Mario Burgos

Clear thinking and straight talk from the top of a mountain.

Wednesday, March 31, 2010

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.

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Wednesday, March 10, 2010

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.

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Monday, March 08, 2010

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.

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Thursday, February 18, 2010

Misguided Priorities at Legislative Close

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. 
 Just to refresh your memory on why this is a bizarre initiative, please go back and read my original pre-legislative session post on this purposeless political soundbite effort.

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Wednesday, February 17, 2010

Stitching a Budget Together With Disappearing Thread

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. 
 I'd say that Senator Jennings concerns about lower revenue levels are well founded.  Consider for a moment the source of some of the revenue being expected to help plug the gap:
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.

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Wednesday, February 10, 2010

Explaining it Another Way

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.

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Monday, February 08, 2010

Complement Higher Taxes with Increased Energy Costs

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.

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Thursday, February 04, 2010

Wall Street Versus Main Street Continues

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. 
So, back to the tax, tax, tax enamored House Democrats. Let's take a look at their proposed solution:
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. 
I've explained in a previous post that what is really being proposed is a tax increase on the profitable retained earnings of remaining small businesses.  In other words, the money they need to weather the storm and keep key employees at work is the target of the tax increase. Now, yes, I'm of the mind that significant spending cuts should be made before even considering any tax increase, but I can't help but wonder if the Democrats are so bent on raising taxes, why they are targeting small New Mexico businesses instead of large Wall Street firms.

Think about it.  The general consensus is that small, not large businesses are the key to a true economic recovery. The irresponsible stimulus spending may have helped keep the doors open of those who are "too big to fail," but it did nothing to keep your neighbors, family and friends employed:
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.

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Monday, February 01, 2010

Before You Raise Our Taxes

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. 

You see, when the House Revenue and Taxation Committee votes today on passing a 1% tax increase on Main Street small business owners throughout the state (see this post), they will be removing $44 million from the economy that could be used to save or create real jobs in order to continue do nothing patronage jobs as noted above:

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.  

When you consider that we're still losing jobs, now is not the time to force higher taxes on small businesses throughout the state that are trying their hardest to help rebuild the economy:

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.

A tax increase on top of all of the other economic pressures would be yet another step back. There are an awful lot of qualified New Mexicans who are out of work because of the downturn in the economy, and they're not going to take kindly to being kept out of work because our elected officials refuse to supress job creation so that they can keep dole out political favors at taxpayer expense.

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Wednesday, January 27, 2010

It's Called Permanent for a Reason

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.

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Monday, January 25, 2010

Only One Committee Referral

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.


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Friday, January 22, 2010

It Only Took Three Days

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.

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Thursday, January 21, 2010

What's Important to Voters

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.

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Wednesday, January 20, 2010

Never Quite Short Enough

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.

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Monday, January 18, 2010

Imagine That

I've noted before that there are places that government spending can be cut to provide taxpayers better return on their investment.  Now, the Committee on Government Efficiency has come to the same conclusion:
The Committee on Government Efficiency delivered its report to Gov. Bill Richardson and legislators with recommendations to merge some departments, eliminate certain boards and commissions, saving $129 million overall.
Now, let's see if the Governor and legislators are more committed to finally reigning in spending or continuing to throw our hard earned money away.

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Wednesday, January 13, 2010

Blood in the Water

There must be blood in the water because the sharks are most definitely starting to circle closer and closer:

A records clerk at New Mexico State University is suing past and present state officials and a couple of controversial financial firms in a class-action suit to recapture money lost in questionable investments by the state Educational Retirement Board.

The suit, filed by Donna Hill of Las Cruces, seeks to win back money for 95,000 beneficiaries of the state educators' pension fund.

Hill, in an e-mail Tuesday, referred all questions to one of her lawyers, Jonathan Cuneo of Washington, D.C.

This suit appears to be identical to another suit that has been filed based on the questionable management of funds by the State Investment Council (SIC). Actually, calling the investment practices questionable is probably a bit too kind. Heck, calling them "investments" is in itself a bit of a misnomer:

The tab for bad investments the state made with Chicago-based Vanderbilt Capital just got worse — to the tune of at least another $65 million.

The Legislative Finance Committee is now estimating the state lost $155 million in a series of highly leveraged mortgage investments with Vanderbilt, up from earlier estimates of $90 million.

On Tuesday, the Senate Finance Committee was told by a private attorney whose client is suing to reclaim the losses that the red ink on the investments could go as high as $200 million.

Legislators were not happy .

"We've got a budget crisis, an ethics crisis and an investment crisis," said Sen. Cisco McSorley, an Albuquerque Democrat and chairman of the Senate Judiciary Committee. "I don't know if we can deal with all three in a 30-day session."

The concern was bipartisan. 

While this news was breaking, our fearless Governor Richardson, Chairman of the SIC, was addressing the Greater Albuquerque Chamber of Commerce (GACC) on his plans to raise taxes by $200 million - just a little more than the amount of taxpayer money the SIC "lost" under the administration's watch. 

Now, for those who might be tempted to argue that the Governor was simply derelict in his duties when it came to oversight of the SIC investment practice, consider this latest finding from an independent third party:

An outside review of the State Investment Council, commissioned after a string of scandals, recommends significantly curtailing the governor's power over the SIC. 

Scandal after scandal is bound to hurt those seeking office in 2010 with deep ties to the administration. After all, how much more can they expect the public to tolerate in the current economy?

On the negative side, said Larry Waldman, senior research scientist at UNM's Business and Economic Research, “The local situation is terrible. Job growth is the lowest it has been since at least World War II. It's worse than most people thought it would be.” He said New Mexico's economy probably won't show signs of recovery until at least the second quarter of this year. 

 Hmm, not exactly the time most rationale people would think to promote regressive taxes, but then again, it's not like this administration has ever really been concerned about the needs of everyday New Mexicans.

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Tuesday, January 12, 2010

Money? What Money? Jobs? What Jobs?

Are you wondering why you can't find new jobs based on New Mexico's investment in roads from federal stimulus money:

A very small percentage of New Mexico's $3.2 billion in stimulus money has been funneled to highway and bridge construction.

The state's total allotment includes $302 million for transportation projects, which covers projects ranging from work on airport runways to bus shelters and mass transit systems. Just more than half of the transportation money, more than $169 million, is going to 15 highway and bridge projects, according to the New Mexico Office of Recovery and Reinvestment Web site. 

I can't help but wonder if it has something to do with the fact that Governor Richardson essentially bankrupt the NM DOT with his reckless spending. But, in all fairness to Governor Richardson, even if this had not been the case, you still would find it difficult to find significant employment gains from stimulus money:

An Associated Press analysis of stimulus spending found that it didn't matter if a lot of money was spent on highways or none at all: Local unemployment rates rose and fell regardless. And the stimulus spending only barely helped the beleaguered construction industry, the analysis showed.

With the nation's unemployment rate at 10 percent and expected to rise, Obama wants a second stimulus bill from Congress including billions of additional dollars for roads and bridges — projects the president says are "at the heart of our effort to accelerate job growth."

Well, it didn't work the first time, so I guess try, try again.  What the heck, it's only your future earnings they keep spending.

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Monday, January 11, 2010

Adding Insult to Injury

Wow, talk about adding insult to injury.  Taxpayers are bilked out of tens of millions while the Richardson Administration was at the helm of the State Investment Council. Now, they are making matters worse by requesting CYA budget increase funds:

The State Investment Council has asked for nearly $6 million in additional money to cover legal expenses associated with the ongoing investment scandal, and a leader in the state Senate is none too happy about it.

"It just doesn't make any sense to me," President Pro Tem Tim Jennings, a Roswell Democrat, said Friday. "I'm concerned that everyone is concerned with protecting themselves instead of protecting the public."

The State Investment Council wants a $1.7 million budget adjustment and a $4 million supplemental appropriation to cover the legal expenses. Much of the money would go to a San Francisco law firm that is charging up to $950 an hour and can earn up to $5.8 million under a contract that started at $30,000. 

Just to make sure that everyone is on the same page.  We have legislative committees recommending tax increases and 2 percent pay cuts for government workers and teachers while $950 an hour is being spent on San Francisco lawyers. 

Yeah, that makes sense.

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Wednesday, January 06, 2010

Executive Budget Recommendation for Fiscal Year 2011

Governor Bill Richardson's 181-page Executive Budget Recommendation for Fiscal Year 2011 was released yesterday, and I'm having a really hard time making it past page ten:

Governor Richardson believes government must be managed in a fiscally responsible manner, and that every government program must be held accountable to the taxpayers. Throughout his administration Governor Richardson has worked to make sure every tax dollar is spent wisely. He has required state agencies to find efficiencies, streamline existing processes, realign resources as policy priorities change, and collaborate to reduce duplication and bureaucracy.

During his first year in office, the Governor implemented a number of efficiency measures, including eliminating unnecessary contracts, maximizing federal and other revenue, shifting dollars to the classroom, executing strategic purchasing and implementing a statewide performance review that by FY07 resulted in more than $80 million in savings to the citizens of New Mexico. He also stepped up enforcement against tax fraud to collect more back-taxes owed.

The only explanation for the above excerpt actually showing up in print is that the Governor has found money to hire joke writers. After all, there is a lot that can be said about how the Richardson Administration has managed the state, but the words "fiscally responsible" don't belong anywhere in that description.

Let's look at some of the key points being made here.

  1. "Every government program must be held accountable to the taxpayers" - When was the last time you heard about a government program being held accountable under the Richardson Administration? The correct response would be never.  The only government programs that have been shutdown for a lack of accountability have come about as a result of external indictments. Heck, even the proposed across the board "3-percent reduction in spending" is a way of avoiding holding individual programs accountable.
  2. "Throughout his administration Governor Richardson has worked to make sure every tax dollar is spent wisely." - Talk about re-writing history. I'm trying to understand how losing $90 million in an effort to fill the pockets of campaign contributors is considered spending tax dollars wisely.

  3. "He has required state agencies to find efficiencies, streamline existing processes, realign resources as policy priorities change, and collaborate to reduce duplication and bureaucracy." Let's see, hardly a year went by where the Governor did not create new layers of government or dole out high paying government jobs to supporters. How this can be seen as reducing duplication and bureaucracy is anyone's guess.

The rest of his claims are just as ridiculous.  Scanning through the actual line item proposals actually leaves one scratching his head as well. Sure, there are a lot of proposed cuts, but its the proposed increases that just don't make a lot of sense.  For example when considering must haves during a time of economic crisis, consider whether these make the top of your list?

  1. 26.2% budget increase for the Athletic Trainers Practice Board
  2. 11% budget increase for the Interior Design Board
  3. 489% budget increase for the Office of the Natural Resources Trustee
  4. 28% budget increase for the Legislature
All I can say is that's an interesting choice of priorities when you're going to be coming after the taxpaying public for even more tax dollars.

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    Monday, January 04, 2010

    Can't Say I Didn't Warn You

    While some celebrated the passing of the Christmas Eve health insurance legislation in Congress, sensible folks lamented its passing for a variety of reasons.  First, as I've noted on more than one occasion providing health insurance to most Americans, does nothing to improve access to quality of healthcare for all Americans. Case in point:

    The Mayo Clinic, praised by President Barack Obama as a national model for efficient health care, will stop accepting Medicare patients as of tomorrow at one of its primary-care clinics in Arizona, saying the U.S. government pays too little.

    More than 3,000 patients eligible for Medicare, the government’s largest health-insurance program, will be forced to pay cash if they want to continue seeing their doctors at a Mayo family clinic in Glendale, northwest of Phoenix, said Michael Yardley, a Mayo spokesman. The decision, which Yardley called a two-year pilot project, won’t affect other Mayo facilities in Arizona, Florida and Minnesota.

    Look for more top quality healthcare facilities to follow suit in the coming months and years. And, where will this leave us? Well, like most big expensive government entitlement programs, it will leave us even deeper in debt, and an insolvent program that fails to deliver as promised.  Oh sure, the program won't be a total loss. In fact, for those states whose Senators were into selling their votes, this legislation will prove to be a big win:

    New Mexico Sens. Tom Udall and Jeff Bingaman on Wednesday criticized special deals that Democratic leaders struck with some senators to win support for a sweeping Senate health care bill headed for passage today.

    But the two Democrats said the deals weren't enough to justify voting against a measure they said would benefit New Mexicans.

    Senate leaders offered Sen. Ben Nelson, a Nebraska Democrat, 100 percent federal subsidies for new Medicaid beneficiaries added to his state's rolls under the Senate legislation. Other senators wrangled separate financial concessions for their states in exchange for their support for the Senate bill.

    Sorry, criticizing the deals after the fact, but voting in a manner that tacitly endorses the deals doesn't really hold water. Pretending this was a win for New Mexicans is a little less than honest:

    According to Udall, the Senate health care overhaul would eventually insure 91 percent of New Mexicans, improve rural health care and grant permanent reauthorization of the Indian Health Care Improvement Act, among other things. 

    Think about that for a moment. Despite promises that this "landmark legislation" would insure all Americans, in New Mexico, the best outcome will be to insure 91% of New Mexicans... EVENTUALLY.  When this does EVENTUALLY happen, you can't help but wonder how many of the newly insured still won't have access to quality healthcare because they won't be able to find an institution willing to take their insurance.

    What a mess.

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    Thursday, December 31, 2009

    2010 The Year of the Tax Increase

    Every year Governor Richardson gives a name to the upcoming legislative session. Well, if even a small part of the proposals made by Governor Richardson's Budget Balancing Task Force come to pass, the 2010 legislative session will be known as The Year of the Tax Increase. Actually, we should probably make that plural. This 400+ page document has tax upon tax upon tax proposed as the solution to our supposed budget woes.

    Some of these tax increases, if passed, would take effect TOMORROW. I kid you not. Proposed income tax increases would begin tomorrow and are designed to take $327,971,000 out of our pockets over the next five years and give it to elected officials to make up for their spending spree over the last seven years. Now, while the economy, at least temporarily, does not seem to be getting worse, it also doesn't seem to be getting any better.  Unemployment numbers are holding steady at levels not seen since the 1940's:

    New Mexico's jobless rate remained steady at 7.8 percent in November, the same as the previous month but much higher than the 4.6 percent rate in November 2008.

    The national unemployment rate in November decreased to 10 percent.

    The state's labor department, the Department of Workforce Solutions, says the state lost 25,400 jobs over the past year.

    The department says the decline in the number of jobs is the worst New Mexico has seen in modern times and it will be a number of years until employment reaches pre-recession levels. 

    That's right, it will be many more years until we get back to healthy rates of employment and a growing economy.  Yet, for those of you lucky enough to be holding a job, you're going to find yourself, not only working harder because you're doing the work that used to be done by two or more people, but also working for less, because state government is going to be taking hundreds of millions of dollars out of your pocket.

    Remember all tax increases are permanent. It's just the nature of the beast. Consider this from the report:

    The gross receipts tax was first levied in 1934 (as the emergency school tax) as a temporary measure to keep the schools open; it was made permanent in 1935. The tax applied to almost all business sectors, including services. This contrasted markedly with other early-adopter states, like Mississippi, which taxed only sales of tangible goods. In 1966, the tax was reorganized and renamed as the gross receipts tax.

    Government  always uses some sort of "emergency" to rationalize its takings, be they individual freedoms or financial. However, long after the "emergency" has subsided, what was supposed to be a temporary measure becomes permanent.  There are those who think it is time to raise these GRT taxes even higher. Yet, consider that:

    The table following the map shows that New Mexico’s average tax rate is the 28th highest out of the 46 states with a sales tax. However, New Mexico ranks fifth highest in terms of sales tax revenue as a percent of personal income, a result of both the relatively low level of personal income in New Mexico and the broad base of New Mexico’s gross receipts tax.

    What, fifth highest in terms of sales tax revenue is not high enough? We want to be number one? I really don't see how being at the top of this list would be a good thing. Let me put this in another perspective, total GRT collected from us, the taxpaying public, in 2004 was $2.3 BILLION.  Five years later, the economic crisis has resulted in only $3.2 BILLION taken from our bank accounts.

    Wait a second! That's not a decline in GRT.  That's an increase in GRT revenue ! In fact, that's a 38% increase in taxes in collected.  Now, ask yourself, am I making 38% more today than I was five years ago?  If the answer is yes, well, you're lucky. But, the truth is that as a whole we're only making about 22% more today than we were in 2004.  If the government thinks they are in a crisis, then the taxpaying public must be beyond crisis. Yet, they want to raise our taxes even more.

    I could go on, but I think you get the point.  State government IS NOT in a revenue crisis situation.  The problem is that spending has been out of step with reality for many years now.  At the very least, we should be cutting expenses back to 2004 levels. If you doubt me, then ask yourself, are my neighbors, family and friends better off today that they were in 2004? I'd be very surprised if you could answer that with a "yes".

    If you're the type to make New Year's Resolutions, I've got easy one for you to make.  Resolve to call your legislators and the Governor, assuming you can locate him, and let them know if they like elected office, they will cut spending to bring it in line with our income growth before considering a single additional tax.

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    Friday, December 18, 2009

    Another Reason Dollars Should Follow Children

    Whether a charter school is succeeding or failing in meeting its students educational needs, there is one component that is undoubtedly in play that does not exist at most regular public schools - parental involvement. In order for a child to be attending a charter school, a parent or guardian had to make a conscious choice and effort to get their child into that school. And, in the end, if they are unsatisfied with the results, they can move their child out of the school and to another.

    This is a good thing. In fact, parental involvement in a child's education is one of the key factors in improving student performance. Yet, the Albuquerque Public Schools (APS) wants to shut down opportunities for more parents to take an active role in their children's education:

    Albuquerque Public Schools wants lawmakers to place a moratorium on new charter schools until existing schools are fully funded.

    The request is one of the items on the district's legislative wish list, and it aims to help APS deal with a budget crunch.

    "We need to stop putting in place new programs or schools that take away from the pie of money," APS lobbyist Joseph Escobedo said.

    The theory that moving dollars from one education environment to another is "taking away from the pie of money" is absurd. It is a redistribution of money, but it doesn't shrink the overall pie. Kids are still going to be educated using the same amount of dollars. Actually, maybe I should reword that to say some kids will finally be educated using the same, and quite possibly less, dollars.

    Why is it that government entities always support redistribution of wealth from taxpayers to their budgets, but fight tooth and nail when the redistribution is from their budgets to another public entity budget? When that is proposed, it makes the pie smaller. Of course, we all know that it doesn't shrink the pool of money, it just allows it to move to potentially more productive uses. Something that really ought to be the focus of the upcoming legislative session as opposed to taking more from taxpayers. But, I digress.

    This is yet another reason that taxpayer dollars allocated for educating our children should follow those children as opposed to making the children follow the dollars.

    Disclaimer: Our kids attend a fantastic charter school, Family School. So, I've got an inherent bias here. Plus, it would be highly hypocritical of me to take advantage of school choice for my children, but say from this point forward other people's children should not be afforded the same opportunity.

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    Thursday, December 17, 2009

    Return to Feudal Times

    People who work for the government work for us - the taxpayers. Ultimately, we're their bosses. I know, based on some interactions you have with your employees it seems that they conveniently forget this fact.

    Be that as it may, it truly works much the same as any business. We, the tax-paying bosses, produce revenue so that they have a job. This goes for everyone who is collecting a government paycheck, from President all the way down to administrative support staff in the smallest municipality in the nation.

    Of course, the one biggest difference is that you, the taxpayer, can't immediately fire these employees for poor performance. Imagine how different your last unsatisfactory interaction with a taxpayer paid employee would have been if you could fire those who don't meet your level of expectation. Sure, you're probably thinking, "I can fire the elected ones." But, the thing is that particularly type of firing is a delayed action. The underlying reason the individual is losing their job is not apparent in that type of firing.

    It's kind of like housebreaking a dog. If you scold the dog after the fact for eliminating in the home, it will not equate the reprimand with the actual act of relieving itself in the home. For that to happen, you actually have to catch the dog in the act and show your displeasure. Same thing with elected folks on the taxpayer payroll. When they get reprimanded (read: the boot out of the door), they think it has something to do with changes in the political wind. They rarely think it is because of their repeated poor job performance.

    Ok, so our system isn't perfect. No news on that front. But, the system we've had in place is still better than any other around the world. Or, at least it had been. There wasn't immediate accountabilty, but until recently there had been some semblance of accountability. For example, until recently, our employees felt obligated to provide us information when we requested. An obligation that is legally mandated.

    I said until recently. Now, it appears even that level of accountability is going by the wayside:

    Days after a spokesman for Gov. Bill Richardson told a TV reporter that it was “not appropriate or dignified” to identify the 59 political appointees who are losing their jobs, Richardson’s office has formally denied a newspaper reporter’s request for that information.

    The Santa Fe New Mexican’s Kate Nash didn’t get much – including anything that identifies the people who are being laid off – in response to her request.

    Reporters, who happen to be taxpayers as well, have historically taken the role of internal audit committee for our, the taxpayers, business. In other words, they've looked out for our interests. However, if we allow them to be shut out and denied information about who is or isn't working for us at a given time, then we stop having any sort of control over our government employees and officials. When this happens, those folks no longer work for us as public servants. Instead, we work for them in a manner very reminiscent of feudal fiefdoms in days of old.

    I don't know about you, but the idea of becoming a serf is not particularly appealing to me.

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    Tuesday, December 15, 2009

    So Here's a Thought

    The union appears to be a little riled with Governor Richardson over the nonnegotiable forced furlough of state employee's as one tactic to plug the state budget gap:

    The American Federation of State, County and Municipal Employees Council 18 says Richardson's administration violated the law by refusing to bargain with the union over five unpaid furlough days Richardson ordered for 17,000 state workers in December, January, March, April and May.

    "It's a fairly simple complaint," said Albuquerque attorney Shane Youtz, who is representing AFSCME and its 6,000 members. "We asked politely to bargain and were told no."

    State Personnel Director Sandi Perez said the state fulfilled its legal duties by discussing the furloughs with union leaders in November.

    Well, here's a fairly simple idea for union leaders. Next time, the government starts promoting spending gobs and gobs of money (translation: hundreds of millions) on things like Spaceports and trains, you might want to voice your opposition. After all, it's things like the ongoing tens of million of dollars in losses incurred by the Rail Runner that are causing your union members to have to take unpaid furlough days:

    The red ink lubricating the wheels of the Rail Runner is getting redder. Its operating deficit for the fiscal year ending June 30, 2009, topped $19 million. It collected a mere $1.9 million in fares against $21 million in operating expenses. The losses are greater than we reported in August. Based on information provided us by the Middle Rio Grande Council of Governments, we reported then that the Rail Runner’s operating loss through May 31, 2009, exceeded $13.4 million. But data for the entire fiscal year, ending June 30, 2009, reveal a number almost 42% higher.

    Now, I realize there are several members that might be taking that train up to Santa Fe, but I'll bet you there are even more that are not. Which mean, that the vast majority of members are going to see a cut in pay, so a handful can pay less than their full share to ride the train to Santa Fe.

    It's just something for you to consider.

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    Friday, December 11, 2009

    Tax Increases Only Inevitable in Governor's Mind

    Governor Bill Richardson is all about raising taxes in the upcoming 2010 legislative session. In his mind, a tax increase is inevitable. But, thankfully sounder minds may prevail:

    Sen. John Arthur Smith, D-Deming, the Finance Committee chairman, said many lawmakers from rural parts of the state — both Democratic and Republican — remain wary of raising taxes during tough economic times, despite the state's budget deficit.

    "There's no guarantee there's going to be revenue enhancements," Smith said Thursday. "I just don't see an overwhelming vote."

    Lawmakers already have reduced general fund spending by about $700 million, from $6 billion to about $5.3 billion, because of steady declines in state tax revenues. Some legislators say there's room for more cuts in the state budget, which grew by 50 percent during Richardson's first six years in office.

    First, a word of advice to those that oppose tax increases. Let's call them what they are - tax increases. The presumably poll tested and less offensive positioning of tax increases as "revenue enhancements" isn't fooling anyone. The voting public in New Mexico is not as naive as some elected officials would like you to think. If you raise our taxes, we'll know it. And, we'll hold it against you. We get enough "enhancement" junk mail in our inboxes to know political spam when we hear it.

    With that said, let's talk about the resistance to cutting the bloated budget - a budget that increased 50% since the current administration took control. Exactly what has this recurring explosion in spending bought us?

    • Is your life better today than it was in 2002?
    • Are schools performing better than they were in 2002?
    • Do you feel safer in your homes today than in 2002?
    • Do you feel more optimistic about your future today than you did in 2002?

    My guess is that the vast majority of New Mexicans would answer all of these questions with a resounding, "No!" So, let's stop talking about tax increases and let's get back to a time when life was enhanced and government was smaller. It would be a small step back to make a huge step forward.

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    Thursday, December 03, 2009

    An Interesting Choice

    Listen, I'm the first one to advocate for cutting the explosion of appointed positions from state government. But, with the culture of corruption and fraud that has plagued New Mexico under Governor Bill Richardson's, especially in the arena of investments, this cut leaves you scratching your head:

    One employee who got a pink slip said his job probably isn't the kind the Legislature intended to eliminate.

    Bruce Kohl, head of the Securities Division at the Regulation and Licensing Department, said he's a recognized expert in his field who has put in 15 years at the division under several governors.

    "I think they intended to get rid of political deadwood, not the technical professionals needed to run state government," he said.

    "I think the public has the perception that exempts are a bunch of political hacks who can't be touched, but there are some very good people who serve as exempt employees," he said.

    Kohl, an attorney, worried more about what's next for the division than his own future. Among other things, the division brings securities fraud cases.

    This is right up there with those that were looking to gut the State Auditor's office. There is only one way I think this makes sense. That is if the Governor's office is going to release a statement that says Mr. Kohl was guilty of looking the other way while the Richardson Administration allowed political connections to be used to guide investment contracts that resulted in millions upon millions of dollars in losses for New Mexico taxpayers.

    Of course, if the opposite were true, and Mr. Kohl played a role in bringing these practices to light, well, then it sure would appear that the Richardson Administration is going after the good guys. I don't know which it is, but someone's got some explaining to do.

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    Wednesday, December 02, 2009

    Political Sound Bites

    That's really what we're talking about here - political sound bites. It's beyond absurd for Governor Bill Richardson to be proposing a special initiative to close the Hispanic education gap:

    Gov. Bill Richardson said Tuesday that he will work with state legislators to develop and pass a Hispanic Education Act in the 2010 session of the New Mexico Legislature.

    This administration has a proven track record of spending hundreds upon hundreds of millions of dollars on budget breaking projects like spaceports and trains, but to expect them to make any gap closing changes in education is just ridiculous. For us to believe this is possible, we would have to forget the track record of education failures in student performance that have plagued this administration from day one.

    And, am I the only one who finds it a little bit insincere for Governor Richardson to talk about closing the education gap for Hispanics by passing a Hispanic Education Act? Seriously, this may make sense for a state with a small percentage of Hispanics, but in New Mexico, we've got the highest percentage of Hispanics of any state in the nation - 45% of our state's population.

    So, nearly half of our public school children are Hispanic. Fixing and education gap for almost half of the student population does not require a special initiative. It requires a complete overhaul of the education system. But, don't expect anyone in this administration to be up to that challenge. Instead, look for them to blow more smoke and spend more money on initiatives that will do nothing to improve student performance:

    Richardson asked summit participants — students, teachers, administrators, politicians and others — to come up with solutions before the legislative session. He said he wants the recommendations to help shape a new Hispanic Education Act, similar to New Mexico's Indian Education Act. That act created a special state division, which compiles an annual report on the progress of Native American students and encourages communication between tribes, among other things.

    Yeah, that's what we need. A new "special state division" to compile annual reports and encourage communications. That'll solve all of our problems. Maybe we should bring back the efforts to create a Department of Hispanic Affairs as well?

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    Tuesday, December 01, 2009

    The Bankrupting of America

    You know you have a problem when the folks that print the money are spending so much that they are exceeding their own debt ceiling:

    The Senate began a debate Monday over the future of health care in America that's likely to go on for weeks, but behind the scenes, lawmakers are struggling to resolve an even more explosive issue: how to pay for all their ideas.

    Federal budget deficits remain at record highs. The national debt is $12.1 trillion; Congress must vote soon to let it go higher, or else the Treasury won't be able to issue new debt. President Barack Obama is expected to announce today a plan to send an additional 30,000 to 35,000 American troops to Afghanistan, which will require more spending.

    If you think healthcare insurance for all is the most important issue facing this country, think again. This forced insurance boondoggle will result in a deterioration of service options and a bankrupting of America. The only good news is that bankruptcy is a time of re-organization. At least that's good news if you think the political leadership of our country needs to be re-organized out. And, by re-organized, I mean shown the door.

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    Monday, November 23, 2009

    Duplication is Really Unneccessary

    When times are tough, it is important to start taking a hard look at the various government commissions funded by taxpayers and ask, "Do we really need this?" For example, the Albuquerque Journal has an article today announcing that the New Mexico Commission on the Status of Women is helping Clovis area homemakers head back into the work force. How are they doing this?

    The commission's Displaced Homemakers office is offering a free workshop called Effective Work Search Skills.

    Lorraine Bantista, coordinator of the Displaced Homemakers Office, said the four-part workshop aimed at women will cover self-assessment, types of job search techniques, tapping into the hidden job market and preparing for the interview.

    Let's deal with the obvious first. Every single one of these topic areas can be found online with a quick Google search. This is just another example of one of those government agencies that would be politically unpopular to defund, but is absolutely unnecessary. If you don't believe me, take a look around the NM Commission on the Status of Women website, and then tell me with a straight face this is a needed agency. Do you really think a single woman's life in New Mexico is improved by the work of this commission?

    Politicians like to play games and talk about putting prisoners on the street, hurting education or letting people starve, but the truth is that until they start cutting these unnecessary commissions and agencies, they have no case to increase taxes.

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    Friday, November 20, 2009

    Taxes Before Responsibility

    There's a war brewing for the 2010 Legislative Session. The battle lines have been drawn, and on one side are those that believe government excess should be pared down, and on the other side are those that want to see the tax and spend party to continue by raising even more taxes. The spend, spend, spend people have formed the organization, Better Choices New Mexico, to make their case, which basically boils down to:

    This alliance of small businesses, faith-based groups, working families, and nonprofit organizations believes cutting critical services and programs would be a terrible mistake. Instead, the Legislature needs to open the books on tax expenditures, close the loopholes for out-of-state corporations, and rollback the tax breaks for the wealthy.

    What's amazing to me is that essentially what they are defending is the spending gone wild policies that have left us in an economic crisis that should not have occurred. Any organization that wants to be taken seriously about seeing better choices in New Mexico had better address the severe mismanagement of taxpayer funds by the state before asking for more money. Their one-pager makes the case over and over again for increasing revenue, but not once does it talk about cutting expenses. The closest it comes is to suggest shifting dollars from one area of waste to another.

    And, mind you there is a lot of waste in government spending in this state. There are the obvious signs of waste that are uncovered everyday:

    Nemazee and others connected to Carret Asset Management gave campaign contributions to Gov. Bill Richardson before and after receiving the contract, according to the magazine. “The contract with the State Investment Council, which oversees $12 billion in trust funds from oil and gas leasing fees, has so far yielded $1.7 million in fees for Carret,” the author of the article, Nathan Vardi, reports.

    Of course, no one wants to take responsibility for this kind of waste:

    Richardson’s spokesman says the governor, who is chairman of the New Mexico State Investment Council, played no role whatsoever in the hiring of Carret.
    Only in New Mexico could the Chairman get away with full denial of accountability. Then again, this is the same Governor who can hand out multi-million dollar favors like candy on Halloween
    without the least bit of economic restraint, no matter how bad out budget situation may be:

    I'm positively shocked that Governor Richardson has been a long time friend of the Hool brothers who are behind the Santa Fe Studios. The project, which I wrote about a few months ago, is being subsidized to the tune of $10 million by state taxpayers with taxpayers in Santa Fe County chipping in another $6 million. The whole thing stinks.

    Of course, at the same time as he is pushing for additional subsidies for an already-subsidized industry, Richardson is pushing for tax hikes on the rest of us.

    Then, there is the wasteful spending that is not so obvious unless you're a government insider:

    I am a state employee who is faced with trying to determine where to cut groceries, utilities, Christmas spending...I can accept the furlough...However, I looked at the salaries at executive agencies and must ask how did the agency on aging become a full Department? Military affairs? Where did some of these commissions come from? Do we need them or should we place higher expectations on persons employed in these areas? For example, why isn't the Department of Homeland Security part of the Department of Public Safety?

    Why not consolidate programs and eliminate some high salaried executives? Why are we paying outlandish rents for private buildings when there are vacant government buildings? I am not placing the blame on any branch of government, just venting.

    Well, someone better start blaming a branch of government. It's called accountability. But, then again, its easier to push for tax increases than to actually try to make a better choices in New Mexico. After all, it's all about our children, right?

    Three sport utility vehicles purchased for school administrators from an out-of-state dealer. A $91,000 tow truck. Thousands of dollars for iPods for students. Paying athletes and cheerleaders to pull weeds. Lunches, including a $110 tab at the Rio Chama Steakhouse paid for by federal funds intended for low-income students.

    These are just some of the questionable expenditures uncovered by audits of five medium-sized school districts that were discussed Thursday at a meeting of the Legislative Finance Committee. One LFC staffer said these audits "barely scratch the surface" of waste and abuse in some school districts.

    Yeah, it's all about the children. Now, you tell me something. Do better choices start with putting more money in state coffers, or does it start by saying enough is enough? Until the people taking and spending our money are held accountable for their fiscal mismanagement, corruption and fraud, I say they don't get to increase taxes by even one tenth of one percent.

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