Errors of Enchantment

The Feed

A tale of two states: Indiana v. Illinois

03.11.2016

Indiana is one of America’s most economically-free states. It also embraced “right to work” in 2012.

Illinois is relatively un-free (although not as bad as New Mexico). It is also not “right to work.”

Our friends at the Illinois Policy Institute put together the following chart to illustrate how manufacturing is thriving in Indiana but not in neighboring Illinois. Is this entirely due to Indiana having “right to work?” Maybe not, but it is definitely part of the reason and it certainly hasn’t hurt (perhaps there’s a lesson for New Mexico?):

Real Economic Development for Sierra County

03.11.2016

chino_mine

Kudos to the New Mexico Business Coalition for drumming up support for the reestablishment of the Copper Flat Mine, which promises to “employ approximately 270 full and part time employees with an average annual salary ranging from $35,000 to $60,000 plus benefits.”

The Bureau of Land Management has extended the public-comment period for the project’s Draft Environmental Impact Statement until April 4th. New Mexicans who support expansion of the Land of Enchantment’s private sector should weight in.

It’s been a horrendous five-year run for copper — the commodity’s price has dropped by about half, and the industry’s layoffs are mounting. Last year, Freeport-McMoRan let more than 200 workers go at its Tyrone mine in Grant County.

In New Mexico’s moribund economy, every job counts. With $55 million already spent on making Copper Flat active again, let’s hope that the project is allowed to move forward.

OEA Bucks for New Mexico’s DOA Economy

03.09.2016

oea

Can Pentagon funding help a state kick its addiction to Pentagon funding?

New Mexico’s Economic Development Department thinks so. It’s conducting “a series of community meetings” to “bring stakeholders together to share information and encourage participation to keep communities informed and prepared regarding defense contractors and subcontractors, related service and goods providers, and other businesses and organizations that could be affected by federal defense cuts.”

The gatherings represent the kickoff of the “Defense Industry Adjustment Supply Chain Map and Portal Project,” an effort being funded by $1.4 million grant from the DOD’s Office of Economic Adjustment (OEA). According to state economic-development commissar Jon Barela, “New Mexico is proud of our military bases and national labs,” but they face “persistent challenges from the federal government,” requiring subsidies to “better support communities in improving their resilience to federal cutbacks.”

Today’s session, held in Santa Fe, was sparsely attended, and the overwhelming majority of those who showed up were economic-development bureaucrats and other government officials. The audience was subjected to a torrent of corporatist jargon — e.g., “strategic planning,” “targeted assistance,” “web portal connectivity,” “deliverables,” “ecosystems,” “incubators and accelerators,” “areas of vulnerability,” “industry clusters,” “SWOT analysis,” “continuum of development.”

Patricia Knighten, who heads up the department’s Office of Science & Technology, stipulated that the billions of dollars in national-security spending New Mexico annually receives from Washington have not translated into “economic prosperity.” The answer? More planning, of course, in the form of government connecting entrepreneurs to federally funded technology developed in the Land of Enchantment.

The “Photonics Commercialization Pilot Program” is one example. The state has 54 firms in the field, and department literature claims optics and photonics “are cross-cutting, with wide-reaching defense and non-defense applications.”

The meeting’s highlight was an overview of the anti-donation-clause-avoiding “New Mexico Catalyst Fund.” Backed by $10 million from the State Investment Council, $5 million from the federal State Small Business Credit Initiative, and $5 million from private sources, it “will be deployed via local funds across the state” and focus “on seed- and early-stage investments.” Knighten admitted that it “was not an easy sell to the U.S. Treasury,” which was justifiably wary about investments in the risky tech sector. Supported by Governor Martinez — who, unfortunately, is reliably susceptible to dodgy economic-development schemes — the fund will be managed by Santa Fe-based Sun Mountain Capital.

There’s no question that New Mexico must diversify its economy away from federal spending on missiles, space systems, nuclear bombs, sensors, lasers, and the like. Washington is broke, and the days of a seemingly endless stream of DOD (and DOE, and NASA) revenue making its way to the state are over.

But New Mexico’s economic-development brain trust has demonstrated a frightening predilection to pursue disastrously unsuccessful policies. The “Encanto” supercomputer, “green” energy, the spaceport, “transit-oriented development” — there’s no shortage of examples. If the state’s community of defense contractors is to transition to business models more reliant on the marketplace, the change isn’t likely to come from additional OEA grants and more busy work for bureaucrats. It will result from pro-investment, pro-entrepreneur, pro-consumer public policies. And the time to act is now.

Grow economy, don’t mandate sick leave

03.09.2016

The aftermath of the 2016 Legislative session is still being discussed and parsed, but the liberal New Mexico Voices for Children think tank is already clamoring for the next expansion of New Mexico government. The issue this time is paid sick leave. Naturally Voices, which views every societal “nail” in need of a government “hammer,” has a government-driven solution.

New Mexico private sector workers are, according to a new report, offered sick leave at a lower rate than similar workers in any other state. To be honest, we at the Rio Grande Foundation share the concerns expressed by Voices on this. We’d like to see more workers paid better and offered employee benefits.

The difference lies in our proposed solutions to the problem.

We view the issue through the lens of recent news reports that an astonishing 10,000 people applied for 290 job openings at the new Cheesecake Factory in Albuquerque. Obviously, there is an over-supply of relatively low-skilled labor in both Albuquerque and New Mexico as a whole. This is a market reality driven by New Mexico’s historical over-reliance on federal dollars and extractive industries.

Voices wants to simply impose a new regulation demanding that businesses offer workers no less than one week of paid sick leave (their report does not differentiate between full and part-time workers). Their own data claim that this will cost New Mexico businesses $240 million annually.

What they don’t seem to understand is that businesses — especially mom-and-pop restaurants and other small businesses — aren’t just going to take this $240 million out of their bottom-lines. Often, they don’t have profits to speak of. So they will lay off the very workers that this proposal is supposed to help. And if part-time workers are included in the proposal, that means part-time workers just starting out in the work force will be the hardest hit.

The real problem with Voices’ proposal is not its unintended consequences, but rather its the lack of vision inherent in it and so many other similar proposals — like the misnamed “Fair Workweek Act” — which was proposed in the Albuquerque City Council in 2015.

Voices sees the economy as a fixed pie. If you take away from labor, you give more to capital, and vice-versa. We at the Rio Grande Foundation see innovation and productivity as beneficial to everyone.

What Albuquerque and the state of New Mexico desperately need is not more government regulation: it’s more and better jobs of all kinds. It is no surprise that New Hampshire, the most economically-free state in the nation (lacking both a sales and an income tax) has the most generous sick leave policies according to the Voices report.

Unfortunately, when businesses or entrepreneurs look at our state they see onerous and often arbitrary regulations, they see a gross receipts tax that makes doing business here more costly than other states. They see a workforce and school system that are not up to preparing workers for the modern economy and they see high crime rates. Lastly, they see a population — especially in the Rio Grande corridor — that tends to be both suspicious of outsiders and highly sensitive to land use and economic development proposals.

These problems are not unique to New Mexico, but New Mexico is unique in possessing all of them in spades. Addressing some or all of these issues in ways that make New Mexico more attractive to business would grow our economy and make it more likely that workers receive competitive wages and benefits.

For many years, New Mexico has enacted policies that make our state less attractive than many of our neighbors for private sector development. Another new regulation isn’t going to change that. Instead, it is time to move in the opposite direction towards economic freedom and competitiveness. This will make jobs more plentiful leading to higher pay and more competitive benefits for New Mexico workers.

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.”

Adding Insult to Fiscal Injury

03.08.2016

OLYMPUS DIGITAL CAMERA

New Mexicans shouldn’t feel too bad about the early box office for Whiskey Tango Foxtrot. At just $8 million, it’s unlikely to recoup its $35 million budget, at least not while the film is in theaters.

Starring Margot Robbie and Tina Fey, Whiskey Tango Foxtrot was shot in the Land of Enchantment, where taxpayers are compelled to subsidize Hollywood to the tune of tens of millions of dollars each year. During the post-Super Bowl broadcast of The Late Show with Stephen Colbert, the following exchange took place:

COLBERT: Where was it actually shot? ‘Cause it really looks like it’s in Afghanistan.

FEY: Thank goodness, we shot it in New Mexico, here in the United States of America.

COLBERT: That took a lot of courage, for you guys to go to New Mexico.

FEY: I was so worried about a Breaking Bad scenario happening.

ROBBIE: Lotta missing teeth.

It’s not the first time that entertainers have insulted New Mexico. As the Albuquerque Journal reported in 2010, during an E! interview, Mary McCormack, of In Plain Sight, “appeared to cringe when mentioning Albuquerque, and agreed with host Chelsea Handler when she said the city is ‘boring.’” The following month, the Journal noted that “Jessica Alba … said that we have bad food and that the highlight of her time here was hanging out at Walmart. Tommy Lee Jones chimed in, saying Albuquerque is simply too loud and inhospitable.”

So New Mexico’s taxpayers provide revenue for tourism promotion, while at the same time subsidizing actors who insult the state. Nice going, economic-development “visionaries.”

Sen. Michael Sanchez: critique of NM’s economy has merit, but he should look in the mirror when assigning blame

03.08.2016

We don’t often agree with Sen. Michael Sanchez, but his article in Sunday’s Albuquerque Journal makes some good (if obvious) points about New Mexico’s struggling economy. You can read the article for yourself, but it is no secret that New Mexico is struggling. Naturally, Sanchez blames Gov. Susana Martinez for everything and (somewhat ironically) points to Texas and Colorado as states that are “doing well economically.”

That last point is especially interesting as Texas and Colorado have followed very different economic development routes from that of New Mexico. These policies were not the work of Gov. Martinez, rather they have been in place for decades. Decades during which Democrats controlled New Mexico’s levers of power.

So, as you can see below, New Mexico is heavily-reliant on government (compared to any state, including Texas and Colorado).

 

And, Texas lacks an income tax (on both personal and corporate income), is “right to work (a policy Sanchez abhors),” has aggressive tort reform laws on the books, and is generally a very free market place to do business (unlike New Mexico).

Colorado, (like New Mexico), does NOT have a “right to work” law, but they have the “gold standard” of taxpayer protections in their State Constitution. All tax hikes must be voted on by the people (at every level of government). And, if the government collects taxes above and beyond the combined rates of inflation and population growth, taxpayers receive a refund. It’s called the “Taxpayers Bill of Rights” and we’d love for Sen. Sanchez to endorse this for New Mexico but we’re not holding our breath.

Yes, Colorado has legalized pot and we’d support that for New Mexico, but in the overall scheme of a state budget, tax revenues from legalizing pot are small as even proponents of legalization acknowledge.

Lastly, Sanchez touts the Democrats’ “Economic Opportunity Plan.” Unfortunately, this hodgepodge of big-government proposals would do further harm to New Mexico’s economy rather than helping it. Sanchez and the Democrats love to blame Gov. Martinez for New Mexico’s economic woes, but our state’s problems preceded Martinez into office and, when she has put forth reforms like “Right to Work,” Sanchez has led the opposition to reforms that would make New Mexico’s economy look more like its successful neighbors (including Texas and Colorado).

 

Why Isn’t New Mexico a Manufacturing Powerhouse?

03.07.2016

In a blog post last week, the American Petroleum Institute’s Mark Green noted:

Energy isn’t just used to keep machines running or factory lights shining. It also provides the heat necessary to shape metal and the building blocks to create chemicals, refined fuels, plastics and fertilizers. Energy is the lifeblood of what we make, and affordable domestic energy is now providing an important leg up for domestic manufacturers. Thanks to the U.S. shale revolution, this newly affordable and abundant energy is making U.S. manufacturers increasingly competitive, or even more competitive, than overseas rivals. The shale revolution has reshaped the playing field and has made the U.S. the place to be for energy-intensive manufacturing.

All true. Green cited a 2014 PwC study that estimated that “continued shale gas development in the U.S. could generate 930,000 new manufacturing jobs by 2030 and 1.41 million by 2040.”

New Mexico is a leading producer of natural gas, and the price of the fuel for industry was halved between 2008 and 2015:

indust_natgas

So manufacturing jobs boomed in the Land of Enchantment during that period, right?

Not exactly.

Here’s annual manufacturing employment in New Mexico (average of all months, seasonally adjusted, in thousands), as determined by the U.S. Bureau of Labor Statistics:

manufact

Corporate welfare isn’t boosting manufacturing jobs here. Neither is huge subsidies to government schools. And neither is cheap natural gas.

Maybe it’s time to consider tax simplification/relief, deregulation, school choice, and a right-to-work law?

NM’s SNAP Rules Are a Step Toward Dignity, Responsibility

03.06.2016

abq_journal

The following op-ed ran in the Albuquerque Journal on March 6th.

Taxpayer compassion is reaching its limits.

U.S. Rep. Robert Aderholt (R-Ala.) has sponsored HR 4540, a bill that permits states to drug-test beneficiaries of the Supplemental Nutrition Assistance Program (SNAP), better known as food stamps.

“If a welfare recipient has the money to buy drugs, then they have the money to buy food,” Aderholt said. “The federal government should not be enabling people to fund their drug addiction at taxpayer expense.”

Maine’s governor is asking Washington to allow his state to waive the rules that allow the purchase of candy and soft drinks with SNAP benefits.

“Multiple Red Bulls in one purchase, Rock Star energy drinks, 1-pound bag of Reese’s Peanut Butter Cups and 3 gallons of Hershey’s Ice Cream in one purchase,” an official with Maine’s Department of Health and Human Services testified at a hearing last year. “We have all seen these types of purchases occur — and it’s unacceptable.”

Here in New Mexico, Ty Vicenti, president of the Jicarilla Apache Nation, claims that “the New Mexico Human Services Department implemented a harsh federal penalty in most of the state that limits unemployed adults without children to just three months of SNAP benefits in three years unless they do 80 hours of unpaid work activity each month.”

Wrong and wrong.

The Martinez administration’s “harsh federal penalty,” as the SNAP website explains, “has been part of the law since 1996.” Welfare reform was sponsored by U.S. Rep. John Kasich, now a candidate for the Republican presidential nomination, and signed by Bill Clinton, a Democrat.

As for “unpaid work activity,” the able-bodied adults without dependents being asked to step up can be either employed, in job training or perform community service. The requirement does not apply to those who are pregnant, disabled, addicted to drugs, under 18 or over 50.

Unreasonable? Cruel? Onerous? Hardly.

In 2009, at the height of the Great Recession, New Mexico and many other states asked D.C. for permission to grant unrestricted SNAP benefits to the able-bodied. According to a Human Services Department spokesman, the request “was only temporary and was never intended to stay indefinitely.” On Jan. 1, limits were restored.

New Mexico is hardly alone in returning to standard SNAP practice. According to the Pew Research Center, only California, Louisiana, Nevada, Michigan, Illinois, South Carolina and Rhode Island have yet to lift requirements for able-bodied adults without dependents. Forty-three states now require work/training/community service, either entirely within their borders or in certain regions.

As the press secretary for Wisconsin’s governor put it, “We aren’t making it harder to get benefits — we are making it easier to get a job.”

In New Mexico, that goal is imperative. The labor-force participation rate in our state is disturbingly low and welfare has become a way of life for far too many of our neighbors.

Dependency is rampant, in part because New Mexico’s taxpayers are more than generous to the state’s low-income community. Medicaid, housing subsidies, Temporary Assistance for Needy Families, energy assistance, food stamps and other welfare programs have stitched together a sturdy safety net. A 2013 Cato Institute analysis found that the “hourly wage equivalent” for major welfare programs was $13.41 — within striking distance of the state’s median hourly wage.

No one would argue that New Mexico’s economy is strong. But that’s no reason to continue incentivizing SNAP benefits for the able-bodied. As the Foundation for Government Accountability explained: “Fewer than three percent of all non-disabled, full-time, year-round workers are in poverty, compared to nearly a third of non-workers.”

With revenue shortfalls mounting at the state and federal levels, welfare programs are facing increased scrutiny. More requirements, rules and eligibility limits are likely in the future.

Asking able-bodied New Mexicans to work, or prepare to work, in order to obtain food stamps is neither mean-spirited nor unworkable. It’s a step toward individual dignity, economic development and fiscal responsibility.

D. Dowd Muska (dmuska@riograndefoundation.org) is research director of New Mexico’s Rio Grande Foundation, an independent, nonpartisan, tax-exempt research and educational organization dedicated to promoting prosperity for New Mexico based on principles of limited government, economic freedom and individual responsibility.

A Valentine to the Right to Work

03.03.2016

The Foundation is tracking 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 February, of 9,591 projected jobs, 7,276 — 75.9 percent — were slated for right-to-work (RTW) states:

zzz_feb_rtw

Fifteen domestic companies based in non-RTW states announced investments in RTW states. Just one announcement went the other way.

RTW prevailed in foreign direct investment (FDI), too. Nine projects are headed to RTW states, with seven to occur in non-RTW states.

Marquee RTW wins included a manufacturing facility for Rhode Island-based Textron Specialized Vehicles in Georgia (400 jobs), the decision by New York-based NBCUniversal Telemundo Enterprises to build its new headquarters in Florida (150 jobs), and Swiss-Canadian startup GF Linamar’s pick of North Carolina to make “light-weight powertrain, driveline and structural components” (350 jobs).

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.

* Intrastate relocations were not counted, interstate relocations were.

Millennial: Proposed bus system will turn Central into a “safe space”

03.03.2016

Supporters of the new bus system are grasping for straws and making ridiculous arguments even though others claim the project is a “done deal.”

According to an opinion piece written by a UNM student in today’s Albuquerque Journal:

I believe the closer we can get to a no-car zone the more attractive this part of town and this city will be for the younger generation.

Central doesn’t need more cars, it needs to be urban. The ART will show Millennials that Central is safe, urban and easily accessible area for them to be, learn and grow into contributing members of Albuquerque’s working population.

What is UNM itself but a relatively large area free of cars? And, while college students undoubtedly enjoy the bars, restaurants, and other offerings along Central, those will certainly go away if cars on Central are eliminated. The increased traffic and general difficulty of getting from place to place along Central is the primary objection of business owners already. I’m at least glad to see someone clarify where this new bus system is taking us.

And, while we in Albuquerque know it as “Central,” people the world over know it as Route 66. Sad to see Albuquerque’s elected leaders deforming “the Mother Road” into a “safe space.”

 

One More Reason to Go RTW

03.02.2016

green_button

Albuquerque Business First had an interesting quote from Sherman McCorkle earlier this week. Back in January, the chairman and CEO of the Sandia Science & Technology Park Development Corporation observed that “for many legislators, more than half of their campaign funding comes from unions. So they’re not going to vote for right-to-work unless each of us … talks to their legislator and reaffirms that something like a third of Fortune 500 companies in America will not even look at New Mexico unless it’s right-to-work.”

McCorkle’s statement was gutsy, but it’s accurate only to a point. Campaign cash is nowhere near the determining factor that Common Cause and its allies claim. (Ask Jeb Bush.) In New Mexico and elsewhere, unions use their forced dues in far more politically effective ways, including newsletters, lawn signs, phone banks, precinct work, voter-registration drives, and get-out-the vote efforts.

That kind of electoral muscle contributes heavily to unsustainable spending and higher taxes. For example, in a 2014 analysis, the National Institute for Labor Relations Research found that of “the nine states with the most debt relative to personal income, eight (Alaska, Connecticut, Hawaii, Illinois, New Mexico, Ohio and Oregon) lack Right to Work laws. Mississippi is the only Right to Work state among the nine most indebted. In stark contrast, of the 11 states with the lowest percentage debt-to-income burdens, 10 (Arizona, Florida, Georgia, Idaho, Iowa, Nebraska, North Dakota, South Dakota, Tennessee and Virginia) have Right to Work laws on the books.”

So while a RTW law is a key tool to attract businesses, investors, and entrepreneurs, it’s also a means to de-fund a coercive political apparatus that hurts New Mexico’s competitiveness through relentless advocacy for bigger government.

ABQ Journal, not Spaceport critics need “jets cooled”

03.01.2016

At its Mojave Desert facility recently, Virgin Galactic unveiled its newest spacecraft which someday may take paying tourists to the edge of space from Southern New Mexico.

This was cause for celebration at the Albuquerque Journal’s editorial board which editorialized that Spaceport “critics should cool their jets” about wanting to de-fund or sell off the facility.

The  Journal’s editorial board are usually fiscally-responsible folks, but I’m not sure how the unveiling of a new, completely untested prototype is some kind of success for New Mexico or how it at all validates the $220 million and counting that New Mexico taxpayers have spent on the facility. I hope Branson and company have a winner with their latest spacecraft, but nearly five years after the facility opened, New Mexicans are at least $220 million in the hole for an largely unused facility that is tied to the success of one company that has yet to successfully achieve the type of space flight (even in testing with their previous ship) it promises its customers.

Oh, and New Mexico is facing a budget gap of 12% of its general fund (between $700 and $800 billion). It would be nice to have all that Spaceport money lying around to balance the budget.

Yes, someone should “cool their jets.” Anyone who believes that New Mexico’s Spaceport is anything but a costly white elephant should realize that New Mexico may someday see tourist flights to space, but that day is unlikely to be anytime soon. And even if/when it does happen, there is zero evidence that New Mexico’s economy will experience benefits in line with its significant and growing investment.

 

The Ugly Reality of Government-School Corruption

03.01.2016

skool_corruption

Analee Maestas, vice president and audit committee chair of the board of Albuquerque Public Schools, has denied submitting “a doctored receipt for $342.40 to the New Mexico Public Education Department in an attempt to get reimbursement for cleaning that took place at her home, not La Promesa Charter School, where she is executive director.”

The outcome of the scandal is anyone’s guess, and Maestas should get the same presumption of innocence that we all would in similar circumstances. But there’s no question that waste, fraud, and abuse is a severe problem in government education.

There is, literally, a book about the subject. School Corruption: Betrayal of Children and the Public Trust is worth a read for anyone working to reform primary and secondary education in America.

Written by Armand A. Fusco, Ed.D., a retired school superintendent, the book contains several anecdotes about New Mexico:

* In 1996, the business manager for Taos Municipal Schools misappropriated $11,236.

* In 1997, the contract for the business manager of Hondo Valley Public Schools was “altered to reflect a $2,524 salary increase without obtaining required approval.”

* In 1998, the state took over financial control over Santa Rosa Consolidated Schools due to a $100,000 deficit.

* In 1999, the Santa Fe Independent School District suffered the same fate.

* in 2000, a Gadsden Independent School District employee was put on leave after a “substantial sum” went missing from a fundraising event.

School Corruption was self-published — no surprise there — in 2005. It’s available from Amazon.

SandRidge Decision Another Blow to Economic Development in New Mexico

02.29.2016

If you haven’t already heard, SandRidge Energy which had applied for a permit to drill in Sandoval County, has pulled its application. Certainly, low oil and gas prices may be an issue, but so was strident and vocal opposition.

As I wrote in an opinion piece published awhile back in the Rio Rancho Observer, “it’s not like New Mexico can afford to simply kick investors out. We have the nation’s highest unemployment rate. The state budget is flat due largely to the decline in oil and gas prices. And, in recent years, despite the self-evident beauty of our state and its great weather, New Mexico has seen more people — especially young ones — leaving than are coming in.”

http://www.riograndefoundation.org/images/rr_observer.jpg

Recently, investors looking to do business in New Mexico, bringing jobs and economic development to our state, received a harsh lesson in NIMBY (Not in my backyard) politics.

Unfortunately, while we’ve come to expect anti-oil and gas hysteria in places like Mora and Santa Fe counties, relatively conservative Rio Rancho and Sandoval County are apparently not immune.

I’m referring, of course, to SandRidge Energy’s plans to drill an exploratory well in the county on privately-owned land west of Rio Rancho. The NIMBY crowd was out in full-force with one man saying he “only” lives eight miles from the proposed site and that it was simply too close.

Yes, oil prices are down right now. And, SandRidge Energy will probably give the mob what it wants and walk away from the project.

But oil prices will rise again in the future. Whether any other investors will want to deal with the emotional and misinformed NIMBY activists who apparently dominate Sandoval County’s politics is another question.

Perhaps if these people ever got out to Farmington or Carlsbad, they would see that oil and gas wells operate discreetly all over urbanized areas. Pump jacks quietly operate in parking lots and next to golf courses on a daily basis with few problems or complaints.

The worst thing about the NIMBY crowd is their hypocrisy. They live in a state where 31 percent of the budget comes from oil and gas. They drive their oil-fueled car on blacktop made with petroleum products (and maintained with a healthy dose of oil- and gas-derived tax revenue) and take their kids to schools that are largely funded by the oil and gas industries.

As long as oil and gas production is done somewhere else, they are perfectly happy to reap the rewards.

Of course, it’s not like New Mexico can afford to simply kick investors out. We have the nation’s highest unemployment rate. The state budget is flat due largely to the decline in oil and gas prices. And, in recent years, despite the self-evident beauty of our state and its great weather, New Mexico has seen more people — especially young ones — leaving than are coming in.

This may not be of concern to the relatively affluent and politically active NIMBY crowd, but a lot of people could be helped by this project.

That’s not to say that every proposed oil and gas project should be approved. After dispassionate discussion and real research, perhaps SandRidge would have been denied on its merits. But that is not what is happening. There is no acknowledgment by hysterical activists of the Obama EPA’s repeated findings of the safety of “fracking” relative to drinking water.

There’s also no discussion of the fact that the process has been commonly used to extract oil and gas since the 1940s. It’s all emotion.

In places like Farmington, Hobbs and Carlsbad, oil and gas are part of everyday life. Often it is what puts dinner on the table for middle class families. Sandoval County doesn’t have that history. Ignorance and hysteria fill the void.

Unfortunately, mindless opposition to private sector investment is a common trait in New Mexico. It is a leading cause of our systemic poverty.

Paul Gessing is president of the Rio Grande Foundation, an independent, nonpartisan, tax-exempt research and educational organization dedicated to promoting liberty, opportunity and prosperity for New Mexico.

 

Challenging School Construction as “economic development”

02.29.2016

Last week, the Albuquerque Journal’s Business section contained an article touting the “job creation” impact of school construction on the local economy.

Of course taxing the citizens and/or oil and gas production do “create jobs” in construction, but as an economic development tool it represents nothing more than shifting money from one pocket to the other. We’re not even pilfering tax dollars from other states as that other “economic development” program Medicaid does.

Here is my article, published in today’s Business Journal explaining that school construction is not going to contribute to overall economic growth:

Sadly, the recent article about school construction providing the bulk of Albuquerque-area construction activity is just another indicator of New Mexico’s abject lack of a private sector (outside of the now-struggling oil and gas industries).

Legislators had a few small successes in Santa Fe with the passage of ride-sharing and worker’s compensation reforms, but they failed to deregulate New Mexico’s economy in any meaningful way. Another traditionally-poor state, West Virginia, raced ahead with passage of a “Right to Work” bill and repeal of “prevailing wage” laws that arbitrarily raise construction prices on public works projects like roads and schools.

The Associated Builders and Contractors, a free market construction trade association, recently rated New Mexico an astonishing 51st nationwide in terms of construction-oriented state policies. That’s behind even the District of Columbia. New Mexico’s lack of a “Right to Work” law and the existence of arbitrary construction pricing in the form of “prevailing wage” were major factors in our performance.

Every industry in our State relies on construction. With 10,000 people showing up to interview for 290 jobs at a newly-opened Cheesecake Factory, it is clear that our economy is in dire straits. Government spending simply can’t save us.

School construction pulling double duty

A Distressing Story

02.26.2016

distress

This week, the Economic Innovation Group issued its “Distressed Communities Index,” which measures “seven well-being metrics” by zip codes, cities, counties, congressional districts, and states.

You know where this is headed.

New Mexico did poorly on the index. Some locales fared worse than others, but overall, the state’s performance was abysmal — sixth in the share of population living in distressed zip codes.

Four of our five neighbors beat us on high-school graduation. New Mexico tied with Arizona for the percentage of adults not currently employed, with Oklahoma, Texas, Utah, and Colorado doing better. All five beat us in percentage change of people employed and percentage change in the number of business establishments.

A special session for real economic-development policies, please?

A Tale of Two States

02.24.2016

Do they have to rub our face in it?

It’s bad enough that Arizona’s looking to implement an ambitious school-choice program. But as a recent article in The Arizona Republic outlined, the Grand Canyon State’s economy is surging.

The paper listed “more than 85 companies, government entities and non-profit organizations collectively advertising more than 27,000 open positions this month,” with each looking for a minimum of 100 new hires.

Yes, some of the positions are for restaurant workers, cashiers, and customer-service representatives. (Not that there’s anything wrong with that.) But many are not. Companies looking to hire include Raytheon, Aetna, Insight Enterprises, Anthem, Intel (ouch), Fresenius Medical Care, Technosoft, Lockheed Martin, Oracle, Mayo Clinic, and Wells Fargo.

In 1910, just before each state joined the union, New Mexico had a population of 327,301. Arizona lagged behind, at 204,354. A century later, much had changed. Arizona’s population is well over 6 million, while its neighbor to the east struggles to top 2 million. (And in recent years, New Mexico has lost population.)

Looking at more recent data, Arizona has soundly bested the Land of Enchantment in recovering from the Great Recession. Both states have gained jobs since their employment troughs, which both occurred in September 2010. But Arizona’s growth has been three times greater:

since_trough

New Mexico has a lot to learn from Texas. But policymakers should look west, too. It starts with a right-to-work law, but regulatory reform, a simpler and less-burdensome tax system, and school choice have roles to play, too. When will the politicians in Santa Fe get it?

Get the latest (and share your views) at public meetings on Albuquerque’s Proposed Bus Rapid Transit System

02.24.2016

I’m not saying it will do anything to stop the project. Mayor Berry seems dead-set on shoving bus rapid transit down Albuquerque’s collective throat and most city counselors of both political parties are not responding to constituent concerns. Nonetheless, there is a series of public meetings being held over the next several days. Feel free to attend and ask lots of questions including:

Why is Cleveland a model for Albuquerque when it comes to bus rapid transit?

Why is the City adopting a bus system that the City’s own consultants, Parsons Brinckerhoff (see page 110), say will reduce mobility along Central?

Overall, this analysis concludes that in the Build Condition, the operational performance at several
intersections would be deteriorated. Several segments would have diminished operational performance,
thereby increasing queuing and congestion along the Central Avenue corridor. This can clearly be
attributed to the reduction in capacity of the general purpose lanes along the majority of the corridor.

Here is the meetings schedule:

Wednesday, Feb. 24, 6 p.m.-7:30 p.m., Special Collections Library, 423 Central NE (at Edith)
Thursday, Feb. 25, 6 p.m.-7:30 p.m., Immanuel Presbyterian Church/Fellowship Hall, 114 Carlisle SE (at Central)
Tuesday, March 1, 6 p.m.-7:30 p.m., Albuquerque Police Community Substation, 2060 Central SW (at Rio Grande)
Wednesday, March 2, 5:30 p.m.-7 p.m., Patrick J. Baca Library, 8081 Central NW (at Unser)
Thursday, March 3, 6 p.m.-7:30 p.m., Alice K. Hoppes African American Pavilion, EXPO New Mexico (San Pedro and Copper-across from the Expo N.M. Pavilion Stage)

ABQ RIDE representatives will be available to answer questions and provide project details. Participants at these public meetings will also get to review plans for:

The latest station renderings and their lighting designs
Lane configurations
Cross sections of lane alignments along neighborhoods of Central Ave served by ART
Landscaping and streetscape plans

The Freedom Index’s Final Scores

02.23.2016

donkey-elephant.jpeg__800x600_q85_crop

Take a cursory glance at the results of the Foundation’s 2016 Freedom Index, and you might make the mistake of thinking that our scorecard exists to promote Republicans and bash Democrats.

This session, the Index’s top ten legislators are all Republicans, with Rep. David Adkins repeating as champion. The bottom ten are all Democrats, with Rep. Christine Trujillo landing at rock-bottom.

But there are 112 member of New Mexico’s legislature. Examine all the scores. You’ll find Democrats who clustered near the top — e.g., Rep. Stephanie Garcia Richard, Rep. Dona Irwin, Rep. Patricia Lundstrom. Republicans who voted in rather disappointing fashion include Sen. Sue Wilson Beffort and Rep. David Gallegos.

Check your legislators’ scores, as well as their votes on individual bills, and let them know what you think about what you found. It’s an election year, and lawmakers should know why you’ll be voting for or against them in November.

Will Arizona Allow “Vouchers for all?”

02.23.2016

During the recently-completed New Mexico legislative session, no progress was made in improving our State’s bottom-dwelling education system. The school choice tax credit bill, HB 207, did not make it out of the Ways and Means Committee in the House (a similar bill did pass the House last year). Fortunately, not all states are as beholden as New Mexico to teachers’ unions and the education establishment.

Take Arizona where their Senate just passed legislation that, if it becomes law, would allow every one of the more than 1 million students in Arizona the opportunity to attend private and parochial schools with tax dollars. Arizona’s plan mirrors reforms enacted first — and subsequently tied up in the courts — in Nevada.

School choice is showing results that are increasingly being verified by the empirical evidence. According to a new report from Louisiana (another school choice innovator):

* The Louisiana Scholarship Program has closed the achievement gap with the statewide average by almost half (44 percent gap reduction) over the last five years for students in grades 3-8 achieving at least “Basic” proficiency.

* Additionally, the report notes that the percentage of students in grades 3-8 receiving nonpublic school scholarships and achieving “mastery” on state assessments increased 4 percentage points, compared to a 3 percentage point increase for all students statewide. Likewise, the percentage of Scholarship students achieving at least “basic” increased 3 percentage points, compared to a 4 percentage point dip statewide.

* Program-wide, the Scholarship program’s increases in student achievement outpaced the majority of districts. If the Louisiana Scholarship Program were considered a school system with a system-wide performance score, the Louisiana Scholarship Program’s 4.7-point growth from 54.3 in 2014 to 59.0 in 2015 would have ranked 9th among all school systems for annual performance improvement.

Perhaps someday soon New Mexico will truly embrace school choice. Until then, I expect the State’s educational outcomes to lag.

Deregulate Dentistry — and Birth Control

02.22.2016

RXXX

One of the disappointments of the 2016 regular session was the failure of HB 191, a bill that would have allowed dental therapists to provide routine care such as drilling and filling cavities.

Occupational-licensing tyranny in the healthcare field is a target-rich environment for reforms that are sure to benefit both consumers and taxpayers. Last week, the Pew Research Center profiled another promising deregulation: permitting pharmacists to supply contraceptives to women without a doctor’s prescription.

“California pharmacists will begin writing their own prescriptions for birth control next month,” Pew reported, “and lawmakers in Hawaii, Missouri, South Carolina, Tennessee and Washington are considering legislation that would give pharmacists the power to prescribe contraceptives.”

Let’s add New Mexico to that list. Pew’s research shows that the Land of Enchantment ranks #9 in unintended pregnancies per 1,000 women aged 15-44, and #11 in unintended pregnancies as a percentage of all pregnancies.

In New Mexico and throughout the nation, the welfare-industrial complex is founded on illegitimacy. An enormous cohort of children born to, and raised by, single mothers acts as a force multiplier for all manner of social pathologies. Letting pharmacists sell prescription-free contraception is no cure for unwed pregancies, but it’s a step in the right direction.

The definition of dumb federal regulations

02.22.2016

Your (the government’s) stated goal is to get food stamp recipients to eat healthier food.

Do you:

A) Limit the foods that food stamp recipients can purchase to healthier options or perhaps (using the electronic cards) require a certain percentage of food stamp purchases include fruits and vegetables? or

B) Require any store (including convenience stores) that accept food stamps stock at least three types of food in each of the four food groups making no demands on the food stamp recipients themselves?

If you are the federal government, you chose “B” (see the Albuquerque Journal story linked above or the federal comments page). Remember that grocery stores are a relatively low-margin business and that especially in densely-packed urban areas shelf space is at a premium. How many convenience stores clinging to existence will be driven out of business by this ridiculous regulation? Also, is there going to be a new corps of USDA employees checking store shelves to make sure they have adequate offerings in each food group? How much will that cost?

Lastly, while the idea of government micromanaging dietary choices is generally repugnant, if the government is going to regulate anyone, it should be recipients of a government program, not store owners.

10,000 people applied for 300 jobs at Albuquerque’s new Cheesecake Factory: Maybe this means something?

02.19.2016

According to a new report from ABQ Biz First, 10,000 people applied for 300 positions at the City’s new Cheesecake Factory. This is the kind of statistic that screams for interpretation and there are a slew of them:

1) The obvious bad news (we already knew this) is that Albuquerque’s economy is in the tank and that competition for low-wage, low-skilled positions is really tough. Approximately 9,700 people applied for but were rejected from cooking, waiting tables, and greeting people at a restaurant.

2) The good thing is that lots of people still want to work and find jobs even at low pay. This speaks to the fact that despite all the obstacles to work and government handouts, a lot of people still want to work, they just can’t find a job.

3) If they care about these working class people who want to work, but can’t find it, our city and state leaders should allow more of those people to work by eliminating arbitrary wage floors.

4) We know “right to work” states generate jobs more readily than “forced unionism” states. Liberal opponents of “right to work” claim that wages are reduced in such states. There is plenty of research to the contrary, but New Mexicans need jobs and they need them now. Hundreds of people in the State’s largest City were TURNED DOWN work at a restaurant!

5) The “happy talk” about the local economy should cease until relatively low-wage businesses like restaurants actually have to compete for workers rather than having 10,000 to choose from.

The Good News About the Worst of the Worst

02.19.2016

Mr_Yuck_Sticker

The 2016 regular session is over, and before we lament the inevitable, budget-cutting special session that is sure to follow, let us rejoice. The worst of this year’s anti-taxpayer, freedom-hostile bills did not pass.

* Each of the minimum-wage increases (HB 125, HB 154, HB 323, SB 236, and SJR 18) died.

* All three gasoline-tax-hiking bills (SB 251, SB 284, SJR 22) crumbled.

* SJR 2 and SJR 3, attempts to tap the Land Grant Permanent Fund for “early childhood education services,” fizzled.

* All three tobacco- and vaping-tax hikes (HB 300, SB 4, SB 77) failed.

* Rep. Miguel Garcia’s bill to extend “public financing” to legislative candidates was ignored.

* The “Gender Pay Equity Tax Credit,” sponsored by Rep. Nate Gentry and Sen. Mimi Stewart, went nowhere.

Sometimes, failure is success.