New Mexico’s Legislative Finance Committee has produced a new study (discussed here in the Albuquerque Journal) claiming that taxpayers in our state could save $700 million by convincing 2,600 additional students to graduate rather than dropping out. Saving $700 million, not annually, but over the life of each graduating class, would be a very nice thing for New Mexico…and of course, there is no reason to stop at 2,600 additional graduates.

And, while the LFC’s recommendations are open to debate, they fail to include adding school choice to the mix. However, school choice has worked elsewhere as the chart below relating to the DC voucher program shows:

Lest we mistakenly believe that such success has only happened in Washington, there has been a great deal of success in Milwaukee schools which have also enacted a voucher program (of note is the dramatic improvement in both public and private schools in Milwaukee where the competition from school choice seems to have pushed traditional public schools to improve as well):

The New Mexico Freedom Hour is presented by the Rio Grande Foundation. It next airs on Saturday, September 27, 2014 from 12pm to 1pm on 770 KKOB AM. This week, Rob Nikolewski of Capitol Report New Mexico will be sitting in for Paul Gessing:

Nikolewski’s guest will be New Mexico Sen. John Arthur-Smith, D-Deming. Smith is chairman of the powerful Senate Finance Committee.

The show will be focused on New Mexico’s struggling economy and what the New Mexico Legislature can/will do about it.

Listeners are encouraged not only to tune in and listen, but to call in with questions: 505-243-3333.

Rob Nikolewski over at Capitol Report New Mexico has reported on a new study from the  American Economic Development Institute which ranks the various US states on being pro-business or anti-business. According to the report, New Mexico received an overall C grade for 2014 — the same grade it got in 2013 and 2012 — but tumbled from 25th in the AEDI rankings to 35th, tying Oklahoma for the most precipitous drop of the year.

See the chart below:

The top 10 states in the AEDI survey  this year were (9 of the top ten are right to work). Lack of right to work is not the only problem New Mexico faces as is clear from the data, but it is obviously a major factor in determining whether a state is business-friendly or not:

1. Utah

2. Wyoming

3. Nebraska

4. Virginia

5. Kansas

6. North Dakota

7. Indiana

8. Missouri

9. South Carolina

10. South Dakota

The bottom 10 consisted of (all of the bottom 10 are not right to work/forced unionism states):

41. Massachusetts

42. Vermont

43. Connecticut

44. Maine

45. West Virginia

46. Wisconsin

47. New Jersey

48. Rhode Island

49. Illinois

50. California

As New Mexicans wait and wait for something, anything to happen at the Spaceport (for which they have paid more than $200 million), those who put their own money up to be among the first to fly into space are getting impatient with the ongoing delays (and are, in some cases, trying to get their money back).

I was recently interviewed for this story by the UK’s Daily Mail.

The story details some of Richard Branson’s broken promises and the unfolding, slow-moving debacle that is New Mexico’s Spaceport. It is worth a read for even those in our state who have been keeping a close watch on the project both because of the different perspective and for the cheeky writing style that Brits seem to pull off so well.

Sometimes a column leaves me positively speechless. This is one of them. It was written by a local developer, Rob Dickson, who went to New York to march against climate change…presumably he walked.

In his article, Dickson calls for “a no-pollution economy.”

He also states that people in business, who claim to support “free enterprise” and “political freedom,” should object to “free” pollution because it:

1) Makes others pay a cost, not of benefit to them.

2) Misallocates resources. Pollution is waste. Waste costs all of us.

3) Is generally the result of corrupting influences at all levels of government.

4) Squashes innovation by mispricing the products and services we buy and sell.

Needless to say, I disagree with Dickson. My responses to each point follow:

1) If carbon is a pollutant then we are all “polluters” by our very existence. Assuming that he is speaking to something beyond carbon emissions (real pollution if you will), we all benefit from the activities that cause pollution: goods produced in factories, food grown on farms, transportation of that food and those products, etc. These goods are taxed and regulated every step of the way. I’m not sure how this would work.

2) Yes, pollution is waste. That is why businesses works relentlessly to reduce waste. UPS drivers, for example, do everything in their power to make only right turns because it saves time and fuel. Compare a modern plastic bottle with one that is 10-20 years old. The reduction in plastic usage is incredible.

3) No. Sorry. Pollution is a reality of human activity. Nothing more, nothing less. Pollution can take many forms and it is often nothing more than dirt and nutrients that have been moved from one place to another associated with human activities.

4) Mispriced according to whom? According to Dickson? According to the marketplace? According to the government? How do we set up a regime that accounts for ALL pollution? Is he saying “cap and trade?” He never states that if that is his belief, perhaps because the European scheme has failed.

I received a media advisory from the League of Conservation Voters recently (for some reason, it was not available online). It said in part, “New Mexico’s Latino community will be represented at the People’s Climate March in New York City this coming Sunday, September 21st by a group of Latinos who are part of local New Mexico program supported by the League of Conservation Voters Education Fund and Conservation Voters New Mexico Education Fund.”

The release listed Eduardo Garcia and Yarida Estrada as heading to New York to attend. I’m just wondering whether our radical green friends will be bicycling or walking to New York. After all, these are the very same people who supported efforts in the EU to impose heavy new taxes on airline passengers in the supposed hopes of reducing carbon emissions and saving the planet.

And, lest you think that these environmental groups are the “little guys” against the Koch-funded Rio Grande Foundation juggernaut, you should check out how much they are charging for an upcoming event here in poverty-stricken New Mexico. There must be even more wealthy “limousine liberal” environmentalists in this state than I thought.

In a broader sense, according to the Center for Public Integrity, the League of Conservation voters is now one of the leading “dark-money” groups in the nation.

The Albuquerque Journal has been running its usual pre-election poll results. Gov. Martinez has a significant (18 point) lead on Gary King and yet, subsequent polls show seemingly broad voter support for two policies Martinez opposes (at least somewhat).

On the minimum wage, 68 percent support the idea while 27% oppose it. Martinez has previously vetoed a hike to $8.58 an hour while having said she supported a smaller increase. These polling data are in line with national polling on the minimum wage.

Unfortunately, the Journal chose not to ask more specific questions involving trade-offs such as higher prices or lost jobs. Economics 101 (and the Congressional Budget Office) tell us that imposing price floors leads to lost jobs:

And, on the proposal to tap the Permanent Fund to create a raft of new government programs targeted at early childhood, the poll results were strongly in favor of the plan. Unfortunately for the advocates, results of similar plans as enacted in other states are mixed.

It is hard to measure the depth of the voting public’s passion when it comes to these issues, but it is worth noting that right to work is supported by overwhelming majorities nationally.

Support for school choice tax credits is also overwhelming (64% to 25%, see Q. 20) and yet New Mexico remains without this type of school choice.

Polls are interesting indicators of public opinion, but support in a poll doesn’t always translate into reality. Hopefully, voters are smart enough to realize that raising the minimum wage and spending more money to expand the education bureaucracy aren’t going to improve New Mexico’s economy.

Julian Morris of Reason Foundation recently presented on the issue of plastic bag bans at a series of events in New Mexico. Already, Santa Fe and Silver City have bans in place. Morris is author of a report on the is the author of the new report “How Green Is that Grocery Bag Ban? An Assessment of the Environmental and Economic Effects of Grocery Bag Bans and Taxes“.

Video of Morris’ presentation (and a five minute personal introduction by RGF President Paul Gessing) is below and his powerpoint slides are available here:

The ineffectiveness of plastic bag bans presentation by Julian Morris of Reason Foundation from Paul Gessing on Vimeo.

Join the Rio Grande Foundation For an Evening of
Discussion and Fellowship at Liberty on the Rocks!

"Liberty on the Rocks" is a no-host happy hour discussion and information-sharing session.

Liberty on the Rocks will be held at Scalo Northern Italian Grill which is located in Nob Hill at 3500 Central Avenue SE in Albuquerque. A private room has been reserved for this event. In August, Liberty on the Rocks will take place on Thursday, September 18th from 6:00 to 7:30PM.

There is no cost for this public event, but attendees are encouraged to have dinner or drinks. Registration is not required but is much appreciated. Click here to register online … it's fast and it's free!

Come celebrate liberty with us!

Unanimously, the Nevada Legislature has passed a generous list of subsidies in order to lure the Tesla “gigafactory” to a site near Reno. A few thoughts follow:

1) Any and all special incentives are sub-optimal policy. The best thing to do is to have low taxes and reasonable regulations.

2) Nevada already has a right to work law and no personal or corporate income taxes. It is also the most logical location for such a factory as it is the closest to the company’s headquarters without being in California which has previously given the company outrageous incentives, but is generally not friendly to business;

3) Since Nevada is already business-friendly and offers the best location, it is hard to understand why Nevada’s politicians were so generous to the company, but they were. Tesla will pay no property or payroll taxes for 10 years, no sales and use taxes for 20 years, and will receive another $195 million in tax credits. The total loss to the treasury (not cost) is $1.3 billion. The good news is that taxpayers will NOT pay anything out-of-pocket for the factory as we at RGF advocated.

4) As generous as Nevada’s subsidies are, they are more economically-defensible than those given to New Mexico’s film industry or were given to Schott Solar or Eclipse Aviation.

That’s because it appears that most or not all of the Tesla subsidies will be in the form of tax breaks as opposed to outright expenditures of taxpayer dollars. It’s also because this battery factory is not entirely reliant on the success of one company. Rather, batteries are a growth industry and even in the absence of Tesla, the factory will likely be useful.

5) Where Nevada could really do well is in the spinoff industries that will likely locate near the gigafactory. These businesses will pay full-freight mostly in terms of taxes and should be plentiful.

Conclusion

Could the Nevada Legislature have driven a harder bargain and gotten a better deal? Probably. Will Nevada ultimately come out just ahead in the Tesla deal despite the very generous subsidy package? I’d also say “yes.”

Can New Mexico make the policy changes necessary to make itself competitive with states like Nevada and Texas? I hope so.

According to Area Development Magazine, 9 of the top 10 states for doing business in 2014 are Right to Work.

Unfortunately, the report only ranks the top 10 states, but New Mexico is nowhere to be found in any of the sub-rankings leading me to believe that we’re towards the bottom.

When will NM get in the game?

The following is from Common Sense with Paul Jacob. Given that New Mexico Sen. Tom Udall is the lead sponsor of this amendment to undermine the First Amendment, I felt it was worth posting in its entirety:

Yesterday’s somber thirteenth anniversary of the 9/11 terrorist attacks was marred by a brand new and savage act of violence against the very essence of America: the First Amendment.

Who orchestrated the attack? Responsibility was not claimed by ISIL or ISIS . . . or North Korea’s Kim Jong-un . . . or even Dennis Rodman.

The culprits? A majority of the United States Senate.

Fifty-four Democrats voted to scratch out the words “freedom of speech” from the First Amendment to be replaced by giving Congress new power to regulate the spending, and thereby the speech, in their own re-election campaigns.

Conflict of interest, s’il vous plaît?

The assault was only thwarted because a simple majority falls short of the two-thirds required to send the constitutional amendment to the House.

Dubbed the “Democracy for All Amendment,” supporters and their many cheerleaders in the media pretended Senate Joint Resolution 19 would overturn the Supreme Court’s Citizens United decision and get big money out of politics. Certainly an amendment could do that, explicitly, but this one would have done no such thing.

Instead, SJR 19 would have empowered our despised Congress to regulate as it pleased, with such sweeping power that the amendment’s authors felt the need to reassure supporters (such as the New York Times) by stating in the amendment that, “Nothing in this article shall be construed to grant Congress or the States the power to abridge the freedom of the press.”

Let’s hope that, for the 54 Senators who voted to repeal freedom of speech, this goes down as a suicide attack . . . politically.

This is Common Sense. I’m Paul Jacob.

My own article on Udall’s assault on the First Amendment can be found here.

The New Mexico Freedom Hour is presented by the Rio Grande Foundation. It next airs on Saturday, September 12, 2014 from 12pm to 1pm on 770 KKOB AM. This week we’ll take on two important subjects relating to New Mexico’s economy:

• In the first half hour, host Paul Gessing will talk about New Mexico’s underfunded government employee pension system which was found to be the most underfunded system among any of the 50 states according to a new report by the Competitive Enterprise Institute (CEI). We’ll discuss the report, what makes New Mexico’s pension system so dire, and what needs to remedy the problem with Aloysius Hogan, a Senior Fellow with CEI.

• In the second half hour, Gessing will interview site selection expert John Boyd about the Tesla decision, why he thinks Tesla chose Nevada over New Mexico, and what New Mexico should consider doing to make it more attractive as a business destination in the future.

Listeners are encouraged not only to tune in and listen, but to call in with questions: 505-243-3333.

You can usually count on the Journal’s Winthrop Quigley to provide the left-leaning viewpoint when it comes to the New Mexico economy and education system. His recent “Upfront” column on the liberals’ desires to tap (raid) New Mexico’s permanent fund to support a variety of early childhood programs including pre k is no different.

Interestingly, while proponents of massive new taxpayer expenditures on early childhood learning love to claim that their programs are “proven effective,” the real-world reality is far different. For starters, there is the federal Head Start program which the government’s own accountability office found to have “no lasting impact by 1st grade.”

The effectiveness of real-world pre k programs at the state level is questionable at best as the charts below illustrate (Oklahoma and Georgia have two of the longest-running universal pre k programs.

And, as if all that is not enough, the US Chamber of Commerce just today released its “Leaders and Laggards” report. New Mexico’s overall performance was certainly poor, but its “return on investment” was graded “F.” It would seem that policymakers might want to get the current education system to something resembling effectiveness before spending hundreds-of-millions more annually.

If you haven’t already read it, Robert Bryce had an excellent article in today’s Albuquerque Journal on the continued growth in the use of hydrocarbon-based fuels (and how that growth has outpaced so-called “renewables”) even while taxpayer-subsidized wind and solar have grown rapidly in recent years.

The good news for those of you in New Mexico is that Bryce will be speaking on December 9, 2014 at Rio Grande Foundation events in Albuquerque and Farmington. We are three months out from that event and will be providing more details as the date grows closer, but with Bryce’s piece appearing in the local paper, it only makes sense to alert our readers that he’ll be coming to New Mexico soon. See Bryce’s article below:

Solar energy appears to finally be coming of age

In July, Bloomberg New Energy Finance declared that we are in the midst of a “solar revolution” and the firm predicted that solar will be the fastest-growing form of global generation capacity through 2030. A few days after that report was released, Deutsche Bank announced plans to lend $1 billion to support solar deployment in Japan.

About 400,000 U.S. homes now have solar panels on their roofs. One of those homes is the White House. Last year, after a 27-year sabbatical, solar panels were installed on the roof of America’s most famous house.

There’s no question that solar is on a tear. Since 2011, the amount of energy produced by the solar sector has more than doubled. But amidst the solar frenzy, we must remember the critical issue of scale. Indeed, despite solar’s rapid growth, its output is still being dwarfed by the ongoing growth in hydrocarbons.

That fact can easily be proven by comparing the surge in solar-energy production with the remarkable growth in domestic oil output. In July, according to the Energy Information Administration, U.S. oil production averaged about 8.5 million barrels per day. That’s a 16 percent increase over July 2013 figures, when domestic crude output was about 7.3 million barrels per day.

Thus, over the past 12 months or so – thanks largely to horizontal drilling and hydraulic fracturing in shale formations – U.S. oil production has increased by 1.2 million barrels per day. How does that compare with solar?

In 2013, according to the BP Statistical Review of World Energy, the energy output of the global solar sector amounted to about 600,000 barrels of oil equivalent per day. Thus, in one year, merely the increase in U.S. oil production has been roughly equal to twice the contribution from every solar-energy installation on the planet.

The scale issue becomes even more obvious when comparing solar with coal. In 2013, global coal use increased by 3 percent. But in absolute terms, that small percentage increase amounted to 2 million barrels of oil equivalent per day. Thus, in one year, global coal use grew by more than three times the contribution now being made by all global solar. Indeed, solar’s contribution is downright Lilliputian when compared with coal consumption, which now totals about 77 million barrels of oil equivalent per day, or roughly 128 times the amount of energy being produced by solar.

Let me be clear: I’m bullish on solar. I’ve invested in solar. I have 3,200 watts of solar panels on the roof of my house. (Why did I install them? Simple: Austin’s city-owned utility paid two-thirds of the cost.)

Prices for solar systems like mine are falling. In 1980, the average cost of a solar photovoltaic module was over $20 per watt. Today, the cost is well under $1 per watt. If cheaper solar systems can be twinned with cheaper electricity-storage devices, we will see a transformation of electric grids around the world. Furthermore, solar will grow quickly in rural areas and island economies, where even relatively small batteries can make a big difference for electricity-starved populations.

That said, the hard reality is that for all of its rapid growth, solar isn’t even keeping pace with the growth in the global appetite for hydrocarbons. And here’s another truth: while civilians and politicians alike eagerly tout the advances being made in renewable energy, they routinely fail to appreciate how ongoing innovation in the oil and gas sector – in everything from better seismic techniques to digitally controlled drill bits – has resulted in faster and cheaper drilling, which, in turn, has turbocharged the growth in hydrocarbon production.

So by all means, let’s appreciate the growth in solar. And if it makes you happy – and/or you can get a subsidy – put some solar panels on your roof. But don’t count hydrocarbons out yet. They’re going to stick around for many decades to come.

RGF president Paul Gessing recently appeared on the public affairs show of KNAT TV. There are two separate interviews, one on New Mexico’s economic situation and the need for a right to work law, the next on Gov. Martinez’s efforts to re-impose work/education/volunteering requirements for food stamp recipients. Total interview time for the combined interviews is 30 minutes:

Paul Gessing discusses the potential for a Right to Work law in New Mexico and Gov. Martinez’s Medicaid reforms from Paul Gessing on Vimeo.

The video of last night’s “Duel in the Desert” debate between myself and former gubernatorial candidate Alan Webber is now up:

9-8-14 Duel in Desert: Paul Gessing and Alan Webber debate the New Mexico Economy (moderated by Gene Grant) from Paul Gessing on Vimeo.

In case you missed it, we also had “dueling” opinion pieces that are now posted at NM Policy Debate.

While the crowd was definitely, pro-Webber, no matter which side of the debate you fall on, the New Mexico economy is the single most important issue facing our state. I was gratified to see hundreds of people show up to hear a discussion of the issues. It was a great opportunity to present the Rio Grande Foundation’s vision of a more economically-free New Mexico to a new group. Definitely not “preaching to the choir.”

For a sneak preview of some of the issues we’ll be discussing, check out Webbers’ opinion piece and Gessing’s, both of which were recently published in the Las Cruces Sun-News.

Tonight, from 6 to 7:30pm, Gessing and Webber will debate these and other economic issues facing New Mexico. Come out and be part of the action!

I’ve been to the Big Apple, San Francisco, and Chicago. All of them are great places to visit, but they are also really expensive places to live with high regulatory and tax burdens.

But what about more affordable cities that still have things to do, but won’t break the bank…you know, the category that Albuquerque or Las Cruces might fit in one day. Well, the folks at Kiplinger have put together one such list and, not surprisingly, all nine of their selections are in right to work states. Perhaps also not surprisingly, four of the nine are in Texas which has no income tax.

Unions and some on the left like to unfairly paint right to work laws as “right to work for less.” What they prefer to gloss over is the very real fact that the cost of living is generally cheaper in right to work states as well.

The Washington Times recently awarded generous film subsidies the “Golden Hammer” for being “egregious examples of government waste, fraud or abuse.”

New Mexico’s subsidies were specifically-mentioned in the show with a special nod to plans to throw money at the television show “The Bachelor” in hopes of bringing the show to Santa Fe.

Interesting story from KOB-TV on Right to Work:

Obviously, if you go ask a bunch of union people about Right to Work, your responses are going to be rather negative, but according to new polling from Gallup, 65% of Democrats nationwide support the concept.

We’re gaining momentum.

I posted last week that California’s Legislature had achieved temporary sanity by rejecting a statewide ban on plastic grocery bags. Unfortunately, but unsurprisingly, that sanity wore off and it looks like Gov. Jerry Brown will be signing the ban into law soon.

Think this type of ban won’t spread elsewhere? Santa Fe and Silver City already have bans in place. I’ve also talked to at least one elected local official who plans to introduce a local ban. Want more information on plastic bag bans? We’ve got free public events coming soon (on the evening of Monday, September 15 and the morning of Tuesday, September 16, in Las Cruces and Albuquerque.

I recently sat down with Jamai Haquani of the Albuquerque-area public access show Local, National, Global to discuss New Mexico’s struggling economy and what can be done about it. See part 1 of the interview below:

part 2:

part 3:

Following closely on the heels of our recent release of polling data on the potential for a “right to work” law in New Mexico (the poll found 85% support the concept of “right to work”), the Gallup polling organization has done some additional polling on issues surrounding unions and “right to work” laws.

For starters, according to the Gallup article, “82% of Americans agree that ‘no American should be required to join any private organization, like a labor union, against his will.’” That closely tracks our results.

When asked about “right to work” in a slightly different way, support for such laws remains strong at 71 percent approval:

Where things get really interesting is that despite overwhelming support for “right to work” laws, most Americans support unions:

This attitude flies directly in the face of anti- “right to work” union critics who try to conflate such laws with being “anti-union.” That could not be further from the truth and majorities of Americans seem to support unions themselves while also believing that workers should not be coerced into joining them or paying dues to them.

This puts RGF in-sync with most Americans although to be fair, we side with FDR in opposing government labor unions, but respect private sector unionism as long as they can’t coerce membership or payment of dues.

Oh, and one last kicker from Gallup. 65% of Democrats and more independents than Republicans (I guess those independents really support not being coerced to join anyone whether that be unions or political parties) support “right to work.”