Utah voters on Tuesday face the most important choice on the ballot anywhere in the nation this year. The issue is whether parents and children should receive any of their tax money back when they opt out of government-run schools or whether their choices are limited to just those schools that are indeed run by the government. The law was signed back in February, but the teachers’ unions, true conservatives in the sense that they have no forward-looking agenda only opposition to change as George Will describes, have done everything in their power to strangle the program in the crib.
While it is true that Utah’s voucher program is a more difficult sell than the tax credit program we’re working on here in New Mexico, the Utah vote will be an important measuring stick to see where voters are on school choice.

Los Alamos and Sandia Labs are on the chopping block in Congress. That is a fact and it has many of the Labs’ employees and local economic officials in a panic. But is it such a bad thing for New Mexico’s long-term economic future? In a recent opinion piece in the Albuquerque Tribune, I argue that cuts at the Labs might be an opportunity to ween New Mexico’s economy from the federal teat and adjust our tax policies in ways that will generate long-term economic growth.
After all, New Mexico has long received more federal largesse relative to what its taxpayers pay than any other state, but it hasn’t done much to improve our economic picture or poverty levels. As the economic impact of these layoffs is felt, our political leaders would be wise to enact some pro-growth reforms (like cutting the income tax or reducing the regulatory burden) in an effort to bring businesses to the state.

According to a new study by researchers at Johns Hopkins University studies high school dropout rates and terms schools that graduate no more than 6 in 10 of incoming freshman a “dropout factory” that is failing far too many students.
According to an article about the study in the Albuquerque Journal, the New Mexico Public Education Department says that in New Mexico, 66 percent of incoming freshman make it to their senior years. That’s bad enough, but in Albuquerque’s Public Schools, only 61 percent of incoming freshmen make it to their senior years. This almost qualifies all of APS as a “dropout factory” according to the Johns Hopkins study.
Of course, APS has its own data which show that not nearly that not nearly so many of its students are dropping out, but New Mexico has already been shown to have fudged graduation data in the past. Who are you going to believe, objective researchers at Johns Hopkins or bureaucrats with a decided self interest who have misled in the past?

For the average politically-unconnected Albuquerque-area developer, dealing with local governments is a nightmare of red tape. Anti-development politicians and anti-“sprawl” and/or “not in my backyard” citizens have passed numerous laws that make it a wonder anything is built. Out-of-control impact fees, high taxes, opaque zoning laws, capricious government officials (see Wal Mart’s experience in Vista del Norte), and onerous “green” building codes all make the process difficult and time-consuming.
On one hand we now have policies that stifle new development and contribute to the decline of existing areas? But, on the other hand we have Tax Increment Financing (TIF) laws here known as TIDD which are targeted at massive new developments that seem designed to help Albuquerque area to grow as rapidly as possible. In these seemingly-conflicting issues seems to be control. Massive new developments are okay, but only if they are acceptable to politicians. New legislation introduced by supposed foe of TIDD, Michael Cadigan, is a perfect example. It’s okay…if you do things my way.
Unfortunately, TIF or TIDD is all about political control as development expert Randal O’Toole points out in this podcast. Opponents of TIDD should remain principled in their opposition and work to make Albuquerque an easier place to build rather than extending political control even further. Unfortunately, that is not the tendency of politicians.

According to the Tax Foundation’s exhaustive analysis of business taxes nationwide, New Mexico, the state ranks in the middle of the pack (23rd overall). There is a lot of great information and analysis in the paper, but the following quote summarizes the study’s findings with regard to New Mexico:

New Mexico has improved several aspects of its tax system in recent years, most advantageously cutting the top income tax rate, with the result that its sales tax system is practically the only thing dragging its overall ranking down to a middle-of-the-pack ranking of 23rd best. Although the almost 6% rate (when including local add-ons) is not excessive, its application to business-to-business transactions is among the most extensive in the nation. This results in several layers of sales taxation, which distorts the economy against sectors that rely on multiple stages of production to bring their products to market.

I have a few quibbles with even this quote, however. First and foremost, the reason we have such an all-encompassing sales tax is that we have a gross receipts tax with lots of exemptions written in. The analysis contained in the paper is correct, but New Mexicans call the tax “gross receipts,” not “sales.” More importantly, few places in New Mexico have sub-six percent gross receipts tax rates. In fact, the statewide average is 6.65 percent and the average rate of New Mexico’s 10 largest cities is in excess of 7 percent. Clearly, the gross receipts tax is an even bigger problem than the Tax Foundation’s report lets on.
New Mexico has improved somewhat in recent years, but we still have a long way to go. Reforming the GRT is a must for the economic future of the state.

Check out this hilarious video which hammers home the point that funding health care programs “for the children” by raising taxes on smokers is pretty ridiculous.

By most accounts, Albuquerque Mayor Martin Chavez is one of the most pro-environment mayors in the nation. We at the Rio Grande Foundation have not always agreed with him on some of his environmental initiatives, most notably the “modern streetcar” which was supposedly designed to get cars off Albuquerque streets.
Of course, there are always some on the extreme fringes for whom even major “green” initiatives are simply not enough. One of those voices, a Dr. John Fogarty who runs a group called Physicians for Social Responsibility, but who has also served on New Mexico’s Climate Change Advisory Group and Gov. Bill Richardson’s Green Building Task Force. To Fogarty, all the green building codes in the world are not enough because they still have that dirty little word “building.”
You see, while Fogarty decries “sprawl” and global warming, and our need for foreign oil, he offers no real solutions to the problem. Fogarty’s regional transportation plans are simply an attempt to impose Portland, OR style policies on New Mexico residents who do not want them. The sad thing is that while Portlanders have grown increasingly resentful of the heavy-handed nature of regional planning bodies, sprawl has increased and so has automobile usage. Portland doesn’t work.
Fogarty and others are trying to impose land use policies in direct opposition to the wishes and desires of New Mexicans. After all, if people wanted to live downtown, wouldn’t the condos down there be selling?

Governor Bill Richardson wants “universal coverage” passed in the upcoming legislative session. That is no secret. What has been secret up til now has been details of his plan. A broad outline was released this week and unfortunately although not unexpectedly, there is nothing new or innovative there and costs are unknown. According to an article in the Albuquerque Tribune

By 2010, everyone in the state would be required to have health insurance or show they have the means to fund their own care, under a four-phase plan Richardson will pitch to lawmakers in the 2008 legislative session. The governor today also is expected to say he wants the Legislature to mandate health insurance companies to spend 85 percent of premiums on direct services to patients, including disease prevention and management.
Officials were still working Wednesday night on the projected costs of the plan.
Richardson’s plan also would require insurance carriers to offer coverage to anyone who wants it, and would prohibit them from excluding patients with pre-existing conditions.

In other words, everyone would have to have health insurance, just like in Massachusetts where Mitt Romney’s similar mandate plan is failing. Is it any wonder that Richardson is postponing this mandate until 2010 when he’ll safely be out of office? Since New Mexico has twice as many uninsured as Massachusetts, the task of insuring everyone will be even more difficult.
Also, insurance companies will be forced to offer insurance in a costly scheme known as “guaranteed issue.”
In other words, there is no innovation, no outside the box thinking, just bigger government. The only thing to do now is to kill it.

I have ridden the Rail Runner before, if for no other reason than to know what I am talking about when I criticize it. That said, I had my nieces (3 and 4 years old) in town this week and “Uncle Paul” had the pleasure of taking them on the train during the afternoon rush hour from downtown ABQ north to the 550/Sandoval County stop.
While the train’s two cars were never filled to capacity, the train did pick up significant numbers of riders heading to the south. Of course, with a day pass costing just $3, most of the costs of riding the rails are borne by taxpayers, not riders. It would be interesting to see what would happen if maybe 25% of the train’s operating costs (rather than the current 10%) were borne by riders as opposed to the rest of us.
The fact is that the Rail Runner in its current form is not going away. The best we can do is to stop the train before Phase II to Santa Fe is complete. Running through all those miles of barren Indian Country to a city of 70,000 or so people will drain transportation funds that could otherwise be used to improve the Paseo/I-25 interchange or alleviate the myriad maintenance problems facing this state. And that doesn’t even account for the millions of annual operating costs that will only increase over time.

Recently, I criticized Rep. Heather Wilson’s support for a massive tax hike to expand SCHIP. What I didn’t mention was that retiring New Mexico Sen. Pete Domenici supported the same plan to expand the program by raising taxes, despite President Bush’s veto. Domenici argues his case here.
While Domenici is certainly more conservative than Wilson, this is not the first time he has been “off the reservation,” especially on health care. In fact, it is particularly ironic that Domenici supported SCHIP expansion at the same time as he has finally succeeded in pushing his mental health parity legislation through the Senate.
For someone who claims not to support government-run health care, he sure likes to dabble in ways that are bound to make insurance and health care in general more expensive, thus forcing more and more Americans onto the government dole that he claims to abhor.

I was out of the office for a few days getting married in Algodones and have not been blogging for obvious reasons.
I was quoted in a recent story in the Santa Fe New Mexican that I think illustrates some of the problems in health care reporting specifically and economic reporting in general — reporters focus only on the benefits of a proposed program and not on the drawbacks, nor do they question why people have the problems they do.
While I am quoted on behalf of the Rio Grande Foundation as a critic of the massive expansion of New Mexico’s involvement in health care decisions, the author fails to discuss the personal decisions that allowed a 23 year old woman to become so obese that she can’t work and requires oxygen at night. Why taxpayers must foot the bill for her health care is another question that goes unanswered.

On Monday, Rio Grande Foundation President Paul Gessing appeared on KKOB radio host Bob Clark’s radio show to discuss New Mexico’s outrageous laws, the Foundation’s work, and the post-Domenici political environment in New Mexico. Audio of the appearance is available here (after a few introductory commercials).

Yesterday, the Rio Grande Foundation announced the results of our outrageous law contest. We got a lot of great coverage out of the contest including this story (click and drag New Mexico Strange Law box) that appeared on the October 16 10 o’clock news.

With the news that Doña Ana County is delaying its implementation of a gross receipts tax increase to fund the Spaceport, one might wonder if that project, like the Rail Runner extension to Santa Fe, is in trouble. We can only hope.
The problems are twofold: First and foremost, as discussed in the Las Cruces Sun article above, other counties are not jumping on board the project by passing their own tax hikes as quickly as Doña Ana did. Also, as with the Rail Runner, Spaceport management is asking for more money than originally estimated.
With all of the Foundation’s complaining about the Rail Runner and Spaceport, one might mistakenly believe that we have something against “economic development.” That actually couldn’t be further from the truth. Rather, we believe that individuals, not governments, drive economic development and will allocate resources far more efficiently than governments do. Both the Rail Runner and Spaceport seem to be bearing this out.

It is no surprise that the Albuquerque Tribune, the city’s left-leaning newspaper, slammed President Bush for vetoing SCHIP expansion. What is interesting is one of the arguments the paper uses in its rebuke:

It’s a truly stunning action, when you consider that the federal debt has nearly doubled during Bush’s deficit-spending tenure, which has been everything but fiscally responsible, let alone conservative. Now, when it comes to America’s children, the federal government cannot afford to insure them against illness or death.
The president essentially decided last week that it was more important to stave off further government intervention in the nation’s failing private health care system than to provide for the vital health care of 4 million more of America’s children.

Obviously, we at the Rio Grande Foundation have a different perspective on the matter as do most free market health care analysts. That said, Bush’s veto would have been far less of a political target if he’d maintained a consistent, fiscally-conservative stance throughout his presidency. Better late than never as far as we’re concerned, but it is politically-difficult for the President.

It wasn’t the most prominent story in this morning’s newspaper, in fact, if you didn’t read the Business Outlook section closely, you probably missed it. The story is that the taxpayer-financed Santa Ana Star Center in Rio Rancho is losing money. (subscription required) Of course, I just noticed that the Tribune reported this story a week ago…
Anyway, while backers expected the arena to earn $1.6 million in its first year, the arena actually lost $47 million. Poor attendance at minor league hockey games and the “newness of the arena” were blamed, but new facilities usually result in more fans and profits, not less, so I don’t see the situation turning around anytime soon.
it is no surprise to anyone who follows public financing of arenas or railroads and streetcars that the cost estimates and profits are low-balled early to get the public to commit and then the costs are jacked up once it is too late to turn back. We’re seeing it right now with the Rail Runner. Thankfully, it looks like Albuquerque Mayor Marty Chavez will be too distracted (subscription required) with other activities to spend his time wasting taxpayer money on arenas and streetcars.

Unfortunately, New Mexico doesn’t have the initiative process which would allow voters to place laws and constitutional amendments on the ballot. In Oklahoma, however, they do have this process in place, but the political establishment jealously guards its power from the people. After all, there is no bigger threat to those who control the process than an informed and energized citizenry.
My friend Paul Jacob and some others who believe in limited government and were trying to put an amendment on the ballot in 2006 to limit taxes and spending in the state have run afoul of the state’s attorney general who is carrying out a vindictive campaign against them. Read Jacob’s account of the absurd efforts to stop citizen-activists.

As I reported here previously, New Mexico Representative Heather Wilson has been one of the ringleaders in the House in support of the massive Senate SCHIP expansion. She is now actively working to overturn Bush’s veto.
This issue went from important to urgent with the news that Pete Domenici would retire and Wilson would be running for his Senate seat. As I point out in National Review Online, SCHIP is just the tip of the iceberg when it comes to Wilson’s liberal record, but we need her to see the Senate race as a reason to move to the right, not the left on SCHIP and other tax and spending issues.

For those who attended and would like to listen to it again or for those who missed John Fund’s talk in Albuquerque on the 27th of September, the Rio Grande Foundation has made a recording of the event available online.
A direct link to the audio can be found here. Photos are also available.

By now, most readers of this blog have heard that Senator Pete Domenici is not running for re-election in 2008. This is big news not just in New Mexico, but nationwide, since this makes it increasingly certain that Democrats will retain control of the US Senate. That said, what does Domenici’s retirement mean? Well, Heather Wilson has already jumped in to the race, but that was almost a certainty as she was going to be redistricted out of her seat soon anyway.
It is also quite possible that Reps. Steve Pearce or Tom Udall may jump into the race as well. My hunch is that Wilson has the best chance of winning a statewide race among these three because she is the “not too hot, not too cold candidate.” (Pearce may be too conservative for the north and Udall may be too liberal for the south)
Of course, some are saying that Richardson will jump into the race which means he’d have to be considered the front-runner. Personally, I’d like to see former-governor Gary Johnson jump into the race….

Increasing federal control over education policy as occurred under No Child Left Behind was never a good idea. For one thing, it gives lobbyists a central location enabling them to force states to purchase their products. In this instance, our own Sen. Jeff Bingaman is taking a lead role. Tim Carney writes about it in a recent Washington Examiner article:

In August, Sen. Jeff Bingaman, D-N.M., together with Sens. Richard Burr, R-N.C., and Patty Murray, D-Wash., introduced the Achievement Through Technology and Innovation Act, or ATTAIN for short. The bill’s various provisions all aim to direct federal funding to local schools under NCLB. A House version of ATTAIN was introduced in May.
One significant aspect of NCLB for struggling schools has been $100,000 federal grants that they could more or less spend as they please. Many schools spent the money on computers or software licenses, but many others invested in a couple more teachers. ATTAIN would remove some of that leeway and require schools to spend certain portions of their federal money on computers, software and training teachers to use the technology.

It would be great if Bingaman and others would exert some self-control and not micromanage the states’ efforts to allocate resources under NCLB, but money comes with strings. This is just the latest justification for ending the law later this year.

Henry Morgan (subscription required) of Alamogordo is my hero. Why? Because he’s sticking it to the man by letting customers smoke in his restaurant. As any smoker and most non-smokers know, New Mexico is now “smoke free” just about anywhere indoors. So, while I personally may not like smoking and under normal circumstances might avoid Morgan’s restaurant because it allows smoking, that choice is, at least under law, already made for me by our friends in Santa Fe.
Of course, while advocates of fascism…er…I mean controlling all of our actions say that restaurants are not impacted by smoke free laws, the economic reality is not so pretty. More details on the economics of smoking bans can be found in this recent blog.

Our spiritual friend in Arizona, Coyote Blog, takes a look at the Rail Runner following this article about it in the AZ Republic, which brushes off the RGF as an ‘anti-tax foundation.’
Give it a read.

Is how we pay for health care important? A few weeks ago I skewered the Albuquerque Journal’s health care columnist for arguing that how we pay for health care is irrelevant.
Needless to say, as an advocate of free markets and someone who is versed in economics, I had to respond to such a statement. This is my response (subscription required) which appeared in Thursday’s paper. Basically, my argument is this:

Even avowed socialists like Michael Moore understand (to a point) that how we pay doctors is important. Insurance companies are taken to task in Moore’s movie “Sicko” for denying patients necessary care. What Moore and other advocates for government-run health care fail to see is that replacing insurance companies with government bureaucrats will only make the current situation worse.
After all, someone has to control costs and that means making decisions about who receives treatment and who doesn’t. Even in countries where the tolerance for high taxes is much higher than it is here, governments have imposed waiting periods and other mechanisms to deny care, thus keeping a lid on costs to taxpayers. (Of course, Michael Moore conveniently left these stories out of his movie.)
There are really only three cost-control options: individuals, insurance companies or the government. It only makes sense that individuals, particularly if they are armed with adequate information by their doctors, can obtain the best care for themselves for the lowest cost. After all, in a world of scarce resources where trade-offs are inevitable, wouldn’t you rather decide how those trade-offs are made instead of having someone else decide for you?
That is the thinking behind Health Savings Accounts (HSAs). Rather than giving insurance companies or the government the final call over my health care needs, as the proud owner of an HSA, I am building money in a savings account and can use that money on the care I need. This includes “alternative” forms of medicine that are not always covered by traditional insurance policies.
HSAs or, better still, simply giving individuals the tax advantages that are now given to employers to pay for health care, will improve the quality of our health care while saving money at the same time. Any scheme that purports to “reform” health care without empowering patients must rely on someone else to contain costs and will only worsen the problems we now face.
How we pay doctors drives the incentives in the health care system. Restoring the relationship between doctors and their patients can only be done by returning patients to the rightful role of owning their own health care.