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.

We at the Rio Grande Foundation certainly did not and do not support the so-called stimulus bill. Of course, with the fear factory in Washington working at a feverish pace and President Obama still in his honeymoon period, Congress caved in and gave him the nearly $800 billion in spending he wanted.
Of course, this did not stop the legislation from passing. But that doesn’t mean that all is lost. Money is going to be spent, so New Mexicans might as well benefit somewhat from this debacle. To that end, check out the New Mexico projects at this site called Stimulus Watch. You can then click on your area and individual projects and vote for the ones you think are either critical or not critical. As you can tell by going to the site, the voters seem to have a better grasp on what is important than their elected leaders. For example, the Paseo and I-25 interchange has been labeled a high priority by voters while the Albuquerque arena and streetcar have justifiably been categorized as low priorities.
I don’t know that the politicians in charge of spending this borrowed money will go to the Stimulus Watch website and peruse the results, but they would be smart to do so. Anyway, given the lack of control average citizens will have over how this stimulus money is used, it certainly wouldn’t hurt to try to influence them in this way.

One of the most frustrating aspects of working in public policy is the vast number of policy advocates out there who advocate undertaking policies on behalf of some public good (like attracting more doctors to New Mexico), but fail to realize that their preferred policies, if enacted, would have the exact opposite effect from what they advocate and wish. One recent example of this is the policies advocated by Frank G. Hesse, M.D., Chairman of New Mexico’s Health Policy Commission who wrote about the need for more doctors in New Mexico in the Albuquerque Journal.
While going through all the dire numbers about the absence of doctors, dentists, and other providers in New Mexico, he concludes saying, “There is a great hope that a universal health insurance program will be adopted, improving health care.” This sentence certainly made me do a double take. As we pointed out in a policy paper, “Governor Richardson’s Health Care Plan:
Enslaving Physicians and Destroying Private Health Care” which analyzed Governor Richardson’s original “universal” health care proposal, his plan contained price controls, including strict controls placed on doctors’ salaries, which would simply chase more providers out of state.
It is true that a socialized health care scheme enacted on a national basis might not have the immediate impact such a plan would have were it enacted in New Mexico only, but it seems hard to believe that working for the federal government is an attractive option for most doctors and those students now exploring making a costly investment in medical school.

If you read this blog regularly, the postings on the topic of education will begin to sound like a broken record. Unfortunately, the key word is “broken” as our educational system is. More evidence was provided recently b the findings of the American Legislative Exchange Council, the limited government-oriented national legislative umbrella organization based in Washington, DC.
That organization’s recent study, the 15th edition of their “Report Card on American Education,” shows that New Mexico’s K-12 government-run education system is not only behind other states, but is falling further behind as time passes. According to the New Mexico-specific pages of the study which can be found here, The Land of Enchantment has fallen from 43rd to 48th since 1998 in ALEC’s overall ranking. This, despite a more rapid increase in per-pupil spending than was found in other states (42% to 36.6%). Of course, this has not deterred New Mexico’s educational establishment from demanding still more money to pour down this rat hole.
One would think that beating out only Hawaii and Mississippi among the 50 states would be enough to encourage New Mexico’s political establishment and citizens to demand immediate change, but so far this session, SB 355 which would establish a system of education tax credits, has languished without so much as a committee hearing. Hopefully this changes quickly before another lost generation of New Mexico children is failed by the government school monopoly.

The Federalist Society for Law and Public Policy Studies in conjunction with the University of New Mexico School of Law are hosting a lecture by Antonin Scalia Associate Justice, United States Supreme Court Tuesday April 14, 2009 3:00 pm at the Albuquerque Convention Center
Registration is free and available here.

New Mexico may be facing a major budget crisis, but pet projects die hard. In December, the Rio Grande Foundation published our 2008 Piglet Book which discussed dozens of ways in which New Mexico policymakers might trim spending when facing a $600 million deficit.
Some of the projects mentioned in the Piglet Book have been debated. First, there was the $22.3 million equestrian facility for which half of the money was cut out to fund last year’s deficit. Now legislators are discussing whether to eliminate taxpayer funding for the $1.4 million recital facility the Santa Fe Opera plans to build. While cutting such frivolous spending would seem to be an easy decision and perhaps unconstitutional, Speaker Ben Lujan has defended the project saying it will “benefit the state.”
While New Mexico families — especially those recently laid off by Zangara Dodge and Eclipse Aviation — New Mexico legislators refuse to make even the most basic cuts in wasteful spending projects. Do we really have an economic crisis in this state or do some of our legislators simply not understand?

Recently, I blogged about the arrogant and ignorant comments made by Ellen Bernstein, the head of the Albuquerque Teachers Federation. Basically, Bernstein told the business community to “sit down and shut up” if they don’t support higher taxes for education.
While New Mexico’s beleaguered and small business community, particularly the Albuquerque Chamber, has repeatedly sold out over the years, perhaps they are turning over a new leaf under the leadership of car dealer Don Chalmers.
The most important example of this turnaround is the fact that the Albuquerque Chamber was among the groups criticized by Bernstein and the fact that, at least to date, the Chamber has remained firm in its opposition. A recent op-ed in the Albuquerque Journal by Chalmers and Cole laid out the Chambers’ very good reasons why the business community should have a tremendous say in our educational system and how it is funded.
Here’s hoping the business community remains engaged and opposed to these unnecessary and economically-harmful tax hikes.

While it has been little-reported in the press, at its meeting on Wednesday the 18th of February, the Albuquerque City Council will be discussing a ¼th cent “tax increase.” The bill which numbered and called “Transportation Infrastructure (O-08-63)” would extend the ¼ cent Gross Receipts Tax surcharge , which is set to expire in a few months, for an additional 6 months.
While an additional 6 months may not seem like a very big deal to some, the fact is that voters only narrowly approved the ¼ cent “temporary” tax back in 1999. Of course, once government gets a hold of a new source of taxpayer money, they are loathe to give it up, so it certainly appears that supporters of this effort are planning to make the tax permanent without going to the voters. Passing a six-month extension at a time of tremendous economic difficulty and without going to the voters would seem to be simply the first step in that direction.
If you can’t attend the meeting on Wednesday and tell your councilors what you think, get in contact with them here.

As if there were not enough reasons to be concerned about the so- called “stimulus package” (you can read it here) now being consideration in Congress, the legislation contains “Buy American” provisions that could start a trade war. Check out this article on the reaction from Korea.
Stifling free trade — and potentially igniting a trade war — would be a great way to extend the current malaise. As one economist pointed out in the aforementioned article, “If we only buy American, we’ll probably pay more for inferior goods.” That may create some jobs for Americans in the short-term, but it will hurt our standard of living even more than the current downturn has.
The Great Depression was ignited in large part by Smoot-Hawley tariffs which imposed the highest tariff increase in US history. I hope our political leaders are smart enough not to repeat that mistake in this spending package.

It never ceases to amaze me how frequently articles get published in the Albuquerque Journal on particular issues with little or nothing in the way of empirical evidence for that particular point of view. You may disagree with the Rio Grande Foundation perspective, but at least we back up our arguments with facts and examples rather than mere conjecture. The article, “Health-Care Reform the Best Stimulus,” which appeared in the paper on Monday is a perfect example.
The article approaches the health care issue in a rather conventional way talking about the cost of care and the number of uninsured, but that’s about it as far as the problems and causes of our current health care system are concerned. A quote from President Obama is then trotted out:

“Obama himself has acknowledged the need to reform health care and invest in publicly funded programs to help alleviate the financial crisis. “The time has come — this year, in this new administration — to modernize our health-care system for the 21st century; to reduce costs for families and businesses; and to finally provide affordable, accessible health care for every American.” He added that health reform, “has to be interwoven into our economic recovery program…This can’t be put off because we’re in an emergency. This is part of the emergency!”

But that’s it. The authors recommend that New Mexico create a supposedly “independent” Health Care Authority as the solution, but make no mention of the exact policies that would save money and insure larger numbers of New Mexicans (or Americans for that matter). Rather than empowering an authority imbued with mythical powers and the ability to remain independent of political considerations despite the fact that literally billions of dollars are at stake, here are some real solutions for our health care problems that, if adopted, would improve our health care system.
Of course, the authors of the article give no specifics about how their plan would stimulate the economy, but at least our proposed solutions are limited to health care, not solving our entire economic situation.

Economist Scott Moody recently analyzed state and local government employment for The Rio Grande Foundation. An opinion he wrote on his findings is available here.