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 email@example.com 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.