There are some important issues on the docket for the ongoing special session. Aside from redistricting itself, the Gov. is pushing for an end to “social promotion” for 3rd graders, something the RGF strongly supports.

Additionally, there are several jobs and economic development issues on the agenda. Various business groups are promoting these initiatives. I have placed a brief explanation of the RGF’s position below the point:

Capital Outlay – Severance tax bonds allow the State to complete capital projects and improve infrastructure statewide.  Authorizing these projects now will keep more New Mexicans working.  If the capital bill passes in September, projects would receive funding around December.  If these projects are not considered until the 2012 session, monies would not become available until May, causing a six-month lag in work.

RGF’s take – Tentative support. The key here is not job creation. After all, we could send construction workers out with shovels to dig and fill in holes if our only goal is “job creation.” We must focus these efforts on building needed infrastructure for the state (the Paseo and I-25 interchange would be a great place to focus resources, but the state may not have the money to start that project at this point)

5% New Mexico business advantage when bidding on contracts with state and local governments – The current statute needs to tighten up residency requirements to ensure that only New Mexico businesses are receiving this advantage.  In the past, other entities—which are not true New Mexico businesses—have qualified and received this credit.

RGF’s take – Generally opposed. While it is understandable that New Mexico’s government contractors would want to have similar preferences as those enacted by surrounding states, policymakers are ultimately sticking taxpayers with the bill. New Mexico policymakers should attempt to move the needle in the opposite direction by encouraging open and fair cross-border competition.

High-Wage Tax Credit – By clarifying that the State’s high-wage job tax credit is to be calculated on the wages and benefits earned by the employee, businesses will continue to receive a predictable credit for hiring New Mexicans in “high-wage” jobs.

RGF’s take – Undecided. Generally, we favor moving away from specific tax credits and carve-outs. We’d like to see a dramatic shift towards less taxation of income and economic growth. This may not be on the table for some time, but we remain concerned about the effectiveness of such credits.

Unemployment Trust Fund – This bill addresses the solvency of the Unemployment Trust Fund without adding over $120 million in taxes on small businesses.  It keeps the current employer contribution rate stable for at least one more year, so the Governor, lawmakers and industry experts can determine the best approach to achieving a predictable and fair contribution schedule in the future.

RGF’s take – Supportive. The entire unemployment system needs to be revamped, but if policymakers can restore solvency without raising taxes, this is a good step.

(Albuquerque) The Rio Grande Foundation is again tracking all the legislation introduced in the 2011 legislative session through its recently launched NewMexicoVotes.org Web site. RGF launched the site with the opening of the 2008 special session in order to provide a more transparent window for New Mexicans to follow what happens in state government. The site www.newmexicovotes.org is free and open to the public and will be updated with votes from the 2011 special session.

With plain English bill information, the site also reveals the missed votes of every legislator; links that show everyone who has donated to each legislator and the amount of each donation; and a whole host of features that those who want to track what happens in Santa Fe will find useful. It even features House floor votes, which are not available online at the state legislative Web site.

Users of the site will be able to interact with each other, commenting on legislation as it moves during the session.

Paul Gessing, President of the Rio Grande Foundation, said of the new public service, “With more alleged corruption in New Mexico making national headlines, the need for more transparency in state government is becoming ever increasingly important. ‘Votes’ is part of our organization’s efforts to bring more transparency and accountability to New Mexico state government.

We want everyone to be able to find out, with a few clicks of a mouse, what his or her legislator is doing, to be able to sign on and read plain English descriptions of what each bill does in a way that the average person can understand, and know immediately what our tax money is being spent on, or whether the bill increases or decreases taxation, regulation, or government transparency.”

Gessing noted that among the most important features of the site is its “missed votes” report which allows users to determine how often their elected official is missing votes in Santa Fe. This report is available here: http://newmexicovotes.org/MissedVotes.aspx Said Gessing, “There are potentially-legitimate reasons for legislators to miss large numbers of votes (such, but not limited to, the family illness that caused Sen. Kernan to miss 180 votes in 2011), but it is something voters should be aware of and follow up with their legislators on.”

The Albuquerque Journal’s Washington correspondent Michael Coleman recently had an excellent article on the various trade bills now being held up by the Obama Administration. The Administration is now sitting on trade agreements with South Korea, Colombia and Panama because of something called Trade Adjustment Assistance (TAA).

Basically, TAA is a payoff ($1.3 billion in 2011) from the rest of us taxpayers, to those workers who have supposedly been impacted negatively by free trade. Disregard the fact that free trade benefits everyone, as Adam Smith pointed out many years ago:

It is the maxim of every prudent master of a family, never to attempt to make at home what it will cost him more to make than to buy.. . . If a foreign country can supply us with a commodity cheaper than we ourselves can make it, better buy it of them with some part of the produce of our own industry, employed in a way in which we have some advantage.

With Obama holding up job-creating trade agreements, it is no surprise that Democratic Sens. Udall and Bingaman as well as Lujan and Heinrich all want their payoff for going along with the agreement. Sadly, even Rep. Pearce (at least as quoted in the article) isn’t completely opposed to TAA.

These trade agreements would be a shot in the arm to the US economy. The fact that Obama is sitting on them is the amusing but obvious result of big-labor’s influence. Republicans and Pearce need to strongly support these agreements while opposing the wasteful spending inherent in TAA

From listening to the concerns of New Mexico legislators who are dedicated to preserving our state’s 49th ranking in K-12 education, one might think that Gov. Martinez’s plan to end social promotion was part of a harsh right-wing agenda to keep kids trapped in 3rd grade. Nothing could be further from the truth and it is not just conservative Republicans (and the Rio Grande Foundation) that support ending social promotion (the term is used to describe the promotion of students from grade to grade regardless of material mastery).

How about that noted right-winger, former President Clinton? In the introduction to this report, he said “I have fought for excellence, competition, and accountability in our nation’s public schools, with more parental involvement, greater choice, better teaching, and an end to social promotion.”

And then there is the American Federation of Teachers which said in a union-published report, Passing on Failure: District Promotion Policies and Practices:

The practice of social promotion contributes to the very problems that can make it seem necessary. Promotion, in the absence of satisfactory academic performance, perpetuates academic failure by teaching students that effort and achievement are not important and that objective standards can not and will not be enforced. It forces classroom teachers to deal with an impossibly wide range of student knowledge, background, and readiness. And it denies students both the classroom and remedial resources that could help them reverse the pattern of academic failure.

Eliminating social promotion would seem like a “no-brainer,” but lack of brains is one reason why we have performed so poorly as a state for so long. Failing our kids is unacceptable. The special legislation provides a great opportunity for the Legislature to move our state a step closer to educational success.

Discussed these topics with the guys at “Framers of the Future” on AM 1550 this weekend. Click here to listen. My interview starts in the second segment (about 10 minutes in).

A few weeks ago we started posting payroll data for New Mexico’s largest cities. We have received data from the largest New Mexico cities minus the troubled community of Sunland Park. Go to the web page and click on the city you are interested in finding salary data for.

It is good to have your arguments verified by reality. The latest of these is the argument that so-called “green” jobs created by government incentives are basically a costly myth. Check out previous postings here and here.

The recent confirmation that “green” jobs are a myth comes from none other than the New York Times. Veronique de Rugy expounds upon and explains the issues uncovered by the Times story over at National Review Online.

De Rugy nicely summarizes the issues with government job-creation efforts, saying:

This story shows once again that the government can’t pick winners and losers and successfully create green jobs — or any other kind of jobs. Government can’t create sustainable jobs, and when they do, or even when they try and fail, it is at the expense of taxpayers, who are left footing the bill. Unfortunately, administration after administration refuses to learn the lesson.

Of course, we in New Mexico knew this already. But when it comes to the Environmental Improvement Board’s carbon cap, we still need to get the green jobs myth taken care of.

We always hear about the horrors of fossil fuels (the Four Corners power plant being one prominent local example). Unfortunately, these same so-called environmentalists refuse to acknowledge the many ways in which coal, oil, and natural gas improve our lives every day.

My friend Marita Noon expounds upon this and explains how fossil fuels are more important than ever — saving large numbers of lives — in natural disasters like the recent hurricane that hit the East Coast. We fully appreciate the importance of reliable electricity when power is knocked out for several days and mobility is never more important than when we are fleeing destruction.

Ironically, considering his negative views on fossil fuels, President Obama’s recent bus tour greedily sucked up enough fossil fuels for thousands of Americans.

I’ll be on Bob Clark’s show on 770 KKOB on Friday morning from 9am to 10am to discuss the Rail Runner and our recent paper which outlines reasons to shut the train down.

There are surely going to be at least a few critics and one of their critiques will likely be the old saw that “no transit system makes money,” so why should we worry that fare box revenues cover only 13% of the system’s costs. Well, I found this interesting data online which shows the various revenue/expense ratios associated with various transit systems nationwide and worldwide. Surprisingly enough, some systems overseas do better than break even and no system is as costly as the Rail Runner.

Call in and share your thoughts about the Richardson Railroad!

It is amazing how consistent the Obama Administration has been in opposing free markets and increasing the size and scope of government. The latest move in this direction is its effort to stop the proposed merger of T-Mobile and AT&T.

Businesses are constantly searching for ways to provide their customers with more and better services (generally at a lower cost) in a competitive economy. And cell phone service providers are a competitive area of the economy as this list of the dozens of cell phone service providers nationwide illustrates.

I’m not even sure what the politics of this decision might be. The Communications Workers of America (supporters of Obama) supports the merger and argues it will create 5,000 jobs. We’ll have to see how this plays out, but there is no doubt that Obama is not changing his stripes (as did Clinton) to achieve electoral victory in 2012.

Given the recent fire season, I think it is totally appropriate to allow localities to ban fireworks within their borders. Legislation along these lines is going to be considered in the upcoming special legislative session.

Of course, we also know that our schools are failing, so it is hard to find fault with the Gov’s recent decision to place a ban on 3rd grade social promotion on the “call” for the upcoming session. This wouldn’t have been necessary if Majority Leader Michael Sanchez had allowed the bill to go to the floor during the 2011 regular session, but that is another story.

The success of our kids in the classroom is at least as important as a fireworks ban, right?

Advocates of the Rail Runner and other government-run rail systems like Amtrak love to argue that taxpayers should pay for their preferred mode of transportation because transit doesn’t make money and because it wouldn’t exist without subsidies. Well, in the case of the Santa Fe Rail depot, the Rail Runner’s bullying tactics could cost 25 people who work for a functioning, private-sector railroad, their jobs.

Sure, the Santa Fe Southern is using (maybe owns) the tracks and station and was there first, but who is a mere private company to stand in the way of the mighty State? I sincerely hope that Gov. Martinez acts to rein in the culprits before another business goes under due to government overreach.

Make this the 11th reason to shut down the Rail Runner.

If the answer is to increase inflation, you’re probably asking the wrong question. That is my opinion and it is also the opinion of syndicated economist Robert Samuelson. One of the curious points here, however, is that I believe that we are already having inflation because inflation simply means an increase in the money supply.

Samuelson implies in his article that he means the actual increase of prices that usually results from inflation. Of course, with our current weak economy, the prices of many goods is not increasing, thus leading some to believe that inflation is not happening.

The “fact” that prices are not increasing according to the government data has led some to argue that inflation would be a good thing. True, rising prices would be a sign that the economy is growing, but it would be a result of growth. Inflating the money supply has certainly not led to economic growth.

In other words, while I quibble with Samuelson about definitions, he is basically correct. Inflation is not going to help the economy.

I’ve been out of the action this week at the annual State Policy Network meeting. Think tank leaders from all 50 states are here and we’re talking policy ideas and exchanging successes and failures. Lots of people from DC are still reeling from the earthquake and now see a hurricane bearing down on their homes.

Thankfully, we in New Mexico are relatively free from natural disasters. And, despite Paul Krugaman’s view that what America needs is an alien attack, the fact is that the Broken Window fallacy still holds. Natural disasters (or unnatural ones for that matter) are bad. Read more on the topic and the recent dust-up on the issue over at Reason.

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: