So-called “cap and trade” legislation has been in the news a lot recently. After all, President Obama has been talking about imposing such a system — one that would make a carbon tax look simple and fair by comparison — without using the appropriate legislative channels through Congress. Cap and trade would have a devastating impact on America’s economy both in the short and long terms.
Of course, Obama’s plan is not the only economically-harmful proposal out there. The Western Climate Initiative of which New Mexico is a member, imposes cap and trade…unlike Obama’s plan, the WCI has already been enacted and will start to take effect in 2012. Of course, supporters of the WCI argue that there will be no economic harm associated with the cap and trade system and that the members will actually benefit. Fortunately, as the Rio Grande Foundation released to the New Mexico media yesterday, there is an alternative and far more realistic economic analysis by the Beacon Hill Institute.
Among Beacon Hill’s findings are that “New Mexico could lose as many as 4,689 net jobs, $1.2 billion in personal income, and $219 million in per capita disposable income” under the WCI.

From time to time, a sister think tank of the Rio Grande Foundation, the Minnesota-based Center of the American Experiment, holds a symposium inviting free market leaders from across the country like Grover Norquist, John Goodman, and yours truly, to share their views on pressing issues of the day.
Given the current economic unease and massive government intervention in the economy, the most recent symposium explored the issue of “How Can Conservatism Better Allay the Economic Fears of Working-Class and Middle-Class Americans? The symposium is available here.

There is no doubt that AIG seems to be deliberately acting in ways to spur the moral outrage of politicians and taxpayers. If you are not completely familiar with the story as it stands now, click here.
New Mexico’s own Sen. Tom Udall couldn’t resist piling on, but he went a step further by explicitly threatening AIG. As economist Russell Roberts points out:

Udall doesn’t like to see our money going to a bad cause. Unless it’s friends of his. From KFDA in Amarillo:
As part of the $410 billion Omnibus Spending Bill, US Senator Tom Udall says he included over one million dollars for Eastern New Mexico industries.
Over $200 thousand is going to a dairy consortium so they can boost research on improved dairy production.
And more than $950 thousand is going to the Sapphire Energy Algae so that company can create and grow technology that turns the algae into fuel.
Udall says the algae company could create 100 jobs.
Love that word, “could.” Can’t wait to count them.
The Senator does not seem to understand that these two stories conflict with each other. AIG has failed to generate private capital to keep it afloat. It can only stay afloat with my money. AIG can’t raise private capital because it has lost the trust of potential investors. They’re bankrupt and exist only because of the government’s largesse funded by taxpayers. Why would you want to repeat the same mistake with that dairy consortium and Sapphie Energy Algae? If they’re good investments, let private investors take the risk and either reap the reward or lost their money. If they’re bad investments, why am I being forced to pay for them?

To his credit, Udall voted against the original bailout bill, but the point remains that throwing taxpayer money at AIG is not much different from throwing taxpayer money at politically-connected companies that pledge to create jobs. If he and others in Washington (not to mention Santa Fe) understood this, we’d all be in much better shape.
HT: Harry Messenheimer

Despite New Mexico’s status as one of the most corrupt and scandal-plagued in the nation, the Legislature appears likely to miss out on an opportunity to give citizens a chance to see where there taxpayer dollars are going.
The House Tax and Revenue Committee tabled SB 159 yesterday which would have made available to the public an easily accessible, searchable budget database on the Department of Finance and Administration’s website. SB 159 passed the Senate floor unanimously.
“SB 159 was a common sense proposal that would have provided much needed budget awareness of how state government spends a nearly $6 billion operating budget. This transparency is essential to ensuring the people retain confidence in their government. Equally important, budget transparency helps prevent waste, fraud and abuse,” stated Tax and Revenue Committee member Rep. James Strickler (R-San Juan-2).
Last week, the Rio Grande Foundation hosted Robert Wood with the Texas Comptroller’s office for a series of meetings on government openness and transparency with New Mexico legislators and elected officials. During his meetings, he explained Texas’ excellent websites Texas OpenBook and Where the Money Goes which includes state contracts, vendor information, and salary information for public officials in Texas.
New Mexico could and should join Texas and the dozens of other states that are using technology to give citizens and taxpayers more information on how their money is used. Unfortunately, the House Taxation and Revenue Committee apparently doesn’t want New Mexicans to have this information.

Awhile back I blogged about CNBC’s Rick Santelli and his articulate rant against some of the federal government’s poorly-designed and unfair policies. During his tirade, Santelli talked about holding a “Chicago Tea Party” to protest these policies which are killing our economy and foisting massive debt on our children and grandchildren.
Well, Santelli has started something. In fact, there is now an Albuquerque Tea Party. The head of this effort, Charlotte Salazar, will be on our radio show, “Speaking Freely” which airs on AM 1550, this Saturday from 9:45 to 10:00am.
I also understand that a Santa Fe tea party is in the planning stages. Hopefully the concept spreads statewide as it already has nationwide.

In case you missed it, John Stossel — whom the Rio Grande Foundation hosted last year — had a great show on Friday night called “Bailouts and Bull%#*&.” The show goes well beyond just the bailout issue and discusses whether or not the American Dream is still alive (it is), whether universal, taxpayer-financed pre-kindergarden is worthwhile.
For anyone who is concerned about limited government, John Stossel’s shows are mandatory viewing.

Good like finding House votes on New Mexico’s legislative website. They’re not posted there and are never made available on the site, even in a historical fashion for past sessions. That’s one of the reasons the Rio Grande Foundation created NewMexicoVotes.org. We wanted average citizens and voters to know how their legislators were voting.
Yesterday afternoon, the New Mexico House voted for one of the largest tax hikes in New Mexico history, HB 346 which would increase New Mexico’s onerous gross receipts tax by 3/4ths of a cent. The final vote is available here. Remember your Rep’s votes come Election Day and be sure to tell your Senator what you think lest we wind up with an economy-killing tax hike on individuals and businesses.

There are lots of indices of various kinds of freedom out there, but this new “Index of Freedom in the States,” which is put out by the libertarian Mercatus Center at George Mason University, is the first that combines economic freedom measures with personal freedom.
Not surprisingly, New Mexico fares rather poorly on fiscal policy (45th), regulatory policy (37th), and economic freedom (43rd). The good news is that New Mexico’s personal freedom ranks very high at 3rd best in the country. Overall, New Mexico scores 36th. Not surprisingly, New Hampshire which lacks both a sales and income tax ranks as the freest state in the nation and New York is a dismal 50th. Certainly, New Mexico has a lot of work to do in the realm of economic policies before residents of The Land of Enchantment are as wealthy as they are personally free.

While New Mexico Republicans largely are exempt from this critique because they have been out of power for so long, the fact is that there is no party of smaller, more limited government in America today. This article is food for thought, particularly considering the predicament our nation faces today.

Believe it or not, the New Mexico Legislature is on the verge of passing some very important — and positive legislation. First, there is SB 159 which has been introduced by Sen. Sander Rue. This bill which would create an online, search able database of government spending, recently passed the Senate 38-0. Hopefully the House will pick up the bill and run with it.
Indeed, the House, led by freshman Rep. Dennis Kintigh, has already passed House Memorial 78 which would study the best way to create an easily accessible, searchable database that displays the state budget and spending for each year; and submit the results by November 1, 2009. This legislation passed the House 48-14 with all the opposition coming from Democrats. Believe it or not, the Texas Comptroller actually did all this voluntarily rather than waiting for the politicians to act.
For an idea of the information that can be made available to taxpayers in these search able online databases, check out the Texas transparency portal.

In case you missed it, yesterday, the voters of Santa Fe rejected a tax hike. The real estate transfer tax was the only measure on the ballot yesterday and it would have imposed a 1 percent fee onto any portion of a home sale price higher than $750,000.
4,557 of the more than 8,400 voters who turned out in the election — about 54 percent — voted against higher taxes and the nascent but ever-growing activism organization Friends of Capitalism should be congratulated for stopping this unwise tax hike. We need more such grassroots organizations to come together around New Mexico. If you’re interested, we at the Rio Grande Foundation highly recommend and are willing to help you attend the National Taxpayers Union conference this summer. Activism works and if it works in Santa Fe (of all places) it can work in your community.

The fact that tax hikes are a bad idea right now is so self-evident that even Sen. Jerry Ortiz y Pino — one of the most left-wing members of the New Mexico Legislature — didn’t make an overt call for specific tax hikes in his recent column in The Alibi. Better still, I was not the only reader of The Alibi, an alternative weekly that is not exactly known for having many conservative or free market readers, who responded to Ortiz y Pino’s cloaked call for higher taxes.
My letter is the second one that appears on the paper’s letters page, but the one by Steve Davis makes many of the same points I do.

The United States Constitution is a much trampled upon document these days. The trend started long ago with Woodrow Wilson and FDR being among the most anti-Constitutional presidents in the history of the Republic. Of course , this trend has only worsened in recent years as both President Bush and Obama have further ignored the document, thus expanding their own powers and taking powers from the states, the REAL ID being one prominent issue that — at least so far — the states have succeeded in defeating.
Fortunately, although it has proven to be less than perfect, the Founding Fathers believed that powers should be split not only among the various federal branches, but also with the various states as a check on federal power. To that end, freshman New Mexico Representative Dennis Roch has introduced HJR 27 which re-asserts New Mexico’s rights under the 10th amendment to the US Constitution. If you are not familiar with that particular amendment, it states:

The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.

Obviously, the federal government and its agents have been ignoring the 10th amendment for a very long time, thus infringing on the rights of both the states and most especially the people as a whole, so it is our hope that Rep. Roch’s efforts will succeed or at least receive significant attention.

Here at this site, we have been tracking whether or not our New Mexico state and local political leaders have come to grips with the ongoing fiscal crisis. The answer, repeatedly (here, here, and here) is “no.” Of course, that is because politicians live in an alternate reality where unlimited quantities of money comes from the work of others and debt is almost unlimited.
Anyway, the most recent example of this “what, me worry?” mentality is the City of Albuquerque’s replacement of perfectly good street signs. I have noticed this in particular on Coors Blvd. where the usual green signs are being replaced by blue signs with Mayor Marty’s beloved “Q” in black in the background. I have no idea how much this is costing Albuquerque taxpayers, but according to this bill from City Council, the city was proposing to spend $2.5 million on street sign replacement.
Obviously, we’re talking about real money here and in difficult economic times, when City Council is considering extending (without voter approval) a 1/4-cent transportation tax, it would seem that this is money that could be better spent elsewhere.

There’s no other way to say it. She wrote an opinion piece in the Albuquerque Journal on Wednesday and I just find it amazing that she continues to push a half-billion-dollar annual tax hike on struggling New Mexicans.
Her first specific point is about the study the Legislature commissioned by American Institutes for Research which found that funding should be 14.5 percent higher than it is now. Even after that increase, she argues that we would only be funding a “sufficient” education for New Mexico’s children. Of course, Utah spends the least per pupil on K-12 education but has some of the highest graduation rates in the nation. Regardless of Stewart’s assertions, spending alone does not make for an “adequate” or even “excellent” education. Notice that she makes no guarantees as to what, if anything, taxpayers will get in terms of improved results for pouring billions of dollars into this broken system in the next few years.
True, New Mexico’s education funding formula is broken, but New Mexico’s K-12 educational system is broken as is apparent due to our near 50% dropout rate. Rather than killing New Mexico’s economy with higher taxes (thus making jobs harder to come by regardless of graduation), perhaps Stewart and the education establishment should re-evaluate “adequacy” and come back with some ideas (like choice). As an aside, it is worth noting that Congressional Democrats are trying to kill Washington, DC’s school choice system.
Stewart and her friends in the teachers’ unions have worked hard to keep New Mexico students from having access to similar programs and thus finding out what an “adequate” education is all about.

If you took a close look at the Rio Grande Foundation’s 2008 Piglet Book on wasteful government spending, you would have seen on page 6 our critique of New Mexico’s supercomputer at a cost to taxpayers of $11 million.
Well, a few weeks ago, the Albuquerque Journal editorialized in glowing terms about the jobs supposedly being created by the State’s $39 million supercomputer. It made me wonder whether the State got ripped off for their computer or whether, as is so often the case, the government officials allowed taxpayers to get ripped off. Well, it turns out that it was basically the latter. After poking around and asking some questions, I discovered that the computer really cost taxpayers $42 million because the State had to “fund the creation of a permanent office, build more college gateways, and hire staff…and design a planned central office for the project and to buy equipment for the gateways on college campuses.”
So, the computer will actually cost taxpayers about 4 times the advertised price. No surprise there; this is government we are talking about. Which leads me to the Journal’s aforementioned endorsement of the project. According to the editorial: “Gov. Bill Richardson announced two deals centered on Encanto and its New Mexico Computer Application Center that could add 100 jobs and a home base for DreamWorks Animation. Insigniam Innovation Discovery Center, a health care consulting firm that recently moved from San Francisco, will use the supercomputer to develop solutions for improving health care quality and value.”
100 jobs may sound like great news in today’s economy, but when you look at the unseen, that being the jobs that would have been created in the private sector had the $42 million been left in the economy in the form of lower taxes, it is hard to believe that New Mexico’s economy would not have been better had New Mexico not purchased this expensive toy. After all 100 people making $50,000 a year would have to work for 8 years just to earn back the investment. That assumes of course that these people, obviously all educated in high-end computers, would have had nothing better to do in the economy without the computer.
More likely, what will happen is that for a few years there will be a few highly-publicized jobs created and after 4 or 5 years when this is no longer the latest and greatest, those jobs will disappear and the taxpayers will have a white elephant on their hands. So it goes in the Land of Enchantment.

Do you think taxes are too high in New Mexico and nationally? Do you think President Obama and our Legislature (not to mention city council and local governments) are planning to raise your taxes regardless of the negative impact those tax hikes will have on our economy? If you are concerned about higher taxes and out of control spending — and want to do something about it — the Rio Grande Foundation and National Taxpayers Union want to help. After all, the only way to stop politicians and their big-spending schemes is to arm large, angry groups of citizens with information and the latest techniques in pro-taxpayer advocacy.
If you are interested in joining hundreds of taxpayer activists from around the country for in-depth sessions on defeating tax hikes in your New Mexico community, join RGF president Paul Gessing and the experts at the National Taxpayers Union for the best taxpayer-activist training you’ll ever receive coming this June 11 through 13 in Arlington, Virginia. In an effort to generate a pro-taxpayer movement throughout New Mexico, the Rio Grande Foundation will be awarding scholarships to a few passionate and articulate wannabe taxpayer activists who are willing to attend this important conference and work to start a taxpayer movement in their community. Please contact us at: info@riograndefoundation.org or by phone at 505-264-6090. We can only send a few people, so act now!

As this article discusses, we at the Rio Grande Foundation are working hard to get the word out about wasteful government spending across New Mexico. If your group needs a speaker, please send us an email at: info@riograndefoundation.org.

With state revenues down, lobbyists from UNM are scrambling to secure funds from the legislature. Instead of working to cut a more crucial slice of the public pie this year, it might be a good time for citizens, legislators, and educators to come up with strategies for making higher education more self-sufficient.
In their ’08-’09 budget plans, University administrators diverted revenue and increased tuition to fund a series of projects with a $1,650,000 price tag. Under the guise of strengthening the University’s “core mission,” “enrollment management,” and “academic departments,” administrators made some expensive promises that deserve analysis.
$200,000 was allotted to keep Zimmerman Library open 24/7. This goal never saw the light of day, and librarians aren’t aware of any such plan. Instead of fulfilling their budget “goal,” University administrators decided to extend Parish Library’s operating hours, a smaller business library with fewer resources for the average student.
Almost half a million was portioned for “Enrollment Management,” which developed a “Parent Relations” website that helps parents understand the issues necessary for their youngsters’ college success, including suggestions for classes. It seems costly and excessive to encourage parents to continue pampering their children throughout college.
Another half million was diverted to offset the increasing costs of copying paper, telecom and other equipment, so the Provost’s office could hire more teachers instead of worrying about standard operational costs. Despite this goal, the University was forced to implement a hiring freeze because of funding shortfalls.
In November, New Mexico voters approved $7,000,000 in bonds to fund a new Science and Mathematics Learning Center. The University planned to break ground for the new facility during the fall semester, but even now, midway through the spring semester, no progress has been made.
These unfulfilled or superfluous projects represent only a tiny fraction of the University’s total budget. There are surely millions more taxpayer dollars funding broken promises and extraneous projects. High costs to the public could be countered if the University was encouraged to become more self-sufficient.
Although far from ideal, the UNM Health Sciences Center is an example of an educational enterprise that is far more sustainable than most at the University. With only a fraction of the total UNM student population pursuing a degree in a health-related field, the patient care services of UNM Hospitals provides 23% of UNM’s total revenue. However, the Health Sciences Center and UNM Hospitals combined account for 54% of UNM’s expenditures, so we can conclude that the medical programs at UNM are almost halfway self-sufficient. If these programs doubled their efficiency, they would be nearly sustainable and wouldn’t require billions in tax money to operate.
Professor Sharon Warner, former director of the Creative Writing program at UNM, organizes the annual Taos Summer Writers’ Conference, an entirely self-sufficient educational program. Warner’s program pays its own rent for the University property it utilizes, as well as pays well-known writers to teach at the conference. Her conference is a shining example of education that does not rely on taxes for funding. Students pay to attend because they know that the teachers have established reputations in the field, reputations that extend beyond the tangle of scholarly journals and the trappings of state run Universities. The product that these writers generate is paid for willingly, instead of through taxation.
When taxes meant for education are funneled through the bureaucratic machine it leaves way too much room, as we’ve seen, for mismanagement and dishonesty. Our educational system needs to reflect the more clear and direct trade that Professor Warner has been able to establish. Educators should be able to demonstrate more obviously that they possess knowledge that is monetarily valuable to students, instead of relying on a Ph.D. as an all-season pass to tax graft.

Legislation now moving through the New Mexico Legislature (it has already passed the Senate and will be heard in the House Labor Committee tomorrow). The legislation will expand so-called “prevailing wage” (read inflated wage) laws.
The simple truth is that this bill will increase costs to NMDOT projects by as much as 50% compared to the federal Davis-Bacon wage scales and thus reducing the amount of resources that NMDOT has to do what it is supposed to do ie. building roads, bridges, and other infrastructure. The State’s own fiscal impact report of SB 33 reinforces the expenses associated with this wage inflation proposal to be $135.4 million over the next three fiscal years.
Clearly, with the stimulus package now in place and state and local governments ready to build those “shovel-ready projects,” big labor is gearing up to expand its piece of the pie. Unfortunately, overpaying for labor means that taxpayers get less bang for their buck.

If you didn’t already see it in today’s paper, check out the editorial which cites New Mexico’s bloated and overpaid government bureaucracy and mentions our study, “The Government Gravy Train,” on the topic.
Thanks to the Journal for noticing our work and for realizing that in tough times, government needs to sacrifice at least as much as the rest of us do. Of course, the Journal deserves kudos for speaking out on the issue and has done its own excellent work in exposing the exorbitant salaries of some of New Mexico’s “exempt” politically-appointed government workers. Check that site out here.

There is an anger building in America. Having been hoodwinked by the supposedly “free market” Bush Administration, the transparent socialism of the Obama Administration is causing average Americans and even the media to take notice. If you haven’t already seen it, check out the following spot-on Rant from Rick Santelli on CNBC:

Lest you think Santelli is just another ranting, talking head on television, check out his insightful interview on National Review Online.
Lastly, a friend of mine, local Albuquerque businessman Wayne Unze, had an excellent letter to the Albuquerque Business Journal. The letter is pasted below:

In case you’re not already painfully aware, since the election stocks have plummeted approximately 2,000 points. This demonstrates a tremendous amount of investor displeasure, or at best, uncertainty, with regards to the newly elected administration. And with so many of the newly appointed Cabinet members either coming under fire and/or resigning for various inappropriate activities or resigning due to an inability to reconcile the new Economic Stimulus Package, investor confidence appears to be non-existent.
It will be interesting (and possibly very frightening) to see what the future holds for those of us who have worked so hard only to see our retirements usurped by a government more focused on earmarks and entitlements than restoring the free enterprise capitalistic system that made America great for so many years. Most Americans seems to have forgotten a very important principle: whenever you accept a “handout” from another individual or entity (especially the government), you relinquish some degree of personal freedom.

To say the state is going through tough economic times is a bit trite at this point, but as I’ve written recently, it seems like many of our leaders in Santa Fe just haven’t gotten the memo. Another example of this was brought to my attention by Santa Fe New Mexican reporter Kate Nash who has been looking at efforts moving forward in the current legislative session that would create two new cabinet-level agencies. One would take all vehicle-related functions from the Motor Transportation Division of the Department of Public Safety and the Motor Vehicle Division of the Taxation and Revenue Department and roll them into one agency called the Department of Motor Vehicles.
The other, which the Senate approved over the weekend, would create an Hispanic Affairs Department. As I discuss in Nash’s article, “This isn’t the time to create more layers of government. During tough economic times and with a massive $600 million deficit facing the state, the last thing we need is to hire more highly-paid cabinet-level state bureaucrats.”
Rather, the state should eliminate “race-specific departments, agencies, and programs, not creating more of them. Besides, we already have a Cultural Affairs secretary.”
Creating two new cabinet-level agencies may not immediately increase the size of the hole in New Mexico’s budget, but they will inevitably increase spending as bureaucrats inevitably receive raises as they move up the state salary pecking order. Hopefully, the sponsors of these efforts realize that their pet projects are simply not pressing matters in the best of economic times and should be pushed to the side without much need for debate in these difficult budgetary times.