It wasn’t a surprise to me that Michigan became the latest state to adopt Right to Work legislation. Why? Well, in part, that’s because I knew that such a law was at the top of the free market think tank in Michigan, the Mackinac Center. They are the sister think tank of the Rio Grande Foundation here in New Mexico and they played an integral role in researching and promoting the importance of Right to Work laws in spurring economic growth.

Well, needless to say, when you are effective in promoting the free market viewpoint, you piss off the liberal media like MSNBC. Check out their story here.

It is great to be on MSNBC’s radar and to upset them so, but we need help from supporters of free markets and limited government here in New Mexico to make that difference.

Check out the link below. It provides some useful (albeit also confusing) data on incentives given to industries in states nationwide and in New Mexico. Tops on the list are the myriad film subsidy companies (Lions Gate received $99.1 million in subsidies and is the largest single recipient) that take advantage of the film subsidies offered by the state. Also included is the JTIP program which unfortunately is under consideration for expansion during the upcoming legislative session, is not a sound way to do economic development, and is ultimately a result of an inefficient education system that does not prepare workers for the jobs available in the economy.

Of course, the Times wouldn’t be the Times if it didn’t also include tax breaks in their analysis. And, while the benefit/harm of specific tax loopholes may be debated, it is not nearly as economically-harmful as outright expenditures of tax dollars for the benefit of specific, well-connected companies.

RGF president Paul Gessing, Gerry Bradley of Voices for Children, and Chris Hellman of the National Priorities Project appeared recently on the KUNM call in show to discuss the “fiscal cliff,” the national budget situation, and its potential impact on New Mexico.

The full podcast is available online by clicking here. Details on the show at the KUNM website.

President Obama is leading this nation over a fiscal cliff and through the weakest economic recovery ever, apparently has time to criticize the efforts of other states to make themselves more competitive (like Michigan). If you haven’t seen the news, Michigan is the 24th state to prohibit union contracts that require membership in the union as a condition of employment. As we’ve pointed out, Right to Work laws are economic boons for states that adopt them.

Of course, the unions are also huge contributors to the Democratic Party and Obama’s political fortunes, so Obama is the one being “political” in taking issue with a state enacting this law. Of course, Obama, being “only” the president, should mind his own business and understand separation of powers.

And, it has been said many times and in many ways that Obama is an economic ignoramus, but his own words illustrate this: “Folks from our state’s capital, all the way to the nation’s capital, they should be focused on the same thing,” Obama said. “They should be working to make sure that companies like this manufacturer is able to make more great products.”

I’m sorry, but the LAST thing I want is politicians (of either party) focusing to make sure companies are able to make “great” products. Government subsidies are taxpayer ripoffs while most regulations are unwieldy and only harm businesses or, they harm innovators in favor of dinosaurs with better lobbyists. The best thing politicians can do is set up clear and simple rules with low, fair, and transparent taxes and get the hell out of the way.

The Heritage Foundation has an excellent, brief, survey of the academic literature on Medicaid and explains that Medicaid is actually failing the very people it was intended to help. Reasons included:

Medicaid reduces access to care.
Longer wait times and later diagnosis.
Higher in-hospital mortality rates and higher costs.

Health care analyst Merrill Matthews also outlines seven reasons why states should say no to Medicaid expansion. An outline is below and full article at the link above.

1. Medicaid is Bad Medicine;

2. The Exploding Medicaid Population — Medicaid currently covers more than 70 million Americans, and ObamaCare increases that number by an estimated 17 million almost immediately.

3. The Woodwork and Crowd-Out Effects — Those Medicaid growth projections are likely low, as eligible people “come out of the woodwork” to join the program. For example, an estimated 25 percent of the uninsured are eligible for Medicaid but not enrolled.

4. The Cost to State Budgets — Medicaid spending has been growing at about 8 percent a year, compared to economic growth of 1 percent to 2 percent. But ObamaCare puts Medicaid on growth hormones. Total Medicaid spending (state and federal) is projected to grow from about $400 billion to about $900 billion by 2020.

5. Federal Controls — While a bipartisan coalition of governors has asked Washington for more flexibility over their Medicaid program; ObamaCare doubles-down on federal control. If states thought federal mandates and restrictions were suffocating under traditional Medicaid, they will be gasping for air under the expanded portion.

6. Rampant Fraud — Medicaid fraud is rampant and will only get bigger under expansion. No one knows for sure how big the Medicaid fraud problem is, but estimates put it in the range of $60 billion a year.

7. Loss of State Sovereignty — Medicaid is supposed to be a federal-state program. But the Medicaid expansion is one more effort by the federal government to micromanage the states and what they do. That effort is fundamentally breaking down our federalist system, a system in which the federal government has its sphere of authority, as do the sates—and individuals, for that matter.

If you haven’t already seen them, Jim Scarantino over at the New Mexico Watchdog has done some great work on the rampant abuse of EBT welfare cards in New Mexico including their use in strip clubs and liquor stores (to name just a few questionable locations). Check out reports here, here, and here.

Well, the mainstream media took notice and Jim’s work wound up on the front page of the Albuquerque Journal. See the report on Jim’s work here.

Please see the following letter to Congress outlining several reasons why spending cuts should be the focus of all negotiations over the “fiscal cliff.”

Recently I talked to Mike Jaxson at This Week in Chaves County about the bad news facing New Mexico and the need to enact reforms, particularly in light of the impending federal “Fiscal Cliff.” See the link here.

Also, I’ll be discussing the struggling New Mexico economy and the potential for its further deterioration with Terri Q. Sayre on 770 KKOB on this Sunday morning from 9am to 10am. Tune in!

Amazing, Michigan, the land of the Big 3 automakers and double the unionization rate of New Mexico, is on the verge of passing Right to Work legislation. This law, if enacted, would prohibit “closed shops” and arrangements that make union membership a condition of employment.

According to media reports, the legislation has already passed the Michigan House of Representatives and looks good for final passage despite protests of organized labor.

Meanwhile, New Mexico’s newly-elected liberal Legislature will likely stand in opposition to a job creating right to work law. This situation is made all the more troubling given the fact that New Mexico is one of the two biggest job-losing states in the nation.

Nonetheless, we wish Michigan well. As other states become more competitive, their success will both provide an example for and put pressure on laggards like New Mexico.

The recent editorial in the Albuquerque Journal on government employee pensions is spot-on: taxpayers should not foot the bill for New Mexico’s pension debacle. We at the Rio Grande Foundation have outlined the problem and outlined the specific reforms needed to actually fix the problem:

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

Unfortunately, so far, it seems like most legislators are more willing to stick taxpayers with the bill for underfunded pensions than they are to stand up to the unions. The ultimate problem with these “defined benefit” plans is that politicians can easily be convinced to sweeten the pot while sticking future generations of taxpayers with the bill. The proverbial chickens are now coming home to roost.

It is widely known that New Mexico’s major industries involve extracting oil and gas and minerals from the ground and government.

The economic impact of oil and gas (and here) has been discussed in this space. Mining has not received as much attention. The industry employs approximately 6,000 workers in our state.

New Mexico businesses—large and small—depend on a steady supply of minerals to develop and deliver the products on which we rely. Copper—of which our state is the third-largest producer in the United States—is used in microprocessors for computers, wiring for electronics, and as a sterile agent in advanced medicine. Minerals are also key components of energy technologies like hybrid vehicles and wind turbines.

Considering the real economic growth generated by minerals mining and the important ways in which it contributes to meeting our nation’s security objectives, New Mexico should seek to fully utilize its mineral resources. It would be a boon to our struggling economy as well.

One “surgery center” in Oklahoma is changing how health care procedures are done by bringing transparency to surgery prices. The third-party payment system is, as I’ve written in the past, the “original sin” of US health care. With all of the negative things going on with today’s economy, this story is a ray of sunshine and hope.

I normally don’t respond to the ravings of lunatics published in the Albuquerque Journal, but union bosses Richard Trumka and Jon Hendry put out something so ridiculous that a response is needed. The headline and much of the article is based on the claim that the top “2 percent” of Americans “doesn’t pay their fair share of taxes.”

Obviously, “fair” is in the eyes of the beholder (and the “dynamic duo” fails to define “fair”), but high income earners are indeed paying higher taxes than their lower-income counterparts. What exactly is “fair?” We are never told.

And, while wacky opinions appear on the local news pages is nothing new, Hendry’s anti-wealth, anti-capitalism, and anti-free market rhetoric makes me wonder why Republicans continue to allow up to $50 million of New Mexicans’ tax dollars annually to flow to Hendry and his union via the film production subsidy. Hendry and his union IATSE 480 are among the leading beneficiaries of the subsidy program.

Leslie Linthicum had a great story in yesterday’s Albuquerque Journal. She interviewed a one-man taxi company headed up by a guy she affectionately dubs “taxi Bob.” Aside from praising his personal initiative and the usual “human interest” stuff, she discusses the need for this new taxi company to endure “eight years of applications to the PRC, hearings, lawyers, and challenges from big cab companies” in order to go into business.

As Linthicum notes, “state officials …only allow a new taxi business if there’s a demonstrated need.”

First and foremost, not every businessperson is as tenacious as “Taxi Bob.” Most of them will either abandon their efforts or go to another state that doesn’t have such ridiculous regulations.

More importantly, the government should let the free market determine “demonstrated need.” Even knowledgeable experts in the field have no idea what the market (us) really wants. In 1977, Ken Olsen, founder of Digital Equipment Corporation, said “There is no reason anyone would want a computer in their home.”

Oops! Most Americans now have several computers in their home including their cell phones. If government had stepped in an asked Steve Jobs and Bill Gates to “demonstrate need” for their products, the personal computing revolution would have been strangled in the cradle. How many other rules and regulations are there that make New Mexico un-competitive? Stay tuned, we’ll be releasing a “regulation of the day” email starting in January.

Regardless of the makeup of the Legislature and no matter who inhabits the Governors’ mansion, New Mexico is in dire need of reform. That is the clear and unambiguous conclusion that can be derived from just a few recent news stories this week.

First, Forbes put the Land of Enchantment at the top of its list of “Death Spiral States. ” Said Forbes:
Don’t buy a house in a state where private sector workers are outnumbered by folks dependent on government.
Thinking about buying a house? Or a municipal bond? Be careful where you put your capital. Don’t put it in a state at high risk of a fiscal tailspin.
Telling its readers not to buy a house in New Mexico is not exactly reassuring for current homeowners in our state.

Second, according to a new report from the US Department of Education, New Mexico’s educational system is 46th out of the 47 systems studied. Just 63 percent of New Mexico students in the 2010-2011 school year finished secondary school.

Lastly, according to a new report from the Fraser Institute, a free market think tank based in Canada, New Mexico is the least economically-free state in the United States and is freer than only the Canadian province of Prince Edward Island.

With NM being ranked the least economically free state in the entire union (and most of Canada) it is no wonder we will continue to see a further hemorrhaging of jobs as businesses and employers will invariably seek to set up shop in any other state with a more business friendly environment.

Said Paul Gessing, president of the Rio Grande Foundation, “New Mexicans are used to their state being ranked poorly in these national rankings, but they cannot feel good about these results and the fact that our state has been hemorrhaging jobs while other states grow. Our state needs a healthy dose of free market policies and educational choice during the upcoming 60-day legislative session.”

No organization has been as active in studying these problems and putting forth solutions. Contact the Rio Grande Foundation at 505-264-6090 for interviews.

You can read or listen to the commentary that ran on KUNM by clicking here.

Albuquerque City Council decided to kick the can down the road rather than change how the Albuquerque Zoo is managed, but that doesn’t mean the issue will go away. That’s especially true with the City facing a sizable deficit of $10 million.

The folks at Reason have an idea: privatize zoo management. As this article outlines, the solution is one that a majority of zoos in America now follow.

Oh, and while they’re at it, perhaps City Council needs to consider some alternatives to rate hikes at City golf courses.

The folks at The Alibi are very concerned that Albuquerque’s City Council could “ignore the will of the people” by rescinding all or part of the recently-passed minimum wage increase. My response in which I remind them of a bit of recent history was posted in this week’s edition.

Marisa Demarco is very concerned that our elected members of City Council may overturn the voter-passed minimum wage increase [“A Simple Majority,” Opinion, Nov. 22-28]. She goes so far as to encourage readers to call the Councilors who might support such a measure and voice their opposition. This is all fine, but democracy is more complex than mere majority rule at the ballot box.

For starters, I don’t recall the Alibi running any articles expressing outrage that City Council subsequently voted to increase the minimum wage after voters rejected a ballot measure on the issue mere months before. The fact that there are several facets to the recently passed ballot measure and faulty language only strengthen the case for repeal.

Lastly, we do live in a republic, not a democracy. This is per the vision of the founding fathers. If we lived in a true democracy, President Obama’s health care law would have been repealed long ago, as the law has been opposed by a plurality (and often a majority) of Americans since it was passed.

City Council is faced with declining tax revenues and a foundering state economy, and it should carefully consider its options before going along with an economically harmful hike in the minimum wage.

The Fraser Institute’s report on economic freedom in the states and provinces previously ranked New Mexico as being freer than West Virginia and several Canadian provinces. Well, the latest version of the report came out this year and the Land of Enchantment is now dead last in the USA and only beat out the Canadian province of Prince Edward Island.

Get all the gory details here.

New Mexico allows some non-profits to fund raise by creating special license plates. While good in concept, the State has a warehouse full of unused plates sitting around for a number of these organizations. Channel 13 asked me to weigh in:

Rio Grande Foundation has long been a proponent of a diverse array of education reforms in New Mexico including school choice, charter schools, digital learning, a ban on third grade social promotion, A-F grading, and yes, even vouchers. Why? Well, aside from the viewpoint that parents and students, not bureaucrats, should be empowered to make decisions, we have long believed that New Mexico’s schools are failing.

Now, add the US Department of Education to the long list of entities concerned about New Mexico’s schools. According to a new report with full chart here, New Mexico’s four year cohort graduation rate is better than only one other state’s (Nevada). Where have you heard that before? Perhaps you’ve seen our repeated postings about the “Diplomas Count” report which has shown that New Mexico’s graduation rate is better than only one state (Nevada).

Lest you middle and upper-class white folks get too complacent and think this is just a problem with Hispanic kids, the study breaks out graduation by states AND ethnicity. White students in NM have better graduation rates than only Nevada and Oregon. In fact, all students in school-choice-happy Arizona (and several other states) graduate at higher rates than do white kids in New Mexico.

Santa Fe, we have a problem. Will the Legislature embrace a reform agenda? Gov. Martinez, it is time to put forth a bold, choice-centric agenda on education reform.

HT: Rob Nikolewski

If you see success and willfully do the opposite, where do you wind up? New Mexico’s neighbors Texas and Oklahoma are creating jobs at the fastest pace in the nation (see the chart on page 3) while New Mexico continues to lose jobs. Notably, Texas and Oklahoma have said “thanks but no thanks” to the federal Medicaid offer or bribe.

This expansion is, of course, being portrayed by backers as an unmitigated boon for state economies, but the reality is that putting people on welfare is not a path to economic prosperity and never has been. Given the makeup of the Legislature, Gov. Martinez will have a limited number of opportunities to actually influence New Mexico’s biggest public policy issues for at least the next two years. The opportunity to say “no” to even greater dependency is one she should embrace.

For anyone living in the Land of Enchantment, this report from Forbes must be troubling. New Mexico has more “takers” relative to “makers” than any other state in the nation according to the report. According to the report, the number of “takers” is the number of state and local government workers plus the number of people on Medicaid plus 1 for each $100,000 of unfunded pension liabilities. See the full, scary list below:

Our new study is the latest report outlining the relative tax burdens of New Mexico’s top 10 cities in population. The cities are ranked in terms of most to least friendly below. Useful charts and data abound in the report itself:

1. Carlsbad
2. Hobbs
3. Clovis
4. Roswell
5. Alamogordo
6. Farmington
7. Santa Fe
8. Las Cruces
9. Rio Rancho
10 Albuquerque