Errors of Enchantment is a project of the Rio Grande Foundation
Errors of Enchantment

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Why not run all of City government as a Foundation?

01.08.2020

As a non-profit ourselves and an organization that takes a fairly skeptical approach to much of what government does, we at the Rio Grande Foundation were admittedly intrigued by the launch of the “One Albuquerque Fund.”  Although the link to the group’s website was not working as of this writing, the Fund is meant to provide private support to the City’s efforts in areas such as “police recruitment and housing vouchers for the homeless” (according to the Albuquerque Journal.

The idea seems to be that if the City does not have the resources for a particular project, then private sector funders will step up.  As long as the process is transparent (and they say it will be), we at the Rio Grande Foundation have no problem with this approach, in fact we’d applaud it.

But, as usual, we have questions:

  1. Albuquerque just passed a massive budget increase in 2019, why is that not enough? Might the issue be priorities, not a lack of money?
  2. If this model proves successful, then perhaps more areas of government should be funded voluntarily rather than by force?
  3. If the model fails to generate significant donations, then what does that say about the lack of interest in funding government when they won’t be put in jail for NOT funding it?

Image result for one albuquerque fund

 

Lujan Grisham’s budget highlights contrast between New Mexico/Colorado

01.06.2020

Gov. Lujan Grisham has released her budget to be considered by the Legislature in the upcoming 30 day session.

According to the Albuquerque Journal, “The nearly $7.7 billion spending plan includes a proposed 4% salary increase for New Mexico teachers and more money for school districts with a large number of “at risk” students.”

The budget would provide for “free” college and expand funding for child-care assistance and pre-Kindergarten programs statewide. “In addition, some of the state’s budgetary windfall would be spent on one-time expenditures, including $320 million to set up a new early childhood endowment fund.”

By contrast, in Colorado which continues to see strong economic growth (albeit minus the “boom” in oil and gas) taxpayers are getting a break in 2020. As reported by Fox 31 Denver, Colorado’s income tax rate will be dropping from 4.63% to 4.5% this year (thanks to that State’s Taxpayers Bill of Rights which was recently affirmed at the ballot box).

As seen below, Colorado has seen an influx of people since adopting TABOR. Perhaps New Mexico would see the same if,  rather than massive spending growth, we saw restraint combined with tax relief?

 

What RGF will be working on in the 2020 Session

01.06.2020

The 2020 session is “only” 30 days long, but as we saw in 2019, a lot of damage can be done in a relatively short time. Considering the “progressive” makeup of the Legislature, there are issues (like Right to Work and Davis/Bacon reform) that simply will not be put forth, but there are plenty of opportunities for bi-partisan economic reform in 2020. We’ll be working to make them happen while also recognizing that there are plenty of bad ideas that could be adopted in 2020.

Below is a list of some of the top issues that RGF will be working on in 2020. Further data and background is available at the links:

1) GRT Reform: The gist of what may happen is for business to business contractors to have most taxes eliminated. This is especially important for service contractors (everything from bookkeepers to lawyers). Tax rates (which have risen dramatically in recent years) would also be reduced slightly.

2) Pension reform: New Mexico has two public employee pension systems: Education Retirement Board (ERB) and Public Employee Retirement Administration (PERA). Both are tremendously underfunded and in need of reform. Earlier this year Gov. Lujan Grisham named a task force to address PERA’s solvency by eliminating over $6 billion in unfunded liabilities over the next 25 years. The changes are significant and positive steps for PERA, but still leave some systemic challenges—namely actuarial methods and assumptions—unaddressed. We will push for further reform while acknowledging that doing something is better than doing nothing.

3) Calling “free” college into question: There so many issues with this concept including New Mexico’s “inadequate” K-12 system, the relative lack of jobs, and the likelihood of price inflation. This proposal has many problems.

4) Questioning the creation of a new “permanent fund” in New Mexico dedicated to “early childhood” education. Permanent funds are nothing but deferred spending and early childhood education (especially pre-K) is of dubious effectiveness. Pre-K programs are also questionable in their effectiveness.

5) Returning surplus money back to New Mexicans: Colorado (a “blue” state like New Mexico) is an economic juggernaut. The key to Colorado’s success is its Taxpayers Bill of Rights (TABOR) which strictly limits government spending and taxation. Colorado just reduced its income tax due to savings from TABOR while New Mexico is likely to spend its surplus. New Mexico politicians should consider returning a significant portion of the oil and gas surplus to the taxpayers.

6) Occupational licensing reform: SB 385 was a bipartisan effort to address occupational licensing problems for those convicted of certain crimes in New Mexico. It was vetoed by the Governor in 2019 after passing both houses. We will continue to support this and other needed (and broader) reforms to New Mexico’s occupational licensing laws in 2020.

Bills are being pre-filed now. To track how bills are moving in Santa Fe and how your legislators are voting (or how they voted in 2019), check out the Rio Grande Foundation’s Freedom Index. 

Albuquerque Journal

Webinar: the importance of restraining state spending, NM vs CO

01.03.2020

RGF president Paul Gessing recently gave a webinar (lasting 20 minutes with 30 minutes left for questions) for the Freedom Hub Working group. The discussion centered around comparing New Mexico and Colorado from the perspective of government spending. To make it simple, New Mexico spends a great deal more as a percentage of its economy relative to Colorado.

The webinar shares some data illustrating the stark differences between the otherwise similar states.

Tipping Point New Mexico Episode 159: Daniel Suhr – Liberty Justice Center

01.02.2020
On this week’s podcast, Paul talks to Daniel Suhr, an attorney with the Liberty Justice Center. 

LJC is a non-profit law firm that litigates against governments for overreach. They successfully represented Mark Janus at the US Supreme Court and won “Right to Work” (the ability to work for their employer without paying union dues or fees) for all government employees throughout the United States. Paul and Daniel discuss this decision and its future ramifications including cases the LJC is bringing around the country.

Then, Paul and Daniel discuss the Rio Grande Foundation’s suit against New Mexico Secretary of State Maggie Toulouse Oliver.  The new suit involves free speech and efforts by organizations like the Rio Grande Foundation to engage in it without being unduly hindered and regulated. It is in some ways similar to the Foundation’s ongoing suit against the City of Santa Fe.

Daniel Suhr Photo

A quick look at the Albuquerque Public Schools budget

01.01.2020

The Albuquerque Public Schools budgets are always worth a close look. The District which failed to convince voters of the need for a big tax hike back in February was able to get its scaled back bond passed in November. But there are several points worth considering about New Mexico’s largest school district as we move forward to the 2020 legislative session and more discussion of education policy at the State and local levels.

  1.  As explained on page 18 of the budget, APS plans to spend $1,475,755,646 during the 2019/2020 school year;
  2. On page 27 we are told that APS expects to have 79,400 students that year.
  3. Simple math gives us total annual spending of $18,586 per-student by APS.
  4. To say the least APS is hemorrhaging students. Back in FY 2014 (six years ago), the district had 86,700 students. But spending continues to rise and the trend seems likely to continue for the foreseeable future.

Will APS reallocate resources by closing unneeded schools and getting rid of bureaucrats? The district shows no signs of this. And, with both a union-dominated board and Legislature (also flush with oil and gas cash), the District’s day of reckoning appears to be a few years away.

The following are a few of the critical charts taken directly from the APS budget document. 

Census data reveal K-12 spending in NM continues to grow, results stagnant

06.19.2017

As RGF research director Dowd Muska discussed last week, the case for New Mexico spending more money, especially at the behest of the judiciary (as a lawsuit would have happen) is nearly non-existent.

Since then, we have run across some fascinating analysis of state-by-state K-12 spending by the education site 74 Million. The most relevant chart has been posted below:

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A few salient points:

  1. Between 2013 and 2015, New Mexico’s K-12 education spending per-pupil grew by 8.21 percent. That’s good for 11th-fastest among states;
  2. In the NAEP test of 4th grade reading, New Mexico’s point score rose during that time frame by 1.48 points, but 8th grade math scores dropped by 1.864 points;
  3. While per-pupil spending grew in nearly every state between 2013 and 2015, it is nearly impossible to uncover any correlation (let alone causation) between increasing K-12 spending and improved results on the NAEP.

Does Udall Still Believe in ‘Peak Oil’?

06.15.2017

After bottoming out, in the fracking era, at 359,000 barrels per day in December 2015, field production of petroleum in the Land of Enchantment rebounded to 439,000 barrels per day in March. The Permian Basin, primarily located in Texas but spilling across the border into southeast New Mexico, is booming. The Bakken is coming back. Nationally, rig counts are up. The Wall Street Journal reports that the “global oil glut is proving immune to the limits set by the Organization of the Petroleum Exporting Countries.” And last week, it must have stung for The New York Times to run a story headlined “Drivers Head Into Summer With a Gift at the Gas Pump.”

In other words, it’s a terrible time to be a peak oiler.

The assumption that global production of petroleum — or at least, affordable petroleum — would soon crest, and then collapse, has been eco-alarmist theology for decades. It’s always been nonsense, since its adherents are unable or unwilling to grasp that humanity is relentlessly finding new ways to extract and efficiently consume oil.

So Errors of Enchantment has question for New Mexico’s senior senator: Do you still believe in peak oil?

U.S. Sen. Tom Udall, while a member of the U.S. House of Representatives, was instrumental in forming the “Peak Oil Caucus.” In 2005, the group of towering ignoramuses decreed that “United States domestic production” had peaked in 1970 and would not recover, and that “the peak in the world’s oil production … is likely to occur in the next decade.” What was needed, of course, was “an energy project with the magnitude, creativity, and sense of urgency of the ‘Man on the Moon’ project to develop a comprehensive plan to address the challenges presented by Peak Oil.”

Almost a dozen years later, it’s more clear than ever that the hysterics were wildly off base. So is Udall willing to come clean with his constituents, and admit he was duped?

That’s probably asking too much from a fedpol who’s cozied up to the corporate-welfare-grabbing, politically savvy folks behind “green power.” But Udall’s junk science is something to remember the next time you hear him weigh in on energy and environmental issues. If he could be so spectacularly erroneous on such an important matter, what else is he getting wrong?

More Dollars ≠ Better Scholars

06.14.2017

It would be difficult to name a public-policy movement more ignorant — and potentially destructive — than the sue-for-higher-school-spending crusade. That’s why New Mexicans must keep close watch on the trial now underway over the consolidation of Yazzie v. New Mexico and Martinez v. New Mexico.

The cases, filed in 2014 by the New Mexico Center on Law and Poverty and Mexican American Legal Defense and Education Fund, allege that taxpayers don’t spend enough to ensure that “every single school-age child [is] provided with a sufficient and uniform public education.”

Some important facts to keep in mind as the trial proceeds:

● There is zero connection between school expenditures and student performance.

New Mexico spends more than its neighbors on government schools. (Thirty percent more than Utah, where pupil proficiencies are stellar.)

● The “fairness” and “equalization” dreams of the educrat lobby have essentially been attained in New Mexico — just a few states surpass the Land of Enchantment in posting the lowest share of K-12 spending covered by local taxpayers.

● Policy by lawsuits, rather than legislation, is poor — and unaccountable — policy. As Walter Olson of the Cato Institute noted: “[M]odern school-finance litigation only poses as being about educational quality. Its deeper mission is control — specifically, transferring control over spending from voters and their representatives to litigators whose loyalty is to a mix of ideologues and interest groups sharing a wish for higher spending.”

It’s the Single Parenting, Stupid

06.13.2017

The annual Kids Count report is out, and nothing’s changed since 2016: “[F]or a second consecutive year … New Mexico [ranked] 49th in the country for overall child well-being and dead last in education.”

As is always worth noting when Kids Count is released, the publisher of the report, the Annie E. Casey Foundation, is a far-left organization. It pushes for “bold and decisive action” (translation: Big Government) to improve the condition of children in America.

If the foundation were truly committed to making every kid count, it would be much more vocal on the role illegitimacy and divorce play in poverty and abuse. It would also be intensely exploring how government programs promote out-of-wedlock births and family fragmentation.

It’s hardly surprising that the three states that rank worst overall on Kids Count in 2017 also rank worst on illegitimacy. Mississippi is rock-bottom on both metrics, while Louisiana and New Mexico switch places when it comes to unmarried mothers. Other top-ten states in out-of-wedlock births that cluster toward the bottom of Kids Count include South Carolina, Nevada, Arizona, Florida, and Georgia. High-divorce states (e.g., West Virginia, Nevada, Arkansas, Alabama) tend to fare poorly on child outcomes, too.

To its credit, Kids Count makes note of the undeniable data:

Children growing up in single-parent families typically have access to fewer economic and emotional resources than children in two-parent families. In 2015, 35 percent of single-parent families had incomes below the poverty line, compared with 8 percent of married couples with children. They also have poorer health and educational outcomes and are more likely to drop out of school, to have or cause a teen pregnancy and to experience a divorce in adulthood.

But inexcusably, the issue isn’t addressed until page 43 of the report — and the main text (before the start of endnotes) stops at page 45!

While there are many well-intentioned members of the left-leaning “for the children” movement, they are unlikely to make much progress on the problem they claim to combat until single parenting is recognized as a force multiplier for social pathologies. “No judgements” may feel good, but as social policy, it’s been a disaster.

Rio Grande Foundation urges the U.S. Supreme Court to hear case challenging mandatory union fees

06.13.2017

Janus v. AFSCME could free all government workers in the U.S. from being forced to pay union fees as a condition of employment

(Albuquerque, NM) – Public schools teachers, state social workers and other government employees should not be forced to pay money to a union just so they can keep their jobs. That’s why Rio Grande Foundation is urging the U.S. Supreme Court to hear Janus v. AFSCME.

Janus v. AFSCME has the potential to finally end the decades-old requirement of forcing government employees to pay mandatory union fees regardless of whether they want to be represented by a union. This case was brought by the Liberty Justice Center and National Right to Work Legal Defense Foundation on behalf of Mark Janus, a child support specialist from Illinois. On Tuesday, Janus petitioned the U.S. Supreme Court to hear his case.

As Rio Grande Foundation President Paul Gessing explains, “Government unions should not be able to take money out of workers’ paychecks before workers themselves. For too long union executives have forced government employees to pay fees to fund their political activity and special interests. This case has the power to free government workers across the country and restore their freedom to choose what political causes they want to support.”

In 22 states across the U.S., government including New Mexico, workers are required to be represented by and pay money to a union as a condition of employment. Janus v. AFSCME argues that forcing workers to financially support a union against their will violates the First Amendment.

The request for the U.S. Supreme Court to hear this case follows a March ruling by the U.S. Court of Appeals for the 7th Circuit, which upheld forced dues, citing the Supreme Court’s 1977 Abood v. Detroit Board of Education decision. The plaintiffs in Janus v. AFSCME argue that Abood was wrongly decided and should be overturned, especially in light of subsequent U.S. Supreme Court rulings that have applied strict scrutiny to mandatory union fees.

Last year, it appeared that the U.S. Supreme Court was ready to strike down forced union fees for public sector workers for good in the Friedrichs v. California Teachers Association case. The plaintiff in that case was Rebecca Friedrichs, who, together with eight other teachers, argued that Abood should be overturned because the forced collection of union fees is a violation of the First Amendment.

Most legal observers agreed that Scalia was set to cast the deciding fifth vote in favor of the plaintiffs. However, his death just weeks before the case was to be decided resulted in a deadlocked court and left Abood in place for the time being. Now, Janus provides another vehicle for the Supreme Court to revisit the constitutionality of compelled union fees for public employees.

 

2017 data show New Mexico state/local spending 2nd-highest nationally

06.13.2017

As the Democrat-controlled Legislature whines about spending cuts and attempts to raise taxes, newly-released 2017 data show New Mexico state/local spending (as a percentage of gross state product) far outpaces neighbors and is 2nd-highest overall. The data are from USGovSpending.com. Only Kentucky spends more as a percent of economic output than New Mexico.

Given that reality, it is no surprise that state/local spending in New Mexico far outpaces its faster-growing regional neighbors and the national average. The data can be seen in the chart below:

 

Hardship in the Hinterlands

06.12.2017

Source: Medicaid in Small Towns and Rural America: A Lifeline for Children, Families, and Communities

Rural America is in trouble. As The Wall Street Journal recently noted: “In terms of poverty, college attainment, teenage births, divorce, death rates from heart disease and cancer, reliance on federal disability insurance and male labor-force participation, rural counties now rank the worst among the four major U.S. population groupings.”

Sadly, the phenomenon is impacting New Mexico in a big way. The U.S. Census Bureau’s new population data show that a whopping 24 of the Land of Enchantment’s 33 counties, all of them rural, lost residents between 2011 and 2016. (The gainers were Bernalillo, Curry, Doña Ana, Lea, Luna, McKinley, Sandoval, Santa Fe, and Taos. Most of the nine saw very modest increases.)

But wait, there’s more. A new analysis by the Georgetown University Center for Children and Families and the University of North Carolina’s Rural Health Research Program found that 59 percent of children in small towns/rural areas in New Mexico were on Medicaid in 2014-2015. For adults, the share was 27 percent — 4th among the states, and a gain of 12 percentage points since 2008-2009.

So much for the “Rural Jobs Tax Credit,” as well as the other schemes New Mexico pols have concocted to revive the economy out in the sticks.

While there is zero evidence that urban cores are enjoying a revival, Americans, and New Mexicans, prefer to live in metro regions. (Preferably in a detached home, with a decent yard, and within easy driving distance of a Costco, Home Depot, and Chipotle.) Rural regions are hollowing out, and for those who remain, life appears to be rougher than ever. It’s a severe, and increasingly expensive, public problem.

Councilor Isaac Benton Issues Gas Tax Hike Defense

06.12.2017

The Rio Grande Foundation has been leading the charge against Councilor Isaac Benton’s proposed Albuquerque gas tax. (You can sign our petition here)

He knows there is significant public opposition to yet another local tax hike and City Council has delayed a final vote on the issue until Monday, June 19. So, he penned an article for the Albuquerque Journal that laid out his position. His arguments are enlightening.

1) There is a minor disagreement over math. The exact rate charged in New Mexico is trivial. The federal rate is 18.4 cents while the state rate is 17 cents. But wikipedia lists a different combined rate.

2) It (the gas tax) is worth it. In Benton’s view, virtually anything that transfers money from your pockets to government coffers is “worth it.” This is obviously purely subjective.

3) See point 2. Benton touts the money government would have as a result of this tax, but dismisses the cost to individuals and families.

4) Benton wants to do whatever he can to distance the gas tax from the unpopular ART (which he supported). Even if no money from this tax is allocated directly to ART, it will free up resources that would otherwise be used on roads that can in turn be used for ART. Money is fungible.

5) Compliance with ADA: his argument would be much more convincing if he outlined specific legal issues the City faced due to ADA non-compliance. I have heard of nothing.

6) Administration and compliance eating up 4.7% of total tax collections is a significant amount.

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Air Traffic Control Reform, an issue whose time has come

06.09.2017

In public policy, if you stick around long enough issues that you thought were “dead and buried” invariably come back. One such issue is air traffic control which President Donald Trump intends to reform by, among other things, separating government’s regulatory/safety function from operations.

Rio Grande Foundation president Paul Gessing wrote about the issue extensively in his role with the National Taxpayers Union, a government reform organization based in the DC area.

Gessing’s involvement in the issue goes back nearly two decades with a policy brief  and items published in the Wall Street Journal. With Canada and the UK already having enacted reforms to free air traffic control from the bounds of government, it is indeed time to reform America’s air traffic control system.

Reforms can improve lottery scholarship for future

06.08.2017

New Mexico’s Higher Education Department just announced that New Mexico’s Lottery Scholarship will cover an average of “only” 60 percent of qualifying students’ tuition at New Mexico institutions.

That’s down from 90 percent coverage this year, thanks to long-term declines in lottery revenues, rising tuition, and the fact that liquor taxes will no longer be diverted to prop up the scholarship program.

These problems were easy to foresee.

A few years ago, the Rio Grande Foundation outlined problems with the program as currently formulated and detailed some potential changes to the scholarship a few years ago in a paper, “A Market-Based Approach to New Mexico’s Lottery Scholarship Program.”

Here are a few initial problems with the program itself:

  1. By traditionally covering 100 percent of costs, the scholarship created an entitlement mentality among students who failed to value the benefit they are receiving.
  2. Students who would otherwise spend their own or their family’s money or obtain scholarships no longer did.
  3. The scholarship subsidized New Mexico’s institutes of higher learning, as they priced tuition to maximize scholarship funding.
  4. There will always be more demand for “free” college tuition than there are people willing to make long-shot bets on lotteries. This is the very definition of a “regressive” (albeit voluntary) tax. People playing the lottery are generally of low income levels while those benefiting tend to be of higher than average incomes.

Based on the points outlined above, given New Mexico’s ongoing budget woes, and more filling the Lottery Scholarship budget with money from elsewhere in the budget is unacceptable.

In fact, a scholarship that “only” covers 60 percent of tuition might be preferable in many ways to one covering 100 percent, as it reduces the entitlement mentality and creates incentives for students to look for additional financing for college.

Should there be higher standards or income limits on the scholarship program? Those are good questions, but it is hard to hold a physics major scraping by at demanding New Mexico Tech to the same GPA requirements as a student in a less-challenging field like political science, my chosen area of study.

And, while it is tempting to make the Lottery Scholarship yet another “progressive” government program geared to helping those of modest incomes, policymakers should demand results from both the Lottery Scholarship and higher education in general rather than punishing “the rich.”

For instance, how many scholarship recipients stay in New Mexico to work instead of leaving our state? Should we limit the scholarship to fund scholarships to just New Mexico schools? Or should the program give students a fixed amount to use at the school of their choice, whether it’s in or out of state?

It’s worth noting that New Mexico spends generously on higher education and that tuition here is lowest in the nation.

In March, Student Loan Hero, an Austin, Texas-based student loan management company, used U.S. Department of Education data to calculate the average cost per credit hour for residents to attend public colleges and universities in each state.

The average rate at schools around New Mexico is by far the lowest, at $112.77. All of this spending hasn’t done much for New Mexico’s economy with its highest-in-the-nation unemployment rate.

In New Hampshire, on the other hand, a credit hour costs $387. Yet, its economy is among the most vibrant in the nation.

If used correctly, the Lottery Scholarship could force New Mexico’s higher education system to excel and be more cost-effective.

Policymakers can and should reform the Lottery Scholarship to bring increased transparency and accountability to all of higher education.

Paul Gessing is the President of New Mexico’s Rio Grande Foundation. The Rio Grande Foundation is an independent, non-partisan, tax-exempt research and educational organization dedicated to promoting prosperity for New Mexico based on principles of limited government, economic freedom and individual responsibility.

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Room for Improvement on Domestic Violence

06.08.2017

No one “makes” you batter an intimate partner.

But while domestic violence is more a function of culture than policy, government plays a proper role in the crime, especially in New Mexico, where the offense is committed at a rate above the national standard.

Unfortunately, according to a new report from the Legislative Finance Committee, New Mexico’s public sector can be doing a much better job serving both victims and offenders.

“Domestic Violence Programs for Victims and Batterers” found that the state’s response to the crime is “fragmented and uncoordinated.” One obstacle is the number of “entities involved in responding to domestic violence,” a list that includes law enforcement agencies at all levels, the New Mexico Children, Youth and Families Department, the Crime Victims Reparation Commission, welfare programs, the Judicial Education Center, and government schools. As the pictograph above shows, the bureaucracies are many, and streamlining is necessary.

Another disturbing revelation was the small number of “clients” who complete batterer intervention programs. Usually ordered to participate by a judge, offenders must complete 78 hours over the course of 52 weeks. But on average, only 20 hours “of any type of counseling” were received in fiscal year 2016. Worse still, the mandate for yearlong participation in a BIP “is unsupported by evidence.” LFC staffers found “no consensus on the optimal length a program should be to be effective.”

The “Domestic Violence Leadership Commission” offers an egregious example of dropping the ball. Formerly founded on an executive order, the 26-member body was “enacted into statute by the Legislature in 2010.” Yet “there is no evidence the Commission has met since that time.” Not impressive “leadership,” that.

Finally, keeping police and judiciary employees up-to-date on best practices in combating domestic violence doesn’t appear to be enough of a priority. The New Mexico Law Enforcement Academy requires “just one hour of refresher training” on the subject “for officers as part of the biennial in-service cycle.” There has been “no statewide domestic violence-specific training for judges and court personnel in New Mexico since 2006,” and the Judicial Education Center’s statute “makes no provision for requiring training” on the crime.

There is a limit to what government can do to address the carnage created by people who choose to abuse an intimate partner. But the LFC’s report shows that New Mexico’s bureaucrats and elected officials need to take the problem of domestic violence more seriously, and implement a number of necessary — and affordable — reforms.

Benchmarking Employment: April

06.07.2017

Last month Errors of Enchantment inaugurated a new system to benchmark employment growth in New Mexico. The U.S. Bureau of Labor Statistics conducts a regular analysis of 12-month employment changes in the nation’s metropolitan statistical areas. Our new analysis looks at New Mexico’s four MSAs, compared with the 49 MSAs found in the state’s five neighbors: Arizona, Utah, Colorado, Oklahoma, and Texas.

As depicted in the chart above, in the second month of our research, the results still don’t look good. Average job growth from April 2016 to April 2017, for the non-New Mexico MSAs, was 1.4 percent. Las Cruces came closest to the regional pace, at 1.0 percent growth. But Albuquerque (0.5 percent) and Santa Fe (0.5 percent) lagged far behind, and Farmington dropped by 1.4 percent. (In the region, only Texarkana, at -1.6 percent, performed more dismally.)

The good news is that since bottoming out in September 2010, employment in New Mexico has been on a generally upward path (See chart below.) But the state has yet to regain its pre-Great Recession peak, and as the BLS data show, neighbor MSAs are doing much, much better. The Land of Enchantment remains desperate for proven, powerful policy tools to boost economic development. How much longer do we have to wait?

 

Combating ‘Willful Inactivity’

06.06.2017

We didn’t need more evidence about the value of limiting the welfare state to the truly needy, but here it is: In Alabama, between January 1, 2016 and May 1, 2017, the number of “able-bodied adults without dependents utilizing the Supplemental Nutrition Assistance Program, known as SNAP or food stamps” dropped by 85 percent.

The Heart of Dixie isn’t alone. In Maine, the cut in SNAP rolls for the able-bodied was 90 percent. Kansas and Indiana have seen big drops, too.

As the Heritage Foundation’s Robert Rector noted last year, when the Obama administration waived the rule that able-bodied adults without dependents (ABAWDs) were limited to “three months of benefits in a 36-month period unless they were employed or participating in a work program at least part time,” enrollment in SNAP program soared. Between 2007 and 2013, the caseload expanded from under 2 million to 4.9 million.

In late 2014, Maine’s chief executive decided to re-impose the productive-activity mandate for ABAWDs getting food stamps. Cruel? Mean-spirited? Perhaps not. Here’s the state’s commissioner of human services:

When we began requiring able-bodied adults without dependents … to work 20 hours per week, volunteer an hour per day, or attend vocational training in order to maintain food stamp benefits, only about one in five complied. Even when we have reached out to ABAWDs with job and volunteer opportunities, they have opted simply to go without benefits and have declined to participate in the training or volunteer opportunities. It is truly a sad situation but it underscores the point that we cannot enable willful inactivity and it is imperative that these programs are designed to help people who are making a genuine attempt to transition from poverty to prosperity. They cannot be a way of life.

We know from the data and from our law enforcement partners that a significant portion of drug related arrests and crimes include individuals with EBT cards and SNAP benefits. Unfortunately, too many of these folks are ABAWDs that aren’t meeting the work requirement of the program. These able-bodied adults need to get a job, not get more food stamps. This experience tells us that government at all levels should consider work and volunteer requirements for all welfare programs in order to end the perception of welfare as a lifetime handout.

And as Rector pointed out, if SNAP were such a critical support for ABAWDs, who “barely have enough money to feed themselves,” why does the cohort smoke so many cigarettes? Using data from the National Health and Nutrition Examination Survey, the scholar found that “over 50 percent of ABAWDs” smoke, “consuming on average 19 packs of cigarettes” a month, at a cost of “around $111 per month.” (See chart above.)

In New Mexico, though, the story’s familiarly depressing. Late last year, the Martinez administration, citing the three-decades-long litigation engineered by the state’s welfare industry to protect SNAP, “asked the U.S. government to continue exempting able-bodied adults receiving food aid from having to get a job or volunteer at a nonprofit agency.”

Meanwhile, the boss of the New Mexico Children, Youth, and Families Department is concerned that “two-thirds of those who are eligible have yet to enroll” their kids in taxpayer-subsidized childcare assistance.

Is it any wonder that “lack of applicants” is a serious problem for New Mexico employers looking to hire?

A Merry, Merry Month for RTW Jobs

06.05.2017

Since January 2015, the Foundation has tracked announcements of expansions, relocations, and greenfield investments published on Area Development‘s website. Founded in 1965, the publication “is considered the leading executive magazine covering corporate site selection and relocation. … Area Development is published quarterly and has 60,000 mailed copies.” In an explanation to the Foundation, its editor wrote that items for Area Development‘s announcements listing are “culled from RSS feeds and press releases that are emailed to us from various sources, including economic development organizations, PR agencies, businesses, etc. We usually highlight ones that represent large numbers of new jobs and/or investment in industrial projects.”

In May, of 13,507 projected jobs, 11,096 — 82.1 percent — were slated for right-to-work (RTW) states:

Once again, Missouri deserves special attention. It accounted for a whopping 33.2 percent of all jobs to be created in non-RTW states. But the Show-Me State passed a RTW law earlier this year, with an effective date of August 28th. When September’s data are compiled, and Missouri begins to be counted as RTW, the labor-freedom advantage in employment growth is likely to spike even higher.

As for the sub-metrics the Foundation scrutinizes:

* Seventeen domestic companies based in non-RTW states announced investments in RTW states. Just two announcements went the other way.

* RTW prevailed in foreign direct investment, too. Seventeen projects are headed to RTW states, with four to occur in non-RTW states.

Marquee RTW investments included:

* Nokian Tyres picked Tennessee for a 400-employee factory

* James Hardie Building Products will create 205 jobs at a new plant for “fiber-cement building products” in Alabama

* Constant Aviation, “a full-service maintenance, repair, and overhaul operation with a nationwide network,” will hire 200 workers to operate a “state-of-the-art” facility in Arizona

Methodological specifics:

* All job estimates — “up to,” “as many as,” “about” — were taken at face value, for RTW and non-RTW states alike.

* If an announcement did not make an employment projection, efforts were made to obtain an estimate from newspaper articles and/or press releases from additional sources.

* If no job figure could be found anywhere, the project was not counted, whether it was a RTW or non-RTW state.

* Non-border-crossing relocations were not counted, border-crossing relocations were.

UNM President Abdallah: “We don’t spend higher ed money wisely in New Mexico”

06.05.2017

Although he’s head of one of the largest tax eating institutions in New Mexico, I’ve always had respect for interim president Chaouki Abdallah. That respect only grew after reading the lengthy profile in the Albuquerque Journal over the weekend.

For starters, Abdallah didn’t back down when various leftists attempted to shut down a talk by Milo Yiannopoulos. But this interview displayed an honesty about both New Mexico and higher education in general that is rare among people of his position. Specifically, he said, “Our higher ed spending is more than most other states; the trouble is we don’t spend it wisely and (we) spread it across so many entities. We do need a plan.” (RGF has made this point repeatedly)

This is anathema to those on the left for whom no amount of spending is adequate. We just saw in the recently-completed special session that legislative Democrats have no desire to cut spending in any systemic way. Even the head of the State’s flagship University “gets it.”

Even more enlightening is his statement “UNM has these spires of excellence, best in the world or top five, but like everything else around this state, the average is bad because you have to make sure everyone is taken care of.”

In other words, resources “paying off” various constituencies and/or distributing resources in ways that are ineffective and unnecessary for mere political reasons that ultimately degrade the quality of the product as a whole.

Abdallah clearly understands the way things work in New Mexico. Since he doesn’t want to stay on as UNM President, perhaps he has a future in politics?

One Month ‘Til GRT-Hike Day!

06.01.2017

Source: GRT rates schedules,  New Mexico Taxation and Revenue Department 

When local governments in the Land of Enchantment increase their gross receipts taxes, the hikes go into effect on January 1st or July 1st. So one month from today, a hefty number of New Mexico taxpayers will be paying more when purchasing goods and services. Albuquerque’s levy, boosted by Bernalillo County’s imposition of a three-sixteenths of 1 percent increase, will rise to 7.5 percent.

Sadly, GRT rates in the new century have gone in only one direction — up. The chart above lists how much New Mexico’s seven largest municipalities raised their GRT rates between January 1st, 2000 and January 1st, 2017. (Rio Rancho is bifurcated into its Bernalillo County and Sandoval County portions.) The biggest burden was imposed by Las Cruces, which increased its rate from 6.375 percent to 7.75 percent. But among the seven, The City of the Crosses will soon lose its status as the top hiker. Clovisites are scheduled to get hit with an eighth-of-a-percent increase July 1st, which means their rate will have increased by a whopping 31 percent since 2000.

Did local pols hike the GRT in your community — or are they planning to? Let us know about it.

No need for City of Albuquerque Gas Tax

05.31.2017

Albuquerque City Councilor Isaac Benton’s proposal to create a 2 cents-per-gallon gas tax will be voted on by the full council on June 5. If enacted, the tax would be a net negative for the city of Albuquerque. Aside from adding to an already-high local tax burden and disproportionately affecting low-income families, Benton’s tax would not do much to improve the city’s roads and have negative effects on its economy.

The proposed tax adds 2 cents per gallon onto the combined state and federal 35.4-cent tax. This is the same gas tax that has been in the crosshairs of legislative Democrats for further hikes as recently as this special session. Albuquerque residents already face the highest tax burden in the state as a percentage of income. A new gas tax will affect a large number of low-income families.

According to the Brookings Institution, 80 percent of households with annual incomes of under $50,000 drive cars, and a third of them own multiple vehicles. These vehicles are often older and less efficient. The well-off can easily afford a 2-cent tax due to their additional wealth and ability to buy new, efficient cars which are even covered by onesureinsurance.co.uk/van-insurance, but the disadvantaged must pay the same tax while earning less and filling their tanks more. While 2 cents sounds like a small burden, for workers whose main focus is putting food on the table for their families, every little bit counts.

A gas tax would also have negative effects on Albuquerque’s economy. The Brookings Institute notes that such taxes drain the economy of purchasing power due to their effects on low- and moderate-income families. Put simply, lower-income families generally spend most of their income, meaning that a spending increase in one area, like gas, means that spending decreases accordingly in other areas. Decreased spending harms the economy, especially one which is still recovering from a major downturn. Thus, families are hit with a double effect: first, they must pay more for gas and lose out on spending elsewhere, and then they must deal with the effects of a slow economy.

As the ordinance is written, the tax would be used to “rehabilitate transportation systems.” This could mean directly supporting or allowing existing dollars to be diverted to the controversial Albuquerque Rapid Transit program and the city bus system. Any gas tax paid by motorists should at least be dedicated to improving and expanding Albuquerque’s roads.

Additionally, as Benton himself said recently, much of the revenue will be allocated to “outdated” roadways that are functional but for some reason or another are not compliant with the federal Americans With Disabilities Act. As well-intentioned as this may be, average Albuquerque residents and motorists want roads that get them from A to B with fewer potholes. As time passes, roads are being upgraded to comply with ADA. Adding a new tax onto the backs of local motorists now in order to comply with a law passed back in 1990 is ridiculous.

Even if the proceeds were dedicated specifically to roads, it is worth questioning what the city will receive in terms of “bang for the buck.” That’s because a significant portion of the money generated by the tax will be spent on the creation of a collection and auditing apparatus. Some of the revenue created would have to be spent on additional bureaucracy to collect, audit and set up an appeals process relating to the new tax.

Gas taxes aside, local taxpayers are facing increased tax burdens. Between Bernalillo County and the city of Albuquerque, gross receipts taxes applied to most purchases will have risen an astonishing 29 percent since 2000 once the latest round of tax hikes kicks in this July. We are reminded every day, whether from news reports or by just driving down the street, that our city has not recovered from the economic crisis of 2008. Raising taxes yet again is not likely to improve the local economy.

You can sign the Rio Grande Foundation’s petition to the City Council and Mayor Richard Berry at www.NoABQGasTax.com.

Dr. Vilchis’s Botched Diagnosis

05.30.2017

For another facile defense of Obamacare in the Land of Enchantment, check out “Potential Impact of Repeal of the Patient Protection and Affordable Care Act on New Mexico.”

The paper is authored by Hugo Vilchis, an M.D. “with more than 30 years of experience in population health, 20 of them in international health.” He’s currently the executive director of the Burrell Institute for Health Policy & Research, a “division” of the Southwest Foundation for Osteopathic Education & Research. (The Burrell College of Osteopathic Medicine is located at New Mexico State University, but does not appear to receive taxpayers subsidies — at least, not yet.)

Vilchis, who believes that repeal “would have far-reaching and negative consequences for every facet of life in New Mexico,” hopes that readers find his paper “useful and accurate,” and welcomes “any comments and feedback.”

Okay. Here goes.

“Potential Impact of Repeal of the Patient Protection and Affordable Care Act on New Mexico” suffers from the usual fallacies and oversights embraced by supporters of Obamacare. These are the most maddening:

* The “coverage” fetish. Vilchis gushes that Obamacare “has expanded health-care coverage to more than 20 million people.” But “coverage” is a tricky thing. What’s the quality of coverage? How much does it cost? Who’s paying for the coverage? Does more coverage actually lead to better health outcomes? Would a more market-oriented approach boost the affordability and quality of coverage? These questions are rarely asked by left-wing defenders of massive government intervention in healthcare. To them, more coverage is better, no matter what the unintended — and often, quite unpleasant — consequences.

* Rosy speculation about the future, little attention paid to failures of the past. Vilchis claims that U.S. healthcare spending “from 2014 to 2019 is expected to be $2.6 trillion less than projected in 2010.” But given that the optimistic prognostications of Obamacare enthusiasts have been consistently off, there’s no reason to count on the estimate’s accuracy. And remember Barack Obama’s promise to “cut the cost of a typical family’s premium by up to $2,500 a year”? It’s AWOL in “Potential Impact of Repeal of the Patient Protection and Affordable Care Act on New Mexico.” (To his credit, Vilchis admits that “premium growth has slowed substantially but continues to grow.”)

* Reliance on “research” by fellow travelers. The Center for American Progress, the Economic Policy Institute, the “Brookings Institute,” the Henry J. Kaiser Family Foundation, the Center on Budget and Policy Priorities — Vilchis draws from an awfully narrow band of analysts. Perhaps worst of all, he approvingly cites the Congressional Budget Office, claiming that if the American Health Care Act were enacted, “by 2026, a total of 52 million Americans would be uninsured, 24 million more than if the current law were left unchanged.” But the CBO’s scoring is marred by flawed assumptions and problematic methodology, as Citizens Against Government Waste, the Galen Institute, and many others have noted.

* Ignoring an obvious conflict of interest. The Burrell College of Osteopathic Medicine benefits from Obamacare’s “increased federal support for the National Health Service Corps, which provides loan forgiveness to health professional students in return for their agreement to practice in underserved areas.” Yet nowhere in “Potential Impact of Repeal of the Patient Protection and Affordable Care Act on New Mexico” is this glaring bias disclosed.

Dr. Vilchis’s “primary research interests” are waterborne diseases, bioterrorism, emergency preparedness, and environmental health. The physician should stick with what he knows, and leave policy research to those who have a fuller understanding of the regulation/taxation/subsidization of healthcare.