Mario Burgos

It Just Keeps Getting Worse

2010-03-16T09:18:00.000-06:00

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."

National Biometric Identification Card

2010-03-12T05:49:00.000-07:00

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

2010-03-11T03:31:00.000-07:00

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

2010-03-10T04:38:00.001-07:00

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

2010-03-08T00:01:00.000-07:00

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.

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.

They Went Ahead and Did It

2010-03-04T06:50:00.000-07:00

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.

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

2010-03-03T07:28:00.001-07:00

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

2010-03-01T09:32:00.000-07:00

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.

Revenue Growth Predictions

2010-02-26T11:19:00.001-07:00

It looks like all of the movie magic in the Land of Enchantment has begun influencing financial projections by the Richardson Administration:

Economic analysts for Gov. Bill Richardson's administration said Thursday they remain confident that New Mexico revenues will increase by nearly $300 million next year, a day after legislators voiced doubts about significant rebounds in the state's economy.

The revenue estimates, which don't factor in proposed tax increases, are key to ongoing budget negotiations between top-ranking Democrats in the House and Senate.

azing prediction. I'm wondering what the Administration's position is on Tooth Fairy and Santa Claus?

Richardson Approval Numbers in Free Fall

2010-02-24T09:12:00.000-07:00

The Teflon Governor is Teflon no more.

We're going to have our New Mexico poll results out starting tomorrow- perhaps the most interesting thing we found is that Bill Richardson has become one of the least popular Governors in the country, with 63% of voters in the state disapproving of him to only 28% approving. He's even in negative territory among Democrats at a 42/47 spread.

I've always been amazed by Governor Bill Richardson's early popularity. Despite the rhetoric, the "successes" of this Administration have been nothing more than smoke and mirrors.

The Richardson Administration threw more and more money to appease education special interests groups, while ignoring the fact that each year student performance is worse than the year before.
The Richardson Administration raided our road funds to give $100 million dollar gifts to billionaires, and build a train that benefits only a tenth of a percent of the state's population.
The Richardson Administration has been mired in one pay-to-play scandal after another.

And, this is just the tip of the iceberg. I could go on for days, but you can just hit the appropriate label button below and read it all without me repeating it.

So, what does this all mean for the Democratic hopefuls during this upcoming election year. Well, right now it looks like Richardson Administration #2, Lt. Governor Diane Denish, is still polling out ahead... barely:

Where New Mexico departs from its regional counterparts is that it still looks favored to vote Democratic in its most significant statewide race this year. Lieutenant Governor Diane Denish leads her top Republican opponent, Pete Domenici Jr., by a 45-40 margin and has leads of 14-18 points over the rest of the GOP field.

Denish is by far the best known of the candidates running, with 41% of voters in the state holding a positive opinion of her to just 34% who see her negatively.

Keep in mind, the Lt. Governor has been campaigning for this position for going on two years. So, I don't know that those numbers are anything to celebrate about - especially, considering Pete Domenici Jr. just got in the race a couple of weeks ago.

It's going to be very hard for the Lt. Governor to start disengaging herself from the Governor after Denish has been so silent for so long. Only 34% of the voters see her negatively right now, but let's be realistic. She has operated in the shadow of Governor for the last eight years. His failed policies are bringing him down very quickly. It's not going to be very long before that same problem is encountered by Richardson's #2. This is particularly true when we consider that the Governor spent so much time out of state during his Presidential dream chasing, that the state was actually being run by Lt. Governor Diane Denish.

Compliance Trumps Jobs as Governmental Priority

2010-02-22T07:07:00.000-07:00

There is well reasoned analysis out there that the high unemployment numbers we are currently experiencing might be with us for some time:

The unemployment rate hit 10 percent in October, and there are good reasons to believe that by 2011, 2012, even 2014, it will have declined only a little. Late last year, the average duration of unemployment surpassed six months, the first time that has happened since 1948, when the Bureau of Labor Statistics began tracking that number. As of this writing, for every open job in the U.S., six people are actively looking for work.

All of these figures understate the magnitude of the jobs crisis. The broadest measure of unemployment and underemployment (which includes people who want to work but have stopped actively searching for a job, along with those who want full-time jobs but can find only part-time work) reached 17.4 percent in October, which appears to be the highest figure since the 1930s. And for large swaths of society—young adults, men, minorities—that figure was much higher (among teenagers, for instance, even the narrowest measure of unemployment stood at roughly 27 percent). One recent survey showed that 44 percent of families had experienced a job loss, a reduction in hours, or a pay cut in the past year.

So, it is kind of interesting that federal and some state governments are more interested in "catching" businesses in a worker misclassification game to fill government coffers than making sure that people can work and feed their families.

President Barack Obama's proposed 2011 budget suggests tough times ahead for employers who rely heavily on independent contractors in order to keep down labor costs.

If the budget is approved, the Internal Revenue Service will add 100 new enforcement personnel as part of a $25 million plan to crack down the misclassification of workers as independent contractors.

When you consider that 50 percent of jobs created during the economic recovery are contingent labor, you quickly see that a Catch-22 situation is unfolding.

Of course, many of the businesses that are able to survive the recession are also smart enough to quickly assess the forthcoming penalties and make employment decisions based on those pending government regulations. Those decisions will be in the best interest of the business and its current employees, but will do nothing to put out of work Americans back to work:

And our associates voted to schedule 50-hour workweeks rather than hire new associates — even if it means working five 10-hour days or maybe even working on Saturdays when needed. We’re just not going to hire right now because we don’t know what’s coming next. We hope something will be made clearer in the next 90 days as our country focuses on what is necessary to create jobs in America. Then we can re-evaluate our decision.

Put yourselves in the shoes of the tens of millions of Americans struggling to keep their families fed and housed. Now, think what this crackdown will mean to them. Instead of earning a living, they will be forced to remain on the public dole or worse, so that tax collectors can go after those that are trying their hardest to survive.

Elect Officials Fail New Mexico

2010-02-19T08:07:00.000-07:00

When the Legislature meets during the 30 day session, the constitutional mandate is clear:

B. Every regular session of the legislature convening during an even-numbered year shall consider only the following:

  (1) budgets, appropriations and revenue bills;

  (2) bills drawn pursuant to special messages of the governor; and

  (3) bills of the last previous regular session vetoed by the governor.

(As amended November 5, 1940, November 5, 1946, and November 3, 1964.)

Yet, despite this clarity of purpose, they adjourned the session without passing a budget:

The 30-day legislative session sputtered to a stop with no agreement on a budget or tax hikes, ensuring a special session that Gov. Bill Richardson said will begin Wednesday.

The special session would be devoted almost exclusively to budget matters, with perhaps "another item or two" on the agenda, according to the governor.

Misguided Priorities at Legislative Close

2010-02-18T07:19:00.000-07:00

Huge budget issues continue to loom as the Legislature comes to a close today. So, you've got to wonder how the Hispanic Education Act can be a priority:

But with only hours remaining in the legislative session at the time of the Senate's 25-13 vote, House Bill 150 was sent back to the House, which needed to approve it before it could be forwarded to Gov. Bill Richardson.

The bill's sponsor, Rep. Rick Miera, D-Albuquerque, was optimistic Wednesday night that the House would concur on the amendment by today's noon adjournment.

The legislation, which is supported by Richardson, would create a Hispanic education liaison position inside the state Public Education Department. It also would require an annual report card on Hispanic performance in New Mexico schools. And it would create a Hispanic education advisory council that would provide input to the education secretary.

Stitching a Budget Together With Disappearing Thread

2010-02-17T06:31:00.000-07:00

They are feeling the pressure at the Roundhouse to get a budget approved before the strike of noon tomorrow.

"I'm hopeful we can come up with something (to avoid a special session)," said Senate President Pro Tem Tim Jennings, D-Roswell, who's participated in the budget talks.

The House approved cuts of about 1 percent for public schools and government services, while the Senate budget package calls for reducing spending levels by about 3 percent.

The shallower cuts in the House plan would be made possible by more than $300 million generated by tax hikes, primarily the gross receipts increase. The Senate plan relies on $180 million in new tax revenue.

However, Jennings said he's concerned revenue levels might end up being even lower than projected and said Richardson has criticized more tax ideas than he's offered.

The Finance Committee approved the budget on Thursday and sent it to the Senate for consideration.

The committee proposed spending about $5.5 billion in the next fiscal year, which starts in July. That includes about $200 million in federal aid that's replacing state money for Medicaid, public schools and higher education.

Of course, there's one obvious problem with this plan. It seems to fail to consider the reality of what is being said about the future of federal money coming to the states:

Payments to states and individuals will fall to $11 billion, from $14 billion, per month. Much of this spending -- such as Medicaid funding and additional unemployment benefits -- was meant to stabilize the economy during the recession.

Yuppers, it looks like that faucet is starting to be turned in the opposite direction. So, here's my prediction. Assuming a state budget gets approved by noon tomorrow, we will most likely see a special session before the summer is over to deal with the "surprise" lower than expected revenues.

Denish-Come-Lately

2010-02-15T08:33:00.001-07:00

Denish-Come-Lately

Noun

Singular
Denish-come-lately

Plural
Denish-come-latelies

Denish-come-lately (plural Denish-come-latelies)

(idiomatic) A newcomer; a novice; an upstart.

Example in Common Usage:

Considering her complicit silence for seven plus years as Lt. Governor and many more years before that as the Chairman of the Democratic Party, many might consider Diane Denish's election year decision to become an open government advocate something of a Denish-come-lately phenomenon.

It's been more than half a decade, all of which Lt. Governor Diane Denish has occupied the number two seat in one of the most corrupt and backroom dealing administrations this state has ever seen, since I've lamented the fact that how the administration spends taxpayer dollars is done in secrecy.

Now that election season is in full swing, Governor Richardson's number two is trying to reposition herself as a "Champion of Sunshine." Well, she may be able to fool some folks, but come November the voters are not likely to forget that when it came to letting the sun shine in this scandal plagued administration, Lt. Governor Diane Denish her time hiding in the clouds.

Even as recently as a few months ago, when this administration refused to identify those the 59 administration faithful who were supposedly being cut (probably to hide the fact that some were being moved to other positions), the sound of Lt. Governor Denish's silence was deafening.

Sorry, but being a Denish-Come-Lately to the sunshine brigade is just not going to cut it in November.

It Just Never Stops

2010-02-11T00:01:00.002-07:00

Explaining it Another Way

2010-02-10T11:57:00.001-07:00

Some of you, actually just one person, likes to take me to task time and time again for standing up for small business and insisting that the proposed gross receipts tax and income tax increase negatively impact those most likely to actually help the economy rebound by creating new jobs. This individual argues that a couple of hundred dollars more in taxes really shouldn't be a big deal to a business making $200,000 in profit. But, nothing could be further from the truth.

First, let's consider the environment in which these tax increases are being pushed:

Please note that no efficiencies to government bills have been adopted and no true cuts to the budget have yet to be made, however tax increases on the private sector are being considered. Unemployment in our state is at a 22 year high, and our focus must be on job retention and creation.

That's the current reality spelled out in a recent communication from the Association of Commerce and Industry (ACI). Mind you, no efficiencies or true cuts are being made even though we know at a bare minimum there are $129 million in cuts that could be easily made. We also know that the despite all of the hype, government stimulus money did not create new jobs. At best, it may have saved some public sector jobs.

We also know that big business isn't adding to their employee roles. So, that leaves small business to come to the rescue. Only someone who has never run a business could argue, "What's $500 in additional taxes?" They'll smugly try to make the case that $500 is not enough to put someone on the payroll. But, that's because they think jobs are added in the private sector in the same manner as they are in the public sector. They are not.

In the government arena, if you want to add a $40K a year employee, you have to raise $40,000 a year in addition taxes. In the small business sector, a $500 investment could very easily result in a $120,000 to $240,000 in new salaries.

Let's explore this a little further with a real life example. Last week, I spent $500 in travel expenses to meet potential customers for a new and innovative technology. The meeting went very well. If the deal is closed it will result in a contract that could easily be worth $1M or more.

New people will be added to the payroll to fulfill the contract. They will have paid benefits and won't need to be supported by the state. The $500 that was not collected in taxes will likely save the state (i.e. taxpayers), tens of thousands of dollars in the form of unemployment benefits that will not have to be paid. In fact, these wage earners will pay state income and gross receipts tax far in excess of the $500 in additional taxes on my business. If they get to keep their house because they are once again gainfully employed, they will also pay property taxes.

Now, let's go back to the scenario being pushed in the legislature. They want to take another $500 (or more) away from small businesses. This is a zero sum game. My business has a budget. If you pull $500 from it in the form of additional taxes that money has to come from somewhere. Due to the tight credit market, it can't come from my retained earnings. Nor, can it come from any line item that will keep me from fulfilling my current obligations.

So, that means it will come from marketing dollars. It might be one less trip I can take to market my business. Or, maybe ten or more marketing lunches that can never be scheduled. Or, a critical conference that has to be passed up.

Those are all possibilities. The one undeniable fact is that it it will be four, five or a dozen jobs that will never happen because elected officials refused to do the right thing and cut unnecessary spending.

Complement Higher Taxes with Increased Energy Costs

2010-02-08T07:11:00.000-07:00

Are you feeling the economic pinch? Well, when the dust settles from the current legislative session, that pinch is likely to feel more like a bone-shattering squeeze. We've got tax after tax after tax being proposed and pushed through, and that's only the beginning.

There are other initiatives out there which will be equally successful at separating you from your hard earned dollars:

The greenhouse gas reduction sought by the advocacy group New Energy Economy would apply to oil and gas producers, refineries, manufacturers, coal-fired power plants and others in New Mexico that emit 10,000 tons or more a year of carbon dioxide.

Public Service Company of New Mexico estimates it would have to reduce current carbon emissions from its fleet of power plants by 36 percent to meet the proposed cap.

And the company says that would mean a big jump in electric bills.

In fact, if you follow the money trail, you'll see that big government lobbyists are behind all of the major wine and dining going on right now in Santa Fe:

However, the latest batch of lobbyist reports that trickled into the Secretary of State's Office last week showed that the lobbyists who were throwing the biggest parties for the senators and representatives were not from commercial interests. Instead, they represented state employees, community colleges and an environmentalist group.

As legislators continue to take on the role of the Sheriff of Nottingham, they would be wise to take note of recent elections around the country. Continuously trying to take more from those making less inevitably has consequences.

Wall Street Versus Main Street Continues

2010-02-04T07:50:00.000-07:00

I've wondered aloud on more than one occasion why the vast majority of stimulus efforts on the federal level were given to Wall Street versus Main Street. Of course, we all know the reason. Democrats are providing special favors to their favorite campaign donors and making sure that big inefficient businesses with powerful unions can keep their doors open regardless of the lack of demand for their product.

Well, as near as I can tell, the same thing is happening in the New Mexico legislature - the interests of large business at the expense of small business. Only instead of giveaways of taxpayer money, we're talking about who the Democrats in the legislature are opting to tax. Mind you, I say Democrats because the Republicans have made it clear that reining in the size of government should happen before increasing taxes:

Republicans in both the House and Senate are expected to take a hard-line approach against tax hikes, although they bristle at suggestions they're merely trying to block the Democratic agenda.

"They've never asked us to be part of the solution," said Rep. Jimmie Hall, R-Albuquerque.

Hall said he thinks there are still ways to trim the budget — by targeting administrative and vacant positions — without hurting core services.

"I can't support any tax increases until we shrink state government down to a level that a populist can support," he said.

Gov. Bill Richardson said Wednesday he supports the House's budget approach, which includes temporarily raising the gross receipts tax rate and imposing a personal income surtax on high-earning New Mexicans.

Unemployment rates were higher in December than a year earlier in 371 of the 372 metropolitan areas and lower in 1 area, the U.S. Bureau of Labor Statistics reported today.

President Obama is finally awakening to the fact that America (and his popularity) is hurting because he has put the interests of Wall Street and unions before that of Main Street families:

Faced with a national 10 percent unemployment rate and a corresponding erosion in his popularity, President Obama delivered his first State of the Union address tonight and offered up a laundry list of proposals aimed directly at the small businesses who do 60 percent of the hiring in America.

So, you've got to wonder why House Democrats in the legislature have targeted small businesses and left big businesses alone. Sure some big business tax bills were introduced, but bills like HB 62, which would could raise taxes on large out of state corporations, got a pass in favor of taking more money away from job creating small New Mexico businesses.

Come Election Day 2010 the House Democrats, all of whom are up for re-election, are going to find that it is the Main Street business owners, employees and their families that are going to vote. You know, the ones that actually live in the state.

Before You Raise Our Taxes

2010-02-01T05:00:00.000-07:00

Legislators who are interested in continuing to serve past November 2010 would be wise to consider cleaning up the mess that is state government before further increasing our taxes. A good place to start might be with the people put on the government payroll that do little more than collect a check:

One of them is Charles Lipski Sr., who was hired at the Department of Transportation two months before the freeze, at $65K a year, with a resume that had his last job ending in 1994. He was given a state job that had no title and no description. Lucky for Lipski and others like him that these temp jobs don't have to be advertised to the public.

Getting that information wasn't easy — NMDOT tried to make a reporter go to Santa Fe to "sign in" to see Lipski in Bernalillo. Asked about what he did, Lipski would only say he was very "excited" about doing a job on the public payroll that he couldn't talk about publicly.

Consideration of a bill that would impose a 1 percent surtax on the taxable income of high-earning New Mexicans was delayed Friday by a House committee.

However, Rep. Edward Sandoval, D-Albuquerque, the chairman of the House Revenue and Taxation Committee, said House Bill 9 will be debated by the committee on Monday.

If enacted, the measure would generate an estimated $44 million in the coming year.

New Mexico’s seasonally adjusted unemployment rate was 8.3 percent in December 2009, a sharp increase from 7.8 percent in November and 4.7 percent a year ago. The national unemployment rate stayed at 10.0 percent.

The rate of over-the-year job growth, comparing December 2009 with December 2008, was negative 3.1 percent, representing a loss of 25,900 jobs. New Mexico’s ranking among the states was twenty-eighth highest at a time when all 50 states reported declining year-over-year employment.

December was not a good month for employment in New Mexico, with the seasonally adjusted series showing a decline of 4,800 jobs. This may be an indication of reduced seasonal hiring, compared to what is normal. However, we still believe that we are several months into a slow recovery. There are typically a number of setbacks in any recovery, as we take two steps forward and one step back. December appears to one of those steps back.

It's Called Permanent for a Reason

2010-01-27T09:52:00.004-07:00

New Mexico has something called a Permanent Fund. It is money socked away in recognition of the fact that one day the oil and gas resources that fill our state coffers will be no more. It might be worth visiting Merriam-Webster's definition of the word permanent:

Main Entry: ¹per·ma·nent
Pronunciation: \-nənt\
Function: adjective
Etymology: Middle English, from Anglo-French parmanant, from Latin permanent-, permanens, present participle of permanēre to endure, from per- throughout + manēre to remain — more at per-, mansion
Date: 15th century
: continuing or enduring without fundamental or marked change : stable
synonyms see lasting
— per·ma·nent·ly adverb

— per·ma·nent·ness noun

Now that we understand the word "permanent," I think we can all agree that there isn't any circumstance in which "Permanent Fund" could be misinterpreted to mean "Rainy Day Fund:"

A type of contingency fund in which money is set aside to be drawn upon in case of a future budget deficit. It is often referred to as a budget stabilization fund.

Yet, that is precisely the type of convenient rewriting of the English language one legislator is promoting:

A leading state Senate Democrat says it's time to borrow against New Mexico's rainy day funds for a $500 million loan — a gamble he says would make it unnecessary for lawmakers to approve major tax hikes and cut the salaries of state workers this year.

Under the terms of a bill introduced by Senate Majority Leader Michael Sanchez, D-Belen, up to $500 million could be moved into the state's general fund by directing the state's Board of Finance to issue short-term revenue bonds.

The bonds would be paid off over five years via a special fund created for that purpose, Sanchez said, with the money coming from general fund appropriations and a portion of the state's gross receipts tax revenues.

Sanchez acknowledged that the bill (SB184) hinges on a wager that the state's economy will improve in the next few years.

You might consider sending the good Senator from Belen an email letting him know that we, the taxpayers and our children and grandchildren, prefer that he keep his wagering to recreational pursuits done with his own money on his own time at any one of the fine tribally owned casinos found throughout the Land of Enchantment.

Only One Committee Referral

2010-01-25T07:14:00.000-07:00

You can tell a lot about the future of a bill introduced in a legislative session by the number of committees it is referred to before it sees the light of day on the floor for a vote. If a bill has three committee referrals, you can expect it's got a long uphill battle that will see the session end before the bill makes it to the the floor. When it comes to tax raising legislation, that is what those of us prefer to spend our own money want to see.

On the other hand, if a bill has only one committee referral, then it's pretty clear that someone with power wants to see it passed. Last week, we noted that HB 9 INCOME TAX SURTAX bill, had quickly collected a lot of signatures by those who believe in taxing more before spending less. Now, we observe that it has only one committee referral. If you find yourself in the group that currently pays 59% of the state's income tax revenue, and you don't want to pay even more, you better start lighting up those phone lines and filling those inboxes.

It Only Took Three Days

2010-01-22T05:13:00.002-07:00

So, who wants to raise our taxes? If you're a legislator in Santa Fe eager to raise taxes on small businesses in New Mexico, raise your hand. No, better yet, just scribble your name on top of the proposed new tax bill.

Oh, sure I understand how some readers might think that this is a tax on the rich, but that's because they don't understand how most small businesses are set up. They are usually limited liability companies or sub chapter S corporations. That means that the profit from their company ends up on their personal income tax filings.

Now with banks being tight on lending (despite bailouts from taxpayers), most profitable small businesses are keeping those retained earnings in their company to keep their doors open and hold onto their key employees. But, that last lifeline is about to be raided by legislators and the administration in Santa Fe because it's easier to force more layoffs in the private sector than to cut unnecessary spending in public sector.

After all, who is going to notice if one more small business is forced to close their doors? Well, the answer is I will, and I sure hope you feel the same. If you find your legislator's signature on this additional tax on small business, I hope you'll give them a call and ask them to get their priorities straight. If you don't know what your legislator's signature looks like, no problem, you can download this PDF of the entire bill along with the document they signed to kick off the session.

What's Important to Voters

2010-01-21T08:03:00.000-07:00

On the national level, elected Democrats just received a wake-up call that their agenda is not our agenda. And, by our, I mean the majority of voting Americans whose number one concern is housing and feeding their families:

Shorn by Massachusetts voters of their pivotal 60th Senate vote and much of their political momentum, the White House and congressional leaders are considering a more modest version of Obama's top legislative priority. It could focus on curbing insurance company practices like denying coverage to sick people and on helping low-earning people and small businesses afford coverage, officials said.

Also fueling the Democratic search for a fresh health care strategy is a conviction by many in the party that it's time for an election-year focus on jobs and the economy, which polls show are easily the public's top concerns.

Of course, they're kind of missing the mark. Jobs and the economy are NOT an election-year focus. They are an EVERY year focus. Think about it. If we have a strong economy and jobs, the vast majority of Americans can take care of meeting their own healthcare needs. I know. What a concept!

I'll also let you in on a little secret. The more government taxes and regulates, the less likely we're going to see jobs and a strong economy. The bigger government gets, the smaller the private sector gets.

Don't believe me? Well, look for a state with a really big government footprint. A state like, hmm, well, a state like New Mexico. We've got lots of big government and very little industry. The result? We've got a very poor populations per capita. Are we seeing how this works?

Our state legislators would be wise to consider this as they wrangle with how to save all of those "very important" government programs. If we want to see jobs and growth, we need to shrink the size of government. Of course, the easiest way to do that is stop feeding the beast. In other words, make do with the revenue we have as opposed to taking away more jobs by increasing taxes even more.

Never Quite Short Enough

2010-01-20T07:29:00.000-07:00

Despite the fact that this year's State of the State address by Governor Richardson was billed to be his shortest to date. It still seemed a bit long to me. Then again, I always have a hard time continuing with the speech after the Governor begins spewing nonsense:

New Mexico has always been fiscally responsible.

Unlike Washington, New Mexico cannot run a deficit, nor overspend.

We must have a balanced budget.

And we have balanced the budget every single year.

If New Mexico can't overspend, you have to wonder how we got ourselves into this pickle. Oh wait, no wondering needed. I know exactly how we ended up here. We took one time funds and created recurring expense obligations - one after another after another. There are the obvious examples like the Rail Runner and the Spaceport, and there are many more not so obvious examples, like continually throw money at education without expecting a single result.

There's been a lot of talk about increasing taxes this session, but the shot heard round the world should serve as a warning to those that prefer tax raising over spending cuts.