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.

On Wednesday, December 9, the Rio Grande Foundation hosted a candidate forum to which each of the five currently-declared candidates was invited. Only two, Rep. Janice Arnold-Jones and Doug Turner participated while the Weh campaign was represented in the opening session by Whitney Cheshire. Video of the forum is below:

New Mexico Watchdog updates its August report. The red ink lubricating the wheels of the Red Runner is getting redder. This pic from inside the Rail Runner during service between Santa Fe and Albuquerque speaks volumes.

A few years ago, New Mexico eliminated its tax on groceries. While this was not technically a tax cut because other taxes were increased, groceries are now a target for the tax-hikers in Santa Fe. Some, particularly self-appointed advocates for the poor, wish to only raise taxes on “bad” food items like soda pop. But, as this column rightly points out, taxing soda will not improve overall health measures.

For starters, “It’s pretty hard to single out soft drinks as a unique contributor to obesity when regular soft drink sales have declined 9.6 percent since 2000, but CDC data shows that adult and childhood obesity rates have risen during that period.” When lawmakers in Santa Fe are talking tax hikes (a misguided proposition), they need to be careful about taxing soda and cigarettes to name just a two because these items are disproportionately consumed by lower income workers. Ah, the dilemma of the do-gooders!

While the idea of a government bureaucracy placing limits on when women can receive mammograms is a big potential problem of nationalized health care, as Sheldon Richman of the Future of Freedom Foundation points out, these mammograms are not free and (successful) Congressional efforts to: “guarantee women access to preventive health care screenings and care at no cost … [by requiring] all health plans to cover comprehensive women’s preventive care … with no copayments.” (Emphasis added)” are also a symbol of what is wrong with the health care legislation now in Congress.

After all, someone has to pay for the mammograms and Congress gets to grandstand and take credit, but ultimately the costs are borne by employers and others who will actually pay the bills. Under a rational system, women would have the “right” to have a mammogram as early as they like if they are willing and have the means to pay for it (or pay for an insurance policy that does), but Congress would not be in the business of micromanaging when this or any other medical procedure is provided.

Apparently, this is “praise Democrat week” here at the Rio Grande Foundation (that or hell has frozen over according to Steve Terrell). Maybe it’s just that Holiday spirit. Who knows? Anyway, I was very pleased to read in the Albuquerque Journal this morning, this story in which Sen. Smith, chairman of the Senate Finance Committee, contradicted Governor Richardson’s calls for tax hikes to fill the budget gaps facing New Mexico for the current and future fiscal year.

Said Smith on the issue of tax hikes, “Most of the support for tax increases has come from Albuquerque and Santa Fe and legislators who represent those larger New Mexico cities.

If you go to the Farmington people or the people in my part of the country, where they’re closing mines, people say no (to tax increases). Depending on what part of the state you come from, you get different answers.”

Interestingly enough, this stance puts Democratic Sen. John Arthur Smith firmly to the right of the Albuquerque Chamber which has endorsed tax hikes to solve the budget issue. Kudos to Sen. Smith. Hopefully his leadership and firm stance moves the debate away from higher taxes and towards spending cuts.

For other recent samples of RGF praising Democrats, check out postings here and here.

So says the Doña Ana County Commission. A Texas-based company undoubtedly received a rude awakening despite the challenging economy when they attempted to open a meat processing plant that would have created 55 jobs near Berino and Anthony. And we wonder why New Mexico’s economic situation — not very good in the first place — continues to deteriorate?

County Commissioner Dolores Salda a-Caviness (as quoted in this story), who voted against the proposal, said she supports “sound, clean economic development and the spirit of entrepreneurship.

“However, I don’t think my threshold has been met,” she said. “I don’t think this is the time or place for the Berino area.” My question for Salda a-Caviness is, “what resources do you have at stake here? What gives you the right to tell your neighbors what jobs are or are not good enough for them?”

Opening yesterday’s Albuquerque Journal, I was heartened to see this opinion piece from New Mexico State Senator David Ulibarri. In his article, Ulibarri cites the possibility that “if uranium mining resumes in New Mexico, we would be looking at the creation of about 20,000 jobs with a projected economic impact of $26 billion dollars over a 30-year period.”

For starters, it is good to see a Democrat out there promoting economic development in New Mexico. It would be great if Governor Richardson and political leaders of both parties embrace uranium mining as a way to generate jobs and economic prosperity in New Mexico.

And yes, environmentalists should support this as well. For starters, nuclear energy is carbon neutral and unlike wind and solar is a consistent, proven source of energy. Also, while many of the problems that have given uranium mining a bad reputation occurred when the federal government and military controlled mining operations. There was also an issue of ignorance of the pollution problem. Today, as Ulibarri points out, the private entities engaged in uranium mining are very safe.

Some of this requires national buy-in to nuclear power, but if that happens, New Mexico, if the right decisions are made, could be in a position to prosper.

Barack Obama just doesn’t get it. The previous economic stimuli that he and his cronies in Washington have foisted upon us as the chart below shows:

Despite the fact that the unemployment rate has now gone back down to 10 percent, Obama’s worst case scenario (no stimulus) would have resulted in the unemployment rate rising to no greater than 9 percent.

According to this article,

A major part of his package is new incentives for small businesses, which account for two-thirds of the nation’s work force. He proposed a new tax cut for small businesses that hire in 2010 and an elimination for one year of the capital gains tax on profits from small-business investments.

Obama also proposed an elimination of fees on loans to small businesses, coupled with federal guarantees of those loans through the end of next year.

He called for more government spending on infrastructure projects such as roads, bridges and water projects and for new tax breaks for consumers who invest in energy-efficient retrofits in their homes. This could be what some administration officials have called a “Cash for Caulkers” program modeled on the now-expired Cash for Clunkers program of tax rebates for people who turned in old cars for more fuel-efficient models.

While the tax cuts may not be actively harmful as the new spending is, Obama (and the rest of our political leaders) need to understand that government spending is the problem, not the solution, and that economic stimuli are ineffective when compared with low taxes and reasonable regulations. Unfortunately, no one is following this prescription, so the national debt will continue to grow, thus creating real problems for the US economy.

My friend Steve Ellis at Taxpayers for Common Sense blew the whistle on an ever-expanding timber subsidy program. It is a case-study of how political log-rolling in Congress makes it difficult for fiscal conservatives to win the day in Washington. The best we can ask for in reforming Washington is for citizen outrage to strip all powers not outlined in the US Constitution from Congress and demand that if spending is to happen, we need to pay for it and do so locally.

Here are a few choice facts from the article: Catron County, NM receives $1,883 per person per year under this program, the highest in the nation. Of course, New Mexico’s two senators (at the time they were Domenici and Bingaman) served as chairman and ranking Republican on the Senate committee that rewrote the timber payments formula.

New Mexico’s increase under the new formula was 692 percent.

Some very interesting polling data from the highly credible Rasmussen polling organization has come out showing that when asked the question “Suppose the Tea Party Movement organized itself as a political party. When thinking about the next election for Congress, would you vote for the Republican candidate from your district, the Democratic candidate from your district, or the Tea Party candidate from your district,” respondents chose the tea parties over the Republicans.

According to the story, the response of all those who were polled was Democratic 36%, Tea Party 23% and Republican 18%. Further, the poll found that independents are more inclined to vote for a tea party candidate over Democratic or Republican candidates. It shows that not only are the tea parties not “tools” of the Republican Party, but that Republicans have a long way to go before they achieve the credibility that the upstart tea party movement has garnered.

I’m pleased to have led a 2 hour training session on Sunday afternoon with the wonderful folks at the Albuquerque Tea Party. It was quite impressive to see 70 or so activists, not getting paid, concerned about their country and its out-of-control government, show up for training on a Sunday afternoon.

Notably, if Republicans do wake up and realize that they should re-embrace limited government like the tea parties have, the Republican/Tea Party movement defeats the Democrats 41% to 36%. The bad news is that the Republicans have already proven exceedingly capable of bungling elections.

Only time will tell whether the Republican Party re-embraces limited government. It is clear that in the form of the Tea Parties a major constituency exists.

A few weeks ago I outlined efforts underway in Louisiana to cut spending bloat. This involved forming a commission to reduce government spending and eliminate wasteful programs. The efforts have yielded some excellent results. Recently, our own Governor, Bill Richardson, who I criticized in my piece for pushing only for higher taxes, named another commission and the mission of the new “Committee on Government Efficiency is to thoroughly review all areas of state government and analyze
potential savings through streamlining, consolidating and eliminating certain areas.”

We at the Rio Grande Foundation applaud Governor Richardson for his willingness to look beyond tax hikes in closing New Mexico’s massive budget deficits. The naming of this commission is a good first step. Hopefully, when the “rubber hits the road” in the upcoming legislative session, Governor Richardson and legislators alike will focus at least as much on ways to reduce unnecessary spending as they do on “revenue enhancements.”

New Mexico Watchdog takes you inside the castle Manny Aragon has been building for the past 21 years in Albuquerque’s South Valley. See the monument being built by the man who was once the most powerful politician in New Mexico in a video report by New Mexico Watchdog’s Steve McAllister.

While Democrats in Congress work overtime to make their health care reforms appear to be “deficit neutral,” University of New Mexico economist Micha Gisser cuts through the disinformation and explains exactly why the plans for a government takeover of America’s health care is simply not possible without dramatically increasing the deficit. Read the article here.

We at the Rio Grande Foundation typically go after the idiocy and corruption of our state political leaders, but the TSA is one entity that we all deal with on a regular basis, but that I have not written about extensively. This is largely because there seems to be no momentum in Congress to undo the nationalization of airport security that was enacted after 9/11.

Over the Thanksgiving Holiday, my wife Krista and I spent the week with RGF co-founder Harry Messenheimer and his wife on the Big Island of Hawaii. We were on Oahu for one day and toured the Dole Plantation. There, we purchase a bottle of pineapple-infused hot sauce. Being good travelers, we checked the bottle which was wrapped in some tissue paper to protect it from breaking. Well, when we got home and opened our bags, we had a pre-printed notice in our bag indicating TSA had checked the bag and we had no sauce. Unbelievable!

Apparently, TSA theft is not a new or uncommon issue. I’m proud that my old organization, the National Taxpayers Union, opposed federalizing airport security when it was done and I wish that our political leaders would get rid of TSA and let airlines and passengers handle security issues.

As “cap and trade” remains bottled up in Congress (thankfully), New Mexico quietly moves closer to allowing the appointed, not elected Environmental Improvement Board, to force New Mexicans to live under a draconian set of carbon emissions regulations. The petition, filed by the green group “New Energy Economy,” would, if adopted, give New Mexico the most restrictive, economy-stifling set of global warming restrictions in the nation with greenhouse gas emissions being limited to 25% below 1990 levels by 2020. This is a more aggressive standard than anything being considered by even the global warming true-believers in Congress.

So, what can be done? First and foremost, send a physical letter (they don’t have an online comment mechanism) to the Environmental Improvement Board explaining your opposition. I’ve pasted a sample letter below. Secondly, attend the one and only public comment session on January 11, 2010 in Santa Fe. Details are still murky on this meeting, but contact the Environmental Improvement Board.

Thirdly, contact your legislators to alert them to the problem of an unelected body usurping legislative policy-making powers and urge them to take public action to oppose the imposition of any carbon cap by the Environmental Improvement Board or any other unelected body. Lastly, write a letter to the editor outlining your concerns about this proposal and the fact that an unelected body has been placed in charge of one of the most controversial public policy issues of the day.

Gregory Green, Chairman (C/O EIB Administrator)
New Mexico Environment Department
1190 St. Francis Dr., N2153
Santa Fe, NM 87502

December XX, 2009

Re: New Energy Economy Petition, Case Number 8-19

Dear Chairman Green:

I am writing to express my opposition to New Energy Economy’s petition to the Environmental Improvement Board to institute a cap on Greenhouse Gas emissions in New Mexico.

Such a move would have severe negative implications for New Mexico, without providing any clear environmental benefit.

No other state is considering such a cap, which would mean New Mexico would stand alone in having this significant cost driver introduced into its economy. Higher prices for energy, goods and services would result from having to comply with the greenhouse gas cap. Having these costs applied only to New Mexico would make it hard for any business to justify choosing this state over others as a place locate and grow. This would lead to job losses for New Mexico and a deepening of the economic struggles we already face as one of the poorest states in the country.

All this to stop a “problem,” that of human-caused climate change, which is now more questionable than ever due to the recent revelations relating to data manipulation by certain climate scientists with the goal of “hiding the decline” in temperatures in recent decades.

Even if global warming is a serious, human-caused problem, reducing New Mexico’s greenhouse gas emissions will have no measurable impact on the global accumulation of greenhouse gas emissions in the Earth’s atmosphere. But your actions will have a significant impact on the welfare of this state.

I urge you and the EIB to carefully consider the consequences of this proposal for New Mexico’s fragile economy. This is not good public policy and I urge you to oppose the New Energy Economy petition.

Sincerely,

Name
Address
City, State, Zip

Today, my friends (and occasional allies) Fred Nathan of Think New Mexico and Allen Sanchez with the Catholic Church wrote an article in the Albuquerque Journal decrying efforts by the Albuquerque Chamber to convince politicians in Santa Fe to oppose re-instating the tax on groceries that was abolished a few years ago. While the Rio Grande Foundation opposed repeal of the GRT on food when it was actually done because it was bad economic policy, the current situation is a bit different. After all, we’re stuck with the higher GRT burden of 0.5% and we may lose the benefit of tax-free grocery sales.

By the way, lest you think dear reader, that the Rio Grande Foundation was being “anti-poor” in opposing elimination of the GRT on food, I’ll point you to this from the left-wing New Mexico Voices for Children outlining their opposition to the tax switch.

But my real beef here is not with Fred Nathan and Allen Sanchez, rather, it is with the folks at the Albuquerque Chamber who are pushing for restoration of the grocery tax in lieu of other taxes. Now, they are right in that the grocery tax is less economically-harmful than some other tax hike proposals on the table, but that is missing the forest for the trees.

The Albuquerque Chamber (and all other business groups in this state) should remain opposed to ANY TAX HIKE on principle. There is ample room for budget cuts and, as I outlined here, there are ample innovative opportunities for spending reductions. At the very least, The Chamber should push for real budget cuts that are equivalent to any “revenue enhancements.” Unfortunately, they have already given away the store, so now it is all about deciding whose ox is gored.

So, in essence, the battle over the grocery tax is of minor import. Eliminating the tax had negligible impact on the poor and re-instating it is not going to be the end of the world either. What is damaging is business groups happily opening the flood gates to higher taxes.

Irony can be fun. This article (actually a letter to the editor) from the Washington Post caught my eye. The reader discusses the sorry state of the memorial, which is located near the National Mall in Washington.

According to the letter-writer:

Many of the light fixtures that are crucial to enjoying, or even navigating, the memorial are burned out. Others have miscolored bulbs that distort. Many of the water cascades are now black pits, wet or even dry, instead of shimmering fountains.

Roosevelt’s great quotations — “I hate war” and “We have nothing to fear but fear itself” — are hidden in gloom.

This is not new; maintenance has been neglected for years and is getting worse.

First and foremost, I just love the fact that the memorial to one of the biggest proponents of government control of our daily lives is in disrepair. One would think that if anyone took extra special care of FDR’s memorial, it would be Obama. But the other thing about this that speaks to me is that this is a memorial that Obama can practically see from his front porch. Keeping a memorial in good working order is a simple, relatively inexpensive job for government bureaucrats to handle.

If they can’t handle the simple task of keeping a memorial in working order, should we really trust them to determine when women should get mammograms or when each of us should or should not receive surgery or other medical procedures?

You are hereby encouraged to sign this petition. Better still, upon signing, the website allows you to send letters to your members of Congress. Check it out here

According to the Albuquerque Journal this morning, the City of Albuquerque faces a $24 million deficit this year. First and foremost, thank you Mayor Marty for leaving the incoming Mayor and the taxpayers of Albuquerque such a nice lump of coal in our (early) Christmas stockings.

Unfortunately, there are no easy ways to solve a major deficit like this in the current fiscal year. There is going to be pain and tough decisions have to be made.

Of course, even after completing this fiscal year, the picture is unlikely to improve dramatically. Deficits are likely to continue, but the good news is that the decisions are somewhat easier. For starters, Berry should do is to strongly consider halting some of the sweetheart union contracts signed during the Martin Chávez administration such as the one for firefighters that calls for a 6 percent pay raise in the coming fiscal year.

There are more systematic reforms available as well. One big one is “managed competition,” a concept that has been adopted in cities nationwide. Our friends at Reason Foundation found that San Diego taxpayers could save $80 to $200 million per year by allowing the private sector to compete with government agencies to do things like clean city buildings, perform maintenance on government vehicles, and run golf courses. There is no doubt that Albuquerque could save a great deal of money — with similar or even improved service resulting — if it adopted these practices.

The full reason study is available here, but the basic method is to take something like garbage collection and open it up to competitive bidding. This can include bids by private companies as well as the government employees who are currently doing the job. Significant cost savings can result. Sure, government employees may not like having to compete for their jobs, but taxpayers can experience significant savings which can come in handy when cities are facing massive deficits.