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.

No, this particular sad day for taxpayers is not due to the fact that tax hikes for the Rail Runner (subscription required) may be on the way…we’ll save discussion of that for another day. This is genuine sadness brought on by the premature passing of one of the greatest taxpayer advocates in the entire nation. I had the privilege of working at the Washington, DC-based National Taxpayers Union for more than six years and during that time John Berthoud was my boss. He was also one of the greatest, most principled advocates for taxpayers one could conceive of and he is now dead at the age of 47.
Most New Mexicans never had the chance to meet John and none had the chance to work with him and grow to respect and befriend him as I did, but I can assure you all that his voice on behalf of taxpayers will be sorely missed.

This is the net result of the ongoing war on politically-incorrect foods and fat people. Senior centers are now turning down donations of baked goods. Now, while I certainly don’t want our seniors to turn into overweight couch potatoes, it would seem that they should probably be consulted on the matter rather than having “nanny-statists” make decisions for them. Unfortunately, the very organization that supposedly advocates for seniors’ rights is one of the very groups pushing us towards socialized health care that will give the control-freaks more power over our dietary decisions.

It may not be the “be all, end all,” health care solution, but given federal constraints placed upon the states, there is only so much that can be done without Congressional action. That said, one of the more interesting state-level approaches to health care reform comes from Missouri where the state is now allowing small business owners to contribute pre-tax health care dollars to their employees’ individually selected policies.
Rather than “universal coverage,” New Mexico and other states might want to consider following Missouri’s example by helping to find ways to give individuals greater control over their own health care needs.

News today is that the United Auto Workers have struck General Motors. While this may not be immediately relevant to New Mexico, the reasons for the strike should be relevant to any non-government union worker. The union says the strike is not about wages or benefits, but “job security” and I believe them.
The problem is that job security for unionized workers in plants run by GM, Ford, and Chrysler will force the so-called Big Three to continue shifting production out of the US in order to avoid combative and inflexible unions. That is not to say that US workers are not the best in the world or that the Japanese car companies that have set up shop here are under-paying their workers. They are not.
The problem is that unions and their convoluted work rules are simply not flexible enough to adjust to today’s economy. Without that flexibility and with unions limited to preserving existing jobs, union membership is dropping and fast. In fact, the only workplaces that are bureaucratic and resistant to change enough to sustain growing union populations are governments…kind of expains why governments work (or fail to work) the way they do.

Heather Wilson strikes again. She has supported President Bush without fail on an unpopular Iraq War, but when it comes to fiscal issues, she is the first one to spend more money or expand government even more than Bush who has admittedly done a poor job of restraining government.
Now, it turns out that where President Bush is trying to restrain spending and stop a massive tax hike, it is New Mexico’s Heather Wilson who is leading the charge for more spending. The program is SCHIP, a program that, if expanded, is a big, incremental step towards nationalized health care. David Hogberg and I discussed this and some of the many reasons expansion should be opposed a few weeks ago in the American Spectator.
No matter how “tough” Wilson’s Congressional seat may be, voting for tax hikes and a massive expansion of government is inexcusable. Wilson is a prime example of a “big-government Republican.”

RailRunner rides that same old line.
It’s good! It’s good! You’ll see, in time.
Ne’er mind the costs, we’re going to town!
What? How many more die till we shut it down?
Bill’s ok. He’s at his station.
“Let’s just have an investigation”
Our schools are crumbling. That’s ok!
We’ll hold classes, anyway!
Learn to drive!
Avoid Railrunner! Stay alive!
Engineers wasted. Families too.
What’s all the fuss? All the ado?
Ne’er mind the costs, we’re going to town.
What? How many more die till we shut it down?
We’ll spend more, make it safer!
Money from oil and gas and oh, the taxpayer!
We can afford it. Yes we can!
What’s the matter with you, man?
Education be damned! RailRunner is mighty!
Ne’er mind those kids, we know they’re flighty.
We’re doing things right. They’ll ride the rails.
One day it will all be just a tale.
RailRunner, RailRunner we long for more.
And, Sister SpacePort is at the fore.
Legislators of sense not common.
Let’s say a prayer. Amen.
— Vic Bruno

With all of the focus on the newest edition of “Hillarycare,” the media have largely ignored the latest mandate working its way through Congress. Unfortunately, our own Pete Domenici is riding shotgun with Ted Kennedy on this one and you just know that is not a good thing. The issue is the so-called Mental Health Parity Act and, if the House goes along with the Senate’s plan, it would likely add between five and ten percent to the cost of a health insurance policy.
At a time when “universal coverage” is high on the political agenda, it would seem that policymakers would be working to make insurance less, not more, costly. Unfortunately, that will not be the case if the Mental Health Parity Act is adopted.

Impact fees… to advocates they are a means of “generating revenue for funding or recouping the costs of capital improvements or facility expansions necessitated by and attributable to the new development .” To detractors, they are just another way for government to reach into taxpayers’ pockets. From the Foundation’s perspective, it would be nice if an actual marketplace for roads, schools, and other services now provided by the government existed because people would actually pay for what they use, not what government bureaucrats tell them they’ve used.
Regardless of their merits, however, according to a new Harvard study outlined here, there is no doubt that impact fees have a negative impact on housing affordability.
Among the study’s findings:
Each $1,000 increase in the cost of a new median-priced home forces 217,000 prospective buyers out of the marketplace;
Every $819 rise in fees paid at the beginning of the construction process–such as an increase in the price of a construction permit, a tap fee, a proffer or an impact fee–adds an additional $1,000 to the final price of the home;
Developers pay an average of $3,114 more than it cost for basic infrastructure and services for a typical 2,077-square-foot house.
Although there was talk about a year and a half ago from Mayor Chavez that he’d consider re-aligning user fees to make Albuquerque more competitive, nothing seemed to come of it. With the national housing market in the tank and Albuquerque bound to be impacted sooner or later, perhaps now is the time to evaluate the situation?

If you have ever seen the excellent film “Commanding Heights,” you are probably familiar with the “Permit Raj” which held India’s economy back for more than 50 years.
A story in today’s Albuquerque Journal (subscription required) reminded me that the “Permit Raj” is alive and well here in our own over-regulated city. First, “an unexpected city requirement triggered a two-month delay in the water park project at what is now the Park Plaza Hotel and Conference Center.” Apparently, the issue related to an “unexpected regulation” from the city that forced the developer to increase the number of public restrooms and showers. This may not seem like a huge deal to those who don’t understand major construction projects, but a two month delay can be costly. Whether the regulation is justified or not, it would seem that the City’s building codes should be clear enough that this doesn’t happen.
In another example of out-of-control regulation, the City has put a hold to renovation of the Wyndham Hotel at 2910 Yale SE. The 276-room Wyndham sits on land owned by the city as part of the Albuquerque International Sunport campus. As a result, the hotel operator must lease the land from the city. In and of itself, this is not a big deal, but now the developer has been told that the City wants to assume the roles of lender and hotel franchiser in the ground lease, neither of which was included in the letter of intent. The relationship requires the owners to provide detailed financial reports on the hotel’s operation, thus bringing problems of proprietary information and competition.
The City of Albuquerque needs to stop playing ridiculous games and instead work to promote and support business development, not scare it away. Otherwise, why not just move to Rio Rancho?

It’s been 15 years since the North American Free Trade Agreement became law and, while the agreement has been extremely helpful for Canada, Mexico, and the US alike, political opposition has stalled a few key provisions including the legalization of Mexican truckers in the US. While there is a lot of ongoing angst about immigration, the fact is that opposition to Mexican truckers is a function of the political muscle of the Teamsters and other labor unions who want to avoid competition and thus keep their wages artificially high. Unfortunately, the US Senate recently decided to allow the Teamsters to preserve their protected market.
As Dan Griswold of the Cato Institute pointed out regarding the recent Senate vote to again postpone implementation of the NAFTA provision legalizing Mexican truckers:

“The Senate majority claims to be protecting highway safety, but the amendment passed yesterday is really just a bald form of discrimination against our Mexican neighbors. The U.S. government can and should hold Mexican trucking companies to the same safety regulations we impose on American and Canadian truckers. But the Senate bill will exclude even qualified Mexican trucking companies from helping to bring goods to U.S. markets. The Senate amendment sends the message that our international agreements mean nothing in the face of political pressure from the Teamsters. The problem the Senate majority has with Mexican trucks is not that they are unsafe but they are driven by Mexicans.”

Albuquerque Journal columnist and former Richardson advisor Ned Farquhar wrote an article recently in which he argued that western cities (including Albuquerque, Denver, Phoenix, and Salt Lake City) need to “pump up” their transportation networks. It may not have been a direct response to my recent article in which I argued against extending the Rail Runner to Santa Fe, but it might as well have been. That said, I’ll pick his arguments apart from the beginning.
First, Farquhar laments $3 per gallon gas and its impact on poor and low-income people. These crocodile tears are amusing for any number of reasons, but I’ll name just a few:
1) It is environmentalists like Mr. Farquhar (and his associates at the National Resources Defense Council) who want to keep most of our domestic oil supply (ANWR for example) out of production;
2) The Legislature is looking to raise the gas tax to pay for roads in part because the Rail Runner is eating up revenues that would otherwise have been allocated to build and maintain roads;
3) Gas prices are not that high by historical standards.
The rest of his article basically laments “inadequate” public transportation systems in the West and argues that it should be tougher to build roads. While he makes a few valid points about politicians preferring to build new roads than maintain existing roads, Farquhar is barking up the wrong tree if he thinks transit is really the solution.
While a genuine “free market” transportation system is a long way off, the fact is that people are willing to use roads — even toll roads — but mass transit has never come anywhere close (page 4) to sustaining itself financially. I’d like to see something approaching a “free market” transportation system in which the government role is minimized, but until that day, it is important to stop wasting taxpayer money on expensive rail projects like the Rail Runner and Mayor Marty’s trolley.

According to the Kaiser Family Foundation, the nationwide average premiums for employer-sponsored health insurance rose an average of 6.1 percent in 2007. While that is slower than in recent years, in New Mexico (according to the Albuquerque Journal subscription required), prices increased by about 8 percent.
Among the factors cited as raising prices in New Mexico is “upward price pressure from physicians” who are being squeezed by declining Medicare and other public-payer reimbursements. This is undoubtedly a big part of the problem, especially since New Mexico’s reliance on public programs (table 1) for health insurance is the third-highest in the nation.
Of course, the state’s high number of mandates — New Mexico added four this year — must take part of the blame as well.
With health insurance rates rising and Governor Richardson pushing for “universal” health care with little in the way of needed reforms, things don’t seem likely to improve for New Mexico health care any time soon.

No, Richardson is not accused of any of the antics of Larry Craig…but I found this article over at Reason interesting in its use of Craig and Richardson as foils for very different visions of the relatively libertarian interior West stands for.
As the author points out, these differing perspectives are much better played out and against each other in a genuinely-federalist government (as the Founders intended) where as many decisions as possible are made at the state level than in Washington.

New Mexico has a statewide smoking ban and both cities and states around the nation have adopted similar bans (Albuquerque banned indoor smoking in 2003, while New Mexico was the 17th state to do so). But what are the economics of these bans? In 2004, two economists, Benjamin Alamar and Stanton Glantz produced a paper which argued that legislated smoking bans are actually beneficial to the bars and restaurants that must ban smoking.
Although we at the Rio Grande Foundation have not done extensive research on smoking bans, the findings seemed to be counterintuitive. After all, if banning smoking was really good for business, you’d think more restaurants and bars would be doing so in order to attract customers in a very competitive industry.
Well, an economist named David Henderson, writing in Econjournalwatch, has poked holes in the argument that smoking bans are good for business. It turns out that Alamar and Glantz based their research on faulty assumptions like comparing the sale price of restaurants both in and outside banned areas to sales and assuming that the ratio had some bearing on the impact of a smoking ban. The authors also failed to account for bars and restaurants that closed their doors after bans took effect, thus lessening competition.
Alamar and Glantz respond, but their arguments just don’t hold. It only makes sense that legislated smoking bans would hurt bars and restaurants — after all, owners of those establishments, not politicians should know best what customers want.

The Rio Grande Foundation is hosting John Fund of the Wall Street Journal for a lunch talk in Albuquerque at noon on September 27.
Mr. Fund is one of the most insightful commentators on today’s political scene. In addition to writing for the Journal itself, he is a regular contributor to the Journal’s web site OpinionJournal.com. He has just been hired as a contributor to the Fox News Channel. His articles have appeared in Esquire, Reader’s Digest, Reason, The New Republic, and National Review.
Fund’s recent book, Stealing Elections: How Voter Fraud Threatens Our Democracy described the U.S. system of elections as “a haphazard, fraud-prone election system befitting an emerging Third World country rather than the world’s leading democracy.” He has written on New Mexico’s experience with voter irregularities.
The event will be held in the auditorium of the Albuquerque Museum which is located at 2000 Mountain Road NW, adjacent to Old Town Albuquerque. Cost per attendee is $25 and reservations may be purchased ahead of time through the Rio Grande Foundation (www.riograndefoundation.org) by check or with a credit card through our secure website. Boxed lunches will be available to all who reserve ahead of time. Pending availability, admission is $30 at the door.