Pay Close Attention

We're paying more at the pump. The economy has cooled and everyday citizens are forced to cutback on their spending. Luckily, the government has the answer (subscription) on how to make our life a little easier:

Plans for a sales tax to support the Rail Runner commuter train and a regional bus system are gaining steam.

Bernalillo and Sandoval counties are to consider this week publishing a legal notice needed to put the one-eighth-cent tax on the Nov. 4 ballot. Valencia County might do the same, though perhaps not until next month.

"I think the Rail Runner's time has come," said Alan Armijo, chairman of the Bernalillo County Commission. Voters "at least need the opportunity to decide that."

The tax proposal must clear one more step before going to the counties — passage by the regional transit board Wednesday. That board, however, cannot put the tax on the ballot itself.

If approved, it will ask the counties to do that. Sandoval County has a meeting scheduled Thursday, and Bernalillo County has one Friday.

"Mass transportation is where we've got to start looking to with the cost of gas and lack of river crossings," Sandoval County Commissioner Don Leonard said.

Yup, this is really going to help. We're lucky to have such progressive thinking group of leaders in county government. A quick review of the U.S. Census shows that the population of Bernalillo County is 615,099, and the population of Sandoval County is 113,772 for a two county total of 728,871 people. Now consider the record number of people that have taken a ride on on the Rail Runner at its peak:

The New Mexico Rail Runner Express gave 5,980 rides last weekend during the first Saturday of Summer service. That ranks as the second highest daily ridership figure since the Rail Runner began service in July 2006. The only other day that had more passengers was on Friday, August 4, 2006 when 6,148 passengers rode the train – three weeks after service began.

A little basic math, and we learn that at its peak .08% of the population in the two county area is benefiting from the "cost-savings" of the Rail Runner service. So, of course, it only makes sense that 99.2% of the population should pay a little more in sales tax to provide the additional $26 million in revenue.

I owe an apology to Mayor Martin Chavez and others who want to put a light rail line on Central. After reviewing the Rail Runner math, their plan makes perfect sense.

Town Hall on Governor Created Problems

It looks like New Mexico First will be holding a "town hall meeting" to discuss the shortfalls in addressing the state's transportation infrastructure needs:

New Mexico’s transportation infrastructure is vital to the state’s economic prosperity and integral to the quality of life, health, and welfare of our citizens. Traditional funding has been well below the actual needs of maintaining a modern transportation system. Federal, state, and local investment in transportation represents less than 40% of the actual needs of the system creating a sense of urgency for states to seek alternative funding options. Both federal and state transportation revenue has not been sufficient to keep up with inflation, the rising cost of construction, and the demands for transportation services of a growing population. Without an increase in investment, our transportation system will become more congested and the condition of our transportation infrastructure will become less safe.

The state's annual spending has grown by BILLIONS under Governor Richardson. Considering that transportation infrastructure is supposed to be one of the top priorities of any government spending, it kind of makes you wonder how we ended up in this crisis situation. Then again, I guess all you have to do is look at what Governor Richardson wants to do with the latest projected windfall of nearly $400 million to understand:

But Richardson pointed to the revenue projections in renewing his appeal to lawmakers to approve a heath care expansion. The governor has said he'll call a special session of the Legislature in August or September to consider mandating health insurance coverage for all residents. New Mexico has the nation's second highest rate of uninsured.

"We can invest in health coverage in a fiscally responsible way," Richardson said in a statement. "While cynics will no doubt complain about using revenue from oil and gas, I am confident — as I have been for the past six years — that New Mexico's economy is performing well and will allow us to expand health care coverage to all New Mexicans."

Yeah, that makes sense. Take a one time windfall and use it to fund a recurring entitlement program at a time when we are unable to meet our basic infrastructure needs. What I find most ironic is that this windfall comes from the oil and gas industry, yet the Governor is doing everything he can to increase operating costs on this industry and push them out of the state:

If the regulations are approved, Gallagher said it will add $150,000 in operating costs for every new well dug in the state.

"If industry drilled just 750 new pits next year, it would mean $112.5 million in additional costs," Gallagher said. "We hired an economist to calculate those figures, and we presented them to the OCD, the lieutenant governor, and the governor. They're not just kicking the state's cash cow in the stomach, they're gutting us."

Raye Miller of Artesia-based Marbob Energy Corp. said many operators will cancel plans to drill new wells if the pit rules are passed.

All of this just serves to bring us full circle back to that town hall meeting:

Highway construction costs are soaring and federal funding to improve roads is declining, said Johnny Cope, chairman of the state Transportation Commission. At the same time, rising gas prices are hurting many New Mexicans, he added.

"This town hall will allow us to discuss these issues and explore some viable options to address the transportation needs of all New Mexicans," Cope said.

Well, here is a thought Mr. Cope... Why don't you call the Governor and ask him to adopt a three point plan:

1. Stop adding unnecessary costs to drilling that are just going to manifest themselves as rising gas prices at the pump.
2. Stop spending oil and gas revenue on creating new unnecessary programs and instead spend it on needed infrastructure.
3. Stop unnecessary regulation on an industry that provided the lion's share of our state budget revenue.

It seems to me that if that plan were followed, we wouldn't even have transportation needs that weren't being addressed (i.e. funded).

Streetcar Back on the Table

Not that long ago, we were all able to breath a collective sigh of relief as the Mayor's Streetcar had died a timely death. But, it looks like the Streetcar is back on the table (subscription):

Albuquerque should focus on building a modern streetcar system along Central Avenue between Downtown and San Mateo if it decides to proceed with the project, according to a consultant’s report.

That stretch of the city is the best bet for a successful start to the system, the presentation from Leland Consulting Group said. Demographics and market forces in the area would support the project, the group said.

The presentation was provided Tuesday afternoon to a City Hall task force studying transportation options in Albuquerque. Here’s a look at what was said:

* The streetcar system could draw about 5,000 riders a day on the Downtown-to-San Mateo segment.

* Each streetcar can carry up to 100 people, though the cars can be linked together to serve up to 200 people.

* The capital cost for launching the system is likely to reach about $106 million on the recommended segment, or about $28 million a mile, the presentation said. Annual operating costs would run about $3.9 million.

* Revenue from extending the life of a quarter-cent sales tax, Tax Increment Development Districts, naming rights, advertising and other sources could fund the project. Only a fairly small portion of the revenue generated by the sales tax would be needed for the streetcar system in some scenarios.

Now, there are a couple of points that really ought to jump out at you. First and most obvious is that the only way this can be funded is by extending a tax on everyone that was supposed to expire.

The next eyebrow raising fact requires a little basic math. Keep in mind that the Albuquerque Metro Area population is up to around 800,000, and is expected to reach a million before long. Yet, this Streetcar is only going to be used by about 5,000 people. Put another way... 99.5% of the people are expected to pay hundreds of millions of dollars (these things never come in on budget - think train), so 0.5% of the population can ride a streetcar instead of taking the bus.

Sure, the consultant said 5,000 people per day, but overall, we're talking about the same people every day. Now, I've been to Portland and used their streetcar system. So, it can be honestly argued it will be used by tourists and provide a tremendous economic benefit to those businesses on the route. Great. If they want the benefit, then they should be willing to pay for it, and let the rest of us off the hook.

Beware the Task Force

Here it comes. The conception of countless new regulations and ordinances has occurred. And, in six months time we'll all witness the birth of new unneeded costly regulations and big government spending initiatives (subscription). Mark my word, they are coming. How do I know? Well...

City Hall launched an environmental task force on Thursday that will recommend ways for local governments and residents to address global warming.

Mayor Martin Chávez joined County Commission Chairman Alan Armijo and City Councilor Isaac Benton to announce the 35-member group, which includes representatives from Sandia National Laboratories, environmental organizations and government agencies.

Chávez said he hopes the task force will compile a “climate action plan” within six months.

The group’s plan should have value even to those who aren’t concerned about the environment, he said.

What's a climate action plan? Basically, it's a politician's sound bite that's guaranteed to cost us, the taxpayers, money and hassle.

State Employees May Take Four Day Work Week

Our state's spending budget has nearly doubled since Governor Richardson took office. Despite this mind blowing growth, state government is apparently feeling the pinch at the pump.

Gov. Bill Richardson has signed an executive order creating a telework and alternative work schedule program for state workers.

It creates a framework for the creation of things like four-day work weeks to cut down on commuting and allowing workers to telecommute. Richardson said it would help reduce fuel use and taxpayer costs.

Um, after nearly doubling the budget, he is now going to pretend to care about saving taxpayer's money. Right. My guess is that despite the bloated state budget, I'm going to try and walk into a state agency office and instead of service discover longer lines, or worse that it is closed, as a result of an executive order that allowed a flexible work week.

Tom Udall Attempts to Rewrite Recent History

It looks like Congressman Tom Udall has a new TV spot that is a little less than honest when it comes to his record on funding for Los Alamos labs:



At the end of the ad Congressman Udall says:

That's why I voted for funding to expand the mission of Los Alamos to create new jobs in counterterrorism and energy research. I'm Tom Udall and I approved this message because we have to do what's right for New Mexico.

Ok.... let's see... let me try and start this off with a positive. That is Tom Udall in that ad. We can all agree that he should be doing what's right for New Mexico. And, there is no question that Los Alamos plays a critical role in countering terrorism and energy research.

So, what's the problem? Well, Congressman Udall, knowing everything above, actually voted TO CUT FUNDING for Los Alamos labs. Of course, don't just take my word for it. You can can go back and read about Tom Udall's vote to cut funding for the labs last summer. Oh, and let's not forget the lack of concern that Tom Udall showed when layoffs were announced at Los Alamos because he wouldn't fight to protect their funding.

Look, Tom Udall is entitled to vote for his own priorities. But, he should not get a pass on trying to rewrite his history to run away from his votes to cut funding for our labs.

Same Old Richardson Administration Antics

It's been awhile since we've seen ethically questionable decisions from the Richardson Administration in the news (subscription). But, it looks like old habits die hard:

After canceling a request for competitive proposals, the administration of Gov. Bill Richardson awarded a no-bid deal to a political supporter and onetime appointee to supply automated teller machines for the State Fair.

Automated Financial Technologies of Albuquerque, headed by Rafael Gutierrez, got the deal in 2004— about a year after Gutierrez resigned an appointment by Richardson to the staff of the Gaming Control Board.

Automated's machines replaced those of a competitor, California-based Mobilemoney, which had provided the service and wanted to compete for the business.

Expo New Mexico in July 2004 issued a request for bids to supply ATMs for year-round use and to bring in additional machines at fair time.

Expo officials canceled the request a month later and never reissued it. Automated took over Mobilemoney's job of supplying additional machines for the State Fair later that year— even though Mobilemoney offered the fair more money than it's getting now.

Larry Dunnwald, president of Mobilemoney, said he believes the company lost the State Fair business because Gutierrez is a Richardson friend.

Well, Mr. Gutierrez obviously didn't win the business because he offered the Fair a better deal, so it would seem Mr. Dunwald's belief has some merit. One thing to keep in mind here is that we, the taxpayers, are subsidizing the Fair's operations, so when antics like this occur, it is our pockets that are being picked.

Ross Perot's Charts

I have to admit that I'm not one of these guys who has always been hooked on politics. In fact, my ten year old son probably - no, make that definitely - has more political awareness than I had until the end of my college years. It just wasn't really my thing in my earlier years.

What I do remember is that the first Presidential election in which I took a keen interest was the 1992 election. In fact, I was inspired to register to vote by that little man from Texas with the big ears, Ross Perot. But, when he withdrew and then re-entered, I lost interest.

The point of this trip down memory lane is that Ross Perot is back on the scene. This time Perot has some new charts, and the graphs do not paint a pretty picture. One chart I find particularly troubling is the one that shows U.S. Government Tax Collections from 1968 through 2007:


A quick glance confirms that our government does not have a revenue problem, it has a spending problem. So, someone please explain to me why, with all of this growth in revenue, the Democratic Congress and the Democratic Presidential candidate would like to see a sunset of the Bush Tax Cuts?

Nature Abhors a Vacuum

Democrats have been in charge of Congress for two years and the economy is slipping. I'm personally feeling the pinch. I can say without a doubt I was better off two years ago than I am today. I did not like the spending spree the Republicans went on when they controlled Congress, but the future, from a small business owners perspective, with the Democrats in control is downright scary.

I can't imagine how much worse off I'll be if Barack Obama were to win the White House and you had completely Democratic control of both the legislative and executive branches of our federal government. Wait, I don't have to imagine. I just have to look at how New Mexico's per capita income stacks up against our neighbors in Colorado, Texas and Arizona.

Now, throw into the mix the article today that points out that our Air Force is looking at flying 80 year old aircraft (subscription), and we've got the makings of a serious nightmare.

“If everything goes perfect with our new KC-45 acquisition — which isn’t likely — the last KC-135 will not retire until 2043,” he said. “We’ve never flown 80-year-old airplanes — no one has. So we’re headed into the unknown.”

It’s not just air tankers that are getting old. The average age of the Air Force’s workhorse fighters — the F-15 Eagle and F-16 Fighting Falcon — is more than 20 years.

“At the end of the Vietnam war, the average military aircraft was about 8 years old,” Suminsby said. “At the end of Desert Storm, it was about 17 years old. Today, the average (Air Force) aircraft is nearly 25 years old, and that’s climbing steadily.”

Suminsby admits he’d like Congress to fund all the Air Force’s needs, including its $18.8 billion “wish list.”

But more importantly, he said, America needs to address two fundamental problems with the federal budget: the mismatch between our national security strategy and its associated costs; and burgeoning entitlement programs such as Social Security and Medicare.

Security gap.

Suminsby says there’s a huge gap between the nation’s security strategy — which is to maintain the capability to fight two major conflicts concurrently or in rapid succession — and what it’s willing to pay to implement that strategy.

The role of government is moving closer and closer everyday to providing entitlement programs to take care of everyone, and further and further away from making security and infrastructure the number one priority. If the Democrats take complete control of the government, we will see an acceleration of this shift.

We need to wakeup and smell the coffee. Throughout history, world wars have begun because others smell weakness. The wolves will begin to circle when the best we can do is protect ourselves with 80 year old weapons. This a time honored tradition. Nature abhors a vacuum.

Bill Richardson's Legacy Begins

We are already beginning to feel the effects of Governor Bill Richardson's legacy of spending, spending and then spending a little more:

Gov. Bill Richardson has been a strong advocate of the spaceport.

"The governor is very hopeful the vote will be successful and the project will move forward," said Gilbert Gallegos, a spokesman for Richardson. "The reality is the state has put in a lot of actual capital and committed a lot of time and energy to the project."

The tax would add a 25-cent charge to a $100 purchase. State lawmakers also have earmarked at least $110 million in capital outlay money over several years to help with startup costs.

In recent weeks, spaceport director Steve Landeene and other officials have worked to educate voters on what they see as the project's merits.

So, let's see, the Governor is apparently two for two. The new train requires new gross receipts taxes to support it. The new spaceport requires new gross receipts taxes to support it. I wonder what else the Governor has pushed through the legislature that will require new gross receipts taxes to support it.

Where's the outcry from all you people who support buying local? I've got to tell you if gross receipts keep going up, you're going to find more and more people making their purchases tax free online. The burden of these regressive spend and tax policies are on the poorest amongst us. How come the advocates for the poor are not crying out? I don't get it.

Sticking Others with the Bill

A very interesting observation regarding the relationship between personal financial management and government fiscal policy.

Tax Day - New Mexico's Place in History

The Sixteenth Amendment to the United States Constitution in 1913 brought us the federal income tax:

The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.

You can read about the history of the U.S. tax system here. Like all government run programs, it has grown and grown and grown in scope from the point of introduction. What you might not know is that New Mexico is widely considered to have a special place in history as 36th state to ratify the amendment. That was the magic number at the time.

Happy Tax Day!

Favorite Line of the Day

Couldn't help but chuckle when I read this:

Yes, whenever our government wants to justify funding items not mandated in the city's charter, they use the 'quality of life' argument. But they conveniently forget that they are lowering the standard of living for the majority of residents when they spend limited tax dollars to provide such 'quality of life' amenities for less than 2% of the population.

A quick search of this blog turns more than one reference to "quality of life arguments." In 2006, there was Bernalillo County's push of three new quality of life tax increases. Quality of life was Governor Richardson's rationale for creating his underunded train to nowhere.

As I've state before, probably the easiest way to maintain our quality of life is to vote against anything that promises to improve our quality of life.

The Man is Uncle Sam

I'm a small business owner. Actually, I own two. A friend of mine told me once that he wanted to start a business because he "didn't want to spend his entire life working for the man." Like many, he wanted to be his own boss. Control his own destiny. Reap the rewards he sowed instead of creating wealth for someone else's gain.

There is only one problem with all this...

When you are your own boss, you suddenly become painfully aware of just how much of the wealth you are creating is going to the government in the form of taxes. On average, I work 12 to 16 hour days and have from day one of officially becoming an entrepreneur. Yet, thanks to our government's commitment to tax and spend, more than a third of my time is spent working to pay for bigger and bigger government.

People have been conditioned to think of taxes as simply the government collecting a portion of the money you earn. We are taught that money is the root of all evil. So, parting with it for the greater good must be a good thing.

But, that conditioning is wrong. The government is not taxing our money. The government is taxing our time. Whereas, money is of little true value. Time is priceless. Everyone has only a finite amount of time.

If I work 12 hour days, five days a week, and pay thirty percent in taxes, then one full month of my life each and every year is spent working for the government. That's one month that I don't get to use to strengthen my family, improve my community or better the world. Every year the government takes one month of my life. Every year, they take one month of yours.

Is the world better off because of it? I don't think so.

Both of the Democratic nominees for President believe that the answer to all of America's problems lies in bigger government. Senator Barack Obama has been packaged as the nominee of "change." But, I would argue that nothing will change if Senator Obama is elected President - at least nothing for the better. Instead, of working one month a year for the government, we can all expect to add another week or more of additional time stolen from our lives to pay for his programs.

Both of the Democratic candidates believe that more government programs and more regulations are the answer to solving every social and economic hurdle that arises. By comparison, Senator John McCain believes, and is promoting, a pro-growth agenda that is focused on small businesses and entrepreneurs, less taxation and more free trade.

Take a listen to what RNC Victory Chairman Carly Fiorina had to say about Senator McCain's economic agenda:



As long as government continues to grow, we are all working for the man... and The Man is Uncle Sam.

Fruit Fly Research in France

So, I always thought New Mexico's special interest spending of taxpayer's money at the state level was ridiculous. But, it looks like that tilapia farm in Hidalgo county that got shot down two sessions ago is nothing compared to the type of earmarks coming out of one Congressman's district in Pennsylvania.

RedState hope to take it back with Chris Hackett. Mr. Hackett, a CPA, is both a fiscal and social conservative. He is pro-life and anti-earmarks. His opponent, Chris Carney, has been spending federal dollars on earmarks claiming they bring the bacon home to the tenth. The problem is, Carney can't explain how his vote for fruit fly research in France brings jobs home. Chris Hackett, on the other hand, can deftly explain how growth in Washington kills jobs in the 10th.

Fruit fly research in France paid for by American Taxpayers? That's just too much. It's no wonder presidential candidate, Senator John McCain thinks a one year moratorium on federal earmarks is a good idea.

A False Sense of Accomplishment

Over the last few years, funding for education has increased exponentially. More than once I've complained that despite this significant investment, we've yet to see any positive results. Now, it seems that the picture is actually even bleaker than we've been led to believe (subscription):

Since the No Child Left Behind Act came along in 2001, New Mexico has been sending the federal government graduation rates based on the percent of seniors who earn a diploma by the end of the year.

By ignoring the thousands of students who drop out between grades nine and 11, the state has managed to post respectable graduation rates— a percentage in the mid-80s.

New Mexico had the U.S. Education Department's full consent, but the federal government was keeping its own books, based on the number of freshmen who graduate in four years. Those calculations were coming up with graduation rates for the state in the mid-60s.

New Mexico was doing nothing unusual but, according to a March 20 article in The New York Times, it has had one of the widest gaps between state and federal figures. Only Mississippi's was wider.

Garcia expects that to change. Starting this summer, the state will start reporting graduation rates based on entering freshmen.

By using seniors, Garcia said, the state was giving itself "a false sense of accomplishment."

My guess is that the state has known all along just what it's level of accomplishment has been. It's the taxpayers they have been trying to dupe.

The Beginning of an Unsettling Trend

Year after year, Mayor Martin Chavez has been spending with reckless abandonment. Last year, it became clear that his fiscal irresponsibility was finally catching up with him. This year the projected budget shortfall for Albuquerque is more than double what was predicted last year (subscription):

A recent budget forecast estimated the city would face a $50 million shortfall next year if no budget adjustments were made. And that was before the mayor announced 5 percent raises for firefighters and double-digit raises and other financial incentives for police to boost recruitment— expected to cost around $10 million altogether.

But Chávez says not to worry: The city can pay for it all by holding the line on other expenses.

"At the very first sign of (an economic) slowdown, we stopped filling positions," Chávez said.

The $50 million projected deficit is based on many assumptions, such as incremental increases in most expenses. Instead, city programs will see a "lack of growth," Chávez said.

Am I the only one who finds it hard to believe they've got it under control when deficits continue to increase?

Cuts Should Begin in Governor's Office

Over the next couple of weeks, the Governor is going to line item veto various capital outlay projects. That is all well and good, but you've got to wonder if he shouldn't look at his own office first as a home mansion of unnecessary expenditures:

The Governor's Office has five public information officers, including two who have duties at other state agencies. Salaries for the five cost taxpayers about $404,000 a year.

Seriously, five public information officers? How can that be in New Mexico's best interest?

Visiting Governor Gets His Due

I don't like Governor Richardson's ill-conceived health care proposal. That's probably no surprise to anyone. But, what really irks me lately is Governor Richardson's holier than thou attitude regarding our citizen legislators:

At a news conference just 15 days ago, an upbeat Gov. Bill Richardson repeated two key words for lawmakers as they convened in Santa Fe: health care, health care, health care.

On Wednesday, halfway point for the legislative session, Richardson used the same words — with a much different tone.

"I said before the session that the focus of this 30-day legislative session would be health care, would be health care, and would be health care," he said, "and up until today we saw very little action."

Unfortunately for Richardson's agenda, the only action on his proposal was a vote by a key House committee on Wednesday morning to strip the bill of its mandate to insure all New Mexicans and ship the measure on to its next stop in the Roundhouse.

The governor deemed the move "unacceptable" and called the assembled lawmakers a "do-nothing Legislature, especially on health care."

I've been known to give the legislators a hard time on occasion. Ok, on many occasions. However, I find it more than a bit offensive for the PAID Governor, who has been absent from the state for nearly a year pursuing his delusions of grandeur, to call the men and women who volunteer their time to serve New Mexicans "a do-nothing Legislature" because they don't rubber stamp the most expensive and ill-conceived program of this administration.

New Mexico is facing an impending budget crisis because of the spendathon launched during this Governor's tenure. Mark my words... in 2009 there will be a grab for additional permanent fund dollars to balance the overgrown state budget.

I, for one, am glad our legislators have finally said enough is enough.

Giving Money Back to the People

It looks like we're going to be getting some of our hard earned money back from the government (subscription):

With unprecedented speed and cooperation, Congress and the White House forged a deal Thursday to begin rushing tax rebates of $600 to $1,200 to most tax filers by spring, hoping they will spend the money just as quickly and jolt the ailing economy to life.

Rebates would be even higher for families with children.

The one-time tax rebates are at the center of a hard-won agreement to pump about $150 billion into the economy this year and perhaps stave off the first recession since 2001. House Speaker Nancy Pelosi, Republican leader John Boehner and Treasury Secretary Henry Paulson worked out the details in negotiations that stretched into Wednesday night at the Capitol.

About two-thirds of the tax relief would go out in rebate checks to 117 million families beginning in May. Businesses would get $50 billion in incentives to invest in new plants and equipment.

The premise behind this is simple. We've given people back their money before and had good results. People choosing how to spend their hard earned money, not bigger government, is what can stimulate the economy. So, if we know this, why are Democrats so eager to let the Bush tax cuts sunset in 2011? Instead, they ought to make the tax cuts permanent and sunset government spending.

Four Billion Reasons Against Universal Health Care

Just like there are consequences in life, there are consequences in government. The spending party never lasts forever. At some point the bill comes and then those spend, spend, spend politicians start looking at new ways to separate you from your hard earned money. But, don't take my word for it. Look at what one reasonable Democratic party leader had to recently say about the state of our state finances:

Tim Jennings warned his audience that he is a blunt speaker.

The president pro tempore of the New Mexico Senate indeed pulled no punches in addressing the attendees at the Association of Commerce and Industry's business day breakfast in Santa Fe.

"We're $4 billion in the hole," Jennings said of the fiscal challenges facing New Mexico. "But luckily we have $360 million in new dollars to solve that, so things are looking up."

$4 Billion in the hole! Ouch, that's not a pretty picture. I would suggest that any reasonable person would say, time to stop the spending. Any bill that is up in the legislature that requires new recurring funding should be dead on arrival.

In his State of the State the Governor said:

Our sound financial management of our permanent funds has allowed us to invest more than $3 billion into New Mexico schools and taxpayers. And I’d like to assure those who opposed the investment into our schools – our permanent funds have grown from $9 billion to $15 billion and our schools are benefiting from that investment.

Anyone want to bet how long it is going to take before some of our folks start planning another raid on that permanent fund? My guess is 2009.

The Railroad to Taxation

The proverbial other shoe is about to drop on the railroad:

The six-member statewide commission sent a letter to the governor this week encouraging establishment of the new transit district, which would let participating counties first elect to be involved, then ask voters to approve up to a 1/2 percent gross-receipts tax to pay for services.

And, "the tax-cutting" Governor has issued a statement supporting it. As the Governor's universal health care proposal continues to be pushed, New Mexicans would be wise to remember that so far every "big" initiative this Governor has put forth has been followed shortly after with a cry for a need for new taxes. We're seeing it with railroad. We saw it with Spaceport America, and we'll see it with the health care proposal.

My biggest fear is that in the very near future, we will see another attempt to raid the permanent fund to pay for all of these unrealistic and poorly planned new entitlement programs.

Why Do I Feel Like I've Been Here Before?

Well, it looks like Governor Richardson is committed to making sure that his legacy to New Mexico is a budget crisis (subscription):

Gov. Bill Richardson's proposed universal health coverage plan would require $590 million in new general fund spending over the next five years, with business picking up most of the tab, Human Services Secretary Pamela S. Hyde said Tuesday.

Thankfully, at least two Senator's are showing some fiscal sense:

Legislative Finance Committee Chairman John Arthur Smith, D-Deming, told the Journal the Health Solutions budget assumes significant new federal matching funds for the state's Medicaid program— which would be in addition to the extra money collected from employers and other new revenue sources.

"That's a sort of ostrich with its head in the sand," Smith said. "Congress is trying to slow Medicaid spending."

The administration's budget counts on additional federal funds to help pay for the program.

"I don't think we're going to buy the governor's numbers," said Senate Minority Whip Leonard Lee Rawson, R-Las Cruces, who is a member of the committee. Rawson also told the Journal he opposes giving Richardson more power by authorizing a new health care authority that is part of the governor's package.

We'd be wise to heed these two gentlemen. After all, it wasn't that long ago that Senator Rawson was warning us about another spending fiasco of Governor Richardson's administration:

Four years ago this month, in ... a special legislative session called by Gov. Bill Richardson, lawmakers passed a mega-bill to improve 37 roads at a cost of nearly $1.6 billion.

Tucked into the legislation was a phrase that authorized one of New Mexico's most expensive and controversial transportation projects— not a road but a commuter rail system from Belen to Santa Fe.

Back in 2003, documents show, the cost for the rail project was listed at $90.2 million. Now the projected tab for the RailRunner Express has ballooned to as much as $425 million— and that doesn't include another $50 million held in escrow.

That's one-fourth of the total authorized for all projects in GRIP— also known as Governor Richardson's Investment Partnership.

While work on the RailRunner is proceeding full speed, other road projects authorized in the GRIP bill have moved to the back burner for lack of funding.

Over the past year, the GRIP funding shortfall has gone from $250 million to nearly $500 million.

It's a cash crunch created by what some lawmakers say is the need for more money for the RailRunner, increased costs for road construction and a projected decline in federal transportation funding.

The Legislature's attempt this year to gain more oversight of train finances proved futile. Richardson line-item vetoed language in the appropriations bill that would have required a separate RailRunner operating budget and quarterly reports on its progress and anticipated expenses.

In the five months since that veto, commuter rail capital costs have grown by 33 percent, legislators learned recently.

Sen. Leonard Lee Rawson, R-Las Cruces, said he feels the Legislature was deceived as to the project's true costs.

"How can you miss the mark five fold without deliberately being deceptive? What we've had here is bait and switch," Rawson said.

Are we really going to allow this bait and switch to happen TWICE?

A Broken Legislative Process

Last week I received an email and a phone call from a reader wanting to discuss my post regarding the government's case in the Metropolitan Courthouse Scandal. Specifically, the reader was troubled by this:

Speaking of unnamed folks in the legislature:

During the 2003 legislative session, Defendant Aragon told a legislative staff member to redirect funds that had been allocated in 1999 to two other projects to the Metropolitan Courthouse for use as additional funding on that project. Defendant Aragon's statements, which caused the redirection of the funds, made additional funds accessible to the members of the conspiracy related to the building of the Metropolitan Courthouse.

Kind of makes you wonder who is this unnamed "legislative staff member" who aided and abetted in defrauding the taxpayers? The 2003 legislative session wasn't that long ago. Is this person still working in the legislature? Are they now assisting other politicians in making "additional funds accessible" for other building conspiracies?

Unfortunately, I was in Washington D.C. with my family last week, so I didn't get to return the phone call for a frank discussion until yesterday. During which time, the reader made a very good point that is worth repeating here. Namely, that "aided and abetted in defrauding taxpayers" may be an unfair way to portray the act of the legislative staff member.

The way this process was explained to me, a legislator (or his/her staff member) asks the legislative staff to draft a change for a reauthorization or insertion of capital outlay into the capital outlay bill. This is done, and it is then voted on by the Legislator. So, charging the legislative staff member with "aiding and abetting " would make as much sense as charging the typist who typed up the change or the courier who delivered the new bill.

So, this brings us back to who has responsibility? Well, the simple answer is that the legislators who voted to approve the 340 page bill and the Governor who signed the bill without questioning the misappropriation of funds share the responsibility.

A quick search of the 2003 Capital Outlay bill, H.B. 200 reveals that "Metropolitan" shows up six times within two pages on the 340 page document. First, money that had previously been appropriated to Indian Pueblo Cultural Center were appropriated to the Metropolitan Courthouse.

But, here is the really disturbing part:

Section 121. MOUNTAIN VIEW ELEMENTARY SCHOOL--CHANGE PURPOSE AND EXTEND EXPENDITURE PERIOD FOR THE METROPOLITAN COURTHOUSE IN BERNALILLO COUNTY.--The balance of proceeds from the sale of severance tax bonds appropriated to the state department of public education pursuant to Subsection T of Section 19 of Chapter 2 of Laws 1999 (1st S.S.) for educational technology at Mountain View elementary school in Albuquerque in Bernalillo county shall not be expended for the original purpose but is reauthorized and appropriated to the Bernalillo county metropolitan court for the purpose of furnishing and equipping the new metropolitan courthouse in Bernalillo county.

That's right, they took money for our kids to line their pockets. And, the kicker to all of this comes from this paragraph taken from Governor Bill Richardson's 2003 State of the State to kickoff the Legisaltive Session:

We cannot achieve our lofty economic and educational goals without first meeting our most basic needs. When I proposed my budget, I set out three basic goals: Better schools, better jobs and more money in the pockets of New Mexicans.

Well, I guess he succeeded in putting more money in the pockets of some New Mexicans.

Richardson Administration Diversion of Road Funds

Governor Richardson' administration is finally starting to come clean about the real problem with road funding (subscription). Of course, if you blink, you might miss the truth and assume it has to do with the federal funding drying up. But, pay close attention and you'll notice this:

New Mexico also has been diverting substantial revenue once earmarked for roads into the state's general fund.

Looks like we're not going to have to wait until Richardson is out of office to begin to feel the effects of his poor fiscal policies.

Road Crisis

On Monday, I attended a NAIOP luncheon, which featured Transportation Secretary Rhonda Faught and MRCOG Executive Director Lawrence Rael as the speakers. During her speech, Secretary Faught provided a lot of facts and figures, but what struck me most was that she repeatedly referred to the "funding crisis" facing our roadways.

Apparently, we have billions upon billions of dollars in road infrastructure needs that we are not going to have the funding to address in the VERY near future. I find this puzzling considering that Governor Richardson has had billions of "extra" dollars that he has blown through during his tenure. In a couple of year's time, we are going to feel the full effect of the Governor's wasteful spending. Of course, by that time Governor Richardson will have conveniently moved onto greener pastures.

One of the most fundamental purpose of government is to provide for the infrastructure needs. The Richardson administration has failed miserably in this regard.