Something I blogged about at the start of November and included in our “2008 Piglet Book” has finally been picked up by the Associated Press.
The story, which was reported in the Albuquerque Journal on Sunday is that New Mexico’s film Incentives hurt our economy rather than helping it. While the fact that that New Mexico’s generous film incentives are economically dubious has been known for some time, I say “better late than never.” And the story includes some good reporting including the following:

More than 40 states have film incentives and they have been scrambling to out-do one another, said Frank Hamsher, a public policy consultant from St. Louis. Michigan offers a production rebate of a whopping 42 percent.
“It’s like poker. They see the last bid and they up it a bit,” said Hamsher, who spoke on the subject at a recent meeting in San Diego sponsored by the Western States Arts Federation.
Fickle filmmakers, meanwhile, are chasing the next best deal, he added.
Most states haven’t taken a hard look at what’s being spent, what taxpayers are getting in return, and how sustainable it is, Hamsher said.

We’ll see if the Legislature decides that overly generous film incentives will face reductions in tougher economic times with the state facing a massive budget deficit.

Just when we thought Richardson was going to leave us, NBC News is reporting that he’s withdrawn his name from consideration for Commerce Secretary. As I wrote previously, his nomination was a mixed bag. I believe the withdrawal of his nomination is also a mixed bag although for Diane Denish I’m sure it is just outright annoying.

As John Stossel points out, Ms. Kennedy fulfills the qualifications. Of course, Stossel being Stossel, his qualifications for Senator are a bit less lofty and unrealistic than those ascribed to senators by many Americans and the media.

Now that the education establishment is lobbying for higher taxes, the pleas for “adequate” education funding are pouring forth. Recently, Sharon Morgan of the National Education Association New Mexico argued that point on the pages of the Albuquerque Journal.
The problem is that among the platitudes and discussion of schools as “community hubs,” Morgan makes absolutely no arguments to support more education spending. After all, what exactly is “adequate?” How much spending do proponents believe will ensure that our children receive an excellent education? The fact is that our current education is a bottomless pit in need of unlimited taxpayer money because there few incentives for schools to improve and compete to serve children.

Now that gas prices are back down it looks like the tax hikers will be out in force demanding a higher gas tax on filling up at the pump. A federal commission just recommended a 50% increase in the federal tax. Of course, with Obama’s infrastructure “stimulus” expected to cost nearly $800 billion, debt won’t pay for it all. Of course, raising taxes to expand government won’t exactly generate economic growth.
Personally, I’d be okay with some kind of increase in the gas tax to improve fuel efficiency and provide for relatively consistent pricing as long as taxes were reduced elsewhere, but tax hikers rarely wish to give taxpayers’ their money back at all.
Rather than raising gas taxes (ostensibly to fund infrastructure), it makes the most sense to get the feds and Congress out of the infrastructure business entirely. This was actually a Republican initiative in Congress a few years ago and by putting the states in control it would at least force them to pay for “Bridge’s to Nowhere” on their own without bilking federal taxpayers.

You may already be aware that the Rio Grande Foundation has a weekly radio show on AM 1550 on Saturdays from 9am til 10am. If you get the chance, listen to the show. You will get information not available anywhere else on the radio. If you can’t listen to the show live, listen to a podcast of the show here. Check back weekly to listen to each new podcast.

Despite much criticism (mostly from the left), the Electoral College by which the United States chooses its presidents is one of the greatest innovations of the Founding Fathers. Better still (at least for New Mexicans), the effect of the Electoral College is that it increases the influence of rural and sparsely-populated states (like New Mexico) relative to larger, more densely populated states.
So, why does New Mexico Rep. Mimi Stewart want to abolish the Electoral College? After all, if you paid even the slightest attention to the recent election, you would have seen that both McCain and Obama spent an inordinate amount of time in New Mexico given the fact that the state’s 5 electoral votes (out of a possible 538) account for just less than one percent of the overall vote.
Of course, those 5 votes can make the difference between victory and defeat in a closely-contested presidential race. Does Stewart really believe that candidates would concentrate such attention on NM in order to woo our 2 million residents, accounting for .066 percent of the popular vote?
The fact is that New Mexico receives far more attention from candidates under the current system than it would under a popular vote system under which candidates would campaign only in densely-populated states and “flyover country” would become, well “flyover country” for presidential candidates.
Perhaps Stewart will further advance her “anti-New Mexico” agenda by attempting to return some of our outsized federal largesse to the Treasury?

With stories of packed trains and huge demand, the average person (subscription required) might be led to believe that the Rail Runner can now be called a success. But is it true? Is New Mexico’s commuter train really a success?
Not by a long shot.
First and foremost, like we saw when the train originally opened, there are plenty of joy-riders taking to the rails in droves right now to see what a free trip to Santa Fe on the train is like. Once commuters and other regular customers become the bulk of the train’s customers, we’ll have a better idea on ridership. But if high ridership continues, doesn’t that make the train a success? Not by a long shot.
Let’s put this in perspective. This train cost taxpayers $400 million to build. It will cost $20 million annually to operate, $19 million of which will be again financed by taxpayers. Only $1 million will come from fares. So, what we have is a massive subsidy. Imagine if the Waltons and other shareholders didn’t care about turning a profit and Wal Mart charged $50 for a new HD television and $25 for a Nintendo Wii. If they did that, there is no doubt that customers would flock to their stores. Of course, if they sold these items for such low prices, Wal Mart would likely go out of business (or at least stop making money) before long, so they instead charge market prices for their goods.
Transportation should be no different from Wal Mart. I as a New Mexico taxpayer should not be forced to subsidize your trip to Santa Fe or Belen any more than I should be paying for your HD TV. Unfortunately, this is not conventional wisdom in this, the age of bailouts.
Nonetheless, those who call the Rail Runner a success are ignorant of economics and simply aren’t weighing the projects’ full cost.

Merry Christmas. For a touching and informative story on the real meaning of Christmas, check out Jim Scarantino’s column in today’s Albuquerque Journal. Unfortunately, I have no link because I couldn’t find it on their site. Anyway, it is fantastic.
Also, be sure to tune in to AM 1550 from 9am until 10am in and around Albuquerque for a discussion of Christmas and whether or not capitalism and free markets are compatible with Christianity. It’s sure to be an interesting discussion.

In case this is your first time to our blog, the Rio Grande Foundation recently released its 2008 Piglet Book on wasteful government spending. Read more about it here. As you might imagine, there was a good deal of discussion on various New Mexico blogs relating to the report.
Mario Burgos did a nice write up over at his blog marioburgos.com.
Another space-focused blog wondered why we’d focus on “small potatoes” in our report in this age of bailouts.
The blog New Mexico Central also covered the story.
Lastly, I appeared on KOB’s show “Eye on New Mexico” last Sunday to discuss wasteful spending in New Mexico and around the country. You can watch the video here.

I was downtown the other day and received a ticket on my car. I wondered what I did wrong and when I took a look at the ticket, I saw this. How many of you, dear readers, knew that parking more than 18 inches from the curb was an infraction? It would seem that our City’s meter maids are being charged with closing at least part of Albuquerque’s budget gap.
It would seem that if Albuquerque’s meter maids are going to be so aggressive it kind of limits the usefulness of efforts to get people to come downtown, right?

Rarely do we at the Rio Grande Foundation see eye to eye with left-wing Sen. Jerry Ortiz y Pino, but he actually talked some sense in a recent column in the Alibi. His conclusion and ours: higher taxes are not the solution to improving education in New Mexico.
In a letter to the editor I expressed support for this realization and the Senator’s call for smaller schools, and suggested a system of education tax credits as a means of spurring reliance on smaller schools in the short term. Find out more about tax credits here.

If you follow the Foundation at all, you probably have heard about our 2008 Piglet Book. Our op-ed on the topic of “pork” and wasteful spending has been making the rounds throughout the state. Check that out here.

As I wrote on this site a few days ago, Albuquerque Mayor Marty Chavez is asking incoming President Barack Obama for a $1.6 billion bailout. Obama has already pledged to “invest” in infrastructure, so Mayor Marty is just getting his, right?
Unfortunately, as Kristina Rasmussen of the National Taxpayers Union points out in a recent article by columnist Cal Thomas: “Total cost of the wish list is $73,163,299,303. They claim this will create an estimated 847,641 jobs in 2009 and 2010. Divide that out, and you get a cost to taxpayers of $86,314 per job. Not exactly a great deal.” It seems like the plan simply shuffles the deck chairs on the Titanic rather than providing any “stimulus.”
As Mayor Marty has figured out, much of this spending represents nothing but pork and other projects, like the Albuquerque streetcar, that would not otherwise receive funding if the issue was left to local politicians and voters. Once Santa Clause (the feds) agree to pay, all restraint is abandoned.
As if to summarize the wrongheaded economic thinking associated with this money grab, Forbes recently named Albuquerque one of 5 “Obama Boomtowns” that are expected to benefit from the “stimulus.” Perhaps Forbes will raise a more important question next time “Which taxpayers and small businesses will lose out the most as massive amounts of their money is wasted on these boondoggles?” Unfortunately, I have a feeling this group includes all of us.

George W. Bush remains an enigma. Does he really believe in the free market? Does he completely misunderstand how markets work? Or, does he simply pay lip service to markets while continuing to undermine them? Regardless of his innermost feelings, there is no doubt that Bush abandoned free markets early and often in his presidency.
Unfortunately, as this recent story illustrates, Bush continues to imply that he was a free marketeer until he decided that a little (or a lot) of socialism was needed.
As Matt Welch points out over at Reason:

The real failure here is one of nerve, of imagination, of historical memory. You cannot save something by destroying it, or abandoning it, or even giving it a few stiff raps in the kneecaps. “Paternalism” is too mild a word for the mentality that produces such a sentiment, let alone the disastrous policies to back it up.

I would go even further and argue that the Medicare Prescription Drug Bill, No Child Left Behind, Sarbanes-Oxley, massive regulation, and massive spending increases under Bush should put lie to the President’s claims of adhering to free markets, but that is just a starter list. Unfortunately, he continues to besmirch and discredit free markets the more he opens his mouth.
Call me crazy, but how much worse can President Obama really be? At least he doesn’t paint himself as a free market believer.

“Tax Lightning” was first used to describe the shock a homeowner experiences upon receiving the initial property tax assessment from their respective county. It has since become more of an umbrella term to reference a larger problem: a severe property tax inequity among homeowners in New Mexico. When ownership of a property transfers, the property tax may be assessed by county assessors at current market value, pursuant to legislation passed in 2001 (HB 366). This has only become a hot topic in the past few years. People who purchased or developed properties at the height of the real estate bubble are paying inflated property taxes. Two property owners in the same district, perhaps even door-to-door, may be paying severely disproportionate property taxes. “Tax Lightning” remains an important issue; particularly with the 2009 state legislative session impending. This trend in property assessment at “current and correct” market value serves the budget concerns of county bureaucrats but chills our already weakened economy by penalizing home buyers.
While the weak housing market certainly makes it more difficult for potential home buyers to pull the trigger, the reality of “Tax Lightning” further hinders the market from returning to liquidity in New Mexico. A potential homeowner won’t enter the market because they face a significantly-increased property tax burden. While this is bad enough for those who are looking for bigger and better housing, the problem is even worse for current homeowner such as seniors, retirees, and those who simply need a lower house payment. Their incentive is not to downgrade to a smaller, more affordable house because they may wind up with a comparable monthly payment for a less valuable property, due to the new assessment and subsequent tax increase.
For some time now local newscasts, newspaper articles, and blogs have attempted to voice the concerns of those homeowners most directly affected by Tax Lightning. But the public outcry appears to have had little effect on this policy. Challenged assessments are continually shot down. The answer given to contesting parties has been the same, unaffected by public outcry: your property tax was assessed pursuant to the law. It follows then that new legislation is the only real means for change. Earlier this year, Senator Mark Boitano sponsored two bills addressing Tax Lightning which county assessors lobbied against. Bernalillo County Assessor Karen Montoya said that her office had considered the fiscal implications and determined that the State would lose too much revenue. The bills ultimately failed. In 2009, Senator Boitano and his colleagues will introduce new legislation that may be more amenable to the opposition. This new legislation may propose the following:
• Clarifying legal nuances regarding the formula to calculate property taxes and the definition of “current and
correct” and “valuation maintenance.” This may narrow the gap between those paying too much and those
paying too little.
• Applying yield control to debt service in addition to operating costs
• Maintaining a 3% cap regardless of a change in ownership
• Removing the 3% cap, reassessing all properties, and then imposing the cap again. Phase in the heavy
increase experience by some and the decrease experienced by others over a 4 year period.
It is clear that this issue is of great concern to those most directly affected. It should be of concern to everyone. It appears that legislation is the only way to interfere with the new trend in assessment. People are seeking shelter from the lightning storm. Concerns should be voiced to state legislators. The 2009 legislative session draws near, and with it a new opportunity to properly address this issue. The desperate state of our real estate market and the extreme dissatisfactions of property owners should be enough to influence legislation.

Once the holidays are over, Albuquerque’s City Council will again be discussing whether to pony up close to $400 million and raise taxes in order to finance an arena. We at the Rio Grande Foundation have long questioned the need for a taxpayer-financed arena or events center, particularly who would actually play there. Possibilities have included the WNBA and an arena football team.
Council better hurry up because the list of possible tenants has become even narrower with news that the Arena Football league has decided not to play the 2009 season. This comes on the heels of news that the Comets, the WNBA team in Houston, has folded. If the WNBA can’t survive in America’s 4th-largest season, how will it survive here?
The fact is that the case for the arena is built on nothing more than hope and taxpayer dollars. If they build it, who will come?

While the Founding Fathers would undoubtedly be rolling in their graves if they were aware of the federal government’s massive intervention in the American economy, we can still celebrate America’s Bill of Rights and its important legacy of limited government. It is also important to educate our fellow Americans that ours is a federal government with limited powers and that the Bill of Rights protect individual Americans and their state and local governments from federal overreach.
Happy Bill of Rights Day!

Sometimes I wonder if Albuquerque Mayor Martin Chavez is serious. Hopefully, Congress does not take him very seriously with regard to his latest scheme to expand government, this time at the expense of federal taxpayers rather than just local taxpayers. The key to this scheme is that he won’t have to build public support for his projects and no one will have to vote on the plan. I’m referring, of course, to his plan for Congress to “bail out” Albuquerque to the tune of $1.6 billion.
As outlined in the New Mexico Business Weekly, Chavez’s wish list includes:

A concentrating solar plant at Double Eagle airport for $532 million, a wind farm for $140 million, a small business energy audit and retrofit program for $5 million and a solar array on the Albuquerque International Sunport with a price tag of $34.5 million.

Of course, no list of Mayor Marty’s would be complete without money for his beloved streetcar down Central Avenue for which he’d like $90 million. Apparently, the voices of City Council and Albuquerque voters have no bearing on Mayor Marty’s dreams. He wants a streetcar and by golly he’s trying to get it even if taxpayers in Des Moines have to pay for it.
The fact is that Congress has at least temporarily rejected the bailout for the Big Three Automakers. Hopefully, this move will put a stop to the bailout bonanza once and for all and Mayor Marty will be unable to force his useless streetcar on us by begging for money from Washington.

Over at the left wing FBIHOP blog, we at the Rio Grande Foundation are accused of believing that voters are “dumb” for voting, albeit narrowly, to raise the gross receipts tax to fund the Rail Runner. Of course, I never said that voters in New Mexico or elsewhere are dumb, rather, I simply argued in a recent Albuquerque Journal column that government should not be able to use taxpayer money to fund campaigns in support of ballot measures. FBIHOP apparently interprets this as my saying that voters are dumb.
Nonetheless, lets not let the facts get in the way of a perfectly interesting discussion. Are voters really informed when it comes to voting on the issues? If anyone watched the JayWalking or other “man-on-the-street” segments about the presidential candidates it seems pretty obvious that voters are not always well informed.
While it is easy to criticize ignorance, as Reason Magazine writer Bryan Caplan wrote voters tend to make boneheaded decisions on basic economic issues when they go to the polls. This is not a sign that they are inherently “dumb,” rather it is a sign of rational ignorance in which people concern themselves with their jobs and succeeding in their daily lives rather than keeping track of politicians and policy issues.
While overcoming rational ignorance is difficult, it would seem that at the very least policymakers should stop government bureaucrats from using taxpayer money to sway voters to vote for bigger government.

If you caught KOB News last night, you saw a report on the release of our Piglet Book. Check out this article which includes some great footage of our pig frolicking in the Santa Fe plaza and handing out copies of our report. The report itself is available here.

In case you missed it on each of the major New Mexico news outlets, the Rio Grande Foundation released its 2008 Piglet Book along with the Washington, DC-based Citizens Against Government Waste. Detailed in the report is hundreds of millions of dollars of wasteful and unnecessary spending. Download the report here.
In case you did miss the stories, you can hear more about the Pig Book on Bob Clark’s show on 770 KKOB AM at 9am on Friday and on 1550 KJOY AM on Saturday from 9am til 10am.

Nick Gillespie over at the Reason blog points out that with the automakers’ bailout practically a done-deal, the states and cities are using infrastructure investment to get their own “bailout.”
Among the infrastructure items funding is hoped for:

* a proposed “O’Malley Road Reconstruction” in Anchorage, Alaska, that will cost $30 million but provide 300 (count ’em!) jobs;
* a Gadsen, Alabama “Hoke Street Sidewalk Construction to serve new Department of Human Resources facility” that’s a real steal at $150,000 but will take almost surviving members of the Allman Brothers Band off the public dole (at last!);
* Police Facility Solar Panels for Lake Havasu City, Arizona, for only $400,000 and 75 jobs;
* Stormwater Settlement Ponds for Beloit, Wisconsin for $1,428 million and five whole jobs, which will feed a family of four in the Badger State, especially if they only eat government cheese;

Bastiat disproved the idea that government can improve our economic situation by wasting money on worthless projects. Unfortunately, if Congress and the White House cave to the governors and mayors we’ll be pushing off any economic recovery and making us all poorer.

Advocates of limited government have been distressed to see one bailout after the other pass through Congress only to have little positive impact on our economy. While it looks likely that the automakers will get their bailout, taxpayer advocates led by the National Taxpayers Union are calling for federal policymakers including the Treasury Department and Congress to make the bailouts transparent at least. Read the recent coalition letter to which the Rio Grande Foundation is a signatory here. A total of 72 grassroots organizations, including many that are not considered to be fiscally-conservative, signed the letter.