Awhile back, I discussed the federal stimulus and the use of those stimulus dollars to purchase LED lights which are more energy efficient than traditional light bulbs used in traffic lights. The cost to taxpayers was $5 million and I figured that, since the deal was already done, I’d heard the last about the issue.

Well, government incompetence and the rush to spend money, supposedly to stimulate the economy, has a funny way of coming back at you. That’s why I was amused to see this article in the Albuquerque Journal which explains that the new energy efficient lights cause a safety problem because they get covered up by the flying snow. Turns out, the heat from traditional light bulbs is actually integral to their operation in the winter.

According to the story, in some areas, public works employees must go out and scrape ice and snow off traffic signals. They recently used an improvised tool made out of a pole and an automotive ice scraper. So, these supposedly “cost effective” and “energy efficient” light bulbs require well-paid government workers to drive their polluting vehicles all over town wiping snow off streetlights every time it snows…..gotta love government!

Unless you have been living under a rock for the past 12 hours, you probably already know that Republican Scott Brown has won the Massachusetts special election and will take the Senate seat formerly held by liberal icon Ted Kennedy. This is most definitely good news for those of us who wish to stop or at least slow down the Obama Administration’s radical domestic agenda, particularly health care reform. That’s because of the political message inherent in the stunning defeat in a very blue state as well as the fact that Brown will provide the 41st vote, thus making it difficult for the Senate to pass legislation along party lines.

This is all extremely important and, if things continue in this way we may see further gains made by Republicans and fiscal conservatives nationwide. But what does it mean for Obama and his health care reform and cap and trade proposals? Simply put, I think it kills cap and trade because there is no way to put enough lipstick on that pig to make it politically attractive, but I think Obama, if he wises up, might have a chance to do something on health care. The key is “if he wises up” and this goes for the rest of his administration because he may very well be dealing with a Republican House of Representatives this time next year.

What path might Obama take forward on health care? Well, first and foremost he should look carefully at the ideas laid out by Whole Foods CEO John Mackey. Another place to go would be the Cato Institute and this article on how the free market can help cure what ails health care.

Basically, rather than handing our entire health care system over to the insurance industry as the Senate bill would have done (that’s according to liberal columnist/economist Paul Krugman), Obama needs to work to restore decisions and responsibility to individuals through a variety of vouchers and the restoration of other incentives that give individuals a greater incentive to control health care costs. If Obama follows some kind of Clintonian “third way,” he may survive this mess, but if he continues down the current path, both he and America will be worse off for it.

I recently penned an expansion of my recent blog posting on temporary tax hikes for the Deming Headlight. Read the article here.

One point that I did not address in the blog posting on certain temporary tax hikes on junk food and soda taxes is the complexity issue. Here are a few excerpted paragraphs outlining the possible administrative nightmare that such taxes would unleash:

Soda and so-called “junk food” taxes are also highly regressive. Worse, they would create an administrative nightmare. After all, potato chips might be a junk food, but are the slightly healthier Sun Chips? How about the fat-free potato chips that have come on the market in recent years? Things can get really complicated and unfair.

Soda taxes also face the same fairness and administrative issues. After all, Gatorade and other sports drinks have a lot of calories and lemonade, orange juice, and chocolate milk actually have more calories for each cup than does regular Coke. Diet sodas on the other hand have zero calories. Which of these items will be taxed? More importantly, once the lobbying heats up and the various interests attempt to exempt their products from taxation, who will answer these questions and how much will it cost to fund a bureaucracy to do this?

According to Governor Richardson’s State of the State address, he’s opposing re-instatement of the grocery tax, so I believe that these narrowly targeted taxes will indeed be the primary targets for Richardson’s “revenue-raisers.”

Jim Scarantino and I have been asked to step in last-second to co-host the program this afternoon. Tune in and give us a call at 505-265-1550. We’ll be talking about the upcoming legislative session, your calls, and whatever else comes to mind. Tune in and give us a call!

Then get out and vote! Yes, while the tax lightning situation may take years to figure out, the fact is that there is an easy way for Albuquerque area taxpayers to cut their tax property tax bills almost immediately.

The Albuquerque Public Schools are asking for a $616 million in additional property taxes. The official election date is Feb. 2, 2010, but early voting for the election began at 8 a.m. on Friday, Jan. 8 and continues from 8 a.m. to 5 p.m., through Friday, Jan. 29, at the following locations:

* Bernalillo County Clerk’s Office Annex, 620 Lomas NW

* APS Building, 6400 Uptown Blvd. NE

* Alamosa Community Center, 6900 Gonzales Road SW

* Don Newton Multi-Generational Center (Taylor Ranch Community Center), 4900 Kachina St. NW.

The ballot language will mislead voters by claiming that passage will “keep property taxes at current levels to fund school construction and renovation,” but the language of course omits the fact that Albuquerque homeowners pay by far the highest property tax rates in New Mexico and those rates have increased dramatically…and what results does APS have to show for it?

As if 25% reimbursements on expenses, interest free loans, and work force training subsidies were not enough, New Mexico is upping the ante in terms of film subsidies. I was quoted extensively in a cover story in today’s Albuquerque Journal outlining some of our concerns about this largesse. I’m pleased to say that film office spokesman Pahl Shipley even attacks the Rio Grande Foundation for not paying enough taxes!

I love unelected bodies like the Environmental Improvement Board (EIB). Their undemocratic nature is problematic enough, but being appointed by the Governor, they serve as nothing more than a gig (undoubtedly a cushy, paid one) for Friends of Bill.

Now, it turns out that the head of the EIB, Gregory Green, is the chief lobbyist for the New Mexico Wildlife Federation. Does this obvious conflict and bias mean that he’ll recuse himself from the proceedings? Of course not! Instead, the Wildlife Federation will simply not participate in the petition process.

With Gay Dillingham, another ardent environmentalist and close FoB on the EIB, it is clear that the fix is in. The only way to stop the EIB from seriously harming New Mexico’s economy is the lawsuit recently filed to strip the EIB of its authority in this matter.

Albuquerque Mayor RJ Berry certainly faced a terrible situation when he took over the reins in December. The budget deficit is $50 million and the previous mayor had locked in $13 million worth of raises for the police and fire departments.

Now, at least in one instance, Mayor Berry is putting a stop to one sweetheart deal put in place by Mayor Marty. The deal was to pay the fire union president $81,000 per year (about $32,000 more than his rank merited). Even if the union sues, this is still a worthy battle for Albuquerque taxpayers because it is a sign that Mayor Berry means business and is not going to coddle government workers in a time of massive budget deficits.

As we at the Rio Grande Foundation have pointed out repeatedly, state and local governments throughout the state suffer from having bloated bureaucracies. Cutting back on this problem may not solve all of Albuquerque’s budget problems, but Berry is doing well by targeting the obviously unfair agreements (including the massive police and fire raises) for cuts.

In case you missed it, the Albuquerque Chamber and several other legislators and business groups have stepped up and are suing to stop the Environmental Improvement Board from placing draconian and ill-advised caps on carbon emissions in New Mexico. More on those caps (and how to fight back) here. This is good news.

Also, the public comment period has now been scheduled for Santa Fe on March 1. The public comments session will run from 10 a.m. to 5 p.m. on March 1, at Rio Grande Room of the New Mexico Regulation and Licensing Department, Toney Anaya Building, 2550 Cerrillos Road, Santa Fe, New Mexico 87505. Comments may be limited to 3 minutes per speaker. Simply put, opponents cannot rely on the courts to stop this crazy train from heading down the tracks.

While I commend the Albuquerque Chamber for taking a stance on the issue, their statement that “if any caps are legislated, they should come at a federal level and be applied to all US businesses equally,” certainly isn’t as firm as it should be. After all, New Mexico businesses are not just competing with businesses in the other 49 states, but also with other nations. More importantly, a carbon cap is either good policy or its not, just come out and say it!

Another question on this is “where is ACI?” They are supposed to represent all New Mexico businesses, why isn’t the statewide chamber on this lawsuit?

Governor Richardson seems adamant in asserting that whatever tax hikes he pushes through during the 2010 legislative session will be “temporary.” Of course, this promise is ridiculous on its face because this is his final legislative session in office and he won’t be around to determine whether the hikes he enacts will be temporary or not. Pretty silly of him to make this promise or for anyone to believe him if he has a 0% chance of backing this up.

Of course, this is not where the silliness stops. According to the morning papers, Richardson is considering “sin” taxes on soda pop, cigarettes, and junk food. So, you are the next governor of New Mexico and, while the economy has improved a bit over the 2-3 years since these “temporary” tax hikes were enacted, you now have to stand up and “cut” taxes. How exactly are you going to sell these supposed tax breaks for tobacco, soda, and junk food?

The reality is that these will be permanent taxes because it will be politically impossible in the future to reduce taxes on products even though they disproportionately consumed by the poor cigarettes and soda. Rather than balancing New Mexico’s budget on the backs of the poor, Richardson (and the Albuquerque Chamber) should focus on cutting New Mexico’s bloated government bureaucracy and spurring economic growth.

If you read the Albuquerque Journal, then you know that their cartoonist, John Trever, is normally spot-on with his cartoons. One recent cartoon from Sunday’s paper in particular caught my eye. That’s because Trever’s cartoon showed the bloat in higher education. See cartoon below:

Of course, our own analyst, Scott Moody, has written extensively on New Mexico’s bloated government bureaucuracy and even pointed out in this study that higher education in particular is a bloated sector of government. See table one of this study.

Notably, Scott Moody who normally resides in New Hampshire is in town right now and will be speaking at a public forum on the issue of government employment, pay, and pensions Tuesday night. More information on that event can be found here. This issue is too important to overlook. I hope you’ll try to come out to learn how we can tackle this problem.

In case you did not pick up a copy of today’s Albuquerque Journal, I wrote in support of smaller schools as one means of improving New Mexico’s K-12 educational system. The proposal was originally put forth by Think New Mexico, another think tank here in New Mexico.

While we certainly don’t always agree with Fred Nathan and his organization all the time, the idea behind smaller schools is sound if policymakers commit to doing it without spending more money (a reasonable possibility). Now, to be fair, smaller schools are not my first choice when it comes to education reform. I’d rather have a total free market with only minimal government involvement in terms of helping the poor obtain educational opportunities. I’d also like to see tax credits or even vouchers.

Smaller schools by their very nature would allow for greater educational options for parents and students. Is it the ultimate solution to education reform? No, but we can’t continue to tolerate 50% graduation rates in New Mexico and smaller schools, if adopted, would likely improve our results.

The editorial page of the Washington Post is not normally my preferred place to go for free market analysis of health care and other major issues of the day, but Charles Lane, a member of the editorial board, seems to have a reasonable grasp on the realities of health care reform. His recent article, which appeared in the Albuquerque Journal starts out with a discussion of the supposed problem of “diagnostic creep.” In the words of Lane, diagnostic creep happens when society medicalizes imperfections that formerly were either not defined as disease or thought to be too minor and/or too intractable for treatment.

Sometimes, this is a real problem and it unnecessarily drives up costs. But, as Lane points out “diagnostic creep sounds bad, but it obviously can be very good” because it has helped people with a whole host of real medical issues.

Ultimately, as Lane points out, government boards that might be set up to determine whether certain procedures are necessary will result in a political firestorm or, if they are too lax, will not result in savings. Unfortunately, Lane does not make the next step and call for an end to the whole charade of government-directed health care, but he is certainly on the right track.

Rio Rancho has done some very silly things when it comes to development recently. Take the money hemorrhaging Santa Ana Star Center…please!

Now, the City is seriously considering using tax incentives known as TIDD’s to spur construction of a 12-14 screen cinema. While the need for a theater is debatable and the use of TIDD’s for this project is questionable, the real kicker for taxpayers is that, as the Journal story points out,

The resolution is contingent upon final approval from city staff and Southern Sandoval County Arroyo Flood Control Authority of a plan to realign an arroyo that bisects the property. Jimenez hopes the arroyo plan will be approved by mid-January. Work to realign and build a diversion channel for the arroyo is expected to cost about $11 million.

So, let me get this straight, taxpayers will have to subsidize this project to the tune of $11 million, not to mention the TIDDs, in order to build a movie theater and potentially (there is no guarantee here) some office space and hotels. This certainly seems like the kind of project that is destined to cause additional financial problems for Rio Rancho. Hopefully, Rio Rancho City Council decides that this $11 million realignment channel is “a bridge too far.”

Here is page two of the thousands of pages of paper documents that the Roswell Public Schools saw fit to provide the Rio Grande Foundation by way of information on their use of taxpayer money.

Transparency is a new watch-word when it comes to giving citizens the ability to find out more about what their employees in government are up to. We’ve made some progress in recent years. For starters, legislative floor sessions are now available for your listening pleasure and you can watch the Senate proceedings from a statonary camera. Also, Rep. Janice Arnold-Jones has opened committee meetings to cameras.

Recently, the New Mexico Contracts Database went live with all state contracts over $20,000 online. This includes a listing of Active Statewide Price Agreements. So, we are making some progress, but before we mistakenly believe that government officials are happy to share what is happening with taxpayers, let me share the Roswell Public Schools “page of the day” with you.

Today’s page, which can be found below, is one of literally thousands that the Rio Grande Foundation received from the Roswell School District in a series of statewide requests for information on how they are spending your money. We were mailed a stack of these papers with sub 6 point font. Government bodies have this information in electronic format, but they were not willing to share this with us. Look for more “pages of the day” from the Roswell Public Schools in the days ahead. Click here for page 1.

If you have a way to cheaply and accurately transcribe this information into an electronic format, please contact us at: info@riograndefoundation.org. In the meantime, perhaps you can help us get the Roswell schools to get us the data in a useful format.

Jonah Goldberg is normally spot-in with his writing, but I particularly enjoyed this piece which also appeared in the ABQ Journal.

As Goldberg eloquently points out, capitalism is blamed for ever wrong, every human foible, and seemingly every problem humanity faces, but never gets credit for all the things that provides us and for bringing billions of Indians and Chinese out of poverty. More importantly, when capitalism is blamed, the problem is not usually “the system,” but human frailties like greed and theft that would persist regardless of what economic system we lived under.

In case you missed it, Jim Scarantino has been making waves recently…especially over the airwaves. For starters, right before the Holidays, Jim appeared on Bob Clark’s show on 770KKOB AM. Listen to that here.

Also, Jim’s new story on the “phantom zip codes.” Channel 4’s Stuart Dyson had Jim on the newscast to discuss his findings.

Lastly, Paul Gessing and our budget analyst Scott Moody who will be in town next week (including an event on Tuesday evening) will be on Bob Clark’s show on Tuesday morning from 9am to 10am. Tune in!

The folks over at the New Mexico Independent have created a new forum over at their website for policy leaders and the general public to discuss the issues of the day. According to the folks at the Independent, “Every week we’ll ask a different question and solicit responses from a diverse group of New Mexico thinkers, pundits and other observers of the state’s political landscape. We’ll add more responses as they come in, so keep checking back to see how the conversation progresses.”

I am pleased to have been asked to participate in this as a panelist in the very first edition of the forum. You can read my comments and the comments of others here. As it says, this is an evolving, interactive project, so check back regularly.

During his failed presidential bid, John Edwards (remember him?), frequently spoke of “two Americas.” This was supposedly a metaphor for the “haves” and the “have-nots” for whom he was fighting. While his populist rhetoric did not resonate with enough Democratic voters to get him the nomination, Edwards does have a point. The problem is that the “two Americas” are not rich and poor, but government workers vs. private sector workers. One group is doing quite well in the current economic downturn while the other has seen drops in salaries, job losses, and overall living standards.

The Rio Grande Foundation has done a great deal of work on the issue. See opinion pieces here, here and here. Unfortunately, as commentator Paul Jacob points out, the gap between public and private sectors continues to grow. As Jacob writes:

A recent Rasmussen poll shows a stark difference. Government workers see the economy getting better, while those in the private sector see it getting worse.

Different perspective or different reality?

Well, during this economic downturn, 6 percent of those in the private sector have lost their jobs, while public sector employment has dipped only 1 percent.

Stuart Varney with Fox Business News says, “If you’re a government worker, you don’t lose your job. You have a very rich and generous pension. You have a very generous health care plan. . . . You’re protected from the real economy.”

He also points out that, “[T]he three wealthiest counties in America . . . are all suburbs of Washington, DC . . . full of very well paid government employees and lobbyists. They are the beneficiaries of a great deal of taxpayer largesse.”

In a column for the Washington Examiner, Michael Barone notes that unions overwhelmingly support Democrats, contributing $400 million in the last cycle. Union members account for only 7.6 percent of the private sector, but a whopping 40 percent of public employees.

This leads Barone to conclude that there is a partisan interest in protecting public sector jobs. He writes, “In effect, some significant proportion of the stimulus package can be regarded as taxpayer funding of the Democratic Party.”

Whatever happened to “we’re all in this together”?

If you are interested in arming yourself with information on this problem, Scott Moody will be discussing the issue of New Mexico’s bloated government workforce at an RGF-sponsored event on Tuesday, January 12. More information is available here.

If you haven’t been shopping since January 1 (or even if you have, but didn’t look at your receipt), you may not have noticed that Albuquerque gross receipts taxes were recently reduced to 6.625% from 6.875%. This is a New Year’s present of .25% off your purchases.

At first, I didn’t know where the tax cut was coming from, but then I realized that it took until November for voters to approve extension of the .25% transportation tax. While we disagreed with extension of the tax, the fact that City Council took so long to extend the tax has allowed it to lapse (I believe this will be until July 1, 2010). Anyway, enjoy the tax cut while it lasts because if Governor Richardson gets his way, we’ll all be paying higher taxes soon.

When will those bumblers at the Obama Administration and recovery.gov get it right? First, the Rio Grande Foundation’s investigative journalist Jim Scarantino found that the Administration had listed several mythical New Mexico congressional districts that had supposedly received stimulus funds. While the Administration dutifully pledged to resolve the situation, they appear to have failed miserably.

Scarantino has now uncovered another problem, this one being “phantom” zip codes that are supposed to have received stimulus money and jobs created in them.

As Scarantino writes:

Closer examination of the latest recovery.gov report for New Mexico shows hundreds of thousands of dollars sent to and credited with creating jobs in zip codes that do not exist in New Mexico or anywhere else. Moreover, funds reported as being spent in New Mexico were given zip codes corresponding to areas in Washington and Oregon.

The recovery.gov site reports that $373,874 was spent in zip code 97052. Unfortunately, this expenditure created zip jobs. But $36,218 was credited with creating 5 jobs in zip code 87258. A cool hundred grand went into zip code 86705, but didn’t result in even one person finding work.

None of these zip codes exist in New Mexico, or anywhere else, for that matter.

It boggles my mind sometimes. The ABQ Journal’s Winthrop Quigley asserted in this recent article that “the Obama administration has yet to increase taxes on anyone despite the president’s objections to the Bush tax cuts.” The article in general is blog-worthy because Quigley seems to be saying that “taxes don’t matter” as they relate to economic growth, but I will focus here on the tax issue. Did Quigley completely forget about Obama’s massive tobacco tax hikes? Most of the impact of these tax hikes, by the way, impact low income taxpayers.

But this isn’t a tax policy post, I’m talking trade war here. Of course, tariffs are simply a tax placed on imported goods. So Quigley is wrong again. The Obama Administration earlier this year levied a 35% tax on Chinese tires.

Now, the newspaper is reporting a third likely tax hike, this one on pipes used in the oil and gas industry and imported from China. Oil and gas being an industry of particular importance to New Mexico, I’m sure that our own New Mexico congressional delegation will stand up to the Democratic Party’s staunch allies, the United Steelworkers and support this vital home grown industry (yeah right!) against this tax hike.

Anyway, perhaps someone who hasn’t published a letter to the editor in the Business Journal in the past week can alert Quigley to these tax hikes? Hopefully fiscal conservatives will unite in opposing this dangerous trade war as well.

Happy New Year!