Categories
Local Government Notable News Open Government

Nothing to Smile About: New Mexico’s Curious Investment in Small Smiles Dental Clinics

Does New Mexico’s State Investment Council know what is being done with the tens of millions of dollars it has invested in New Mexico venture capital?  That doesn’t seem to be the case, at least in the instance of one curious investment.

In its 2007 annual report the State Investment Council (SIC) reported it had acquired ownership positions in 45 New Mexico companies.  These investments amounted to $141.4 million.  That sum includes the $19 million invested in Eclipse Aviation, which is now in bankruptcy. The report does not disclose how much New Mexico has invested in these  companies or what percentage of their stock is owned by New Mexico state government as the result of these equity acquisitions.

The Rio Grande Foundation has been asking the SIC for that information for two months So far, the SIC has not been able to provide an answer.  It does not seem to be any more readily available to the SIC than to taxpayers who want to know what is being done with their money.

Except for the Eclipse Aviation investment and the millions invested directly in Earthstone, a Santa Fe cleaning products company, the rest of the SIC’s current investments in New Mexico companies have been made in partnership with a venture capital funds that are based in New Mexico or have an office here, though their principal office may be in another state.

As Charles Wollmann, the SIC’s Public Information Officer explains it, the SIC relies on these investment firms to determine how much is invested in each company.  Accordingly, that information is not readily available to the SIC…or New Mexico taxpayers.  Indeed, Wollmann has cautioned that some of this information may be proprietary and not for public disclosure.

The Rio Grande Foundation has taken a closer look at Small Smiles, one of the 45 New Mexico companies identified in the SIC’s 2007 report.  We have learned that Small Smiles is not truly a “New Mexico company” but is a multi-state chain of Medicaid dental clinics owned by out of state interests and managed by a company whose ownership can be traced back to the small Arabian nation of Bahrain. Our investigation also reveals that by investing in Small Smiles the SIC has bought into a company with a record of abusing child patients and engaging in  unethical billing that has put it under government investigation.  And, as we have learned, there are more public relations troubles brewing for Small Smiles.

Small Smiles, a New Mexico Company? Try Colorado, Tennessee or even the Middle East.

Small Smiles operates Medicaid dental clinics for low income children and infants in nineteen states and the District of Columbia.  It began operations in New Mexico in 2007, opening one clinic in Santa Fe, one on Albuquerque’s west side and one in southeast Albuquerque.

Through its partnership with Red River Ventures of Plano, Texas, the SIC acquired equity in Small Smiles in 2007.  Bruce Duty, a director of Red River Ventures, told the Rio Grande Foundation that his company invested a total of about $5.5 million in “Smile Smiles, LLC.”  About 10%, or $550,000 of that investment came from New Mexico’s SIC.  The rest came from other investors, including the United States Small Business Administration.

There is no New Mexico corporation identified in the records of the New Mexico Public Regulatory Commission as “Small Smiles, LLC.” Instead, the Public Regulatory Commission corporations archive reveals three Small Smiles professional corporations corresponding to each of the three clinics.  Each of the Small Smiles dental clinics was incorporated as a separate professional corporation.

None of the directors of the New Mexico Small Smile clinics are New Mexicans.

The director of the Santa Fe clinic and the clinic on Albuquerque’s west side is Kenneth E. Knott.  He is a Senior Vice President of FORBA of Nashville, Tennessee. FORBA is one of the nation’s largest dental clinic chains.  (More on FORBA below). Knott is a busy man.  He is also a dentist, and is licensed in Ohio, the District of Columbia, Connecticut, New Hampshire, South Carolina, Kentucky, Oklahoma, and Virginia.  He also is the director of Small Smiles Clinics in Akron and Youngstown, Ohio, Ft. Wayne, Indiana, the District of Columbia, and Reno, Nevada.

The director of the Small Smiles clinic in southeast Albuquerque is Adolph R. Padula.  He is a retired dentist from Pueblo, Colorado.  He is related by marriage to the DeRose family of Pueblo, Colorado, the founders of the Small Smiles chain of Medicaid dental clinics.

The corporate records of all three New Mexico clinics give either mailing addresses or identify a principal out of state address in Pueblo, Colorado.

So how does this tie Small Smiles to the Middle East?  Follow the thread a little bit further.

First, we have to go through Pueblo.  That’s where Small Smiles began, growing out of the DeRose dental clinic.  The DeRoses once owned a string of dental clinics across the country catering to Medicaid patients.  They sold their interest in Small Smiles to FORBA. Dr. Michael DeRose, one of the founders of the Small Smiles chain, in 2007 agreed to pay the federal government $10 million to settle charges his clinics had charged Medicaid for unnecessary procedures, such as capping children’s teeth.  As reported below, this is an allegation that continues to arise against Smile Smiles clinics even after the DeRoses sold their interest to FORBA.

All Small Smile clinics are now managed by FORBA, which also began in Pueblo.  FORBA owns the trademark on “Small Smiles.”  FORBA stands for “For Better Access.”  It has grown into one of the nation’s largest dental care management companies.  It reported revenue of $142.2 million in 2006.  That year it was acquired by a Sanus, a Nashville-based holding company, and then moved its main corporate offices to Tennessee.  It continues to maintain some operations in Pueblo.

Sanus, in turn, was acquired by Small Smiles Holding, LLC, a company formed for the express purpose of acquiring Sanus.

But Nashville isn’t the end of the line.  The terminus is Bahrain.  In January 2007, just before SIC’s investment in Small Smiles, Sanus sold FORBA for $435 million to Arcapita Bank of Bahrain.

In sum, instead of investing in a New Mexico company, the SIC’s partner has invested in a company owned by a bank on the Arabian Peninsula.  The SIC’s 2007 report, claiming an investment in a New Mexico company called Small Smiles, is incorrect.

Grim Smiles

At the time that the SIC’s money was being invested, Small Smiles was the subject of a damning Emmy Award winning expose’ of its medical and business practices in Washington, D.C. area clinics.  WJLA-TV of Washington, D.C. launched its investigative report with film footage of a screaming child being restrained on a “papoose board” while his mother was excluded from the room.  The series of investigative reports also discovered that Small Smiles was using unlicensed x-ray technicians and billing Medicaid for hundreds of thousands of dollars in unnecessary dental work, including pulling children’s teeth without a valid medical reason.

“Drilling for Dollars,” triggered a criminal investigation by the Maryland Attorney General.  Several insurance companies suspended Small Smiles and directed patients to seek dental work elsewhere.   The report elicited complaints from patients and employees around the country that were collected at the television’s website.

In May 2008, New York terminated Small Smiles’ participation in its Medicaid program in response to reports by CBS-6 news of Albany that its Colonie clinic was performing unnecessary procedures such as needlessly crowning teeth.  When Small Smiles challenged these claims, more than one hundred parents came forward with complaints of mistreatment backed by photographs.  As in Maryland, parents were not permitted to be present with their children during examinations and dental procedures.  A dozen parents also reported that their children were restrained on a “papoose board.”  Some parents reported their children screaming in pain because the dentist operated before anesthesia took effect or operated without any anesthesia at all.  Parents also reported the use of dirty dental instruments.  Lawsuits have been filed by several parents against Small Smiles based on these allegations.

Small Smiles has drawn the ire of New York’s United States Senator Charles Schumer.  After the New York Office of the Medicaid Inspector General revoked their Medicaid authorization, he issued a statement saying, “”I’m glad they’re terminating Small Smiles,” said U.S. Sen. Chuck Schumer (D-NY), a staunch critic of the company. “They don’t deserve to be in business and certainly not get any federal money.”  Sen. Schumer says he has seen news reports documenting similar allegations against Small Smiles clinics in Denver, Rochester, and Washington D.C.  “They ought to prosecute some of the people who did this,” he told CBS-6 via satellite from Capitol Hill. “This goes beyond a mistake. This is hurting our children and ripping off the federal government…and I think there ought to be a criminal investigation of this.”

Similar allegations against Small Smiles clinics in Kansas have been reported by The Wichita Eagle and in Colorado by KUSA-TV of Denver.

Debbie Hagan of Owensboro, Kentucky collects complaints from Small Smiles patients and parents at her blog, “Dentist the Menace.”  (www.debbiehagan.blogspot.com).  She also receives reports from dentists who have worked in Small Smiles clinics.  One person identifying himself as a dentist who worked at a Small Smiles clinic wrote, “I was disgusted with the way children were treated.  I wouldn’t take a dead snake to that place.”  FORBA has sued Hagan for defamation and posting what it claims are copyrighted internal company documents.  That has not stopped Hagan from continuing to run her blog.

The bad publicity for Small Smiles and FORBA may be getting worse.  Good Morning America recently aired parents’ complaints against Small Smiles.  Additionally, ABC’s nationally televised investigative news program “20/20” has completed a critical report on Small Smiles.  According to its producer, Glenn Ruppel that report will air very soon.

What Did the SIC Know and When Did It Know It?

The SIC does not seem to have been aware of any problems with Small Smiles while its partner Red River Ventures was investing taxpayer dollars in that troubled company.  A review of all the minutes of meetings from 2007 and 2008 of the State Investment Council and the New Mexico Private Equity Investment Advisers Council, which advises the SIC on private equity investments, did not reveal any discussion of nor any report on Small Smiles.

The SIC had no response when asked if it was aware of the history of problems of Small Smiles’ clinics.  The SIC does say it is no longer categorizing Small Smiles as a New Mexico company.

Categories
Energy and Environment Open Government

Elected Officials on the Payrolls of Environmental Groups

Every special interest group that seeks to influence public policy pays lobbyists. There is    nothing remarkable in that observation. Manufacturers, hospitals, insurance companies, banks, even churches pay lobbyists to transubstantiate their agenda into laws, money, and regulations. But some environmental groups in New Mexico have gone where no interest group has gone before. They have three elected officials directly on their payrolls.

Deanna Archuleta is Vice Chair of the Bernalillo County Board of Commissioners and Southwest Regional Manager for The Wilderness Society. State Representative Jeff Steinborn of Las Cruces is the Southern New Mexico Director for the New Mexico Wilderness Alliance (NMWA). Las Cruces City Councilor Nathan Small is also on NMWA’s payroll as a “wilderness protection organizer.”

The mission of these groups is to influence public policy to preserve wilderness and other public lands. Their work has expanded to include fighting the oil and gas industry as a general principle. Their fight against oil and gas drilling has taken them from the Rocky Mountains to the depths of the oceans.

The Wilderness Society has been one of the leaders in opposing opening the Outer Continental Shelf and areas in the Gulf of Mexico to energy exploration and production. NMWA has led the opposition to natural gas drilling in Otero Mesa, a sprawling desert emptiness on the Texas border. Blocking energy production in the Arctic National Wildlife Refuge has been at the top of the agenda for The Wilderness Society for a generation. Even though the Arctic plain is thousands of miles distant, with a climate, flora and fauna unlike anything in New Mexico, NMWA has joined that fight.

Both organizations want reintroduction of large predators in New Mexico, expansion of their range and restrictions on human activities that come in conflict with the animal’s needs and behavior. These groups have worked aggressively for reintroduction of wolves in southwest New Mexico. They also want to see reintroduction of the jaguar. The current executive director of NMWA has called for releasing grizzlies in New Mexico even though that might cause an “inconvenience” for human beings. Both organizations also participate in litigation to stop human activities, from recreation to natural resource extraction, which they deem contrary to the interests of selected wildlife species.

The programs of these organizations adversely impact the oil and gas revenues that constitute a third of the New Mexico state budget and support schools around the state. These organizations’ wildlife policies also place them into direct conflict with agriculture, one of the major employers and sources of income and taxes in rural New Mexico.

Opposition to developing ANWR, the OCS and other federally owned energy deposits has the added consequence of reducing federal revenues critical to New Mexico’s economy and contributes to the nation’s increasing dependence on foreign sources of oil.

The Wilderness Society has headquarters in Washington, D.C. It is a tax-exempt 501(c)(3) organization, meaning it does not pay taxes on its income. According to its 2006 report to the IRS, The Wilderness Society earned $37.5 million in income. It claimed assets of $53.9 million, including an investment portfolio of $27.6 million. Its top executive officer earned nearly $300,000. It has more than 85 employees who earn over $50,000, about twice the median income of a New Mexican family of four.

Though it is much smaller, NMWA has offices in Albuquerque, Las Cruces, Carlsbad and Santa Fe. Its budget in 2005 exceeded $750,000. Its 2006 budget was $427,000. Its executive director makes more than $50,000. Details on other staff salaries are not public information.
ETHICAL PROBLEMS OF ELECTED OFFICIALS WORKING FOR PRESSURE GROUPS
(a) Nondisclosure and Misleading Disclosure

Under state and federal law, a person paid to influence legislators and their staffs is required to register as a lobbyist, disclose their clients, and report gifts, meals and trips provided to legislators and staff.

Environmental groups, like industry groups, have teams of lobbyists that work Capitol Hill and the Roundhouse in Santa Fe. Certain New Mexico lobbyists, such as Gregory Green and Linda Siegel, specialize in representing environmental groups as part of a “progressive” advocacy practice. A search of lobbyist disclosure records reveals the identity of their clients. A search by organization, conversely, reveals the lobbyists each organization has retained.

No similar disclosure requirements apply to the three elected officials on the payrolls of The Wilderness Society and NMWA. The on-line legislative profile of Jeff Steinborn describes his occupation only as “land conservation.” That information is so inadequate it is misleading. The occupation of “land conservation” could equally apply to a range scientist working with ranchers and farmers. Much of the work of Steinborn’s employer, on the other hand, is intended to, or has the consequence of, adversely impacting agricultural activities. Steinborn’s employer’s idea of “land conservation” is removing land from all uses except sitting idle as wilderness.

Steinborn’s vague occupational description fails to reveal that he works in direct opposition to the state’s largest private employer, the oil and gas industry, and the largest single pillar upholding state government’s budget. NMWA fights the industry throughout the state. Sometimes those battles swirl around remote areas like Otero Mesa. But NMWA has also jumped into the fight to prevent oil drilling in the Galisteo Basin outside Santa Fe. This area has been so impacted by human activity—subdivisions, roads, utility corridors, mining—it would never qualify for wilderness designation.

NMWA also injects itself into controversies about oil and gas operating regulations. NMWA has endorsed tighter and more costly restrictions on oil and gas operations that, by their very nature, do not take place in wilderness but in existing production areas.

Neither Bernalillo County nor the City of Las Cruces requires very detailed financial disclosure information from elected officials. The nature of the employment of Archuleta and Small is not described on those governments’ websites.

Because so little information is publicly available about the work and financial interests of these public officials, the author e-mailed four questions to each of them at the address of their environmental employers. The questions were identical for each official:

1. What are your duties and responsibilities for The Wilderness Society [or NMWA]?

2. How do you separate your role as County Commissioner [State Representative, City Councilor] from your role as an employee of The Wilderness Society [or NMWA], particularly how do you prevent your public office and title from benefiting The Wilderness Society’s [or NMWA’s] work?

3. Do you perceive any conflicts of interest between the interests of The Wilderness Society [NMWA] and the interests of your constituents? If so, please explain.

4. What is your compensation from The Wilderness Society [NMWA]?

None of the officials would answer these questions.

(b) Separating the Special Interest from the Public Interest

The New Mexico State Legislature is a volunteer legislative body. Legislators receive only a per diem while in session or performing committee work between sessions. Their occupations range from lawyer to rancher. Many are educators. Many are retired. A few work for non-profit organizations or tribal governments.

No legislator but Steinborn works for an organization whose sole reason for existence is to influence public policy and law through political action, grassroots pressure and lobbying.

Bernalillo County pays commissioners just under $30,000 for what is supposed to be a part-time job, but sometimes balloons into a full-time calling. The Commissioners have other jobs in real estate, broadcasting and education. None but Archuleta works for an organization that exists to bend governmental policy to serve its organizational objectives.

The Las Cruces City Council is composed of volunteers. Only Small is employed by an organization that also lobbies the Council.

Other legislators have occupations and trades. Why does it matter that these elected officials work for organizations that exist to influence governmental action and policy?

Consider more closely Nathan Small’s dual role as a Las Cruces City Councilor and a “wilderness protection organizer.” He and Steinborn have spearheaded a multi-year, costly campaign by NMWA to persuade Congress and the President to designate about 400,000 acres surrounding Las Cruces as federal wilderness and National Conservation Areas. The wilderness designation is the most forceful tool in the preservationist’s toolbox. It imposes the most stringent, sweeping restrictions of any federal conservation measure. No building or road construction may occur and no motorized vehicles or mechanical equipment may be used in wilderness. Flood control authorities may not use bulldozers, the lame cannot use wheelchairs, and policemen would have to get out of their vehicles and chase on foot or horseback a criminal driving—illegally—into a wilderness area. The implications of these restrictions for life in a large urban area have triggered opposition from the Chamber of Commerce, community leaders, off-road vehicle recreationists, and law enforcement.

One of the strategies of the campaign directed by Small and Steinborn has been to seek endorsements from local governments to demonstrate for Congress local support for the wilderness proposal. Before Small was elected, he lobbied the City Council to win its endorsement for wilderness. Since Small’s election, opposition to wilderness has exploded and the Council is being asked to join other local governments in reversing its position. The Las Cruces City Council has yet to schedule that vote.

During City Council consideration of any matters involving wilderness, Small makes a show of excusing himself. But a theatrical departure from chambers cannot completely insulate council from his influence. Legislation is a process of compromise, negotiations, trading favors and storing up payback. At some point, a fellow council member will need Small’s support on a close vote for roads, sewers, playgrounds and public improvements in their council district. Legislators remember favors granted and favors denied. Small may be out of the room when wilderness is being discussed, but he is never out of the picture.

Tom Cooper of Las Cruces is co-chair of People for Preserving Our Western Heritage, a coalition of ranchers, industry organizations, and hundreds of businesses opposed to NMWA’s wilderness proposal. Does Small’s recusal from chambers while wilderness is being discussed satisfy Cooper? “Absolutely not,” Cooper says. “It is difficult to take seriously. He constantly works on wilderness. That’s his job. We’ve been told many times he works behind the scenes.”

A second problem is that the elected office and title held by these individuals cannot help but benefit their employers.

Small cannot seem to keep his NMWA role separate from his official duties when he is in the public eye. He led a rally on June 24, 2008 in support of the wilderness proposal. The story earned a banner across the top of the front page of the Las Cruces Sun-News. Small’s photo occupied the upper right hand corner. He was identified as a city councilor speaking in support of wilderness.

Hatch is an agricultural village in Dona Ana County north of Las Cruces. Small sought support for NMWA’s campaign from its village trustees and chamber of commerce. He was identified in those proceedings as a Las Cruces City Councilor. Hatch Village Trustee David Sment says he did not know Small was being paid by NMWA until sometime afterwards.

Then there is the battle over Otero Mesa.

Otero Mesa is located about 150 miles east of Las Cruces, across the Organ Mountains, White Sands Missile Range, and tens of thousands of acres of other federal land. It can only be reached by rough roads with a well-earned reputation for destroying tires, as this author has personally experienced. Otero Mesa contains large groundwater reserves that are currently being tapped for agriculture across the border in Dell City, Texas. The El Paso metropolitan area is the most likely recipient of that groundwater if it is ever mined for municipal use.

Ranching is the sole industry on Otero Mesa. This shadeless, windy steppe offers little recreational value to a distant urban population. It has no developed visitor sites, campgrounds or trails. If you visit Otero Mesa, bring your own water. The only potable water is inside the few isolated ranch houses. A person who comes unprepared will have to decide if they are thirsty enough to slurp the muck from earthen stock tanks.

Since Small’s election, the Las Cruces City Council has discovered Otero Mesa. This year City Council voted to endorse NMWA’s proposal to block gas exploration and production in Otero Mesa.

Bob Gallagher, President of the New Mexico Oil and Gas Association, points to the curious interest of the Las Cruces Council in an empty patch of New Mexico in another county as evidence that Small’s status as a city councilor is being exploited by NMWA. Except for the fact that Small is a member of that body, asks Gallagher, “What the hell does the Las Cruces City Council have to do with whether some gas drilling takes place on Otero Mesa?”

Gallagher also points to Steinborn’s record of fighting his industry in the State Legislature and the administrative agencies of New Mexico government. “I don’t think it’s right that Steinborn is a legislator employed by NMWA. It has absolutely hurt our ability to work with the Legislature. Every day I hear from legislators who don’t want to cross him by supporting our industry, or I receive warnings that he’ll somehow use his office to hurt us.”

Kent Evans, a Dona Ana County Commissioner, is challenging Steinborn for his seat in the New Mexico House of Representatives. “To me,” says Evans, Steinborn’s employment “is an issue. He’s trying to pretend he doesn’t work for an environmental group. It is a clear conflict of interest. He has a definite agenda, and that is forcing wilderness on the community.”

“And,” continues Evans, “just the fact that he works for the wilderness group is enough. It is clear where he’s coming from, who pays him, and where his interests lie.”

In researching this report, inquiries were made as to whether any industry advocacy group has any elected official on their payroll. No elected official on the payroll of an industry advocacy group could be identified. Gallagher says he’s never heard of it. Michelle Frost of the New Mexico Cattle Growers/New Mexico Wool Grower’s Association laughed. “We have only two people on staff, period. Me and our executive director.”

Coincidental or not, every one of the elected officials on the payroll of these environmental groups is a Democrat.

By placing on their payroll politicians with no other significant source of income, these environmental groups can effectively subsidize a political career. As that career advances, the    politician is in a better position to repay, if not simply remember, who their patron has been.

U.S. Senator James Inhofe of Oklahoma, the ranking member on the Senate Environment and Public Works Committee, released in September 2008 a report on the increasingly indistinct lines between tax-exempt environmental organizations and prohibited partisan political activity. Entitled, “Political Activity of Environmental Groups and Their Supporting Organizations,” the report details the myriad creative ways environmental organizations have been using tax-exempt money to engage in electoral politics. New Mexico may be on the cutting edge of a disturbing new development in this area.

Jim Scarantino is an investigative reporter with the Rio Grande Foundation. A nationally recognized political columnist, Scarantino appears as a regular panelist on KNME-TV’s weekly public affairs program, “In Focus”. Scarantino also was executive director of The New Mexico Wilderness Alliance in 2003 and served as Chair of the Coalition for New Mexico Wilderness from 2000 to 2004

Categories
Local Government Notable News Open Government

Elect Representatives to Serve, Not Bring Home Bacon

rgf_media_las_cruces_sun-news

With the onset of the first debates in the Republican primary for New Mexico’s open US Senate seat, some attention has been temporarily re-focused on the state’s myriad congressional races and away from the presidential race. Now is the time to discuss a few broad parameters outlining what we should expect from our candidates as they attempt to win the right to represent us.

The point I’d like to make here is that we should not judge our candidates by how much federal money they pledge to bring back to New Mexico. Brian Sanderoff, a respected New Mexico pollster, said that the loss of Sen. Pete Domenici’s ability to bring money to the state was “potentially devastating to New Mexico” and went on to compare the state’s prospective congressional delegation to a baseball team that has a lot of rookies that winds up in last place.

There will undoubtedly be a period of adjustment given the recent turnover and new faces, especially in the Senate since Domenici has held the seat since 1972. But will the loss of so much seniority really hurt New Mexico’s economy? More importantly, is it really healthy for New Mexicans to encourage their elected officials in Washington to grab as much money for the state as possible? I say “no.”

Unfortunately, the pressure to bring federal money back to the state looms large for candidates. Given the hype surrounding Sen. Domenici’s well-documented efforts on behalf of the labs and military bases, the issue has also loomed large in Republican Party criticisms of Rep. Udall and his lack of willingness or inability to stop cuts at Sandia and Los Alamos labs.

Gov. Gary Johnson, on the other hand, in deciding not to run for the Senate, cited the need for New Mexico’s delegation to “belly up to the federal trough” as one particularly unattractive aspect of the job. Johnson told the Albuquerque Journal, “I’d be terrible at that job.”

This is sad. Regardless of whether or not Gary Johnson or Tom Udall would make a good U.S. senator, New Mexicans should vote on whether they support each candidate’s agendas and not based on who can bring the most federal money to New Mexico.

After all, relying on the federal government has not made New Mexico a prosperous state in the past. In fact, while New Mexico receives more money from the federal government relative to what it sends to Washington in the form of taxes ($2 for every $1), we remain among the poorest states in the nation.

Given our sudden loss of clout in Washington, this might be the time to further efforts at economic development such as further reducing New Mexico’s income tax rates and creating a more business-friendly regulatory environment. Such efforts would be preferable to more narrowly targeted efforts, given the struggles experienced by Eclipse Aviation, Tesla Motors, and Green Rubber Global — three businesses that have received generous tax breaks and subsidies to locate here.

In an economy driven by federal spending, benefits are largely limited to recipients of government largesse that is taken from productive citizens in other states. Innovation and entrepreneurship are not cultivated as policymakers are not forced to create the conditions necessary for such activity to flourish. In an economy that is forced to sustain itself, creativity is nurtured and the benefits of this creativity are spread throughout the economy.

New Mexicans have little or no control over the location of military bases, Indian reservations, and a relatively robust federal presence. However we must disavow ourselves of the notion that federal spending is or should be the key to our economy.

More importantly, no matter who we vote for, we should elect our leaders based on how they will represent our state, not how much money they can take from taxpayers nationwide and bring home.

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

Categories
Local Government Open Government Tax and Budget

More Silliness in Santa Fe

alamogordo_daily_news

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.

Categories
Open Government Tax and Budget

Meter Shows New Mexico Spending in Real Time

los_alamos_monitor

Most New Mexicans think of July as a time to celebrate America’s independence, but government bureaucrats around the state celebrate the month for an entirely different reason. There are no backyard barbecues or fireworks for this celebration, however, and the nation’s Founding Fathers might not even approve of the cause.

Indeed, few New Mexicans even recognize the passing of this “other” July holiday and the Rio Grande Foundation is one of the few organizations (outside of the government) that even marks the occasion.

What is this red-letter day? The “holiday” is nothing more than the start of a new fiscal year for the state government. In other words, it is the day when government budgets officially grow and they get to start spending more money than they had during the previous fiscal year.

Most discussions about New Mexico’s budget focus on the General Fund, which will total $5.6 billion in FY 2008. But, during the 2008 fiscal year, New Mexico’s government will spend a total of 13.6 billion taxpayer dollars.  Both of these numbers are rising rapidly.

The General Fund is the most well-known pot of money and barometer of spending in the state – it rose by 11 percent last year. Not included in that number is $8 billion in additional money that includes the permanent fund, various road funds, and much of the money spent on Medicaid and Medicare. Overall spending, which amounted to $13.6 billion in FY 08, rose dramatically last year as well for a robust 9 percent single-year increase.

Both the 11 percent figure for the General Fund and the 9 percent overall budget increase are far above the rates needed to keep up with inflation (about 2 percent this year) and population growth which averages about two percent annually in New Mexico. Thus, state government grew rapidly in real terms this year.

The Rio Grande Foundation marks the date by updating its “spend-o-meter.” With the start of this new fiscal year (2008) our spend-o-meter 9 percent faster than it had spun during the previous fiscal year. This 9 percent increase also explains why government bureaucrats celebrate: they get to spend even more of your money than they did before.

Unfortunately, when numbers get big, readers’ eyes sometimes glaze over. That’s because most of us never deal with anything in terms of billions, much less money. The Rio Grande Foundation created a “spend-o-meter” to allow average New Mexicans to visualize state spending and measure just how fast the state is spending our money. The meter runs continuously and is posted on our websitewww.riograndefoundation.org.

So, just how much is $13.6 billion?  To spend that money over a single year, the state spends $433 per second. Put differently, based on New Mexico’s population of approximately 2 million, our government will spend $6,957 for every man, woman, and child in the state during the current fiscal year.

Based on data from the New Mexico Tax and Revenue Department estimating that there are 875,000 tax filers in the state, the state will spend $15,542 for each and every tax filer in FY 2008. That works out to over $1,295 every month for each-and-every New Mexican that filed a tax return.

While politicians might believe that they are better stewards of taxpayers’ money than the people who earned the money in the first place, this sentiment is less common among the average taxpayer. More importantly, New Mexico’s high poverty levels and low incomes call into question past efforts by government officials to “manage” the state’s economy.

Rather than continuing down the path to bigger government, taxpayers, if they are baffled by the rapid rate of spending growth here in New Mexico should question where all that money is going. More importantly, they should contact their legislators to find ways to amend the New Mexico Constitution to limit spending. Left to their own devices, politicians will spend whatever the government collects. Only the active involvement of concerned taxpayers can halt the spending spree in Santa Fe.

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.

Categories
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.

Categories
Open Government

How Accessible Are Your Legislators?

While most New Mexicans are enjoying the lazy days of summer at the swimming pool, on the golf course, or on vacation, many of our state representatives are busy going door-to-door campaigning to get re-elected. Others are working hard to take their places. New Mexico is among the vast majority of states with a part time legislature, but there is no doubt that in many respects, being in the legislature is a year round job.

New Mexico’s legislative sessions alternate between having 30 days in even-numbered years or 60 days in odd-numbered years. By the time the session rolls around, nearly all bills that have a chance of passing have already been filed and legislators are busy working to build coalitions and lobbying for support for their legislative priorities. By the time the session rolls around, there is little time for developing new ideas or dealing with constituent issues. This problem is particularly acute given the deluge of legislation they will face. In 2006, for example, 2,641 bills were introduced during the 30-day session. This number does not even include the House and Senate Capital Outlay bills which numbered a whopping 3,225.

As part of our work in promoting effective and responsive government, the Rio Grande Foundation took a close look at what information legislators made available to their constituents. On the website of the New Mexico Legislature, space is available for each Member to offer constituents their capitol phone number which they only answer during the legislative session, an office phone number for their regular 9-5 job, and their home number.   Space is also available for legislators to give out their physical and email addresses.

In order to determine the accessibility of our legislators, the Rio Grande Foundation took a careful look at the information each legislator makes available. While nearly all legislators had at least one phone number listed in addition to their capitol phone number, email addresses were less common.

In the 70-member House of Representatives, there are 43 Democrats and 27 Republicans. A mere 23 of the 43 House Democrats (53.5 percent) make email addresses available to the public. The numbers were somewhat better for Republicans 22 of 27 (81.5 percent) of whom have email addresses listed on the legislative website. Among the prominent members of the House lacking email was Speaker of the House Ben Lujan.

In the 42 member Senate, the situation was somewhat better overall, however there is one glaring example of a member of the New Mexico Senate with whom constituents probably find it quite difficult to communicate. That member, Leonard Tsosie, lacks any phone number, but the Capitol phone number at which he would only be accessible a few months out of the year.

Democrats in the Senate outperformed their colleagues in the House of Representatives somewhat, with 15 of 24 or 62.5 percent of Senate Democrats listing email addresses on the legislative website. Senate Republicans, on the other hand, performed the best of all, surpassing their House colleagues with 16 of 18 Republican senators listing their email addresses (89 percent).

Considering that a recent survey from the Pew Internet & American Life Project found that 73 percent of American adults (age 18 ) go online to use the internet or email, it is hard to believe that 100 percent of New Mexico’s legislators are not making themselves accessible online.  With the Governor’s Task Force on Ethics Reform recommending the state pay legislators salaries for their work; it might make sense to try less expensive solutions like email first.

There is no doubt that some legislators, especially in rural areas with limited internet access, may be at a disadvantage when it comes to internet access relative to their urban colleagues. But, no consistent pattern developed when we analyzed the data. Some urban members lack email and many rural members do have email. Nonetheless, it is hard to believe that even our most rural legislators would be unable to access the internet when all members of both the Arizona and Utah legislatures – state with areas every bit as desolate as New Mexico – have email addresses.  Notably, Utah’s legislators also work on a voluntary basis.

The fact is that when it comes to expressing an opinion about a specific issue or asking your elected official to consider introducing or sponsoring a bill, most people simply don’t feel comfortable calling their representatives during the workday and interrupting them at the office. Of course, it is no more appealing to call your legislator in the evening at their home phone number. Email is simply the least obtrusive and most logical way for constituents to communicate with their legislators at the state level and those that are not connected are missing out. This makes even more sense given that the large geographical size of many districts in New Mexico makes relying on direct personal contract quite difficult.

The Internet is not a new technology anymore; it is an integral part of most of our lives. Although our legislators are behind the curve, this is one problem that could be solved quickly, easily, and best of all, cheaply.

A list of New Mexico’s legislators with district information, phone numbers, and E-mail addresses (if they have them) can be found below. The Rio Grande Foundation encourages all legislators to do make themselves more accessible to their constituents by offering their constituents the option of emailing them. Since email is free, there is no need for the state to spend limited taxpayer dollars on this project.

New Mexico House Members and Contact Information
Dist Name E-mail Telephone City/Area Pty
1 Thomas Taylor tom@tomtaylor.net 325-8941 Farmington R
2 Dick Cheney rcheney0202@msn.com 320-0315 Farmington R
3 Sandra L. Townsend townsend1225@aol.com 334-2481 Farmington R
4 Ray Begaye ray.begaye@nmlegis.gov 368-4192 Shiprock D
5 Irvin Harrison irv4u@cnetco.com 863-1216 Gallup D
6 George J. Hanosh   287-4451 Grants D
7 Kandy Cordova kandy_cordova@msn.com 864-1483 Belen D
8 Fred Luna   865-7426 Los Lunas D
9 Patricia A. Lundstrom   722-4327 Gallup D
10 Henry Kiki Saavedra   242-9582 Albuquerque D
11 Rick Miera   843-6641 Albuquerque D
12 Ernest H. Chavez ernestc1531@aol.com 877-5416 Albuquerque D
13 Daniel P. Silva   280-9647 Albuquerque D
14 Miguel P. Garcia miguel.garcia@nmlegis.gov 450-2455 Albuquerque D
15 Teresa A. Zanetti electzanetti@comcast.net 344-7248 Albuquerque R
16 Harriet I. Ruiz hrruiz@peoplepc.com 771-3059 Albuquerque D
17 Edward C. Sandoval edward.sandoval@nmlegis.gov 344-8449 Albuquerque D
18 Gail Chasey gailchasey@msn.com 266-5191 Albuquerque D
19 Sheryl Williams Stapleton sheryl.stapleton@nmlegis.gov 265-6089 Albuquerque D
20 Richard Berry richardberry@nmvictory.com 293-1130 Albuquerque R
21 Mimi Stewart mstewart@osogrande.com 880-8249 Albuquerque D
22 Kathy A. McCoy katrina@swcp.com 281-9540 Cedar Crest R
23 Eric A. Youngberg eric_youngberg@msn.com 843-8181 Albuquerque R
24 Janice E. Arnold-Jones jearnoldjones@aol.com 938-3141 Albuquerque R
25 Danice Picraux danice.picraux@nmlegis.gov 232-2977 Albuquerque D
26 Al Park   256-0818 Albuquerque D
27 Larry A. Larranaga   821-4948 Albuquerque R
28 Jimmie C. Hall jimmie.hall@nmlegis.gov 294-6178 Albuquerque R
29 Thomas A. Anderson ta_a@msn.com 897-2593 Albuquerque R
30 Justine Fox-Young foxyoung@gmail.com 883-3017 Albuquerque R
31 William “Bill” R. Rehm billrehm@comcast.net 259-3398 Albuquerque R
32 Dona G. Irwin   546-9376 Deming D
33 Joni Marie Gutierrez jonig@zianet.com 647-5577 Mesilla D
34 Mary Helen Garcia   526-2726 Las Cruces D
35 Antonio Lujan alujan@zianet.com 649-2218 Las Cruces D
36 Andy Nunez   267-3451 Hatch D
37 Ed Boykin   522-8174 Las Cruces R
38 Dianne Hamilton dianne38john4132@zianet.com 538-9336 Silver City R
39 Manuel G. Herrera   537-5577 Bayard D
40 Nick L. Salazar   667-0362 Ohkay Owingeh D
41 Debbie A. Rodella debbie.rodella@nmlegis.gov 665-0075 Ohkay Owingeh D
42 Bobby Gonzales   758-2674 Taos D
43 Jeannette O. Wallace wallace@losalamos.com 661-2575 Los Alamos R
44 Jane E. Powdrell-Culbert jpandp@worldnet.att.net 721-9021 Corrales R
45 Jim R. Trujillo jimtrujillo@msn.com 470-0143 Santa Fe D
46 Ben Lujan   455-3354 Santa Fe D
47 Peter Wirth peter.wirth@nmlegis.gov 988-1668 Santa Fe D
48 Luciano “Lucky” Varela   982-1292 Santa Fe D
49 Don L. Tripp trippsdon@netscape.net 835-2465 Socorro R
50 Rhonda S. King   832-5050 Stanley D
51 Gloria C. Vaughn   434-2819 Alamogordo R
52 Joseph Cervantes cervanteslaw@zianet.com 526-5600 Las Cruces D
53 Terry T. Marquardt terry.marquardt@nmlegis.gov 437-7783 Alamagordo R
54 Joe M Stell   785-2188 Carlsbad D
55 John A. Heaton jheaton@caverns.com 887-5983 Carlsbad D
56 W. C. “Dub” Williams   378-4181 Glencoe D
57 Daniel R. Foley dan@foleyinsuranceagency.com 624-0608 Roswell R
58 Candy Spence Ezzell csecows@aol.com 625-0550 Roswell R
59 Avon W. Wilson   624-7442 Roswell R
60 Thomas E. Swisstack tswiss1@msn.com 891-8656 Rio Rancho D
61 Donald L. Whitaker   394-2045 Eunice D
62 Donald E. Bratton   393-2937 Hobbs R
63 Jose A. Campos josephs@plateautel.net 472-5267 Santa Rosa D
64 Anna M. Crook anna.crook@nmlegis.gov 763-4108 Clovis R
65 James Roger Madalena jr_madalena@yahoo.com 834-7359 Jemez Pueblo D
66 Keith J. Gardner gardners@prodigy.net 622-6500 Roswell R
67 Brian K. Moore brian@ranchmkt.com 374-9681 Clayton R
68 Hector H. Balderas hectorbalderas@msn.com 730-1342 Wagon Mound D
69 Ken Martinez mlo1@7cities.net 287-8801 Grants D
70 Richard D. Vigil   425-9793 Ribera D
New Mexico Senators and Contact Information
Dist Name E-mail Telephone City/Area Pty
1 William E. Sharer bill@williamsharer.com 325-5055 Farmington R
2 Steven P. Neville nmsenate@msn.com 327-5450 Aztec R
3 John Pinto   928-871-6952 Tohatchi D
4 Lidio G. Rainaldi   863-3643 Gallup D
5 Richard C. Martinez richard.martinez@nmlegis.gov 753-8027 Espanola D
6 Carlos R. Cisneros carlos.cisneros@nmlegis.gov 670-5610 Questa D
7 Clinton D. Harden charden@theosogroup.com 389-1248 Clovis R
8 Pete Campos petecampos@newmexico.com 454-5700 Las Vegas D
9 Steve Komadina komadina@stevekomadina.com 893-2840 Corrales R
10 John C. Ryan johnchrisryan@yahoo.com 343-1400 Albuquerque R
11 Linda M. Lopez   831-4148 Albuquerque D
12 Gerald Ortiz y Pino jortizyp@aol.com 265-3717 Albuquerque D
13 Dede Feldman dede.feldman@nmlegis.gov 242-1997 Albuquerque D
14 James G. Taylor jamesg.taylor@nmlegis.gov 877-4986 Albuquerque D
15 Diane Snyder   830-1669 Albuquerque R
16 Cisco McSorley cisco.mcsorley@nmlegis.gov 266-0588 Albuquerque D
17 Shannon Robinson shannon.robinson@nmlegis.gov 998-6600 Albuquerque D
18 Mark Boitano boitanom@aol.com 798-1092 Albuquerque R
19 Sue Wilson Beffort sue.beffort@nmlegis.gov 292-7116 Albuquerque R
20 William H. Payne william.payne@nmlegis.gov 884-6872 Albuquerque R
21 Kent L. Cravens klcravens@alphagraphics.com 294-1368 Albuquerque R
22 Leonard Tsosie     Crownpoint D
23 Joseph J. Carraro joecarraro@aol.com 898-9369 Albuquerque R
24 Nancy Rodriguez   983-8913 Santa Fe D
25 John T.L. Grubesic john.grubesic@nmlegis.gov 820-1825 Santa Fe D
26 Bernadette M. Sanchez   270-6952 Albuquerque D
27 Stuart Ingle   356-3088 Portales R
28 Ben D. Altamirano   538-3525 Silver City D
29 Michael S. Sanchez senatormssanchez@aol.com 865-5583 Belen D
30 Joseph A. Fidel   287-4432 Grants D
31 Cynthia Nava cynthia.nava@nmlegis.gov 882-6200 Las Cruces D
32 Timothy Z. Jennings   623-8331 Roswell D
33 Rod Adair radair@dfn.com 627-8372 Roswell R
34 Vernon D. Asbill vernon@asbillforsenate.com 302-8135 Carlsbad R
35 John Arthur Smith john.smith@nmlegis.gov 546-4979 Deming D
36 Mary Jane M. Garcia maryjane.garcia@nmlegis.gov 523-0440 Dona Ana D
37 Leonard Lee Rawson lee.rawson@nmlegis.gov 528-1801 Las Cruces R
38 Mary Kay Papen   524-4462 Las Cruces D
39 Phil A. Griego senatorgriego@yahoo.com 988-2233 San Jose D
40 Dianna J. Duran dianna.duran@nmlegis.gov 585-9896 Tularosa R
41 Carroll H. Leavell leavell4@leaco.net 395-2535 Jal R
42 Gay G. Kernan ggkern@valornet.com 392-2327 Hobbs R