a partnership with the advertising company Lamar. Lamar will provide about $1 million for the shelters and will be able to place billboards on them for five years. This is a win-win in a city that is too often hostile to private enterprise.
One of the most prominent features of the Rio Grande Foundation website is the spend-o-meter which tallies New Mexico spending in real time. I had an article in the Los Alamos Monitor that discussed the meter and what it means for New Mexico taxpayers. This elicited a response from a John Lilley who felt the article was "biased."
Without dwelling on my disagreements with his article, it would seem to me that there may just be some waste in New Mexico's budget. Apparently he doesn't think so.
Readers of this blog and followers of the Foundation may have already read my recent Wall Street Journal column, but if you have not, you can listen to it as a commentary that recently aired on Albuquerque's public radio station, KUNM.
The Pacific Research Institute recently released a new study that discusses the importance of owning one's own health care and then ranks all 50 states on various matrices dealing with health care ownership.
Ownership is important because absent individual ownership, politicians interfere with our freedom to use our own money to make our own choices about the health care we need. Government mandates increase costs and, more important, lower the quality of care. The choice about health care should be in the hands of the patient and his doctor.
Surprisingly enough, especially given our high rate of uninsured and the prevalance of government health care in the state, New Mexico actually fares pretty well in the study with an overall ranking of 22nd.
Categories included: government health care in which Newe Mexico came in at 48th because it seriously underinvests in prescription drugs, is much too dependent on federal matching payments, and has overexpanded Medicaid eligibility; private health insurance (NM is 16th); medical tort (NM is 45th due to an unpredictable and often unfair system); and lastly, New Mexico is actually best in the nation in burden of regulation (the authors state that this is because of few restrictions on nurse practitioners’ scope of practice and the corporate practice of medicine).
New Mexico can do better by reforming Medicaid, but adopting "universal" coverage as Massachusetts (ranked 45th) has done will not help matters.
The libertarian Reason Magazine contained an article in its August/September print edition (available here online), that questions presidential candidate Bill Richardson’s “libertarian” bona-fides.
Richardson calls himself “a market-oriented Democrat” and, as the anti-tax Club for Growth said recently of Richardson, he’s “A different kind of Democrat, hopefully.” Even David Boaz of the libertarian Cato Institute says of Richardson, “He really might appeal to the libertarian vote. I’ve heard a number of governors pegged as ‘libertarian Democrat,’ and usually when I look into their records, it doesn’t hold up. But Richardson comes close.”
But not all are convinced of Richardson’s “libertarian-ness. Former New Mexico Governor Gary Johnson, for one, when asked about Richardson said, “I don’t think Bill Richardson has got much to offer libertarians. He plays up the fact that he cuts taxes when, if you add up all the fees he’s approved, there’s been a net tax increase. It’s an indictment of Cato and the Club for Growth that they’d consider him a tax cutter.” How much of an indictment? “It makes me a little less impressed by the good grades Cato gave me.”
With all of the back and forth on tax cuts, the Reason piece fails to mention spending, but I recently aired that issue in a Wall Street Journal article.
I think my last line sums it up best whether the topic is the relative libertarian-ness of Richardson or their fiscal conservativism Richardson is certainly better than Obama, Clinton, and Edwards, but that doesn’t mean he’s actively “good,” just less “bad.” Unfortunately, in presidential politics these days, it seems like small government types are too often left with voting for the lesser of evils (with the exception of Ron Paul, of course).
The passage of legislation during the legislative session earlier this year that will offer protections for New Mexico property owners from eminent domain abuse was positive, but property rights are by no means secured.
Unfortunately, un-accountable, rogue bureaucracies like the Albuquerque-Bernalillo County Water Authority can get judges to strip private companies (subscription required) like New Mexico Utilities Inc. of their property rights for no good reason.
Sure, the unaccountable thugs at the water authority will claim that only they can ensure that water is used efficiently and, since it is such a "scarce" resource, it is too precious to be left in private hands. What they won't tell you is that there is no "water crisis" here in New Mexico, but there is a water distribution crisis. That is, upwards of 80% of the water in this state is used for agriculture, an industry that plays a relatively small role in the state's economy.
Rather than using a supposed crisis as an excuse to weaken property rights, New Mexicans and the state's legal system should use property rights to solve the state's water distribution problems.
New Mexico Governor Bill Richardson is running for President and is doing so by campaigning as a "market-oriented Democrat" and a tax cutter. While these terms may be music to the ears of limited government types, the truth is that Richardson has expanded government in New Mexico at an unprecedented pace.
Recently, I discussed Richardson's fiscal record on the pages of the Wall Street Journal. Let's just say that while he is certainly to the right of most of his Democratic colleagues (and perhaps some, Republicans as well) he's no fiscal conservative.
Some good news was reported last week on the New Mexico economic front. According to the Albuquerque Journal, a company called Green Rubber Global is going to set up a headquarters in Albuquerque and open a state-of-the-art tire recycling business in state. No one can dispute the fact that this is good news for the state economy or that tire recycling fits in well with the overall "green" development model that is driving development in the state.
Of course, a few days later the Journal ran another piece (subscription required) outlining the $3.9 million incentive package the state is offering Green Rubber in order for them to build a $30 million plant. Of course, this project will be a boon to New Mexico's economy in the end, but wouldn't it be great if taxes were and regulations were made reasonable for every business owner in the state and not just those making a $30 million upfront investment in a politically-favored business model?
Few cities are so willing to adopt senseless and economically-harmful policies as Santa Fe. Whether the issue is the dreaded toilet exchange program or the incredibly inflated $9.50 an hour minimum wage, Santa Fe is on the loony left.
Now, some city councilors would like to push the city even further down the road to economic foolishness. The latest proposals are for a two cent tax on soda pop and a 1 percent hike in the city's gross receipts tax. The plan is to use the money for a variety of open space and child development initiatives.
While the soda tax may not be as big or economically-harmful as a 1% increase in the gross receipts, it is patently unfair and unnecessarily targets one group of people – soda drinkers – to pay for something that most of them will never benefit from. Besides, as soon as a soda tax is levied, can taxes on burgers, pizza, and ice cream be far behind?
Of course, raising the gross receipts tax -- especially by a full penny -- will do more economic harm than the soda tax. Santa Fe already has the heaviest gross receipts tax burden of any major (25,000 people or bigger) city in New Mexico, a one-cent increase would give the city an astounding 8.625 percent gross receipts tax rate. The new rate would be an astounding 25 percent greater than the rate charged in Albuquerque. Check this table for gross receipts tax rates statewide.
While it may not happen overnight, eventually Santa Fe's economy and even its tourist industry will begin to suffer from these absurd policies. After all, most wealthy people didn’t get that way by carelessly wasting money. Eventually, even Santa Fe’s tax burden may cause tourists and part-year residents to look elsewhere.
waste more taxpayer money!!! Seems like our friends in Sandoval County have admitted their complete and total failure(subscription required) at getting countywide, subsidized wi-fi. Unfortunately, the County's failure is not a mere matter of "breach of contract" as County Commissioner David Bency claims.
The problem is that governments simply are not efficient managers of services that are either not absolutely essential or rely on being up to date on the latest technology. Hopefully, unlike our friends in Sandoval County, Albuquerque's elected leaders will understand their limitations.
From a fiscal policy perspective, the growth of government during Mayor Chavez's term is easy to quantify and well-publicized. Whether we're talking about the streetcar or taxes, Chavez is not shy about increasing the size and scope of Albuquerque governmnet.
But another are in which government has grown in troubling ways is in so-called "nanny-state" activities. Simply put, Chavez seems hell-bent on becoming the third parent most Albuquerque residents never had. There are almost too many examples to cite, but red light cameras and regulations on pet owners are two examples.
Chavez also pushed for and got a ban on talking on your cell phone while driving and he singlehandedly banned smoking on all city-owned land save golf courses.
Not to be outdone, the Legislature-passed ban on riding bikes or skateboarding without a helmet if you are under 18 also went into effect recently. Apparently parents and their children are simply not able to make this decision for themselves.
Ultimately, what it all boils down to is that we have put our politicians on such a pedestal that they have nearly unlimited powers to tell us what we must and must not do. While some may agree with one or more of these particular laws, there is unquestionably a trend both locally and at the state level to allow politicians to make more and more decisions for us. With each nanny-state law that passes, New Mexicans will become a little less free to choose what is right for themselves. That is unfortunate.
Sorry for the massive server troubles over the past week. I believe we are back and expect no further problems.
Steve Terrell of the Santa Fe New Mexican wrote an interesting piece discussing Governor Richardson's claims of having increased the number of jobs in New Mexico by 80,000 as Governor. A number of economic policy experts (including myself) are quoted throughout the story to determine how much credit the Governor should receive for new jobs in the state and the economic growth that has taken place here.
The ulitmate point of our studies of New Mexico's economy is that elected officials exert only a limited amount of control over the short-term health of the economy. External factors like oil and gas revenues can cover up the effects of mistakes elsewhere, just as a recession could make a governor look worse than they really are.
Unfortunately, New Mexico's long-term economic struggles are the direct result of a lack of economic freedom.
Thanks to a reader of our blog, James McHenry, for this story from Bloomberg which explains that New Mexico's State Investment Council, which funds education and government services for children, has $522.5 million tied up in investments so risky that they make "junk bonds" look safe. In fact, because of their risky nature, bankers call these investments "toxic waste."
These collateralized debt obligations (CDOs) are packages of securities backed by bonds, mortgages and other loans that have been bought by the State Investment Council with hopes of generating returns as high as 20 percent. That is, of course, assuming that the Investment Council doesn't lose its shirt on the deal.
The fact is that state employee pension funds across the nation are tremendously underfunded and there is a great deal of temptation, like any gambler in Vegas knows, to double down on losses in an effort to make their money back.
This is just another reason that, contrary to the pleas of organized labor, we are much better off investing our own money in our own retirement accounts than we are letting governments or even corporations do the investing for us.
Sure, the Rio Grande Foundation has been saying it for years: New Mexico's tax burden makes the state a difficult place to do business. Now, the respected accounting firm Ernst & Young has reinforced those findings with a new study which shows New Mexico to have one of the heaviest business tax burdens in the nation.
The main culprit is the relatively heavy tax burden placed on business inputs by state and local government. Unfortunately, it is our gross receipts tax which is unique in the country for its high rates and broad base that cause this problem. I don't know if the momentum is there on either side of the aisle for reform at this point, but changes are in order before the gross receipts tax gives New Mexico the heaviest business tax burden in the nation.
It seems that Albuquerque Mayor Marty Chavez has put plans for an arena on hold at least temporarily. As I pointed out previously, this is most certainly a good thing as the metro area already has more arena space than it needs.
That said, it is interesting to note that the New Mexico Scorpions minor league hockey team, despite having a succesful year on the ice, are deeply concerned about attendance numbers at their new digs in Rio Rancho. As long as the drive is out to the new arena, it seems a bit unlikely that the location is a real problem as plenty of other acts have, and continue to, sell out there. Regardless of the reason for the Scorpions attendance woes, it is hard to believe that any team Albuquerque could draw to a proposed 14,000 seat arena would have any better luck. If private investors spending their own money feel differently, then they have every right to move forward, but Albuquerque taxpayers should not foot the bill.
I attended some of New Mexico First's health care event in Albuquerque. And, while I was impressed with the organization itself and the Town Hall concept, it was readily apparent that if the left hasn't taken over the organization itself, then at least this particular event was dominated by advocates of universal coverage and bigger government.
On the opening panel of Don Chalmers, President, Don Chalmers Ford, Charlotte Roybal, Executive Director, Health Action New Mexico, David Scrase, Executive Vice President and Chief Operating Officer, Presbyterian Healthcare Services, and Michael Trujillo, Executive Director, Translational Genomics Research Institute, only Chalmers seemed to understand the marketplace and the limitations of government. Particularly disappointing was Trujillo who, in response to a question I asked about Health Savings Accounts, basically said that Native Americans were too uneducated to manage their own health care....apparently the dysfunctional Indian Health Services is doing a great job.
Lunchtime was more of the same as Secretary of Human Services Pam Hyde and Secretary of Health, Michelle Lujan Grisham said "it is not a matter of IF New Mexico will adopt a universal health care system, but WHEN it will." Bob Crittenden of the Herndon Alliance was also unabashedly "progressive."
One conservative speaker did address the attendees, Edmund H. Haislmaier of the Heritage Foundation spoke at dinner, but even the Heritage Foundation has latched onto big-government health care solutions at least as far as the results of its vaunted Massachusetts Connector plan are concerned. That said, his comments were the only counterweight to the non-stop drumbeat coming from the expand government to solve health care crowd.
As followers of the Rio Grande Foundation may already know, Albuquerque Mayor Martin Chavez has proposed a modest reduction in the gross receipts tax. Unfortunately, most in City Council and even some fiscal conservatives seem unwilling to step forward and support the Mayor's plan.
Unfortunately, as this video from a recent Council session shows, the big spenders are more than happy to give NONE of the money back to taxpayers.
With Albuquerque's City Council, it seems like bad ideas refuse to die while good ideas whither on the vine. My recent opinion piece in the Albuquerque Journal seems to be the only tangible sign of support for a reduction in the City's gross receipts tax, but Councilors like Debbie O'Malley refuse to let the streetcar die the quick and painless death it deserves.
As recently as Monday night, O'Malley was trying to appropriate $224 million to the boondoggle. Thankfully, the resolution was deferred a week, but it (and other measures designed to keep the project alive) will undoubtedly be introduced in the future. Taxpayers must remain vigilant...everyone who pays taxes in this city should be a member of SWAT (Stop Wasting Albuquerque Taxes).
The Rio Grande Foundation has long been concerned about government-directed economic growth. A prime reason for our concern is that politicians are not experts in the field and, since they are not using their own money but taxpayer dollars, they don't have the same incentives as entrepreneurs do.
Diane Velasco of The Citizen has done an excellent five-part series on the movie studios that are planning to relocate to Mesa del Sol and how in some instances the studios have misrepresented themselves in order to hitch a ride on the taxpayer-funded gravy train.
We're all for economic development, but this activity is much better left to those with a direct financial stake in the matter, not politicians using our money.
Buried in all the hub-bub of a busy legislative session and Governor Richardson's calls for a special session (not to mention the US attorney scandal), the eminent domain issue has been on the back-burner for many in the media and the punditry class.
Thankfully, despite a rocky road to success, Governor Richardson has signed legislation providing protections for New Mexico property owners. Protections for property owners were among the Foundation's top priorities for the 2007 legislative session.
Considering the importance of the issue and the controversy that ensued after Richardson vetoed eminent domain protections the last year, it is hard to believe the Governor is not making more hay out of his successful effort to pass protections for property owners. He didn't even send out a press release.
No matter what, it is a good day for private property in New Mexico.
Text of the legislation can be found here.
"If you build it, they will come." This line from the movie Field of Dreams has been used to justify taxpayer-financed construction of professional sports stadiums for years. Now, as the Washington Post discussed on its pages this Sunday, Governor Richardson and a number of leading New Mexicans and civic boosters in and around Las Cruces have been pushing a taxpayer-financed spaceport in order to allow billionaires like Richard Branson start commercial space flights.
While it is being sold as an economic development tool, the plan requires a significant and economically-harmful hike in the gross receipts tax. With more than three-dozen of these spaceports either complete or under construction, New Mexicans need to understand just how speculative this type of "economic development" really is.
Governor Richardson wants the Senate to come back to Santa Fe in part to pass his transportation plan known as GRIP II. While roads are certainly something that even advocates of the most limited of governments can get behind, the episode illustrates some particular flaws associated with politically-driven transportation planning.
Among the items contained in GRIP II is $25 million for the proposed Spaceport for which taxpayer subsidies are already being used. Thankfully, Albuquerque Senator Joe Carraro has said he will vote for the bill only if money is included for improvements to the clogged I-25/Paseo del Norte juncture (subscription required).
I'm not trying to be Albuqueque-centric here; I'm sure there are dozens of transportation projects in cities throughout the state that should be higher priorities than additional subsidies for the multi-millionaire's who want to go launch their rockets, but I drive the I-25/Paseo corridor on a regular basis and can assure you that something should be done.
Unfortunately, we have a socialized transportation system (how else do you explain the RailRunner) that could use a good dose of market forces in order to better allocate resources. The folks at the Reason Foundation have been beating the drum for such reforms for years and have some really great research on how to bring the free market to transportation.
After months of discussion and delay Albuquerque's City Council finally repealed the November tax hike/extension for Mayor Chavez's trolley. Theoretically-speaking, the quarter-cent hike in the gross receipts tax will now expire in 2009 as voters originally gave approval for in 1999. As Dr. Messenheimer and I have pointed out, because of its unique nature, even small hikes in the gross receipts tax can create large amounts of revenue and significant economic harm.
Council unfortunately did not approve an amendment that would have given voters final say on any proposed streetcar, so the victory is not complete. Worse, a rigged "study" of the project will now be funded that -- due to its makeup -- will undoubtedly produce recommendations attempting to justify the project.
Council will most certainly not let this tax expire without a fight, but at least round one goes to taxpayers.
The New Mexico House of Representatives will vote tomorrow on a resolution that declares Pluto be a planet, and tomorrow, March 13, 2007, as "Pluto Planet Day". The bill's sponsor, Doña Ana County Democrat and landscape architect Joni Marie Gutierrez, must have a vastly over-inflated sense of government power. The State of New Mexico has no jurisdiction over the heavens, and might as well attach an amendment declaring the moon be made of blue cheese.
The text of the resolution recognizes that "the state of New Mexico is a global center for astronomy, astrophysics and planetary science" and that we host "world class astronomical observing facilities." The state government interfering in this regard, denying the scientific definition of 'planet' and controverting the International Astronomical Union, is an insult to this scientific tradition. Let's hope that representatives who do respect science and astronomy vote against this stunning piece of anti-intellectualism.
It's not every day that we agree with the editorial board over at the Albuquerque Tribune, but their editorial "10 days is enough for legislative session" hit the nail on the head. Legislators are like college students facing their mid-terms: rather than paying attention in class and studying for weeks in advance, they procrastinate -- debating extraneous issues like cock fighting and resolutions on impeaching the President -- until the last minute and are so rushed that they don't take the time to carefully look at what they are doing.
Of course, it could be worse, several states like California and New York have year-round legislative sessions...that is the last thing we need here.
The greatest tax increaser in New Mexico history is starting a doctorate in corporate welfare (see yesterday's Business Outlook p.2. "NMSU plans a doctorate" -- no link available). The acronym for the program is DED (we could only wish it were so -- but this is New Mexico).
Reporters affiliated with both major Albuquerque newspapers picked up on my have picked up on my recent National Review Online article on Richardson's spending record. The Albuquerque Journal and Tribune have both highlighted the story in recent days.
Richardson's record will provide the Foundation with some great fodder as he runs for the nation's highest office. If Big Bill (or any other politician) wants kudos instead of brickbats, broad tax cuts, school choice, and the restoration and maintenance of New Mexicans' Constitutional liberties would be a great place to start.
In case you missed the Rio Grande Foundation's most recent commentary, I discussed Governor Richardson's record in a recent article on National Review Online. Richardson's run for the White House is a great opportunity for the Foundation and for those concerned about the very real political and economic problems facing New Mexico to expose them and discuss them on a national stage. These problems -- high taxes, poor educational performance, and poverty -- are not new. Richardson didn't cause them, but he could be doing more to resolve them. I just hope that our efforts are more productive than the Republican Party's calling Richardson a "carnie huckster."
The Foundation remains steadfastly non-partisan, yet our state's politcal culture would benefit greatly from a more robust debate -- as opposed to name-calling -- between the two parties.
The Rio Grande Foundation will be releasing a new paper in a matter of days that thoroughly analyzes New Mexico's gross receipts tax and both the economic and political issues associated with dramatically broadening the tax base as New Mexico has done. Our first take on the issue was done for a national audience in the publication Human Events .
With state legislative sessions starting up around the country, other states are looking to generate ever more revenue, especially if it can be done without appearing to raise taxes. Broadening the tax base can do just that by going after those who are "unfairly" escaping certain consumption taxes (ie. services).
Be on the lookout for upcoming work on this important topic from the Rio Grande Foundation.
Finally, the worst-kept secret in New Mexico is out of the bag nationally -- Governor Richardson is running for President. Although the Rio Grande Foundation definitely has concerns about Richardson's credentials as a fiscal conservative, not to mention his plan to expand Medicaid without needed refom, we do welcome the attention Richardson's run will generate for New Mexico and -- as the National Taxpayers Union points out -- Richardson is more fiscally responsible than most of the Democrats who have announced for President.
If nothing else, hopefully Richardson will recognize that a run for the top office in the land will require he do something to improve New Mexico's abysmal education system and to reform eminent domain.
Governor Bill Richardson delivered an ambitious State of the State address this afternoon: text available here. Among the many plans for your tax dollars and the money paid to the state by the oil and gas industries is a massive Medicaid expansion, a 7.4 percent hike in teacher salaries, and lots of new spending on solar and wind power. He did propose some modest tax cuts, but an 11 percent spending increase is the order of the day.
Conspicuously absent from the Governor's remarks was any mention of eminent domain reform. Although he claims to be supportive of his task force's findings on the issue, his failure to mention eminent domain during his speech is a troubling sign indeed for property rights activists.
There is no doubt that Richardson has an ambitious agenda. It will be an interesting session.
Given the lack of public disclosure of the project's financing and the very nature of government-financed projects, the only surprising thing about this story is that it took so long to develop. As it turns out, Governor Richardson has overcommitted New Mexico taxpayers to funding the RailRunner based on the assumption that Congress was going to step in and foot $75 million of the bill. Raising the gas tax to pay for these "unexpected costs" would be a disaster. If lawmakers in Santa Fe had any guts, they'd kill this train before any more taxpayer dollars are wasted on what will undoubtedly be further cost overruns (not to mention at least $8 million in annual operating costs).
The water fight between the government-run Albuquerque Bernalillo County Water Utility Authority and the privately owned New Mexico Utilities Inc. is getting ugly. As the Rio Grande Foundation has previously pointed out, a government takeover of a private utility is a foolish step that will only result in higher water rates.
Having listened to Senator Ortiz y Pino discuss water policy at a recent legislative forum and hearing him say that 90% of New Mexico's water is used for agriculture while only 10% is used for residential purposes, I realize once and for all that the proposed takeover has nothing to do with water or conservation and it has everything to do with power. A sad commentary on the government agencies that are supposedly there to serve us.
We have over 14 inches of snow in the East Mountains. Enjoy:
Thanks to the Citizen for recognizing RGF President Paul Gessing and other deserving individuals as "community heroes." I wholeheartedly agree. The evidence for Paul is here.
Amidst all the snow and holiday hustle and bustle, I almost missed the fact that City Council wisely decided not to impose a moratorium on so-called "big-box" shopping centers. Although the regulations on the location and appearance of these stores could be problematic depending on which direction Council decides to go, at least they have avoided imposing an unnecessarily harsh moratorium. Although the Rio Grande Foundation did not take the lead role in opposing these restrictions (we did go on record as opposing them ahead of the vote), it is our hope that their rejection may be a sign that Albuquerque's Council is beginning to realize that heavy regulatory and tax burdens will harm Albuquerque and push even more economic development out to Rio Rancho and beyond.
In case you missed it, on Thursday, the Albuquerque Journal reported that New Mexico's new pre-K program is "falling below national norms in rankings of classroom quality and literacy and math scores." The full article is available here if you have a subscription.
Although the findings of this study are not conclusive, it definitely demands more study, especially since other studies have found mixed results from these programs as well. Not in New Mexico...Governor Richardson has instead proposed doubling pre-k spending next year. That seems to be the pattern in this state. Start a new program and before effectiveness or lack thereof can be studied, increase its size.
In case you missed it, Governor Richardson's eminent domain task force heeded the advice of property owners and supporters of private property rights like the Rio Grande Foundation and Institute for Justice and recommended that the Governor and Legislature prohibit the use of eminent domain to promote economic development in New Mexico.
Hopefully, the Governor and Legislature can agree this year on long-overdue protections for New Mexico property owners....in the meantime, it is our understanding that S. 3873, the “Private Property Rights Protection Act of 2006” will come to the floor of the United States Senate this week. Find out more about this important legislation and how to contact your Senators at the website of Americans for Tax Reform.
It turns out that Albuquerque got $8.1 million of your tax money from the state to "plan" the "modern" streetcar. A "consultant" HDR was "hired" without competition. That consultant also "planned" the train to nowhere.
What happened to our $8.1 million?
HT: Terry Storch
I've never been very good at math so help me out on this one. The Rail Runner's website says that its 200,000 rider was celebrated on October 13. The Rail Runner has run on weekdays since July 14 (except for Labor day). That means it took 64 days of train rides before the 200 thousandth rider was celebrated (by counting all the weekdays from July 14 until October 13). Are you with me so far?
This article in the Albuquerque Journal quotes Lawrence Rael as saying that during the 3 and one-half month free trial period the Rail Runner was averaging 1500 riders per day. By counting all the weekdays until November 1 (when the free rides ended), we get 75 weekdays of free rides. But if I multiply the number of days (75) by Raels 1500 riders per day average I only get 112,500 riders during the entire free ride period. So here's the puzzle: how can the Rail Runner celebrate it 200,000th rider on October 13 when only 112,500 riders had taken the train through October 31?
Here's another one for extra credit: How can the Rail Runner be averaging only 1500 riders per day during the free ride period when 200,000 riders had taken the train by October 13? By my calculation that is 3,125 riders per day (200,000 divided by 64 days). Where have I gone wrong?
I wonder if this math puzzle arises from a later statement by Rael that ridership is now down to 800 to 1200 riders per day. It doesn't look so bad if ridership goes from 15 hundred down to 8 to 12 hunderd per day. But how does it feel to explain a decrease that goes from over 3,100 down to 8 to 12 hundred per day? Doesn't that look like ridership is down some 62 to 74 percent!? Inquiring minds want to know.
Bob Parmelee of Santa Fe describes in gory detail why voters throughout New Mexico -- not just in Albuquerque -- should be worried about the budgetary impact of the Albuquerque trolley system now moving through City Council. He also has a few kind words for the work of the Rio Grande Foundation.
If you have followed New Mexico politics and the Rio Grande Foundation at all over the past year, you are probably aware of the RailRunner commuter rail train and the streetcar system that is now being fast-tracked through City Council by Mayor Chavez.
I attended a public hearing on the RailRunner in Santa Fe on Thursday, the 16th. While at least 100 people were in attendance -- many of them skeptical of the RailRunner in the first place -- the only real discussion focused on which of two routes should be used to lay track to downtown Santa Fe. Unfortunately, no one has any numbers on whether the system as it operates now is a success or failure. While backers of the project and the streetcar seem to think that the RailRunner's success is self-evident, they give no data to support their claims.
The fact is that since it opened to great applause from the media and politicians, ridership on the Rail Runner is down significantly. I took a ride on it a few months ago and noted the drop in ridership and I took another ride on it on Friday, November 17. While 60 or so people were on the 7:24am train downtown, 10 or less were on the 7:35am train from downtown to Bernalillo. Even on the trip downtown there was plenty of room to spread out as each car is designed to hold 200 passengers.
Of course, the only way to really tell what is happending would be for MRCOG to release detailed ridership statistics and revenue information, but that hasn't happened yet. Before we spend $270 million taxpayer dollars to build another rail project, shouldn't we at least find out if the first one is achieving its goals?
The Rio Grande Foundation has often criticized special interest tax breaks and subsidies, so, when Larry Barker, Channel 13's investigative journalist broke a recent story about shenanigans involving New Mexico's film tax credit program, he contacted us for comment. The stories are posted here. Gessing appears in both stories.
Given the proximity of the vote to Election Day, even dedicated followers of local politics might be forgiven for having missed out on the latest folly perpetrated on local residents by the Albuquerque City Council. Yes, in the apparent belief that no tax burden is too heavy and that money grows on trees, Council voted 6-3 to extend a 1/4 percent gross receipts tax until at least 2020 (although it is hard to believe that it will ever be recinded at this point).
The Rio Grande Foundation and others are looking carefully at the way in which a tax was extended for such a long period without voter approval, so this one is not done yet. Eventually, the Legislature will be asked to spend taxpayer dollars on this ridiculously-wasteful project. Hopefully their representatives realize that Farmington, Roswell, and Las Cruces taxpayers shouldn't be bilked out of $100+ million for a project that will only benefiit a small portion of Albuquerque.
In case you missed it in Saturday's Albuquerque Journal, the Rio Grande Foundation is busy making the case against Mayor Martin Chavez's proposed "modern streetcar" boondoggle. If you have the chance, please contact your counselors and let them know that this project is an unnecessary waste of taxpayer dollars. Better yet, take the time to come to Monday's City Council meeting and tell them in person what a bad idea this project is. I'll be there and I'd love to meet you!
It wouldn't be like the New York Times to take a stand for smaller government, but they did run an article discussing the planned New Mexico Spaceport. One important fact that was not mentioned in the article is that New Mexico is not alone in its spaceport venture. In fact, New Mexico's spaceport will be competing with similar ports in at least five other states and in several other nations. New Mexico can't even get it right when it comes to making movies, it seems rather obvious that the chances of seeing any return on this, highly speculative "investment" of taxpayer dollars, is rather slim.
Just in time for the upcoming election, the Rio Grande Foundation has put together its own guide to the ballot measures that voters will have the final say on. It is safe to say that the so-called "quality of life" tax hike is not the only vote likely to have a significant impact on taxpayers' pocket books.
Although it is nice that politicians allow citizens to have the final say over some of these issues, it would be even better if New Mexicans could actually put items like constitutional tax and spending limits on the ballot rather than even more spending as the politicians seem to prefer.
If our ballot guide is not enough for you or you are interested in what voters in other states are voting on -- four states will be voting on tax and spending limits -- then be sure to check out the ballot guide put together by the National Taxpayaers Union,
Recently, on the pages of the Albuquerque Journal, there has been a debate over whether or not the law school at the University of New Mexico is biased to the left of the political spectrum. Asserting that there is rampant bias at UNM was Christina Hoff-Summers of the American Enterprise Institute while the Dean of UNM's law school weighed in to assert that there is no bias at the school.
Unfortunately, conservatives who complain about bias at NPR, on PBS, and in the universities should realize that bias is inevitable at institutions that depend on government largesse for their existence. These people are not going to bite the big-government hand that feeds them and when it comes down to it, unless they say or do soemthing truly outrageous as the University of Colorado's Ward Churchill did a while back, these people are pretty secure in their rather cushy jobs.
Perhaps then, libertarians and conservatives should agree to work together not to change the party identifications of those who are hired and fired at these government-supported institutions, but to privatize them entirely. Michigan and Virginia law schools are de facto privatized and even Berkely is considering the idea. How about it UNM?
The Rio Grande Foundation of New Mexico today published a study that once-and-for-all shatters the myth that Bill Richardson is a fiscal conservative and makes the case for Colorado-style tax and spending limits.
Among other facts brought to light:
Governor Richardson is not just a bigger-spender than former-Governor Gary Johnson, but he is the biggest spender relative to the growth of inflation and population among the last four New Mexico governors (2 Republicans and 2 Democrats);
The average personal income of a New Mexican is approximately $10,000 less than that of the average Coloradoan;
New Mexico not only receives more taxpayer dollars from Washington relative to what its citizens pay in taxes than any other state (yes, we even beat out Alaska), but New Mexico also has more state and local employees per capita than any state but Alaska and Wyoming.
Only by giving taxpayers greater control over tax and spending decisions can New Mexico achieve its full potential.
Given New Mexico's poor track record on K-12 education, it is no surprise that many of the students entering New Mexico colleges and universities are ill-prepared. But, as the Albuquerque Journal editorialized on Wednesday, it is shocking just how unprepared students are. According to the editorial, "High-performing states have 64 percent of students in upper-level math classes and 40 percent in upper-level science, New Mexico has 35 percent and 21 percent." The study, which includes a table indicating that New Mexico students receive an "F" in preparation and "D" in completion of their college educations is available here.
The problem here is two-pronged, but in both cases it is caused by government: 1) The simplest way to address student unpreparedness is to reform the K-12 monopoly and put parents back in charge of their child's education. Only this accountability will cause educational outputs to improve because nobody cares as much about kids as their parents. 2) Rather than using oil and gas revenues to subsidize college tuition for New Mexico students, our colleges and universities need the freedom to adopt real standards and be able to go after the best-qualified students. A merit-based system, not gussied up welfare, will make our higher-education system world class and will force New Mexico's students that want to go to college to improve their achievement.
Business is business, but as a frequent guest on 106.3FM and a talk radio listener, I am going to miss having that station at the end of my dial. With so few decent radio options available around here and just one talk station, perhaps it is time to make the jump to XM or Sirius?
Last night, I attended one of the City of Albuquerque's meetings on Mayor Chavez's so-called "Modern Streetcar Project." It wasn't so much a meeting involving give-and-take between community leaders and residents as it was a sales pitch from the City's Transit Department and the HDR Company which will manage the project.
There was a 30-minute powerpoint presentation and a Q & A session, which did feature lively debate, but the only elected official who actually showed up, Councilman Heinrich, left immediately after making a short introduction. Most of the attendees appeared skeptical of the $224 million project and justifiably so. Although this meeting was designed to convey the sense that this project is a "done-deal," information on expected ridership numbers, operating costs and subsidies, fares, and operating hours was in short supply.
A few things struck me as particularly troubling:
First and foremost, Heinrich and others constantly compared the $224 million streetcar to the Big I interchange reconstruction which cost $230 million to complete. There is no doubt that the Big I carries exponentially more people and goods than the streetcar will ever carry.
Secondly, while the Mayor's trolley will be paid for by all taxpayers whether they ride or not, the Big I was largely paid for by motorists and truckers themselves through gas taxes and other fees. There simply is no comparison between the two projects as far as importance to the community is concerned.
Lastly, the people pushing this project say Portland is supposed to be our model. Unfortunately, that just doesn't hold up to scrutiny. Albuquerque is only 60 percent as dense as Portland and Albuquerque's metropolitan area has only 40 percent as many people (797,000 as compared to 2 million).
I'm really only scratching the surface of the arguments against this and other rail projects, but as was made clear last night, we won't have a chance to vote on this. Pressuring City Council to oppose this boondoggle is the only way to stop it.
Despite the fact that I live nowhere near a Rail Runner station and have no real need to ride the thing, I decided to take a ride on the train this morning to see how ridership is holding up. As you may know, the train is still "free," at least in the sense that it costs nothing to get on, but that will change in mid-October.
Anyway, I took the train from Journal Center northbound at 7:46am and found that the crowds have thinned out considerably as compared to what I'd read in early news reports about the throngs of people aboard. Despite the fact that there were only two cars on the train, I had my own row and there were less than 25 passengers on my car.
When I got off at the 550/Sandoval station, a handful (less than 5) people got off who looked like they were going to work. Most of the rest of the people seemed to be waiting either on or near the train for the trip south. Clearly, 2 months in, a large percentage of the train's passengers are joyriders.
On the way back south on the 8:20am train, I switched cars and counted 10 passengers on board. When I got back off at the Journal Center station, there were between 10 and 15 people getting on to go downtown, but by no means was the train going to be crowded.
Another sign of the Rail Runner's declining popularity was abundant parking -- the lots at 550/Sandoval and Journal Center were at most half full.
So, what does this all mean? Just that before millions of additional taxpayer dollars are spent on laying Rail Runner track to Santa Fe, perhaps we should more honestly assess whether these trains more resemble shiny new toys that will actually harm our overall transportation network or whether they are in fact serious efforts to better move people from place to place.
There is a lot of talk about the 2005 Energy Bill that passed Congress and the campaign ads in which Patty Madrid criticized Heather Wilson for voting for a bill that contained $2.6 billion in subsidies for the oil industry. Wilson defenders have hit back saying that the Energy Bill was "good for New Mexico" and that all five members of the New Mexico delegation voted for the bill.
So, what is the real story? Well, Dr. Harry Messenheimer recently cut through a little of the confusion by putting "a pox on both houses" by criticizing both politicians for their disinformation about gas prices and the energy industry in general. But, there is even more meat on this bone.
First and foremost, yes, there were very real subsidies in the Energy Bill. In fact, the Energy Bill was far more costly than the $2.2 billion received by the oil industry. The real cost of the Energy Bill is closer to $74 billion. Unfortunately for Madrid, much of that money was spent on nuclear energy, "clean coal," and the development of "next generation" energy sources.
Is this good for New Mexico? After all, New Mexico is a big producer of energy. Any economist worth his or her salt would say "no, let the market decide." First and foremost, people need energy from all sources, the only thing subsidies do is alter which form of energy is used and artificially raise or lower demand. Unless the bill specifically encouraged use of energy sources from New Mexico at the expense of other sources of energy, there is no net benefit to the state.
Unfortunately, in New Mexico, the concept of a "free market" might be as rare as a saguaro cactus sighting is within our borders.
Albuquerque Mayor Martin Chavez is acting as if the city itself won the latest lottery jackpot. A week ago he introduced plans for a new, taxpayer-backed downtown sports arena, now he is pushing his latest big-budget idea, a so-called "modern streetcar" running along Central Avenue from Old Town to Nob Hill and from Central Avenue to the Sunport." (I urge you to check the previous link to the schedule of "town hall" meetings the Mayor is holding on this project and to attend and speak your mind as I will)
Never mind that the cost for this system would be $240 million (split evenly betwen the city and the state) and that although the Mayor has repeatedly called the system "modern streetcar," it is really just a light rail system that brings all the costs and problems of light rail (cost overruns, slowness of service, and clogged streets among the prominent issues).
Beyond all of the problems associated with light rail is the question that must be asked, "Why do we need light rail running down Central Avenue when the Rapid Ride serves the same purpuse at a much lower cost?" Instead of blowing $240 million on a shiny new toy, Mayor Marty should consider ways to expand bus service to serve more people at a far lower cost, or he should do nothing and let taxpayers keep some of their hard-earned money for a change.
Now that Rio Rancho is set to open its arena in a matter of weeks, Albuquerque Mayor Martin Chávez has a serious case of arena-envy. Chávez has threatened eminent domain for a project that wouldn't have a single permanent tenant lined up. Of course, eminent domain isn't the only potential problem with the proposed arena, taxpayers would also be on the hook as an insurance policy on debt repayment. This may have been something of a gamble when a similar agreement was made, but with a competing arena located in Rio Rancho, not to mention The Pit, I can only imagine how poorly the taxpayers will fare under such an arrangement. Here's hoping Mayor Marty comes to his senses!
I took my first-ever trip on the new Rail Runner commuter train this weekend to and from the New Mexico Wine Festival and thought I'd offer a few thoughts on the train. First and foremost, I got on at the Paseo/Los Ranchos station for the first train of the day. The train was jammed to the gills and it wasn't just standing room, but sardine-like conditions. The train cars are nice and the air conditioning was cranked up so conditions weren't too bad. On the way back on the 3:05 train, there were fewer people although it was still standing room only.
Obviously, the price for a ticket is still "0" and most economists will tell you that there is a nearly unlimited demand for anything that is "free." Curiously enough, this very same dynamic was at work inside the wine festival as well where the lines for a "free" sip of wine were upwards of 10 minutes long. I did notice that, while large numbers of passengers did take the train to the wine festival, equally large numbers (at least on the first train of the day) appeared to be joy-riding. After all, I saw many of the people that had just gotten off the train at Bernalillo, get back on the train right away.
While the train may prove popular even after the "reduced fare" of $2 per trip (as opposed to free) is instituted on October 14, the most important number is the estimated $320 million cost to taxpayers. Even if you don't believe as I do that the $320 million would be best given back to the taxpayers of New Mexico in the form of tax cuts, it is hard to believe that other legitimate needs would not be better served than a train, the tickets for which, are priced far below market prices.
According to the August 17 article, about 4.1 percent of New Mexicans moved here from another state within the last year. This puts New Mexico at No. 9 in the nation for the percentage of its residents who had moved from another state within the previous year.
Although New Mexico's increased popularity is a good sign, it is hard to tell whether the state is actually becoming a more attractive place to live or whether greater numbers of native New Mexicans are leaving the state for greener pastures. The Rio Grande Foundation recently studied the issue and found that at least historically-speaking New Mexico has tended to lose population to other states as a result of poor tax policies.
The Rio Grande Foundation and others knowledgeable of the uses and abuses of eminent domain recently presented before Governor Richardson's eminent domain task force. Aside from presenting a variety of information relating to eminent domain laws in other states and how New Mexico property owners could best be protected, the experts all criticized Rio Rancho's recent uses of eminent domain.
New Mexico came in as the 19th best state for employment in june with a 4.1% unemployment rate. But even with low unemployment and strong growth, New Mexico is still among the poorest states.
On a lighter note, The Economist writes about economist blogging. Apparently, you don't have to go to an Ivy League university anymore, you can just read the blogs of the professors that teach there!
The New Mexico state legislature wisely rejected the proposed increase in the statewide minimum wage. As a result, Santa Fe--with its own substantial increase--will stick out like a sore thumb.
Any business that wants to locate in New Mexico will surely avoid Santa Fe. Even those that need to be located right in Santa Fe will tend to avoid the city's high wages. It's said that 19 restaurants have already closed.
It's said that a higher minimum wage will have no effect on firms that don't hire low wage workers, but this is untrue. A $10 minimum will probably be felt in the form of wage increases higher up in the pay scale. Otherwise why were union lobbyists so thick around the capital during the minimum wage debate?
Albuquerque Mayor Chavez wants to install streetcars between Old Town and Knob Hill. I don't know why. Here are a few reasons why not:
1. Construction costs would be high and streets would be torn up for months. Whatever the estimated cost, the actual cost would be far higher.
2. Low benefit-cost ratio. Dozens of cities (including Albuquerque) have abandoned their streetcar systems for one reason or another.
3. Unlike other forms of mass transit, streetcars actually add to congestion, as their tracks use one or more lanes of the street.
4. Streetcars endanger riders who have to get from the sidewalk to the streetcar, dodging auto traffic.
5. Eventually the system will prove to be a lemon, and taxpayers will have to foot the bill for tearing up the tracks and paving over the ruts.
Does anyone disagree?
By now it has become obvious that the planned "communter" train between Belen and Bernalillo makes no economic sense. Yet the legislature continues to debate this monstrocity. Can't anyone step up and introduce a bill to put the train out of its misery?
It's bad in so many ways:
--The cost will greatly exceed revenues.
--Ridership will be so small that no appreciable reduction in congestion will occur.
--The purchase of BNSF land and track holds many pitfalls, such as liability for damage claims and the loss of tax revenues on the land.
--What benefits there are (and these will be slim) will acrue to a very limited number of people, while taxpayers statewide pick up the tab. Better to use the money statewide for needed road improvements.
Now proponents of the rail line are asserting that even though the train will lose money, in twenty years it will begin to make sense. What a weak argument, unsupported by any evidence!
It's time to pull the emergency cord and stop this monumental waste.
Thanks to Dick Rowland's staff at the Grassroot Institute of Hawaii, here is a nice behavioral analogy apropos to NM (perhaps you have seen it before):
The difference between a bureaucrat and a public servant is the degree to which an individual is empowered to take action for positive change in a system and the extent to which they exercise that power to benefit the common good.
Essentially, bureaucrats can be the source of the problem or victims of the system based on their actions or inactions. I think it is safe to say that bureaucrats ARE a large part of the problem in government. Most of you know that I like to tell a good story to illustrate my point….
Start with a cage containing five apes. In the cage, hang a banana on a string and put stairs under it. Before long, an ape goes to the stairs towards the banana, but as soon as he touches the stairs, spray all of the apes with cold water.
After a while, another ape makes an attempt with the same result – all the apes are sprayed with cold water. Turn off the cold water. If, later, another ape tries to climb the stairs, the other apes will try to prevent it even though no water sprays them.
Now, remove one ape from the cage and replace it with a new one. The new ape sees the banana and wants to climb the stairs. To his horror, all of the other apes attack him. After another attempt and attack, he knows that if he tries to climb the stairs, he will be assaulted.
Next, remove another of the original five apes and replace it with a new one. The newcomer goes to the stairs and is attacked. The previous newcomer takes part in the punishment with enthusiasm.
Again, replace a third original ape with a new one. The new one makes it to the stairs and is attacked as well. Two of the four apes that beat him have no idea why they were not permitted to climb the stairs, or why they are participating in the beating of the newest ape.
After replacing the fourth and fifth original apes, all of the apes, which have been sprayed with cold water, have been replaced. Nevertheless, no ape ever again approaches the stairs.
Why not?
“Because that’s the way it’s always been around here.”
Sound familiar?
We should immediately ban the use of the phrase “We’ve always done it like that” by any public employee. They should be allowed and even encouraged to apply common sense in the workplace. We should pay people who work for government based on the service they provide versus the amount of paper they push. Maybe then we will create true public servants in government rather than bureaucrats.
As hints for the forthcoming legislative session are beginning to appear I am reminded of Groucho the great philosoper:
“Politics is the art of looking for trouble, finding it everywhere, diagnosing it incorrectly and applying the wrong remedies.” - Groucho Marx -
This week's "The Line" on KNME Channel 5 in Albuquerque (8:30 pm Friday, 7:00 am Christmas Day) features our good friend John Dendahl. Tune in and you will see an informing and entertaining discussion of
* boondoggling in state government
* groping in state government
* pay-to-play in state government
* and more.
Merry Christmas and Happy Hanukkah.
I just saw Mario at lunch and he was a little chagrined that I characterized his blog as usually-reasonable. For the record, I am a big fan of his blog and have to date not found an unreasonable post. Perhaps I am subconsciously jealous that his blog is more widely-read than our own?
On another note, I now realize I should not have characterized Joe Monahans blog as right-of-center. I apologize if I have offended either Joe or bona fide righties.
Unlike some politicos, we here at the Foundation are not ashamed to admit our mistakes.
New Mexico has a small but growing community of bloggers. Here, in no particular order, are some of my personal favorites:
Mario Burgos: His is a usually-reasonable right-of-center perspective from an active Republican.
New Mexico Politics with Joe Monahan: Another right-of-center perspective from an even more active Republican.
Duke City Fix: A mostly-apolitical mlange from a very diverse group. Their newest writer is a senior at my alma mater!
Albloggerque: A left-of-center chronicle of life around Nob Hill from a socially-conscious educator named Jon Knudsen.
Gregpayne.com: A right-of-center blog from a New Mexico State Representative and ubiquitous commentator.
Democracy for New Mexico: At face-value it would appear that we at the Foundation have very little in common with this decidedly lefty-group. That said, Ive always believed that libertarians and progressives have a lot more in common than most people think. Both groups are skeptical of big power, special interests and invasions of civil liberty. Furthermore, both share a deep concern for the plight of the poor and the powerless. Now, if we could only get the progressives to appreciate that the best way to lift the poor out of poverty is to permit free individuals to interact in a free market.
And finally, we have the latest entrant:
NewMexicoMatters: A blog from a self-proclaimed non-blogger, this center-left New Mexico patriots commentary looks promising. Welcome!