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.
As Democrats ascend to power and Republicans begin picking up the pieces of electoral defeat, there is a lot of spin going on as to what the big issues were that caused the Republicans to lose Congress. One particularly confusing bit of “analysis” was recently performed by the folks over at the Republican Main Street Partnership, which blamed the Republican Party’s defeat on its “pursuit of a far right agenda.”
If the Main Street Partnership were a libertarian group critical of Republicans’ social or Iraq War policies, this critique would make sense, but the Partnership is really a left-wing faction within the Party dedicated to fighting any efforts to restrain the growth of the federal government and specifically created in opposition to the Club for Growth.
With President Bush and the Republican-dominated Congress having grown government at rates comparable to Lyndon Baines Johnson and that left Bill Clinton in the dust, it is hard to argue that Republicans adhered to a “far-right” philosophy on spending and that cost them the election. But, when your policies have been followed and have failed so miserably, I suppose recriminations are to be expected.
The National Taxpayers Union has some excellent analysis of the Main Street Partnership’s agenda here.
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.
Although the Rio Grande Foundation cannot and does not take a position on specific candidates and their races, Bruce Bartlett makes a compelling case as to the merits of splitting control over the legislative and executive branches of our federal government. It is hard to argue with some of the data he includes as far as the relative success of limiting spending and passing necessary reforms. We’ll just have to wait until November 8 when, hopefully, the votes will be tallied and America will know who controls Congress.
As much as one doesn’t want to pick on the citizens of the Gulf Coast region, one might think that taxpayers and residents of the area would agree that we don’t want something like Katrina to ever happen again. Unfortunately, it looks like that is what federal taxpayers are in the midst of paying for — rebuilding in flood-prone areas.
Unfortunately, Congress has proven once again to be an inadequate steward of our taxpayer dollars. So, instead of reforms or, better still, the elimination of the National Flood Insurance Program which ultimately creates these perverse incentives, we’ll have aother Katrina-like storm in the future.
Perhaps you may have heard about the recent letter that was signed by some 675 economists who endorse raising the minimum wage from $5.15 an hour to $7.25. It would be nice if Congress could raise the income levels of working Americans with the wave of a legislative wand, but as Steve Chapman points out, these economists — yes, it happens to them too — have fallen prey to a bout of “wishful thinking.”
While New Mexico, because of its relatively high poverty and low wages, will hurt its low-income workers more than most states, the best thing about Congress’s decision not to raise the wage this year is that some states are raising their wages while others are not. Given time, those states that raise their wages the most aggressively will see a negative economic effect while others will escape harm. Allowing states to go their own ways is far better than a one-size-fits-all policy from Washington.
Many of New Mexico’s leading fiscal conservatives were quite upset when, in the 2004 Report Card, the Cato Institute gave Bill Richardson a “B” and called him “an aggressive tax cutter, the best Democratic Governor in the nation bar none,” and “one of the best new governors in the nation.”
Recently, Cato released its 2006 study of governors and, while Richardson only receives a “C,” Cato still lists him as the 9th-best Governor in the nation. What gives? For starters, despite all his shortcomings, Richardson is a net tax cutter based on his income and capital gains tax reductions. With all of the other governors out there raising taxes, Richardson is going to be seen in a favorable light on tax policy.
Spending is something of a different story. According to Cato: “Richardson’s budget proposals have grown faster each year, and the general fund budgets he signed into law between fiscal 2004 and 2006 have grown in total by a whopping 23 percent—almost five percentage points faster than population and inflation.”
We at the Rio Grande Foundation have been saying very much the same thing about Richardson’s spending record. If nothing else, hopefully his desire to play the part of a fiscal conservative and the reduction in oil and gas tax revenues will force Richardson to exert some fiscal restraint rather than raising taxes and further tarnishing his credibility as a “fiscal conservative.”
Often, much is made of America’s “economic competitiveness” with the rest of the world. Thomas Friedman’s book, The World is Flat made a big deal over whether Americans can “compete” in the world economy. Unfortunately, politicians from both the left and the right of the political spectrum too often harp on our “competitiveness” without fully explaining themselves.
Fortunately, that is why we have people like Paul Jacob to explain in just a few hundred words that we are not really competing against the Chinese or the French, rather we are all cooperating through the wonderful capitalist system to raise living standards in all nations that embrace free trade and economic liberty. In other words, rather than worrying aboiut what the Chinese or Indians are doing and whether they’re “catching up” to us, we should celebrate their gains and work to improve our our own country.