Sure, the Rio Grande Foundation has been saying it for years: New Mexico’s tax burden makes the state a difficult place to do business. Now, the respected accounting firm Ernst & Young has reinforced those findings with a new study which shows New Mexico to have one of the heaviest business tax burdens in the nation.
The main culprit is the relatively heavy tax burden placed on business inputs by state and local government. Unfortunately, it is our gross receipts tax which is unique in the country for its high rates and broad base that cause this problem. I don’t know if the momentum is there on either side of the aisle for reform at this point, but changes are in order before the gross receipts tax gives New Mexico the heaviest business tax burden in the nation.

E.J. Dionne had a recent column in which he outlined the findings from a new left-wing report outlining ways in which lawmakers can help the poor. As is so often the case, many of Dionne’s assumptions are way off base. First and foremost, he assumes that because inequality of incomes is greater that the poor are “falling behind,” when in reality we are actually much better off now than we were 20, 30, or 50 years ago.
Then, Dionne outlines several “reforms” like raising the minimum wage, increasing unionization, and helping 16-24 year olds get to work. Perhaps they would get to work if minimum wages didn’t prevent them from doing so, but the more likely culprit is our inadequate education system.
Anyway, the Rio Grande Foundation has its own ideas about how to reduce poverty; needless to say, they are quite different from Dionne’s.

While the World Bank and opposition to its existence has long been a favored cause of the whacky left, ironically, this is one issue on which right and left can work together if not agree. As George Will points out, the Paul Wolfowitz scandal has drawn attention to the Bank, but what really needs to be brought to light is the colossal waste of money that the Bank really is.
The fact that both the World Bank and the International Monetary Fund are blatantly socialist organizations that hurt the very third world countries they are supposedly trying to help should give left and right enough ammunition to kill these institutions.

Mark Perry blogs about out-of-control retiree costs in Michigan public schools. My guess is that New Mexico faces a similar situation. Can anyone enlighten us on public school retirement formulae in NM?

It seems that Albuquerque Mayor Marty Chavez has put plans for an arena on hold at least temporarily. As I pointed out previously, this is most certainly a good thing as the metro area already has more arena space than it needs.
That said, it is interesting to note that the New Mexico Scorpions minor league hockey team, despite having a succesful year on the ice, are deeply concerned about attendance numbers at their new digs in Rio Rancho. As long as the drive is out to the new arena, it seems a bit unlikely that the location is a real problem as plenty of other acts have, and continue to, sell out there. Regardless of the reason for the Scorpions attendance woes, it is hard to believe that any team Albuquerque could draw to a proposed 14,000 seat arena would have any better luck. If private investors spending their own money feel differently, then they have every right to move forward, but Albuquerque taxpayers should not foot the bill.

Although the focus of this great new book is about the relative absence of prosperity in West Virginia, it could just as well be about New Mexico. The book is receiving lots of attention in WV. Maybe we could get the authors to write about New Mexico too, since it ranks right down there with WV and gets lots of attention in the book.
The first four chapters explain why economic freedom (rather than government) promotes prosperity. Chapters 5 thru 14 lay out specific policy measures that promote prosperity. Notice, however, that New Mexico has been doing just the opposite of what these scholars recommend — NM emphasizes playing favorites (chapter 8), does not emphasize tax competitiveness (chapter 5), does not reduce labor restrictions (chapter 10), does not quit punishing the working poor (chapter 11) and so forth.
This is a good read for those of you who want a better understanding of the relative weakness of NM’s economy. Hat tip: Professor Lawson at Division of Labour.

The Chairman of the Federal Communications Commission, Kevin Martin, has waded into the debate over so called “a la carte” programming on cable television. What is “a la carte?” Essentially, the FCC wants to mandate that cable companies offer consumers the choice over what programming they do and don’t want to receive when they pay for cable (or satellite).
Of course, most consumers understand the concept of “bundling” of services and how costs can be driven down under such pricing schemes, but that is not good enough for the bureaucrats who regulate what we see and hear in the media. Worse, the FCC itself admits that an “a la carte” regulation would cost consumers even more money than they are already paying for these services.
If politicians want to cut costs, they might want to consider reforming video franchising at either the federal or state levels. Creating more competition, not government regulation, is the only surefire way to cut costs.

As recently as earlier this year, I was willing to give the global warming crowd the benefit of the doubt and at least consider that reducing one’s “carbon footprint” might be a good thing. But alot has happened since then and I’ve been educating myself on the issue. Sometimes, given the “debate” going on in the mainstream media, it seems like this is what passes for debate.
This quiz is one creative way to dig deeper beyond the surface and figure out what you know about the issue.
Needless to say, while I recycle and drive a small car for my own reasons (recycling is REALLY easy and I’m cheap, so I like smaller cars) the hypocrisy of folks like Al Gore makes me wonder what his real agenda is….don’t give me any garbage about “carbon offsets,” you either live this stuff or you don’t. You can’t buy a clean conscience.
The thing that really makes me wonder is the longer perspective. We’ve had climate scares for generations (hot and cold), not to mention the malthusians who constantly harp on population and the supposed fact that earth simply cannot support more people, regardless of the fact that it continues to do so.

A new national study analyzes the economic loss high school dropouts place on the economies of the 50 states. Not surprisingly, given its size, New Mexico suffers from a relatively heavy burden. In fact, the class of 2006 dropouts are expected to cost taxpayers $3.3 billion.
For some reason, although the study was released in January, the Santa Fe New Mexican failed to report the results until May and when they did, they gave $111 million as the economic loss of graduation. Strange…
More troubling is the fact that many of our elected officials actually believe that simply raising the dropout age will stop high school students from dropping out.
If New Mexico is serious about improving education results and cutting the dropout rate, perhaps we need to offer students and parents more choices when it comes to education? After all, only by forcing schools to teach and even compete to attract students can we break out of the current socialist education model.

I attended some of New Mexico First’s health care event in Albuquerque. And, while I was impressed with the organization itself and the Town Hall concept, it was readily apparent that if the left hasn’t taken over the organization itself, then at least this particular event was dominated by advocates of universal coverage and bigger government.
On the opening panel of Don Chalmers, President, Don Chalmers Ford, Charlotte Roybal, Executive Director, Health Action New Mexico, David Scrase, Executive Vice President and Chief Operating Officer, Presbyterian Healthcare Services, and Michael Trujillo, Executive Director, Translational Genomics Research Institute, only Chalmers seemed to understand the marketplace and the limitations of government. Particularly disappointing was Trujillo who, in response to a question I asked about Health Savings Accounts, basically said that Native Americans were too uneducated to manage their own health care….apparently the dysfunctional Indian Health Services is doing a great job.
Lunchtime was more of the same as Secretary of Human Services Pam Hyde and Secretary of Health, Michelle Lujan Grisham said “it is not a matter of IF New Mexico will adopt a universal health care system, but WHEN it will.” Bob Crittenden of the Herndon Alliance was also unabashedly “progressive.”
One conservative speaker did address the attendees, Edmund H. Haislmaier of the Heritage Foundation spoke at dinner, but even the Heritage Foundation has latched onto big-government health care solutions at least as far as the results of its vaunted Massachusetts Connector plan are concerned. That said, his comments were the only counterweight to the non-stop drumbeat coming from the expand government to solve health care crowd.

With all of the controversy surrounding possible shady business involving the New Mexico film industry and our tax dollars, it might be easy to forget that providing these subsidies in the first place is dubious economic policy.
Apparently, California is now discussing subsidies for the film industry to keep up with states like New Mexico. As the Orange County Register points out, “giving one industry tax money is government discrimination against every industry that doesn’t get tax money.”
The last thing New Mexico needs is to get into a bidding war with California over who can subsidize movie studies the most. Instead of providing subsidies to one narrow interest, Governor Richardson and the Legislature should focus on reducing gross receipts tax rates or on eliminating the income tax. Those are fair solutions that will provide far greater benefits to New Mexico’s economy.

As followers of the Rio Grande Foundation may already know, Albuquerque Mayor Martin Chavez has proposed a modest reduction in the gross receipts tax. Unfortunately, most in City Council and even some fiscal conservatives seem unwilling to step forward and support the Mayor’s plan.
Unfortunately, as this video from a recent Council session shows, the big spenders are more than happy to give NONE of the money back to taxpayers.

No, the food fight I’m referring to is doesn’t involve Trent Lott throwing a pie at Ted Kennedy (as fun as that would be to watch), I’m talking about impending Congressional action on the farm bill. The Albuquerque Tribune had an excellent op-ed outlining how the perverse system of subsidies costs us billions of dollars every year and hurts America’s health.
Although limiting subsidies and eliminating those that subsidize certain unhealthy foods would be a good start, the Washington-based Cato Institute has outlined a more comprehensive plan to eliminate subsidies and spur global free trade.
Agricultural reform and specifically the elimination of subsidies is not just a “conservative” issue, but environmentalists and anti-poverty advocates have embraced.

Zoning and land use are not only tricky, but they can be extremely controversial. San Juan County is now considering a growth management plan for the unincorporated portions of the county that would include zoning. As this article from the Washington Post points out, zoning, because it allows nosy and controlling neighbors such leeway, can often result in economic harm and gross injustice.
There are large numbers of bloggers and analysts who focus their work on alternatives to zoning that San Juan County might want to consider. Proponents of zoning must consider the very real tradeoffs and limitations these policies may have.

I had the opportunity to listen in on a conference call hosted by Senator Byron Dorgan and others including Savetheinternet.org who want to regulate the Internet. The plan is to enact legislation known by the touchy-feely name “net-neutrality,” but what the term and the legislation these people support really would do is regulate to the point of socializing the Internet.
Interestingly enough, while several major companies that use large amounts of bandwith on the Internet are trying to pass the “net-neutrality” legislation, it was notable that a New Mexico company: NMChili.com was the major business presence on the conference call. From the looks of their website, they certainly don’t seem like the kind of high-bandwith user that would benefit from “net neutrality” regulations, but many New Mexicans seem to embrace government regulation almost instintively.
Given the high stakes and the support for regulation among the left and even among some on the right, it is clear the issue is not going away. Listening in on this conference call made that clear.

I attended Mayor Chavez’s budget meeting (schedule available at link) at Taylor Ranch Community Center on Saturday to voice support for the tax cut proposal and opposition to the Mayor’s streetcar plans that he refuses to let die. While taxes and police were discussed, by far the hottest topic was transportation.
Interestingly enough, transportation and more specifically rail transit is a big issue in our Nation’s Capitol as well. While visitors to Washington are often impressed by the City’s clean and relatively fast METRO, far fewer people understand the costs associated with this system and that Albuquerque by its nature could never have something similar.
First and foremost, Congress is considering spending $1.5 billion over the next 10 years to support the system. This will not happen in Albuquerque. Even with that massive infusion of cash, METRO will still require tax hikes in DC, Maryland, and Virginia in order to create a “dedicated funding source” to keep the system afloat.
More importantly, the Washington area is massive compared to Albuquerque and its traffic problems are much bigger. This makes transit more viable, but what really helps is the massive concentration of federal jobs around METRO stops as outlined by Congress. The Pentagon alone has more people working in it than all of downtown Albuquerque.
Before Albuquerque spends the money to try to create a rail transit network like Washington or Portland, citizens need to understand what they are getting themselves into.

Everyone knows that governments tax the rich and give to the poor, right? I’ve got news for you, the reality couldn’t be further from the truth. Whether the issue is raising gross receipts taxes so billionaires can fly into space or shifting massive amounts of taxpayer money into transit boondoggles, usually rail projects, designed to get wealthy people with cars to ride transit, the reality is that government often taxes us all for the benefit of the well-heeled.
This is once again illustrated in the battle over changes the Federal Aviation Administration wants to make regarding user fees. Right now, those who use corporate jets and fly as a hobby are being subsidized by the rest of us schmucks who fly coach and have to put up with the joys of the Transportation Security Administration.
The rich are not going to give their subsidies up without a fight of course.
Hopefully, our elected officials in Washington will do the right thing.

Despite having won electoral victory in part by campaigning against the abusive use of earmarks, Democrats on Capitol Hill seem to lack the will to take substantive action to reform the earmarking process.
Of course, as Novak reports in the article I linked to above, the Republican leadership doesn’t really want earmark reform either. Alas, yet another issue with widespread support among the American people that Congress allows special interests to block.

Did you know that there are as many transit riders now as there were in 1957? What an accomplishment!!! Considering that the country has almost twice as many people now as it did then and taxpayers have invested billions of dollars in new transit systems, this is an amazing non-accomplishment.
Kind of makes proponents of a $300 million streetcar in Albuqeuerque look silly, doesn’t it?

With Albuquerque’s City Council, it seems like bad ideas refuse to die while good ideas whither on the vine. My recent opinion piece in the Albuquerque Journal seems to be the only tangible sign of support for a reduction in the City’s gross receipts tax, but Councilors like Debbie O’Malley refuse to let the streetcar die the quick and painless death it deserves.
As recently as Monday night, O’Malley was trying to appropriate $224 million to the boondoggle. Thankfully, the resolution was deferred a week, but it (and other measures designed to keep the project alive) will undoubtedly be introduced in the future. Taxpayers must remain vigilant…everyone who pays taxes in this city should be a member of SWAT (Stop Wasting Albuquerque Taxes).

I’m all for tax cuts, but does it really make sense for New Mexico to target boxing, wrestling, and martial arts events for gross receipts tax elimination? If New Mexico is going to continue with this fiction of a broad and fair tax policy as the gross receipts tax is supposed to be, then we can’t carve a loophole for everyone who wants one.
Again, as we saw with the Las Cruces convocation center losing events to Texas as a result of New Mexico’s charging tax on tickets and Texas not doing so, it is another sign that taxes do matter.
I just wish our elected officials would reduce the tax burden on all New Mexicans, not just those who run sporting events the Governor likes or who face an immediate threat from another state.

Last year, Congress passed legislation to make the ultimate recipients of your tax money public information. In other words, people would be able to “google” their tax dollars.
One excellent example of this powerful new tool is being run by the group OMB Watch and can be found here.

The Rio Grande Foundation has long been concerned about government-directed economic growth. A prime reason for our concern is that politicians are not experts in the field and, since they are not using their own money but taxpayer dollars, they don’t have the same incentives as entrepreneurs do.
Diane Velasco of The Citizen has done an excellent five-part series on the movie studios that are planning to relocate to Mesa del Sol and how in some instances the studios have misrepresented themselves in order to hitch a ride on the taxpayer-funded gravy train.
We’re all for economic development, but this activity is much better left to those with a direct financial stake in the matter, not politicians using our money.

Did you know that nealy 42 percent of New Mexico is owned by the federal government? A greater percentage of New Mexico is owned by the feds than even Washington, DC.
While there is certainly a justification for some of this land — military bases for example — it is hard to believe that absent any market forces acting on the federal government, that much of this land could not be put to more productive uses by someone who had an economic incentive to do so.