I appeared on Channel 7 News last night on the 10pm broadcast to discuss reasons why voters should oppose the 1/8th cent tax hike to fund a portion of the Rail Runner’s operation costs and some new bus service. An article on the tax hike is available here. Not sure when/if video will be posted on their site. I believe that the vote will be quite close.Taxes in New Mexico
Still wondering what to think of the myriad ballot measures on the ballot this Election Day? Check out this article which discusses the measure and the concept of raising taxes in the current economic downturn. The article appeared in both the New Mexico Free Press and the Roswell Daily Record.Taxes in New Mexico
Regardless of what happens on Election Day, New Mexico is facing a tougher economic climate than it has faced in quite some time. We will be front and center with solutions to reduce the budget and ensure that economically-devastating tax hikes are not foisted on already reeling New Mexico taxpayers.
To this end, we have been critical of the state’s giveaways to the film industry. More articles and analysis are available on our website and blog. Recently, I found an analysis from the Arrowhead Center which is the economic research arm of New Mexico State University. Unlike so many other economic “analyses” done in this state, the Arrowhead Center takes a clear and unbiased look at the New Mexico film industry.
Some of its findings are not pretty and, not surprisingly went unreported in the media. Regarding the state’s 25% film production rebate (filmmakers receive 25% of their taxable expenses back as a rebate from taxpayers), meaning if you take your film crew out to dinner after a shoot and spend $1,000, New Mexico taxpayers pick up 25% of the tab. According to the study:
During fiscal year 2008 the NM government granted $38.195 million in rebates. The resulting increase in economic activity generated $5.518 million in revenues. The implied return is 14.44 cents on the dollar. This means that for every one dollar in rebate, the state only received 14.44 cents in return.
14 cents on the dollar? Even if you are not good at math, it is clear that the film industry tax credit is nowhere close to paying. Rather than wasting money on film subsidies, we should have been cutting taxes on all New Mexicans. With a fiscal crisis in the making, the least the Legislature can do is cut this program back significantly.Economics in Focus
The story of an 83 year old California woman Ageda Camargo is unbelievable and truly scary for anyone who cares about property rights. She is from La Quinta, CA and has owned her house for years, before La Quinta was even a city. When she bought her house, it had a third bedroom that was originally a garage. Now they are threatening to put her in jail if she doesn’t change the room back to a garage.
Of course, the city is not offering to refund Camargo the additional taxes she’s paid all these years for the additional living space. Thankfully, I haven’t heard any stories like this from New Mexico, but one never knows what government bureaucrats will do next.
Yesterday I blogged about the “study” that was recently released in order to help justify the construction of an arena/events center in downtown Albuquerque. In my posting, I noted that the information in the “study” was not objective, but was designed instead to justify its construction.
Of course, while our arena faces its own unique issues, other cities have also fallen prey to arena/events center boondoggles sold by the convention and tourism industry. Check out this very interesting story from the New York Times about the failed Pyramid in Memphis.
Among the interesting factoids regarding the arena is the price tag of “only” $68 million ($109 million in today’s money according to the Bureau of Labor Statistics). This is obviously far less than the $400 million number being tossed around for the Albuquerque equivalent.
Also interesting is the divergence of opinion between regular people and those who are paid to promote these kinds of projects. Check out the quotes below:
“It’s quite a striking feature on the skyline,” says Ed Frank, the president of the West Tennessee Historical Society. “But as a citizen and as a taxpayer, it was a waste of money to build the Pyramid on low ground there. I have gone to events there, and I can say I’m not that impressed by the feeling inside.”
But Kevin Kane, the president of the Memphis Convention and Visitors Bureau, says the charm of the Pyramid depends on where you stand. Yes, it is a monument to failed dreams. But it also helped to energize downtown Memphis, he says. “From my view, the Pyramid more than paid for itself many times over.”
In what has to be considered the least surprising news story of the day, one of the myriad studies from consultants hired to sell er…study the downtown arena has been released. The study, done by a firm called Conventions, Sports, and Leisure, found that the market characteristics for the proposed $400 million arena are “very favorable.” I did some googling on this firm and (not surprisingly) found that they are a rubber stamp or cheerleader for taxpayer-financed development.
By no means are they an objective source of information. Check out this report on the proposed Durango convention center. Among other red herrings and factual mis-steps the document states that “the overall convention and trade show industry reflects stability and annual growth.” This is simply not accurate. As this study from the Brookings Institute points out “The overall convention marketplace is declining in a manner that suggests that a recovery or turnaround is unlikely to yield much increased business for any given community, contrary to repeated industry projections.” Conventions, Sports, and Leisure is papering over this inconvenient truth.
The Albuquerque study, the executive summary of which can be found here has its share of red herrings as well. My favorite is that the proposed event center’s location near the Rail Runner station would help make it a success. Downtown Albuquerque is such a night spot that according to the schedule available on the Rail Runner website there are no evening Rail Runner trains currently in operation. In fact, the last trains leave at 6:30pm.
Since most sporting events don’t start until 7pm or 7:30, this will have to change. One way or the other, taxpayers will be footing the bill both for the events center and for the Rail Runner to run late into the night. Of course, since the trains only run at one-hour intervals, if you miss your train, you’ll have plenty of time to hang out. The whole thing is a boondoggle on top of another boondoggle!
I presented on an issue I normally don’t get to talk about at the New Mexico Restaurant Association‘s legislative panel today. Federal “card check” legislation will be a top priority of the next Congress, particularly if Obama is elected President. The following are my brief comments:
Passage of the “Employee Free Choice Act” is one of the Democrats’ top priorities in 2009. The legislation which is also known as “card check” was introduced in both the House and Senate as HR 800 and S. 1041.
So, what is “card check” and why is it important to the business community, especially restaurants? Today, employees are entitled to a private-ballot election when deciding whether they want union representation in their workplace. These elections are overseen by the National Labor Relations Board, which has numerous procedures in place to ensure fair, fraud-free elections.
1) If adopted by Congress and signed by the President, the “Employee Free Choice Act” would allow unions to abolish secret ballot organizing elections for unionization votes. Rather than giving employees the ability to make a private decision in a secret ballot (as is currently done) as to whether or not to unionize, a union would be certified if organizers could convince a majority of workers to sign union cards.
Unlike the current secret ballot system, the cards would be signed in public, often under the watchful eye of party bosses and others who might threaten and attempt to coerce people who would otherwise wish to contract privately with their employer. Abolishing the secret ballot exposes workers to the kind of intimidation high-pressure tactics which secret ballots are designed to avoid.
As bad as some of the controversies we are seeing in the election over allegations of fraudulent voter registration and voter intimidation, we can at least take comfort as voters in the fact that the particulars of how we vote is not public information that can be used against us. Union bosses wouldn’t like it very much if employers got to stand over their employees’ shoulders and watch how they voted, I don’t see why union organizers should be able to do that when they are organizing a union.
2) A second component of the “Employee Free Choice Act” is binding arbitration. This aspect of the law would require the federal government to appoint a mediator and impose a contract if management and labor cannot come to an agreement. It would allow either party (usually the union) to delay coming to an agreement in the hope of getting more in binding arbitration than they would get in bargaining.
Obviously, if one party in a negotiation has no desire to come to an agreement on a particular issue, this further tilts the likely outcome of the negotiation to the benefit of the unions.
3) Lastly, the legislation as it is now written would increase penalties for employers, but not for unions or others, who violate union organizing laws.
The Employee Free Choice Act passed the House 241 – 185 in March or 2007, but did not make it to the Senate floor for an up or down vote this Congress.
As far as New Mexico’s delegation is concerned, Wilson and Pearce voted against it and Udall voted for it. The New Mexico House of Representatives passed a memorial in support of the federal “Employee Free Choice Act” on February 4, 2008. I have passed out a roll call vote listing from the Foundation’s new legislative tracking site www.newmexicovotes.org. As an aside, I’d urge all of you who have business in Santa Fe to take advantage of this free and easy to use site. It is much more user-friendly than the Legislature’s site.
So, why are the unions pushing this issue right now? First and foremost, unions have shrunk dramatically relative to the overall workplace over the years. In 1973, private sector unions could count 25 percent of the work force as members. That number is down to about 7.8 percent of the work force currently. Public sector labor unions have not experienced the same decline with membership remaining consistently between 35 and 40 percent of the work force over the same time period.
The fact is that private sector unions are desperate for members and they want to use this fall’s Democratic electoral landslide to increase membership. Many elected officials and Democratic Party activists are enthusiastic about this legislation because strong union support could cement electoral gains for years to come.
Regardless of the political implications associated with this legislation, it is hard to believe that a party that calls itself “Democratic” would undermine a core tenet of the Democratic process, the secret ballot.
If you as a business owner are concerned about this issue, it seems doubtful that the House of Representatives will move to the right after this election. Nonetheless, with three new House members in New Mexico, it is probably still worth talking to them. The real action, of course, will be in the US Senate. Also, while New Mexico’s House of Representatives is on record as supporting the federal legislation, the Senate may not be as enthusiastic about passage of a Memorial.
Certainly, it would not hurt to explain what this legislation could mean to your employees. You can’t be afraid to approach your employees with information. After all, a recent Zogby poll found that union members themselves believed, by an 84 percent to 11 percent margin, that employees should be able to vote on union membership. You will likely receive a receptive audience if you provide non-biased information in a non-threatening manner about the potential negative impacts of this legislation and get your employees involved.
While it might seem that Congress will be more than happy to pass Card Check legislation, it will be easier to preserve the secret ballot in Congress than it will be to head off anti-democratic card-check unionization drives at your work site.
Barack Obama has clearly expressed his desire to redistribute wealth in American society. Unfortunately, while such sentiments may sound nice to the average voter, there are a number of major political and moral problems with such redistributionist policies. Who is to be in control of redistribution efforts and what right do they have to simply take from one group of individuals and give to another? How much redistribution is enough? After all, as this link shows, the wealthy already pay far more in federal taxes than the rest of us. Where does it stop?
Here is one blogger’s humorous take on wealth redistribution and how it works when boiled down to the personal level. Stealing from the “rich” and giving to the “poor” sounds great in concept until your wealth is being taken away.
Check out the video from Sunday’s episode of Eye on New Mexico in which I debate the merits of raising the Gross Receipts Tax in Bernalillo, Sandoval, and Valencia Counties to fund the Rail Runner and some other transit projects.
Speaking of the Rail Runner and other tax hikes on the ballot this fall, why is it that governments are clearly spending your taxpayer dollars to fund public campaigns to convince voters to raise their taxes.
Check out the Rail Runner’s campaign site. You’ve probably already seen their tv ads. It seems that all of the measures on the ballot this fall have their own government-financed campaigns behind them. It would seem that all voters should get behind some kind of effort to prohibit the spending of taxpayer money to ask for more taxpayer money…