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!

Airline security may seem to be more of a national security issue than a “free market issue,” but with aviation experts proposing even more onerous and costly security measures, presumably paid for through higher aviation taxes, the issue becomes economically important.

As Reason’s Jacob Sullum writes:

The reaction to Abdulmutallab’s fizzled bomb shows that the government continues to fetishistically focus on the details of the latest incident and impose conspicuous precautions without regard to whether the security payoff is worth the cost. Because Abdulmutallab used a blanket to conceal what he was doing, the TSA told airlines to ban the use of blankets during the last hour of flights to the United States. Also prohibited during the last hour: getting up from one’s seat, “passenger access to carry-on baggage,” and “personal belongings on the lap.”

Why the last hour? Because that’s when Abdulmutallab tried to set off his bomb. Therefore that is what all terrorists will do.

The TSA also instructed airlines to “disable aircraft-integrated passenger communications systems and services (phone, internet access services, live television programming, global positioning systems) prior to boarding and during all phases of flight.” And it forbade “any announcement to passengers concerning flight path or position over cities or landmarks.”

Those rules, combined with the focus on the last hour of flight, suggest the TSA believes Abdulmutallab wanted his bomb to go off as the plane was approaching Detroit, and it therefore is trying to prevent other bombers from knowing where they are. But these precautions are easily evaded by anyone who does a little preflight research and wears a watch (next on the list of banned items?). In any case, other terrorists may decide to strike at a higher altitude, where the damage caused by an explosion would be compounded by decompression.

With airline passengers already facing heavy tax burdens, it would be great if policymakers would focus on keeping bad people off of planes rather than making passenger flight more costly and difficult for all of us.

New Mexico taxpayers are finally off the hook for the latest boondoggle perpetrated upon them by their elected “leadership.” I’m referring to the flights between Albuquerque’s Sunport and the Mexican city of Chihuahua. The state has spent $175,000 of our money to subsidize the three-times-a-week service — which averaged a whopping nine passengers a flight on the 52-seat jets.

Politicians should learn their lesson. If the market won’t support something, wasting taxpayers’ money to support it isn’t going to do the trick…at least not for the long term. Unfortunately, as I blogged a few weeks ago, this “throw money at the problem” mentality is all too common among government officials.

If politicians want to make the Sunport a truly “international” airport, rather than bribing airlines, they should try reducing taxes and unnecessary regulations to make New Mexico a regional economic powerhouse as opposed to a being a ward of the federal government. Give businesses and people a reason to come here to do business and make money and we’ll have more international flights than you can shake a stick at.

In a rational free market system, the need for hospitals in a particular area would be determined by a combination of market forces and the willingness of entrepreneurs to invest in that kind of business. But, as was discussed in a front page story on the cover of the Albuquerque Journal the influence of market forces in determining hospital need is somewhat minimal — and New Mexico is not (thankfully) — a certificate of need state (in other words, government permission is not necessary).

So, what determines where hospitals are located in New Mexico? According to the article:

The University of New Mexico (one of the 2 hospitals in question) is looking for financing from Housing and Urban Development;

Presbyterian (the other hospital, a non-profit) is asking its employees to help finance the project to the tune of $3 million;

Both hospitals are looking for property tax revenue from Sandoval County to finance operation costs.

So, how will the hospitals make money? Well, one of the most interesting quotes in the article is that “Hospitals often complain Medicare reimbursement aren’t high enough, but at least Medicare pays reliably, and Medicare patients utilize 2.5 times as many inpatient services than the average patient.” So, again, subsidies play a major role.

While Congress looks to rid the American health care system of the last vestiges of free market, the debate over two new New Mexico hospitals is yet another example of how non-market forces predominate.

Given the busy holiday season, I’m probably not the only one who hasn’t been able to keep up on their newspaper and current events reading. That said, if you haven’t already done so, I urge you to read the interesting article “State Can’t Waste This Budget Crisis” which appeared in the ABQ Journal on December 21.

In the article, New Mexico Senator Steve Fischmann emphasized the role of over-spending in causing the current budget situation and even pointed out the issue of political corruption as a cause. Then, Fischmann argued strongly in favor of reducing government spending by targeting the most wasteful and unnecessary government programs rather than copping out and cutting spending across the board. He also specifically mentioned criminal justice reform, a topic that RGF has promoted as a possible cost saver.

Lastly, Fischmann discusses “revenue enhancement.” And, while the devil is undoubtedly in the details, the concept of eliminating narrowly-targeted tax breaks and spending programs is certainly worth looking at. I recently discussed the ineffective ways in which New Mexico attempts to develop economically. Before going overboard on raising revenue, I’d urge Fischmann and his colleagues to eliminate special interest payouts like the film industry’s very generous subsidies first.

Regardless of this minor point of disagreement, I think Fischmann is someone that fiscal conservatives can work with on the budget issues facing the state. Hopefully he joins other common-sense Democrats like John Arthur Smith and Tim Jennings to stop tax hikes and cut spending during the 2010 legislative session.

Enjoy the Holiday which, for many of you, will be a White Christmas this year. Also, enjoy this brief capitalist history of Christmas. It turns out that far from being ruined by “commercialization,” Christmas, even in its original form, was a celebration of prosperity.

As Obama and the Democrats bribe senators in their slow march to 60 votes in the Senate, more and more details continue to come out. The picture isn’t pretty. First, there are the bribes:

— Nebraska’s Ben Nelson, in exchange for a “yes” vote on the 10-year, $871 billion package — received permanent and full federal aid for his state’s expanded Medicaid population;

— Louisiana got up to $300 million in Medicaid benefits;

— Vermont and Massachusetts got $1.2 billion in Medicaid money — a change that was described as a correction to the current system which exempts those two states because they have robust health care systems. Vermont Sen. Bernie Sanders also boasted Saturday that he requested and won an investment worth between $10 and $14 billion for community health centers.

— Western states secured higher federal reimbursement rates for doctors and hospitals that serve Medicare patients. The provision covers the low-population “frontier” states and applies to Montana, North Dakota, South Dakota, Utah and Wyoming — the latter two states are both represented by two Republicans, but ended up as beneficiaries anyway since they qualify. The legislative language defines frontier states as states where at least 50 percent of the counties have fewer than six people per square mile.

— Florida, New York and Pennsylvania — where five of six senators are Democrats — will have their seniors’ Medicare Advantage benefits protected, even as the program sees massive cuts elsewhere.

— Sen. Max Baucus, D-Mont., reportedly secured expanded Medicare coverage for victims of asbestos exposure in a mine in Libby, Mont.

— Connecticut is receiving $100 million for a “health care facility” affiliated with an academic health center at a university that contains the state’s only “public academic medical and dental school.”

Then there are the actual policies. For starters, it now appears that the Medicare savings in the bill which most everyone believe will never come to pass, have been double-counted to make the “savings” contained in the bill look bigger.

All of this adds up to Robert Samuelson’s calling the Senate health care bill “a bad bargain because….health benefits are overstated, long-term economic costs understated. The country would be the worse for this legislation’s passage. What it’s become is an exercise in political symbolism: Obama’s self-indulgent crusade to seize the liberal holy grail of ‘universal coverage.’ What it’s not is leadership.”

Hopefully a left-right coalition of liberal Democrats and Republicans, spurred on by the American people who are repulsed by the process and its result, will convince the House to kill this incredibly bad legislation.

Jonah Goldberg is one of the most thoughtful columnists in America. This Goldberg column which also appeared in the Albuquerque Journal makes a persuasive case that what environmentalists are pushing under the guise of “climate change” legislation is really wealth re-distribution and expanded government.

If environmentalists are really concerned with mitigating the potential impact of climate change on both humanity and planet, they should focus on economic development and free market capitalism.

Last week in the Albuquerque Journal’s business section, reporter Winthrop Quigley wrote in something of a convoluted fashion about the fight over global warming and the potential for the US Environmental Protection Agency to act to limit carbon emissions regardless of Congressional action.

Quigley justifiably expressed concerns about the potential for the Obama Administration to skirt Congress, saying:

If he cares to, Obama will be able to avoid a lot of the pointless, stupid, ugly and unproductive debate that has afflicted health care legislation in Congress.

That is like electing to avoid a food fight by stepping into a minefield.

He goes on to discuss the demerits of the Supreme Court’s Roe v. Wade decision which, as Quigley again rightly points out, has caused the abortion issue to fester for decades. Unfortunately, Quigley fails to point out that the US Constitution has a simple solution for all of this. I responded to all of this with a letter to the editor that appeared in paper today.

Letter appears below and can be found online here.

Stick with democracy

Winthrop Quigley made several good points about the frustrations (and benefits of working through the process) of “getting things done” in America’s political system (“Democracy’s Glacial Pace,” Dec. 14). His central point, that Obama should not use the EPA to push draconian restrictions on carbon dioxide emissions that he cannot achieve through the democratic process, is spot-on.

The good news for Quigley and our political leaders is that a road map exists for addressing issues as diverse as the environment and abortion: the U.S. Constitution. The Founding Fathers wrote this document with the idea that while the states should be constrained by the federal government in military and trade, the states are the “laboratories of democracy” where a majority of both social and environmental policies should be made.

Unlike the federal government, the 50 states are not a monopoly. They have to compete with each other to formulate the best policies to attract citizens and businesses. Washington policymakers simply don’t face these pressures.

As much as I may oppose climate change legislation now moving through Congress and think that any such policies should be handled by the states, a move by President Obama to use an unelected bureaucracy to achieve his favored policy ends will result in nationwide outrage and even blatant disobedience. For all our sakes, I hope Obama sticks with democracy, regardless of its flaws.

Paul J. Gessing
President
Rio Grande Foundation
Albuquerque

I love Whole Foods. They have good food there and as an added bonus, their CEO and founder, John Mackey, is a free market libertarian who stuck his neck out to oppose the terrible health care legislation now moving through Congress and propose his own market-oriented reform ideas.

That all said, my wife and I don’t shop at Whole Foods all that often. It is really expensive. But apparently, people on food stamps can shop there. This from a story by Leslie Linthicum in today’s paper (unfortunately the online version doesn’t have the pictures like the paper does). Anyway, Lisa Aragon, the recipient interviewed, is photographed shopping at Whole Foods at taxpayer expense. Interesting that I shop at Wal Mart while she gets to shop at the high-end grocery. One would think Aragon might have gone to a less upscale place to shop if nothing else but for the benefit of the paper…

Caveat: It is too early to tell at this point, but, according to this article from the Albuquerque Journal Governor Bill Richardson may be pushing a “fix” for the problem of tax lightning during the upcoming legislative session. For the uninitiated, “tax lightning” is a situation in New Mexico dealing with property taxes in which someone who buys a new home experiences a dramatic increase in property tax burdens because the property they are purchasing is no longer covered under the state’s 3 percent annual assessment increase limit.

The fix, as it is spelled out in The Journal would involve altering New Mexico’s Constitution to “allow for a class of people to be taxed differently. This would allow the state to continue protecting longtime homeowners with the 3 percent cap on rising home values.”

While we applaud efforts to protect homeowners with the 3 percent cap, the idea of allowing the politicians in Santa Fe to start taxing different groups of people differently would open a dangerous new way for them to discriminate against various groups of taxpayers. In fact, New Mexico’s “anti-donation clause” was meant, in part, to prevent this discrimination among various groups of taxpayers, but it has been weakened over the years to the point that various special interests are able to use the rest of us as a piggybank.

Rather than changing the Constitution, New Mexico’s elected leaders should consider a flat 3% cap for everyone. That would be the fairest solution to “tax lightning.”

To paraphrase Shakespeare “Something is rotten in the State of New Mexico.” What’s rotten? One thing is our governments’ misguided ways of generating (or stifling as is more often the case) economic development. In this blog, I’m going to concentrate on a few such efforts in the southern region of the state. First, I wrote about the Doña Ana County Commission’s denial of a meat packing plant’s desire to set up shop and create 55 new jobs (subsidy-free). Heaven forbid someone try to actually build a factory and create jobs WITHOUT suckling from the government teat!

So, that leads me to the Doña Ana County Commission’s decision to look for $500,000 in state incentives to help finance a factory that produces components for large windmills. Sure, $500,000 is not that much within the overall $5 billion-plus state budget, but if you haven’t noticed, we are considering both cuts and tax hikes right now. Hardly seems like the time to be spending taxpayer dollars to finance a private business. Couldn’t we just give this factory some tax breaks rather than actual taxpayer handouts or are these subsidies ON TOP OF these tax exemptions?

To tie the bow on on this sorry package, I submit the example of the Spaceport. While this project edges a bit closer to reality, less-publicized is the fact that New Mexico taxpayers are not done paying for the Spaceport. In fact, it recently came to light that taxpayers will need to pony up another $7.5 million to build a road for the express benefit of the Spaceport. The project is already costing taxpayers $225 million.

The point is that projects that require government subsidies are not economically viable without those subsidies. New Mexico has built much of its economy around attracting those industries that demand subsidies while killing off those (like oil and gas and other forms of mining) that require no subsidies. This is not a model that has worked and this philosophy is a significant reason for New Mexico’s lagging economy. Unfortunately, despite tough economic times, it seems that policymakers have no desire to focus on building an economic base for New Mexico that makes sense and doesn’t demand taxpayer handouts.

Okay, I am not 100% in agreement with him, but he is correct in asserting (as he does in this piece) that the health care bill on the verge of passing out of the US Senate “expands private insurers’ monopoly over health care and transfers millions of taxpayer dollars to private corporations.” In sum, it is not the way to reform health care.

Of course, where Dean and I disagree is in what direction to actually take health care. Dean’s objection to the Senate bill is that the federal government’s role is too small whereas I’d like to reduce government’s role in standing between market forces and the health care system. Here’s a good description of a free market direction that, with any luck, Congress will seriously consider after (hopefully) killing this horrible legislation.

For anyone who cares about limited government, the possibility that former New Mexico governor Gary Johnson will run for President of the United States is a tantalizing possibility. For anyone who doesn’t remember the 2008 campaign for the White House, Ron Paul had a staunchly limited government campaign that generated a great deal of media attention and put libertarian-oriented ideas front-and-center while generating tremendous support from younger Americans.

Gary Johnson has launched a group called the “Our America Initiative” and the plugged in folks over at The Politico have now dubbed Johnson “The next Ron Paul.”

Certainly, given the paucity of proponents of limited government among the leadership of both parties and the popularity of the Tea Party movement, the door is open for a true fiscal conservative like Gary Johnson to make a big splash in 2012. Only time will tell, but New Mexico could have another “dog in the hunt” during the next presidential election.

The Rio Grande Foundation has released a new study on New Mexico’s government employment from Scott Moody and Wendy Warcholik, Ph.D. and the news is not good. That’s because, even as the private sector cuts costs and embraces economic reality, the public (government) sector continues to grow unabated.

Among the study’s findings:

* In 2008, state and local government employed 25.3 people for every 100 people employed by the private sector, that’s a 0.8 percentage point increase from 2007 when state and local governments employed 24.5 people for every 100 private sector workers;

* Relative to the national average of 16.72, New Mexico’s state and local government employment ratio is 51 percent higher and is the 2nd highest ratio in the country (New Mexico was 3rd highest in 2007;

* Not only does New Mexico hire more government workers than almost any other state, but those employees are more highly compensated than average New Mexico workers. In 2008, state and local government compensation was $49,711 per job while private sector compensation was $44,601 per job. As a result, the average state and local government job paid 11.5 percent higher than the average private sector job;

* The budgetary savings to the state by aligning New Mexico’s state and local government employment and compensation ratios to the national average would be astounding. In 2008 alone, such an adjustment would have saved taxpayers up to $2,946,289,629.

Not only is New Mexico’s bloated bureaucracy among the ripest targets for policymakers, but the problem worsened significantly between just 2007 and 2008. Unfortunately, allowing the number of private sector workers who pay taxes to whither away while continuing to expand government is unsustainable.

I wish someone at APS or in the Public Education Department had gotten caught yanking someone by their hair. Then, perhaps, the daily crisis of New Mexico’s abysmal educational system would have received the attention it deserves.

Instead, we get another article from the Albuquerque Journal explaining that in much of the state, even if students muddle their way through the broken system and receive a diploma, they are often not qualified to get into college. Putting it as delicately as possible, the writer stated:

A Journal analysis of state education data suggests New Mexico may have a quality control problem when it comes to ensuring that students rec eiving high school diplomas have mastered the state curriculum.

The analysis of 23 randomly selected high schools in 13 of the state’s 89 school districts found that some of the schools with the lowest proficiency rates have among the highest graduation rates.

Shocked, I’m shocked I tell you!!! Unaccountable, socialized (government ownership of the means of production) schools are giving students diplomas even if they don’t have the basic skills that they are supposed to have in order to achieve this diploma. I simply cannot fathom why people are not marching in the streets demanding reform…and no, money is not the issue. We’ve increased public school funding dramatically in recent years.

Instead of more money which we simply don’t have, the discussion should start with the “Florida Model” which includes a variety of school choice mechanisms, greater teacher accountability, no social promotion, and incentives. The time for half measures has passed. We need dramatic reforms before even more children are lost in a failed system.