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13
Mar 2013

New Mexico Lottery Fund Depleting. Solution: Raid Permanent Funds and Expand Eligibility!

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With the continuous rise in tuition costs and increased participation in the program, the New Mexico Lottery Tuition Fund is facing a $5 million shortfall. At its current trajectory, the Fund is simply unsustainable. But that hasn’t stopped our legislators from doing what they can to shore up the program by raiding other funds.

lottery

The scholarship fund was intended to be self-sufficient and maintained by the New Mexico lottery. A fairly straight-forward concept that doesn’t involve using taxpayers’ money to pay for others’college tuition. It only used gamblers’ money that they voluntarily give up in their hopes of winning riches. So when this program exceeds its own funding, the logical thing to do is to reform it so as to fit it back into the box from hence it is given life. Whether it is through increases to the GPA requirements or class load, or cuts to benefits, as long as the costs are shrunk back down to what the lottery scholarship fund can support.

Of course, government doesn’t “cut back” or reform in order to “shrink” itself. We continue to make the same mistake thinking that this particular government program won’t do what ALL government programs inevitably do…EXPAND.

This is made evident by a few bills circulating our legislature at the moment.

The scholarship fund originally made to be self-sustaining–via the New Mexico lottery–is found to have blown up beyond the capacity of its original revenue source. So what does legislators do? Cut down the costs? Nope. They’ve decided to raid other funds in order to support the ever-expanding scholarship fund.

Senate Bill 392, sponsored by Senator Michael Sanchez,  raids the tobacco settlement permanent fund for 25% starting in FY 14 to be distributed to the lottery tuition fund. And if “the balance of the lottery tuition fund is not sufficient to meet the scholarship obligations for fiscal year 2014, 2015, or 2016 then it would require the governor to transfer from the general fund operating reserve to the lottery tuition fund the amount necessary to meet that fiscal year’s scholarship obligations.”

Whoa, the program has gotten too big. Its ok! We’ll just use taxpayer money to keep it going.

A separate senate bill creates a whole new tax for the lottery fund. Senate Bill 535 creates a new severance tax in which 50% of the revenue goes to the lottery fund (the other 50% goes to “energy education and marketing” and “clean energy grants”).

Another bill brought forth (and was passed) in the House of Representatives is House Bill 27. One would think that with a scholarship fund running out of money you would increase the rather lax eligibility requirements so as to decrease the scholarships awarded out. Or, at the very least, freeze the amount that is awarded out so as not to increase the burden on the fund.

Not so.

In their infinite wisdom, House Bill 27 expands the eligibility for the Legislative Lottery Scholarship! According to the LFC fiscal impact report, the expanded eligibility would  generate a 10 percent increase in recipients per academic year. If there were no other restrictions on the total amount awarded in legislative lottery scholarships, the Higher Education Department estimates that this 10 percent increase would total $12.1 million between FY14 and FY16. Basically, lets bankrupt the fund as quickly as possible.

Just to recap:

Situation: Scholarship fund has become more expensive than the lottery can afford to support, thus the lottery fund is running out of money.

Government response 1: Make the taxpayers pay for it

Government response 2: Lets expand those eligible to receive the scholarship thus making it even more expensive now that the taxpayers are paying for it!

Instead of making taxpayers, especially those who chose to work and not go to college,  pay for the college tuition of others, we should reform the scholarship fund so as to shrink it back down to what the lottery fund can afford. There is incredible room for reform. A 2.5 GPA requirement for all NM grads is incredibly lax. Scholarship is a privilege, not a right or entitlement. You should earn it.

There are several ways we can not only fix the lottery scholarship fund but make it more efficient without resorting to just throwing money at it and hope it goes away:

  • § Increase the minimum GPA to somewhere between 3.0 and 3.3 on a 4.0 scale. I don’t know of any scholarship that gives a student a full ride to a university that only requires a 2.5 GPA. Raising the standard naturally filters out those who are not serious about their college education or those who are just not ready yet to embark upon a college education. Having a mediocre standard begets mediocrity.
  • § Allow up to one or two years after completing a high school diploma or equivalent to be eligible for the scholarship. Between 25% and 35% of New Mexico high school graduates will lose the Lottery scholarship after their first semester of college.  And only 15% of all people who lose their Lottery scholarships will graduate in 6 years. By essentially forcing kids into college who are just not ready for it only squanders the money that can best be used by others who are more likely to finish college. If this is an investment, then invest it wisely. Many are not suited for a college education or do not even need one for their respective career choices. Instead of throwing money at students so they can go to college for the sake of going to college is a waste when they spend most of their time lolly-gagging around studying music appreciation because their heart is not in it. Let them explore the world, gain some valuable work and life experience so that they can then decide if college is the right thing for them or not.
  • § Only allow scholarship to be used on community colleges for the first year or two of an awardee’s degree program. Or what is required to fulfill the boring pre-requisites. There is no difference between an intermediate algebra class in a community college and one at a university. Why spend the money on the much pricier university when you can get the same product at a much cheaper cost from a community college?
  • § Increase the required class load to 15 credits a semester instead of 12 credits. If they only do 12 credits, then lessen the amount that is awarded to them–the individual can cover the rest with the side job they must have with the increased free time.

These are only a few simple, common sense reforms. There is still means-testing or limiting the scholarship awards to specific degree programs in which the payoff matches the money spent to get the degree. Is it really necessary to pay for a 4-year degree on “Music Therapy” or “Art History”?

And automatic stabilizers should be in place if the awards begin surpassing what the lottery can fund. Automatically decrease the amount awarded across the board until the total amount is back within the capacity of the fund. Or increase GPA requirements again, etc.

Bottomline: The New Mexico Lottery fund is but another example of an ever-expanding government program that inevitably grows beyond its original capacity. Lets not facilitate the expansion until its gotten so big and people have become so dependent on it that its takes a life of its own and becomes politically untouchable with no way to scale it back down. Lets nip it in the bud now. The New Mexico lottery scholarship fund is suppose to be self-sufficient. Cut costs to maintain that self-sufficiency. Don’t make other individuals who decided to work instead of go to college pay for the college education of others. It is not exactly an equitable use of taxpayer dollars.

 

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Categories: 2013 Legislative Session, NM Politics
28
Feb 2013

U.S. Employment Growth By State (New Mexico Lags Behind)

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The chart below shows employment growth by state. Its divided up by the last month, the last year, 3 year, and 5 year.

In the five year map, a vast majority of states showed negative growth, which is understandable considering the 2008 crisis.

What is worthy of note is that for the 3 year growth rate, New Mexico is one of two states that showed negative employment growth (and was the worse off of the two). The year over year, New Mexico is one of a handful of states that continued to show a loss in employment.

But take comfort in that we had .29% growth last month!

growth1

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Categories: Economy, NM Politics
19
Feb 2013

Restaurant Won’t Comply With Minimum Wage. Employees Sign Contract In Agreement.

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Rt66

 

Albuquerque Business First reported that the owner of an Albuquerque restaurant called Route 66 Malt Shop will not comply with the city’s new minimum wage law. Apparently, his employees signed paperwork agreeing to continue working at the old minimum.

The city attorney has said this action is illegal. You just can’t do that, pal.

City Attorney David Tourek told the Journal the agreement described by Szeman is “an illegal contract” and that businesses can’t opt out of the ordinance. But the city won’t step in.

“Without the necessary authorization and necessary resources being provided by (the City) Council, the City Attorney’s Office will not be initiating civil lawsuits in court against private businesses on the behalf of private individuals,” Tourek told the Journal.

For now, the city won’t step in. But if they get additional heat from activist groups, it could change things. This is a clear example of the damages minimum wage laws impose on businesses and workers. It also clearly demonstrates the unwanted government interference between the free and voluntary contracts between employer and employee.

Minimum wage laws do not create any jobs. But they do outlaw them. As the city attorney above says, “it is an illegal contract”. This law, in blatant disregard of the economic liberties of individuals, have made it criminal for a worker to agree to work for a wage below the arbitrary minimum decreed by others.

Obviously, the workers of this restaurant can make the owner pay them the new minimum wage. The owner probably let them know that hours would have to be cut or an employee or two would have to be let go to cover the costs of the wage hike. Whatever the reason, the workers voluntarily are willing to forgo the wage hike in order to ensure they all have the job.

Each worker will make their own decision eventually. Maybe they enjoy the work environment and value that above a higher wage somewhere else or no job at all. Maybe they’ll eventually leave for a different restaurant that will pay them more. Or maybe the restaurant will eventually be able to cut costs elsewhere or raise the price of their product in order to cover the wage hike in the future to get the government and activists groups off their backs. Who knows? Bottom line: Right now they’re apparently getting along just fine. Leave them alone.

FYI, the article also mentions that activist group ProgressNow New Mexico plan on protesting and boycotting the restaurant for their uncooperative ways. These individuals have all the right in the world to not buy anything from this restaurant and to wag their fingers at the owner in a scolding manner. However, they probably don’t realize or care that they’re hurting the actual workers they’re claiming to be helping.

You can read the article here.

UPDATE: This was reported in the ABQ Journal. And the owner did say the costs were too much and he let his employees know–the ABQ Journal reports:

he warned his employees that Albuquerque’s new minimum-wage law would result in layoffs, schedule cuts and, in the end, “we’d have to close our doors.”

But he says he found a way to avoid that. Szeman’s employees signed paperwork agreeing to continue working at the old minimum, he said.

“I researched the law and found out there’s no enforcement for noncompliance,” said Szeman, who owns the Route 66 Malt Shop. “So we’re not complying, and our staff is perfectly happy to work at the old minimum wage.”

You can read the Journal article here.

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Categories: NM Politics, Uncategorized
18
Feb 2013

When “One Size Fits All” Doesn’t Fit

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one size

 

There was a great editorial in the ABQ Journal today on School Choice. It was directed towards House Bill 460, sponsored by Rep. Mimi Stewart, D-Albuquerque, and Sen. Tim Keller, D-Albuquerque. This bill would prohibit any public/charter school from being managed/administered by private companies or having out-of-staters on governing boards.

First, ask yourself, are you happy with New Mexico’s education system? And are schools/teacher unions success or student performance and achievement the primary goal in education?

This bill doesn’t even attempt to take into account actual performance or achievements of the schools they’re requesting to prohibit. Even if these schools outperformed every single traditional school in the state, they would be prohibited on the mere fact that a private entity manages them or out-of-staters sit on the governing board.

If these individuals actually cared about New Mexico’s failing education system, why would they be so adamant to maintain the status quo and go out of their way to prevent MERE CHOICE being given to the parents? It is not as if there is a call to privatize all schools, or force parents to send their kids to some designated corporate education institution. Not at all. Parents, students, and residents throughout the state are seeking to expand educational resources, and expand choices and availability of quality education. What does it matter who manages or administers a school as long as it adequately performs its function as a quality education institution. Much like New Mexico Virtual Academy, chartered by the Farmington school board and run primarily by the for-profit K-12 Inc., which this bill would essentially shut down.

The private sector/free market has given us so much in regards to improvements in our standard of living. From handheld computers, cheap and efficient communication across the globe, to affordable and abundant food. Why can’t we allow it to do the same to our education?

Charter schools and online education have already done much to prove their success in their various innovations and methods. It has proven to be able to service the myriad of different and unique needs of each student in order to provide them the quality education they deserve. The students who benefit from these programs vary as much as the programs themselves- all ages from our youth to adult students who want a second chance at an education; and all skill sets from those who need more of a challenge to those who need more attention because they need more help understanding. ALL individuals benefit from having a CHOICE.

The one-size-fits-all approach of government education has been failing New Mexico for generations, and for some to attempt to prevent the innovations of the 21st century from taking form in the education sector is only committing a disservice to our children and the future of our state.

You can read the editorial here.

Bottom line: There is no logical reason for a bill like this that seeks to eliminate the mere option of alternate educational institutions regardless of their actual performance. Especially when the status quo of the current education system is unacceptable. The only reasonable explanation is the influence of special interest groups such as the public teacher unions.

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Categories: 2013 Legislative Session, Education
03
Feb 2013

Tax Reform – NM Senate Bill 368

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tax-daySenate Bill 368. A complete overhaul of New Mexico’s tax code. A much needed overhaul. Our current tax code has become nothing more than a record-keeping book of New Mexico’s auctions (or what some call our legislative sessions). Its been tinkered so much with favors here and favors there, deduction for this group, an exemption for that one, that its become an unrecognizable, incoherent blob of quid pro quo’s.

Sen. Sharer of Farmington have granted us a bit of a spring cleaning. It cleans up the gaming board for our current generation of “lawmakers” to start fresh with a new set of quid pro quo’s.

Aside from the pessimism, this reform would do wonders to an overburdened New Mexico economy.

A few key points of the bill:

  • eliminates personal income tax
  • eliminates corporate income tax
  • eliminates estate tax
  • eliminates several other taxes
  • establishes an across-the-board 2% gross receipts tax

It is worthy to note that these taxes are replaced by a gross receipts tax and not a simple sales tax that many people are reporting. This an important distinction which you can read about here in a Rio Grande Foundation 2007 report titled: “New Mexico’s Harmful Gross Receipts Tax: A Warning to Other States“.

taxesHowever, this is a much better tax alternative to the complete mess we currently have. It would remove an immense weight off the New Mexico economy and would increase our competitiveness in attracting business and investment. The market economy can flow more smoothly without the impediments of the convoluted tax code. Many of the distortions caused by the various narrow tax incentives and the corresponding special interest deductions, credits, and exemptions would be removed and the way it altered the market process. With the removal of the myriad of interventionist tax policies, much of the functionality of the economy would be restored to the natural demands of the market.

Bottom line: People and businesses get to keep more of their own money. The tax code becomes less targeted and narrow, infested with political favoritism, and becomes a bit more equitable with its broad-based low rate.

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31
Jan 2013

NM Legislature 2013 Update – Day 16

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Here’s a fly-over of various legislation making its rounds in the legislature.

 

SB 240 – Space Flight Informed Consent Application - Senate President Pro-tem Papen, D-Las Cruces

This bill provides liability protections that would limit the lawsuits against parts suppliers and manufacturers involved in building spacecraft (essentially the supply line of Virgin Galactic and any other future commercial space flight operators).

Without these protections, these are the negative consequences:

  • Virgin Galactic halts its operations and would most likely leave Spaceport America
  • New Mexico becomes less competitive in attracting similar corporations involved in commercial spaceflight
  • New Mexico loses the prospect of recurring revenue from leases/user fees as high as $1 million annually per commercial spaceflight operating customers
  • The $209 million of taxpayer money already invested into the Spaceport is squandered

For starters, $209 million of taxpayer money to build a spaceport is NOT a good use of taxpayer dollars. With that said, the spaceport was built and the $209 million investment is sunk. It would be irresponsible to not pass legislation that would cost the taxpayers nothing in order to allow the spaceport to continue forward in operation and ensure its success as much as possible.

The bill has rushed through the Senate unanimously (34-0) and heads to the House.

 

HB 77 – Firearms Transfer Act  -Rep. Garcia (D-Abq)

This legislation apparently closes the “gun show loophole” by requiring background checks even when private citizens transfer their guns with each other. You’re even required to conduct a background check even if the individual your giving your gun to is a family member. The last point of which was the major issue for Rep. Alcon (D). Rep. Alcon was the sole democrat who voted against the bill in the House Judiciary Committee, deadlocking the bill with an 8-8 vote.

However, it seems it might make a come back with some amendments. A former version of the bill required the state to retain a database on all gun purchases, until that met such heavy resistance, Rep. Egolf, Jr. introduced an amendment removing those references from the bill.

Obviously, such a bill is a lawmaker’s knee jerk reaction to the Sandy Hook shootings. It is clearly anti-2nd amendment rights and would only cause many unintended consequences. It would definitely affect gun shows, but I don’t see private citizens strictly adhering to these statutes, if passed (since there is no registry and no way of tracking ownership). This is nothing more than the usual reflexes of a “gotta do something” lawmaker.

 

HB 114 – Prohibit Enforcement of Federal Gun Laws – Rep. Espinoza (R)

The debate over gun control vs gun rights rages on. This bill prohibited the enforcement of unconstitutional federal gun laws within New Mexico and even goes so far as making it a third-degree felony.

This is a very strong states’ rights bill and fully embraces federalism. There is nothing wrong with our state’s gun laws that we would need the extra layer of federal decrees coming from D.C. 2,000 miles away. It establishes certain protections for the citizens of New Mexico in case of future federal encroachment on individual liberties.

Unfortunately, this bill was tabled by the House Consumer and Public Affairs Committee on Tuesday with a 3-2 vote. However, it does spark up a discussion of state nullification.

 

HB 194 – Amend Motor Carrier Law Act – Rep. Taylor (R)

This bill affects the regulations over the taxi, shuttle, and moving company industries. Let me start off by describing the current rules in effect on taxis.

In order for a new taxi firm to enter the market, they must apply to the Public Regulation Commission. The PRC then must approve of their proposed business rates. The new firm must also inform the incumbent firms (or potential competitors) on their intention to enter the market. The incumbent firm(s) can then protest the entry of the new firm. In which case, the new firm must prove that the market is big enough for another firm. They must prove there is a “demonstrate need”.

Obviously, such a high barrier to entry has resulted in a shortage of taxi services and monopoly prices. What we have are state-sponsored cartels, the very essence of crony capitalism. It took Taxi Bob a persistent 8 years to receive a temporary license to operate his cab.

According to Think New Mexico, 24 of New Mexico’s 33 counties have either a single monopoly taxi company or no taxi service at all.

Limiting the availability and affordability of alternative means of transportation can have negative unintended consequences, especially for a state that has a problem with drinking and driving.

HB 194 reforms many of these negative aspects of the Motor Carrier Law. It would allow new firms to enter the market, eliminates the monopoly power and state protection of these cartels, and limits the price-fixing and the PRC’s role in business rates. Basically, it shifts the focus of the PRC to protecting consumers instead of monopolies.

The bill also involves regulation in moving companies. You can read the bill here.

 

HB 292 – Transfer of Public Land Act – Rep. Herrell (R) and Rep. Martinez (D)

HB 292 involves transferring million of acres currently owned by the federal government back to the ownership of the state of New Mexico. There are exceptions, such as national parks, national monuments, tribal lands, etc. The bill also lays out how the funds would be dispersed for any sales from the acquired lands.

This is a great step in strengthening New Mexico and embracing federalism. It reasserts New Mexico’s control over its own lands. Much of the western United States, in general, is under federal control:

map-owns_the_west

 

fed_st_lnds_color_web

Does this legislation have a chance of passing? I don’t know. Despite it having a bipartisan sponsorship, the Santa Fe New Mexican is of the opinion that its “…one of the most ambitious and longest-shot bills introduced so far this session…”. It is based on Utah’s Transfer of Public Lands Act, and apparently other western states are considering similar options.

 

HB 182 – Decrease Certain Corporate Income Tax Rates – Rep. Strickler (R)

This Governor-backed legislation, introduced by Rep. Strickler, would cut the top two corporate income tax rates to 4.9%. Specifically:

  • Current rate of 6.4% for those who make over $500,000 is lowered to 4.9%
  • Current rate of 7.6% for those who make over $1,000,000 is lowered to 4.9%. The lump sum that is in addition to the tax rate is lowered from $56,000 to $24,000.
  • The lowest bracket (income less than $500,000) remains at 4.8%

Essentially, the top two rates combine into one rate. This creates a simpler and flatter corporate tax code and would make New Mexico a lot more competitive with neighboring states.

Unfortunately, this bill has been tabled for now in committee until other bills are viewed and more study is done on the effect on revenue. Opposing members were concerned with the loss of revenue.

Of course there is an initial loss with any tax cut. The point is to allow residents and businesses of New Mexico to keep more of their money in order to spur economic growth. If the members are concerned with the loss of revenue and a balanced budget, then they should look for ways to cut spending. The fact of the matter is, New Mexico is not going to attract business or create jobs in the current field of state competition under its current conditions. New Mexico’s economy has been one of the worst performing in comparison to other states in the nation. The private economy can’t bloom when its being crowded out by government spending. The lifeblood of government spending is what it can syphon out of the private sector. The more we give to government, the less robustness we get from the market economy.

 

HB 12 – Spending Restrictions on Public Assistance – Rep. Gentry

HB 12 limits what can be purchased with cash assistance. Cash assistance is a form of welfare for low-income individuals in which they are given a set amount of cash (via an EBT card).

The bill will restrict use of cash assistance in EBT transactions at:

  • liquor stores
  • gaming establishments
  • adult-oriented entertainment establishments (aka strip clubs)

This bill will reduce welfare abuse. Tax dollars dedicated to welfare should not be squandered at any establishment other than those providing the basic necessities of those in need.

What do you think of the various legislation hitting the roundhouse?

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27
Jan 2013

You Get What You Vote For: Minimum Wage Hits UNM’s Johnson Center

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If individuals don’t understand the pure logical reasoning against minimum wage mandates and its effects, you would think they would learn from the empirical evidence time and time again. The most recent example of which hits home for the University of New Mexico. They are cutting the Johnson Center hours due to the recent minimum wage increase in Albuquerque.

The minimum wage increase in the city of Albuquerque has hit home for the University of New Mexico.

The school said Thursday that it will cut hours at Johnson Center, which houses gymnasiums and fitness facilities, six days a week. The center will close one hour earlier Mondays through Thursdays, and one hour earlier on Saturday and Sunday, the school said in its UNM News Minute newsletter.

“Due to the mandatory increase in the minimum wage that went into effect Jan. 1, 2013, there will be a reduction in hours in Johnson Center,” the newsletter said. “This reduction is necessary to stay within budget and not run a deficit.”

Read the rest of the article here.

Many just don’t think things through. They see an option to raise the minimum pay and think “Well why not get paid $8.50 instead of $7.50?” Economic ignorance partnered with the force of government has given PubliusNM and I’m sure many of our readers an all too familiar feeling…

face palm

Its not like the people were not informed, especially the students of UNM. Here is a Daily Lobo article--Wage hikes make low-skill jobs scarce– explaining the adverse affects of minimum wage laws in an effort to persuade against voting for the minimum wage increase :

I don’t quite understand why those who call for a raise in the minimum wage don’t take the time to analyze the effects of such a policy beyond stage one. These individuals treat raising the minimum wage as some panacea for the poverty of the world.

If we can cure poverty by mandating higher wages, why stop at $8.50? Why not $10 or $15 or $20? Make it illegal to be poor.

That’ll cure the problem! I recognize that the intentions are noble, and I can understand the frustration regarding the people who struggle financially, and that we strive to bring everyone up from poverty. However, rash decisions, like arbitrarily raising the minimum wage, will hurt those very people the policy was intended to help. There are unintended consequences to these feel-good intentions.

American politics are too quick to judge the effectiveness of a policy based on its intent rather than its effects. “The road to hell is paved with good intentions.” Let’s take a closer look at the minimum wage beyond stage one.

Will Thomson keeps mentioning how these “families” can’t survive off the minimum wage of $7.50. Many times, what is portrayed is a single mother struggling to scrape by on minimum wage. It is not exactly as simple as that. According to a recent Rio Grande Foundation study of Albuquerque minimum-wage earners, only about 10 percent of those who would be affected are single parents raising children on their own; 40 percent of minimum-wage earners live at home with their families and relatives; 17 percent live with a spouse who also earns an income.

The average family income of those employees who would be affected by the wage increase is more than $55,000 a year. So it isn’t as simple as saying how those affected are surviving on $15,000 a year when the vast majority of those who would be affected are not single parents supporting a family. Many of those earning minimum wage are new into the workforce, or holding a side job to earn extra spending income. These job opportunities give new workers the chance to gain important job skills that will allow them to advance to higher-paid positions. It is their stepping stone, the bottom rung of the ladder of opportunity. Raising the wage above market prices will only price many of these individuals out of the market.

New Mexico’s teen unemployment rate is already about 22 percent.

These lower-productivity workers will lose that bottom rung that would have given them the skills needed to keep climbing. The higher we raise the low-hanging fruit, the higher that unemployment number will go up. An employer is simply not going to pay employees more than the revenue they bring in. Raise the cost of labor, and the entrepreneur will have to compensate in other areas. They’ll either invest in capital improvements that will automate the lower-productive jobs, remove or decrease certain benefits to the employee, not hire additional workers or maybe even fire the marginally productive workers.

Let’s examine this in a hypothetical scenario. Once upon a time, there was this low-skilled worker: an inexperienced teenager with no skills, maybe his first job — we’ll call him Homer. I’m willing to hire him if he brings in more revenue than it costs to pay him. Let’s say he brings in $8 worth of revenue. I make $0.50 off this employee in profit. Another worker, we’ll call him Pluto, who is more experienced — he’s been working for me for a while — brings in $9 worth of revenue. He’s a pro at flipping burgers and can flip several at once. I’m receiving $1.50 in profit from him.
Then our great planners decide to raise the minimum wage to $8.50.

Well, as the owner of this hypothetical enterprise, I am going to have to let poor Homer go. He’s only bringing in $8 worth of revenue but it costs me $8.50 to employ him. I lose $0.50 every hour I keep him employed. Pluto, fortunately, is now earning $8.50, which is much more in accordance with the value he brings to my business. I now only profit $0.50 from employing Pluto — well, until the next wage hike.

The result of a wage hike in this hypothetical scenario is that Pluto certainly did benefit from it. He’s definitely earning more for what he does. But who is to say I wouldn’t have eventually given him a raise for being a more productive worker in order to keep him working for me and not my competitors? And if I didn’t, who is to say he would not have eventually left me for a higher wage offered by a competitor? Instead, poor Homer lost the job and wasn’t even given a chance to learn the skills and gain the experience to become more productive. He’s been priced out. His productive capacity is $8 an hour, yet no one can effectively hire him since he costs more than he produces. Even though he is willing to work for less, it is illegal for him to do so.

Even though this is a simplified hypothetical, it demonstrates the unintended consequences of artificially fixing wages. Why do we accept interns making below minimum wage? At times, they earn nothing at all. Is that slavery? Is that criminal? They voluntarily decide to work for someone for nothing. They must be psychologically unstable! Not really. The intern is gaining valuable skills and knowledge and s/he deems that more valuable than a paid position somewhere else. It is their bottom rung on their way up the economic ladder. It is the same situation for those lower-skilled workers earning the wage agreed upon between employer and employee.

Raising the minimum wage in Albuquerque is not the cure to poverty. That is absurd. If it truly was, I’d like to propose raising the minimum wage to $100. Instead, what we need is an environment that welcomes entrepreneurs and encourages creative minds to enter the market and compete in this free marketplace of ideas. We need a city that ensures the protection of private property rights and contract rights and does what is necessary to protect against fraud and corruption.

A free society eliminates poverty, not a centrally commanded and controlled one. Allow free individuals to negotiate their labor contracts with each other and stop the paternalistic, forceful governing that hurts the more it tries to help.

 The city of Albuquerque was informed through several minimum wage articles in the journal such as these ones:

  1. Minimum Wage Hike No Panacea
  2. Minimum Wage Hike Will Harm Employees
  3. Editorial: Minimum-Wage Issue Could Harm Workers

It is fair to say that it is widely understood that price and wage controls are bad and lead to all sorts of distortions and shortages. Minimum wage mandates is a price control on labor. When you mandate a price that is higher than what the market deems it should be, we end up with a surplus of labor (higher unemployment) and decreased labor demand. Prices are nothing more than signals from the billions of different factors and preferences that influence the supply and demand of a product. Prices aren’t evil or wrong or emotional or anything other than the output of an organic market process. This learn liberty video from the Institute for Humane Studies explains it well:

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Categories: NM Media, NM Politics Tags: ,
26
Jan 2013

Publius Digest

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Today we want to bring you an update on what has been going on in the news both nationally and here in New Mexico. It was a busy week with the inauguration and the legislature arguing over, well, everything. Here’s some news and hope you all have a great weekend!

Inauguration day!!
Inauguration-Day

 

National

Inauguration Day

Inaugurations nowadays seem to get even more excessive and gluttonous every time.

Congressional Quarterly’s comprehensive “Guide to the Presidency” helpfully explains that “the only part of the inaugural ceremony that is required by the Constitution is the taking of the oath of office.” If only somebody had bothered to check, we could have wrapped it all up Sunday when Chief Justice John Roberts swore Barack Obama in for his second term, and spared ourselves an extra day’s worth of pomp, circumstance and dreadful poetry.

After his swearing-in, “Calvin Coolidge simply went to bed in 1925.” George Washington’s admirably brief second inaugural clocks in at 135 words. But modern presidents fail to appreciate that for presidential inaugurations, as with presidential activism, less is more. In his first inaugural, in 1993, Bill Clinton suggested that the ritual of presidential anointment brings hope and life to the world: “This ceremony is held in the depth of winter. But, by the words we speak and the faces we show the world, we force the spring.”

In his unsettling second inaugural, in the midst of two bloody and seemingly endless wars, an unfazed George W. Bush pledged America to “the ultimate goal of ending tyranny in our world.”

Four years ago in his first inaugural, a newly anointed President Obama promised a transformational presidency that would “wield technology’s wonders” and “harness the sun and the winds.” He decried “the cynics” who dared to “question the scale of our ambitions, who suggest our system cannot tolerate too many big plans.”

This time around, the president seems not to have adjusted the scale of his ambitions downward. Columnist Steve Chapman summed it up on Twitter: “Shorter Obama inaugural speech: I’m a liberal. Deal with it.”

Would that it had been shorter. Though most of yesterday’s address was a high-minded word-souffle, light on specific policy prescriptions, several passages stuck out. For example: “We reject the belief that America must choose between caring for the generation that built this country and investing in the generation that will build its future.”

Read the rest the reason article here

Something else you might find interesting is the word cloud (most used words) of Obama’s 2013 inauguration address:

2013inaugural word cloud

Revealing?

Women in Combat

Recently, the Pentagon announced it was removing a 19 year ban on women in combat.

WASHINGTON—Defense Secretary Leon Panetta signed an order Thursday striking down the two-decade-old rule excluding women from combat positions in the military, a move that will eventually open thousands of new jobs on the front lines.

The new policy recognizes that in modern warfare, everyone in a combat zone is on the front lines, Mr. Panetta said.

“There is no distinction that’s made between the sacrifices of men and women in uniform,” Mr. Panetta said. “They serve, they’re wounded and they die right next to each other. The time has come to recognize that reality.”

woman soldierWhat exactly are these implications? There aren’t very many details on what specific jobs women will actually be able to serve in where they were previously excluded. Many officials have commented that most likely infantry and special operations units would remain closed.

As a former combat veteran myself, I don’t hold any particularly strong opinion on a woman’s right to be in a combat unit. However, there are practicality issues that would compel me to be against such a matter. As of right now, physical standards in the military are different for male and female. If females are going to be allowed in physically demanding units where they’ll be pit against enemy ground troops, they must be able to meet the minimum standards that male combat soldiers must meet. I’m sure there are many who can meet such standards, while others can not. Either way, you can’t have separate standards if we wish to maintain an effective fighting force.

Another issue that concerns me is pregnancy. There were many examples of women in non-combat supporting units who got pregnant right before a deployment, precluding them from being deployed with the rest of us. I am not saying they would or would not get pregnant on purpose to avoid a deployment, however, the issue remains that it does happen and would be severely crippling to a combat unit. Let’s say half an infantry platoon is made up of women. Before departure date for a deployment half those women get pregnant. 25% of the platoon is now out of commission before they even set foot in theatre! If men could get pregnant, it’d happen to them, too.

There are other arguments for and against women in combat. While I believe if women chose to maintain the necessary standards and make the harsh sacrifices male combat troops make daily, they should be able to accomplish their goals, I also believe there are social dynamics, biological dynamics, and questions of morality that make women in combat a complicated issue. What do you think?

 

Gun Battles

It would seem President Obama will be using his political capital (apparently he still has some) to push his gun control agenda on the American people:

The Obama administration is bypassing Capitol Hill as it works to get gun-control efforts passed, with President Barack Obama and Vice President Joe Biden planning trips outside Washington to build public support.

Obama’s gun control plans depend on many Democratic senators who come from states with strong weapons rights supporters, and the administration’s plans to bypass them and take the cause to the people marks a more aggressive strategy than Obama took in his first term of office, reports the Washington Post.

The president is mobilizing supporters through his former campaign committee, Organizing for Action, which will run grassroots campaigns to pressure lawmakers. Plans are also under way for Obama and Biden to meet with police, clergy, hunters, and others who back their proposals.

Of course with America being a society that highly values the right of citizens to own guns, obviously there was some pushback. Especially among sheriffs across the country.

A collection of sheriffs across the country have sent Congress and the Obama administration a message: If we don’t like your gun laws, we aren’t going to help enforce them.

As of Thursday, 90 sheriffs, many from rural counties, have pledged not to enforce laws they deem unconstitutional, according to a list compiled by the Constitutional Sheriffs and Peace Officers Association, a Texas-based group that has “vowed to uphold and defend the Constitution against Obama’s unlawful gun control measures.”

Stories like this are popping up everywhere. Even here in New Mexico where sheriffs representing 30 of the 33 counties in the state and stood up for our right to bear arms. The current gun control vs gun rights fervor will doubtless be a hot topic in many state legislatures. Gun owners are definitely fired up as the NRA membership has sky-rocketed.

I know this story is a week or so old but if you haven’t seen the Reality Check video that went viral explaining the incorrect gun statistics claimed by Piers Morgan (in the now infamous Piers vs Alex feud) you should check it out. Ben Swann is one of the most objective reporters I’ve seen.

Debt Ceiling Deal

Debt-Ceiling-Gun

Looks like our political leaders got tired of the last debt ceiling fight and decided to just go ahead and kick the can down the road a few months right off the bat.

The House on Wednesday passed the “No Budget, No Pay Act,” a Republican bill that would effectively defuse the debt ceiling threat for several months.

The bill would let the Treasury Department borrow new money until mid-May. In exchange, the legislation would require lawmakers in both chambers of Congress to pass a budget resolution or have their pay withheld until they do.

The vote was 285 to 144, largely on the back of Republican support.

Read the rest of the article here

Of course the “No Pay” portion of the bill is just a bunch of the usual smoke and mirrors considering actually taking a member’s pay is a violation of the 27th amendment which prohibits changing congressional pay until the next election has passed. At best, their pay will be held in escrow until the next Congress, at which time they’ll probably be paid what was held.

 

New Mexico

Driver’s permits for Illegals, a compromise option?

 The ABQ journal ran this story a couple days ago:

SANTA FE – Top Democratic leaders of the House and Senate indicated tentative support Monday for legislation that would grant a new driver’s permit to illegal immigrants In New Mexico but could not be used as legal identification.

The idea, spearheaded by Senate Minority Leader Stuart Ingle, R-Portales, and Senate Finance Committee Chairman John Arthur Smith, D-Deming, is being discussed as a possible solution to a two-year legislative impasse on Gov. Susana Martinez’s push to repeal a 2003 New Mexico law allowing illegal immigrants to get state driver’s licenses.

House Speaker Ken Martinez, D-Grants, and Senate Pro Tem Mary Kay Papen, D-Las Cruces, expressed cautious and conditional support Monday for the alternative that would create a new driver’s permit for illegal immigrants but would not be valid as identification to board an airplane or enter a federal building, as required by the federal Real ID Act. Martinez and Papen, elected as the top leaders of their chambers this year, have opposed the governor’s push to repeal the license law in the past.

“It’s a concept I support,” Papen said. “It’s a concept that hopefully could move us forward, but I wont commit to anything until I see a bill.”

Speaker Martinez said he would rather address public safety concerns related to the illegal immigrant driver’s licenses by making changes to the current driver’s license law. “If that doesn’t necessarily carry the day, you can look at a two-tier licensure system,” he said.

“Look at that (idea),” Martinez said, “but make sure it’s meaningful to the immigrant community, (that) it’s not something they would be reticent to get.”

You can read the rest of the article here.

Governor Martinez said she might be able to jump on board this proposal.

Gov. Susana Martinez, in a potential change of course, said Tuesday that she would consider legislation to create a driver’s permit for illegal immigrants if the proposed permit card could not be used for identification or used to get a driver’s license in another state.

“If we have something that proposes that, and takes care of public safety, I’m certainly willing to take a look at it,” Martinez said Tuesday.

Public safety concerns previously cited by the Republican governor have centered on non-residents fraudulently obtaining New Mexico driver’s licenses for identification purposes.

Her comments Tuesday are in contrast to her position during the 2012 legislative session, when she warned she would veto any legislation that would allow illegal immigrants to drive legally in New Mexico.

Although, there hasn’t been any legislation introduced yet, proposals are being drafted. It seems like something that could be passed and signed by the Governor. This bill brings up some issues that I’m curious about from a logical stand point. While it appears to be legislation that pleases the Governor or those against drivers licenses for illegals, at the same time it gives the Democrat’s (or those who supported driver’s licenses for illegals) an out in their support.

drivers_license_636In this two-tiered system, what happens is that all it does is separate the illegals from the legals in identification. There is no reason why a person who is eligible to get the regular driver’s license will opt to get the permit. Only those who can NOT get a regular license, due to their illegal status, will opt to get the permit (if they decide to come out in the open like that). Who’s to say at a later point these permits won’t be used as a way to identify illegals and apprehend those in possession of them?

And if a police officer pulls over an individual and that individual hands them this new permit, doesn’t the officer then know there is a good chance that the driver is an illegal immigrant? In which case, does the officer have the probable cause to further investigate this individual based on the type of identification he holds? It seems logical that anybody who holds these types of permits are illegal immigrants and as such are easily identified and can be deported.

If this is so, I don’t see illegal immigrants going out to get themselves these new permits since they’d probably understand how easily it would identify them. So essentially, this would be the same as eliminating driver’s licenses for illegals.

Whatever one’s position is on the issue of driver’s licenses for illegals, I think this is a roundabout way of eliminating the driver’s licenses for illegals (wether intentionally or not).

NM Spaceport

As we all know, the infamous New Mexico Spaceport has soaked up over $209 million from NM taxpayers. Its been an extravagant government-sponsored money pit. With that being said, the costs are sunk, we’re stuck with it, and the best course of action to take right now is to allow it to function and operate so as to encourage its success as much as possible. Due to certain liability issues, the spaceport has been at risk of being stalled out and being abandoned by Virgin Galactic.

Here is the Rio Grande Foundation’s take on the issue:

From day one, the Rio Grande Foundation has been critical of the use of $209 million of New Mexicans’ tax dollars to build a spaceport.

For starters, government has a shaky track record of betting on “the next big thing.” The spaceport is also a classic example of wealth redistribution from New Mexico taxpayers (arguably the poorest state in the nation) to wealthy businessman Richard Branson and the millionaires who plan to spend $200,000 to fly into space.

Despite all of this, the project was built and is now open. Thus, it makes sense to make it as successful as possible. Unfortunately, to date New Mexico’s Legislature has failed to pass a law that protects manufacturers, suppliers and anyone else who builds and maintains spacecraft from liability lawsuits. This law would cost nothing to change and will not impact any New Mexican who does not choose to fly into space.

New Mexicans have spent $209 million on the spaceport. The Legislature would be committing an act of legislative malfeasance by failing to pass these basic protections.

Luckily, it seems the legislature and the Governor might being coming to terms on settling for a limited-liability agreement, as reported by the ABQ Journal:

Democratic leaders said Tuesday that an agreement has been reached on limited-liability legislation for Spaceport America and predicted the contentious issue soon would be settled, but some Republicans said they hadn’t seen the deal.

The Democratic leadership said their announcement followed negotiations that began last summer between Virgin Galactic and the New Mexico Trial Lawyers Association.

A bill reflecting the agreement was expected to be introduced as early as today, and the Democratic lawmakers suggested it would have bipartisan support.

Republican leaders, however, didn’t attend the hastily called news conference.

Liability problems have been called a threat to the state’s $209 million investment in Spaceport America. (Associated Press)

“We haven’t seen the details of any deal yet,” said House Republican Whip Nate Gentry of Albuquerque. “We’re hopeful that, whatever it is, is something that will allow the spaceport to be successful.”

Republican Gov. Susana Martinez’s office was noncommittal. Her spokesman said she met with Virgin Galactic officials on Tuesday “and is hopeful that the final legislation that passes will lead to the company’s commitment to stay in New Mexico, and that it will lead to making New Mexico capable of attracting other space industry business.”

School Choice Week In Albuquerque New Mexico

The Rio Grande Foundation is a co-sponsor of a national event by National School Choice Week occurring in Albuquerque, NM:

w_s_flyer

 

 

We’ll close off this week’s Publius Digest with an interview of Paul Gessing, the President of the Rio Grande Foundation, discussing School Choice Week in New Mexico:

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Categories: Constitutional Rights, Illegal Immigration, National Politics, NM Politics Tags: , , , , , ,
20
Jan 2013

The Return of PubliusNM. Issues To Look Out For In New Mexico’s 2013 Legislative Season

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PubliusNM is back into operation! And to start off the new year, we give you a list of the most anticipated issues to look out for in the 2013 NM legislative session.

http://www.santafenewmexican.com/localnews/Legislature-set-to-adjourn-30-day-session

http://www.santafenewmexican.com/localnews/Legislature-set-to-adjourn-30-day-session

budget-clip-artBudget

Both the Governor and the Legislative Finance Committee have released their budget proposals for the 2013-2014 fiscal year. Surprisingly, both propose a 4.1 percent increase in spending. This may be due to apprehension caused by the uncertainty of what will happen in Congress, considering how dependent New Mexico’s economy is on her allowance from uncle Sam.

However, there are specific areas in the two proposals where certain spending allocations differ.

Major areas of contention to watch out for:

1% Pay Raise (across the board)

While the LFC plan calls for $32.2 million to be spent in order for all state employees and teachers to receive a 1 percent salary increase, Martinez said she does not believe the time is right for such a measure. “I don’t think when we are losing government jobs, 400 alone in the month of November, is a time for us to start giving pay increases,” Martinez said.

Corporate tax rate cut from 7.4% to 4.9%

Meanwhile, Martinez’s budget proposal would leave nearly $50 million available for tax breaks designed to make the state more economically competitive with its neighbors.
That includes a proposal to lower the state’s corporate income tax rate from 7.4 percent to 4.9 percent. That tax cut would likely be phased in over several years, Finance and Administration Secretary Tom Clifford said Thursday.

Education

http://www.publicagenda.org/files/images/education_front.jpg

http://www.publicagenda.org/files/images/education_front.jpg

Education will definitely be an issue in this year’s roundtable session as the lawmakers spar over:

Social promotion (whether or not failing 3rd graders should advance forward)

Nearly half of New Mexico’s third graders cannot read to grade level, according to a 2011 state-standardized test.

And if you listened to the rhetoric in the debate over what to do with those students, you might think the choice is simple: hold them back or pass them on to fourth grade without any consequences.

Should advancement in grade school become those “thanks for trying” medals we all got on field day and science fairs?

Funds for remediation/intervention for students struggling to read K thru 3rd grade

The administration has proposed $13.5 million to pay for remediation and intervention for students struggling to read in kindergarten through third grade, said Enrique Knell, the governor’s spokesman. Additional dollars also are being proposed to help students in early grades, Behrens said.

Funds to reward high-performance teachers

Martinez proposed $11.3 million in funds “to recruit, retain, and reward our best educators.”
“Reform in education should have no political party label. It’s not about party or politics,” Martinez said. “It’s about having the courage to challenge the status quo, to put student achievement and nothing else at the very top of our list of concerns.”
High performing teachers would need to be evaluated using standardized testing. This is something that Sanchez does not agree with.
“We can’t recruit teachers if we continue to insist they spend more time testing than teaching and blame them for all of our problems,” Sanchez, whose wife is a school teacher, said in his State of the State response.

Student achievement is the key phrase here. While legislators discuss whether or not 3rd graders who cannot read should advance to 4th grade, they essentially squabble over whether our children should be expected to achieve. Our best educators should be rewarded for EDUCATING and our best students should be rewarded for learning. The idea of merit based pay is a good one and worth exploring while we iron out details of how to measure the results we’re rewarding.

Driver’s Licenses for Illegals

This continual controversial issue will remain so throughout this legislative session. Will they actually reach an agreement? Don’t hold your breath.

Gov. Susana Martinez has been pushing to repeal the law since taking office, but so far, she hasn’t been able to get Democrats behind her.
Martinez said it’s a public safety issue. Authorities arrested seven illegal immigrants last week who were allegedly trying to fraudulently obtain licenses.
But Hispanic groups said repealing the law isn’t the right move.
“But to give a driver’s license to somebody we know here is illegally in the country, that is where New Mexicans have said no and asked me to fight for it over and over and not give up,” Martinez said.
“We shouldn’t be looking at stepping backward because it’s going to be a seesaw battle forever. Let’s find the right solution, and then end it there,” Lulac resident Ralph Arellanes said.??Arellanes said state lawmakers need to compromise. He wants the state to strengthen the requirements to get licenses, and then require drivers to renew them every year.

Read the rest of this article here.

Minimum Wage

http://flaglerlive.com/wp-content/uploads/minimum-wage-cartoon.jpg

http://flaglerlive.com/wp-content/uploads/minimum-wage-cartoon.jpg

Santa Fe’s minimum wage is increasing this year by 22 cents, from $10.29 an hour to $10.51–surpassed only by San Francisco nationally–due to its wage mandate tied to an annual CPI for the western United States. Similarly, Albuquerque voters has tied their wage mandate to inflation as well with the passing of a resolution increasing their minimum wage to $8.50 an hour.

With Albuquerque passing such a measure, we could very well see the Democrats this session push for a statewide minimum wage increase to $8.50 an hour (it currently sits at $7.50).

Mayor Coss may be relishing in his “triumph” over poverty and the lowest unemployment rate in the state, but the city’s 16-24 year olds unemployment rate (the group most affected by wage mandates) is already hovering about 22%.

Gun Control

http://libertyfeatures.com/wp-content/uploads/2013/01/Cartoon-Gun-Control-for-Dummies-990-600x467.jpg

http://libertyfeatures.com/wp-content/uploads/2013/01/Cartoon-Gun-Control-for-Dummies-990-600×467.jpg

In the aftermath of the most recent mass shooting, there has been a wave of gun control and anti-gun control fervor sweeping across the nation. New Mexico is no different in this regard. This session will see both legislation calling for more gun control and legislation counteracting federal gun control measures:

 

 

Gun control bill - HB77 :

Rep. Miguel P. Garcia, D-Albuquerque, introduced legislation to close the “gun show loophole” by requiring mandatory background checks for firearms purchased at gun shows or from a private vendor.

Gun rights bill - HB 114 :

Republican legislator Nora Espinoza introduced the bill yesterday, which has been co-sponsored by ten other New Mexico legislators. If passed, the law would make it a third degree felony for federal or state agents to restrict, register or seize firearms under color of federal law. The protections of the bill would apply assault weapons and high capacity magazines, which the White House seeks to ban, as well as semi-automatic handguns. The bill would also require the New Mexico Attorney General to defend any state resident charged by the federal government with violation of federal gun laws.

Many other state legislatures are finding similar bills being proposed. You can read more about the HB 114 here.

There are many recurring issues this legislative session, and there are many new players we have to watch out for. Between drivers licenses for illegals and gun bans vs bans on gun bans, we’re going to be busy here at PubliusNM. We’re happy to be back and look forward to watching the drama unfold (much like a bad reality tv show). Hold onto to your wallets and liberties, folks, they’re up for auction while the legislature is in session.

http://www.cartoonstock.com/newscartoons/cartoonists/efi/lowres/efin2883l.jpg

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Categories: 2013 Legislative Session, Budget, NM Media, NM Politics Tags: , , , , , , ,
30
Nov 2012

PubliusNM on Hiatus

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Contributors to PubliusNM are currently overwhelmed in other areas of life, generally due to the ever increasing leviathan of our federal, state, and local governments, which requires increased vigilance and work. Plus many of us have families.

We hope you have enjoyed our posts over the past couple of years and also hope to pick this blog back up at some point in the future.

If there are any would-be PubliusNM contributors who are interested in being considered for the blog, please contact us at: publiusnm-at-gmail-dot-com.

In the meantime, we can recommend the following sources for local and national updates — some of these we agree with, and some we just see as providing timely information that is good fodder for discussion.

New Mexico Sources:

National Sources:

In bidding adieu, we leave you with this video containing clips and commentary from Atlas Shrugged, Part II (click here to view in YouTube):

If you have not seen the movie, try to go today (click here to find theaters nationwide).

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