The idea that taxes and their rates don’t make a difference in economic activities is perpetuated by many on the left. Two recent examples, one from New Mexico and one national story illustrate that they do drive economic activity (or kill it). Check out this story from the Aircraft Owners and Pilots Association on New Mexico’s gross receipts tax. It has effectively driven the aircraft repair business out of New Mexico (thus costing our state jobs and economic activity).

The other story has been widely reported in the national media and involves pro golfer Phil Mickelson who is extremely upset by the rising tax rates that he’ll face both as a US taxpayer and as a resident of California where the top rate on income now exceeds 13 percent (the easy answer is to at move out of California and to a state like Nevada, Florida, or Texas where personal incomes are not taxed).

The fact is that taxes dictate a lot of economic activity. While not much can be done about Washington at this point, New Mexico policymakers should consider ways to create a fairer, more transparent tax code that incentivizes entrepreneurship and business formation for all New Mexicans.

From day one, the Rio Grande Foundation has been critical of the use of $209 million of New Mexicans’ tax dollars to build a spaceport.

For starters, government has a shaky track record of betting on "the next big thing." The spaceport is also a classic example of wealth redistribution from New Mexico taxpayers (arguably the poorest state in the nation) to wealthy businessman Richard Branson and the millionaires who plan to spend $200,000 to fly into space.

Despite all of this, the project was built and is now open. Thus, it makes sense to make it as successful as possible. Unfortunately, to date New Mexico’s Legislature has failed to pass a law that protects manufacturers, suppliers and everyone else who builds and maintains spacecraft from liability lawsuits. This law would cost nothing to change and will not impact any New Mexican who does not choose to fly into space.

New Mexicans have spent $209 million on the spaceport. The Legislature would be committing an act of legislative malfeasance by failing to pass these basic protections.

Although often overlooked, it is worth noting that early voting is now underway (here are the locations) for the Albuquerque Public Schools school board and the related bond measure request  of $368 million. Even if you don’t have a contested race in your area (district maps can be found here), it is worth going to the polls on the bond issues. Of course, if you do have a candidate in your district, it is important to find out as much as possible about their views on issues including their views on charter schools and educational philosophy.

If you don’t make it out for early voting, the actual election is Feb. 5. Here is a list of Election Day voting centers. 

And, while APS officials will repeatedly state that your taxes will not go up if their bond measure is approved, your property taxes would drop if it were defeated. This school district recently went with HIGHEST bidder on a major school construction project.

Lastly, in the Wall Street Journal, Texas comptroller made an excellent point when she wrote: “Most people don’t have the first idea of how new proposed debt fits into the total debt being carried by their local governments. Every ballot in an election for new bonded indebtedness should state, at minimum, the current amount of outstanding debt and and annual debt-service payments, and show how the proposed debt will affect the tally.”

Education “Alternatives” Truly Alternative

According to Merriam-Webster, charter schools are: A tax-supported school established by a charter between a granting body (as a school board) and an outside group (as of teachers and parents) which operates the school without most local and state educational regulations so as to achieve set goals.¹ Unfortunately, in New Mexico, charter schools are still beholden to large numbers of rules and regulations associated with traditional public schools.

According to the National Alliance for Public Charter Schools, New Mexico law requires charter school teachers to have the same certification requirements as traditional public school teachers. It requires charter schools to adhere to the same three-tiered salary schedule as traditional public schools and, for teachers who have been employed at the school for three consecutive years, adherence to the NM School Personnel Act is required as well.²

Charter schools are supposed to act as an alternative to traditional public schools. While New Mexico’s charters have attempted to do this, they have been hamstrung by regulations that force them to adhere to similar, strict regulations, thus making charters less of a real choice for parents and students.

New Mexico’s Legislature should eliminate certification requirements, adherence to the three-tiered salary schedule, and tenure for all charters. These regulations are generally problematic for traditional public schools (as outlined above on the certification issue). Giving charters the freedom to avoid these regulations would allow for the gathering of real-world evidence as to the benefits or detriments of these policies.

¹Merriam-Webster, definition of “charter school”

²National Alliance for Public Charter Schools, “Measuring up to the Model,” http://www.publiccharters.org/law/ViewComponent.aspx?comp=16

Like the “Three-Tiered Licensure” system now in place for teachers, New Mexico mostly measures inputs as opposed to outputs when it comes to licensing principals. For example, New Mexico requires a master’s degree and at least six years of teaching experience before it is possible to become a principal.

Of course, being a teacher and being a principal are two completely different jobs requiring vastly different skill sets. Also, limiting the pool of potential principals reduces significantly the talent available, removes potentially excellent teachers from the classroom, and results in a distinct lack of innovative ideas and promotes a relatively homogeneous mindset.

After all, teachers have all been through schools of education, the same certification programs, and grown acclimated to teaching in today’s classrooms. The ability for innovative and visionary outsiders to bring new ideas to the schools as administrators is quite limited.

Additionally, principal pay (like that of teachers) is highly inflexible and determined by various statewide formulae based on inputs rather than outputs like student achievement. These rigid formulas and the lengthy service requirements only serve to make finding good school principals more difficult given the widely-reported, ongoing principal shortage.¹

The final problem with principal licensing in New Mexico is the same overriding problem we have with the state’s teacher licensing system, which is an emphasis on inputs in the form of credentials rather than outputs in the form of more educated students.

¹Jimmy Guterman, “Where have all the principals gone?: the acute school-leader shortage,” Edutopia, http://www.edutopia.org/principal-shortage

School Choice Week is right around the corner. This year’s celebration includes a special cross-country “whistle stop” train tour with stops in 14 cities from coast-to-coast, including Albuquerque. Our celebration takes place on Saturday, Jan. 26 at the Albuquerque Museum in Old Town. More information is available on the Rio Grande Foundation’s website. Please come out to support school choice in New Mexico!

School choice is working here in New Mexico. Only 10 percent of New Mexico’s public schools are charters, yet charters made up 25 percent of the top 40 public schools that received an “A” grade under our new school grading system. In fact, four of the top 10 schools are charters.

Compare this with New Mexico’s overall education system, which is ranked 46th out of 47 by the US Department of Education. Just 63 percent of New Mexico students in the 2010-2011 school year finished secondary school. It is no secret our state’s education system is in need of significant improvements and reform. School choice can and should be a major part of these reforms.

For starters, New Mexico’s current charter schools must be preserved, expanded, and improved upon. Today, over 14,000 New Mexico students attend one of 82 charter schools across the state. Charter schools provide a healthy, publicly funded alternative to the traditional public school.

Presently, charters must adhere to many of the same rules and regulations as the public school system such as certification requirements, three-tiered salary schedule, and tenure, policies that hinder innovation. It limits the effectiveness of an educational institution that is intended to be outside the realm of the traditional system, thereby giving parents an actual distinctive choice.

Of course, charter schools are not the only way to enhance school choice. Education tax credits can be an effective school choice policy and their popularity continues to grow nationwide with bi-partisan support.

Unlike school vouchers where the government sends a check to parents to send their kids to a voucher-approved school, education tax credits reduces the amount of money a taxpayer owes the government for every dollar he or she spends on a child’s education.

Tax credits allow for their recipients to donate to scholarship funds that give low-income and needy families education choices including those of private or parochial schools. Such a policy can even save the state money. According to a nonpartisan study of the Florida Tax Credit Scholarship Program, for every $1 spent on the tax credit program, Florida taxpayers saved an estimated $1.49. Florida is one of many states to have embraced tax credits as a tool for creating school choice.

Virtual education is yet another form of school choice with great potential for New Mexico. The term describes a type of schooling that entirely or primarily uses online methods. It is a relatively new innovative development in education with enormous potential. Technology has improved many facets of our lives and it is only natural to extend those benefits to education. Virtual learning provides an enhanced and customized delivery of education that would benefit New Mexico by providing individualized learning opportunities to students.

The Florida Virtual School (FLVS) is a great example of the success of an online learning alternative. A report by the Florida TaxWatch Center for Educational Performance and Accountability found that students in the Florida Virtual School outperformed their peers in traditional public school on the Advanced Placement exam. FLVS students scored an average of 3.05 on AP exams versus an average score of 2.49 for public-school students. In a survey conducted by the FLVS, 53 percent of parents said that their students learned more in their FLVS courses than in the traditional classroom.

These are but a few of many reform options that could benefit our children by improving their educational outcomes. We owe it to the current and future generations of New Mexico children to allow for the best possible educational environment. We should implement policies that allow for the decisions to be made at the ground level — on the frontlines — by parents, educators, and local communities.

Join the National School Choice Week celebration in New Mexico on Jan. 26 so that we may shine a spotlight on effective education options for every child.

Marcos Portillo is a policy analyst with New Mexico’s Rio Grande Foundation, 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.

It is not often that the Rio Grande Foundation argues on behalf of lawyers, but on the issue of reciprocity, New Mexico’s “anti-free market” restriction of the supply of lawyers is economically-harmful. Regulations on lawyers are not made the Legislature or some administrative body, but by the five member New Mexico Supreme Court itself.

New Mexico finds itself sandwiched between our adjoining and more enlightened States of Utah, Colorado, Arizona, Texas, and Oklahoma. It is bound by states that foster the free movement of legal professionals, and encourages the free flow of legal commerce. When businesses are looking to locate their headquarters or large offices, they want the flexibility to bring in their own experienced legal departments without the burden of time consuming, expensive, delaying, wasteful or redundant bar examinations rather than having their hiring pool artificially limited.

The state is one of only eleven jurisdictions in the United States that has not adopted what is called “admission-by-motion procedure” that enhances reciprocity.¹ New Mexico requires experienced and competent lawyers to take a bar examination administered by New Mexico to gain admission. New Mexico does not impose the same requirement for other professions such as doctors, other medical professionals and certified public accountants.²

The American Bar Association has commented in its commission on ethics that the effect of requiring attorneys already licensed and experienced in legal practice to take another bar exam is an “erection of an excessive barrier” that is “lengthy, expensive and burdensome”; and while reciprocity was not necessarily needed when the rules were originally promulgated because people maintained law offices in a single jurisdiction over their entire careers, geographic mobility and the increasing demands of multi-state clients make this an obvious reform.

New Mexico’s Supreme Court should end its economically-harmful, regulatory provincialism, and adopt the American Bar Association’s “Admission by Motion” procedure.

¹American Bar Association, “Model Rule for Admission by Motion,” http://www.americanbar.org/…pdf

²House Memorial 2 to Adopt the American Bar Association’s Model Rule on “Admission by Motion,” http://www.nmlegis.gov/Sessions/12%20Regular/memorials/house/HM002.pdf

Rio Grande Foundation president Paul Gessing recently explained in a 2 minute editorial for KUNM 89.9FM that raising the minimum wage actually harms the very people it is meant to help.

Interestingly enough, Santa Fe’s minimum wage will be rising to a nation’s-highest rate of $10.51 an hour in March.

Having just taken effect at the beginning of 2013, Albuquerque’s minimum wage hike is already forcing businesses to make tough decisions and resulting in worker layoffs. Check out stories here and here.

According to the Santa Fe Reporter:

Currently, there are a set number of liquor licenses available in New Mexico, based on the principle of one license per 2,000 people. That restriction dates back to post-Prohibition times. Beer and wine licenses for restaurants are separate, and there are different prices for bars than for retailers selling packaged alcohol.

Because of the limited number of licenses, they commonly go for $500,000 a pop or more-a prohibitively large sum for would-be new business owners.¹

The article goes on to note that:

According to the Texas Alcoholic Beverage Commission website, a two-year packaged liquor retailer in Texas pays $1,500. By contrast, a recent packaged liquor license sold in New Mexico cost $750,000, according to the New Mexico Alcohol and Gaming Division. Retailers and bars pass that price on to consumers.²

All New Mexicans understand that the state has had and continues to have serious problems with alcoholism and drunk driving. On the other hand, our current licensing laws are extremely arbitrary and are not designed to address the real issue of problem drinking.

The current environment creates artificial scarcity and limits the ability of those of modest means to involve themselves in the business of serving liquor. In other words, it creates a cartel run by those who can afford to invest outrageous sums in liquor licenses. Current law, therefore, penalizes small businesspeople and their potential employees.

Rather than limiting liquor licenses based on an arbitrary population number in a way that has caused tremendous price inflation, New Mexico legislators should consider regulatory changes designed so the number of licenses enables their price to reach a market price similar to that of one or more surrounding states.

¹Wren Abbott, “License to Sell,” Santa Fe Reporter, March 14, 2012, http://www.sfreporter.com/santafe/article-6618-license-to-sell.html

²Ibid.

It is a bleak picture these days when it comes to New Mexico’s economy. On day 1 of the legislative session, Sen. Majority Leader Michael Sanchez, the most powerful man in the Legislature, made it clear that he will be an implacable road block to reform. With an abject lack of economic freedom and education reforms, it is unlikely that New Mexico’s economic or educational performance will improve.

What is the good news out there? Not much. The best we can hope for involves the opening of vast new markets for New Mexico natural gas (we are one of the top producers of natural gas in the nation). Free trade in natural gas could be New Mexico’s ticket to economic growth. The experts agree, natural gas exports would be a boon for this country (and the state). Margo Thorning of the American Council for Capital Formation has a persuasive column as does energy expert Michael Economides who explains that Blocking LNG Exports Helps a Few but Hurts Many.

I asked Sen. Martin Heinrich about the issue and he sounds supportive, but the ball is ultimately in President Obama’s court. Our elected and business leaders need to get engaged and make the case against the unholy alliance of radical environmentalists and big business that wants to keep New Mexico’s clean natural gas out of international markets (and China reliant on coal).

With the implacable (and now angry) Sanchez in power, we can’t expect salvation from within.

One sign of the close relationship between government employee unions and the government officials they support is the eagerness with which states (including New Mexico) have collected union dues of government employees on behalf of the very same public employee unions that are supposed to be “adversarial” in their efforts to protect employees from the unfair demands of their bosses in government.

The fact is that public employee unions in New Mexico have trouble keeping members if governments don’t collect dues on behalf of the unions. According to Bob Williams of State Budget Solutions¹:

Voters in Washington State approved a “paycheck protection” law in 1992. The law stated that employees must give annual written consent before unions could collect money for political activity. Before passage, approximately 82 percent of the members of the Washington Education Association contributed to the union’s political action committee. After the law’s first year of implementation only 11 percent of teachers contributed to the union’s political fund.

In 1997, Idaho lawmakers required political committees to get annual written consent from workers before obtaining contributions through automatic payroll deductions. According to news accounts, the number of union members contributing to union political committees dropped by 75 percent.

In Wisconsin, when Gov. Scott Walker eliminated payroll deductions for union members, the Wisconsin American Federation of State, County and Municipal Employees (AFSCME) say its membership fall from 62,818 in March 2011 to 28,745 in February 2012. 6,000 of the 17,000 members of the American Federation of Teachers (AFT) quit the union.

Robert Chanin, the former general counsel for the National Education Association, once said in U.S. District Court: “It is well-recognized that if you take away the mechanism of payroll deduction, you won’t collect a penny from these people, and it has nothing to do with voluntary or involuntary. I think it has to do with the nature of the beast, and the beasts who are our teachers … [They] simply don’t come up with the money regardless of the purpose.”

¹Bob Williams, “Why government employee collective bargaining laws must be reformed now,” State Budget Solutions, June 5, 2012, http://www.statebudgetsolutions.org/publications/detail/why-government-employee-collective-bargaining-laws-must-be-reformed-now

(Albuquerque) The Rio Grande Foundation (along with a host of organizations that support educational choice) is pleased to participate in School Choice Week 2013 which includes a first-of-its-kind trans-continental whistle stop tour.

The tour will stop in Albuquerque on Saturday, January 26, 2013 and includes a reception to begin at 5:30pm at the Albuquerque Museum of Art and History near Old Town.

Rio Grande Foundation president Paul Gessing will be among the speakers – a list that includes elected officials, parents, and children who have benefited from school choice – on-hand to explain why school choice is important.

Said Gessing, “It is only fitting that – 150 years after construction began on the first transcontinental railroad – supporters of educational reform embark upon a whistle stop tour on behalf of educational choice. After all, the transcontinental railroad opened up a continent that had previously been closed to all but a select few; school choice will open up children’s’ minds and grant educational options to all children, not just a select few who’s parents can afford educational choice.”

The Rio Grande Foundation has, and continues to support, all forms of school choice including charter schools, education tax credits, vouchers, digital learning, and home schooling. As such, it advocates from the perspective that parents, not bureaucrats and politicians, know what is best for their children and will, if given the choice, find suitable educational options for their children.

Noted Gessing, “This year’s School Choice Week celebration is a truly unique opportunity for New Mexico as we are one of only 14 stops on the national whistle stop tour. Given our state’s historically poor educational performance, relatively limited choice options, and the onset of the 60 day legislative session, we hope that our state’s political leaders will take notice of the strong support school choice has in this state.”

Additional information on the Whistle Stop tour, including how to attend, can be found at www.riograndefoundation.org or can be attained at: 505-264-6090. Further details on the route of the tour, dates, and other participation opportunities can be found here: http://www.schoolchoiceweek.com/train

“Collective Bargaining” for government workers began in New Mexico in 1992. The law lapsed in 1999 and Gov. Gary Johnson wouldn’t sign a bill to renew it. But in 2003, Gov. Bill Richardson signed a collective-bargaining bill that, unlike the first one, did not have an expiration date.¹

The term “collective bargaining” is defined as: “a process of negotiations between employers and a group of employees aimed at reaching agreements that regulate working conditions.²”

It sounds innocuous on its face and is often called a “right” by government employee unions and their advocates, but it really represents a closed-circuit whereby government unions organize their members for political power, elect politicians, and then “negotiate” with those very same politicians who are largely dependent on the government employee unions for their campaign donations and political support.³ The union representing many government workers, the American Federation of State County and Municipal Employees (AFSCME) was the largest outside spender of the 2010 elections.⁴

Allowing government employees to collectively bargain was opposed by prominent liberals like Franklin Delano Roosevelt who said “The process of collective bargaining, as usually understood, cannot be transplanted into the public service.⁵” Even George Meany, the president of the AFL-CIO, seemed to oppose collective bargaining for public employee unions, “The main function of American trade unions is collective bargaining, it is impossible to collectively bargain with the government.⁶”

Collective bargaining is bad for taxpayers and has led to government growth beyond what is economically-supportable along with unfunded government employee health care and pension obligations in excess of $25.8 billion.⁷

The problem with collective bargaining is that government employees do not operate in a free market environment. Union workers do not compete in the same way as private sector workers (union and non-union alike).

Surprising to some, collective bargaining is not necessarily popular with union members. It is very popular, however, with union leadership. In 2005, Indiana Governor Daniels signed an Executive Order eliminating collective bargaining for state employees. At that time there were 16,408 dues paying union members. Today only 1,490 out of 28,700 are dues paying union members – 95 percent chose not to pay union dues when given the choice.⁸

The New Mexico Legislature must pass legislation to abolish public employee collective bargaining in the state. Employees are individuals and should be treated as such.

¹Steve Terrell, “Lawmaker warns workers: State isn’t safe from GOP efforts to bust unions,” Santa Fe New Mexican, February 22, 2011, http://www.santafenewmexican.com/local%20news/-New-Mexico-is-next-in-line-#.UOkF-6whGVo

²http://en.wikipedia.org/wiki/Collective_bargaining

³Daniel Disalvo, “The Trouble with Public Sector Unions,” National Affairs, Fall 2010, http://www.nationalaffairs.com/publications/detail/the-trouble-with-public-sector-unions

⁴Brody Mullins and John D. McKinnon, “Campaign’s Big Spender,” Wall Street Journal, October 21, 2010, http://online.wsj.com/article/SB10001424052702303339504575566481761790288.html

⁵Franklin Delano Roosevelt, “Letter on the Resolution of Federation of Federal Employees Against Strikes in Federal Service,” August 16, 1937, http://www.presidency.ucsb.edu/ws/index.php?pid=15445#axzz1ra9SmdJ2; Read more at the American Presidency Project: http://www.presidency.ucsb.edu/ws/index.php?pid=15445#ixzz1ra9keHik

⁶Daniel Disalvo, “The Trouble with Public Sector Unions,” National Affairs, Fall 2010, http://www.nationalaffairs.com/publications/detail/the-trouble-with-public-sector-unions

⁷J. Scott Moody and Wendy P. Warcholik, Ph.D., “Fixing New Mexico’s $25.8 billion unfunded retirement system.” Rio Grande Foundation, February 2010, http://www.riograndefoundation.org/downloads/rgf_nm_unfunded_retiree_system.pdf

⁸Bob Williams, “Why government employee collective bargaining laws must be reformed now,” State Budget Solutions, June 5, 2012, http://www.statebudgetsolutions.org/publications/detail/why-government-employee-collective-bargaining-laws-must-be-reformed-now

I discuss the likely path of the 2013 legislative session and what that means for New Mexico’s struggling education system and economy. Click the interview link here.

Health care is among the most heavily-regulated areas of the economy. One particularly costly regulation requires health insurance companies to be licensed and regulated within their respective states. Among other things, this forces young, healthy individuals looking for "bare bones" insurance plans to pay for a slew of coverage items that they have no need or desire for and that dramatically increase the prices of their plan. New Mexico’s 59 mandates are more than all but a handful of states, thus driving insurance prices in the Land of Enchantment higher than necessary.¹

Aside from the mandates, New Mexico is a relatively sparsely-populated state that allows fewer opportunities for "risk pooling" (the very point of insurance).² This drives up the cost of health insurance plans in the state. Enabling additional health insurance companies to do business in the state along with larger risk pools will inevitably drive down the cost of this insurance.

The Public Regulation Commission should allow any insurance company licensed in another state to do business in New Mexico. Absent that ideal situation, the PRC should negotiate "compacts" with other states to allow reciprocity agreements between states to allow insurance companies licensed in one state to practice in both states.

The Legislature should undertake an effort to reduce or eliminate regulations, perhaps making them optional under certain low-cost health plans targeted at young people. Foisting 59 mandated coverages on anyone who purchases health insurance is like mandating that a young or poor person purchasing a car must buy a fully-loaded BMW or go without a car.

¹Victoria Craig Bunce, "Health Insurance Mandates in the States, 2011," Council for Affordable Health Insurance, 2012, http://www.cahi.org/cahi_contents/resources/pdf/MandatesintheStates2011ExecSumm.pdf

²http://en.wikipedia.org/wiki/Risk_pool

Day 12: Eliminate or Dramatically Overhaul New Mexico’s Costly Renewable Portfolio Standard

01.14.2013

The 21 Day New Mexico Regulation Reform Study!

Day 12:  Eliminate or Dramatically Overhaul
New Mexico’s Costly Renewable Portfolio Standard

In March, 2004, then Gov. Bill Richardson of New Mexico signed into law Senate Bill 43. This bill required sources of renewable energy to make up 5 percent of the investor-owned electric utilities sales by 2006, and 10 percent by 2011. In 2007 the law was expanded by Senate Bill 418, which accelerated the timeline and increased the mandate such that renewable sources account for 10 percent of all power generated by 2011; 15 percent for 2015; and 20 percent for 2020 and thereafter.¹

Renewable sources include energy from solar, wind, geothermal, biomass and small hydroelectric facilities. One might assume that any combination of “renewables” would be adequate in achieving the standard, but this is not the case. The standard was made even stricter by the Public Regulation Commission (PRC) which has adopted diversity requirements for Investor Owned Utilities (IOUs). These mandates require proscribe that the Renewable Portfolio Standard (RPS) must be fulfilled with:

• No less than 20% Wind;
• No less than 20% Solar;
• No less than 10% Other technologies;
• No less than 1.5% Distributed Generation (2011-2014); and
• 3% Distributed Generation by 2015.²

According to the report “The Economic Impact of New Mexico’s Renewable Portfolio Standard,” New Mexico’s RPS will cost utility rate payers $2.3 billion over the decade from 2011 to 2020.³

In this situation, both the PRC and the Legislature can have an impact. The PRC should consider eliminating the provisions mandating that certain percentages of various sources of power be used. The Legislature should reduce or eliminate the RPS levels entirely at least until new more cost-effective technologies are in place that make wind and solar economically viable absent a regime of subsidies and mandates. Nationally, wind and solar combined generate less than 5 percent of electric power generation.⁴

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¹David Tuerck, Paul Bachman, and Michael Head, “The Economic Impact of New Mexico’s Renewable Portfolio Standard” American Tradition Institute and Rio Grande Foundation, February, 2011, http://www.riograndefoundation.org/downloads/rgf_nm_rps_study.pdf

²New Mexico Public Regulation Commission, “Resource Diversity and the RPS,” http://www.nmprc.state.nm.us/utilities/renewable-energy.html

³David Tuerck, Paul Bachman, and Michael Head, “The Economic Impact of New Mexico’s Renewable Portfolio Standard” American Tradition Institute and Rio Grande Foundation, February, 2011, http://www.riograndefoundation.org/downloads/rgf_nm_rps_study.pdf

⁴Zachary Shahan, “11 percent of Energy Production from Renewables in 2010,” April 12, 2011, http://cleantechnica.com/2011/04/12/11-of-u-s-energy-production-from-renewable-resources-in-2011/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+IM-cleantechnica+%28CleanTechnica%29

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Day 1:  The Dire Need for Regulatory Reform in New Mexico

Day 2:  The Economic Benefits of Deregulation

Day 3:  An Introduction to Regulations and Solutions

Day 4:  Eliminate Unnecessary Construction Licensing

Day 5:  Build for Cost-Effectiveness and Efficiency, Not Arbitrary LEED Certification

Day 6:  Simplify/Eliminate Occupational Licensing For Low-Income Professions

Day 7:  Pay Market Wage, Not Union-Imposed Prevailing Wage For Public Projects

Day 8:  Eliminate Common Carrier Regulations

Day 9:  Increase Election Freedom and Election Competitiveness

Day 10:  Adopt a Right to Work Law

Day 11:  Adopt Teacher Certification System Based on Student Outputs, Not Inputs

There is increasing evidence that excellent teachers are among the most important factors in improving educational outcomes in public schools.¹ Unfortunately, there is also a great deal of evidence that traditional teacher certification tools do not have a significant impact on teacher quality.² The following chart illustrating the small impact of teacher certification.

It is widely-recognized that more, better, teachers are essential to improving our educational system, yet government licensing policies are designed to limit supply. A PhD physicist who has retired from Sandia Labs would need years of additional schooling to put their considerable schools to work as a teacher in the classroom.³

Teacher licensing is an issue both for those who would like to become teachers through alternative paths and for accomplished and effective teachers who would move up in terms of pay much faster absent the “three-tiered licensing” system New Mexico has in place.⁴

According to the New Mexico Effective Teacher Task Force:

The current teacher recognition process in New Mexico places emphasis on years of experience and credentials obtained. Members of the Task Force recognize these factors are important; however, they fail to offer teachers any acknowledge of student achievement. Many New Mexico teachers see the growth of students in the classroom, but work in a system that does not recognize or reward them for it.⁵

The Legislative Finance Committee recently confirmed the fact that teacher licensing in New Mexico is ineffective, saying: “New Mexico’s three-tiered career ladder system does not align pay with student achievement.”⁶

The New Mexico Legislature must enact legislation to allow for truly alternative teacher certification paths for qualified professionals. Eliminating the “three tiered” licensing system (which measures inputs) in favor of a system that measures and rewards outputs in terms of student achievement would also be sensible.

¹Raj Chetty, John Friedman, and Jonah Rockoff, “The Long-Term Impacts of Teachers,” National Bureau of Economic Research, December 2011, http://obs.rc.fas.harvard.edu/chetty/va_exec_summ.pdf

²Robert Gordon, Thomas Kane, Douglas Staiger, “Identifying Effective Teachers Using Performance on the Job,” The Brookings Institution, April 2006, http://www.brookings.edu/views/Papers/200604hamilton_1.pdf

³New Mexico Public Education Department

⁴Teach NM, “3-Tiered Licensure System,” http://teachnm.org/home/3-tiered-licensure-system.html

⁵New Mexico Effective Teaching Task Force: “Final Report and Recommendations,” August 26, 2011; http://ped.state.nm.us/ped/TTFDocuments/NM%20TTF%20Report%20FINAL.826.pdf

⁶Legislative Finance Committee, “Promoting Effective Teaching in New Mexico,” November 15, 2012, http://www.nmlegis.gov/lcs/lfc/lfcdocs/perfaudit/Public%20Education%20Department%20%E2%80%93%20Promoting%20Effective%20Teaching%20in%20New%20Mexico.pdf

If labor unions were like any other private club or organization, an individual could choose whether or not to pay dues and become a member. Unfortunately, unions have been granted government protections over the years that have allowed them to dominate certain industries.

Simply put, "Right to Work" laws prohibit employers and unions from requiring membership in a union or payment of union dues as a condition of employment.

According to economist Dr. Richard Vedder, both population and income growth have been significantly faster in the 22 states with right-to-work laws than in those states that allow forced unionism. Texas, Oklahoma, Arizona and Utah all have right to work laws in place. Indiana became the latest state in the nation to adopt such a law. A recent Rio Grande Foundation paper found that New Mexico would have New Mexico’s employment in 2011 would have been approximately 21 percent higher had a Right to Work law been enacted in 1980.¹

If New Mexico’s political establishment wants to stand up to special interests and create jobs, there are few policy prescriptions with better track records of success than passage of a "Right to Work" law.

¹Eric Fruits, Ph.D., "Right to Work and Economic Growth: A Comprehensive Analysis of the Economic Benefits to New Mexico of Enacting a Right-to Work Law," July 2012, Rio Grande Foundation, http://www.riograndefoundation.org/downloads/rgf_right_to_work.pdf

New Mexico’s Constitution contains no requirements for individuals who are running for Legislature to collect a particular number of signatures in order to get on the ballot.¹ The advent of of new ballot-access legislation prior to the 2012 filing period threw the ballot access process into into chaos due to insufficient attention to detail among more than a dozen legislative candidates (including several incumbents).² Notably, these undue burdens, while impacting Democrats and Republicans alike, disproportionately impact third-party candidates.

Ballot Access Expert Richard Winger has cited New Mexico’s signature requirements along with Illinois, Massachusetts and New York as being among the most onerous in the nation.³ These regulations have repeatedly resulted in lawsuits against the state being filed by candidates of both major parties and third parties. The current ballot access laws are unwarrented and should be repealed. As long as the candidaye meets that Constitutional requirements (age, resident of the district, etc.) they should be allowed to run.

Competition is beneficial in politics, not just economics.

¹Article IV, Section 3, http://ballotpedia.org/wiki/index.php/Article_IV,_New_Mexico_Constitution

²Rob Nikolewski, "We’ve got one fine primary mess this year," Santa Fe New Mexican, April 8, 2012, http://www.capitolreportnewmexico.com/2012/04/commentary-weve-got-one-fine-primary-mess-this-year/

³Richard Winger, "Ballot Access: A formidable barrier to fair participation." http://archive.fairvote.org/reports/1993/winger.html

New Mexico’s Public Regulation Commission (PRC) is responsible for approving utility prices, regulating insurance, and licensing motor carriers.¹ Among its broad regulatory powers, the PRC enforces "common carrier" regulations which fix the rates and limit the amount of individuals who can legally provide services such as tow trucks, taxis, moving vans, buses, shuttles, ambulances and railroads.² Prospective companies seeking to enter the market must file a "certificate of public convenience and necessity" according to a report by Think New Mexico.³

These certificates are significant barriers to entry leading to higher prices and fewer options for consumers. It is not unreasonable to lable this relationship a cartel, which benefits the few well-connected and protected businesses at the expense of everyone else. Arguably, this marriage between public regulators and private businesses creates a symbiotic relationship that continues to block competition as well as engender an environment ripe for corruption. Clearly, the success of Carter-era deregulations discussed in our "Day 2" E-mail could be brought to New Mexico.

As well as being subject to the regulations of the PRC, motor carriers of passangers and household goods are also regulated by the New Mexico Department of Public Safety (DPS).⁴ These unwarrented burdens on businesses who seek to provide transportation services etc. must be challenged and abolished. The issue of safety should be exclusively regulated by the DPS and the PRC should curb its meddling in the transportation sector. By maintaining the status quo New Mexicans suffer from higher prices, innovation is stifeled, and fewer entrepreneurs are able to pursue their business ideas.

¹http://www.nmprc.state.nm.us/index.html

²http://www.abqjournal.com/main/2012/10/07/opinion/use-power-of-your-vote-to-bring-prc-into-line.html

³"Think New Mexico," Rethinking the PRC, Fall, 2011.

⁴Ibid.

Day 6. Simplify/Eliminate Occupational Licensing For Low-Income Professions

01.08.2013

According to the Institute for Justice, there exist 52 low-income occupations that require licensing in New Mexico, including everything from funeral attendants to animal trainers.¹ These requirements order individuals to pay fees as well as invest a considerable amount of time in training and education. For example, an individual must commit approximately two years in experience before receiving a license to become a pest control applicator, while an aspiring emergency medical technician is required to invest 42 days and pass two exams.²

These licensing requirements for low-income occupations create barriers to entry for those who can’t invest the time or money simply in order to gain governmental permission to work. This results in fewer businesses, which means less competition and higher prices for consumers. If such professions were deregulated and the mandatory licensing system was abolished more entrepreneurs could enter the market and provide their goods and services. The current system solely benefits those businesses that have already attained their licenses, providing protection from potential competitors.

To advocate for abolishing the absurd licensing requirements in New Mexico is not to take the position that standards are unnecessary, rather to promote the idea that such standards should be brought about by consumers and not arbitrarily established by bureaucrats. If state licensing was optional, businesses would have the choice of pursuing or abstaining from going through the licensing process. Consumers could then choose to pay the additional premium set by a licensed business or opt for an unlicensed service that would in most cases be cheaper.

New Mexico needs to rid itself of these unreasonable licensing standards. With fewer state sanctioned obstacles in the way of entrepreneurs, both consumers and small businesses will benefit.

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¹Dick Carpenter II, Lisa Knepper, Angela C. Erickson, John K.Ross, "License to Work," The Institute for Justice, May 2012, http://www.ij.org/licensetowork

²Ibid. 98.

Day 5: Build for Cost-Effectiveness and Efficiency, Not Arbitrary LEED Certification

01.07.2013

Due to Gov. Richardson’s Executive Order #06-001, New Mexico law currently requires all public buildings over 15,000 ft2 to be LEED (Leadership in Energy and Environmental Design) Silver certified.¹ According to the U.S. Green Building Council, these building requirements are intended to promote "sustainable site development, water savings, energy efficiency, materials selection, and indoor environmental quality".² The reality is that this effort to make public buildings in New Mexico more "green" increases costs and doesn’t necessarily provide more energy-efficient buildings.

LEED standards can include building a minimal number of parking spaces in order to encourage the use of car pooling or public transportation, the addition of charging facilities for electric cars, and installing large numbers of bike racks.³ Certification for new schools constructed throughout New Mexico has added between $2,350 to $ 7,950 per building, not including additional material or design.⁴

The added costs of LEED Silver would be a small price to pay for buildings that are more efficient and better for the environment, but there have been numerous examples of LEED certified buildings failing to meet their long-term efficiency goals.⁵ This failure has even been recognized by the U.S. Green Building Council (USGBC), which noted in its own study focusing on 121 certified buildings that "more than half – 53 percent – did not qualify for the Energy Star label and 15 percent scored below 30 in that program, meaning they used more energy per square foot than at least 70 percent of comparable buildings in the existing national stock".⁶

The truth of the matter is that in many cases the efforts led by the USGBC have created more costs while failing to provide more energy-efficient buildings. Executive Order #06-001 should be overturned immediately so that tax-payers are not put in the position of funding inefficient building projects that do little or nothing for the environment.

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¹U.S. Green Building Council, "LEED Public Policies," May 1, 2009.

²https://new.usgbc.org/leed

³http://www.usgbc.org/DisplayPage.aspx?CMSPageID=2599

⁴http://www.abqjournal.com/main/2011/08/01/news/to-build-green-or-not.html

⁵Henry Gifford, "A Better Way to Rate Green Buildings," http://www.energysavingscience.com/

⁶http://www.nytimes.com/2009/08/31/science/earth/31leed.html?pagewanted=2&_r=2emc=th

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Day 4: Eliminate Unnecessary Construction Licensing

01.07.2013

The Construction Industries Division (CID) in New Mexico requires that any individual who is engaged in construction-related contracting must be licensed. This includes "general construction work, electrical, mechanical and plumbing and LP gas."¹ Due to these current licensing requirements of the CID, construction-related projects are significantly more expensive to carry out, reaching levels as costly as an increase of 25 percent.²

Contractors who pursue construction-related contracting without obtaining a license risk being ineligible for licensure for one year. The CID can also suspend construction on the project.³ This prevalence of such barriers to entry varies greatly from state-to-state. In neighboring Oklahoma, construction contracting is almost entirely unlicensed.⁴ New Mexico would benefit greatly by abolishing the current onerous licensing system which would remove unnecessary cost burdens on contractors and provide incentives for individuals who would have otherwise pursued construction outside of the state, thus reducing construction costs in New Mexico.

The total abolition of the current CID licensing system is indeed a radical proposal, but one which should be seriously considered. In the absence of such a step, the CID should be restricted to simply approving initial construction plans and the final construction. This would allow construction to take place without the costly burden of unnecessary micromanaging by the CID.

Efforts such as the recent "electronic plan review system" which will allow businesses to submit their proposals online for a faster review process that will save both time and money are modest steps towards improving contractors’ ability to get to work.⁵ Much more is necessary in order to provide a free market environment for New Mexico’s contractors, and it begins with limiting the regulatory power of the CID.

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¹http://www.rld.state.nm.us/construction/

²October 31, 2011, interview with Harold Meyers who owns a small business in West Texas and Clayton, NM.

³Construction & Manufactured Housing: Overview, http://www.rld.state.nm.us/construction/

⁴http://www.contractors-license.org/ok/Oklahoma.html

⁵http://www.abqjournal.com/main/2012/07/24/biz/business-briefs-45.html

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