Proving that low taxes and less government works
Economics, unlike physics or chemistry, is not a “hard” science. In other words, the results are open to a great deal of interpretation. This is largely because economics deals with humans, the long-term actions of which are difficult to re-create in controlled experiments.
Economist Scott Moody who has done a great deal of work for the Rio Grande Foundation on government pensions and other issues, but some research he’s done comparing the economic histories of Maine and New Hampshire shows the power of leaving money in the pockets of ordinary citizens instead of government bureaucrats. New Hampshire lacks both a personal income tax and a sales tax while Maine has adopted both over the years.
These policies have led to higher incomes, greater migration, and fewer job losses during the recession for New Hampshire. I’d love for New Mexico to attempt to compete with Texas by eliminating the personal income tax. That alone would be a boon to the state.
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Diploma’s Count Recounts New Mexico’s REAL Education Record
For a sobering, objective look at New Mexico’s real graduation rate and state efforts to mask it, check out the amazing “Diploma’s Count” study for 2010. For example, did you know that APS is one of 25 “dropout epicenters” in the United States?
It is a big district, but not in the top 25 nationally.
“Balanced Approach” = Tax Hikes
I love our friends over at Voices for Children. They have truly never met a tax or spending program that they don’t like and their latest opinion piece in the Albuquerque Journal, they stay true to form.
The author, Fred Harris (apparently a very left-wing former professor at UNM) writes that a “balanced” approach to New Mexico’s budget involves all manner of tax hikes, but not a single area in which spending could be reduced. In the “Voices” world, government is the highest moral use of all of society’s resources. We individuals should just forget about holding onto any of our money, even if government programs like the Rail Runner, film subsidies, and Spaceport fleece average taxpayers for the benefit of wealthy, well-connected people.
There is a lot the left and right can agree on (like questioning the merits of various tax incentives), but if the solution is always more taxes and more spending, there is no common ground and we’ll fight them every step of the way.
Diane Denish’s bogus graduation “improvement”
During the recent gubernatorial debate, Diane Denish asserted that New Mexico’s graduation rates have improved by 6 percentage points from 2008 to 2009. The problem is that New Mexico doesn’t seem to know what the real statewide graduation rate is. You may remember back in 2009 when the state published the fact that 54% of New Mexico kids were graduating. After a public outcry, that number was quickly revised to 60%.
What is the real rate? Well, we have cited the national “Diplomas Count” study which in 2008 found that New Mexico kids were graduating at 54.1%. So, what does the 2010 version of this study have to say? According to the most recent “Diplomas Count,” New Mexico’s graduation rate is now 54.9%, a less than one-percent improvement (unfortunately, it now costs $4.95 to download New Mexico’s brief). Not exactly a stunning turnaround.
Certainly, the Richardson-Denish Administration has failed to turn around our schools during their 8 years. Isn’t it time we tried real school choice and Florida-style accountability?
Charter Schools a Valuable Option
There has been a lot of criticism recently about charter schools in New Mexico. This report from the Legislative Finance Committee, in particular, was a shot across the bow for the entire movement. While charter schools are not the “only” reform option (as discussed in this opinion piece), I do agree with new Rio Grande Foundation board member Doug Turner that charter schools are a valuable option for parents and students and that we should not “throw the baby out with the bathwater” by simply capping the number of charter schools in New Mexico.
Instead, we need to make sure that charters that are not doing the job are closed and we’ve got to further expand educational choice and tighten standards by enacting reforms like those seen in Florida.
Number crunching on the relative size of New Mexico’s local governments
The Rio Grande Foundation recently published a comparison of government employment in New Mexico cities and counties. While the size of New Mexico’s state and local work forces combine for second-highest in the nation, there is a great variety among cities and counties. Rob Nikolewski of Capitol Report has dug into the numbers with some more analysis here.
Again, we have already done research finding that relative to the private sector, New Mexico’s state and local work forces are the second most bloated in the nation, states do allocate duties differently among state and local governments, so interstate comparisons are difficult.
Two Americas: One Recent Example
I’ve written about the “two Americas” being government employees and the rest of us here and here. Now comes word from our own Rep. Heinrich that he rushed back to Washington recently to vote “yeah” on the latest federal bailout (aka stimulus), this one being $26 billion.
Among the beneficiaries of this new federal debt will be mostly government workers and the such, but one story caught my eye, that is that $2.5 million of the stimulus will be used to “Offset the costs of increased insurance premiums for public school teachers, administrators and teacher’s aides.” What a nice, heart-warming story, right?
But what about my health insurance? My Blue Cross rates are going up by 21% this year, but I’m not a government employee, so no bailout for me! Now, don’t interpret this as wanting a bailout… I just want the government to stop expanding at a breakneck pace and for the Obama Administration to stop greasing the palms of its favored constituencies. If Obama wants a real stimulus, he’d pare back government and give the private sector some breathing room in terms of regulations and freeing up limited financial resources. Until then, the economy will be stuck in neutral.
Yesterday’s Higher Ed Town Hall
Yesterday afternoon, I participated in one of the series of town halls being held around the state on efforts by the Higher Ed Department on developing an education master plan. We at the Rio Grande Foundation have done a good deal of work on higher education and support the concept of a master plan to ensure that limited resources are used efficiently and that institutes of higher ed exist because they are necessary, not as trophies and patronage tools for local politicians.
While I made some of those points during the discussion, there are a few points that need to be addressed about the town hall format:
1) Approximately 1/3rd of the attendees were from the school at which the town hall was held, in this case SIPI. More than that in terms of the crowd of 25 or so were directly involved in the university system and therefore have a direct financial stake in more higher ed spending;
2) These events draw some eccentric and misinformed people. Attendees ranted about the $787 billion federal “stimulus,” the bank bailouts, tax cuts for the “rich,” and New Mexico’s K-12 system.
State Senator Dede Feldman was in attendance and, for a politician, did a remarkable job of not dominating the discussion. Although Feldman is a pretty liberal sort, she did make some good points including advocating tying reimbursements made by the state to higher education departments to graduation rates. This is a sensible, moderate solution.
While Feldman and most in the room avoided the topic of actually closing some components of our bloated higher education system, I think the way to do this is with our own equivalent of the federal government’s Base Realignment and Closure Commission. This would involve a commission studying which schools and branches are least necessary and then giving the Legislature the chance to vote up or down on the recommendations.
Anyway, perhaps the current Higher Ed Department can come up with a solid plan that the next Governor can implement. Coming up with a plan is simple; implementing it is the difficult part.
What About the Bush Tax Cuts?
A lot has been said about the Bush tax cuts and whether to eliminate them, eliminate parts of them while keeping others, or to keep them. I’m a big fan of tax cuts of any kind and would like to see the cuts made permanent, but I doubt that will happen with Obama in the White House.
Left-wingers claim that these tax cuts caused our current financial and economic situation. Conservatives disagree with this, but haven’t proposed any coherent solutions of their own (with the possible exception of Rep. Paul Ryan).
I have a solution to the real problem – that is the exploding size of the federal government. Since liberals seem so intent on wiping away Bush’s legacy, let’s take the size of the federal government back to Bill Clinton’s last year when the federal government spent a mere $1.9 trillion.
Government didn’t seem too small back when Clinton left office, but federal spending has doubled since then to $3.8 trillion! That is our real economic problem and I’d like to see someone argue how that extra $1.9 trillion in federal spending has made us more secure and economically-prosperous than we were 10 years ago.
City/County Government Workers Per Capita
The Rio Grande Foundation has done a great deal of work analyzing the size of New Mexico’s state and local government bureaucracies. As a means of further exploring the situation, I decided to have our summer interns do some research to find out which city and county bureaucracies have the most employees per capita.
Check out the city chart ranked from most employees per capita to least:
The county employment chart can be found below:
