Rep. Mimi Stewart (D-unions) has introduced legislation (HB 3) that would reduce class sizes in New Mexico (she’s also got a bill, HB 66 to reduce graduation standards). Small class sizes sound great in concept, but even the very liberal Center for American Progress (CAP) which has studied the issue and found that reducing class sizes is usually not a cost-effective route to higher student performance. Not surprisingly, CAP is not alone in noting the failure of small class sizes as public policy. The libertarian Cato Institute has come to the same conclusion, noting that:  ” in 72% of the (300) studies reviewed, there was no statistically significant effect on measurable student achievement associated with smaller classes.”

And then there is the Constitutional Amendment (SJR 12) to tap the permanent fund for a massive new pre-kindergarten program. Again, left and right agree (nationally at least) in the form of Cato and the center-left Brookings Institute, both of which are skeptical of the impact of pre-k programs in improving educational outcomes. Says Andrew Coulson of Cato, “federal pre-K programs have proven ineffective for half a century and that the claims of large returns-on-investment due to pre-K stem almost exclusively from just three small-scale programs—out of hundreds of such programs operating around the nation for decades.”

Brookings researcher Grover “Russ” Whitehurst concludes that:  “They (policymakers) and the general public need to be wary of the prevailing wisdom that almost any investment in enhancing access to preschool is worthwhile. Some programs work for some children under some conditions. But, ah me, which programs, children, and conditions?”

So, if the educational basis for pre-k and smaller class sizes is not the reason for the massive push for these expansions of government, what is? Simply put, these programs massively expand both the entitlement mentality and the number of unionized teachers and administrators on the government payroll. It’s about bigger government in much the same way that ObamaCare is about growing the federal role in our daily lives (as opposed to reforming/improving health care).

(Albuquerque) As the Legislature discusses the budget during the 2014 legislative session, pay hikes for State and local government workers are on the table. The Legislative Finance Committee has proposed relatively ambitious pay raises ranging from 1.5 percent to more than 3.0 percent. Gov. Martinez, on the other hand, has proposed more modest pay hikes targeted at teachers. Martinez’s plan would result in small raises for about 7,000 of the state’s roughly 22,000 workers.

With these competing proposals on the table, it is worth looking at the data to better understand the compensation premium that’s already enjoyed by government workers in New Mexico. New research conducted for the Rio Grande Foundation, documented in “New Mexico’s Unionized Employees earn more than their non-union Counterparts” demonstrates the source of that premium: In unionized sectors of New Mexico government, employee pay is higher than it is for government workers who aren’t union employees. In other words, taxpayers pay more than they have to for basic public services.

Economists from the University of Miami (OH) and Trinity University conducted a study of 819 public employees in the state, and found that collective bargaining in the state leads to less-affordable services for the taxpayers and artificially-inflated pay for unionized government employees.

Noted Rio Grande Foundation President Paul Gessing, “Around the state, government employees who are working under a union-negotiated collective bargaining contract cost taxpayers 7.4% more in total compensation – the “union premium” – for services the taxpayers could be getting more affordably from a non-unionized counterpart.”

When discussing across-the-board pay raises for public sector workers, it is important that policymakers and the Legislature have a full understanding of public employee pay and benefits relative to their private sector counterparts.

Concluded Gessing, “New Mexico desperately needs to improve the health of its private sector. While a growing private sector economy can support a growing and better-compensated public sector, this is not currently the case in New Mexico.

We at the Rio Grande Foundation supported efforts to dergulate New Mexico’s motor carrier industry which includes taxi cabs and all manner of motorized, public transport. Unfortunately, our definition of “deregulate” is different from the Democrat-controlled Legislature’s. True “deregulation” means that as long as I am operating in a safe manner, I should be able to get into a specific business. Under the Legislature’s warped definition, “deregulation” still means having hearings at the Public Regulation Commission to determine whether there is a “need” for a particular service.

See this recent article from the Albuquerque Journal which describes efforts by two companies to enter the motor carrier business, one as a taxi service in Albuquerque and the other to give tours of sites used in the filming of the show “Breaking Bad.”

Unfortunately, as the Journal reports, despite last year’s modest reduction in the regulatory stranglehold of certain incumbent cab companies, you still need to get the PRC’s blessing before going into business. This kills jobs and economic growth. At a time when New Mexico’s economy is struggling worse than almost any other state, we need real, broad deregulation not just of motor carriers, but of a wide variety of activities. Overcoming the entrenched special interests won’t be easy, but it is essential to New Mexico getting out of 50th place on so many economic measures.

The following series of charts and data are taken directly from a blog posting from a Washington Post blog. We at the Rio Grande Foundation have been raising concerns over New Mexico’s lack of economic freedom. No matter what, it would seem that some serious changes are needed in New Mexico’s economy and education systems.

One of New Mexico’s top economists hosted an annual economic forecasting conference Thursday, but what stands out in the presentation she delivered is the dire state of the state.

Population growth is at a virtual standstill. On good indicators, the Land of Enchantment often ranks near the bottom; on bad indicators, it’s often near the top. It relies heavily on the public sector, including the fickle federal government; and the gap between the top and bottom on education and income is wide.

Overall, the forecast shows the state adding jobs and income at a rate just below the national average over the next few years. But the real estate market in Albuquerque, the state’s largest city, remains relatively weak, according to a presentation given by Dr. Lee A. Reynis, director of the University of New Mexico’s Bureau of Business and Economic Research. Sectors that will drag the economy down include construction, the federal government, professional and technical services and manufacturing. But there are bright spots, too: mining, oil and gas production, technology, tourism and transportation.

The state “needs to protect its water resources, to deal with income inequality and deep and persistent poverty, to address the inadequacy of its public education system,” Reynis concludes in her presentation.

Here are some of the highlights, which show the tough spot New Mexico is in:

Population growth is approaching zero

The education disparity is wide, too

A similar trend is apparent in education, with New Mexico ranking fourth among states on PhD holders and in the bottom 10 on those with a bachelors or higher degree.

Reliance on food stamps and Medicaid is rising

Over the past five years, there has been a big increase in the use of food stamps (top left) and Medicaid (bottom right). Welfare (top right) rose but is close to its pre-recession levels.

The state is highly reliant on the public sector

Local and state employment have risen significantly over the past 20 years, contributing to New Mexico’s high reliance on the public sector.

Even though the graph below shows federal government employment has held relatively steady and military employment is down, both accounted for 4.8 percent of jobs in 2010, compared to a national 3 percent average. Federal spending in New Mexico was $13,578 per capita, the sixth highest in the nation. As a share of federal taxes paid, New Mexicans got the most bang for buck.

The map below, from a fall Mercatus Center report, shows the state’s reliance on government in another way. The share of total jobs accounted for by the public sector and federal contracts was higher in New Mexico than any other state, a less-than-ideal reality given the recent trend toward slashing spending.

Residents unable to live up to their work potential

The number of New Mexicans who are marginally attached to the workforce (see definition below) or involuntarily in part-time as opposed to full-time jobs is high. In fact, it basically doubled from 2007 to 2012, according to statistics cited in the presentation. An analysis of 2011 data, charted below, shows that New Mexico is second only to Nevada in its share of such workers.

Relatedly, job growth is very low in New Mexico. After ranking among the top 15 states in employment growth over the past 40 or so years, it was ranked 48 in November. Albuquerque, a key part of the state economy that bested state and national performance for years, was “seriously lagging,” Reynis said in the presentation. The problem is exacerbated by the fact that “in the good years growing employment masked many serious problems,” including the “extremely high” poverty, low per capita income and wages and racial and ethnic disparities in income and employment.

But many of the problems facing the state are ones facing the nation as a whole — some just tend to be more severe in New Mexico. And the presentation wasn’t all bad.

“It’s easy to find evidence of improvement,” Reynis said at the Thursday forecasting conference, according to the Albuquerque Journal. Most sectors are adding jobs after nearly all were losing them in 2010, the paper notes.

RGF president Paul Gessing recently sat down with KNAT TV’s Mike Cosgrove for two separate interviews to discuss New Mexico’s economy, why it is such an important issue, and what can be done to turn it around. Gessing also discusses criminal justice reform efforts that have been under way in the New Mexico Legislature. He explains some of the concepts his group is looking to use to influence criminal justice policy reforms, his involvement with Right on Crime, and how such reforms could help New Mexicans prosper.

I found this report fascinating. The basic point is that Americans who are struggling to make ends meet can most help themselves by moving to where the jobs are. As previously noted, this is exactly what many New Mexicans are doing, but the idea of moving rather than staying in one place could also be applied to government benefits like unemployment and food stamps which tend to make the poor and unemployed more comfortable and thus less likely to move to find work.

Interestingly, but not surprisingly, the federal government’s meddling with the housing market and the powerful incentives it provides for home ownership as opposed to renting are major reasons why Americans are not moving (or working) as much these days as they used to.

Amazing how many of our problems are caused by the unintended consequences of government!

The Legislature will soon be considering reforms to New Mexico’s Lottery Scholarship Program. While a number of tweaks such as increasing the GPA requirement have been offered and will likely be considered, after taking a careful look at the program as a whole, it would appear that the Lottery Scholarship could use a serious overhaul.

Before getting into specific reforms, it is worth pointing out that while they have provided college educations for thousands of New Mexico students, the Lottery Scholarships are not free money. Their proceeds are the result of voluntary lottery ticket purchases which are disproportionately made by middle and low income people. These people could have potentially saved, invested, or even invested in their own child’s educations.

The fact that there are tradeoffs and that the Lottery Scholarship is a regressive (albeit voluntary) tax, makes it extremely urgent that the return on New Mexico’s Lottery Scholarships must be maximized both in terms of educational outcome and overall impact on our state’s economy.

To maximize the program’s positive impact, it is imperative that lottery scholarships not cover 100% of tuition and that they instead be offered in limited amounts. This policy change alone would force New Mexico’s institutes of higher education to compete on price for the 26 percent of their undergraduate customers receiving lottery scholarships. It would also encourage students to look for additional funding sources for their educations. Outside scholarships, parents, and obtaining employment could provide additional funds for college that would in turn allow more students to receive a college education.

Furthermore, having scholarships of a set, limited value would encourage students to look for the educational option that makes the most sense for them such as a community college or a vocational degree without feeling the need to “take advantage” of a four-year full-ride at a more expensive, four-year institute.

Simply, in its current form, the Lottery Scholarship reinforces the idea that a free higher education is an “entitlement.” Providing scholarships in a fixed amount will both encourage students to value their educations while encouraging our institutes of higher education to compete for those students.

Ideally, once this most important reform is enacted, we at the Rio Grande Foundation would like to see that Lottery Scholarships be made available for any institute chosen by the student whether that is in or outside New Mexico. There is no educational justification for forcing students to use their scholarship at an institution here in New Mexico. In fact, enabling students to experience cultural and educational institutions outside New Mexico could go a long way towards broadening the outlook of top students throughout our state.

No matter what happens with the Lottery Scholarship program, it makes no sense to prop it up with revenues from the General Fund. The Gov. is calling for $16 million in state funds while the Legislative Finance Committee is calling for $22 million. The Legislature has already spent $10 million from the state’s Tobacco Settlement Fund (really the General Fund) to prop up the Lottery Scholarship program.

Unfortunately, human nature being what it is, the Legislature is only likely to deal with the issue when students and their families lose of face the threat of losing their scholarships and put pressure on their elected officials. More money will just kick the proverbial can down the road again.

Lastly, while raising GPA standards sounds like an easy enough fix for the Program’s finances, this must be done with great care. Maintaining a 2.5 GPA in University Studies or Political Science (I was once a Poly Sci major) is far cry from maintaining the same grade in Engineering or Math at New Mexico Tech. At a time when STEM is being encouraged throughout our schools, some accounting must be made not to discourage Scholarship recipients from those areas of study for fear of losing their scholarships.

The program as designed today has several unattractive features and inefficiencies as outlined above that need to be changed. Hopefully, the Legislature will lead the way to maximizing the benefits of this program.

Paul Gessing is the President of New Mexico’s Rio Grande Foundation. The Rio Grande Foundation is an independent, non-partisan, tax-exempt research and educational organization dedicated to promoting prosperity for New Mexico based on principles of limited government, economic freedom and individual responsibility

As the 2014 Legislature gets under way tomorrow amidst an ongoing flurry of bad economic news (check out this Washington Post blog for even more depressing details), it is easy to wonder why our state constantly finds itself at the bottom of most good lists and at the top of most bad ones. I have blamed the Legislature and their failure to adopt needed policy reforms, but it is the voters of this state who elect and re-elect these people, so at some level they must represent us, right?

Take a look at some recent actions (outside of the legislative process) taken by everyday New Mexicans that hinder the ability of businesses and individuals to interact on a voluntary basis.

Railroad town battles train crude cars: Lamy tries to stop oil transport plan in its track: Lamy, (I’ve been there) a town that really barely qualifies as a town, doesn’t want crude oil transfers made there. No word on whether the protesters all walked to the meeting to oppose plans that might possibly bring some economic development to the area.

Winery plans stall as permit denied: Think “dirty” oil is the only thing New Mexicans get up in arms about? Not so fast. Recently, the Bernalillo County Planning Commission denied a special use permit to have public art and music events at the winery. Heaven forbid someone use their own property for an activity they might enjoy that could put a few people to work.

Horse slaughter: Congress recently helped kill this one by abusing its power (not appropriating money for horse slaughter). Of course, private entities would do a better job of inspecting meats, but I digress. Anyway, Congress only helped New Mexico Attorney General Gary King who was doing everything in his power to stop this business from ever opening.

Mora County bans oil and gas drilling (need we say more): Interestingly, they have been sued on this.

In Albuquerque, Wal Mart’s efforts to open a store at Coors and Montano were denied. An unemployed relative of mine could be working at this store right now if it had been approved, but I’m sure glad that the empty lot is still in place.

My point in recounting these stories is to show that if New Mexico is ever going to get out of 50th place, changing who represents us in various elected bodies won’t do much by itself. We need a broad, philosophical change in our relative attitudes towards dependency on government, work, poverty, and one’s freedom to operate a business without NIMBY voices dominating the discussion.

Click here.

The Rio Grande Foundation has re-launched its legislative tracking tool called “Freedom Index,” which provides a daily review of legislation impacting economic freedom in the state.

For the first time, lawmakers will be able to get an independent, free market view of legislation pending before the Legislature. Moreover, voters can see whether their legislators are voting for free markets or for bigger government.

Users will be able to see:

• The relative voting performance of legislators according to the Freedom Index;
• The relative voting performance of each party according to the Freedom Index;
• The analysis criteria behind the legislation ranking will be made publicly-available for download;
• Links to legislation detail;
• Links to legislator Information, including contact information;
• And selections of legislation by relevant categories.

The Freedom Index is available here. 

Our analysis will be available before final votes on those bills that are analyzed and can be used by both legislators, legislative staff and interested voters to debate the merits of a bill.

In short, the Index provides an excellent analysis of bills that will come before committees or a vote on the floor as well as tracking a legislator’s Freedom Index score. The public will find our Freedom Index to be a tool to hold elected officials accountable for their vote and to gain a better understanding of the legislation being proposed by the House or Senate members.

Rio Grande Foundation president Paul Gessing said of his organization’s new legislative tracking web site, “We are thrilled to add the freedom perspective to the legislative process in Santa Fe. For too long, the special interests have run wild with the voice of taxpayers and those who pay the bills too often pushed to the side.”

I always thought that the Chairman of any major political party was to encourage the election of candidates of that Party and to encourage the general population to sign on to that Party’s ideals. I also thought the Democratic Party was the “big tent” party which prided itself on diversity and openness. Perhaps that’s changing at least when it comes to fiscal responsibility thanks to Democratic Party Chairman Sam Bregman?

In one recent interview with KRQE Channel 13, Bregman called out relatively fiscally-conservative Sen. John-Arthur Smith and told him that he should get in line behind liberals’ big-spending proposals to tap the Permanent Fund or get out of the Party.

In this interview conducted separately with Albuquerque Biz First, Bregman argues that legislators should pass a $10/hour minimum wage for New Mexico which would give the state the highest minimum wage in the nation. He also claims that no businesses have closed because of the higher wage already imposed. Apparently, Bregman missed this story detailing how several Albuquerque businesses were closing. And, just because the owner of a closing business doesn’t mention the minimum wage hike as a reason for closing, don’t believe that it’s not at least a partial reason. No one wants to be seen as having a case of “sour grapes.”

I’m not a Democrat and I don’t understand how someone could see what the left-wing economic policies imposed upon this state by decades of Democratic-Party rule have done to our economy and education system could support even more spending and bigger government. But, there are fiscally-conservative Democrats out there. After all, unlike Bregman, John-Arthur Smith has to stand for election every four years. Apparently, despite being charged with increasing the size and power of his Party, Bregman seems hell-bent on imposing purity tests on Democrats with the intent of getting rid of those who are insufficiently pro big-government. It’s an interesting strategy.

The Albuquerque Tea Party recently had a column in the Journal that discussed their targeting by the IRS. The article also noted that new regulations have been proposed which would further clamp down on free speech. Anyone who is concerned about the ability for organizations like the Tea Party and other non-profits to engage in the political and policy debates facing our nation should be concerned and should consider taking a few minutes to comment.

Details on the IRS’s proposed regulations (from the IRS itself) can be found here. More English language information is available from the Center for Competitive Politics which advocates for free speech among these organizations. Lastly and most importantly, comments can be sent to the IRS here. The Rio Grande Foundation has posted the following comments:

The Rio Grande Foundation is a 501c3 non profit think tank based in Albuquerque, New Mexico. We have the following concerns about the proposed IRS regulations. We are concerned because they are discriminatory as they only applying to 501c4 organizations;
they violate First Amendment rights of citizens and organizations;
the regulations are complicated, complex and will burden small citizens groups;
they ignore the fact that political and lobbying activities ARE for the social welfare and the public good;

The following are things that 501c4 organizations should be allowed to do 365 days a year:

Hold candidate forums and debates;
engage in nonpartisan voter registration;
engage in get-out-the-vote activities;
issue voter guides;
discuss the voting records of incumbents;
engage in grassroots lobbying 365 days per year; and
volunteer programs should NOT be subject to taxation.

On this 30 minute interview with Fred Martino of KRWG public television in Las Cruces, Gessing discusses several issues facing New Mexico including the struggling economy, the RailRunner and Spaceport, education reform, federal lands in New Mexico, and criminal justice reform. Check out the video below:

Today’s Albuquerque Journal includes an article by Winthrop Quigley dealing with New Mexico’s population loss. This is an issue we’ve been covering for at least the last year (and here), so it is great to see the Journal covering it.

Unfortunately, as is so often the case with our friend Winthrop, he gets the story exactly wrong. It is not a loss of population (for some random metaphysical reason) that is going to harm New Mexico’s economy. Rather, it is New Mexico’s economy that is causing people to leave the state. Obviously, there are reasons other than jobs for which people move from one place to another as the article cites. One that was not cited, BTW was weather, which would seemingly play to our advantage.

And, of course, there may be hiccups and short-term migrations for one reason or another (Utah was a top-ten outbound state according to United Van Lines this year for some odd reason, but I don’t look for that to continue), but New Mexico has been an outbound state for two years in a row. That has the makings of a trend. And when you look at the states from which people are moving and compare them to the states to which people are moving, it is hard not to see the desire for better employment and more economic freedom as a driving force.

Freedom drove the Founders to move from Europe to the New World. Freedom drove settlers to the West. Freedom drove American blacks from the Old South to the North, and freedom has brought immigrants from all over the world to the United States. Is it really a surprise that freedom will cause people to move from one state to another?

Rep. Mimi Stewart is a hard-line liberal and supporter of the education establishment (she’s also a retired educator). We disagree on a wide variety of issues, notably school finance (she views more education spending as inadequate) and school choice (I believe in a wide variety of choice options and she generally wants to restrict them). While we disagree, I have to admit that her proposal to lower New Mexico’s graduation standards is a real head scratcher.

To be fair, the bill would just lower standards. Rather, it sets up two graduation tracks for New Mexico schools. One of these would be based on current standards and one would have fewer graduation requirements. That doesn’t mean that lowering education standards is a good idea. In fact, you constantly hear complaints from employers around the state over the inability of graduates of New Mexico’s public schools to read effectively or do simple math. I don’t think a second track is what we need, rather we need a more effective education system.

On that note, I found this article from The Economist interesting. It details what nations that perform well on international tests do. A few choice paragraphs:

(The author) follows three American teenagers who spend a year as foreign-exchange students in Finland, Poland and South Korea. Their wide-eyed observations make for compelling reading. In each country, the Americans are startled by how hard their new peers work and how seriously they take their studies. Maths classes tend to be more sophisticated, with lessons that show the often fascinating ways that geometry, trigonometry and calculus work together in the real world. Students forego calculators, having learned how to manipulate numbers in their heads. Classrooms tend to be understated, free of the high-tech gadgetry of their schools back home. And teachers in every subject exhibit the authority of professionals held in high regard.

And check out this paragraph which to my mind offers a truly devastating critique of the left-liberal Mimi Stewart mindset:

In Helsinki Ms Ripley visits a school in a bleak part of town, where classrooms are full of refugee immigrants.“I don’t want to think about their backgrounds too much,” says their teacher, wary of letting sympathy cloud his judgment of his students’ work. “It’s your brain that counts”. She marvels at how refreshing this view is when compared with that of teachers in America, where academic mediocrity is often blamed on backgrounds and neighbourhoods. And she laments the “perverse sort of compassion” that prevents American teachers from failing bad students, not least because this sets these youths up to fail in a worse way later on.

Liberals and conservatives rarely agree on anything, but the fact that Koch Brothers-funded Americans for Prosperity is leaving New Mexico is bad news for conservatives and good news for left-wing liberals like George Soros.

While this is unfortunate news for advocates of the free market and limited government throughout New Mexico, we at the Rio Grande Foundation aren’t going anywhere. We’ll continue to advocate for the free market and against the far-left agenda that has led New Mexico to the bottom in economic freedom and the top of so many bad lists when it comes to poverty, overall economic performance, and education.

Join Us For a Special Event During
National School Choice Week

You are invited to a special screening of "The Ticket: Stories of School Choice and Quality Education" by filmmaker and school choice advocate Bob Bowdon. Following the 30 minute film, you'll be invited to participate in a Discussion of Educational Choice in the Land of Enchantment which will be led by Paul Gessing of the Rio Grande Foundation and will include former New Mexico Senator and school choice leader Mark Boitano and Daniel Ulibarri, head of Educate New Mexico.

The event is being held as part of nationwide National School Choice Week celebrations from January 26th to February 1st of this year.

We are hoping to have an interactive discussion of the wide variety of school choice options and where New Mexico stands with respect to each option. These might include great public schools, public charter schools, magnet schools, private schools, digital/online learning and homeschooling. So, bring your questions!

Co-sponsors of this year's event are the Rio Grande Foundation and Educate New Mexico.

National School Choice Week's Albuquerque Event
Wednesday, January 29th – 6:00 to 7:30pm
St. Pius X High School
5301 St Joseph's Dr. NW
Albuquerque, NM  87120

There is no cost to attend this event. Snacks and sodas will be provided. An RSVP would be appreciate via the online registration form available here.

We look forward to celebrating with you!

Location Details: The event will be held in the St. Cecelia building. It is the second one on the right as you enter the St. Pius campus.

The old Bob Hope quote never gets old. It is why Americans continue to move to Washington, DC. More importantly, it is an indication of serious economic issues: if you want to move to America’s wealthiest places, move to where the government is.

Check out this article which goes through the data. Los Alamos is the 3rd-wealthiest county in America (thanks to the government!). 4 of the 5 wealthiest counties are in the DC suburbs (only Los Alamos is not). 6 of the top 10 wealthiest are in the DC area.

Anyway, fascinating data and a sad commentary on the central role Washington now plays in the US economy.

A local filmmaker is taking on the federal budget. Actually, he’s made a reality film about eight people who use real-world budget information to balance the seemingly un-balanceable federal budget. The film, called “Big Bad Budget,” will be shown at UNM on Saturday, January 18. For more details, click here. Admission is free, but an RSVP is requested.

For a preview of some online games that you can use to balance the federal budget, check out this site and this one.

(Albuquerque) The Legislature will consider reforming the system during the upcoming 2014 legislative session. Several proposals have been made in the hopes of reforming New Mexico’s Lottery Scholarship program which plays such a large role in financing higher education in the Land of Enchantment.

In its newest paper, “Let’s Really Reform New Mexico’s Lottery Scholarships,” Paul Gessing, president of the Rio Grande Foundation, takes a broader look at the impacts, both positive and negative, of the Lottery Scholarship program and outlines some principles that legislators should adhere to in considering the program’s future. He also offers some approaches that might increase the positive impact of the program both on educational outcomes and New Mexico’s economy as a whole.

The paper includes:

• A reminder of the tradeoffs and negative impacts of government-sponsored gambling;
• Analysis of how New Mexico’s Scholarship program results in students “slacking off” in high school;
• The scholarship discourages students from pursuing scholarships and other funding opportunities for their higher educations;
• An explanation of why it might not be good public policy to encourage New Mexico’s best high school students to stay in New Mexico; and
• How the Lottery Scholarship spurs price inflation among New Mexico’s institutes of higher education.

Gessing strongly discourages the Legislature from using General Fund revenues to prop up the Lottery Scholarship Program and cautions against over-emphasizing the use of grades in determining who keeps and who loses their scholarships.

Finally, Gessing encourages the Legislature to consider an innovative voucher-style proposal that, if adopted, would solve several of the problems inherent in the current, flawed model.

A Gessing argues, “The Lottery Scholarship Program has the potential to improve New Mexico’s work force. We believe that a healthy dose of market-based incentives could make limited lottery funds go further without tapping taxpayers for even more spending on higher education.”

It’s time to get innovative in how America deals with unemployment. Washington Republicans who just supported a budget deal that broadly expanded government, but allowed extended unemployment benefits to expire, are now looking for ways to capitulate to demands from Democrats that unemployment benefits be expanded beyond 26 week (up to as many as 99 weeks) for 1.3 million Americans.

If the government keeps giving people money for being unemployed, you are going to get more unemployment. How about instead helping the unemployed Americans stuck in high-tax, low economic freedom states, get out of those states and find jobs in places where the unemployment rate is hovering around 5 percent or less? Areas like Midland, TX, the fastest growing city in America could also provide much-needed jobs for struggling workers in high-tax states like New York from which large number of Americans are fleeing (might be why Chuck Schumer is so angry at Rand Paul and others who oppose unemployment benefits w/o end).

Over the long-term, being on unemployment DOES hurt the very workers it is intended to help. And unemployment benefits can keep people in places that will take a long time to recover from this economic downturn. It’s time to incentivize people to move where the jobs are. This idea was actually written about in the Washington Post, so I’m not the only one thinking along these lines.

Update: North Carolina which reduced the length of unemployment insurance availability saw dramatic declines in its unemployment rate. Notably, North Carolina is one of the states to which people are moving according to the United Van Lines report cited above.

United Van Lines isn’t a think tank, nor is it dedicated to demography, but as a moving company, they do have a pretty good idea where Americans are moving to and coming from. As the map below shows, New Mexico again finds itself on the list of top 10 states that Americans are moving out of (last year’s report can be found here):

Some points worth noting on the top states to which people are moving:

Three (SD, TX, and NV) have no personal income tax;
One, OR, has no sales tax;
Five are right to work states (SD, TX, NV, SC, NC);
One, CO, has a constitutional amendment (called TABOR) that both limits spending growth and mandates a vote on ALL tax hikes.
One, DC, is the capital of our bloated, federal government which forcibly takes money from productive citizens in the rest of the nation.

Among the states from which people are moving:

UT is a right to work state while the rest are forced-unionism states that possess both income and sales taxes.

A few recent letter writers to the Albuquerque Journal’s Business Outlook section attacked the Rio Grande Foundation’s views and its funding. One of these letter writers happened to be from the Sierra Club. I responded with the following which was published in the Business Outlook section on Monday, January 6, 2014:

Some letter writers have attacked the Rio Grande Foundation on these pages and I feel compelled to set the record straight. A representative of the Sierra Club attacked us for allegedly being funded by those who would “burn the dirtiest, cheapest energy they can.”

The reality is that Rio Grande Foundation is funded primarily by New Mexicans who believe that free markets, not government mandates, are the best means of creating economic prosperity. While we do accept corporate donations when those businesses also support free market principles (by no means a common occurrence), those donations pale in comparison to the $25 million the Sierra Club accepted between 2007 and 2010 from the natural gas industry.

Now that fracking has made natural gas a competitor for “renewables,” the Club has changed direction and, misguidedly in my opinion, calls the natural gas industry, “dirty, dangerous, and run amok” on its “Beyond Natural Gas website.”

A second letter writer makes a series of claims out of left field relating to what is subsidized by government and what is not. Law enforcement should be subsidized by government. Roads have historically been and will likely continue to be subsidized by the taxpayer, but they also generate significant user-fees in the form of gas taxes and are a basic requirement for a variety of public services.

Nonetheless, European nations have relied on privately-operated toll roads for decades and as gas taxes decline as a source of revenue due to increased fuel efficiency, we hope that private-sector providers will play a larger role in America’s transportation system.

My organization has opposed and continues to oppose the RailRunner because its high cost outweighs any benefit it provides relative to our transportation network. We also believe that the same transportation role could be performed better and far more cheaply by buses.

Paul J. Gessing
President
Rio Grande Foundation

The Tax Foundation is broadly free market tax policy research organization based in Washington, DC. They have created a new award for national leaders from around America who have contributed to the fight for pro-market tax reforms. New Mexico Gov. Susana Martinez was just honored by the organization for her corporate tax reform efforts that were enacted at the end of the 2013 legislative session.

According to the Tax Foundation, “New Mexico Governor Susana Martinez proposed a far-reaching business tax reform and, by skillfully working with the Legislature, signed into law in 2013 a final bill that included much of what she had sought. Provisions include a reduction in the corporate tax rate from 7.6 percent to 5.9 percent over several years, tightening of some tax credits, and improvements to tax administration.”

Kudos to Gov. Martinez. Her efforts are one of many reforms needed to make New Mexico a more economically-competitive state.

John Stossel is one of the guiding lights of the free market movement. His platform as a national television host gives him regular opportunities to weigh in on the pressing issues of the day. Unlike many politicians and media personalities, Stossel is a consistent opponent of government overreach and a proponent of individual liberty. He’s done a great deal of work on education issues.

So, it was only a matter of time before Stossel took on the education policy known as “Common Core.” While some conservatives and advocates of limited government have endorsed Common Core, Stossel outlines his concerns here.

According to Stossel, the fundamental flaw with Common Core is that:

As American education has become more centralized, the rest of our lives have become increasingly diverse and tailored to individual needs. Every minute, thousands of entrepreneurs struggle to improve their products. Quality increases, and costs often drop.

But centrally planned K-12 education doesn’t improve. Per-student spending has tripled (governments now routinely spend $300,000 per classroom!), but test results are stagnant.

While Common Core may have some good aspects, I believe that we must fundamentally re-form our entire K-12 education system in ways that emphasize choices and individuality. These concepts, as Stossel notes, govern the rest of our lives. It is hard to imagine that another centrally-imposed curriculum or set of standards, no matter how well-intentioned, is the cure for America’s education woes.