Recently, the House Appropriations Committee in Congress voted to slash funding for the proposed Chemistry and Metallurgy Research Replacement Nuclear Facility at Los Alamos. This project is one that we have criticized in the past as costs have spiraled out of control as the project has moved forward in the design stages — let alone construction.

The actual savings are small and yes, there may be some minimal impact on New Mexico’s economy, but the time for fiscal restraint is now. Hopefully Congress will continue cutting!

Kate O’Neill of the UNM Taos campus and UNM president David Schmidly had an inane column recently in the Albuquerque Journal. The sum total of their arguments was to argue on behalf of the myriad branch campuses throughout New Mexico. By my count, UNM alone has 10 statewide education centers, main campus, and a campus in Rio Rancho. Other universities such as NMSU and Highlands have their own campuses throughout the state as well.

Basically, the assertion is that New Mexico simply can’t afford to cut down on any of these branch campuses lest we fall behind even further in education. Of course, the “local jobs” argument was thrown in as well for good measure. To say the least, their arguments don’t hold much water in my book as they have no data to back up their arguments.

The Legislative Finance Committee, on the other hand, has an excellent report that is well worth reading on higher education in New Mexico, the fact that we have too many branch campuses and a bloated higher ed system that is not accountable for results. Interestingly enough, New Mexico has among the worst college graduation and first-year retention rates in the nation.

Separately, in a letter to the editor published today, a writer claimed — in a letter that I otherwise agreed with — that UNM’s graduating students have the second-highest debt load in the nation. This is simply not the case as this report from the Project on Student Debt points out. No New Mexico university appears on the report’s “heavy debt” listing although two of them do appear on the listing of “low debt colleges and universities.”

Las Cruces teacher Bill Soules writes in the Sun-News that if we spent more money on education, we’d have better schools. Haven’t we explained this canard before?

Here is a chart of US spending on education as compared with actual education results:

Here is a chart of students per teacher:

As this paper notes, New Mexico’s experience is not out of line with those elsewhere.

The problem is clearly not a lack of spending, the problem is instead one of incentives and the fact that spending more money doesn’t necessarily result in the hiring of better teachers and overall improvements in educational output.

It has been a contentious point at City Council in Albuquerque and the Albuquerque Journal has editorialized in favor of the cameras, but I tend to think — like Councilors Lewis and Cook — that red light cameras are more about revenue than they are about safety. Read their article here.

Regardless of their effectiveness or lack thereof, I’d like to at least have a public vote on them. Data from the Virginia study on the increase of accidents at camera-enforced intersections can be found here.

The only way for the RailRunner to break even is to reduce service. By definition, this means that the system is not sustainable.

The folks at Rio Metro who operate the train understand this and were faced with some tough decisions in face of a loss of federal funds for the train. A few days ago, I wrote that discontinuing some early morning services and eliminating stops on a few trains could actually improve service.

Instead, Rio Metro will discontinue weekend service on the train. In some ways, this is a logical decision. After all, if the goal of the train is that of a “commuter” train, weekday service must be continued at the expense of weekend service.

The Journal also had an article on the decision and, while the tourists who use the train were understandably perplexed, Rey Garduno who sits on the Rio Metro board had the silliest remarks. Said Garduño, “Weekend routes are valued by the community and should be protected.” Well, if that service was valued by the community, wouldn’t the community be willing to pay enough to continue it? To date, weekend service is only “valued” to the extent that a $1.2 million federal grant is available.

While she did not move to shut down the RailRunner during this legislative session, Gov. Martinez is wisely not planning to add even more General Fund dollars to subsidize weekend service. I hope she maintains this stance, but as long as it rolls down the tracks, the RailRunner will continue to be an unnecessary burden on New Mexico taxpayers.

I blogged yesterday about the confusing and often-conflicting data on graduation rates. Well, in taking a closer look at the data, I found that Santa Fe schools had one of the worst graduation rates in the state in 2010 at 53 percent.

One would think that one of the wealthiest cities in New Mexico with median household incomes of $52,045 as compared to New Mexico’s median income of $43,028 would have some of the best schools around, but that is not the case. Instead, students in “The City Different” lag behind some of the smallest and poorest towns in New Mexico.

The fact is that we have a systemic problem in Santa Fe and New Mexico schools. Time to follow reforms that have worked in other states.

With the school year having recently been completed, there has been a lot of talk about graduations and graduation rates. According to state data, New Mexico’s rate is 67.3 percent. But, according to the latest “Diplomas Count” study, New Mexico’s graduation rate is only 57.1 percent. According to this same study, APS’s graduation rate is 55.4 percent (49th of 51 states (including the District of Columbia).

According to the State, however, APS graduates kids at a 64.7 percent rate with the various schools in the City charted here. The problem is that, according to the Albuquerque Journal, 12 percent of those students were not actually qualified to receive their diplomas.

Yes, there is some difference in the years being analyzed here, but a majority of the discrepancy has to do with varying methods of calculation. In a free market or even “choice” environment with competing schools, you can bet that we’ve have a firm grasp on these numbers. Until then, finding out the truth about graduation is a real challenge.

With Gary Johnson having been snubbed this week by having been excluded from the CNN debate, the race to oppose Obama in 2012 is really getting started. Interestingly enough, a recent poll by Public Policy Polling finds that of the “major” GOP candidates (Ron Paul was inexplicably excluded from the poll), Johnson is THE ONLY GOP candidate to have positive polling numbers in their home state.

Johnson as 44-32 favorability ratings here in New Mexico. This is good news both for America and New Mexico for three reasons:

First and foremost, it shows that CNN was wrong in excluding Johnson;
Secondly it shows that being a fiscal conservative is popular, even in a heavily-Democrat state like New Mexico (hopefully Gov. Martinez has seen these numbers);
Thirdly, it would seem to indicate that the people who know the various candidates best like Gary Johnson better than people in other states. Interestingly enough, Mitt Romney, former Governor of another liberal state (Massachusetts), the front-runner and father of the failed “RomneyCare” experiment, has polling numbers that have him 12 points in the negative among his home-state voters. It would appear that small government ideas are still more popular among voters than are big government ideas.

The Santa Fe New Mexican has reported that the loss of $1.2 million in federal funding could force the system to alter service in ways that might include:

Using bus service to replace the earliest northbound and southbound trains on weekdays.

Having other trains make fewer stops by bypassing the soon-to-open Sandia Station north of Albuquerque and the unopened Zia Station in Santa Fe.

Other changes might be made as well, but the fact is that buses can make the trip from Albuquerque to Santa Fe far more quickly than the train does. Also, the Rail Runner has built way too many stations into the system (slowing the train’s path), eliminating certain, little-used stops would be helpful.

With buses being far faster (1hr 9 min. vs. 1hr 38 min), more flexible, and cheaper than the train, it leads one to wonder why New Mexico taxpayers have been asked to pour more than $500 million into the train to date.

This fascinating report from the New Mexico Watchdog (a project of the Rio Grande Foundation), tracks judicial donations.

According to the report, “Members of the Richardson-era judiciary on average paid more than four times as much in political donations during recent years, compared to the recent political donations of long-time judges who remained through the Richardson era.”

Find out who donated how much and to whom here.

The Rio Grande Foundation caused a bit of a stir recently when we posted the salaries of County workers online. Interestingly enough, according to news reports, the new Mayor of Chicago, Rahm Emanuel (a former Obama Administration Chief of Staff) has taken the same step with city workers in Chicago.

Said Emanuel of the decision:

During the campaign I promised to have the most open, accountable and transparent government that the City of Chicago has ever seen. Today’s effort is another step toward this goal, as we create an administration that is accountable to the citizens of Chicago.

Kudos to Rahm Emanuel for his leadership on basic governmental transparency.

HT to Sarah Welsh @ New Mexico FOG.

Greg Scandlen has an excellent post on American health care expenditures relative to those of other nations here. Folks on the left constantly talk about how much the US spends on health care and to an extent they have a point.

Problem is that, as the following chart illustrates (from Scandlen’s blog posting), Americans do not directly spend much on health care. Rather, the spending is done by governments and insurance companies:

How can this be rectified? Well, the first thing to be done is to equalize the tax treatment of health care so that employers are not given the incentive to buy insurance for their employers and that individuals take control for more of their health care spending.

Left-wing environmentalists like recent Albuquerque Journal columnist Edward Mazria love government regulations. In this case, the author is calling for more restrictive energy efficiency regulations on buildings.

As usual, he argues that 1) rather than costing money (or at least acknowledging that regulations have trade-offs), the preferred regulations have nothing but economic benefits; 2) Unstated, but implicit is the assumption that customers and consumers are too ignorant and uninformed to demand greater energy efficiency on their own 3) The regulations will save the world from the dire threat of global warming.

Simply put, Mazria fails to answer or even address any of these issues and instead simply asserts the need to use government force to demand that the rest of us simply fall in line with his personal preferences. Rather than falling victim to his scare tactics, New Mexicans should return to the old building code regulations and, if they prefer greater energy efficiency, the market will fulfill that wish.

Horace Greely is famously quoted as saying “Go west young man.” The idea was that success and riches could be had if a young man only had the courage to live on the frontier and make a better life for themselves. If Greely were alive today, he might say: “Follow the government young man.”

A brief look at this recent article from Forbes makes it very clear that Americans are getting rich by sucking up to big government. 5 of the 6 richest counties in America are either in the Washington, DC area or have other massive government installations nearby — number 6 is Los Alamos right here in NM with the Los Alamos Labs.

I long for the day when the best a young man or woman could do is to innovate and create products in a free market that serve others, not rely on a bloated and inefficient federal government to become wealthy.

HT: Hap Richardson

Our posting of the Bernalillo County payroll online has resulted in exactly the kind of transparency we hoped for. Commissioner Art De La Cruz is calling for an employee pay study to make sure that the County’s pay structure makes sense. The story is available here.

There is no single problem with higher education in general or higher ed in New Mexico in particular. We at the Rio Grande Foundation have discussed some reform ideas here and here, but local attorney and lobbyist Dick Minzner has some ideas of his own.

Specifically, Minzner discusses ways to improve and make more efficient the college lecture. Certainly, his ideas could save massive sums of money and would make college more affordable and accessible for students. The biggest problem (extrapolating from Minzner’s ideas) is that the colleges and universities have monopolies on pieces of paper called diplomas.

For more on reforming the undergraduate degree for the 21st century, I highly recommend these short podcasts from Charles Murray which can be accessed here and here.

There are lots of studies which focus on economic freedom and relative business friendliness, but a new report from the Mercatus Center at George Washington University called “Freedom in the 50 States” is relatively unique in that it explores both economic and social freedoms.

It will be of no surprise to regular readers of this space that New Mexico is among the most economically-unfree states in the nation (45th in this report). The good news, at least for social liberals and libertarians is that New Mexico scores 10th best on measures of personal freedom.

By way of summarization, the report’s authors had the following analyses and recommendations for New Mexico policymakers:

Analysis

New Mexico is the laggard of the Mountain West, but like several other small, rural states, it does well on personal freedom. Spending and taxes are high, fiscal decentralization is low, and a fifth of the state’s workforce is on state or local government payrolls (this ratio did drop consistently from 2004 to 2008). The state does well on personal freedoms because gun control is light, several kinds of gambling are allowed, private-school regulation is light (but homeschool regulation is tougher by national standards), there is RFRA, asset forfeiture has been partly reformed, a medical marijuana law has recently been enacted, and victimless-crimes arrest rates are low. However, the state recently expanded the ages of mandatory school attendance and enacted sweeping smoking bans. In economic regulation, New Mexico could improve most by rolling back health-insurance coverage mandates and occupational licenses. Eminent domain was reformed in 2007.

Policy Recommendations

Roll back occupational licenses, such as those for teacher assistants, ambulance drivers, mobile-home installers, pipelayers, boilermakers, bartenders, and dental assistants.

Repeal health-insurance mandated coverages for services such as lay midwives, acupuncturists, TMJ treatment, bone-mass measurement, home health care, and IVF.
Spending on higher education, police, and corrections is high; these areas should be targeted for reduction with the savings applied toward cutting the gross-receipts tax.

Many on the left (including President Obama) are blaming corporations in particular and businessmen in general for sitting on hoards of cash and not investing and creating jobs. The idea is that these businesses are generating returns and should be hiring and investing. Of course, this is a political issue for the Obama Administration as the economy is the number one issue facing his presidency these days.

Winthrop Quigley recently took up the mantle for Obama in the Albuquerque Business Journal when he accused businessmen of “cowering behind piles of cash.” I felt this was an unfair criticism and responded with a letter to the editor:

Winthrop Quigley began his recent column on businesses and risk-taking with a lengthy and quite legitimate laundry list of reasons why businesses are leery to hire large numbers of new workers and make major investments. Then he calls those concerns “a crock” and makes a variety of statements that just don’t make sense.

For starters, he cites the courage of Intel in making new investments in 1980 during a time of high interest rates and economic uncertainty. Of course, Quigley fails to mention that both Carter and Reagan enacted a series of pro-growth tax and regulatory reforms that provided reason for optimism. The two men succeeded in killing stagflation, but the leadership to solve today’s more intractable problems of out-of-control spending and debt is nowhere to be found.

Quigley cites opportunities to privatize infrastructure – a great idea – and improve health care – impossible if Washington doesn’t dramatically alter or abolish ObamaCare – and questions where businesses are. Well, I don’t know any businessmen who don’t want to make money for themselves and their investors. If anything, the current bout of caution is simply a response to the heedless optimism of the last decade.

Threatening to force businesses to hire and spend is obviously the wrong thing to do. Government can do its part by providing political certainty on taxes and regulations and tackling the fiscal crisis facing the nation. Given these needed changes in Washington, I’m sure that this “crisis of confidence” will soon pass.

Paul J. Gessing
President
Rio Grande Foundation
PO Box 40336
Albuquerque, NM 87196
505-264-6090

Over the weekend, the Journal’s front page carried an interesting article on the difficulties facing young people in finding gainful employment.

It is no surprise that unemployment rates for young people are higher than for the general population. These are, after all, unskilled workers with short employment histories and lower education levels as a group. But, the sad thing is that minimum wages force employers to either overpay young people or not hire them at all. In a weak economy, they tend to not hire at all.

Economist Walter Williams, a national treasure in my opinion, was on John Stossel’s show last week. He explains in the following interview why things like minimum wages and licensing laws actually hurt minorities and young people by forcing them out of certain jobs:

Rio Grande Foundation board member Vic Bruno had an opinion piece in the Albuquerque Journal over the weekend that outlined and explained several of the reforms included in our new policy paper on economic development.

Recently, Gov. Martinez and the State Investment Council have won plaudits for changes they have made to the state’s film loan program. We too are encouraged by these needed reforms.

But, as Joe Henchman of the Tax Foundation writes in a new paper, New Mexico is just one of many states that have cut back dramatically — or eliminated entirely — subsidies for filmmakers. That $50 million could instead be applied to lower the corporate or personal tax rates for all New Mexicans, thus spurring sustainable economic development.

The Environmental Improvement Board has voted to adopt the less-stringent, less-costly haze restrictions on the Four Corners power plant. We applaud this move and hope the EPA is willing to accept the state-level regulations.

Nonetheless, during the public testimony period on the issue, I made sure to add the Rio Grande Foundation’s voice in support of the more reasonable haze reduction measures.

(Albuquerque) Expensive studies are in the works and much discussion is taking place on the best ways to develop New Mexico’s economy. This is great news to advocates of the free market. For too long, economic development in New Mexico meant waiting for the federal government or the Labs to bring more jobs and money to the area.

Of course, some politicians and economic development “experts” are hoping to promote their own visions of targeted economic incentives, tax giveaways, training programs, and other methods of bringing jobs to New Mexico. At best, these methods are unproven in terms of generating net, long-term growth. Rather, the new plant or business may be “seen,” but the businesses and investments that would have happened absent those taxes is the unseen and untold story.

In an effort to steer the debate towards proven, pro-free-market policies, the Rio Grande Foundation has released its own study, “A Roadmap for a More Economically-Competitive New Mexico” that bases its findings on “tried and true” principles of taxation, spending, and regulation as a path forward for New Mexico’s economy. The study is available at the Foundation’s website.

Said Gessing, “Politicians and economic development ‘experts’ love targeted incentives because they give them power and a political constituency and financial support. But, true economic development comes from unleashing the inherent productivity of a given population, not from top-down decisions and resource-shifting.”

Gessing noted that “Reforms like ‘Right to Work’ laws have been shown to increase economic growth rates by 11.5% where they have been enacted. Elimination of state taxes on personal income have also proven effective with no-income tax states having created 89% more jobs and had 32% faster personal income growth than their high-tax counterparts between 1998 and 2007.”

“Other reforms,” Gessing noted, “including reduced regulatory burdens, better, more cost-effective educational systems, and reducing the size of New Mexico’s government work force, are designed to increase the effectiveness of government spending and/or re-direct resources from government to the private sector. These initiatives and ones like them have a high likelihood of driving economic growth and creating jobs.”

Gessing concluded that, “While the reforms contained in this paper WILL spur economic growth, they are also politically-challenging. New Mexicans and their political leaders must choose between political expediency and proven success.”

Channel 13 did a second story over the Memorial Day weekend discussing our efforts to increase transparency in Bernalillo County Government. And, while such efforts have caused consternation among some County employees, there were clearly disparities in pay that merited discussion.