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

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

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

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

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

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

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

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

Step 1—Fix the Public Sector Over-Employment Problem
Step 2—Transform Defined Benefit System into a Defined Contribution System
Step 3—Continue to Increase Employee/Retiree Contributions to the Retiree Healthcare System
Step 4—Expand the Private Sector

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Get all the gory details here.

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

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

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

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

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

HT: Rob Nikolewski

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

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

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

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

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

There has been a lot of discussion recently about New Mexico’s “Three Tiered Licensing System.” This has been spurred by a report from the Legislative Finance Committee which stated that “New Mexico’s three-tiered career ladder system does not align pay with student achievement.”

Curiously, this seems to be a factor IN SUPPORT of the system, at least according to the unions. Quoting directly from the article:

The three-tiered system was never, ever about raising student test scores. In fact, as the Journal itself has aptly pointed out on numerous occasions, including in this article, student test scores correlate more closely with demographic factors such as family income, home language and parents’ level of educational attainment than they do with a teacher’s location on the three-tier professional scale.

So, what he is saying is that we have this three-tiered-licensing system that has nothing to do with improving test scores, but simply results in more highly paid teachers. No wonder the unions like it, but no one else does. While it is obvious that having excellent teachers is an important factor in improving educational outcomes, paying teachers more for simply having another set of credentials is a silly and ineffective way to spend money.

What should be done? Simply put, rather than wasting money on a broken and irrelevant licensing system, why don’t we judge teachers based on the educational outcomes of their students? Standardized tests shouldn’t be the ONLY or even the dominant measure here, but objective measures are important if we are serious about measuring teacher performance objectively.

New Mexico Watchdog Jim Scarantino takes Attorney General Gary King to task for his unwillingness to prosecute State Rep. Ray Begaye for his outright fraud on travel reimbursements. It is hard to imagine anyone wanting to do business in New Mexico when the man entrusted with enforcing our laws is unwilling to prosecute such blatant cases of law breaking by its elected officials.

There’s no doubt that New Mexico needs to become more economically competitive. Tax policy is one area in need of improvement. I discuss the opportunities in this 15 minute interview. The show airs live on KNAT Channel 23 on Thursday, Nov. 29, 2012 @ 10:00 am

Paul Gessing discusses tax reform on KNAT TV from Paul Gessing on Vimeo.

With everything going on in Washington these days, some important issues are bound to get lost in the mix. One issue that Congress will hopefully tackle soon is to open up the international market for natural gas. New Mexico is a big producer or natural gas and to say the least, prices are down.

Unfortunately, while the US has a surplus in natural gas, the international market in the fuel is just developing for a variety of reasons. The federal government holds one major key to opening international markets like Japan to US exports.

Such openness could be a boon for New Mexico which has been hurt by low natural gas prices. Support of free trade SHOULD be a no-brainer for our Congressional delegation because it is clearly in our self-interest and a truly non-partisan issue. The folks at the center-left Brookings Institute have written a brief explanation of the issue and why free trade is a good thing.

Free trade would be a boon for New Mexico, but powerful interests oppose free trade in natural gas. Where does your Congressman/woman stand?

Full-disclosure, I am on the founding board of the charter school discussed in this opinion piece, but the message is absolutely important and relevant to reforming New Mexico’s education system moving forward. Online learning may not be right for every child, but it can help large numbers of them. We need to get out of the “one-size-fits-all” mentality in education.

Sounds like one of those ridiculous forwarded emails that can easily be debunked on Snopes.com or another site, right? Wrong. This legislation is being voted on in a lame duck Congress as early as next week. It would give nearly two dozen federal agencies unlimited access to your email without a warrant.

Yes, we normally stick to “economic freedom” issues here at Rio Grande Foundation, but this threat from power-hungry “representatives” in Washington is simply too big to ignore. Economic freedom requires a semblance of privacy and the ability to carry on business without government meddling and looking over our shoulders.

Bingaman’s DC phone number is: (202) 224-5521
Udall’s DC number is: (202) 224-6621