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.

A few days ago on this blog, I outlined some work the Foundation has been doing on the correlation between poverty and the size of government. In a recent article on the subject that was published in the Albuquerque Tribune, I mentioned New Mexico Voices for Children as a group advocating higher taxes and higher government spending.
Well, their Executive Director Catherine Direen took enough offense to respond with a letter to the editor of her own. While she makes a number of points in her response, mostly dealing with a new study they are touting on the relative level of taxation of New Mexico’s poor people, her last point was the most interesting: “New Mexico is not a poor state because of its tax rate. New Mexico is a poor state because of its history of poor wages.”
If it is really as simple as that — New Mexico is poor because of low wages — then it really is as simple as using government’s coercive power to force those greedy business owners to pay higher wages. There are a number of reasons for New Mexico’s disproportionate poverty levels.
I’d love to have some debates with NM Voices folks for the sake of the Legislature.

You may have seen this article in today’s Albuquerque Journal. We’re always happy to get published in New Mexico’s largest newspaper, but I wish they would have gotten the headline right…the gross receipts tax is NOT a sales tax! I pointed this out in the article today and I wrote an entire piece in the Albuquerque Tribune outlining the differences between the two and the greater economic harm that results from our gross receipts tax.
Regardless of what you call the tax, it is clear that Albuquerque has seen a rapid uptick in tax rates this decade. Hopefully Mayor Chavez’s proposal marks the beginning of further tax cuts.

Buried in all the hub-bub of a busy legislative session and Governor Richardson’s calls for a special session (not to mention the US attorney scandal), the eminent domain issue has been on the back-burner for many in the media and the punditry class.
Thankfully, despite a rocky road to success, Governor Richardson has signed legislation providing protections for New Mexico property owners. Protections for property owners were among the Foundation’s top priorities for the 2007 legislative session.
Considering the importance of the issue and the controversy that ensued after Richardson vetoed eminent domain protections the last year, it is hard to believe the Governor is not making more hay out of his successful effort to pass protections for property owners. He didn’t even send out a press release.
No matter what, it is a good day for private property in New Mexico.
Text of the legislation can be found here.

All too often, those who want to expand government poverty programs seem to have the moral high ground in discussions with those who don’t. Nothing is easier than saying that a particular individual “doesn’t like poor people,” or that they are just “taking advantage” of those less fortunate.
In today’s Human Events I argue using ample state budget and poverty from the 1990s that regardless of empathy, it is fiscal conservatives, not advocates of big government, that are helping the poor. Since New Mexico is the third-poorest state in the nation, it is obvious that New Mexicans rely too much on government, but at the same time there is a clear way to improve our lot.

In something of a quick turnaround, Governor Richardson has vetoed a bill that would have put the state in charge of a system of mandatory vaccinations for all girls entering the 6th grade. As recently as 3 weeks ago,I’d blogged about the issue and mentioned that with Richardson having expressed support for the effort, the bill looked like “a slam dunk.”
Apparently, he got cold feet. Wise move by the Governo, especially after the debacle over this issue in Texas. States should not be in the business of providing mandatory vaccinations unless the disease is highly communicable and dangerous.

At this point it is anybody’s guess as to whether or not Governor Richardson will succeed in convincing the Senate of the need for a special session. But, the Rio Grande Foundation made its views on the successes and shortcomings of the 2007 session clear in an opinion piece in the Las Cruces Sun-News.
The lack of education reform and spending restraint were both disappointing.

Commercial aviation is one of the most heavily-regulated and taxed industries in the nation. Thus, some new developments that made news this week, could have an impact not only on the industry itself, but on the flying public as a whole.
First and foremost, in a major positive development, the United States and the European Union have finally approved an “open skies” agreement that should make trans-Atlantic air travel cheaper and more convenient. Under the agreement, starting next March, airlines based in any of the EU countries would be allowed to fly to any American city and U.S. carriers will be allowed to fly to any destination in the EU’s 27 countries.
Open skies will be a huge boon for the flying public, but of course there is one major opponent: labor unions. The funny thing is that since US workers are actually more productive and less expensive to hire and fire than their European counterparts, American aviation workers should benefit, but that never seems to stop labor unions from fighting economic liberalization.
Unfortunately, the news is not all good. Despite paying incredibly high taxes that subsidize wealthy passengers on private jets, commercial airline passengers will be paying even higher taxes if the airports have their way.
Needless to say, when there is as much government involvement in an industry as their is in aviation, incentives are going to be mixed up…nonetheless, we are in better shape now than we were 30 years ago thanks to of all people, President Jimmy Carter who deregulated the airlines.

A few weeks ago I blogged a Washington Post story on the supposed trend of voters in Western states moving from the Republican Party to the Democratic Party. In a recent column for the Albuquerque Journal, recently added columnist Ned Farquhar made the same point and cited Colorado’s Taxpayers’ Bill of Rights as an important reason for Colorado’s shift from red to blue.
Unfortunately, Farquhar ascribes too much credit to the Republican Party for its role in adopting TABOR in Colorado and he completely fails to account for the fact that Governor Owens led the charge on behalf of weakening the spending limit in 2005. As I point out in a letter to the editor responding to Farquhar’s column that appeared in today’s Albuquerque Journal, it was not Republicans’ “rigid ideology” that cost them votes. Perhaps it was the other way around?
Text of the letter appears below:
I ENJOYED reading Ned Farquhar’s commentary outlining why he believes the Republican Party is losing the West, but many of his facts are simply wrong and in other cases he ascribes trend status to mere political fluctuations.
His focus on Colorado is particularly telling. He argues that Republicans “painted themselves into an ideological corner” and cites that state’s spending limit known as the Taxpayers’ Bill of Rights. What he fails to mention is that voters, not Republicans or Democrats, adopted the law in 1992.
And, while voters did suspend part of the law for five years starting in 2005, Colorado voters— unlike New Mexicans— have the final say on any and all tax increases at both the state and local level.
Specifically regarding the politics of the situation, his subsequent mention of then-Gov. Bill Owens, a Republican, is interesting. Owens actually led the campaign on behalf of the referendum that ultimately suspended a portion of Colorado’s spending limit. The Republicans did indeed lose Colorado, but it was hardly the result of their supposedly rigid ideology.
Ultimately, elected officials should try to put political calculations aside to do what is best for their states. Cutting taxes and restraining government have been shown to work everywhere they’ve been tried. Western politicians have historically heeded this, and that is why our states are among the fastest-growing in the nation.
PAUL GESSING
President, Rio Grande Foundation, Albuquerque

“If you build it, they will come.” This line from the movie Field of Dreams has been used to justify taxpayer-financed construction of professional sports stadiums for years. Now, as the Washington Post discussed on its pages this Sunday, Governor Richardson and a number of leading New Mexicans and civic boosters in and around Las Cruces have been pushing a taxpayer-financed spaceport in order to allow billionaires like Richard Branson start commercial space flights.
While it is being sold as an economic development tool, the plan requires a significant and economically-harmful hike in the gross receipts tax. With more than three-dozen of these spaceports either complete or under construction, New Mexicans need to understand just how speculative this type of “economic development” really is.

Governor Richardson wants the Senate to come back to Santa Fe in part to pass his transportation plan known as GRIP II. While roads are certainly something that even advocates of the most limited of governments can get behind, the episode illustrates some particular flaws associated with politically-driven transportation planning.
Among the items contained in GRIP II is $25 million for the proposed Spaceport for which taxpayer subsidies are already being used. Thankfully, Albuquerque Senator Joe Carraro has said he will vote for the bill only if money is included for improvements to the clogged I-25/Paseo del Norte juncture (subscription required).
I’m not trying to be Albuqueque-centric here; I’m sure there are dozens of transportation projects in cities throughout the state that should be higher priorities than additional subsidies for the multi-millionaire’s who want to go launch their rockets, but I drive the I-25/Paseo corridor on a regular basis and can assure you that something should be done.
Unfortunately, we have a socialized transportation system (how else do you explain the RailRunner) that could use a good dose of market forces in order to better allocate resources. The folks at the Reason Foundation have been beating the drum for such reforms for years and have some really great research on how to bring the free market to transportation.