The Las Cruces Sun-News has an article today about that city’s $26 million convention center. During the past year, the center hosted only six conventions and instead became taxpayer-financed competition for local businesses. Of course, the City’s leaders should have known better. Both Rio Grande Foundation and the national center-left Brookings Institute — to name just two organizations — have explained the many reasons not to pour taxpayer dollars into such facilities.

Which reminds me that upon his election as Mayor of Albuquerque, RJ Berry faced a decision as to whether or not to build a new taxpayer-financed convention and events center downtown. We all know now that he decided not to do this and instead has worked to rehabilitate the existing convention center. He also just got re-elected with 68% of the vote.

Avoiding dumb decisions is “the dog that doesn’t bark” in elections. Mayor Berry became a popular mayor in part by not wasting taxpayer dollars on expensive convention and events centers. Too bad the folks in Las Cruces weren’t more careful.

Have you ever been part of a group that cared more about numbers than membership actually meaning anything? I think the Fiscal Leadership Council may have fallen into that trap with the addition of former New Mexico Gov. Bill Richardson to its membership.

According to the group, it is a “bipartisan group of 41 former governors – 20 Republicans and 21 Democrats – from across the country united in the belief that our mounting national debt must be addressed to preserve America’s long-term fiscal health and prosperity.” Certainly, the debt and deficits are serious issues worthy of serious leadership, but Richardson’s track record as Gov. of New Mexico is hardly that of a fiscal conservative (I do wonder about the other 40 members of the group as well, but Richardson is the only one on the list from New Mexico).

As I noted in a 2007 National Review article, Richardson grew New Mexico spending by 11 percent in one year and by an average of 7 percent during his term in office. That’s hardly fiscally-conservative in a way that expresses concern about deficits or debt. Worse is Richardson’s deal to build and fund the Rail Runner. This commuter train was built with two hidden balloon payments of $230 million that come due in 2025 and 2027.

In other words, Richardson’s train deal allowed current voters to experience a tangible benefit that is to be paid for by future taxpayers. Thus, the Rail Runner deal resembles the fiscal design of Social Security and Medicare insofar as the program is “popular” with current recipients while their children and grandchildren who are either ignorant or cannot vote yet will have to bear the burden.

Perhaps Richardson has mended his ways and is now serious about not piling debt onto future generations. I certainly hope so. The situation is too serious to be otherwise.

New Mexico is sitting on an untapped gold mine. Well, not quite a gold mine (although we do have some), but in terms of natural resources, the oil and gas located on New Mexico’s federally-owned lands is about the same.

New Mexico is among the top oil and natural gas producing states in the nation. These industries are the foundation upon which New Mexico’s economy and budgets are built. However, we’re like a car that is only firing on four of six possible pistons. That’s because so much of our lands are owned by the federal government and thus, underutilized.

A whopping forty-one percent of New Mexico is controlled by Washington. Some of these lands are completely off-limits to economic activity as they are owned and managed by Native tribes and the DoD, but more than 20 million acres currently managed by the Fish and Wildlife Service, National Forest Service, and Bureau of Land Management, could be considered for oil and gas exploration.

At a time when New Mexico’s economy is struggling, the positive economic impact of accessing these resources would be tremendous. A new report from Dr. Timothy Considine, professor of energy economics at the University of Wyoming, the results of which were released by the Rio Grande Foundation, found that New Mexico could see an increase of 68,000 new jobs, more than $1 billion in new tax dollars, and $8.4 billion in additional economic growth if energy production was allowed on these lands.

To say that these numbers represent an economic game-changer for New Mexico is an understatement. We could go from struggling economic laggard to having plentiful jobs and economic-prosperity.

Look at North Dakota. That state’s economy grew by an incredible 13.4 percent in 2012 while the nation as a whole grew by only 2.5 percent and New Mexico grew by a paltry 0.2 percent. The unemployment rate in North Dakota is just 3 percent, lowest in the nation. This is the result of technological advances that have unleashed an energy boom in North Dakota. But having the land under state and private control has made a big difference. Only 2.7 percent of North Dakota is controlled by Washington as compared to New Mexico’s 41 percent.

Proposals to shift New Mexico’s federally-controlled lands to the state will undoubtedly set off alarm bells among the environmental community, but they shouldn’t. After all, in terms of environmental problems on New Mexico’s federal lands, the recent epic forest fires are among the most significant. They are being caused by federal mismanagement.

According to the US Government’s own Watchdog, the GAO, “The most extensive and serious problem related to health of national forests in the interior West is the over-accumulation of vegetation, which has caused an increasing number of large, intense, uncontrollable and catastrophically destructive wildfires.”

Under a regime where the state controlled these lands as has been proposed in the Legislature, a portion of the $1 billion in new tax money collected could be used to manage New Mexico’s federal lands in a way that prevents forest fires, allows for multi-purpose uses, and restores the lands to pristine conditions in the wake of any energy or other uses.

Unfortunately, Washington lacks the focus to invest these resources and has mismanaged New Mexico’s lands to the point that each June massive new forest fires are expected.

There is no doubt that the current Administration in Washington will oppose any shift of federally-controlled lands to state control. But as New Mexicans, as we saw with the bi-partisan effort to restore the withheld $26 million in royalty payments, we can move mountains when we unite.

Environmentalists, outdoors enthusiasts, frustrated job-seekers, traditional users, and political leaders looking to goose the economy should come together to support efforts to restore poorly-managed federal lands to state control.

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

Hunger. What does it mean to be “hungry?” New Mexico’s HSD Secretary Sidonie Squier recently made some comments indicating that hunger is not a serious problem in New Mexico. Not surprisingly, liberal Albuquerque Journal columnist, Leslie Linthicum took Squier to task in this morning’s paper for her comments.

But, before we unpack the issue of “hunger,” it is important to define our terms. I was hungry before lunch today, but that’s clearly not what we are talking about. Linthicum relies on some national interest group measures of “food insecurity” and a group called New Mexico Appleseed that lobbies for increased government spending on anti-hunger programs. Of course, they are going to promote the concept that hunger is indeed a serious problem lest their funding dry up.

But let’s get beyond the fuzzy concept of hunger and look at some hard data:

According to the chart below, only 1.5% of poor families often had inadequate food to eat over the past four months. That’s a far cry from the 20% of New Mexicans deemed “food insecure.”

And, despite attempts to portray a massive gulf between rich and poor, when it comes to actual nutrition, on average the groups are quite comparable:

And, of course, we all know that obesity, not malnutrition, is the main nutrition-related problem among the poor:

<a href="http://www.heritage.org/~/media/Images/Reports/2007/bg2064/bg2064chart3.ashx?w=500&h=639&as=1"

Lastly, while hunger is tough to measure and temporary, stunted growth due to malnutrition is easy to measure and exceedingly rare in the US.

So, did Squier step in it? Anytime you make a blanket statement and say that hunger is not a problem in a state of 2 million people, you are bound to open yourself to criticism. But, with large numbers of anti-hunger programs now in place and little evidence of Americans who go without food for a significant amount of time to the point of impacting their long-term health, it would seem that Squier is closer to the truth than her liberal critics would like to believe.

As mentioned in yesterday’s post on a recent policy proposal from Voices for Children, today’s blog focuses on a proposal from Think New Mexico. As mentioned, they would qualify as “centrist” and we’ve agreed and disagreed with them over the years. Most recently, we worked closely with them (successfully) on legislation reforming motor carrier laws.

Their latest proposal is really four separate proposals that they are calling their “Job Creation Initiative.” One of their proposal is a “no-brainer,” something that we should already be doing. That is a one-stop business portal for all fees and filings. This is a nice start. Of course, RGF has already outlined some of the dozens of regulations that need to be eliminated or changed. Simplifying the attainment of those often wasteful and unnecessary government permission slips for work would be a start.

A second proposal would establish a post-performance incentive that offers businesses a rebate of up to 30% of the new tax revenue they produce when they relocate to or expand operations in New Mexico—but only after new jobs and new state revenues have been created. This one sounds great in principle and performance measures have been discussed before. The devil is certainly in the details and we wonder if the 30% rebate would last for one year or be permanent and how that would work, but it is a proposal worth discussing.

A third proposal involves seven special interest tax loopholes that the organization would like to close. The problem here is that one man’s “loophole” is another man’s tax increase. We believe that tax reform should be comprehensive and that this makes both the politics and the policy better. While closing “tax loopholes” always sounds nice, those industries got those loopholes through concentrated lobbying efforts. It would seem likely that more often than not, they will be effective in retaining those incentives unless they are part of a broad-based reform effort…think Reagan’s 1986 reforms which have been completely gutted by subsequent lobbyists and subsequent congresses.

The fourth and most interesting proposal involves incentivizing educated immigrants to come to the US through tuition scholarships. This one may be worth it’s own separate future blog posting, but there are a lot of moving parts. It is important to recognize that this idea represents an “end run” around New Mexico’s poor K-12 education system and business-unfriendly policies. By bringing educated, ambitious people here, the hope is that some fraction of them will stay put and build businesses in our state. One can hope.

There are two major problems:

1) The US immigration system does not cooperate with this model. Perhaps if we were in Canada where high-skilled immigrants are valued, eh?

2) Once these people get here and they have their educations, what is to stop them from starting their businesses in other states? After all, they can move across state lines just like any other American and there are plenty of more attractive places to start a business these days than New Mexico;

Is the immigration idea worth a shot? Perhaps. I think you’ll find a lot of people angry that someone who doesn’t pay and never has paid taxes to New Mexico is getting the benefits of a lower-cost education, but these ideas are all worthy of discussing even if I don’t think any or all of them will dramatically change our economy for the better. We need to make the tough free-market reforms like adopting Right to Work and reforming our tax code to emphasize growth.

Despite a an aggressive campaign on the part of the fire fighters union, Mayor RJ Berry won re-election as Mayor of Albuquerque with a record 68% of the vote, thus avoiding a runoff. Republicans lost one seat on Council and face a tough challenge getting Janice Arnold-Jones over the finish line in a runoff election. You can count on that being a boisterous election as Democrats simply need to retain all of the votes while Arnold-Jones needs to either boost Republican turnout or draw in more Democrats or Independents in the runoff. Since this will be for control of Council, it promises to be an interesting month.

Certainly, Berry’s success proves that common sense, center-right policies delivered in a low-key style are popular among Albuquerque voters. And, while labor unions may be very organized and have more signs, they can’t sway an election all by themselves. This is good news. The bad news is that he didn’t have very long coattails and may wind up losing City Council, thus making it tough to move a reform agenda. Also, the runoff system raises the bar facing conservatives for the future.

If Berry sticks to his pledge to only serve for 8 years, he won’t have to run for re-election. Given the fact that the unions have and will fight him every step of the way, it would seem to be a good time to continue and expand upon those public labor reforms.

The Rio Grande Foundation works with/against various other policy organizations around New Mexico. Voices for Children is one such organization that, while it is avowedly left-liberal and we are avowedly free market conservative, we occasionally work with but usually work against them. We have agreed with them in the past that eliminating New Mexico’s tax on groceries and raising the broader GRT was a bad idea. We’ve also noted their opposition to film subsidies.

Recently, Voices produced a very good report, Kids Count, which detailed some of the issues facing New Mexico’s children. While the report focused on problems facing our kids, it was somewhat light on recommendations for solving the problem. That is what we see in this new report, Kids are Counting on Us, from Voices.

I can’t call it a serious policy proposal. Rather it is a left-wing fantasy laundry list that would result in a dramatic increase in taxes and spending. I counted 51 separate policy proposals in the report, only one of which involves reducing harmful government regulations or eliminating a government program (treatment instead of incarceration for drug users).

As I wrote in an op-ed immediately after their “Kids Count” report was published, New Mexico’s problems are the direct result of poverty. Addressing them piecemeal with targeted government programs is not the solution. Rather, we need to bring economic growth to our state. Tax reform that emphasizes growth, education reform that creates choice (a glaring omission from the most recent Voices report), and regulatory reforms that increase individual freedom are all necessary components of reforms that would spur New Mexico’s economy. Getting some of our federal lands back from Washington would be great as well.

Clearly, when it comes to New Mexico public policies, Voices adheres to a far-left, government-driven agenda that has failed to bring New Mexicans economic prosperity.

Tomorrow we’ll take a look at a new report from the more centrist Think New Mexico.

Throughout the spring and summer, United States Secretary of Education Arne Duncan has travelled the country to build support for President Obama’s “Preschool for All” program. He has made stops in Colorado, Georgia, Minnesota, Wyoming, and several other states. Recently, he began his weeklong “Strong Start, Bright Future” bus tour of the Southwest. To kick off the tour, Duncan spoke at United Way of Santa Fe County Early Learning Center and at Emerson Elementary School in Albuquerque.

Secretary Duncan spoke mainly about President Obama’s early education program, which was introduced this past spring as part of the President’s fiscal year 2014 budget proposal. The program is designed to expand preschool access and would be funded with a mix of state and federal dollars. Over the first ten years of the program, the federal government has committed to spend $75 billion dollars, which would be raised by increasing the federal excise tax on cigarettes by 93 percent as well as increasing the tax rates on other tobacco products. The states that choose to participate in the program cover about ten percent of its cost in year one but their funding obligations increase steadily each year—rising to 50 percent in year five and a whopping 75 percent in year ten. So if our state participates in the program, New Mexico’s taxpayers will be responsible for funding the greater share of the program in the long-term.

Improving our nation’s education system, particularly for our youngest students is crucial to improving graduation rates and preparing our children to enter high school, college, and the workforce, however the results of pre-K programs already enacted in various states is decidedly mixed. More than a decade after offering students universal preschool, neither Georgia nor Oklahoma which have two of the longest-running pre-k programs has shown impressive gains in students’ academic achievement, as measured by the National Assessment of Educational Progress (NAEP).

Even if pre-k were a slam dunk in terms of student success, the program’s funding mechanism is incredibly problematic. Over time, the Obama proposal increases the financial burden on the New Mexico taxpayers in ways that make this expansion unaffordable.

Tobacco taxes, particularly cigarette taxes, have proven to be very unreliable sources of revenue. The non-partisan Tax Foundation, a Washington, D.C.-based think tank, calls the decision to fund the program with cigarette taxes “a recipe for increasingly large deficits” because the cigarette tax will not raise the necessary revenue after year ten.

The introduction of a new tobacco tax increase could affect non-smokers as well. According to the National Taxpayers Union, between 2001 and 2011, 70 percent of tobacco tax increases were followed by other tax hikes over the next two years. Cigarette tax increases have the effect of decreasing tax-paid sales because they encourage adult tobacco consumers to seek out the cheaper and oftentimes untaxed alternatives available online, in other states, or even on the black market. For example, in 2009, the federal government increased the per pack cigarette excise tax from $.39 to $1.01, and in the following year, tax-paid sales on cigarettes fell 8 percent nationwide. This precedent could prove to be problematic for the President’s initiative, as the federally financed portion of the early education program is entirely reliant on tobacco taxes.

In addition to potentially jeopardizing this program’s finances, the tax increase could have negative economic impacts on our state. It could hurt retailers, particularly convenience stores, who rely on the sale of tobacco products for nearly 40 percent of in-store sales and lead to increased smuggling. Furthermore, tobacco taxes are highly regressive, as they unfairly target adult tobacco consumers, most of whom earn incomes far below the state and national averages.

The low initial cost of entry into the new pre-k program is very tempting, but New Mexico taxpayers cannot afford to be left bearing the burden of an expensive new government program. If history repeats itself, as it likely could, these federal tobacco taxes may fall short of their revenue projections and New Mexico taxpayers could end up paying much more than expected. This is not fair to our children or the hardworking New Mexicans who will have to pick up the tab.

Ruben Pacheco is a Policy Analyst with 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

Even if he doesn’t actually “get it” when it comes to the Rio Grande Foundation, it’s ideas, or Gov. Martinez, it was nice of Pat Davis of the far-left Progress New Mexico to recognize our organization’s impact in a recent column he wrote for the Rio Rancho Observer. Not surprisingly, however, Davis needs to brush up on his facts.

Yes, RGF supports lower taxes including those on corporations. However, as I wrote immediately after the deal, the prospects for job growth from the legislation were unclear. Besides, after a five year phase-in (that’s 2018 folks), New Mexico’s corporate income tax rate will be 5.9%. That’s one-tenth of 1% lower than Oklahoma’s corporate income tax (assuming that they don’t cut theirs). Texas will remain at zero on both personal income and corporate income taxes and is a Right to Work state, so to say that we are doing anything to emulate Texas is ridiculous.

Also, Davis fails to understand that in a free market (as opposed to government), Intel must constantly innovate to remain competitive. They are struggling to adapt to the switch to smartphones. Of course, if government were in charge, we’d still be using phones like this.

The fact is that Intel received some pretty massive subsidies from politicians who were in office long before Gov. Martinez (Davis and I may even agree that such largesse is a bad idea). But eliminating so-called “corporate welfare” makes it all the more important to have competitive policies. To say the least, Davis and the left-wingers who still control the Legislature and have run this state for most of its 100 years, have failed miserably in terms of competitive economic policy.

It never ceases to amaze me how many “environmental” groups there are in New Mexico and that constantly get their anti-human, anti-modernity messages out in the Albuquerque Journal. As an aside for those who harp on the number of times RGF gets its message in the paper, it would be interesting to compare environmental groups to any other special interest in the amount of coverage they receive.

A piece by a group called “Bold Visions Conservation” is just the latest article straight out of left-field. Thankfully, New Mexico’s oil and gas industry upon which this state is so reliant, decided to respond. So, the head of IPANM, Richard Gilliland, published his own article detailing the many benefits provided by the hated (by a radical few) oil and gas industries.

Gilliland didn’t break any new ground. Those who actually study the industry and the environment carefully are aware that even “environmentalist” radicals benefit from the oil and gas industries on a daily basis in terms of transportation and products with oil and gas as major inputs, not to mention the $1.7 billion paid into NM’s General Fund and additional billions paid into the permanent funds. And, of course, while the self-proclaimed environmentalists want people to believe that the environment is falling apart, by most any reasonable measure the environment is cleaner today than it has been in decades.

When Texas Sen. Ted Cruz took to the floor of the Senate in opposition to ObamaCare, he had lots of air time to fill. This provided an opportunity for him to call attention to some of ObamaCare’s opponents around the nation. This included a quote from Paul Gessing, president of the Rio Grande Foundation. You can find the quote in the Congressional Record, but it is this: “ObamaCare locks in the worst aspects of American health care. Rather than restoring the patient-doctor relationship, it puts the IRS and the Federal Government alongside insurance companies between patients and their doctors.”

Curiously enough, our own dear columnist Winthrop Quigley of the Albuquerque Journal defended ObamaCare in a recent column. Quigley apparently believes that conservatives and free market advocates should be happy about the law because it “rescues the nation’s for-profit health-care financing system.” Notice that Quigley doesn’t say “free market.” Perhaps we’re getting through to him on that front.

Not surprisingly, I disagree with Quigley on his assessment. ObamaCare doesn’t “rescue” our health care system. Rather, by burdening the remnants of what was once a relatively free market system with further regulations, the law is moving us further down the path to a single-payer system. Harry Reid gets this.

As I explain in my quote above, ObamaCare embraces the very worst aspects of our existing system by inserting new parties — mostly government bureaucrats — between doctors and their patients. That is the point of ObamaCare and that is why conservatives at the Club for Growth are opposed to it.

To be sure, the Rio Grande Foundation has NOT proposed this although we are working to return other lands to state control, but with the federal government having shut down today, I think it would be great if the states and not the federal government managed the National Parks. After all, when it comes to average Americans actually being impacted by the shutdown, the one thing that is constantly discussed is the economic problem (and the personal pain) of the National Parks being shut down.

And, while EVERYONE hates having the Parks shuttered, the reality is that their management is a rounding area when it comes to the overall federal budget (1/13th of 1 percent).

The situation reminds me of Obama’s essentially holding air traffic control “hostage” earlier this year as a means of ending the sequester. It also brings to mind the way the private sector businesses near Yellowstone stepped up to plow the roads when Washington decided it couldn’t.

So, perhaps the states would do a better job of managing the parks too? At least they’d have a really strong incentive in the form of tax dollars to keep those parks open regardless of what is happening in DC. Unfortunately, given the political difficulties facing efforts to devolve other federal lands to the states, I don’t see the pros and cons of this even being discussed anytime soon.

While many conservative states and conservatives have followed the “lock em up” approach to criminal justice, we at the Rio Grande Foundation were pleased to participate in and support a new approach to conservative criminal justice from a group called “Right on Crime.” In today’s Albuquerque Journal, RGF co-founder and former NM attorney general Hal Stratton and Jerry Madden, former Corrections Committee Chairman, had an opinion piece detailing ways in which New Mexico might both save taxpayer dollars and make New Mexico a safer place. I testified before the same legislative committee as Rep. Madden and you can see that testimony here.

Notably, New Mexico is a relatively high crime state, so we have much to do:

Readers of the West Side edition of the Albuquerque Journal were treated to an effusive editorial praising the recently-begun development of a Rail Runner-related transit center at Montano and the railroad tracks. While the paper argues that plowing more taxpayer dollars into this project is a good thing, I have another take that I expressed in a letter to the editor:

I would love to believe the hype that “mass transit is where it’s at” and that the new North Valley transit hub will be some kind of boon to the local economy, but history and data say otherwise.

When all is said and done, New Mexico taxpayers will spend an astonishing $1.3 billion on the train. Despite my organization’s opposition to the project, I have ridden it and cannot recall a single major business that has sprung up to serve the train and its customers. Certainly, no business has generated anywhere near the tax money to pay for even a significant portion of the system. There is no reason to believe that the $7.1 million transit center will be better investment of scarce tax dollars.

And, much like the electric automobile, mass transit has been the “next big thing” for decades. In fact, according to federal data provided by transportation analyst Wendell Cox transit’s market share (of transit and motor vehicles) has fallen since the 1950s. In 1955, transit’s market share was over 10%. Today, transit’s share hovers below 2% nationally and is not growing despite rapid spending growth.

The fact is that unlike a car, no matter how good the system and how wishful the thinking, transit cannot get you to wherever you want to go, when you need to be there especially in spread out Western cities like Albuquerque.

While this may seem like mere pontificating, I have gained some firsthand experience of the problems with transit. A family member has moved here from out of town and is living with us. She has been looking for work in retail and this has led her to jobs at Coronado Center. Let’s just say that the bus schedules to Coronado on a Saturday or Sunday from the West Side do not fit the needs of retail workers.

That’s exactly what is happening according to the Santa Fe Reporter.

It only makes sense. Santa Fe has a beautiful climate and very unique culture, but it also has incredibly onerous government regulations (the toilet mandate being just one) that make it likely that most good jobs are in government, the high minimum wage is another. A relative lack of jobs for young people and entrepreneurs makes things even more difficult. Lastly, folks like Santa Fe Rep. Brian Egolf view activities like mining as below them.

Making a community expensive to live in and not producing large numbers of new jobs is a recipe for population decline, so it should be no surprise that Santa Fe is starting to look more like a retirement community.

I recently sat down with Mike Jaxson of KSVP radio to discuss the findings of an RGF report which details the significant economic benefits that could come to New Mexico if the federal lands located within our state’s boundaries were managed more economically. Listen to the interview here.

There are too many government employees in NM’s Legislature. No, that’s not a statement of the Rio Grande Foundation or some other conservative think tank, it’s from Milan Simonich of the Santa Fe bureau of the Las Cruces Sun-News. The story itself is certainly worth a read and I can’t disagree with the central point of the piece that New Mexico is too reliant on government workers and has too many government workers in the Legislature (this isn’t to say that many of these government workers aren’t excellent legislators).

However, it would be great if New Mexico had more doctors, business owners, and other private sector workers. But which comes first, the chicken or the egg? As Simonich notes, New Mexico’s economy is way too dependent on government, so isn’t it logical that government is heavily-represented in the Legislature? Well, that is true, but New Mexico is also heavily-reliant on oil and gas and there’s not nearly as many of them in the Legislature as there are government employees (I know of only one oil and gas worker offhand).

Simonich alludes to the part-time nature of our Legislature as the source of the problem and I’m not necessarily going to disagree with him. It is certainly worth talking about. Even better would be an outright ban on anyone who receives a check (either directly or indirectly) from the State serving in the Legislature, but in some districts we might have unclaimed seats!

With Sen. Ted Cruz filling up the airways and ObamaCare about to take effect, I suppose it is better late than never for Republicans to introduce a free market health care reform alternative to the present law which expands government control and increases spending. The legislation, known as the “American Health Care Reform Act,” would take the all-important step of leveling the playing field between those who receive insurance from an employer and those purchasing it in the individual market. This is what I’ve often called the “original sin” of American health care.

The Daily Caller has a more detailed analysis of the bill which most certainly moves us in the right direction in US health care unlike ObamaCare, RomneyCare, or Bush’s Medicare Part D expansion.

Broadly-speaking, the Act, HR 3121, follows several of the RGF’s market-friendly ideas that reduce unnecessary government-imposed barriers between Americans and their health care providers.

As Rob Nikolewski over at New Mexico Watchdog reported recently, Gov. Martinez’s plans to incentivize high-performing teachers has not exactly won high praise from the unions with one union boss calling the plan “disgusting.” Frankly, it seems that whatever Martinez does, even if it is supported by the Legislature as was this proposal, the unions will oppose it. Funny how that works.

Myself, I’m not sure why shifting marginally less effective teachers to teach good students while shifting marginally more effective teachers to poor-performing classes is a good idea, but I haven’t studied that particular issue (I’d rather see an emphasis on recruiting and paying highly-effective teachers and getting rid of the others, but if the unions don’t like this proposal…)

Of course, the unions aren’t the only ones who have it out for Martinez, some “community activists” just can’t make up enough “facts” to make sense.

By way of facts, there is no doubt that having highly-motivated, competent teachers in the classroom makes a difference. Only recently, as the Washington Post reports that Teach for America (a program that specializes in bringing young, highly-educated, and highly-motivated teachers into difficult classrooms) increases student performance significantly.

The business community is atwitter at what they are calling “the largest office deal in recent years.” The purchaser of this office space is none other than Blue Cross, the insurance company and the deal was consummated due to the new health care law commonly known as “ObamaCare.”

Said Scott Whitefield of the transaction, “It’s a great experience when you can connect a top-of-the-line tenant with a top-of-the-line landlord.” “It’s a great opportunity for Albuquerque and shows that there are opportunities in the health care market.” The local NAIOP chapter is holding an event on Monday the 23rd, the title of which is “Healthcare…a catalyst for real estate development in New Mexico.” Sounds like this is a real winner for New Mexico’s economy, right? Not so fast.

For starters, as Dr. Deane Waldman (a health care analyst for the Rio Grande Foundation), bureaucracy is the “greediest of all players in health care.” Note that Blue Cross is not hiring a single doctor or treating a single patient at their new 85,000 sq. ft. office. The considerable number of people hired to work in those offices will be bureaucrats. They may technically work in the private sector, but they are bureaucrats nonetheless.

Also, while record-keeping and proper accounting are essential to the operation of any business, is there anyone who believes that the insurance companies don’t already have enough bureaucrats working for them? The reality is that these workers create nothing and are largely destroyers of economic value. This tendency in health care is not limited to ObamaCare, but has been the trend in US health care for decades as we’ve moved away from the doctor-patient relationship towards a third-party payer system.

So, the reports may indicate a temporary uptick in Albuquerque’s office market, but that is just a classic case of the seen vs. the unseen. We may see this occupied office and be pleased, but we are not seeing the foregone private activity that could have generated real wealth and prosperity had the government not taken those funds.

And, as if this were not all enough waste, we have heard that a local, non-union contractor that had attained the low bid on the Blue Cross project was summarily replaced for unknown but obvious political reasons on the job in favor of a far more costly union contractor. While a private company certainly has the right to hire whoever they may choose, how much of Blue Cross is actually “private?”

In case you missed it, yet another report came out this week stating that the level of methane emissions from fracked natural gas wells is relatively low. The new study states that methane releases are 97% lower than previous estimates. Researcher Jon Entine has an interesting piece on the issue over at Forbes including the controversial stances of two Cornell University researchers.

What is not controversial is that fracking is good for the economy as a new report from Businessweek illustrates. How good?

In 2012, the energy boom supported 2.1 million jobs, added almost $75 billion in federal and state revenues, contributed $283 billion to the gross domestic product and lifted household income by more than $1,200…the competitive advantage for U.S. manufacturers from lower fuel prices will raise industrial production by 3.5 percent by the end of the decade.

Given all of that, it is no surprise that the center of the fracking boom, North Dakota, has seen its economy go gangbusters according to this article from CNN. As the map below shows, North Dakota grew by 13.2% in 2012 while Texas did very well at 4.8%. New Mexico performed poorly at 0.2 percent growth:

As the RGF’s new report shows, federal ownership of so much of New Mexico’s land is one factor holding us back from North Dakota or even Texas-style growth.

(Albuquerque) New Mexico could see both an economic boom and improved management of the federally-controlled Forest Service and BLM lands within its borders. New data providing three different scenarios on the economic potential of New Mexico’s public lands from Dr. Timothy J. Considine, a professor of energy economics at the University of Wyoming, illustrates the vast potential of these lands for oil and gas production.

Notes Rio Grande Foundation president Paul J. Gessing, author of the brief, The Economic Possibilities of Unlocking Energy Resources on New Mexico’s Federal Lands, “Opening portions of New Mexico’s federal lands to resource development is not and should not be an open invitation to pillage the land.

“Rather,” argues Gessing, “oil and gas can be accessed in an environmentally-sensitive manner while some of those revenues could be used in prevent forest fires, improve wildlife habitat, and allow the public to access and recreate on those lands in ways that are not currently possible.”

In fact, the Rio Grande Foundation’s analysis indicates that BLM and Forest Service lands would be better managed by state officials here in New Mexico as opposed to federal bureaucrats from Washington, DC. Bi-partisan legislation, HB 292, to formally request the return of these lands from Washington was introduced during the 2013 legislative session. Similar legislation has passed in Utah and other Western states.

For an idea of the significance of this added economic activity relative to New Mexico’s economy, the number of jobs created could be as much as 7.8 percent higher and New Mexico’s gross state product would rise by a whopping 10 percent.

Considine’s paper upon which this research is based is available here.

Check out the following from our friends at the Tax Foundation:

Increasingly, the “defined benefit” model of retirement plan (where the employee is paid a lifetime annuity, based on years of service and final salary) is being replaced by the “defined contribution” model of retirement plan (where the employee owns and controls an investment account). One of many reasons for this shift is the tendency of DB plans to be underfunded (promises to pay exceeding available assets), which is structurally impossible for a DC plan. One estimate of private sector DB plan underfunding is over $300 billion.

State and local public employees, for the most part, have DB retirement plans. Much discussion has occurred in recent years to estimate how underfunded they are: the estimates start at $1.3 trillion and go up from there. The difficulty is that calculating the amount depends on your estimate of future rate of return. Most plans themselves project they will earn 7 to 8 percent on their investments, and critics say that is too optimistic.

The organization State Budget Solutions this month produced one such estimate, using a 3.2 percent rate of return (the 15-year Treasury bond yield rate). This calculates to public employee pension plans having only 39 percent of the assets they need to cover their promised payments—a $4.1 trillion gap. A map of their state-by-state funding ratio estimates is below.

Moody’s and the Government Accounting Standards Board (GASB) have sought to change reporting requirements to make it harder for public employee pension funds to increase liabilities without funding them. Further, many states are considering reforms to bring assets and benefits more in line with each other, and a few have implemented them.

As the map below indicates, New Mexico’s pension funds are 33% funded. That is not as woefully bad as Illinois and Connecticut, but it is among the bottom ten ratios among the states.

I’ll be speaking on an ObamaCare panel discussion tonight (9/17/13). The panel is sponsored by the Santa Fe Republican Party and will be held at the Santa Fe Women’s Club. The event is 6pm to 7:30 and the Club is located at 1616 Old Pecos Trail.

In other ObamaCare-related news, we made the front page of the Albuquerque Journal today thanks to their economics columnist Winthrop Quigley. The mention came only as we were the conduit by which he received a report from the Manhattan Institute which produced a report saying that New Mexicans would see the largest increase in insurance prices under ObamaCare. See my posting here.

Quigley, of course, was not impressed by the report. He says that it compares “apples to anvils” because insurance plans under ObamaCare will cover so much more stuff (like child birth) than currently-available individual health plans. He’s right, but I don’t think it invalidates the report. Myself, I don’t know of the Institute’s report will prove to be accurate, but a price tag is a price tag and lots of people aren’t going to be interested in all the bells and whistles forced upon them under ObamaCare. In fact, many healthy people (like me) would rather have an inexpensive insurance policy available in case I get hit by a bus but that gives me control over day-to-day health care costs.

Plans like these are called health savings accounts and they are both proven to reduce health care spending by up to 25% (bending the cost curve) and are under attack from the health care law.