The most recent episode of “Speaking Freely” has been uploaded. This week, Jim interviews RGF Board member Vic Bruno regarding his upcoming event on June 24. For the rest of the show, Jim interviews District 5 City Council candidate Dan Lewis.
Lewis who is running against Councilor Michael Cadigan discusses why he is running to represent District 5 and his overall vision for the city.

When I picked up this morning’s Albuquerque Journal, I was stunned to see the headline, “Workers Sue over ‘Wage Tax.’” The story detailed a lawsuit being brought against the state by AFSCME, the American Federation of TEachers, the NEA, and other uniions who apparently feel that their members should be exempted from both economic reality and state law.
Certainly, New Mexico’s budget faces cuts given the tough economic times and the Legislature, aware of this fact and not wanting to raise taxes or lay off large numbers of government workers, decided to increase the amount government workers must contribute to their pensions. Certainly, this would not raise any eyebrows were similar cuts made in the private sector. After all, businesses have limited resources and when the economy goes south, layoffs, wage freezes, and benefit reductions are part of life.
But unionized government workers don’t live in the real world. Rather, they know that governments can be influenced politically — making it doubly impressive that the Legislature chose to place part of the burden for tough economic times on this politically-powerful lobby. Unfortunately, while it seems doubtful that the unions have much of a case, it would seem that their suit is designed to raise the costs, both political and financial, of such legislative actions by fighting the battle in court.
We at the Rio Grande Foundation have done a great deal of work on the issue of New Mexico’s bloated and overpaid government work force. Studies can be found here and here. Hopefully legislators stick to their guns, and realize that New Mexico’s bureaucracy remains bloated and a prime target for future cuts. There can be no doubt that well-financed unions — financed with New Mexicans’ taxpayer dollars — will fight to avoid any cuts and will do so every step of the way because they don’t live by the same rules we do.

(Albuquerque) – Victor Bruno is one of the best-known and most respected commercial real estate brokers in Albuquerque and the entire state of New Mexico. He has been involved in commercial real estate in Albuquerque since 1973. Bruno will be discussing the local real estate marketplace and how national and global events are impacting the industry. A member of the Rio Grande Foundation’s board of directors, Bruno will especially emphasize the public policy decisions that have led us to the current situation.
• What: Discussion of current and future issues facing Albuquerque’s commercial real estate market with Victor Bruno
• When: Wednesday, June 24 from 7am to 8:15am;
• Where: The Albuquerque Museum located at 2000 Mountain Road, NW at the edge of Old Town Albuquerque;
• Cost is $10 payable at the door or at the Rio Grande Foundation website, continental breakfast will be provided.
Bruno’s presentation, “Don’t worry, be wary,” will help the general public and the practitioner alike learn the answers to the following questions.
• Who Are the Players? …. A description of who the many players in real estate are and what roles they play. (this will include government and politicians as players);
• What Happened? …. A reflection on the bubble years and how we got there;
• Where Are We Now? …. An update on present conditions (to include not only economic stats on real estate but a brief run down on local government overreach – issues like impact fees, smart growth, downtown revitalization, west side mess, Mesa del Sol and Suncal);
• Where Are We Headed? …. Nearly everyone says commercial real estate is about to tank and if so, why?
• What should we do next?
To attend this event, please reserve your seat for $10 at our website at http://www.riograndefoundation.org/pg_di.html. If you’d like to pay at the door, email us at rsvp@riograndefoundation.org or call us at 505-264-6090.

Recently, John Charles visited Albuquerque and presented on the drawbacks of Portland’s transportation and land use model. His powerpoint presentation is available here. As if to validate the timeliness of this presentation and the fact that many policymakers consider Portland to be the model for the rest of America, columnist George Will, writing in Newsweek recently, discussed Obama’s transportation Secretary Ray LaHood and the Administration’s emphasis on Portland-style rail and land-use planning.
Will writes, in a passage that backs-up Charles’ belief that the Portland model is really about controlling the rest of us:

For many generations—before automobiles were common, but trolleys ran to the edges of towns—Americans by the scores of millions have been happily trading distance for space, living farther from their jobs in order to enjoy ample backyards and other aspects of low-density living. And long before climate change became another excuse for disparaging America’s “automobile culture,” many liberal intellectuals were bothered by the automobile. It subverted their agenda of expanding government—meaning their—supervision of other people’s lives. Drivers moving around where and when they please? Without government supervision? Depriving themselves and others of communitarian moments on mass transit? No good could come of this.

Hopefully, Albuquerque residents will keep Will and Charles’ admonitions in mind when they head to the polls in the city election this October.

Speaking Freely airs on AM 1550 on Saturdays from 9am to 10am. This week, Victor Bruno, member of the Rio Grande Foundation’s board of directors and an expert on commercial real estate will join Jim from the NTU conference in Washington to discuss his upcoming event in Albuquerque. Reservations are $10 and can be made for the June 24 event can be made here.
Jim will also be interviewing Dan Lewis a candidate for the District 5 City Council seat now held by Michael Cadigan. Jim and I interviewed Cadigan a few weeks ago on the show. That episode is available here.
Tune in! And if you miss the show live, check back here for the podcast on Monday

The Albuquerque Journal has done some excellent reporting on the state’s supercomputer and an excellent new study by the Legislative Finance Committee. Unfortunately, such detailed reporting has not been seen on a statewide basis.
So, in an effort to explain the economics of the supercomputer and just how little sense it makes, I wrote an op-ed that appeared in the Las Cruces Sun-News. In summarizing the case against the supercomputer, I wrote:

The fact is that businesses and universities that expect to benefit from such projects should form their own privately-financed consortiums if a supercomputer is indeed a worthwhile enterprise.
One reason for this philosophy is that private businesses putting up “real” money — whether that is $13.8 million or millions more — have a very real incentive to make such a costly investment only if it is absolutely necessary and will lead to real productivity gains.

Having spent trillions of dollars on economic stimuli and bailouts all while unemployment has continued to spiral out of control and jobs still scarce, it will be interesting to see what President Obama and Congress do regarding the estate or death tax. According to a new study (see release here), New Mexico could add some 8,930 new jobs at no cost to taxpayers if the federal estate tax were repealed. The full study is available here.
Not all taxes are created equal. The death tax disproportionately impacts small business owners and others who create large numbers of jobs. Eliminating this tax would go a long way towards promoting real job growth in New Mexico and around the nation.

Jim Scarantino and I sat down this weekend with RJ Berry to discuss his candidacy for Mayor of Albuquerque. The interview is available on the Foundation’s website.

Last week, the Rio Grande Foundation hosted a events with John Charles of the Cascade Policy Institute. Among the points Mr. Charles made in his presentations was the fact that transit is not always “greener” than automobiles. After all, transit vehicles of all types are large and consume large quantities of energy both to construct (in the example of rail projects) and to operate. If these trains and buses are not consistently full, they will not be as efficient as they could be.
As if to second Mr. Charles in his presentation, Yahoo’s website today offered this story which also argued that transit is not always green. These are not the findings of a right-wing think tank, rather the scientists’ findings were published in the British Journal Environmental Research Letters.
Hopefully Mayor Marty and Albuquerque’s City Council will pay attention to this study before building a streetcar. It’s too bad Governor Richardson didn’t question the supposed “green-ness” of passenger rail before we got the RailRunner.

Most rational people might think that in today’s economy, with 9.4 percent unemployment rates, that workers would be happy to see a business putting their fellow laborers to work. That would not be the case for Carpenters Local No. 1319 of Santa Fe.
Instead, the union is protesting (subscription required) the fact that Lone Sun Builders is doing renovations on the Hotel St. Francis using non-union labor. The owner of Lone Sun Builders, the heroic Chet Karnas, said of his company and its workers: “No single individual in this company makes less than $11 an hour. Not one person. He also provides an ample benefits package including health care, a 401(k) plan with matching contributions, and life insurance.”
He and two other Lone Sun employees held a banner that said, “Employee benefits and great wages. Our benefits: Health, dental and life insurance. Health reimbursements, pension and retirement. Sounds like a real shady outfit to me. The unions hate nothing more than employers who treat their workers right without giving them a cut of the action. Here’s to you Mr. Karnas! Oh, and next time I recommend a hotel in Santa Fe, I’ll be sure to recommend Hotel St. Francis.

Jonah Goldberg makes several good points about the term socialism and its application to the economic and political situations we now face. Of course, as Goldberg points out:

The government effectively owns General Motors and controls Chrysler, and the president is deciding what kind of cars they can make. Uncle Sam owns majority stakes in American International Group, Fannie Mae, Freddie Mac and controls large chunks of the banking industry.

Our economy may not be completely socialist, but we are sufficiently socialist to make Hugo Chavez jealous. Facts are facts and we are moving rapidly in the wrong direction — at least if individual liberty is important.
My only quibble with Goldberg is that he attempts to paint socialism (or corporatism) as creatures exclusively of the left and the Democratic Party. He fails to appropriately castiate Republicans, particularly GW Bush for his massive spending and expansions of government into so many new areas of our lives.

If you are not already a listener, this is a good weekend to check out our radio show “Speaking Freely” from 9 to 10am on AM 1550 (listen here online). Mayoral candidate RJ Berry will be on the show. Berry had this column in the Albuquerque Journal in which he decried Mayor Marty’s having “grown the city budget by almost 50 percent between 2003 and 2007” and policies that Berry says have “put the city’s financial future, our public safety and our quality-of-life projects on shaky ground.”
Check back for upcoming interview with Richard Romero and Mayor Marty — that is if Chavez decides to run…

Remember the question mark guy who appeared on those late-night commercials pushing all those “‘free” government programs that would allow you to get Uncle Sam to pay your tuition or for some money-making scheme? Well, he’s come up with a new “commercial” relating to the federal bailouts:

If you haven’t already seen today’s Albuquerque Journal, check out my column on the State Investment Council. While we have certainly critiqued the SIC’s investment practices in the past, this column focuses on reforms moving forward and how New Mexicans would best benefit from these massive pools of money.
Reform ideas range from simply removing the SIC from the control of one politician (The Governor) to the more radical option of returning significant portions of the money to the citizens of New Mexico as is done in Alaska. Regardless of what is done, something needs to be done. Because this money seems to come from nowhere — it comes mostly from oil and gas — the average citizen and even politician seems to treat it as being “easy come, easy go.” That attitude needs to change and some systematic changes will stop the waste and abuse that has taken place recently.

Yesterday, Tom Bowles, Chairman of the N.M. Computer Applications Center Board had an opinion piece in the Albuquerque Journal. In his piece, he criticized the Legislative Finance Committees recent studies of the Supercomputer. The LFC study can be found here.
The problem with Bowles’s article is that he never really addresses the core issues with this supercomputer, that is it’s high cost (a total of $36 million over six years)relative to its relatively small benefit as previously pointed out in the Journal:
• The supercomputer unveiled in January 2008 hasn’t produced the kind of revenue projected. Including the purchase price, the operation has cost the state $13.8 million, but has taken in only about $300,000 in cash;
• The project’s ability to raise enough money to operate indefinitely is in question. Three research universities, two national laboratories and one nonprofit have used the supercomputer at no cost since July 2008, and the supercomputer isn’t currently generating any revenue.
Bowles claims that the supercomputer will be self-sustaining once taxpayers have coughed up $36 million, but he never explains just how taxpayers will experience any real benefit from this costly project. That is the first thing that any government program should be justified upon, not an afterthought.

Water is a big issue here in New Mexico. As I’ve pointed out in the past, while New Mexico’s urban water users are constantly admonished to conserve and reduce usage, the real issues are agriculture (which uses 75% of New Mexico water) and simple inefficiency.
As the National Center for Policy Analysis points out in their bulletin — which relies in part on RGF data — increased privatization of water is a global phenomenon that can result in significant cost savings for consumers and a more rational distribution of water. Until water is priced at something close to market rates, we’re going to suffer from “shortages” and less than optimal water distribution which will ultimately hurt our economy.

The United States Postal Service is a truly socialist enterprise. Anyone who has to deal with the Post Office on a regular basis, especially if you have to go to the actual offices themselves, is aware of this. Of course, as has been well-publicized in recent months, the Post Office now faces massive financial problems.
Of course, in a socialist agency such as the Post Office, politics plays an incredibly large role. As this article from today’s New York Times illustrates, when it comes to cost savings, politics makes increased efficiency very difficult to achieve. With USPS facing a $6.5 billion deficit, “the agency continues to spend $46,000 a year for a challenging small-plane route that serves about 20 addresses secluded in the roadless wilderness of the northern Rocky Mountains.”
Inevitably, the story goes on “John E. Potter, the postmaster general, began getting calls, letters and e-mail messages from the owners of ranches on the river. People showed up on Capitol Hill in rafting sandals and cowboy boots.
Then, just before Mr. Potter was about to face a conference call with the four members of Idaho’s Congressional delegation, he decided that the high-flying weekly route through the Frank Church-River of No Return Wilderness, in place for more than half a century and the last air route into a wilderness area in the continental United States, should best be left as is.”
So, 20 or so people receiving a massive government subsidy succeeded in killing a reform that would have saved this so-called business money in it’s ongoing effort to break even. A private company, on the other hand, could easily make the decision to not serve such high-cost customers. Unfortunately, America is moving rapidly towards greater politicization of health care, energy policy, and manufacturing to name just a few areas of the economy that will become much less efficient under government control.

In case you didn’t already know it, Portland-based transportation and government planning expert John Charles will be coming to Albuquerque and Santa Fe for events on Tuesday and Wednesday. If you are interested in hearing Mr. Charles discuss the issues and talking to him on the radio, listen to “Speaking Freely” from 9am to 10am on AM 1550.
Hopefully you can make one of the events with Mr. Charles this week, but check out the radio program as well.

In today’s Albuquerque Journal, I was rather perplexed to see the headline ‘Light Rail’ on rubber about the latest efforts by our friends at MRCOG to put more Albuquerque-area residents into transit while removing them from their cars. My first thought was “They just won’t leave this trolley issue alone!”
Then I read the story and found out that what is really being discussed is something called Bus Rapid Transit. Done right, bus rapid transit can be a much more cost-effective way to move people than rail systems such as the Mayor’s streetcar or even the Rail Runner. In fact, I suggested bus rapid transit as an alternative to the Rail Runner, but Lawrence Rael downplayed it as a solution.
The fact is that we already have a form of bus rapid transit in Albuquerque — the Rapid Ride bus. Before we close off any road lanes to use them for buses only, careful studies need to be done about potential ridership, a cost-benefit analysis, and whether simply allowing the buses to alter red light timing might be more effective. Nonetheless, at least it is a step in the right direction.

It is gratifying to see politicians continuing to embrace fiscal responsibility when they run for office, even while the politicians that occupy office behave in just the opposite fashion. One exhibit of this is Albuquerque Mayoral candidate Richard Romero’s article in today’s Albuquerque Journal. In the article he touts his fiscal responsibility with nuggets like: “All current operational budgets should be based on realistic revenue estimates and not influenced by an incumbent’s wish list of high-profile projects that we can’t afford,” and “Future operating costs should not exceed gross receipts tax revenues.” These are sentiments with which I think we can all agree and I hope that no matter who is elected to City Council and as Mayor, I hope they stick with them. All too often, candidates campaign on fiscal restraint only to govern as big-spenders.
I don’t have any firsthand knowledge of Richard Romero’s fiscal track record and whether his statements should be taken as indicators that he will not push the taxpayer-financed streetcar and arena projects, but it is gratifying to see that fiscal restraint is going to be front and center in the 2009 Albuquerque Mayor’s Race.

I hope you had an enjoyable Memorial Day weekend. We’re back to work here at the Rio Grande Foundation and I happened to check the Washington Post website to find this story by Sebastian Mallaby. He writes about the ramped-up efforts on the part of the Chinese to find a way to stop relying on the dollar. I’ve written previously about the debt we’re leaving our children.
This debt is of course of concern to our economic future, but, as Mallaby writes, “If the greenback declines, China’s government stands to lose a fortune.” Having so much money tied up with the drunken sailors in Congress and the White House cannot be a comfortable situation (I know I’m not comfortable with it), so the Chinese have been looking for ways to get out from underneath the dollar without harming the investment they already have made in the currency.
I don’t know if the Chinese can square that circle, but if they simply decide to stop digging the hold that they’re in by not buying any more dollars, we’ll be in serious trouble.

We at the Rio Grande Foundation have believed it for a long time, and it only makes sense: giving parents and students greater control over education decisions improves results. Of course, if you’ve been following the debate, you may also be aware that the Obama Administration and Congressional Democrats are dismantling choice programs. The problem being that regardless of results, teachers unions, a powerful voting and fundraising ally, can’t stand school choice.
We need educational choice in New Mexico and nationwide. Regardless of political party affiliation, improving educational outcomes and creating more diverse opportunities for students should lead to choice-based reforms.

Back in early March, the Albuquerque Journal published a glowing editorial about New Mexico’s supercomputer. I responded to this with a blog posting saying, in essence, that the jobs produced by the computer were minimal and that taxpayers are still getting ripped off.
How quickly times change! On Sunday, the Journal changed its tune completely with this front-page, above-the-fold story which detailed how the computer is “living on state handouts” and explaining that “$115 million will be required over a seven-year period for recurring and nonrecurring costs.” Yesterday, the Journal continued its full-court-press against the supercomputer with this editorial which argued that the state needs to “do better” when it comes to this deal or we might have to “pull the plug.”
For the record, we first criticized the supercomputer back in 2007 and included it among the porky items in our 2008 Piglet Book. Too bad no one consulted us before embarking upon this boondoggle.

The Wall Street Journal had an excellent article about the negative impact of high marginal tax rates yesterday. The article discussed misguided efforts by politicians in California, Connecticut, Delaware, Illinois, Minnesota, New Jersey, New York and Oregon to increase income tax rates on the highest earners within their respective borders. While politicians facing massive, spending-induced budget deficits are certainly eager to get their mitts on “excess” earnings of the “rich,” the track record of these politicians in doing so without destroying wealth is rather spotty.
As the authors point out:

From 1998 to 2007, more than 1,100 people every day including Sundays and holidays moved from the nine highest income-tax states such as California, New Jersey, New York and Ohio and relocated mostly to the nine tax-haven states with no income tax, including Florida, Nevada, New Hampshire and Texas. Over these same years the no-income tax states created 89% more jobs and had 32% faster personal income growth than their high-tax counterparts.

So, the truth is that the taxing and spending policies of America’s most poorly run and rapacious states are simply pushing productive activity to more fiscally-responsible states like Texas. In fact, the authors point out, “Texas created more new jobs in 2008 than all other 49 states combined.”
To the credit of New Mexico politicians, income taxes were not increased during the last legislative session although such a move was considered as part of the education tax hike effort that subsequently passed the House in another form. Despite his failings in other areas, Governor Richardson should be applauded for his role in reducing New Mexico’s top income tax rate from 8.2 to 4.9 percent.