Since March of 2020 (the start of COVID 19) the Rio Grande Foundation has been located in downtown Albuquerque.
While Albuquerque has never had the greatest downtown, there is no doubt that the area has been hammered by COVID 19, the riots over the summer of 2020, and Mayor Tim Keller’s lax policies towards crime and homelessness. He just announced that he will be running for reelection this fall.
The Rio Grande Foundation recently took a drive around downtown and up Central Ave./Route 66 with a mounted camera to see what the City looks like. Watch the video for yourself below.
Rio Grande Foundation president Paul Gessing recently sat down with KRWG’s Fred Martino. We discuss the Spaceport and ongoing issues there and then move on to talking about the 2018 Legislature and why voters should be so skeptical of government infrastructure projects.
Albuquerque City Councilor Isaac Benton’s proposal to create a 2 cents-per-gallon gas tax will be voted on by the full council on June 5. If enacted, the tax would be a net negative for the city of Albuquerque. Aside from adding to an already-high local tax burden and disproportionately affecting low-income families, Benton’s tax would not do much to improve the city’s roads and have negative effects on its economy.
The proposed tax adds 2 cents per gallon onto the combined state and federal 35.4-cent tax. This is the same gas tax that has been in the crosshairs of legislative Democrats for further hikes as recently as this special session. Albuquerque residents already face the highest tax burden in the state as a percentage of income. A new gas tax will affect a large number of low-income families.
According to the Brookings Institution, 80 percent of households with annual incomes of under $50,000 drive cars, and a third of them own multiple vehicles. These vehicles are often older and less efficient. The well-off can easily afford a 2-cent tax due to their additional wealth and ability to buy new, efficient cars, but the disadvantaged must pay the same tax while earning less and filling their tanks more. While 2 cents sounds like a small burden, for workers whose main focus is putting food on the table for their families, every little bit counts.
A gas tax would also have negative effects on Albuquerque’s economy. The Brookings Institute notes that such taxes drain the economy of purchasing power due to their effects on low- and moderate-income families. Put simply, lower-income families generally spend most of their income, meaning that a spending increase in one area, like gas, means that spending decreases accordingly in other areas. Decreased spending harms the economy, especially one which is still recovering from a major downturn. Thus, families are hit with a double effect: first, they must pay more for gas and lose out on spending elsewhere, and then they must deal with the effects of a slow economy.
As the ordinance is written, the tax would be used to “rehabilitate transportation systems.” This could mean directly supporting or allowing existing dollars to be diverted to the controversial Albuquerque Rapid Transit program and the city bus system. Any gas tax paid by motorists should at least be dedicated to improving and expanding Albuquerque’s roads.
Additionally, as Benton himself said recently, much of the revenue will be allocated to “outdated” roadways that are functional but for some reason or another are not compliant with the federal Americans With Disabilities Act. As well-intentioned as this may be, average Albuquerque residents and motorists want roads that get them from A to B with fewer potholes. As time passes, roads are being upgraded to comply with ADA. Adding a new tax onto the backs of local motorists now in order to comply with a law passed back in 1990 is ridiculous.
Even if the proceeds were dedicated specifically to roads, it is worth questioning what the city will receive in terms of “bang for the buck.” That’s because a significant portion of the money generated by the tax will be spent on the creation of a collection and auditing apparatus. Some of the revenue created would have to be spent on additional bureaucracy to collect, audit and set up an appeals process relating to the new tax.
Gas taxes aside, local taxpayers are facing increased tax burdens. Between Bernalillo County and the city of Albuquerque, gross receipts taxes applied to most purchases will have risen an astonishing 29 percent since 2000 once the latest round of tax hikes kicks in this July. We are reminded every day, whether from news reports or by just driving down the street, that our city has not recovered from the economic crisis of 2008. Raising taxes yet again is not likely to improve the local economy.
The Rio Grande Foundation, New Mexico’s only free market think tank, launched the #NoABQGaxTax education campaign today to inform Albuquerque residents about City Councilor Isaac Benton’s plan to impose a new tax on local motorists – a 2-cent per gallon gas tax.
The online campaign, centered around www.NoABQGasTax.com, will highlight the regressive nature of Benton’s proposed tax increase while alerting Albuquerque residents to the fact that the tax would not be dedicated to road construction or new river crossings, but to “rehabilitate transportation systems,” such as the despised Albuquerque Rapid Transit system.
The tax hike will be voted on by City Council on Monday, June 5, 2017.
“The tax hikes are coming fast and furious these days even though voters in liberal Santa Fe sent a clear message when they rejected Mayor Gonzales’ soda tax,” Rio Grande Foundation President Paul Gessing said. “New Mexicans don’t have an appetite for higher taxes. The Albuquerque City Council should follow Santa Fe’s lead and reject Councilor Benton’s tax increase.”
Benton’s is a new city tax that will be added on top of the 35.4 cents per gallon motorists already pay in taxes. Of course, earlier this year the Legislature passed a separate 10 cent per gallon increase that may be pushed once again in the upcoming special session. If these If these taxes pass, it will cost $7 in taxes alone to fill up a tank of gas.
Additional #NoABQGasTax Facts:
Residents of Albuquerque already face the heaviest tax burdens as a percentage of income of any city in New Mexico, even Santa Fe.
A report from the Brookings Institution stated high prices at the pump “do affect both consumers and the economy adversely, and they are especially harmful to lower- and moderate-income households.”
Tax collection requires auditing and a collection policy, as well as an administrative appeals process. In other words, administration and compliance costs will eat up a significant portion of the revenue generated.
This tax will not be dedicated to road construction or needed river crossings, but to “rehabilitate transportation systems.”
If this tax is adopted by City Council, it will appear on an already-crowded fall municipal election ballot in October.
For nearly two years, skeptics, critics and opponents have assembled an impressive arsenal of arguments against Albuquerque Rapid Transit, the proposed dedicated busway along Central Avenue.
The mayor, seven of nine city councilors and the city’s transportation bureaucrats don’t care.
Adamantly committed to the project, and unpersuaded by intense public opposition and a plethora of policy-grounded objections, ART’s overseers have forged ahead. They’ve dedicated municipal-bond revenue to the busway. They’ve asked for, and secured, White House approval for $69 million in federal subsidies. And they had planned to begin construction in May.
But last month, two significant obstacles to ART emerged. One lawsuit, filed in state court, lists a number of small businesses and residents as plaintiffs. Another, filed in federal court, is backed by the “Coalition of Concerned Citizens to Make ART Smart,” an “unincorporated association,” as well as Jean and Marc Bernstein, the owners of the Flying Star restaurants.
The state complaint filed last month said Route 66 is “one of the most historic and well-known iconic roads in the U.S.,” and ART will impact “over 150 places on the National Historic Register.” The National Historic Preservation Act “requires that any federally funded undertaking” consider the impact on “any site, building, structure or object that is included in or eligible for inclusion in the National Register of Historic Places,” the suit said. But the analysis of ART’s threat to history was perfunctory, the suit alleged. Plaintiffs requested “a full review of Historic Landmarks and the impact of the project there-on rather than the illegal cursory indication that no significant impacts would occur with regard to Historic Properties.” In addition, the complaint charged that ART would “constitute a complete nuisance and interference with the rights of the existing businesses to continue to contract with their customers and to function.”
The state complaint is strong. Its federal counterpart is stronger. The federal lawsuit charges that the city misrepresented the facts when it asked the Federal Transit Administration for an exemption to the requirement that ART account for its environmental footprint. Central Avenue isn’t known for rich wildlife, but the issue isn’t biology — traffic congestion, traffic patterns, economic vitality and the like, in an urban area must be assessed. Yet Washington approved the city’s request for an exclusion.
It gets worse. In its request to relax environmental scrutiny, according to the federal suit, the city answered “no” to the question: “Is the project likely to generate intense public discussion, concern or controversy, even though it may be limited to a relatively small subset of the community?” Whoa. Last summer, when the city applied for its exemption, the city was well aware of mounting citizen and business opposition. (And since then, resistance has only intensified.)
The federal complaint tacks on a number of other counts, including (like the state case) violation of the National Historic Preservation Act; violation of the state-level Prehistoric and Historic Sites Preservation Act; and nonconformity with the city’s “Complete Streets Ordinance,” which mandates that “the need to move vehicles efficiently” must be balanced with “placemaking, pedestrian-friendliness, historic preservation and economic development,” according to the suit.
We’ve long known that ART is wrong for Albuquerque. The corridor doesn’t have anywhere near the population density to support bus rapid transit. The project would severely reduce mobility by creating more traffic congestion, and is all but certain to put many Central Avenue restaurants and shops out of business. And Washington is nearly insolvent, with no surplus funds to spend on a dubious transit project in a city suffering from a high crime rate and subpar job growth.
Thanks to the state and federal lawsuits, we now know that ART has an even darker side. The city’s proposed busway likely violated federal law, a state statute and a local ordinance. Albuquerque’s residents and businesses should not have had to resort to the courts to block a proposal that’s sure to prove disastrous to both transportation and economic development in their struggling city. But let’s hope that the legal actions, however costly and time-consuming, help put a permanent end to Albuquerque’s budding bus boondoggle.
D. Dowd Muska is research director of New Mexico’s Rio Grande Foundation, an independent, nonpartisan, tax-exempt research and educational organization.
(Albuquerque) The proposed bus rapid transit (BRT) line is a solution in search of a problem, and our bankrupt federal government should steer clear of providing 80 percent of the infrastructure costs for this unnecessary project. That’s the conclusion of a new Rio Grande Foundation report, “Throwing Taxpayers under the Bus,” which analyzes the case for bus rapid transit along Central Avenue in New Mexico’s largest city.
“Throwing Taxpayers under the Bus,” authored by Rio Grande Foundation Research Director Dowd Muska, argues that the current Rapid Ride bus system along Central has been quite successful in generating ridership. Muska wonders what benefits, in terms of mobility, the new system will provide that the current system does not.
In fact, as Muska argues, in addition to the temporary construction which would tie up traffic throughout the Central corridor, the BRT would limit motorists’ left turns onto Central while removing two traffic lanes to make way for buses. The loss of traffic lanes would result in the elimination of parking along some of Central’s busiest corridors.
The cost estimate being put forth by the city today is likely to rise once construction gets underway, argues Muska. “Throwing Taxpayers under the Bus” cites Willie Brown, a former California politician, who once said, “In the world of civic projects, the first budget is really just a down payment. If people knew the real cost from the start, nothing would ever be approved. The idea is to get going. Start digging a hole and make it so big, there’s no alternative to coming up with the money to fill it in.”
Ultimately, as Muska notes, BRT advocates are less concerned about mobility within the Central Corridor than they are about “redevelopment” in the area. Advocates claim that so-called “Millennials” are avoiding Albuquerque in search of more densely packed urban areas.
This claim simply doesn’t hold water. As Muska points out, sprawling Western cities such as Oklahoma City, Phoenix, and Dallas are growing rapidly and attracting young people. Albuquerque’s poor job growth is the likeliest reason for the city’s ongoing struggles to draw and keep Millennials.
With Washington trillions of dollars in debt, “Throwing Taxpayers under the Bus” concludes that an Albuquerque transit project in need of a purpose is unworthy of federal taxpayer dollars.
Randal O’Toole spoke earlier this week on the issue of Albuquerque’s transportation future. In particular he focused on the City’s proposed bus rapid transit system, the Rail Runner, and the future of transportation. The entire presentation is below (slides here). Below that are some of the most important slides from O’Toole’s presentation. If you want to get active against bus rapid transit, there is a grassroots activism organization called “Save Route 66.”
The proposed bus rapid transit system will increase congestion in the Central corridor, just ask the consultants tasked by the City with looking at the proposal:
Portland, OR, is often touted as a “model” for mass transit, but after spending billions of dollars, transit carries fewer passengers than it did in 1980:
Transit is a trivial portion of the transportation mix in Albuquerque:
Transit appeals to those who make almost nothing and those who have very high incomes and can choose to locate next to it. For working/middle class Americans, transit is far less useful:
Albuquerque’s bus system is not especially “green” when it comes to energy use. It’s hard to believe a new bus system will be a dramatic improvement:
Recently, Paul Gessing sat down with Dan Mayfield of the Morning Brew to discuss several issues the Foundation is working on. Specifically, we talked about an event the Foundation put on relating to civil asset forfeiture. And, while that event has come and gone, several of the issues discussed remain relevant and topical in advance of the 2016 legislative session.
Robert P. Robeda of Keep Albuquerque Moving argued recently on these pages that extending the quarter-cent transportation tax this November is a “must” for the city. In his article, he rebuts a series of arguments supposedly put forth by opponents of the tax.
While it would be hard to quibble with the fact that increased spending on transportation has not improved mobility in Albuquerque, Mr. Robeda does not mention any tradeoffs associated with voter approval of the tax extension or potential issues with the tax that voters might want to consider first.
There are indeed tradeoffs. First and foremost, Robeda makes the simplistic argument that “the quarter-cent Transportation Program costs 25 cents on every $100 dollar purchase.” This would be the case if Albuquerque and the state of New Mexico charged a simple sales tax rate, but our gross receipts tax is not at all like a sales tax.
Unlike Texas’ sales tax, for example, New Mexico’s gross receipts tax covers everything (including services). And unlike nearly all other states, New Mexico also taxes business-to-business transactions. The overall effect is somewhat hidden because taxes are charged on top of taxes in a process called “tax pyramiding.” The fact is that a quarter-cent tax is more than just a tax hike of 25 cents on a $100 purchase.
Regardless of the aforementioned point, it is estimated that the quarter-cent tax will increase local tax collections by $35 million annually. Unlike the previously-passed 1/4 cent tax, if approved by voters, this tax would be permanent. Voters should wonder why they are not being asked for just another 10-year extension since the previous tax supposedly worked so well. Making this tax permanent takes taxpayers out of the picture, a convenient solution for politicians but a foolish move for taxpayers.
Another issue with this particular tax hike is that it over-invests in transit and bike trails at the expense of roads and road maintenance. A total of 41 percent of the money collected under this tax will be allocated to transit or bikes. Though the vast majority of people do not and will never get around town on buses and bikes, the funding structure contained in the ballot measure language will enshrine these lopsided percentages into law permanently, thus leading to relative over-investment in those modes.
Regardless of exactly how these additional resources are allocated, it should be noted that local taxpayers are already paying higher taxes to fund a variety of transit projects. As of this past July, the gross receipts tax rate rose 1/8 cent to pay for the Rail Runner and a variety of bus services that feed passengers to it. Additional spending on any good or service — no matter how important it may be — inevitably results in diminishing returns. The Rail Runner, with its increasing operating deficits, may be at that point already.
When voters head to the polls over the next few weeks, they must ask themselves not just whether they want to see transportation improved. We all want more and better in a world of limited resources. Instead, voters should ask themselves whether additional transportation spending is the single best use of $35 million annually. Or, might we be better off leaving $35 million in the hands of taxpayers and small businesspeople who are dealing with one of the worst economic downturns in modern history?
Even if our transportation network suffers, as Mr. Robeda says it will, without the $35 million, the nice thing about a democracy is that voters and their elected officials can always come back at a later date. But if we make the transit tax increase permanent, we will be forever stuck with a bad decision.
Paul Gessing is president of the Rio Grande Foundation, an independent, non-partisan, tax-exempt research and educational organization dedicated to promoting prosperity for New Mexico based on principles of limited government, economic freedom and individual responsibility.