According to a new report from the Friedman Foundation for Educational Choice, government school populations are slowly increasing while administrative and teacher hiring has exploded. According to the report:

Between FY 1992 and FY 2009, the number of K-12 public school students nationwide grew 17 percent while the number of full-time equivalent school employees increased 39 percent, 2.3 times greater than the increase in students over that 18-year period. Among school personnel, teachers’ staffing numbers rose 32 percent while administrators and other staff experienced growth of 46 percent; the growth in the number of administrators and other staff was 2.7 times that of students.

New Mexico’s bloat was even more extreme than the rest of the nation due in large part to its slow-growing student population which rose at 7 percent, less-than half the national average, while hiring kept pace with national trends.

Meanwhile, total school personnel in New Mexico increased 39 percent, teacher hiring rose at the slightly lower rate of 30 percent, and administrators and other staff grew by an astonishing 47 percent.

Check out the interactive map associated with this report here. Note that the bloat affecting New Mexico has not happened in many other states, including neighboring Arizona.

This story from Capitol Report New Mexico explains how the Public Employee Retirement Association (PERA) saw its unfunded liabilities jump by an astonishing $1.2 billion over the last year alone. That jump means the unfunded liability has risen from $5 billion to $6.2 billion. In the last three years alone, the unfunded liability has nearly tripled (it was $2.3 billion in mid-2009). But that’s not the worst of it.

The situation has deteriorated despite relatively strong performance in the stock market this year (the S&P 500, for example, returned nearly 15% over the past 12 months). That rate of return exceeds even the optimistic 8 percent rate assumed by New Mexico’s pension funds, so after a number of down years, things should have started looking up, not further down.

Of course, there are options for real reform, but they won’t be as popular as the milquetoast “reforms” the Legislature will be considering during the 2013 session.

As RGF experts J. Scott Moody and Wendy P. Warcholik, Ph.D wrote in a paper on needed pension reforms a few years ago, the solutions needed are:

Step 1—Fix the Public Sector Over-Employment Problem
Step 2—Transform Defined Benefit System into a Defined Contribution System
Step 3—Continue to Increase Employee/Retiree Contributions to the Retiree Healthcare System
Step 4—Expand the Private Sector

Once the election is over, Medicaid expansion and whether New Mexico should accept the federal government’s bribe, er, “support” to massively expand Medicaid. Of course, the results of the election could have an impact on whether New Mexico legislators are inclined to follow the diktats of ObamaCare and whether the president and Congress intend to keep the program in place.

John Goodman of the National Center for Policy Analysis discusses New York Times columnist Paul Krugman and his clueless statements/outright lies on Medicaid and health care in general.

In a separate brief, the Heritage Foundation outlines potential scenarios under the new health care law and how much it is likely to cost taxpayers at the federal level and in the individual states. According to the analysis, New Mexico will spend at least $330 million more on Medicaid under ObamaCare from 2014-2022.

The National Taxpayers Union has released its ballot guide for issues and amendments. Check the New Mexico version out here. The full report with ballot measures for the other 49 states is available here. Share it with your friends, family members, and others in search of information on ballot measures in their state.

This is short, entertaining video showing just some of the miseries of a world without capitalism and free markets.

The fact that New Mexico’s education system is in dire need of reform is not lost on citizens of our state. Recent polling found that 75 percent support the simple act of holding back third graders who can’t read.

This is good news! People clearly want to see reform — and our children deserve the best education possible for them.

While eliminating the social promotion of third-graders who cannot read would be a good start for the Legislature next session, we need to use all the tools at our disposal to ensure that kids can read and their schools are successfully teaching them to do so.

Hopefully, voters focus on this issue in the upcoming election and weigh support for such modest education reforms in deciding who they wish to represent their interests in Santa Fe.

The reality is that banning third-grade social promotion is not enough to improve our schools. In fact, no single education reform is going to solve the problems that have been with us for generations.

One reform that is sweeping the nation — but is being hindered here in New Mexico — is the fast-growing virtual/digital learning model.

Why is New Mexico, once again, falling behind in education?

We do have the state’s first full-time virtual charter school up and running in Farmington because an innovative school district saw the possibility of virtual education. But, New Mexico Connections Academy, a proposed full-time, statewide public virtual school that applied for another charter for the 2013-2014 school years, was denied on a 6-3 vote by the Public Education Commission.

Despite strong interest from parents, a thorough application, committed volunteer board, and no opposition voiced at a public meeting, the PEC turned down the New Mexico Connections Aca-demy charter application.

The application is now on appeal to Education Secretary-designate Skandera.

There are countless examples of how technology has positively impacted virtually every aspect of our lives. It is only now getting started in truly changing education.

The PEC’s decision was based in part on a Richardson-era legal opinion that questioned the legality of “virtual” charters. With such a mind-set, it is a wonder that New Mexico students are not forced to use only an abacus to learn math, or a wax tablet to learn how to write.

Michael O’Leary is an adjunct scholar with New Mexico’s Rio Grande Foundation, a limited government proponent.

Why do conservatives and libertarians tend to support markets over “democracy?” The following video provides a strong justification for that view:

While the ignorance and willingness to just make stuff up on the part of these people may seem reprehensible to some, the reality is that it is a direct result of “rational ignorance.” That is, given their likely minimal impact on the outcome of a given election, most people don’t pay that close attention to the issues. That is why “democracy” is inherently flawed. Interestingly, I’d say the interviewees are likely voters because they cared enough to lie about having seen the debate. A truly ignorant person would flat-out say “what debate?” and not really care. These people were trying to put up a front of being “good citizens.”

Free markets, on the other hand, create incentives (financial ones being preeminent) for all parties to become informed. And, even if you don’t understand all of the inner workings of an automobile (as I don’t), it is relatively easy to pick up a copy of Consumer Reports and find out what the experts say or rely on the power of market forces that kill off inferior products while boosting superior ones.

While politicians make promises that may or may not be kept, there are some issues on this fall’s ballot that voters have direct control over. One such issue is whether the City of Albuquerque should meddle further with the wages paid by local businesses. Check out the new advertisement below:

While much of the attention this November has been focused on the presidential races and the race for Congress, it is worth keeping a few facts in mind as you head out to vote in early voting (which begins this Saturday, October 20).

New Mexico’s Legislature makes a vast majority of the economic development and educational policies in the state. According to the US Census Bureau, our state has the highest poverty rate in the nation. According to Diplomas Count, New Mexico has the 2nd-lowest graduation rate in the nation. The New Mexico Legislature has been a monopoly for decades, with one party having controlled New Mexico’s House since the first-term of US President Dwight D. Eisenhower.

Bonds may not raise taxes, but they do cost real money that could otherwise remain in your pockets. If a project is indeed a priority like the Paseo del Norte Interchange, by all means vote for it, but also realize that higher education in New Mexico is bloated and recently handed out a $453,093 parting gift to departing NMSU President Barbara Couture.

According to the US Chamber of Commerce, New Mexico has one of the worst legal climates in America (44th). New Mexico’s judiciary is ripe for new blood.

New Mexico’s Public Regulation Commission is extremely powerful and scandal-plagued. Reforms on the ballot are modest, but should be considered a starting point for more dramatic reforms.

Lastly, there is no such thing as a “free lunch.” Leftists who support raising the minimum wage (as is on the ballot in Albuquerque) claim that mandating a higher wage for low-income employees will create jobs and wealth. What they don’t say is where the money will come from. Will it be manifest out of thin air? (that seems to be their prevailing theory); or, will it come as a result of price increases, increased automation, or staff reductions elsewhere? They don’t want to acknowledge these, far more likely, possibilities.

Keep these facts in mind as you head to the polls. Oh, and don’t keep this knowledge to yourself. Send this information to your friends and family. They’ll thank you for sharing factual information as opposed to rhetoric.

If you didn’t see it, the new study from the Employment Policies Institute that I blogged about yesterday really explains why laws mandating increased minimum wages are unwise. Here are some specific details on unemployment for 16-24 year olds (August 2012 data) that further bolster the case against higher mandated wages:

Albuquerque’s unemployment rate for 16-24 year olds: 8.8%
Santa Fe’s unemployment rate for 16-24 year olds: 21.9%
National unemployment rate for 16-24 year olds: 16.5%

Clearly, the job market for young people, the group primarily impacted by minimum wages, is far better in Albuquerque than it is in Santa Fe, despite the “City Different’s” low overall unemployment rate. Santa Fe’s highest-in-the-nation minimum wage hurts those it is supposed to help. Albuquerque should not follow Santa Fe’s path to economic self-destruction.

(Albuquerque) The Laffer Center for Supply-Side Economics at the Texas Public Policy Foundation has joined Rio Grande Foundation to publish a recent analysis of income taxes at the state level. The study, “Taxes Really Do Matter: Look at the States” authored by Dr. Arthur B. Laffer, a former advisor to President Ronald Reagan, and Stephen Moore, senior economics writer for the Wall Street Journal, debunks recent research by the Institute for Taxation and Economic Policy (ITEP), a group that advocates for state level income taxes.

In the report, Laffer and Moore found that in any ten-year period, the no-income tax states – Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming – consistently outperform the equivalent number of the highest income tax states – Oregon, Hawaii, New Jersey, California, New York, Vermont, Maryland, Maine and Ohio. No-income-tax states experienced a 14 percent population growth versus only 5.5 percent of the highest income tax states. Similarly, job growth in the no-income tax states was 5.5 percent while -1.6 percent in the highest tax states.

“The California/Texas comparison is especially interesting as California has one of the highest income tax rates at 10.3 percent and Texas has no income tax,” said Laffer. “Over the ten-year period studied, Texas gained nearly 870,000 transplants from other states while California lost over 1.5 million residents.”

“New Mexico provides further evidence for the Laffer/Moore thesis on the reduction or elimination of personal income taxes, said Rio Grande Foundation president Paul Gessing. “The top rate was reduced from 8.2 percent to 4.9 percent during the Richardson Administration which spurred economic growth, at least relative to other states.”

The data clearly shows that Americans are moving out of low tax states and moving away from high tax states and taking their incomes along with them. “You can’t tax an economy into prosperity,” said Laffer.

The Laffer Center for Supply-Side Economics is a partnership with the Texas Public Policy Foundation dedicated to preserving and promoting the core tenets of supply-side economics.

Laffer Center website: http://www.laffercenter.com/

Facebook page: www.Facebook.com/TheLafferCenter

Twitter feed: www.Twitter.com/LafferCenter

WASHINGTON – Today, the Employment Policies Institute (EPI) released a new study authored by University of Kentucky economist Aaron Yelowitz, which examines the impact of citywide compensation floors in cities like San Francisco. The study finds that (all else being equal) each additional $1 in wage and benefit mandates reduces young adults’ labor force participation by roughly two percentage points, increases unemployment by 4.5 percentage points, and causes a 26-hour reduction in annual hours worked.

In the City of Albuquerque, which is currently considering an initiative to create a $8.50 per hour minimum wage, similar employment consequences from a wage mandate are expected.

The full study and executive summary are available here

Progressive researchers have long insisted that San Francisco’s highest-in-the-nation compensation floor (including a soon-to-be $10.55 minimum wage, mandatory heath care coverage, and paid sick leave requirements) has had no negative impact on employment. However, by closely examining Census Bureau data from San Francisco and similar cities around the country, Dr. Yelowitz demonstrates that increasing compensation floors causes significant harm to the employment prospects of young adults.

“San Francisco might consider itself a unique progressive outpost where the laws of economics don’t apply, but this study’s results suggest otherwise,” said EPI research fellow Michael Saltsman. “The evidence is clear—labor and wage mandates create job losses, particularly for the least-skilled job seekers.”

Advocates for a higher minimum wage—such as those currently campaigning for an increase in Albuquerque– rely on a handful of outlying studies to make the case that a higher minimum wage has no effect on employment. Yet according to economists at the University of California-Irvine and the Federal Reserve Board, 85 percent of the most credible studies on the subject from the last two decades point to job loss following an increase in the minimum wage.

“Albuquerque voters are currently deciding whether to follow San Francisco down the path of onerous employer mandates,” Saltsman concluded.” They should think twice before adopting a policy that will eliminate jobs for the city’s most vulnerable jobseekers.”

The Rio Grande Foundation has been involved in ongoing discussions over whether or not to expand UNM Hospital. Over the weekend, the new President of UNM had an article in the Albuquerque Journal outlining why he believes the hospital expansion is needed.

Color me unimpressed. Rather than basing his arguments on the supposed shortage of hospital beds and the need for the hospital to build yet another hospital in order to serve the community, Frank chooses to focus on the supposed economic impact and “multiplier” impact of the hospital’s construction. To say the least, this is an argument that we take issue with. Frank’s argument is straight out of the Keynesian economic cookbook which becomes more discredited as every day goes by. After all, is it really more beneficial to the overall economy to tax people to the tune of $146 million to build a hospital or to leave that $146 million in the pockets of average citizens. You may see the hospital, but what is left unseen is what average citizens would do with the money if left to their own devices. Of course, advocates of bigger government always side with higher taxes and more spending.

As the New Mexico Board of Finance considers this hospital expansion, it needs to base its decision on whether the expansion is the highest and best use of taxpayer dollars, not some discredited economic theory that would just as soon allocate resources to fight off an alien attack.

What is Austrian economics? Who is responsible for the economic crisis? Should America adopt the Gold Standard? Tom Woods discusses these issues and more:

Tom Woods from Paul Gessing on Vimeo.

I recently participated in a policy symposium on the American family that was organized by the free market think tank Center of the American Experiment. The entire document can be found here and here. With more than half of New Mexico births coming outside of wedlock, the issue of the family is not one that free market conservatives and even libertarians can ignore.

Check out this exciting video which details the myriad benefits of digital learning:

ollie-riogrande from Paul Gessing on Vimeo.

According to this document from the American Action Forum, the so-called “Affordable Care Act,” has cost New Mexico taxpayers $168 million in additional regulatory costs. New Mexico is on the low end of the cost spectrum. Texas has already suffered a regulatory of $1.8 billion while it has cost Arizona taxpayers $567 million.

Reports and rankings are useful things, especially when they measure relevant data and show clear paths to improvement or continued success. Two 50-state rankings came out this week. Here is some information and analysis:

Tax Foundation’s 2013 Business Tax Index: The question asked is how business friendly are the various states in terms of the taxes levied on businesses? The answer, according to the Tax Foundation, is that New Mexico is 38th in the nation. Our property tax burden is the best in the country, but our sales/gross receipts tax burden is 45th, our corporate income tax rate is 39th, and our personal income tax is 34th. There are two takeaways: 1) New Mexico has relatively heavy overall tax burdens on business 2) Without cutting or increasing the overall tax burden, New Mexico’s policymakers might consider ways to reduce growth-killing taxes (like that on corporate income) with small property tax hikes. You can see the mapped rankings below. Note that New Mexico underperforms all of its neighbors.

The second relevant study is the Cato Institute’s 2012 Fiscal Policy Report Card on America’s Governors: According to the report, Gov. Martinez is graded “C” (although she is the top-graded “C” in the report).

According to the report:

Her spending score in this report is a little below average, and was likely dragged down by New Mexico’s liberal legislature. For example, her proposed spending increases have been lower than the final enacted increases. However, Martinez scores well on tax policy. She promised to oppose tax increases, and she has stuck to that pledge. In 2011, for example, she vetoed a tax increase to fund unemployment compensation saying, “I support reducing unemployment benefits to protect the solvency of the fund, but I do not support increasing job-killing taxes on small businesses while we are struggling to recover from a recession.”

She also vetoed a bill to expand the corporate tax base. She has pursued business tax cuts to make New Mexico more competitive. She signed a bill to reduce the “pyramiding” or layering of gross receipts taxes on inputs to construction. And she has called for exempting about 40,000 small businesses from the state’s gross receipts tax. Another good move by the governor was approving a reduction in film tax credits, which are wasteful corporate welfare.

Americans for Prosperity in conjunction with the Rio Grande Foundation & the New Mexico Business Coalition Invites you to meet Tucker Carlson of FoxNews and the Daily Caller October 13, 2012 at 10:00 a.m. at the Hotel Albuquerque 800 Rio Grande Blvd, NW Refreshments Served

Gov. Gary Johnson is going to be in town today for a rally at UNM (I’ll be speaking). It got me to thinking about one of the core tenets of his campaign, that is his proposal to cut the federal budget by 43% in his first year. Completely-unrealistic, right? Not really.

If you take a look at the Historical Tables of the federal budget you will note that federal tax revenues in 2012 are expected to be about $2.5 trillion. If the government spent “only” what it did way back in the dark ages of 2005, we’d have a balanced federal budget. I could be wrong, but I don’t remember anyone starving in the streets in 2005. In fact, the national unemployment rate was 5.2 percent at the start of 2005 and dropped to 4.9 percent by the end of the year. That sounds a lot better than Obama’s recent 7.8 percent rate improvement and shows that as government has grown more rapidly in recent years, the economy has suffered. It’s time to unleash the private sector by returning resources to the free market, not the government.

Tom Woods, author of dozens of books, and senior fellow with the Ludwig Von Mises Institute will be speaking at a Rio Grande Foundation luncheon event in Albuquerque (details here) this Friday, October 12. I interviewed Mr. Woods for this week’s edition of the Rio Grande Foundation hour on KIVA 1600 AM, the Rock of Talk. You can download the show here or go to the online listing of RGF radio shows and listen to the 10/7/12 show.

Woods and I discuss the economic crisis and what got us into it, the Federal Reserve, the history of nullification and how it could restore liberty to America.

So, according to his article in the Albuquerque Journal, Santa Fe’s Mayor, David Coss doesn’t think an increased minimum wage hurts his City. The cynic might believe that Coss is just trying to lure Albuquerque to enact bad economic policies similar to those of his home town in order to reduce, but I think Coss is a true-believer.

What I don’t understand is what advocates of the higher minimum wage have against the disabled. What, you say? Wonderful organizations like Voices for Children and “Ole” would NEVER discriminate against the disabled. Oh yeah, well why does New Mexico’s minimum wage law state the following: Section 50-4-23 allows the Director of Workforce Solutions to issue special certificates for those “whose earning or productive capacity is impaired by physical or mental disability or injury or any other disability…”

So, New Mexico’s minimum wage law discriminates against the disabled and the ballot measure on November’s ballot here in Albuquerque doesn’t do anything to remedy the situation. That means that the disabled may continue to be employed at wages below the minimum. But, you say, raising the wage paid to the disabled might make it impossible to find jobs!

And that conundrum is in a nutshell the problem with minimum wages and raising them. For many disabled, the value of their labor is lower than the minimum wage. Of course, the problem is not limited to the disabled and I’ve also known disabled who were among the hardest-working people in a given workplace and were far superior to many so-called “able” employees. If you are “able,” but have few skills and little or no experience, then “Voices” and “Ole” and other advocates of mandated wages are perfectly-comfortable with making a productive an economically-untenable proposition. Leeway is only given if the Director of Workforce Solutions deems you “disabled.”

Santa Fe is considering yet another economically and environmentally-dubious policy idea. In this case, the policy under consideration is a ban on plastic shopping bags. Thankfully, even in the “People’s Republic,” this policy is generating opposition. You can add your voice to the opposition by clicking here and sending a message to your City Councilor.

The devil, as they say, is always in the details. Todd Myers of the Washington Policy Center who actually visited “The City Different” earlier this year, speaks out regularly about “Eco-Fads” and has even written a book on the topic. As he writes in this article, bans on plastic bags actually have a net-negative impact on the environment due to increased energy use.

So, rather than jumping on the bandwagon and doing something that feels good, but ultimately harms the environment, Santa Feans should take a close look at the proposal to ban the bags and say “no.”

(Albuquerque) Wind energy, because of its variable nature, is not suited to be the lone or primary source of a grid’s total electricity, according to a new Rio Grande Foundation–Reason Foundation study. If it is used to produce more than 10-to-20 percent of a system’s electricity, wind power increases operating costs due to the need for expensive storage facilities or continuously available CO2-emitting backup power generation facilities.

The new Rio Grande Foundation–Reason Foundation report uses a full year’s worth of hour-by-hour power grid data from PJM Interconnection, which manages the electrical grid in part of the Eastern United States, to simulate how wind would’ve supplied the necessary power to customers in 2009. Reason’s models show wind power would’ve failed to supply all of the electricity PJM customers needed over 50 percent of the time.

Thus, if wind is going to produce a large percentage of a grid’s electricity it will be necessary to build expensive energy storage facilities or reserve power generation facilities to supply power when there is not enough wind to meet energy demands at any given time and to prevent brownouts and blackouts.

The study shows that as more reserve power is needed, the environmental benefits of wind power decrease due to the C02 emissions from those facilities, which rely upon fossil fuels and must operate even when not being used, in order to ensure reliability of the electrical grid.

The study concludes that, given the costs involved, the practical upper limit for wind power’s contribution to the electricity grid is 10% of the total energy mix. This would result in a 9% reduction in CO2 emissions.

Very high wind penetrations are not achievable,” said William Korchinski, author of the study. “As wind’s share increases, system reliability will be adversely affected disproportionately—unless adequate reserve power is available. That power reserve is expensive and lowers any possible environmental benefits.”

Full Study Online

“The Limits of Wind Power” is available online here.