Jim Scarantino has been doing some great work over at the New Mexico Watchdog site, but his recent report on taxpayers footing the bill for workers to represent their union — rather than doing their actual work — is a must-read. Cities across the state have fallen prey to this practice which highlights a real problem of government employee unions.

Cities (and other governments) should hire and contract with their workers individually because that is what they are. Unions simply create hostility unless their chosen candidate (like Marty Chavez) holds office and goes along with union wishes.

There are two serious issues that I just wish Albuquerque’s City Council would just drop entirely. The first is the “Isaac Benton Preservation Act,” also known officially as R-12-69 which would expand City Council from nine members to 13. This conveniently comes at a time when left-wing Councilor Isaac Benton has been redistricted out of his seat. If there were a compelling case for adding councilors, that should have been made BEFORE the recent redistricting, not afterwards. No compelling case has been made for the additional expense associated with four additional councilors, staffs, potential upgrades to Council chambers, and (presumably) another round of redistricting to create a 13-seat map.

Another issue of “leave well enough alone” comes to us from none other than Councilor O’Malley and involves the reconstruction of the intersection at Rio Grande and Candelaria. The plan has rightfully generated opposition. Although I don’t live in O’Malley’s district, I drive through this intersection multiple times per week.

The simple truth is that this is one of several recent projects that are designed to make Albuquerque less driver-friendly (the Lead/Coal and Central “traffic diet” come to mind as others). We can blame/thank our friends in Washington who, while running trillion-plus dollar deficits, apparently have $1.5 million to throw at a perfectly good intersection here in Albuquerque. This roundabout is a classic example of government waste. City Council should listen to the opposition and stop this wasteful project.

This week, it was reported that a partisan Democratic Party organization, Emerge New Mexico, has been authorized by the Legislative Council to use the Senate chambers in the Roundhouse. What has not been mentioned, but I believe is a critical point, is that they are not being charged for the use of the space.

Certainly, the Roundhouse is a waste of some very nice space for many months of the year and I (and most taxpayers) probably wouldn’t have a problem with allowing groups like Boys State to use it for free or other non-profit organizations to use it for a fee. I just find it hard to believe that taxpayers of this state are being asked to subsidize the activities of a partisan organization by letting them use public facilities free of charge.

It is not too late. Hopefully policy makers will ask Emerge to pay a fair rate for the use of taxpayer facilities.

Larry Reed of the Foundation for Economic Education, one of the nicest people I know and one of the most consistent advocates for liberty in America, has some hard-hitting thoughts for politicians on the Chick Fil A issue.

He rightly takes politicians to task for their bullying tactics. Notably, the use and abuse of government force is always and everywhere the problem, not individuals or businesses. I have zero problem with people protesting (although the kiss-in may prove problematic due to property rights issues); I have zero problem with people turning out in droves to support the company or staying away if that is their wont.

The problem, of course, arises when politicians use bullying rhetoric to play to their political bases. Even the nation’s number one nanny, New York Mayor Michael Bloomberg gets this. So, protest or eat mor chikin or whatever you choose, but if you’re a politician, forget about the threats and belligerence.

I don’t know whether to laugh or cry every time I drive my gas-burning car past the billboards from New Energy Economy (NEE) which say “Coal Hurts.” Of course, the billboards are blatantly misleading as the smoke stacks pictured might as well be from China or the 1890s United States given the amount of black smoke billowing from them (the EPA would never stand for that these days).

But, what really makes me think about them these days are the 600 million Indians sitting in the dark due to their inadequate electricity infrastructure. Now, I’m not going to mislead you and blame the Indian situation on the environmentalists, but I will note that the preferred energy sources of enviro groups (wind and solar) like NEE are less reliable than coal and environmentalists consistently attempt to gain a “free ride” for their preferred energy sources when it comes to infrastructure.

So, does coal hurt? Yes, there are no “free lunches” in this world. But for generations, human beings all over the world have chosen coal and other steady, reliable, and cost-effective energy sources over their supposedly “green” counterparts. I guess a small and rapidly-declining amount of pollution beats sitting in the dark.

Mayor Berry is a great guy and I love his vision for Albuquerque, but I think the Railyards redevelopment may be an overreach. Unfortunately, Mayor Marty already put us (taxpayers) on the hook for $8.5 million. Mayor Berry is looking for ways to use the property, but problems abound and it would seem that taxpayers might have higher priorities than what could be a costly redevelopment with an unclear vision in mind.

I discussed some of the issues with KRQE Channel 13 on last night’s 10pm newscast.

Mayor wants $800k for Railyards

The Rio Grande Foundation and Drug Policy Alliance recently hosted a briefing for candidates on criminal justice issues including civil asset forfeiture. Marc Levin of the Texas Public Policy Foundation and Right on Crime made the following remarks:

7-31-12 Marc Levin on Criminal Justice from Paul Gessing on Vimeo.

All too many supposed conservatives — including our friends at the Heritage Foundation, the American Enterprise Institute, and the Wall Street Journal — seem to believe that military spending is sacrosanct and that we should be doing more of it regardless of the federal budget situation. This, despite the fact that the US and its allies Britain and France spend about as much on its military as the rest of the world combined does.

Unfortunately, these groups fail to remember that incompetence is not the sole province of welfare programs, ethanol subsidies, and Solyndra. The DoD has had some “epic fails” as well. Check out this recent article on the F-22 which cost $80 billion to develop ( price tag of $420 million per plane), but only performs “as well as” its much cheaper European rival in close “dogfight”-style combat.

If the military is indeed going to be hit by “devastating” cuts as a result of sequestration as some in both parties have claimed, it would seem that our military planners have no one to blame but themselves.

Of course, a strong defense is important, but that doesn’t mean we can afford a blank check either.

Recently, it was reported that Gov. Susana Martinez will oppose efforts to tax sales made over the Internet. This may sound like a straightforward case of “to tax or not to tax,” but it is not and New Jersey Gov. Chris Christie recently signed a deal with the online vendor Amazon to collect certain taxes and has endorsed federal legislation that would enable collection of taxes on sales made over the Internet.

The issue is complicated because states rely on vendors (private businesses) to collect taxes for them. That is easy when a business with one or more physical locations can charge one tax rate at each location. It is not as easy with 7,400 local and 45 state tax jurisdictions nationwide. That burden is why the Supreme Court has ruled that businesses lacking a physical presence in a given state should not be forced to collect taxes on sales made in that state. With the advent of the Internet, governments have been working hard to alter federal laws to capture that revenue stream. I wrote this policy paper back in 2000. It still provides a nice summary of the issues. Simply put, the issues are not whether Internet sales should or should not be taxed (they are), but whether small businesses should be burdened with the states’ responsibility for collecting taxes and whether a unified, federal system will hinder competition between the various states (it will).

An updated article explaining the unfairness of federal legislation under consideration on the topic of Internet sales taxation is also available from the Competitive Enterprise Institute. Kudos to Gov. Martinez for her stand for consumers and small businesses. Unfortunately, I’m skeptical that our current Senators in Washington will take such a firm stand.

I spoke to the Eagle Forum group this week in Alamogordo (it was a very busy week). The paper ran an article on the talk. My presentation centered on our efforts on bringing “Right to Work” to New Mexico and America’s health care system/ways states and individuals can respond to the Supreme Court ruling on “ObamaCare.”

Syndicated columnist Harold Morgan writes a column that appears in smaller papers throughout the state. In it, he called me a “sinner” for arguing that “New Mexico doesn’t attract businesses.” The following is my response which appeared in several papers:

I have to take issue with Harold Morgan’s assertion that I’m a “sinner” for stating that “New Mexico doesn’t attract business.” I said (or wrote) no such thing. Rather, New Mexico’s public policy regime is not particularly attractive to entrepreneurs.

Businesses will indeed locate here for a variety of reasons, most commonly government incentives. This includes the Bendix/King “success” Morgan mentions. The state’s press release on the company explains that the company will receive support under both the “High Wage Tax Credit” and “Job Training Incentive Programs.”

This may sound like a great victory for taxpayers, but it actually reinforces my point that our tax and regulatory climates are not competitive. So, in order to attract companies to our state, our political leaders need to provide incentives.

But, politicians don’t have the foresight to know if a particular company will succeed. Think of Eclipse Aviation which lost $19 million in taxpayer funds. Schott Solar lost another $16 million recently.

On the flip side, how many visionary New Mexico politicians had the foresight to offer incentives to a young Bill Gates and his colleagues who were putting together the first personal computers in Albuquerque in the 1970s only to later move to Seattle?

The best way for states to develop economically is to adopt a system of low, fair, and transparent taxes and simple regulations. Our failure to do that is what makes New Mexico poor and unfriendly to business.

In case you missed it, the Journal’s investigative reporter Thom Cole had an in-depth article on the Rio Grande Foundation this morning. It was a fair piece although it focused more on money and where it comes from than on ideas.

I will say that if you go online to a site like Guidestar.org which contains our financial documents as well as those from other, similar organizations in New Mexico, our donors are getting a tremendous “bang for their buck” in terms of output and influence in New Mexico’s public policy debates.

The only part of the column that made me even the slightest bit uncomfortable was Cole’s pointing out that we have argued that Medicare is “welfare.” While true, he gives no context or explanation. None other than Washington Post columnist Robert Sameulson has made the point that Social Security and Medicare are “welfare” programs.

As Samuelson notes:

Welfare is a governmental transfer from one group to another for the benefit of those receiving. The transfer involves cash or services (health care, education). We have welfare for the poor, the old, the disabled, farmers and corporations. Social Security is mainly welfare. Workers’ payroll taxes pay the benefits of today’s retirees. The taxes aren’t “saved” for the workers’ own retirement. There have been huge disparities between taxes paid and benefits received.

What federal programs are not welfare? Well, highways and defense are two that come to mind. Unfortunately, the federal government is shifting from one based on preserving basic liberties and creating infrastructure, to one that focuses on transferring wealth from one group to another. For details on that, check out this Reason article about the “war” between Baby Boomers and the young in which the young are going to face lifetimes of lower living standards than their elders for the simple fact that they’ll be stuck with the bills.

Mitch Daniels sat down with John Stossel to discuss how he is reforming Indiana government (including signing a right to work law earlier this year). Check out the video below and see what a difference good policymakers can have at the state level, especially with a reform-minded legislature

What do you call governments that push aside tax-generating developments and promote tax-eating developments? “Stupid” would be one choice term that comes to mind, but “Albuquerque and Bernalillo County” would be other potential terms. Let me explain.

First and foremost, the tax-generating development is the proposed Wal-Mart at Coors and Montano. RGF has consistently advocated for such a development and as a West Side resident, it makes sense. But it has come under fire from the NIMBY crowd and some politicians.

Imagine my surprise when I found out that the City and County are hoping to re-zone a plot of land (called Oxbow Town Center) at Coors and Sequoia for low-income apartments. Now, I don’t care if the apartments are planned for the poor or the Queen of England, but the County is planning to issue $15 million in tax-exempt bonds to help finance the project.

We are assured, as the release above points out, that the developer is merely using the County to access tax-exempt bonds that can be provided by the government, but what happens if the housing market falls apart again and the project stalls? More importantly, why should this development get tax-exempt bonds, but not the rest of us? Sorry, but there is no reason for the rest of us to pay full-freight while this favored developer receives a generous tax subsidy.

At this point, unfortunately, all we have is the blunt instrument of stopping this by denying the zoning change, but the taxpayer subsidy is the real issue here.

The following appeared at NMPolitics.net and in the Deming Headlight.

New Mexico, along with much of the country, still struggles to recover from a recession that began more than four years ago. While the state has benefited from the recent energy boom, states like New Mexico have struggled to cope with the employment consequences of the recession. In response, policy makers have tended to focus on fiscal policies such as tax cuts and “stimulus spending” rather than market structural solutions.

Right-to-work laws can be a key component of a pro-investment and pro-employment package for New Mexico that encourages firms to locate and expand in the state. A large body of research has found that as a group, right-to-work states have enjoyed more rapid employment growth, better job preservation, and faster recoveries from recession that states without right-to-work laws in place. New Mexico has recognized this when the legislature passed right-to-work legislation twice—in 1979 and 1981—only to see the legislation vetoed by Governor Bruce King.

Proponents of right-to-work legislation argue that individuals should have the choice of whether or not to join a union and that that the choice of whether to join a union should not be a condition of employment. They point to the relatively rapid growth in employment and incomes in right-to-work states relative to non-right-to-work states.

On the other hand, opponents of right-to-work legislation argue that union collective bargaining benefits all employees—without compulsory union membership, employees have incentives to “free ride” on the benefits of collective bargaining without contributing to the costs associated with such bargaining. They suggest that the potential job gains from right-to-work are virtually non-existent.

In fact, right-to-work supporters are correct. The legislation would give New Mexico a permanent structural advantage in attracting employers and employment to the state.

A recently released study from Rio Grande Foundation quantifies the impacts and potential impacts of right-to-work legislation on employment and income growth in New Mexico, using data from each of the 50 states and spanning a time period covering almost 60 years. The study finds that if right-to-work legislation goes into effect next year, then by 2020, New Mexico would have 42,300 more people working than if it maintains the status quo. In addition, the state’s personal income would be nearly $5 billion higher and wage and salary income would be $2.2 billion higher.

The study has broken new ground. It covers a very long time period, every state, and relies on what is believed to be the largest datasets ever employed to study the impacts of right-to-work laws. The results demonstrate more than just a correlation between right-to-work policy and economic growth, but point toward a causal link. In other words, this research demonstrates that the right to work actually contributes to more employment, higher incomes, and faster economic growth. It is therefore a policy from which New Mexico will permanently benefit.

Unlike fiscal policies that must weigh spending against taxes or pit one government program against another, enacting right-to-work legislation will not take a single dime out of state coffers. Indeed, right-to-work legislation is one of the very few pro-growth policies that is virtually costless to enact.

Even if this research had not so clearly shown that New Mexico’s economic prospects would improve as a right-to-work state, we would still support a right-to-work policy based on the non-economic benefits that the name itself implies. It is unconscionable that a job-seeker in can be denied the opportunity to make a living simply because he or she declines to join a union. Thus even basic principles of liberty and the pursuit of happiness demand that New Mexico assert employees’ and job-seekers’ right to work.

# # #

Eric Fruits, Ph.D. is president and chief economist at Economics International Corp., an economics consulting firm and an adjunct scholar with the Rio Grande Foundation. His economic analysis has been widely cited and has been published in The Economist, the Wall Street Journal, and USA Today.

The Rio Grande Foundation invites you to "A Discussion on Tax Policy with U.S. Senator Orrin Hatch." The Rio Grande Foundation has just confirmed this important event on the economic future of our country to be held this Saturday, July 21, from 2:30 to 3:30PM at the Marriott Pyramid. There is no charge for this event.

Senator Orrin Hatch represents Utah and is Ranking Member of the Senator Finance Committee. Depending on November's elections, Hatch could be the Chair of the Committee. He will be discussing some of the fiscal challenges now facing our nation including future tax and spending policy. He will answer questions from the audience.

It has been a bit of a rough patch for Gov. Martinez’s education reforms. The A-F grading system has generated widespread opposition among the state’s education establishment and, while it is based on a complex formula, the Albuquerque Journal’s article on the topic does a great job in explaining how the grades work.

On top of the A-F implementation which appears to have suffered from a lack of explanation and implementation, we see the teacher evaluation system coming under attack from teachers unions with vocal protests in Santa Fe.

But, some good news comes in the form of this previously-unreported (at least in New Mexico) paper from the Manhattan Institute which illustrates how the policy of banning social promotion — another Florida policy reform — can work to improve student outcomes.

As the study concludes: “On average, the students who were remediated did better academically, in both the short and long term, than those who were promoted.”

So, while the A-F grading system may be complex, it too is based on a solid foundation. Ultimately, if we stick with it, we’ll see improved education results.

Carter Bundy of the AFSCME government employee labor union hit back today at a recent column written by Tom Molitor, and Adjunct Scholar at the Rio Grande Foundation.

While Bundy relies on a great deal of hyperbole in his article, he does make some substantive points that are worth a response.

1) Bundy notes that AFSCME was supportive of reform legislation relating to government pensions in a recent legislative session. He implies that his favored solution would solve the problem. The problem is that it won’t (as I pointed out some time ago). For starters, the Government Accounting Standards Board assumes an 8 percent rate of return for pension investments. That is not happening these days. Any pension system that relies on assumptions of 8 percent returns is not solvent.

2) According to Bundy, the size of New Mexico government has shrunk in real terms since 2003. No thanks to AFSCME of course, but it is true. The economic crisis and the fact of the economic crisis has reduced the size of government in the aggregate.

3) Bundy notes that states have not declared bankruptcy, but Molitor never asserts that they have or are. He states that they are hovering close to it. These are unprecedented times. Several bigger states like California and Illinois have been driven to the wall by public employee unions. We’ll see what happens when they can’t pay the bills.

4) Bundy notes that the Democrats cut taxes under Richardson. He is right. This was the “man bites dog” of tax cuts and illustrated just how seriously New Mexico’s tax policy had been screwed up before. But, in the aftermath of those tax cuts, those same AFSCME-backed politicians started trying to repeal those tax cuts.

5) Lastly, Bundy is correct about the illegality of strikes by public workers in New Mexico and many other states. Molitor was stating a general principle that is accurate insofar as government workers having the monopoly advantage, but his point seemed to imply that government employee strikes have happened in New Mexico. To my knowledge, they haven’t, but that doesn’t mean that public employee unions don’t disobey state laws against strikes as this article notes.

Bundy is a lawyer and a sharp guy. He makes it sound like the article is out of left field. It isn’t. Just because a state hasn’t gone bankrupt yet, doesn’t mean that it can’t happen. Just because New Mexico has a law on the books prohibiting strikes, doesn’t mean they haven’t happen in other states with the same laws on the books.

Everyone appears to be an expert at running a utility in New Mexico these days. Everyone from Environmentalists to the League of Women Voters seems to think that shifting our power generation from coal to “cleaner sources of energy.”

I wrote a letter that appeared in the Albuquerque Journal Business section on Monday that critiqued the economic impact of such a shift and what it might mean for energy consumers.

PNM may be winning plaudits from environmental groups for its renewable energy procurement plan, but I think the story would be different – and less positive – if the voices of rate payers and taxpayers who bear the brunt of the costs of these policies were added to the mix.

While the direct cost of the “renewable” mandate will add “just” $1.40 to each customer’s bill monthly, for now, our analysis concludes that during the current decade ending in 2020, the renewable portfolio standard and associated laws and regulations will cost New Mexicans an additional $2.3 billion in higher electricity costs.

These subsidies and added costs are just the tip of the iceberg when it comes to solar. The recent failure of Schott cost New Mexicans $16 million and the well-publicized Solyndra failure cost taxpayers more than $500 million. According to the Congressional Budget Office, so-called “renewables” receive $16 billion (of $24 billion total) in federal subsidies to the energy industry.

Wind and solar consume a vast majority of energy subsidies, but generate less than 10% of total renewable energy output.

Wind and solar are not “new” technologies. They have been used by humans at least as long as have fossil fuels. Government subsidies and mandates are a losing game. If a given energy source is effective, consumers will embrace it. If not, they will prove to be far less “sustainable” than other forms of energy.

I recently discussed this issue with KRQE Channel 13. Rather than the state spending taxpayer dollars to purchase art, I’d like to see the state allow up-and-coming artists display their art for sale in public places. Unfortunately, taxpayers are on the hook for art purchases made with our money:

State spending flying under the radar: krqe.com

Read the full article here and go comment in support of this simple, pro-market, pro-job creation policy change.

Readers of this space are well aware of the calls made by the Rio Grande Foundation for serious reforms to our higher education system due to poor performance and high costs to taxpayers. But another great reason to introduce market forces to higher education is that it would likely to result in a more ideologically-balanced academia. I’ve written before about UNM’s faculty and their hard-left views, but one Doug Morris who hails from Eastern New Mexico University makes the UNM folks look like Milton Friedman wannabees with his recent paean to singer Woody Guthrie.

Now, I’m not denying that Guthrie was a talented singer. What I am saying is that his political ideas, at least as represented by Morris, would have been an immoral disaster had they been implemented in the USA. Morris states repeatedly in his article that Guthrie supported communism. He argues that “private ownership of social and economic resources” is “anti-democratic and exploitative.” Lastly, he calls capitalism “tyrannical” and lumps it in with fascism, racism, militarism, and imperialism. This is just crazy.

As Ayn Rand noted, “laissez-faire capitalism. It is a system where men deal with one another, not as victims and executioners, nor as masters and slaves, but as traders, by free, voluntary exchange to mutual benefit.” All of the terrible things Morris discusses arrive at the point of a gun. Capitalism, unlike communism, is voluntary in nature. If you don’t want to trade, you don’t have to.

So, why doesn’t Morris get this and why don’t other faculty speak out? Two things come to mind: 1) Our education system is heavily socialized (with government ownership of the means of production and the means being the schools themselves). Therefore, the systems attract those who like and feel most comfortable in those systems (there are exceptions to every rule, of course). 2) Those exceptions don’t speak out due to the social pressure to conform which is placed on them by their peers and leaders of their institutions. After all, an attack on socialism and in support of limited or smaller government is a direct attack on the institutions themselves and potentially their budgets.

Summer vacations may be in full-swing for many, but the upcoming week will be an extremely busy one for the Rio Grande Foundation.

This Tuesday, July 17, Rio Grande Foundation president Paul Gessing will be speaking to the Albuquerque Tea Party’s meeting. The meeting will last from 7:00-9:00pm and is held at East Gate Church at 12120 Copper Avenue, NE, in Albuquerque.

Gessing will be discussing the recent US Supreme Court ruling on Obamacare and how this will/can effect the upcoming General Election and what average citizens can do in response.

On Wednesday, July 18, The Libre Initiative and Rio Grande Foundation present:

LIBRE ON THE ROCKS!

From 5:30 pm – 7:30 pm at The Apothecary Lounge Rooftop Patio at Hotel Parq Central which is located at: 806 Central Ave, SE in Albuquerque.

Come join us for a unique opportunity to gather in an informal setting, share drinks, food and conversation, and celebrate liberty and freedom. Light appetizers and non-alcoholic beverages will be provided. Happy Hour special will be available during the event!

Lastly, join us this Thursday, July 19, from 4:30 – 6:30 pm at the MCM Elegante Hotel, Albuquerque for the New Mexico Business and Social Hour sponsored by the New Mexico Business Coalition.

The Rio Grande Foundation is pleased to send out the following message in support of the New Mexico Business Coalition’s “Business and Social Hour.” In addition to the agenda outlined below, Foundation President Paul Gessing will briefly address the meeting on the topic of the Foundation’s new report “Right-to-Work and Economic Growth.”

The New Mexico Business Coalition (NMBC) is pleased to invite you to a BASH (Business and Social Hour) on July 19th!

We will also have a presentation by journalist turned media analyst, Mark Mathis. Mark studied our use of oil for ten years and what he found shocked him so much he made a movie called ‘spOILed’.

The oil and gas industry is a key economic driver in New Mexico which frequently leads to debate among policymakers and voters. Mark’s comments on what he believes is misinformation, distortions, and outright lies about the industry are sure to generate some great discussion! Be a part of that discussion on July 19th!

Introductions of elected, appointed and those running for office begin at 5:10 pm. Limited Seating, RSVP today

According to a new report from CNBC, New Mexico is the 36th-best place to do business among the 50 states. Texas, not surprisingly, comes in at number 1 while Utah is 2nd, Colorado is 8th, Arizona is 22nd, and Oklahoma is 23rd (so, we’re the worst in the region by a fair amount).

What makes New Mexico business-unfriendly according to the report? Our education system is ranked 46th (actually higher than our graduation rate would lead one to believe) and our “business friendliness” comes in at 47th. That broad category would seem to place us at the bottom of such a report, but we do better than average in the categories of “economy” (we’re relatively diversified and punch above our weight thanks to the federal government) and our relatively good infrastructure.

Read the full report here.