Last week I blogged an article I wrote for the Tribune about the generous subsidies being given to the film industry for them to set up shop in New Mexico. Now, I’m sure that part of the reason our political leaders have targeted the film industry is to burnish New Mexico’s credentials as a tourist destination and remind people that we really are part of the good ole’ US of A.
Needless to say, it was quite a shock to the system when I picked up today’s Albuquerque Journal and read that not one, but two Hollywood stars ripped into Albuquerque after having filmed here. Jessica Alba, the star of a new film called The Eye said in a recent interview: “In Albuquerque there’s really only one restaurant that’s pretty good. You can only take Applebee’s and Chili’s so much. Our big day was hanging out at Walmart for five hours. It was like, “Yeah, Walmart!”
Adding insult to injury, Tommy Lee Jones, the star of not one but two films that were shot in Albuquerque, dissed the town, saying “Albuquerque is a really hard place to work. It’s very noisy. There are crows there, planes, trucks, people working on their cars. It’s just a noisy place to shoot.”
As if scary aliens weren’t a big enough reason to stay away from the Land of Enchantment, now Alba and Jones make Albuquerque out to be a noisy little hick town with nothing but Wal Mart’s and Chilis. Publicity like that is priceless. Me, I’d rather save our tax money and let entrepreneurs decide what our city and state should be known for.

A week or so ago on this blog I discussed the stimulus package moving through Congress and argued that it was unnecessary and based on bad economics. Unfortunately, the President and Congress don’t always listen to us, so we teamed up with the National Taxpayers Union — a Washington, DC-based grassroots taxpayer organization — to express our concerns. Read the coalition letter on the stimulus here.
Although I didn’t mention it in my previous posting on the topic, one of the additional problems with such politically-motivated legislation is that individual members understand that and will tack on whatever spending or interest group goodies they can. We are now seeing that process at work.

Somewhat surprisingly given its usually reasonable editorial opinions, the Albuquerque Journal endorsed Governor Richardson’s health care plan. After all, as the paper concluded, “New Mexico’s condition can only get worse.”
We’ve heard this before. Richardson, in his state of the state address, repeatedly implied that health care in New Mexico cannot get worse than it is now. For starters, he said, “the status quo is unacceptable” and he went on to state “The most expensive choice is to do nothing.” While advocates of radical change in our health care system seem genuine in their conviction that things can get no worse, what are the facts?
Yes, New Mexico has a disproportionately high rate of uninsured with 400,000 out of 2 million (third highest in the nation). While it may seem plausible to state that health care could get no worse, how about for the rest of us? Richardson’s plan would force doctors — as a requirement for licensure — to accept whatever the state or insurance companies provide them in the way of payment. Clearly, both the state and insurance companies will have tremendous incentives to cut costs at doctors’ expense, thereby forcing doctors out of the state.
Obviously, if ever-greater numbers of doctors are forced out of New Mexico, we could end up with even less access to actual health care (as opposed to insurance) for the 1.6 million insured and the 400,000 uninsured alike. Before embarking on a massive government program that even supporters view as “imperfect,” we need to take a clear-eyed look at whether this supposed “solution” might actually make the current situation even worse.

We have previously noted on this blog that pre-k programs in other states have failed in their supposed goal of improving lasting educational attainment for children. Yesterday, Richard P. Boyle, Ph.D. of UNM’s Institute for Social Research, confirmed this in an opinion piece which appeared in the Albuquerque Journal.
The conclusion reached by Dr. Boyle (study available here), an independent researcher who is not affiliated with the Rio Grande Foundation in any way, is that “While both preschool and full-day kindergarten programs were successful during the time they operated, most advances in achievement appear to have washed away by grade four.” This closely mirrors the findings in Arizona which is even further along with its “early education” initiatives than New Mexico.
Ultimately, pre-k and all day kindergarten are simply tools to give the public education system even greater control over our children while employing more teachers and draining taxpayers’ pockets. If New Mexicans are serious about education, they need to consider choice options that restore parental control and force schools to compete to best serve parents and students. Monopolies don’t work!

Today’s Albuquerque Journal contains a very insightful editorial (subscription needed) about the way government operates.
The article discusses the US Conference of Mayors’ request for more federal spending on local police which the Journal points out is a core function of government. The editorial contrasted police, something cities should fund, with projects like Mayor Marty’s proposed streetcar, Tricentennial Towers, the car wash Bernalillo County wanted to buy for $500,000, or the Hiland Theater commissioners voted to purchase and spend $1.3 million on renovating.
Justifiably, the piece argued that this was a case of “municipal leaders ordering dessert first while expecting someone else to pay for the meat and potatoes later.”
The problems is not only a local one. Rather, it is exactly how governments at all levels tend to function. Politicians and bureaucrats like power, not necessarily because they are malicious although that is sometimes the case, but because they think they are the most competent stewards of resources (see the El Vado case). Unfortunately, this is not the case and instead, governments accrue power while the “boring” core areas of government like policing and road and bridge construction are left to rot while trolleys and Rail Runners flourish.
The only solution is a vigilant, well-informed population that constantly pushes back against empire-building government officials.

Regular readers of this blog are undoubtedly aware that we have no love for the unelected bureaucrats over at the Albuquerque-Bernalillo Water Authority. We tangled with them over their outrageous attempt to use eminent domain to take over a privately-owned water utility, New Mexico Utilities Inc. That case is still tied up in court.
Now, Councilor Michael Cadigan has succeeded in allocating even more power to the un-elected bureaucrats at the Authority by giving them tremendous power over building and planning activities. Just over a month ago, Cadigan had been quoted as saying the Authority should have these powers and recently the Authority granted themselves the power — notice how that’s done!
The Albuquerque Journal had the right take on things in this morning’s paper, saying “the authority’s board should rescind its vote and forward its ideas to the City Council and County Commission, where public policy can be hammered out in a more democratic process.”
It is unfortunate that we have allowed water, the lifeblood of our city (not to mention development and individual property rights), to be controlled by an unelected group of bullies. Instead of putting a government agency in control, we should privatize the authority and make it accountable to its customers.

While the Rio Grande Foundation is often called a “conservative” think tank and Albuquerque’s alternative news weekly would typically be called anything but, part of our charge is to reach out to those who may not necessarily share ideas — at least normally. Nonetheless, when I read this article in the Alibi I felt that it was a perfect opportunity to weigh in on why all of us, no matter our political persuasion, should be concerned about government health care schemes. After all, if the state places the kind of controls on doctors that the Governor has proposed, New Mexico could see doctors leave the state in droves. This is not the favored outcome of liberals and conservatives alike.

The economy is on the front pages of newspapers and at the top of most newscasts nowadays (at least it has replaced Britney Spears’ misadventures). President Bush and Congress agree that a so-called “stimulus package” is necessary, but each have their own ideas on what the package should contain.
Unfortunately, election time is known in Washington as the silly season and from an economic standpoint (as opposed to a political one) a stimulus is at best economically unnecessary and at worst harmful. Robert Samuelson writing in the Washington Post and argues, quite correctly in my opinion, that much of what passes for economic commentary these days is simply hysteria.
Steve Stanek of the free market Heartland Institute also criticized the idea of a stimulus, writing “lawmakers should rein in federal spending and approve long-term tax reductions that apply to everyone, not just to people in certain income brackets.”
I agree 100% with Stanek. Temporary stimuli are not what the economy needs. Rather, making President Bush’s tax cuts which are set to expire in a few years permanent would be a good first step. Slowing government spending growth would also be better than what this stimulus amounts to which is the economic equivalent of simply dropping money from the skies.

Rio Grande Foundation President Paul Gessing recently appeared on Bob Clark’s radio show to discuss Governor Richardson’s health care reform plan and some free market alternatives. Listen to the show by clicking here. Fast forward almost one-third of the recording to get past the advertisements, etc.

Dan Mayfield, a columnist in the Albuquerque Journal, writes in today’s paper about New Mexico’s growing film industry and argues that policymakers should keep the spigot open by not limiting the amount of money the state dishes out.
You see, the current rebate program pays up to 25 percent on all direct production expenses that are subject to taxation by the state. So, if your film company spent $20 million here, you could get a $5 million rebate. This is a refund, not a credit, on the full amount of the expenditure, not just the tax portion. When you think about it, that is an amazing subsidy and it is coming out of taxpayers’ pockets whether the film makes any money or not.
Sure, the film office estimates that the industry has spent $496 million here since January 2003, but what industry would not grow and spend more money if taxpayers reimbursed it for 25 percent of their expenses? No one knows, but I can say with relative certainty that New Mexico would have been better off, instead of spending $70 million over the last five years and offering generous tax breaks to the film industry, if that money had been returned to the economy through a broad-based gross receipts or income tax cut.
Unfortunately, when taxes are cut across the board and equally for everyone, it is more difficult for politicians to take credit for the creation of a new industry out of whole cloth. Thus, while Richardson ran for President on his targeted tax credits, he left out the positive impact of his income and capital gains tax cuts (even though some hikes offset those cuts, they were still more economically beneficial than any tax credit).
Politically, it looks like generous film subsidies are here to stay. The industry has these policies in place and is going to be a powerful force. It will be interesting to see what the state’s cost-benefit analysis looks like.

According to a new report from a panel that included some of the nation’s leading transportation policy experts, we are not paying nearly enough in gas taxes and the tax should be increased by 40 cents a gallon.
Most New Mexicans will dismiss such findings out of hand and justifiably so. But the fact is that there are several major road projects around the state that should be top priorities including the Paseo and I-25 interchange in Albuquerque just to name one.
The problem is that governments are poor stewards of transportation resources. Congress wastes hundreds of millions on “bridges to nowhere” and diverts ever-growing amounts of gas tax revenue to wasteful transit projects. At the same time, New Mexico is wasting $400 million plus $20 million in annual operating costs on the Rail Runner and diverting millions of dollars in state gas tax revenue to the General Fund.
Instead of raising the gas tax, shouldn’t we re-allocate gas tax revenues to pay for roads and bridges? Let transit users pay for their favored mode of transportation and stop stealing from tax paying motorists!

It was inevitable. While campaigning for President, Richardson stated that tax hikes to pay for the Rail Runner were “off the table.” Now, that he is out of the race, he has put them back on the table. Given the fact that voters in the southern part of the state have been asked to pay for a portion of the Spaceport via higher taxes, it is probably “fair” that residents of the areas served by the Rail Runner pay the costs, but it makes no sense to vote on this now.
After all, the Rail Runner is a fait accompli. It isn’t going anywhere. The trains will run whether voters raise their taxes or not because Richardson wants it to be his legacy. Thus, if taxpayers go along with higher taxes to pay for the train, they’ll essentially be choosing to pay higher taxes for no good reason. Hopefully voters will decide to give Richardson and his boondoggle a firm rebuke at the polls, but I’m sure the Governor and his minions will try to convince the voters otherwise. Nonetheless, these votes are a good thing because they provide voters with their first real chance to express themselves on the train.

While education is not at the top of the legislative agenda this year, it is never far from the minds of politicians and those of us who are concerned about out-of-control budgets. That is why the Rio Grande Foundation is supporting the idea of education tax credits. Recently an opinion piece I wrote appeared in the Los Alamos Monitor making the case for the adoption of such a credit in New Mexico during the current legislative session. In building the case for these reforms, I cite Dr. Messenheimer’s recent policy paper published by the Rio Grande Foundation which showed that education results in New Mexico are stagnant despite ever-increasing resources dedicated to education.
My article drew a rather misinformed response from a reader to which I responded with the following:

As the author of a recent (January 3) article on the need for tax credits for education choice here in New Mexico, I feel the need to clear up some misconceptions contained in a recent letter written by John Lilley, dated January 17.
Mr. Lilley states that private schools already have the capacity to accept donations and that such a system is already in place. This is true, but that does not mitigate the need for New Mexico to adopt its own tax credit program for the benefit of needy children in failing K-12 schools.
The idea we are promoting and which is being carried forward by Sen. James Taylor (D- South Valley) this year is for individuals and businesses to take a credit against their New Mexico tax burden. Unlike the federal deduction which Lilley references, tax credits would allow individuals to take a credit against a very high percentage (up to 90 percent) of their New Mexico tax burden and allocate that money to eligible scholarship programs.
The current tax deduction is taken against a taxpayer’s federal tax burden. This provides a significantly lower rate of return and is available only to those who itemize their federal taxes (typically higher income taxpayers).
Two other misconceptions are that we want people to be able to donate directly to their own children’s education. This is simply not the case as donations would be made to a non-profit, scholarship organization to offer scholarships for low-income children.
Lastly, Lilley calls into question our status as a “charity.” While we are designated as a 501c3 non-profit, we are not a grant-making organization. Not all non-profits make grants.
Lilley has every right to criticize both the editor of this paper and the Rio Grande Foundation if he wishes, but his assertion that my writing is nothing more than factually incorrect “ramblings” is incorrect and out of order. If Lilley or any reader of this paper has questions about our work or education tax credits, I encourage them to check out our website: www.riograndefoundation.org.

You can tell Bill Richardson is no longer running for President (and that he is a lame-duck governor). After all, who in their right mind that is running for office would attack an entire interest group for no good reason. I’m referring to Richardson’s comments that doctors are “greedy.” Richardson said of doctors, “They’re greedy. They shouldn’t be so greedy. They should be part of the plan,” in reference to his “Health Solutions New Mexico” plan.
Doctors oppose Richardson’s plan in large part due to its reliance on price controls which would force doctors to take whatever payment is being offered by the government or insurance companies. This doesn’t seem “greedy” to me, rather given doctors’ experiences with Medicare and Medicaid, the prices of which are both determined by the federal government, doctors have a lot to worry about if they become even more beholden to the government for their daily bread.
Doctors spend a long time in medical school at great personal and financial cost to themselves. Most doctors I know are “greedy” only in the sense that they want to be fairly compensated for their work. In reality, Richardson is the greedy one because he wants to take credit for offering health care to more people with doctors, insurance companies, and businesses footing the bill. That’s greedy.

Rarely does an opinion piece get published in both the <a href="http://www.abqtrib.com“>Albuquerque Tribune and the <a href="http://www.abqJournal.com“>Journal, but recently an outfit called the Quivira Coalition which is holding their annual conference in Albuquerque, scored that success.
Unfortunately, the Coalition seems to be like so many other environmental groups in wishing to turn back the clock on modernity. We are supposedly living in an “Age of Consequences” according to Courtney White, the author, who goes on to compare the future to a hurricane coming ashore. The metaphor, unfortunately, fails to hold water, and arguments to “build resilience” are senseless or even meaningless.
The best White comes up with is the concept of “regional solutions.” That would seem to mean that trade, commuting, and travel are on their way out in the coming “hurricane.” Despite the occasional unsafe good from China, trade is good for all of us. Worse still for the Quivira folks is the fact that international trade is booming. In fact, international trade is growing at rates more than double the growth of the world economy, thus trade is becoming more, not less important.
Despite what leftists would like to believe, we are not headed to a crisis unless we cave to their wishes by regulating our economy whether that be in regulating energy usage or trade. Left to their own devices, Americans and indeed the rest of the world as a whole will continue to realize the very real benefits of trade, ignoring the tempests in the proverbial teapot expounded upon by Al Gore and others.

Paul Gessing of the Rio Grande Foundation discussed Governor Bill Richardson’s plans for socialized medicine in New Mexico on “Eye on New Mexico” this Sunday morning. Dennis Domrzalski hosted the program while Gessing’s opponent was Charlotte Roybal of Health Care for All New Mexico. The video is now available online.

The Albuquerque Tribune editorialized in favor of Albuquerque Mayor Marty Chavez challenging the City’s term limits law by running for a third term, saying it “did no harm.” This may be true, but how about Albuquerque voters, more than 70 percent of whom supported term limits back in 1994?
When the Constitution doesn’t address an issue, as is the case with term limits for city officials, shouldn’t the default be to obey what the citizens say unless there is an issue of direct harm or a minority is being unjustly attacked? Sure, Mayor Marty can run for another term and he may get elected, but that doesn’t mean it is best for the City or that it’s the right thing to do.

Bill Richardson has dropped his bid for President. While we certainly are not shy about criticizing Richardson’s policies here in New Mexico, the reasons for Richardson’s failure to gain traction are only partially his fault. A big part of Richardson’s difficulties stems from the process itself.
First and foremost, Richardson did not run a great campaign. He made too many gaffes and tried to have it both ways on policy issues that required an obvious stance. This recent discussion between Richardson and Barack Obama on the issue of carbon caps and whether or not it would increase prices for consumers is a perfect example.
As for the reasons that were not necessarily his fault, except for the Iraq War, Richardson was a “centrist” relative to his fellow Democrats. On taxes, guns, and trade, Richardson was to the right of his fellow Democrats.
Unfortunately for Richardson, Democratic primaries tend to reward those on the left and penalize centrists. Only in the general election do centrists have the advantage. Even though we at the Rio Grande Foundation weren’t overly enthusiastic about Richardson as a President, his run did bring great attention to New Mexico. From that perspective, we are sad to see him drop out.

Today’s Albuquerque Journal included a column from Kathy Chavez, President of an organization called Albuquerque the Educational Assistants Association. The organization even has a website here.
Essentially, Chavez argues that while teachers and principals have received salary increases of 20 percent to 40 percent over the last three year, “classified employees,” that is, those who handle non-classroom related functions, have seen stagnant salaries. Chavez wants a raise for those people and takes Sen. John Arthur Smith to task for proposing a 2 percent increase next year.
Who’s right? It is hard to say because there is no such thing as a free market in education. Public education is a government monopoly with almost no competition in the system. Therefore, it is hard to tell what pay structure is “fair” and schools and districts have no need to compete for staff. If Chavez and her ilk are serious about increasing pay, they must seriously consider educational choice as a means of increasing salaries. Given the AFT’s statement on both vouchers and privatization, the AFT seems unlikely to embrace any market-based education reforms in the near future.
Lastly, while I’m not saying Chavez doesn’t have some point, New Mexico spends more on administration and other outside-the-classroom costs than any other state in the nation…that is, less of each education dollar in New Mexico goes to the classroom than any other state. Go here and click on NM on the map of the USA. Clearly, we are spending large sums on administration, where it is going is anyone’s guess.

Those who understand economics understand that capitalism and free markets are the most efficient and fairest means of allocating resources in any society. Unfortunately, most people (including our elected officials) don’t necessarily understand that. Thus, we fall prey to those who would lead us to believe that some central planning agency will allocate resources more effectively than individuals and companies interacting in a free market. This was the thinking among economic planners in the old Soviet Union and it is the thinking behind New Mexico Governor Bill Richardson’s health care proposal.
In response to the Governor’s government planning model, the Rio Grande Foundation recently released an issue brief, “Cutting Costs and Improving Health Care in New Mexico,” that outlines several ways in which New Mexico could cut health care costs, improve quality, and improve upon its ranking as the state with the third-highest rate of uninsured in the nation.

The Rio Grande Foundation has long decried New Mexico’s economically-destructive Gross Receipts Tax and urged other states to avoid our mistakes.
Unfortunately, at least in Maryland, that message seems to be falling on deaf ears. That state recently decided to levy a 6 percent tax on companies that provide computer support services, computer programming, consulting services for computer systems design and disaster recovery.
Critics say the tax will be a “small-business tax,” as many smaller companies outsource their computer network maintenance work. Of course, those who like bigger government call the $200 million tax hike a “fiscal necessity.”
One would think that Maryland, a state with the 5th-highest personal incomes in the country would not be taking economic policy cues from New Mexico, a state with the 45th highest personal income level in the nation, but revenue-hungry governments are not known for their discretion. If Maryland is wise, they will refrain from adopting the rest of New Mexico’s GRT “model” which includes rates as high as 8 percent and includes nearly all services, not just those related to computers.

I didn’t come up with the title for this piece which appeared in today’s Albuquerque Journal so the point is not that renewable energy should be considered at the same level as fossil fuels.
My real point is that Marks unfairly targets the very energy industry that does so much for New Mexico’s economy in a recent opinion piece. If New Mexico produced little in the way of oil and gas, bashing the industry that fuels America’s economy would be reprehensible enough. Since we do rely disproportionately on oil and gas severance taxes, it is just ignorant and foolhardy.

No wonder the health care debate here in New Mexico has gotten so off track. The policymakers and advocates seem to have little or no understanding not just of markets, but of how bureaucracies actually operate. Two opinion pieces that somehow managed to get published in today’s Albuquerque Journal are perfect examples.
The first article, “Start Health Care Reform in ’08,” by Charlotte Roybal of the Health Care for All campaign first discusses New Mexico’s failure, despite reports to the otherwise, to reduce uninsured numbers. Fine, without reform, little change is to be expected.
Roybal then goes on to discuss the Governor’s proposed Health Care Authority and how it would slash administrative costs and should generally be accountable. Of course, no specifics are offered, but plenty of buzzwords like “transparency”, “meeting health care policy needs”, and “clear balance of power.” None of this actually gets to the heart of what the Authority will actually do and how it is supposed to control health care costs (in reality that will be rationing), but we’ll just figure it all out after it passes I suppose.
The second article, Health Care Fixes Require Thought, by Dr. J. Deane Waldman at the University of New Mexico, starts out like the author is making a case for Evidence Based Medicine, a concept that would bring the scientific method to health care. The practice, while it sounds good, if imposed in a bureaucratic and governmentally-controlled system, would result in utter stagnation in innovation as doctors would be unable to offer new and patient-unique treatments.
Strangely, the author does not dwell on the topic and instead launches into the doctor and nurse shortage in New Mexico, all without mentioning that we are one of the only states nationwide that taxes health care services under the gross receipts/sales tax. There are many reasons that fewer Americans are studying to be doctors and nurses, but the most important one is socialism. We have a quasi-socialized system already and we are on the verge of going all the way. The only way to improve health care is by restoring the individual to the equation, not by adding more government on top of what we already have.

An editorial in today’s Albuquerque Journal discusses ways in which the state can do a better job of attracting dentists. New Mexico has no dental school and I’m sure that is a hindrance on some level, thus measures have been taken to attract dentists to the state, but the Journal is not optimistic about one reform that would do more than others to attract dentists: stop charging them the state’s gross receipts tax!
As the Foundation has pointed out on a number of occasions here, and here as well, New Mexico’s gross receipts tax is economically-devastating with rates upwards of 8 percent in some areas. This would be bad enough if the tax were only applied to retail purchases, but the tax is also levied on services provided by dentists, doctors’ co-pays, and deductibles, and all fee-for-service procedures.
Clearly, before we embark on a “universal coverage” scheme of indeterminate cost, we should enact simple reforms like eliminating unnecessary taxation, right?