Category: Local Government

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Local Government Open Government Tax and Budget

More Silliness in Santa Fe

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In case you have not been following the latest news in the video game industry, you may not be aware that a proposal cooked up right here in New Mexico has made news in gaming circles nationwide.

The proposal, which was developed by the Rio Grande Chapter of the Sierra Club and is being lobbied for by a coalition called “Leave No Child Inside,” is to levy a new 1 percent tax on TVs, video games and game equipment sold in the state.

Money from the tax an expected $4 million annually, according to proponents will go into a fund administered by the Public Education Department and will be used (unless a future legislature diverts it) to fund outdoor programs and other programs in an effort to fight obesity and poor school performance which may result from “excessive” TV, movie and video game exposure.

The legislation has been introduced in the current 30-day session by Rep. Gail Chasey, D-Bernalillo. Needless to say, because it essentially levies a “sin tax” on gamers and TV watchers, it has drawn the attention of many of the millions of Americans who enjoy these activities.

Unfortunately, with Gov. Bill Richardson’s massive health care proposal taking top priority and sucking up most of the media attention, the average New Mexican remains blissfully ignorant of this latest taxing effort in Santa Fe.

Of course, taxing video games to fund outdoor education sounds great to the average do-gooder. Video games and television are politically correct and they supposedly make us fat. Who could be against taxing such harmful products?

The bigger question is, “Why is the government trying to stop us from watching TV or playing video games?” Isn’t it an individual’s responsibility to exercise? Certainly, governments have increasingly involved themselves in every facet of our lives, from what we eat to whether we smoke, not to mention where we live (remember, suburbs are bad) and what we drive (or if we should take transit instead). But shouldn’t we draw the line somewhere?

Besides, as if in direct response to those who would tax TV and video games “for our own good,” senior citizens around the country are now using video games to stay physically fit. As reported recently in USA Today, Flora Dierbach, 72, who chairs the entertainment committee at a retirement home in Chicago, helped arrange a bowling tournament using the Nintendo Wii.

Said Dierbach, “It’s a very social thing and its good exercise É and you don’t have to throw a 16-pound bowling ball to get results.” She added, “The competition had people who hardly knew each other cheering and hugging in the span of a few hours.” That doesn’t sound like the zoned-out teenage slacker/video game addict to you, does it?

The fact is that no matter who is playing video games and watching TV, the state of New Mexico should not be in the business of using tax policies to mold us into better people. Government should serve us as citizens, not the other way around.

And, while a 1 percent tax, to be levied on top of the already onerous gross receipts tax which is levied at rates approaching 8 percent in some parts of the state, may not make or break anyone’s decision as to whether or not to buy the latest flat screen TV or game system, don’t expect the tax rate to stay at 1 percent for long if this misguided tax is adopted. After all, whether it is outdoor activity or incredibly expensive commuter trains, governments never run out of ways to spend money.

During the current, short, 30-day session, even a group with the sympathetic-sounding name “Leave No Child Inside” will have difficulties getting their new tax enacted into law. But if New Mexicans don’t speak out now, similar proposals will undoubtedly rear their ugly heads in the future.
Gessing is the president of New Mexico’s Rio Grande Foundation, an independent, tax-exempt research and educational organization.

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Local Government Tax and Budget

Albuquerque Should Learn Lesson from Wi-Fi Debacles

Albuquerque Mayor Marty Chavez made a splash recently in the local media when he requested proposals from several companies asking them to find ways to create a free, citywide wireless Internet service. Providing free wireless access may sound like a great idea, but there are some big problems with the proposal.

First and foremost, while costs will not be known until all proposals are in, the experiences of Sandoval County in particular (and governments nationwide) show that wi-fi service could stick taxpayers with a big bill while stunting the growth of internet access in the City rather than moving it forward.

Before moving forward, in fact, city officials should carefully study the debacle unfolding with Sandoval County’s scandal-plagued broadband system. The County was originally supposed to provide fully-functional wi-fi access county-wide at a cost of $9 million. To date, 3 million taxpayer dollars have been spent with no results. Much of this money has been wasted or perhaps even stolen and state auditor Hector Balderas is now looking at situation.

Unfortunately, Sandoval County is by no means alone in its struggles with taxpayer-financed internet access. As Sonia Arrison, Dr. Ronald Rizzuto, and Vince Vasquez, report in their recent report, Wi-Fi Waste: The Disaster of Municipal Communications Networks, published by the Pacific Research Institute, publicly-financed broadband systems invariably cost more and deliver less than promised.

The survey examined 52 government-owned networks that compete in the cable, broadband, and telephone markets. It concludes the government-owned systems are “financial disasters.”

Among the major problems with these systems is that they rely heavily on loans and transfers from established municipal utilities such as electricity and water. Even with the power of the public purse, 77 percent of the time municipal networks can’t pay their way, the report observes.

As government officials rush to show leadership and take credit for delivering the goods, they often trade short-term political benefits for serious, long-term financial problems: cost overruns, mounting debt, and tepid profits, the report observes.

Even with access to subsidies and loans not available to private-sector companies, municipal systems can’t break even, let alone establish positive cash flow, the report notes.

“Adding all the operating years together, our select sample of publicly-financed systems has been in existence for 294 years,” the authors write. “Of these 294 years, these operations have incurred negative free cash flow in 227 years. In other words, 77.2 percent of the time these networks have not paid their way.

Those subsidies also enable the government-aided networks to use their funding advantage to drive out more efficient private-sector competitors. This may not sound like much of a problem in the short term if the city receives is a “state-of-the-art” system at the outset, but unlike roads and sewers, internet technology is evolving constantly and rapidly.

Today’s wi-fi technology may not be enough for tomorrow’s needs. Unfortunately, depending on how the technology evolves, competing with a “free” service may be too much for Qwest and Comcast, thus negatively effecting high-end users.

Rather than throwing more money at a wireless project, Mayor Chavez should let the free market – that is the wireless companies and their customers – decide how widespread and robust wireless service needs to be. Some people are clearly willing to pay for high-speed wi-fi access in their own homes or at their local coffee shop. Why should they make the rest of us pay for a city-wide system?

Paul Gessing is President of the Rio Grande Foundation, a 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.

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Local Government Tax and Budget

Take Time Booting Up Albuquerque Wi-Fi Deal

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The city is evaluating plans from five companies that submitted proposals last week to create a citywide wireless system for Internet and other communications.

The competitive process was kicked off by Mayor Martin Chávez as a way to bring free wireless to town and get more residents than ever before connected to the Internet.

The mayor envisions a two-tiered wireless Internet signal covering the entire city that will support not just the basics of Web surfing, e-mail and the like, but phone service and video as well. If this vision is fulfilled, the basic tier will be a free, 1 megabit signal for anyone and a premium service at 3 megabit for a reasonable cost. A secure 4.9 gigahertz signal for the city’s private use— fire, police, rescue and such— is also part of the proposal.

This all sounds great, and if a company is willing to step up and make what some analysts believe could be a $25 million investment for the privilege of providing this service, it would be hard for the city to say “no.”

But there are some very real stumbling blocks on the entrance ramp to the information superhighway that have tripped up our neighbors in Rio Rancho and Sandoval County.

Back in 2003, Rio Rancho contracted with a Michigan-based wireless company named Azulstar to provide eight hours of free wireless service to anyone accessing the network within city limits in return for use of the city’s rights of way.

The system is so dysfunctional that the agreement has been put on life-support until mid-August, at which point the deal may be terminated by the city. But, at least it hasn’t cost taxpayers anything.

Sandoval County, on the other hand, has wasted at least $1.2 million on a system that, according to County Commissioner David Bency, is no more usable than “a series of tomato cans attached to a string.”

The problems that have plagued both systems should serve as a warning to Albuquerque leaders that they also must carefully evaluate the city’s role in setting up such a system. At the very least, Albuquerque must stick to its guns by making sure that no taxpayer money be spent to subsidize a wireless system.

Additionally, while not a direct financial subsidy, it would also be a mistake to give one provider exclusive favors that it doesn’t offer to other potential entrants. This could be a major stumbling block as any company making a $25 million investment will likely want to lock in some kind of monopoly status in order to protect its investment. Of course, consumers would then be locked in to the municipal service as other providers leave the city unable to compete with a favored provider.

It is important to have a clear understanding that providing wireless service is much different than managing roads and sewers. Roads and sewers require investments that make their private provision quite difficult under current conditions. Will the new system put private industry out of business?

Assurances must be made to ensure that those who are willing to pay for Internet and wireless services above and beyond what the city’s chosen provider offers will have that option available and that existing competitors will not be driven out of the market.

The last issue is changing technology. New technologies known as GSM (global system for mobile communications) and CDMA (code division multiple access) are widely deployed by major commercial providers. Is Albuquerque’s provider going to be ready to change if another technology takes hold? What if wi-fi becomes irrelevant as a technology in just a few years?

It is human nature to want something for nothing. Nowhere is that attitude more prevalent than the fast-changing field of computing, where more powerful at a lower price is the expectation.

Before we delegate our choices over how we connect to the Internet to the city’s chosen contractor, Mayor Chávez and the council must have a firm grasp on the issues and be willing to walk away if no one can properly fulfill these requests.

Paul Gessing is president of the Rio Grande Foundation, a nonpartisan, tax-exempt research and educational organization dedicated to promoting prosperity for New Mexico based on principles of limited government, economic freedom and individual responsibility.

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Local Government Tax and Budget

County Should Stay Out of Wi-Fi Business

Sandoval County’s scandal-plagued effort to create a county-wide publicly financed broadband system has been widely-reported on. The project has received $3 million in state and county funding for the supposed purpose of providing cheap, ultra-high-speed wireless access countywide, but much of this money has been wasted or perhaps even stolen. State auditor Hector Balderas is now looking at the situation.

Though it would be easy to simply blame the contractors and government officials who are attempting to get the project up and running by 2009 for being corrupt and/or incompetent, the fact is that Sandoval County should not be involved in such a project in the first place.

As Sonia Arrison, Dr. Ronald Rizzuto, and Vince Vasquez, report in their recent report, “Wi-Fi Waste: The Disaster of Municipal Communications Networks,” published by the Pacific Research Institute, publicly-financed broadband systems invariably cost more and deliver less than promised.

The survey examined 52 government-owned networks that compete in the cable, broadband, and telephone markets. It concludes the government-owned systems are “financial disasters.”

Among the major problems with these systems is that they rely heavily on loans and transfers from established municipal utilities such as electricity and water. Even with the power of the public purse, 77 percent of the time municipal networks can’t pay their way, the report observes.

Those subsidies enable the government-aided networks to use their funding advantage to drive out more efficient private-sector competitors.

As government officials rush to show leadership and take credit for delivering the goods, they often trade short-term political benefits for serious, long-term financial problems: cost overruns, mounting debt, and tepid profits, the report observes. The report clearly shows what Sandoval County now knows: “Public telecom networks are risky gambles, regardless of the technology or the business model.”

The report also reveals the extent to which these operations rely on interest-free loans, inter-utility transfers, and permanent subsidies, the details of which in many cases are buried in financial reports, if reported at all.

“The footnotes in most of the networks’ financial statements have omitted any discussion of cost allocation between the telecom utility and other utilities, which suggests that utility accountants may be shifting around costs to enhance the appearance of telecom profitability,” the authors report.

The utilities also appear to be hiding other significant costs. “There is also the issue of system accountants’ failing to divulge major financial transactions on the printed public record. For example, at the end of the 2003 fiscal year, the telecom network of Harlan, Iowa, received an intra-utility loan for $768,025. In 2004, this intra-utility loan was forgiven but the financial-statement disclosures did not provide any explanation for this transaction,” the report says.

Even with access to subsidies and loans not available to private-sector companies, municipal systems can’t break even, let alone establish positive cash flow, the report notes.

“Adding all the operating years together, our select sample of publicly-financed systems has been in existence for 294 years,” the authors write. “Of these 294 years, these operations have incurred negative free cash flow in 227 years. In other words, 77.2 percent of the time, these networks have not paid their way.

Sandoval County is not alone. The county’s venture into providing the latest in high-speed Internet access was likely to cost taxpayers more and deliver less than was expected from the very start. The fact that governments run businesses poorly is a lesson that needs to be reinforced regularly lest other New Mexico governments repeat Sandoval County’s mistakes.

Rather than throwing more money at a wireless project that is clearly going to cost taxpayers far more than the original $9 million estimate, Sandoval County should “pull the plug” on this foolhardy taxpayer-financed venture immediately.

Some people are clearly willing to pay for high-speed wi-fi access in their own homes or at their local coffee shop. Why should they make the rest of us pay for a county-wide system?

PAUL GESSING is president of the Rio Grande Foundation, a 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.

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Local Government Notable News

New Mexico’s Legislative Session: Busy But Undistinguished

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Many bills were passed during what was by all accounts a busy 60-day session, but the important question is whether we will be better or worse off than we were before. It is impossible to discuss everything that happened, but here are a few important points:

First and foremost, credit must be given to the governor, the governor’s task force, and those in the Legislature who worked so hard to protect taxpayers from the abuse of eminent domain. Assuming Gov. Bill Richardson signs the bill, which is based on a concept he has supported, property owners will be able to rest a bit easier knowing that local governments cannot take their land whenever they feel like generating more tax revenue.

Another good bit of news is that no tax hikes occurred this year. While the idea of raising taxes in a time of record-setting revenues may seem absurd, several tax hikes ­ including a 60 cent-per-pack increase on cigarettes ­ were considered and defeated this session. Raising taxes in times of budgetary crisis is a bad idea, but hiking them when revenue is overflowing from state coffers is inexcusable and sends a message that government is insatiable.

The absence of tax hikes was good and some taxes were even cut, but the small ($94 million) package of tax cuts passed this year was too small to have an impact on New Mexico’s economy. Worse, the cuts that were actually made ­ including a gross receipts tax deduction for disabled street vendors ­ were targeted in ways that will not improve New Mexico’s economy.

Despite its recent success which has coincided with a strong national economy, New Mexico remains one of the poorest states in the country. Our political leaders should be working day and night to improve that dismal statistic by reducing our heavy tax and regulatory burden. Small, narrowly-targeted tax breaks are not the answer.

Unfortunately, several actions taken during this session will have a negative impact on New Mexicans for years to come starting with the 10 percent increase in the general fund. That rate of spending growth is much more than double the rate needed to keep pace with inflation and population growth (about 4 percent).

With government growing so quickly, once oil and gas revenue suffer even the slightest setbacks, New Mexico’s budget could be in serious trouble. Worse, this rapid growth in spending took place while legislation that would have limited future spending growth that was introduced in both Houses ­ the Taxpayer Protection Act ­ was not seriously considered.

So, where will all of this new money go? A large portion has been allocated to increasing teacher salaries and expanding the state’s Pre K program. Although higher teacher salaries and expanded Pre K have been touted by many self-interested advocates among the education establishment, studies have shown that the benefits of Pre K evaporate by fifth grade. Worse, universally increasing the salaries of all teachers at once will do nothing to attract and retain the best teachers. Basing pay on teacher quality would be a far more effective way to increase teacher quality.

While more money was thrown at the teaching establishment this year, legislation that would allow taxpayers to take a tax credit for donating money to provide scholarships for needy children was killed once again. This effort which the teacher unions mislabeled “vouchers” would have given poor children and their parents the same ability as wealthy parents have to choose the school that is best for them whether that is a public or private school.

The last major legislative faux-pas of the session was increasing the minimum wage to $7.50 an hour. Fortunately, McDonald’s and most other employers of low-wage workers are already paying at similar wage rates and the wage will not automatically increase with inflation, thus somewhat mitigating the law’s negative impact. But New Mexico is a poor state with relatively low salaries; this wage increase will particularly harm border cities because none of our neighbors mandate wages as high as $7.50.

It was an action-packed session and some good was done. Unfortunately, massive spending without any economically-significant tax cuts will and a higher minimum wage will make it more, not less difficult for New Mexico to catch up with the rest of the country.

Paul Gessing is the president of the Rio Grande Foundation, a 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.

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Local Government Open Government Top Issues

Eminent Domain Reform a Must This Session

Things are finally looking up for New Mexico property owners. As most people are aware, in June of 2005 the United States Supreme Court further weakened the constitutional protection of personal property rights when it ruled in Kelo v. New London that any government could take a person’s property and transfer it to another, more connected private interest, in the name of economic development and greater tax revenue.

The court left it up to the states or congress to enact legislation to restore the constitutional protection of property owners. New Mexico’s Legislature passed a bill unanimously last session, which Gov. Richardson vetoed. Proponents of property rights, justifiably shocked and dismayed by the governor’s veto, look for actions this year to result in stronger protections.

Legislation passed last year was insufficient as it only protected owners from the taking of their property on behalf of another, presumably more well-connected private interest, for three years. Three years and one day later, the government could dispose of it as they wished. To his credit, and with the understanding that a vast majority of New Mexicans want their property rights protected, Gov. Richardson did not simply veto the bill.

Instead, he quickly formed a task force to study the eminent domain issue and make recommendations for the 2007 legislative session. More recently, Richardson has endorsed the task force’s recommendations and says that he plans to have them introduced as a package of reforms in the Legislature.

Those recommendations have been released and after careful analysis it is clear that the task force agreed with the Rio Grande Foundation and others that property rights must be protected. Recommendations made by the task force included:

  • Repeal of both the Urban Renewal and the Community Development laws. Over time, layers of laws have been enacted in New Mexico pertaining to eminent domain. This unanimous recommendation more clarifies than changes policy.
  • On a 10-7 majority vote, the task force recommended removing eminent domain authority from the Metropolitan Redevelopment Act. This is where the task force takes its firm stance against eminent domain for economic development and against the Kelo decision. The task force explicitly states that governmental “police powers” are the appropriate way to remedy “hazardous and unsafe conditions” without resorting to the “extreme powers contained in the Metropolitan Redevelopment Act.”
  • In another move to protect property owners, 14 of the 17 members of the task force expressed concern that “nearly any property in New Mexico could be found to be a slum or blighted area as currently defined.” To remedy this situation, the task force urges clearer language to ensure that “blight” really means what the term implies.
  • The task force also unanimously urged several procedural changes including increased hearing and notice requirements prior to eminent domain proceedings and the provision of relocation and transition assistance for those affected by eminent domain. Elsewhere, statutory language would be tightened under the task force’s recommendations.

These recommendations are an important contribution to the debate over eminent domain. Despite the overwhelming opposition to abuse of eminent domain as evidenced by the public outcry in the wake of Kelo, special interests — developers and representatives of local governments — have been effective in bottling up legislation in Congress and in some states. In fact, William Fulginiti, executive director of the New Mexico Municipal League, said that organization strongly opposed the task force’s recommendations and would work to prevent them from being implemented.

If Gov. Richardson truly has national ambitions, he must ignore Fulginiti and others who want to weaken your property rights and act this year on eminent domain. The task force’s recommendations are sound; the time for action is now.

Siebert Ickler, of Las Cruces, is an adjunct scholar with New Mexico’s Rio Grande Foundation, an independent, non-partisan, tax-exempt research and educational organization.

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Local Government Notable News

New Mexicans Deserve Direct Democracy

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While politicians and voters around the country and here in New Mexico celebrate their Election Day victories and mourn defeat, voters in 24 states nationwide — not including New Mexico — also exercised a more direct form of control over how their affairs of state are managed. In these states, voters were able to place measures on the ballot through the initiative process, rather than waiting, sometimes forever, for politicians to tackle the issues.

In the Land of Enchantment, however, voters can only hope that the politicians they have elected will live up to their promises. In fact, New Mexico and Hawaii are the only western states (Rocky Mountains and beyond) that lack this form of direct democracy.

In the aftermath of Election Day 2006, it is clear that citizens do not always speak with one mind, but they always have something important to say. Gay marriage and efforts to prohibit it may get the most headlines, but did you know that 11 states considered measures to limit the use of eminent domain? With Gov. Richardson having vetoed a bill that would have restricted the use of eminent domain and polls showing that a vast majority of New Mexicans support such restrictions, wouldn’t it be nice to circumvent the politicians on this one?

Raising the minimum wage is another hot topic here in New Mexico, and while I personally believe that it is bad economic policy for states to legally-mandate wage levels, I am pleased that voters in six states were able to decide for themselves on Election Day.

The fact is that voters are by-and-large well-informed on these single-issue ballot measures and are often willing to take on issues considered too politically radioactive for politicians to handle. In fact, while three states — Oregon, Nebraska and Maine — rejected the placement of strict limits on the power of politicians to tax and spend, Colorado’s strict tax and spending limit was passed in 1992 through the initiative process. Some states may not be ready for Colorado-style tax and spending limits, but it would be nice if New Mexicans had the final say.

Legislative term limits are another area that voters are willing to tackle that most politicians, for obvious reasons, seem more than happy to ignore. In fact, 16 states nationwide limit the terms of their legislators and all of these states did so through the initiative process. As it lacks the initiative process New Mexico is of course one of the states lacking legislative term limits.

The term limits issue is perhaps only the most obvious issue on which legislators tend to act in their own interest while ignoring the will of voters. While a legitimate debate can be had over whether term limits improve governance, it is hard to argue that legislators view term limits as a anything but a mortal threat and they will not pass them. Tax and spending limits like Colorado’s are another limit on legislative power and, as such, such limits are not likely to pass in the absence of the initiative process. After all, it is the belief of overwhelming numbers of our legislators that they, not taxpayers, can make the best decisions on how to spend taxpayers’ money.

The fact is that voters are not always correct in assessing difficult political and economic decisions, but neither are legislators. Given the ever-increasing amounts of unfiltered information available to voters over the Internet and elsewhere, doesn’t it make sense to give citizens a greater say in New Mexico’s future?

Siebert Ickler is an adjunct scholar with New Mexico’s Rio Grande Foundation. The Rio Grande Foundation is 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.

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Local Government Notable News

Kelo Decision One Year Later: New Mexico Property Owners Still Unprotected

Friday, June 23rd marks the one-year anniversary of the United States Supreme Court’s Kelo v. New London. Unfortunately, earlier this year, Governor Richardson vetoed a bill that would have offered at least some protections for New Mexico property owners against eminent domain.

It is widely known that the Kelo decision effectively reinterpreted the Fifth Amendment’s prohibition on the “taking of private property for public use without just compensation” to mean that any eminent domain taking, even for the express benefit of another private entity was legal as long as the condemning authority had a “plan” and officials believed that some public benefit would result from the taking.

Although a bi-partisan group of legislators including among many others, Justine Fox-Young (R-Albuquerque) and Al Park (D-Albuquerque), supported strong measures to stop eminent domain for private benefit in New Mexico, the legislation that wound up passing both houses unanimously was watered down significantly. In fact, the bill that Richardson vetoed only prohibited the transfer of property from one private interest to another private interest for five years. This provision could have easily been abused by revenue-hungry local governments if they wished to hold seized land in escrow and lease it for five years, at which time they could then sell it to the new developer.

Although, he was, at the time, the only Governor in the nation to have vetoed a bill addressing eminent domain protections – protections supported by 85-90 percent of the American public – he has since been joined by Arizona Governor Janet Napolitano and Iowa Governor Tom Vilsack, also fellow Democrats. Richardson’s veto put New Mexicans in a tougher spot than our neighbors to the west, however. That’s because, unlike neighboring Arizona where voters can use the initiative and referendum process as a check against their government officials, New Mexicans must rely on their elected officials to pass legislation to protect property owners.

As he promised in his veto of the eminent domain legislation, Governor Richardson has proposed a task force charged with the duty of “closely examining the Kelo case and recommending any and all fixes to New Mexico law before the next legislative session.” Property owners should be skeptical of this commission. After all, as Charles Kettering, the inventor of the electric starter once said, “If you want to kill any idea in the world, get a committee working on it.”

The problem with Richardson’s commission – regardless of whether the Governor really wants to address the issue or not – is that there are no mysterious hidden secrets that both sides can agree on. The fact is that the battle over eminent domain is a battle between money hungry local governments and just about everyone else over whether or not government can take a person’s property for just about whatever reason it wishes (usually to increase tax revenues). Put yet another way, “Do individuals exist to serve their city or county or do cities and counties exist to serve individuals?”

These are not the sort of profound, philosophical decisions that can be easily addressed by any commission, no matter how well-intended and well-qualified its members may be. What we need is leadership in the Governor’s Mansion. New Mexicans need someone who will stand up for their property rights against government officials and developers who are just looking to pad their bottom lines.

The Founding Fathers believed that all rights belonged to the individual and they wrote the Constitution to protect those individual rights. It is time for our leaders to save us from the five black-robed members of the Supreme Court and any other government bureaucrat who would say otherwise.

Paul Gessing is the President of New Mexico’s Rio Grande Foundation. The Rio Grande Foundation is 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.

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Local Government

Cable and Internet Costs Would Come Down If We’d Just Get Modern and Institute a Competitive System

It is a widely known economic fact that in the absence of competition, consumers are stuck paying too much for too little in the way of goods and services. Nowhere is that truer than it is in the cable TV market.
New Mexico consumers are stuck with overpriced, inferior-quality video services, because federal and state regulations have failed to keep up with fast-changing technologies.
Unfortunately, New Mexico is not alone – almost every state in the Union regulates cable providers under outdated statutes written when the industry was in its infancy, before the word “Internet” even existed. In those days, there were only three TV networks, and no one had conceived of new, modern interactive video technologies that combine entertainment and advanced communications capabilities.
But we live in a much different world today. High-speed broadband service can give consumers access to video, voice and data communications, all wrapped in one package. New technologies promise to completely revolutionize home entertainment, education, business and health care in ways that we can only imagine.
But if regulations are left unchanged, it will be years before these technological benefits are available to consumers and states and nations that fail to update their laws will be left behind.
The fact is that while the United States and most states plod along on the regulatory equivalent of dial-up, other countries are enthusiastically adopting these modern communication technologies and seizing upon their benefits.
China is aggressively moving forward to provide these next-generation technologies to their citizens and workers. With an annual growth rate of 90 percent in broadband subscribers, China will surpass the United States in total subscribers sometime later this year. The United States also is losing ground in the percentage of households with broadband service as we sit at a lowly 19th in the world. Slovenia is expected to surpass the United States in broadband penetration by 2007.
The problem is simple: Our outdated laws make it almost impossible for new companies to enter the market.
Companies could offer high-tech Internet, TV, phone and more video services over new cables, but they must wade through quite a process to obtain a franchise for video service – though cable companies can sell anything they want with just one franchise. They are required to negotiate individual contracts with every city government in each service area. It is estimated that this cumbersome process will slow the deployment of broadband services in the United States by as much as 15 years.
In the meantime, our overly restrictive franchise system is making consumers pay through the nose for plain old cable TV.
In Albuquerque, Comcast increased its most popular package by $3 in August, raising the total price including tax to more than $50. This increase took place a mere 11 months after the last increase, a jump of $3.05 the previous September. Over the past six years, Comcast’s rates have shot up 60 percent. If there is any consolation, it can only be that we are not alone. Nationally, prices have increased upwards of 45 percent.
Unfortunately, we shouldn’t expect any real relief from rapidly rising cable bills until regulations are rewritten to allow for a competitive market.
Not only would prices come down – Texas has seen an average 25 percent decline in cable rates since it adopted needed reforms, including adoption of a statewide franchising system – but the benefits of greater competition would soon be felt.
The Standard Bureau of Economic Analysis estimates that each $1 of capital spending generates $2.86 of output in the telecom sector. Additionally, 18.2 jobs will be created by each $1 million telecom investment.
Many companies are ready to enter the market. They are prepared to invest billions of dollars in high-tech communications infrastructure. All that is stopping them is our counterintuitive franchise system.
Several states are attempting to modernize their laws, and some members of Congress are talking about changes at the national level, but these needed reforms can’t happen fast enough. We need New Mexico’s elected officials to push forward with franchise reform as well.
Our monopolistic system has run its course. Let’s try a competitive market, for a change.
Today’s Byline
Gessing is president of New Mexico’s Rio Grande Foundation, which describes itself as an “independent, nonpartisan, tax-exempt research and educational organization dedicated to promoting prosperity for New Mexico based on principles of limited government, economic freedom and individual responsibility.”
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Local Government Notable News

Condemnation Bill Veto Is Shocking

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In a move that can only be described as “shocking” for both political and moral reasons, Gov. Bill Richardson became the first governor in the country to veto legislation aimed at protecting individual property owners from the abusive use of eminent domain.
According to the Institute for Justice, the nation’s leading authority on the use of eminent domain, abuse primarily occurs when the government takes one person’s property and gives it to another private party.
In June 2005, the Supreme Court’s decision in Kelo v. New London made eminent domain abuse constitutional by interpreting the Fifth Amendment to mean that any eminent domain taking, even for the express benefit of another private entity was legal as long as the condemning authority had a “plan” and officials believed that some public benefit would result from the taking.
Although the court’s decision was a tremendous blow to property owners everywhere, the court explicitly allowed for the possibility that states could place restrictions on the use of eminent domain. That is exactly what had been happening nationwide as more than 40 states have bills under consideration and six states had already passed bills to address the court’s decision. In fact, until Richardson’s veto, no governor had opposed efforts to limit Kelo’s reach.
It is surprising that the governor sees no problem in allowing state and local governments unfettered power to take people’s homes and small business. Even more surprising is that a man faces re-election this year and who, by all accounts, wants to run for president in 2008 would choose to take such an unpopular stand.
All available polling data shows that Americans of all walks of life are strongly opposed to the Supreme Court’s broad interpretation of eminent domain and would thus disapprove of Richardson’s veto.
While it is rare to find any issue on which more than 80 percent of Americans agree, poll-after-poll clearly shows that large majorities of Americans of all income levels, ethnic backgrounds and from all geographical regions oppose the use of eminent domain to further private development initiatives. In one recent survey by the American Farm Bureau, when respondents were asked about the Kelo ruling, an overwhelming 95 percent expressed disapproval; of those respondents, 87 percent said they disagreed strongly with the ruling. As a means of comparison, “only” 64 percent of Americans opposed the Dubai port sale.
Not only is opposition to Kelo remarkably broad, but Americans are demanding that something to be done to protect homeowners.
Conservatives and libertarians tend to believe constitutional limits on government power should be obeyed, but Richardson’s own base is even more directly impacted and mobilized. After all, Richardson calls himself a “business friendly progressive,” thus implying that much of his support comes from middle and working class New Mexicans.
The impact on the poor was explained by former Justice Sandra Day O’Connor in her Kelo dissent. O’Connor explained that “the fallout from this decision will not be random. The beneficiaries are likely to be those citizens with disproportionate influence and power in the political process, including large corporations and development firms.”
Despite his professed concern for poor and working class New Mexicans, Richardson has taken the side of the rich and influential developers on this issue. It will be interesting to see what the fallout from this move is for property owners – and for the governor’s political career.
Paul Gessing is the president of New Mexico’s Rio Grande Foundation. The Rio Grande Foundation is 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.