It's All About the Benefits

Reading article after article about the budget crises facing state, county and municipal governments, and one culprit becomes clear - budget busting benefits.  When people in government find themselves furloughed or worse, they ought to take a moment to consider they may be the victims of their own success. Think I'm exaggerating? I'm not. Consider the courts:

Now, Metro Court employees are looking at furloughs for the first time, while 2nd Judicial District Court employees are likely to go from the equivalent of about half a week a year to a total of about eight days unless more money is found somewhere.

"Ninety-five percent of our budget is people — salary and benefits," state District Court executive officer Juanita Duran said. "There's only one answer: furloughs."

 Of course, the benefits problem is not just limited to the courts. Schools have the same problem:

One reason for the Albuquerque school district's budget crisis: Officials miscalculated the amount of money needed for employee salaries and benefits during the past two years.
        
Superintendent Winston Brooks announced last week that the district must cut $43 million from next year's budget, likely requiring hundreds of layoffs.
        
About $24 million of the required cuts is due to a reduction in state funding.
        
The remaining, however, is to make up for nearly $20 million in underestimated employee salary and benefit costs over the past two years.

Every time their unions sat down to the bargaining table, they pushed for increasingly more attractive benefit packages.  And, when the financial screws are turned, they do everything in their power to protect those unsustainable benefits:

The teachers’ union and other advocates are exhorting state lawmakers to repeal state income tax cuts passed earlier this decade — and to pass other tax-side measures – rather than rely on cuts and the increased contributions law to address New Mexico’s budgetary shortfall. Recent projections show the state with a $441 million shortfall for the year that ends July 1, 2010.

Of course, this problem is not limited to state provided benefit entitlements.  We've known for years, and are now reminded with increasingly frequency, that nearly every entitlement program introduced at the federal level is unsustainable:

The trust funds for both Medicare and Social Security will run out of money earlier than expected because of the recession, the trustees reported today. The Medicare Trust Fund will run out of money by 2017 two years earlier than forecast last year. The Social Security Trust Fund's life has been shortened by four years and is expected to run out by 2037.

Yet, despite this knowledge, our elected officials keep introducing more budget breaking "benefits" to the mix. It makes absolutely no sense at all.

That's Gonna Hurt

Individual Democratic legislators who caved to pressure from their leadership and voted to increase food taxes on struggling New Mexico families despite an overwhelming public outcry against it are rightfully starting to worry about their chances for re-election:

New Mexico legislators chafed at Gov. Bill Richardson's veto Wednesday of a renewed tax on food, which averts a controversial tax hike but also eliminates $68 million meant to help balance the state's $5.6 billion budget.

Legislators, who approved the food tax as part of a more than $230 million tax increase and budget plan during a special session earlier this month, complained that the second-term Democratic governor simply delayed tough decisions on fixing state finances until after he leaves office at the end of the year.

Hmm, that's an interesting take from the legislators. Blame their unwillingness to cut unnecessary fat from government on the Governor.  Yeah, I don't think that's going to fly in November. Especially, when the campaign mailers uses quotes from Democrats saying that food tax should have never been sent to the Governor anyway.

Job Killing Legislation Needs Immediate Fix

Yesterday I had reason to communicate with our New Mexico Congressional delegation, or at least try to do so.  No, I wasn't sending a note about the recently signed 2,000 page Healthcare bill. Instead, my request had to do with the actual number one concern of the vast majority of Americans - the economy and jobs.

I was asking them to fix a flaw in Section 31(b)(2)(B) of the Small Business Act to clarify and confirm contracting officers’ discretion to treat SBA’s programs equally.  The problem has to do with replacing the word "shall" with the word "may" in the referenced legislation.

Seems relatively simple, right? Well, Congress has been failing to act on this relatively simple correction for nearly a year and half despite the fact that even HUBzone advocates have long been onboard with the fix:

Even some strong HUBZone advocates agree with the proposed change of wording. In July, Rep. Roscoe Bartlett (R-Md.), co-chairman of the HUBZone Caucus, said the small business categories should be treated equally. 

The lack of action on that one little word, or on the one line bill introduced by Rep. Wally Herger (R-Calif.), is at the center of a recent Federal Court decision that threatens to single-handedly do the following according to a recent communication from the SBA:

• Potentially undermines program opportunities for socially and economically disadvantaged, SDVOSBs and WOSBs.

• Substantial federal contracting dollars potentially will NOT go to non-HUBZone 8(a) (socially and economically disadvantaged small businesses), SDVOSBs, or WOSBs. 

• Based on contracting data for FY2008, $29.3 BILLION went to SDBs (of which $16.2 BILLION went to 8(a) firms); $14.7 BILLION to WOSBs; and $6.5 BILLION to SDVOSBs.  

• The Court’s reading of the Act, if applied to other procurements, could re-direct to HUBZone firms tens of BILLIONS in federal procurement dollars currently spread across small businesses, including HUBZone, 8(a), SDVOSBs, and WOSBs. 

• An absolute HUBZone preference could have a devastating economic impact upon thousands of non-HUBZone 8(a), SDVOSB and WOSB firms that currently participate in government contracting, and the hundreds of thousands of jobs they provide. 

• This could cause a flood of protests in any non-HUBZone procurement, paralyzing the procurement process and making litigation-avoidance a primary contracting objective.

And, if you think this is an exaggeration on the part of the SBA, think again. Click here, and you'll see that the impact of this job crippling legislation is already having an effect with contracts worth millions being canceled or needlessly delayed. Now as a disclaimer, I have to acknowledge that I have a personal stake in this as I own a recently certified 8(a) firm that might be impacted by this lack of action by Congress.

As such, I have a reasonably in-depth knowledge of the different set-aside programs.  My company is small enough that I could just move it into a HUBzone, make sure that 35% of my employees live in a HUBzone and seemingly call it a day.  But, it's not that simple.  It took over 14 months, hundreds of hours and nearly 500 pages of paperwork to get 8(a) certified.

The HUBzone certification process is just as onerous. I have a friend who owns a one-man business which he operates from his house in a HUBzone here in New Mexico, and nearly a year into the process he has still not been certified. Worse yet, the HUBzone program was crippled because of widespread fraud uncovered by the GAO.

Now, the timing of this court decision is critical. In about a week's time, we will enter into the last two quarters of the federal fiscal year. This is the time that agencies start getting a significant number of their contracts out the door. The impact of this court decision, and the failure of Congress to act to correct the parity issue, is going to cause wide-spread confusion and delay in the award of those contracts.  In other words, it is going to further devastate the small business sector and cause jobs to not be created or worse yet cause additional jobs to disappear.

It's for this reason I tried to reach out to our congressional representatives yesterday via email.  Interestingly enough, you'll notice on their websites that if you try to email our congressional delegation via their House websites, your only option is to use an online form.  The problem is, if your address is out of their district, the form rejects your submission.

Considering the fact, that I'm a small business owner who is currently bidding on projects in all three congressional districts as well as other states that could provide jobs for their constituents, you'd think they would want to hear from me regardless of where I live in New Mexico.

As a final note, take a moment to think about how one word in legislation passed in 1997 can devastate thousands of businesses over a decade later.  Then, factor in how difficult it is to get that one word fixed, and you'll understand why 2,000 pages of life and death legislation pushed rapidly through Congress (i.e. the new healthcare laws) are so dang scary.

Higher Cost Lower Quality of Care

By passing the 2,000 page over-reaching health insurance legislation on strictly partisan lines, Democrats in Congress just added to the tax burden of nearly all Americans.

Under the plan now headed to Obama, individuals are required to purchase health insurance coverage or face a fine of up to $750 or 2 percent of their income -- whichever is greater. It includes a hardship exemption for poorer Americans.

Companies with more than 50 employees that don't provide coverage are required to pay a fee of $750 per worker if any of its employees rely on government subsidies to purchase coverage.

The compromise package would drop the individual fine to $695 or 2.5 percent of income, whichever is greater. The fine on companies failing to provide coverage would jump to $2,000 per employee.

Worse yet, and admittedly by design, they have created a system that will encourage employers, to stop offering health insurance as a benefit:

Third, if more than two-thirds of the employees qualify for subsidies, the company would be paying the same tax penalty as if it had not offered a health plan in the first place. Faced with paying a hefty tax penalty whether they offer health insurance or not, many companies would drop their health plan, harming the remaining workers who do not qualify for subsidies. Those workers would be forced to buy health insurance on their own, paying 100 percent of the premium (instead of 40 percent or less through the employer) and paying with after-tax dollars. Even if the company raises pay by the amount they would have paid for health insurance (less the tax penalty), employees would now face income taxes on compensation that would otherwise be non-taxed health benefits.[3] 

This will result in an even higher cost for the program than projected, and will spell the decline of healthcare in America.  Those who will be impacted most, will not be the wealthy, who will always have access to quality care, or the poor who will see very little difference in their access to care.  Instead, it will be America's middle class who will bear a higher burden for a lower quality of care.

Think of the ever-growing costs and accompanying decline in quality when it comes to public education, and you've got a good idea of what to expect in the not too distant future of healthcare.

Tax Food Then Light

The unemployment situation in New Mexico continues to grow bleaker in New Mexico with the latest job cut announcement:

About 700 employees are expected to be out of work starting in two weeks. That means more people out of work in a town that's already suffering from a high unemployment rate. The city's unemployment rate is sitting at 8.9 percent as of January of this year.

Yet, in the spirit of the Sheriff of Nottingham, the Democrats in the legislature pushed a food tax increase on the unemployed and our Democratic Governor is poised to sign it. As if that wasn't bad enough, now they are going to make it even harder for struggling families to keep the lights on, and for those poor souls with electric stoves, cooking their newly taxed meals will also come at a premium:

In general, the state would set greenhouse gas emission caps based on its reduction goals. Companies would be allowed to exceed state-set emissions caps by buying "allowances" from others that reduce their emissions more than required.
        
Critics argue that a cap-and-trade program will drive up the cost of electricity and other fossil fuel energy sources, and say they make no sense at the state level.
        
The Environment Department announcement this week was accompanied by a lengthy and highly technical "white paper" on the program and solicitation for public comment regarding the basis for the cap, distribution allowances and rate of cap reduction.
        
It did not address potential costs or economic impact. 

 Well, let me help fill the void and address the potential cost and economic impact.  It will cost those already struggling to get by even more money.  See, when you raise the cost of energy source providers, they pass those costs onto consumers of energy. What makes this particular "hidden tax" increase so abhorrent is that it is an end run around the legislature. 


We already know that the Democrats holding the legislature hostage have no problem raising taxes on struggling working families and the unemployed, but even they had the sense to avoid passing the nonsensical statewide cap and trade tax that has been introduced in the last few sessions. Yet, the Governor and his minions are once again showing a lack of respect for our legislative process and adopting a dictatorial decree (AKA regulatory law making) approach to increasing taxes.

The thing is... the people have had just about enough of this.

It Just Keeps Getting Worse

With every passing week, it becomes ever clearer that Governor Richardson, and everyone in his administration,  will find themselves tainted come Election Day by the pay-to-play political scandals of the last eight years:

Douglas Goldberg, a former vice president of CDR Financial Products, admitted in federal court in Manhattan on Monday that he was involved nationally in bid rigging of investment agreements and other contracts involving municipal bonds from 1998 to at least November 2006. He is cooperating with authorities.
        
Goldberg was involved in getting CDR hired in 2004 to work on the $1.6 billion state bond program in New Mexico known as Governor Richardson's Investment Partnership.
        
The company won a contract as an adviser on exotic financing arrangements that were not described in the request for proposals issued by the New Mexico Finance Authority.
        
It later received a no-bid, sole-source deal to manage the escrow account for the bond proceeds from the authority, which was charged with handling the GRIP financing for the Rail Runner and other New Mexico transportation projects.

The voting public is not going to be able to drive a road or see the RailRunner without being reminded that someone bought the opportunity to win those projects from this administration.  Now, some of you may think that Governor Richardson is termed out, so this is all just water under the bridge.  But, this is clearly not the case.

Take for example the current scandal plaguing the Secretary of State's office. We might all remember that not all that long ago Insurance Superintendent Eric Serna was chased from office for the shakedown of those doing business with his office:

Former New Mexico Insurance Superintendent, Eric Serna, got forced to resign after years of allegedly shaking down those that came under his authority:

Serna indicated to Madison that he favored "good corporate citizens" making contributions to legitimate charitable organizations. Ruiz said Serna sometimes "looked the other way" on fines when insurance companies agreed to make contributions to favored charities. Ruiz said Serna would choose Con Alma and $35,000 would be sufficient.

At first glance, some might argue that he is just trying to help out some needy charities. Of course we later learned that Serna used at least one of those charities as his own personal slush fund.

A couple of years later, we see that absolutely nothing has changed. Our elected Democratic officials are still following the example set by the Richardson Administration:

A string of e-mails obtained by the SUN does support one of the allegations made in Salazar’s letter. Salazar states in one e-mail to [Secretary of State Mary] Herrera that he feared losing his law license because of activities in the Office.

“Ma’am, I not only have a duty to protect you, this office and the people of New Mexico, I also have my law license to protect,” Salazar wrote in a Feb. 12 e-mail to Herrera. “By law, this office is charged with responsibility for enforcing the Governmental Conduct Act. If we are asking our current contractors for this, then it is illegal.”

This e-mail refers to the Office’s attempt to ask private companies that contract with the Office for money to help fund a training event for county clerks to be held later this month.

What blows my mind is that you would think Secretary of State Mary Herrera would be particularly diligent in following the letter of the law considering her immediate predecessor is under indictment for her activities while heading up that office. But hey, this is the Land of Eternal Single Party Rule.  A magical place where elected officials can shakedown businesses and individuals with impunity.  Sure, they will occasionally have to throw one of their own to the scales of justice, but then they go back to their ways without ever worrying about Election Day ramifications... until now.

Election Day 2010 is looking to be the day the piper finally comes to get paid.  People have had just about enough and are ready to bring honesty back to elected offices. Granted, the favorite attorney of the pay-to-play crowd (e.g. Vigil and Correra) may see a downturn in business, but the rest of us will be far better off.  Heck, it looks like even Mr. Bregman might need a little time for a breather. His ability to outright deny the allegations of wrongdoing by his clients is becoming more and difficult:

But Bregman told the Journal that Salazar's resignation had nothing to do with any of the concerns voiced in the letter.
        
"It had everything to do with the fact that he didn't want to work," Bregman said. "It's clear he wasn't a good fit for this office — as he said in the e-mail — and that's because it required a lot of work."

Even the casual reader can't help but notice that in his attempt to deflect the blame, even Secretary of State Herrera's attorney didn't deny the allegations of the resignation letter, which if you haven't read, I would strongly urge you to do so (hat tip: nmpolitics.net).

National Biometric Identification Card

There's a fine line between enforcing the law and taking away freedoms for the law abiding. With the push for a national biometric identification card, the government  is crossing that line in a manner that should alarm everyone:

Lawmakers working to craft a new comprehensive immigration bill have settled on a way to prevent employers from hiring illegal immigrants: a national biometric identification card all American workers would eventually be required to obtain.

Lawmakers working to craft a new comprehensive immigration bill are proposing a new national biometric ID card that would be required of all U.S. workers. WSJ's Laura Meckler explains the proposal and the objections from privacy advocates.

Under the potentially controversial plan still taking shape in the Senate, all legal U.S. workers, including citizens and immigrants, would be issued an ID card with embedded information, such as fingerprints, to tie the card to the worker.

The ID card plan is one of several steps advocates of an immigration overhaul are taking to address concerns that have defeated similar bills in the past.

The uphill effort to pass a bill is being led by Sens. Chuck Schumer (D., N.Y.) and Lindsey Graham (R., S.C.), who plan to meet with President Barack Obama as soon as this week to update him on their work. An administration official said the White House had no position on the biometric card. 

I heard Judge Napolitano give a perfect reason as to why this should give us all pause.  Due to the countless television shows dealing with law enforcement in one aspect of another, I expect that majority of Americans know that they have "a right to remain silence."  Yet, with a quick swipe of a biometric card, a government employee, any government employee, would instantly know more information about you than they have any right to know. 

I've warned before (during the previous administration) that this is a slippery slope that is just plain scary. It will turn us into a country that none of us will like regardless of our political persuasion.

It's A Good Question

I mentioned in a previous blog post that I heard Lt. Governor Diane Denish on the campaign trail saying, "Now is not the time to raise taxes."  All too often politicians say one thing on the campaign trail and do an entirely different thing when they are elected to the office for which they are campaigning.

Looks like we don't even have to wait to elect the Lt. Governor to see her live up to that long tradition of saying one thing and doing another.  Consider this from a recent press release by GOP candidate for Governor Susana Martinez:

Denish initially claimed to oppose an "across-the-board tax on all food." That sounded to me like a cleverly-worded statement that left the door open to a "partial" tax increase on "certain" foods (like maybe tortillas, for example, as was proposed during the regular session). So in January,  [http://cts.vresp.com/c/?SusanaMartinezforGov/b794e4993b/c534fc8f02/dc0b33a94e] I called on her to clarify.

Her response? Silence.

Sure enough, as the "partial" reinstatement of the food tax was flying though the legislature and she was presiding over the state Senate, she did nothing.

And just last week, Denish was acting Governor... As acting Governor, she even signed legislation.

So, that raises this question: If Denish is so opposed to the food tax, and she was acting Governor, why didn't she take the opportunity to show real leadership and VETO the food tax increase?

It's a good question.

Tax Them Not Me

There is a troubling trend I'm seeing during this economic crisis, and I guess the best way to sum it up is a "Tax Them Not Me" attitude that is prevalent throughout the state. I've never been one to say that we should have no taxes and no government.  Quite the opposite.  I believe that we should have limited taxes thereby limiting the size of government.

I firmly believe that our current tax structure, particularly during good economic times, is generating too much revenue, and in turn, needlessly growing the size of government. Unfortunately, the result of this is that when the economy turns south, the self-preservation tendencies of those in government is to raise taxes in order to protect their pet projects, and in many cases, irrelevant jobs (e.g. film museum director positions in non-existent film museums):

The film museum is perhaps New Mexico's most unusual cultural property. It's not in the phone book, and there are no exhibits, no visitors and no staff. In fact, there's no museum.

What they do have, however, is an executive director. Last year, the governor put Maloof in charge of a staff of none at a nonexistent museum paying her $88,000 a year. Maloof became the highest-paid museum director in the state system administered by Cultural Affairs Secretary Stuart Ashman, a member of Richardson's cabinet.

Now, historically my limited taxes / limited government stance has put me in the camp of the business community and those who have worked, saved and invested to accumulate wealth.  However, during this economic downturn, a surprising number of those same folks have now taken a stance that is truly troubling. Namely, rather than fighting and unneeded tax increases and pushing for a leaner, more productive government, they've become advocates of increasing taxes on the poor:

TERRI COLE, president and CEO, Greater Albuquerque Chamber of Commerce:

Now, back to food. Yes. The Guv should sign the partial reinstatement of the food tax. Signing it gets us closer to the fact that it should never have been repealed in the first place. It was bad tax policy. We need broad based taxes so that they can be kept low and fair to all. We should, however, use effective programs like LICTR (Low Income Comprehensive Tax Rebate) to help New Mexicans neediest families.

The Greater Albuquerque Chamber of Commerce is not alone in taking this stance. Other special interest and business groups have also endorsed the idea of taxing starving families to protect their subsidies and keep their profit taxes in check.  Personally, I just can't get behind that idea.

First, let's deal with the obvious.  Like the Earned Income Tax Credit on the federal level, the neediest families don't take advantage of things like LICTR because they can't afford to have tax consultants  on a retainer to tell them how to get their money out of the system.  And, generally speaking, the way that the government communicates those credit opportunities is nonsensical even to the most educated amongst us. In fact, government and those pushing policies like these count on large numbers of people not taking advantage of what is available to them.

So, if an industry cluster is going to push for tax increases to balance the budget, they should adopt an attitude of tax me first, as opposed to tax them not me. Or, alternately, they could, like me, say enough is enough.  Get serious about reining in the spending and eliminating unnecessary jobs and programs before we consider raising taxes.

Let's See the Proof

The Governor's office and Lt. Governor Diane Denish appear to be in a he said / she said squabble about the state's failure to land a Race to the Top education reform grant from the Obama administration:

Richardson spokeswoman Alarie Ray-Garcia said that despite Denish's interest in education, she declined repeated invitations to help develop the proposal.
        
"Her only involvement was to write a letter in support of the state's proposal, which she praised as being 'innovative,'" Ray-Garcia said.
        
"Now, for whatever reason, she has decided to attack the hard work of a lot of New Mexicans, including Secretary Garcia and her staff, who dedicated a lot of time and resources into this proposal. It was a strong proposal and Governor Richardson was proud to spend considerable time in Washington D.C. last week lobbying Secretary Duncan on its merits."

Denish spokesman James Hallinan said Denish was never invited to participate in the grant-writing process. 

Now, I admit to being a bit curious as to whom is telling the truth here. And, as it was pointed out to me by one reader, this should be relatively easy to prove one way or the other. Maybe Richardson spokeswoman Alarie Ray-Garcia would like to send us a copy of the emails or memos that were sent to the Lt. Governor inviting her to help develop the proposal, or maybe a copy of one of the written responses where she "declined repeated inivtations."


Alternately, maybe the Lt. Governor's spokesman, James Hallinan could send us a copy of the request the Lt. Governor made to actually be involved with the proposal writing. I'm just saying, if one of you is telling the truth, please back it up with a little written evidence.


As a relative tangent, you've got to love the fact that teachers' union representative actually wrote a letter AGAINST the state's request for $160 million from the feds:

And while the state's chances probably weren't helped by a letter from Albuquerque Teachers Federation President Ellen Bernstein criticizing the state's application, that likely wasn't a determining factor. 

It may not have been a determining factor, but I do hope that when we have a second special session this year because revenue is less than projected, our state legislatures take note that the union went out of their way to keep money for education from coming into the state.  Education cuts in the amount of $160 million should absolutely be on the table if a second special session is called.

They Went Ahead and Did It

It took three days of meetings behind closed doors for the Democratic leadership to make a monumental mistake and push through regressive tax increases on New Mexico's working and non-working families:

The tax hike legislation included an increase in the statewide gross receipts tax, or sales tax, as well as a partial reimposition of the sales tax on food.
        
Members of the Republican minority harshly criticized the omnibus bill (SB10,12,13), arguing that the largest tax increase in recent history had been hatched without their input and that the tax changes should be considered separately.
        
The proposal would impose "a serious tax burden on New Mexico working families," said Rep. Dennis Roch, R-Tucumcari.
        
House Speaker Ben Lujan, D-Santa Fe, said the tax increases were needed to avoid deep cuts to public schools in the 2011 budget year, which begins July 1. 

Of course, the Speaker's excuse is total and complete nonsense. The tax increases pushed exclusively by the Democrats on everyday New Mexicans struggling to get through this economy that has left so many unemployed and struggling to pay for the basics, like FOOD, could not come at a worse time. More than half of the $200 million tax increases introduced are regressive in nature. Yet, we all know that almost an identical amount could have been easily cut from government:

The committee to improve government efficiency has delivered its final report to Gov. Bill Richardson, recommending cuts and consolidations that total $129 million.

The committee said there are too many state government employees. New Mexico has nearly 25 state employees for every 1,000 people. That ratio is higher than any state in the region and twice the national average.

So, please excuse us Mr. Speaker while we take umbrage with your attempt to pretend your putting our children first.  It is clear to everyone that patronage is the first priority of your caucus, and to heck with taxpaying New Mexicans.

Of course, you've got to love the irony of the fact that one Lujan expresses outrage at increases in healthcare premiums at the same time his father pushes tax increases on food for the same struggling families:

One New Mexico congressional representative expressed outrage at the increases in a statement.

“At a time when families throughout New Mexico are struggling to make ends meet, these rate increases are outrageous,” Rep. Ben Ray Luján, CD-3, said.

Maybe this family of politicians needs to caucus.

What's That You Feel in Your Pocket

Near as I can tell that hand you feel in your back pocket belongs to the NM Senate:

The Senate-passed tax increase package would raise the statewide gross receipts tax rate — now 5 percent — by one-eighth percentage point, yielding almost $60 million a year.
        
The bill also would reimpose part of the gross receipts tax, or sales tax, on food. The rate would vary, depending on the local gross receipts tax rate of the city or county in which the food was bought, but average about 2 percent. The change would bring in an estimated $68 million.
        
Another $66 million would be gained from eliminating the deductions that some New Mexicans can now take on their state tax returns for the state and local taxes they've paid. That would increase their taxable income.
        
And the state would get $11.6 million from a newly imposed compensating tax on out-of-state companies that sell products to New Mexico businesses but have no physical presence in the state.

Oh, I know that some you will say that the legislature has no choice.  They have to raise taxes to get us out of this pickle. But, that's not true.  There are other options:

The numbers are big and the money bigger, but the bottom line is New Mexico could find $280 million to help fix its budget.  Rep. Dennis Roch, R-Tucumcari will try to bring an amendment to the state budget bill that will simply cut those state positions which are currently vacant.


Roch points to a report he requested from the Legislative Council Service (LCS) outlining the job vacancies in state government. The report says as of January 4th, there were 4369 vacancies in state government. The problem according to Roch is that the proposed budget lawmakers are trying to tackle would fund 3396 of those positions. Roch argues if the state can function now without those positions filled, then it can function by eliminating them altogether.

But hey, that makes too much sense, right? Cut non-existent jobs over increasing taxes on struggling families.

I've got to run, but you can catch me today at 3:00 pm on Jim Villannucci's show on 700 KKOB discussing this and other issues with Carter Bundy.

New Mexico Democrats Have a Problem

Last week, I attended an event that had, among others, Lt. Governor Diane Denish as a speaker. To the delight of myself and the small business audience in attendance, the Lt Governor said, and I paraphrase, "Now is not the time to raise taxes. It is time for the government to do what the private sector has been forced to do and control spending."

Now considering that Lt. Governor Denish is usually considerably to the left of me, and that her campaign for Governor is well-funded, it can only be concluded that her internal polling is telling her that supporting tax increase, any tax increases, right now would be the equivalent to political suicide.

And, herein lies the problem...

More details on tax hikes and spending cuts in a new state budget plan emerged Sunday as New Mexico lawmakers prepared to return to the Capitol today for a special session on the budget.
        
The plan, hammered out behind closed doors by top-ranking House and Senate Democrats, would increase the state's gross receipts tax, raise the tax on cigarettes and have New Mexico cities reinstate a portion of the gross receipts tax on food items that was repealed six years ago. 

Yup, leave it to the Democrats to propose a slew of new taxes as families are struggling to survive. If these tax increases are passed, they are going to hurt campaign efforts of every Democrat running for office during this election cycle. Mind you, that's not something that's particularly upsetting to me, but for a strategic standpoint its interesting to watch how this is playing out. 

As a limited government guy, I wouldn't mind seeing some taxes cut for a variety of reasons I've outlined over the years.  But, in the current economy, I would be willing to settle for no new taxes. The Democrats seem to be operating as though it is business as usual (i.e. let's find another incremental tax to pass).  But, there is nothing usual about the situation in which we all find ourselves.


Right now, Lt. Governor Denish is trying to emerge from Governor Richardson's shadow and define herself as a leader in her own right. Of course, taking a stand against new taxes when her Democratic colleagues are pushing for them is setting her up to appear either:


a) Lacking in leadership and the ability to influence policy.


OR


b) Saying what the people want to hear in public and privately supporting the taxation of the masses.

Either way, New Mexico Democrats, from the Lt. Governor on down, have a big problem.