Despite the Tea Party’s influence on policy and the S&P Downgrade, it seems that nothing has changed in terms of spending. For starters, there is this ridiculous story about the federal government’s $40 million poultry bailout. Apparently, chicken prices are simply too low, so Washington had to step in. I know $40 million isn’t a lot of money in a $3.8 trillion budget, but if we can’t cut that, what can we cut???

Then there is the debate over cost savings at the Post Office and whether to run Las Cruces mail through El Paso The Las Cruces Sun-News says “no.” I don’t get it. The Post Office ran an $8.5 billion deficit this year. Clearly, things have to change rapidly lest taxpayers be left holding the bag. In this day of email and instant communication, is having your own postmark as a city really that big a deal?

Lastly (in this list of examples, but not by any means in terms of wasteful spending), there is the essential air service debate. I lauded GOP Members of Congress for standing firm, only to watch them cave. Not surprisingly, Transportation Sec. Ray LaHood promptly promised to waive any service cuts under the program. Kinda like Lucy and Charlie Brown playing football…

Again, if the federal government keeps bailing out the poultry industry, forcing the Post Office to waste money, and subsidizing wasteful flights, what chance is there to address entitlements and the really big issues?

Mike Jaxson with KSVP Radio in Artesia and I recently discussed our new report on the Rail Runner, the upcoming special session of the New Mexico Legislature, and what New Mexico might learn from Texas’ economy. Listen to the 15 minute interview here.

I’ve written numerous times on this blog about the “Texas Economic Miracle” and what it means for New Mexico. With Rick Perry’s entrance into the presidential race, the national spotlight is now being shined on the Texas economy in a big way. Liberals like Paul Krugman want nothing more than to cast doubt on the low taxes and limited regulations in Texas and their role in spurring the Texas economy.

As Shikha Dalmia of Reason writes, Texas has indeed done a lot right and there are good reasons for people to flock there. In summary writes Dalmia, “Texas offers proof that people prefer jobs, even low-paying ones, to lavish social benefits — repudiating the liberal tax-and-spend economic model.” After all, unskilled Mexicans who choose to live in Texas (and make up a great deal of the state’s population growth) are not likely to be paid more than minimum wage, but they still prefer Texas to high-tax welfare states like California.

Of course, as Dalmia points out and conservative columnist Tim Carney expands upon, just because Texas is a business friendly place, that doesn’t mean that Rick Perry is hitting all the right notes in terms of economic policies.

So, New Mexico should follow Texas by eliminating its income tax and adopting Right to Work legislation, but that doesn’t mean Gov. Martinez should follow everything that Rick Perry has done in Texas.

As previously reported, the Rio Grande Foundation has been collecting publicly-available government employee salary information from all over the state. This caught the attention of the folks over at the Clovis News-Journal which ran this story about our efforts and transparency issues in Curry County.

Education analyst Franklin Schargel asks this question in a recent opinion piece that appeared in the Albuquerque Journal. The question is a good one and I agree with much of the article. As an editorial from the Defensor-Chieftain rightly states, the Legislature in particular needs to allow Education Sec. Skandera and the Gov. implement their agenda rather than continuously fighting them.

There are real problems with New Mexico’s (not to mention the nation’s) educational system. These are systemic and built up over generations. Are legislative Democrats going to try “stall-ball” as they did under Gary Johnson or are they actually going to try something new?

The New Mexico Watchdog asks this question in his new story which is available here. Here is the link to AFSCME’s information available on the Taos County website.

While AFSCME is a government employee labor union by definition, it seems odd that the County would want to advertise for AFSCME. Considering that AFSCME is a very political organization that essentially acts as a powerful arm of the Democratic Party, it would seem to be highly inappropriate and something that should be eliminated right away.

If you haven’t got the time to read the full-length policy paper which was released this week, I have a shorter article that ran on NMPolitics.net.

Even if we don’t shut the train down, it is time to make sure that the process that creates future projects like the train are transparent and don’t use scams like “balloon payments” which hold off a majority of the bill until 2025 and 2027.

A few weeks ago, RGF president Paul Gessing had the opportunity to speak at the Albuquerque forum on economic development put on by Jon Barela’s Economic Development Department. It was a great opportunity to discuss the Foundation’s findings on turning around New Mexico’s economy with members of the business community. Read full coverage from the Albuquerque Journal here.

There is no doubt that our ideas will move New Mexico in the right direction economically-speaking, but the business community is much more focused on small changes, some of which are more “business-friendly” than “free market.” Some of the ideas are great and we fully support them; some are open to debate.

Nonetheless, we do appreciate Secretary Barela’s willingness to give us an opportunity to share our principled, big-picture ideas.

In case you missed it, Channel 13 had an excellent report last night on the Rail Runner. It echoed many of the points in our new policy paper which calls on Gov. Martinez and the Legislature to shut the boondoggle down.

Rail Runner: Go big or go lean?: krqe.com

However, while I appreciate Larry Abraham’s having blown the whistle on the real financial situation taxpayers face as a result of the train, I think his suggestions to expand the system are absurd. Perhaps a casino car or a shift to emphasis on tourism could make a dent in the train’s financial situation, but I don’t see a government agency having the incentives or capability to be truly innovative.

A new documentary film is coming out that focuses on oil and its role in our economy and political debate. The film happens to have been created by Mark Mathis, a local filmmakers. The film is showing at the downtown library at 501 Copper NW Thursday morning at 10:00. Find more out about the film festival’s schedule here.

Check out the preview here:

(Albuquerque) The Rio Grande Foundation has long been critical of the Rail Runner and its finances. A new report from the Foundation outlines the top “Ten Reasons to Shut the Rail Runner Down Now.” The report is available here.

Originally marketed at a price of $122 million and as possibly being “high-speed,” the Rail Runner shuttles (mostly) tourists and government employees from downtown Albuquerque to Santa Fe and from Albuquerque south to the bedroom community of Belen.

Regardless of whether you think the Rail Runner is worth the money or not, there is no doubt that the process that created the train is rotten to the core. For starters, the train has been operational for five years, but only recently have the system’s true finances been explained in any detail.

Most egregious among the revelations is the fact that rather than paying the train off in equal annual payments over 30 years as a family would do with a mortgage, Gov. Richardson managed to set up the train’s financing so that he got the credit, but future governors and legislators would have to pay the bills. New Mexico taxpayers are on the hook for two lump sum payments of $230 million per year in 2025 and 2027.

According to newspaper reports, the train will cost a total of $1.3 billion over the next 20 years. This does not include the replacement cost of the train sets and track which transportation expert Randal O’Toole estimates must be done at approximately their original cost every 30 years.

If the train is shut down, taxpayers will save at least $18.12 million in annual taxpayer-financed operating costs beginning with the system’s shutdown. This would add up to $453 million over the next 25 years if the train is shut down right away. The train’s total per-passenger subsidies come to $50 per-passenger, enough to purchase a car (costing more than $18,000) for each passenger annually.

Said Rio Grande Foundation president Paul Gessing, “As painful as it might be in terms of prestige, the Rail Runner is not an integral part of New Mexico’s transportation system and is simply an unaffordable luxury. It is time to shut it down.”

Read the full report and all 10 reasons to shut the train down here.

This interesting article discusses what is currently happening in the US protectorate of Puerto Rico. The conservative, Republican governor of the island has cut taxes and reduced the size of the government work force. So far, the result is a dramatic reduction in unemployment rates, a 70% drop in the deficit, and credit rating upgrades that have allowed for increased bond sales and a reduction in interest payments.

Sounds like a model for New Mexico and the federal government as a whole. At the very least, policymakers and the media need to watch what is happening there very closely.

Too many politicians (of both parties) would prefer to forget about the past. A lot of Republicans would prefer to forget about the Bush years and the fact that federal spending grew out of control during the eight years of his term. Democrats and President Obama, on the other hand, would prefer to forget that the $787 billion stimulus was an abject failure. This was the largest “jobs” project since at least the New Deal.

Rep. Martin Heinrich, in his opinion piece today, tries to take Congressional Republicans to task for “not bringing a single jobs bill to the floor.” This is just silly. The federal government, especially when it is as heavily-indepted as ours is, needs to focus on the basics, not throwing more corporate welfare at preferred businesses.

If Heinrich wants a jobs bill, how about repealing ObamaCare? How about getting rid of some of the piles of regulations that make doing business so difficult in the United States? How about stopping the out-of-control EPA and NLRB?

Heinrich, like most politicians, simply doesn’t understand how jobs (and more importantly, prosperity) are created. Hint, government can create the conditions, but it is entrepreneurs and average people working hard that create wealth. The federal government is destroying wealth and has been for many years.

Recently, I discussed the (unwarranted) optimism I had about Congressional Republicans’ efforts to eliminate the so-called “Essential Air Service” (EAS) program. Rob Nikolewski over at Capitol Report did some further analysis of flights into and out of Alamogordo, NM, a city that “benefits” from the EAS program.

Among his findings:

Only 374 people hopped aboard flights in Alamagordo in 2010. That’s an average of just 1.2 passengers per service day;

The US government sends some $1.6 millon in subsidies to airlines providing service to Alamogordo, so that works out to $3,126.57 per ticket (not counting the out of pocket price of between $70 to $90 each passenger pays for a one-way flight).

Almost makes the Rail Runner look like a good deal! If Congress can’t eliminate this narrowly-targeted and relatively small (within the scope of the federal budget) subsidy, how are they going to deal with Medicare, Medicaid, and Social Security?

They say that the first step in solving a problem is recognizing that you have one. So, in a sense it is positive that AFSCME, the labor union representing large numbers of government workers in New Mexico, has come up with a list of reforms that it is okay with.

Ideas including raising the retirement age, re-working the cost of living adjustment (COLA), and basing final average salary calculations off of a longer period of time.

The full scope of the plans is outlined at the link above and AFSCME is wise to recognize that the current pension system is unaffordable. Of course, as our own Scott Moody has pointed out, New Mexico’s pension problem is much larger than either side is admitting at this point (more like $22.9 billion as opposed to $4.6 billion).

Interestingly enough, at the very same legislative meeting that AFSCME introduced their proposal, a separate proposal from GASB, the folks that attempt to keep government’s books honest (good luck!), was introduced. In discussing the proposal with Moody, he told me “If these changes happen, it will explode the pension liability. The proposal would also move the pension liability directly onto state’s balance sheets. I would imagine that would mean many states would have negative
equity.”

Looks like AFSCME is doing too little, too late, but something is better than nothing, I suppose.

With all of the talk about the broader economy, the ongoing issues with ObamaCare have been out of sight for a few weeks. Dr. Deane Waldman who sits on the board of the Rio Grande Foundation and is an expert in health care policy (and a pediatric cardiologist), takes on some of the more disconcerting aspects of ObamaCare in an opinion piece published in the Albuquerque Journal.

The Rio Grande Foundation believes strongly in government transparency. To that end, we are submitting information requests to, and collecting payroll information, for all major cities — and eventually all counties — throughout New Mexico.

The list of cities is below. Albuquerque already has a transparency site with payroll information available, so a link to that is provided. Links will be activated as information is received.

Albuquerque
Las Cruces
Hobbs
Rio Rancho
Farmington
Clovis
Los Lunas
Alamogordo
Sunland Park
Las Vegas
Santa Fe
Carlsbad
Portales
Roswell
Gallup
Los Alamos (Los Alamos is both a City and County, so it will be posted in both)
Deming
Artesia
Tucumcari

The results from the recall election in Wisconsin are in and, Gov. Scott Walker and the Republicans who courageously pressed a reform agenda (at great savings to taxpayers) have won the day. Read the full story here.

This is good news for reformers here in New Mexico and across the country. After all, reform is sure to be controversial and will trigger a backlash. The truth is that voters by and large stuck with the reformers.

I’ve written before about the Leadership Institute and how it provided me with useful training (and how it can provide budding activists and free market leaders the same).

Therefore, I was honored to be named the Leadership Institute’s “graduate of the week” this week.

So, thanks to LI for all the great training and, it is worth noting that the Institute is doing some youth training in Albuquerque soon on August 20th.

With everything going on these days, it has been tough to keep up with some important local issues. Some letters to the editor in today’s paper reminded me of the controversy over LEED certification for APS school buildings. APS Board member David Robbins has been fighting for sanity and cost-effectiveness against the movement to build school buildings to LEED standards and go through the certification process.

First and foremost, kudos to David Robbins. Even in times of increased concern about out-of-control spending, the person who sticks his/her neck out and demands efficiency or event cuts is often pilloried (Think Tea Party).

Secondly, it is important to clear up what LEED means. It is a marketing tool and it is just one of many supposedly “green” building methods. It is arguably not even more energy efficient than regular building methods.

What it does do is raise building costs. As this article notes:

Construction-related expenses for LEED-certified buildings can increase a project’s cost by about 10 to 30 percent. LEED certification alone can account for 5 to 15 percent of the total construction costs, not including funds required for other mandated expenses.

Architects and engineers usually demand higher fees for green designs. Green designers add value to the end product and provide extra services. A green-design professional typically charges 1 to 2 percent more for a LEED-certified building design.

These figures do not include the rates of a LEED Accredited Professional (which can increase design fees by 10 to 15 percent), LEED-certification application fees, or the costs associated with monitoring and reporting building performance.

We at the Rio Grande Foundation applaud Robbins’ stance and note that we pointed out the folly of LEED standards and certification back when APS was looking for more of your tax dollards.

In Sunday’s Albuquerque Journal, I saw an article that truly made me shake my head. A link to the article can be found here from the Charlotte Observer, but in the Journal, the headline was “Southeast Trails in Renewable Energy.

The article has some truly choice quotes. Basically, some environmental groups are complaining that states in the Southeast are not forcing their electricity users to buy so-called “renewable power” from sources like wind and solar. Utilities’ lobbying and conservative Republicans are to blame. But where it gets interesting is the statement that “residents in the Southeast benefit from some of the lowest electricity bills in the country, making politicians reluctant to tamper with anything that could hit their constituents in the wallet.”

Duh! A freer market in electricity with fewer government regulations makes for lower costs. Marita Noon of Energy Makes America Great made that very point recently in the Journal. Of course, barring a victory in the courts, environmentalists are succeeding in driving up electricity costs at a time of great economic hardship.

(Albuquerque) In August of 2010, the Gail Ryba bike bridge over the Rio Grande at I-40 was opened. The project, which was funded with federal stimulus money, cost approximately $5 million to construct. And, while the fight continues over the ultimate economic impact of the federal stimulus package, we at the Rio Grande Foundation wanted to better understand the impact of the new bike bridge on local commuting habits.

At the dedication ceremony last August, West Side Councilor Dan Lewis called the bridge “another bridge crossing over the Rio Grande” and, while the statement is certainly accurate on its face, we wanted to see how many people are using the bridge and how many of those people are actually commuting to work.

To do this, two Rio Grande Foundation employees stood on the bridge, counting people and filming the scene from the bridge during a recent morning rush hour (from 7:40am to 8:30am). Video of the rush hour (which we have sped up, set to music, and uploaded to Youtube) clearly shows traffic on the Interstate Highway passing by at a rapid rate with only occasional bike or walking traffic on the bridge.

In 36 minutes of continuous video (available above or via link at www.riograndefoundation.org), a total of 13 bicyclists and 7 pedestrians use the bridge, none of them seemed to be dressed for the office or seemed to be carrying work-related items. Regardless of their purpose in making the trip across the river, that is less than one person biking across the bridge every other minute.

Said Rio Grande Foundation Paul Gessing, “The Foundation expressed its concerns about the project at the time as not being economically-stimulative and not necessary for improving mobility in Albuquerque.” Gessing continued, “After a year, it would be great if a government agency provided some data on whether or not this bridge was worth the cost, but that is not the way government operates.”

Gessing concluded, “With all of the fiscal pressures facing the federal government, it would seem that this money could have been saved and used to reduce the gaping budget deficit, but this ‘stimulus’-funded project has been built and instead provides little in the way of mobility increases for Albuquerque residents.”

While nearly everyone seems to be looking towards 2012 and the potential end of the Obama Administration as the cure-all for the US economy, I’m not so excited. I haven’t seen nearly what I’d like to in terms of specific spending cut proposals from Republicans.

Ruth Marcus of the Washington Post makes this point in a recent article. Like them or not, Gary Johnson and Ron Paul have put forth specific ideas for reducing and ultimately eliminating the deficit. I don’t really see the same specifics coming from Mitt Romney and the other candidates.

I think the Tea Party and anyone who cares about this country needs to demand that any politician running for any federal office have a specific plan for eliminating the federal deficit. I like John Stossel’s for one,but there are other paths.

The US EPA has made its decision; it will NOT be rational, nor will it follow its own guidelines. Instead, it is going to force costly new haze controls on the San Juan Generating Station.

Read the following article on the situation from William Yeatman, an energy policy analyst at the Competitive Enterprise Institute,

The Environmental Protection Agency (EPA) is poised to run roughshod over New Mexico officials and impose nearly $340 million in unjustified costs on PNM customers—in blatant disregard of its own rules. At issue is a provision of the Clean Air Act, known as “Regional Haze.” Unlike other parts of the Act, which are meant to protect public health, the Regional Haze provision is an aesthetic regulation, intended to improve the view at national parks.

Under New Mexico law, the state cannot impose Regional Haze emissions controls that are more stringent than what the federal government requires. In 2005, the EPA published Regional Haze guidelines that established recommended emissions controls to comply with the visibility regulation. These recommendations are known as “presumptive limits.” On June 2, the state Environmental Improvement Board (EIB) unanimously approved a Regional Haze plan that would meet the EPA’s “presumptive limits” by spending $34 million to retrofit the San Juan Generating Station, a coal-fired power plant located 15 miles west of Farmington.

Despite comporting with both federal guidelines and state law, these controls weren’t good enough for the EPA. Perhaps this has something to do with President Barack Obama’s campaign promise to “bankrupt” the American coal industry. Whatever its rationale, the EPA is proposing Regional Haze retrofits at San Juan that would cost New Mexico ratepayers $370 million—a nearly ten-fold increase over those approved by New Mexico officials.

And what does this huge sum buy? Not much. Based on peer-reviewed research, there is a 35 percent chance that the visibility “benefit” of the EPA’s preferred controls could be perceptible by the general population on the seventh worst visibility day of the year at Mesa Verde, the National Park closest to the San Juan Generating Station. In other words, most people won’t even notice the difference wrought by the EPA’s ultra-expensive controls.

But New Mexicans certainly will notice the difference in their utility bills! PNM estimates that the EIB-proposed controls would result in a rate increase of $12 a year, while the EPA-proposed controls would increase rates by $82 a year—almost seven times more. In these tough economic times, New Mexicans should not be forced to pay hundreds of millions of dollars in exchange for imperceptible benefits.

If the EPA decides to reject the EIB’s plan, and impose its own, the administration of Governor Susana Martinez would have a strong case in court, thanks to the unique discretion afforded states in deciding how to protect visibility under the Clean Air Act. According to the EPA’s own Regional Haze guidelines, “Congress evinced a special concerning with insuring that States would be the decision-makers.” If the EPA chooses to ignore that fact, New Mexico should remind it in court.