I recently appeared on KSVP radio in Southeast New Mexico to discuss the important issues being discussed during the legislative session and Gov. Martinez’s State of the State address. Go to this link and click the first podcast.

I attempted to lend some sanity to the Alibi’s letters section. In the process, I tried to encourage Sen. Jerry Ortiz y Pino to look on the bright side when it comes to education reform (see my tax credits posting).

As Rob Nikolewski over at Capitol Report points out in a story, the Rail Runner is going to suck up ever larger quantities of taxpayer cash in the years ahead, including two $235 million balloon payments which come due in a bit more than a decade.

We’ve previously outlined the myriad reasons to cut our losses by shutting down the Rail Runner, but these $235 million balloon payments must be paid no matter what.

Moving forward, the Legislature must demand that any major infrastructure project be financed with regular, even payments over the years, not with balloon payments that force future legislators and governors to deal with previous decisions.

Paul Gessing, president of the Rio Grande Foundation, will be discussing the legislative session and what can be done right now to help turn both New Mexico’s economy and its education system around. The following show which lasts 30 minutes and airs on KCHF, a Christian station based in Santa Fe, channel 11, will air at the following times:

Friday, Jan 19 at 10am
Friday Jan 27 at 10:30 a.m.
Sat. Jan 28 at 10 pm
Mon Jan 30 at 6pm

Also, in the Las Cruces area, Gessing will appear on KRWG Channel 22 (the local PBS station) to discuss education issues in NM for 30 minutes on

Thursday, Jan. 26 at 7pm
Saturday, Jan 28 at 5pm
Sunday, Jan 29 at 11am

Tune in or set your DVR’s!

The number one legislative priority of the Rio Grande Foundation this session is to get education tax credits for school choice. A letter on this has been posted below. Liberal Sen. Jerry Ortiz y Pino has sponsored one of the bills. Feel free to use parts of this letter to contact your own legislators.

January 18, 2012

To Whom It May Concern:

The Rio Grande Foundation is New Mexico’s only free market think tank working on public policy issues of interest to residents of our state. Our primary research areas include tax, budget, and education reform. The issue of education reform transcends the others because education forms such a large portion of the state’s budget – nearly half of the general fund – and impacts so many areas of the state economy.

The potential for positive impact of the Equal Opportunity Scholarship Act and the Special Needs Student Scholarship Act would be immeasurable.

Here’s why passing these bills is important for New Mexico’s economic vitality and our children’s future:

• More than one-third of our students drop out before graduating from high school.

• This must be turned around in order to attract new businesses and business growth in our state and to give our children the opportunities they need to succeed in school.

• This legislation will help provide scholarships that will enable lower-income and special-needs students to attend schools that will better meet their needs. They will be much more likely to stay in school and to develop a solid educational foundation.

According to recent polling data more than 70 percent of N.M. voters support tax-credit scholarships for children from low-income families. For special-needs students, the support for tax-credit scholarships rose to an astonishing 78 percent in the poll.

While money is still tight, the good news is that these tax credit bills will have a slight, positive impact on New Mexico’s budget. Rather than sucking resources out of the budget, these bills would give greater educational choice to parents and students, all while slightly improving the budget.

Education tax credits are not a partisan issue. Legislators of both parties have supported education tax credits in states that have adopted them including Florida, Iowa, Pennsylvania, Arizona, and Rhode Island.

New Mexico needs serious education reform. That is why the Rio Grande Foundation supports the Equal Opportunity Scholarship Act and the Special Needs Student Scholarship Act.

Sincerely,

Paul J. Gessing
President

There is an excellent, short article here from the Manhattan Institute’s City Journal. It explains that, despite an economic downturn that has significantly harmed the convention center business — on top of a longer-term, more gradual decline in the business — cities nationwide continue to build new convention centers.

Rather than embarking on this misguided and costly path, Mayor Berry should be applauded for focusing attention on everyday governance issues and game-changing, but basic ideas like the Paseo/I-25 interchange.

I was up in Santa Fe much of the day for the first day of the legislative session. And, while the Speaker’s cancer announcement was a bombshell, I was intrigued by the shenanigans of the so-called “Occupy” movement. At the start of Gov. Martinez’s “State of the State” address, they caused a disruption and yelled, interrupting her.

This plain lack of disrespect is one of the biggest differences between “Occupy” and the “Tea Party.” The former simply doesn’t respect the forum and the right of those who they disagree with to be heard.

To be honest (as it has been all along), it is unclear what their specific grievances with the Gov. are. Are they upset about the drivers’ license issue? I’m not sure. I walked past their rally several times throughout the day and heard a bunch of statements about the Federal government and issues they have with it, but heard very little in the way of specific critiques against Martinez. Of course, it is worth noting that the Gov. has an approval rating of 65%, so far from being the 99%, they are, at least in this instance, no more than the 35%.

Recently, Public Service Company of New Mexico filed an application to charge higher electricity rates to its customers in order to recoup money spent on so-called “renewable” energy projects.

Not surprisingly, the very same environmental groups who convinced policymakers to impose the “Renewable Portfolio Standard” have challenged the rate increase on the grounds that the application “gives the false impression renewable energy is responsible for increased rates.” Of course, as the Rio Grande Foundation has pointed out, the RPS will cost New Mexico utility rate-payers $2.3 billion over the next 10 years if it is not altered.

The chart below illustrates how the cost differentials stack up:

The Rio Grande Foundation hosted a forum on K-12 education reform in Las Cruces on Jan. 12. Forum participants included Paul Gessing of the Rio Grande Foundation, Sen. Steve Fischmann (D-Las Cruces), Tracey Bryan of the Bridge of Southern New Mexico, and Robert Carreon of Teach for America.

Watch 1-12-12 Education Forum Las Cruces.wmv in Activism & Non-Profit  |  View More Free Videos Online at Veoh.com

Apparently not, if we are to take left-wing Democratic Rep. Miguel Garcia at his words and again here. I’m not sure if this is a desperate cry for help or attention or if he really believes half of what he says, but it looks like “the Mexican on the 4th Floor” was just a prelude for the really crazy stuff.

No wonder New Mexico has survived rather than thrived. It would seem that too many of our representatives have no grasp on reality.

We all know that health care is a major issue in America. I met a very interesting man named Stan Brock recently who works to bring medical care to those who cannot access it. There is a great “60 Minutes” story below:

Unfortunately, one detail that “60 Minutes” left out is that Remote Air Medical won’t come to New Mexico and most states besides Tennessee because doctors from other states are not allowed to volunteer their medical services in states in which they are not licensed. Yet another way that licensing fails to serve those who it is theoretically supposed to protect.

Anyway, if any legislators out there are interested in sponsoring legislation to allow volunteer doctors from out of state to serve in New Mexico, we’d be happy to help.

Thomas Sowell has an excellent column discussing the different ways in which time and government policies have impacted the Kodak company (which recently filed for bankruptcy) and the Post Office.

Of course, government never innovates and always responds first and foremost to political rather than economic and market forces. So, all of the problems faced by the Post Office are only multiplied when one considers that there are no viable, large-scale competitors to our government schools (yes, there are private schools, but people who send their children there must pay twice) and the health care system once ObamaCare is fully implemented (per Obama’s own rhetoric).

So, while we are using smaller, higher-resolution digital cameras that forced Kodak out of business (due to a failure to innovate), the government continues to keep our children in failing and outdated schools (without even the hope of real competitors like FedEx and UPS) and stands poised to completely take over our health care system.

There are plenty of good government workers out there, but how secure is your job when the firing of three City workers is front-page (above-the-fold) news? Certainly, fraud and all of the abuses of power that were apparently taking place are big issues that give cause to the firings, but does anyone in government ever get fired for mere incompetence?

Of course, we expect that the government workers union will find some reason to challenge these firings and will make the process far more costly for taxpayers (and lengthy) than it should be, but we applaud Mayor Berry and his staff for taking firm action when needed. The City of Albuquerque is slowly become a more efficiently-run, less corrupt place due to his efforts.

Gov. Martinez has discussed ways in which she’d like to reduce New Mexicans’ tax burdens by tackling aspects of the gross receipts tax. This is a good thing.

I discussed some of the preliminary reform ideas with the Santa Fe Reporter which portrayed my views towards the reform in a largely negative light. However, that is not the case. We at the RGF are very enthusiastic about the Governor’s proposal to eliminate the GRT on small businesses. Taxing these tiny, single-person, and often part-time businesses creates more hassle than it is worth in terms of revenue.

However, there is a legitimate discussion to be had over whether the GRT is worth saving or whether the best way to eliminate its worst aspects is to create carve-outs that attempt to eliminate “pyramiding.” This is where the negative nature of my comments comes through in the article. The GRT is meant to be low and broad. It has become a tax that is charged at a high rate with many carve-outs included. Martinez’s well-intended effort to eliminate pyramiding COULD result in higher rates down the line, especially if spending rises.

New Mexico’s Public Education Department has released its first-ever batch of A-F grades for public schools around New Mexico. The data relies on several measures to better understand and give parents and students the information they need to see if schools in their community are doing the job and whether student performance is improving or declining. This tool idea was brought to New Mexico by the Rio Grande Foundation as part of the “Florida Model” for education reform.

If that isn’t enough for you (would you rely on just one data source before buying a new car?), check out the recent school analysis tool that was created by the New Mexico Coalition for Charter Schools.

The Rio Grande Foundation has been a leader in bringing attention to New Mexico’s pension problems. Dan Boyd of the Albuquerque Journal recently wrote an interesting column on legislators and their “double-dipping” in the State’s pension system in which he quotes me. Rob Nikolewski over at Capitol Report New Mexico has an excellent overview of the situation as well.

The problem is real and demands reform. However, the problem is inherent in New Mexico’s pension system and the fact that it is underfunded and unsustainable. I would have zero problem with legislators (or anyone else) “double dipping” if they actually owned and managed their own retirement savings in a 401K-type account. Far from being a crazy idea, Michigan has done this and has saved taxpayers billions of dollars while giving government workers personal ownership and control over their retirements.

Michigan’s reforms have also eliminated many controversies over pension problems like the one outlined above.

The Rio Grande Foundation has been using a new state law to request and post payroll information for city and county governments statewide (we are working on school districts). Despite having posted payroll information for Farmington and several other major cities statewide back in August, the effort has only started to make waves over the last few days. Check stories here and here.

The good news is that political leaders in the City of Farmington are planning to take the initiative by posting this (and perhaps other) information online in a further effort to improve transparency. So, kudos to those in the City who are attempting to give taxpayers a better idea of how their money is being spent!

Santa Fe has made news recently with plans to increase the City’s minimum wage to as much as $10.32. This is certainly not a cause for celebration. Rather, as the Hoover Institute points out in a new brief, “As the wage demanded increases, the jobs offered in the labor market will decline.”

The paper goes on to note that, “after the wage level was increased, unemployment rates did move sharply upward. Some of today’s workers will be lucky enough to ride the living-wage tide upward, but others are likely to be cast aside.” These and other regulations have not made the City a high-unemployment city, but Santa Fe continues to grow less-quickly than other cities in the state.

Of course, it is only intuitive that forcing businesses to pay more for employees will reduce employment, but it bears repeating.

Our friends to the West at the free market think tank Goldwater Institute recently received some good publicity in, of all places, The New York Times. The article clearly showed the Institute to be a principled, conservative voice for free markets and limited government.

It detailed some of the organization’s successes, including upsetting Sen. John McCain. While we at the Rio Grande Foundation don’t have the same resources, or the same conservative political climate as our neighbors to the West, an organization like Goldwater gives us a model and a clear understanding of just how effective a state think tank can be.

If you agree and want to help us truly become the “Goldwater of New Mexico,” donate to the Rio Grande Foundation here.

William Yeatman of the Competitive Enterprise Institute previously wrote a paper on the issues surrounding the Four Corners Power Plant and the EPA.

He recently posted an update on the situation on his blog here.

Recently in the Business Journal Winthrop Quigley discussed the transition taking place in our economy. Key to that transition is an educated, innovative work force. The problem is, as I pointed out in the following letter to the editor, our education system — especially in New Mexico — is woefully inadequate for preparing tomorrow’s work force.

Albuquerque Journal Business Outlook

Winthrop Quigley, in a wide-ranging analysis of the current economy through the lens of Nobel laureate economist Joseph Stiglitz, makes the point that the US economy is in a state of transition that has exacerbated our current economic woes. He further notes that the US workforce is lagging behind in terms of needed skills. This, as our country and world shift away from a manufacturing economy and towards an information and knowledge economy.

This issue should be especially noteworthy for New Mexico policymakers as our state repeatedly comes in at the bottom of the pack relative to the nation as a whole in terms of educational achievement. Of course, in a globalized economy, workers in our state – and by extension the educational system that produces them – are not just competing against other Americans, but also Chinese, Indians, and others.

To say that education reform is an economic issue is to re-state the obvious, but our business community needs to engage in the upcoming legislative session and demand reforms that will allow for greater educational choice and accountability.

Both our nation and our home state of New Mexico face major economic changes. We will only survive and thrive in this transition with an educated and competitive workforce.

Paul J. Gessing
President
Rio Grande Foundation

Everyone in New Mexico is aware that Indian tribes are not beholden to state laws on gambling in the same way that other entities are. The interesting thing is that gambling could be just the start and, if they decide to be entreprenurial, tribes could be a useful check against government overreach.

The latest example is the payday loan industry. A few years ago, the Legislature and Gov. Richardson decided that they, not those seeking loans, knew better what terms money should be lent at. While I am certainly not going to run out and get a payday loan, the fact that some people need them is understandable.

Now, with tribes getting into the loan business, the fact is that consumers will have access to the loans regardless of New Mexico law. This is a good thing and I look forward to more efforts by the tribes to take advantage of/check the spread of draconian state laws.

Mora County Commissioner John Olivas wants a ban on oil and gas drilling in Mora County because he is concerned with the environmental impact of a drilling process named hydraulic fracturing – or “fracking,” as it is colloquially called.

Mora County is not alone in its concern about fracking. Santa Fe, Rio Arriba and San Miguel counties have halted or discouraged drilling and fracking with ordinances and moratoriums.

Fracking involves a process wherein, once a well has been drilled to hydrocarbon-bearing rock (usually shale), the rock is blasted by a mixture of water, sand and chemicals. Fractures in the rock then allow the trapped gas or liquids to make their exit.

Why are county commissioners in New Mexico jumping on the “ban wagon”?
Maybe they have been watching too many Michael Moore-like documentaries on Netflix. An Oscar-nominated documentary, “Gasland,” says that fracking contaminates our water supply with chemicals. In the movie, some homeowners set their tap water on fire. Industry experts maintained that the film was fraught with errors and misinformation, but nevertheless it dealt fracking something of a blow.

The movie got a lot of attention (maybe Commissioner Olivas’?), but the movie’s arguments against fracking turn out to be deceitful.

Apparently, the dramatic tap water blaze had little to do with fracking. In many parts of America, there is enough methane in the ground to leak into people’s well water. The best fire scene in the movie was shot in Colorado, where the filmmaker is in the kitchen of a man who lights his faucet.

But Colorado investigators went to the man’s house, checked out his well and found that fracking had nothing to do with his water catching fire. His well-digger had drilled into a naturally occurring methane pocket.

It’s not overstating the case to say that unconventional hydrocarbons have shifted the world’s energy balance of power. The “shale gale” has spread the wealth around. Vast volumes of hydrocarbons are not just Middle Eastern plays anymore.

This shift has been enabled by new technology, revolutionary, really. Across the world, we’ve seen vast, stunning improvements in applied mathematics and computational abilities. Just on that basis along, today’s energy industry works with much-better exploration tools than in the past, better seismic and geochemistry.

Then there are new dramatically improved capabilities in directional drilling, with better drill bits and better fluids. After the holes are drilled, there’s fracking. The modern energy industry has more powerful pumps, more control of down-hole pressures and even better nanomaterials for holding the cracks open in the fractured shale and other tight rocks. What’s more, there are better post-completion treatments.

Here, in the U.S., the shale gale has eliminated the need for liquefied natural gas imports, likely for several decades and perhaps longer. In addition, the shale gale has the potential to significantly reduce Russia’s influence over the European natural gas market. At the same time, the shale gale will dramatically diminish the “petro power” of other major OPEC players, such as Iran and Venezuela.

Fracking plays a very important role in energy production nationally and in New Mexico.
A recent report from the American Petroleum Institute concluded that if Congress were to place additional federal regulations that govern the oil and gas industry practice of fracking, the number of new U.S. wells drilled would plummet 20.5 percent over a five-year period.

The oil and gas industry provides significant revenues to the state of New Mexico and local municipalities. For fiscal 2010, oil and gas revenue payments in the form of taxes, royalties and other revenues totaled nearly $2.2 billion – that represents a 27 percent contribution to the state’s general fund.

Natural gas is not risk-free, but no energy source is. Perfect is not one of the choices, Commissioner Olivas.

Thomas Molitor is an adjunct scholar with the Rio Grande Foundation in New Mexico and a regulatory analyst with the American Action Forum in Washington D.C.

I provided a few comments for this article which appeared in the Santa Fe New Mexican. Seems like the City of Santa Fe would rather not post salaries at all if they can’t provide a searchable database like the City of Albuquerque has done.

Certainly, Albuquerque’s efforts at transparency are to be emulated, but that doesn’t mean you can’t start somewhere. In the meantime, check out what we got when we requested payroll information from the City of Santa Fe.