Economy Public Comments and Testimony

Rio Grande Foundation President Paul Gessing’s Comments to Governor Bill Richardson’s Task Force on Eminent Domain Use

Chairman Bullington and distinguished Members of the Task Force, thank you for inviting me to address you on the issue of eminent domain in New Mexico and what, if anything should be done about it. My name is Paul Gessing. I am President of the Rio Grande Foundation. The Foundation is registered as a 501c3 in the state of New Mexico. Our mission is to promote the ideas of Liberty, Opportunity, and Prosperity here in the state. We do this by informing New Mexicans of the importance of individual freedom, limited government, and economic opportunity. We receive financial support from over 200 donors and foundations and the approximately 1,000 people who have signed up to receive our regular updates.

Although the Rio Grande Foundation is an independent organization dedicated to New Mexico, we are part of a nationwide network of like-minded policy organizations called the State Policy Network. A bulk of our work deals with economic policy, but we also support reforms that promote fair, competitive elections and greater participation in the political process on the part of the people of New Mexico.

While we had a number of concerns about the eminent domain bill that Governor Richardson vetoed earlier this year, we believe that its limited protections would have been better than nothing. However, if this task force’s recommendations assist Governor Richardson and the Legislature in creating stronger protections for property owners than last year’s bill would have achieved (with specific language along the lines of what Ms. Perkins described to you last week), then we will be extremely pleased.

Property Rights and the Harm of Eminent Domain Abuse

Although eminent domain was not at the top of many Americans’ agendas prior to the Supreme Court’s decision in Kelo, which was handed down in June of 2005, government’s use of the power has been controversial since the founding of the Republic. Back in 1795, in fact, the Supreme Court, ruling in the case of case of Vanhorn’s Lessee v. Dorrance, called eminent domain “The despotic power” and urged states not to exercise that power “except in urgent cases.” The justices went on to say that they could not imagine a situation “in which the necessity of a state can be of such a nature as to authorize or excuse the seizing of landed property belonging to one citizen, and giving it to another citizen.[1]”

We at the Rio Grande Foundation agree with the Court’s 1795 ruling. That is because it is our strong belief that private property rights constitute the foundation upon which all other human freedoms are based. Respect for private property is one of the major differences between America and less-free nations.

As I will explain later on in my testimony, those concerned with promoting long-term economic growth have a significant interest not only in maintaining individual property rights, but in protecting themselves against the often misguided and expensive plans of government officials and politically-connected developers.

First, let me briefly describe the situation as it stands now. Despite the explicit prohibition against taking private property for public use without just compensation found in the Fifth Amendment to the United States Constitution (and despite the precedence provided by the Court’s 1795 ruling), the Supreme Court’s 5-4 decision in Kelo throws the door open for eminent domain as long as government officials have a “plan” and believe that there will be some economic benefit from the taking. Thus, in just over 200 years we have moved away from using eminent domain to facilitate the construction of roads and bridges (which clearly fulfill the “public use” requirement), to allowing eminent domain to pave the way for a shopping center or new corporate offices. In the post-Kelo world, as long as government officials believe that tearing down a Motel 6 and giving the land to the Ritz Carlton will generate greater tax revenue, the use of eminent domain is perfectly acceptable (this example was used by Justice Sandra Day O’Connor to clarify the arguments being made by the City of New London lawyers during the Kelo hearing).

Although the Kelo decision put eminent domain front-and-center in American public opinion, the fact is that the habit of using eminent domain to force private-to-private property transfers had become all too commonplace in many states even prior to Kelo. In New York alone between 1998 and 2002, there were 146 instances of eminent domain for private use – and these are just those instances that the media publicly documented; we have no way of knowing how many so-called consensual or voluntary takings occurred where property owners were threatened with eminent domain. These takings were primarily based on precedents set by two court decisions. The first case was the U.S. Supreme Court’s 1954 Berman v. Parker decision, which allowed governments to use eminent domain to seize private property in order to tear down so-called “blighted” areas.

For those of you who are familiar with the neighborhoods of Washington, DC, it was Berman that is largely-responsible for the Southwest quadrant of the city. Unlike much of the city which has managed to retain its charming brick row-houses and is now in the midst of a tremendous revival, the Southwest quadrant – which was home to a predominantly black population – was bulldozed in the 1950s to make way for 1960s and 70s “redevelopment” using massive slabs of concrete that have proven inhospitable to the urban life so prevalent in the rest of the City.[2]

The second decision – the one that really began the trend of eminent domain for private use – was made by the Michigan Supreme Court and is known as the Poletown decision. In this 1981 ruling, the Michigan Supreme Court allowed the city of Detroit to bulldoze an entire neighborhood, complete with more than 1,000 residences, 600 businesses, and numerous churches, in order to give the property to General Motors for an auto plant. That case set the precedent, both in Michigan and across the country, for widespread abuse of the power of eminent domain. It sent the signal that courts would not interfere, no matter how private the purpose of the taking.

New Mexico and Eminent Domain

Thankfully, despite the broad power given to it by the federal government and a State Constitution that offers relatively few protections for New Mexicans, governments in this state have not engaged in the kind of massive abuses of eminent domain found in other states. But, that is not to say that as more people move to New Mexico and as the state continues attracting more businesses and heavy industry – with requisite calls for “economic redevelopment” – that eminent domain abuse will not become a greater problem.

Now, as Rio Rancho Mayor Kevin Jackson discussed last week, there are some specific problems relating to the platting of land in New Mexico and our state’s history that have created added pressure for eminent domain in certain areas. Given a situation in which so many land owners in the areas affected by poor platting have not developed their land and that so many of these parcels of land are owned by individuals residing elsewhere, I can understand why city officials were willing to delegate their eminent domain power to a developer. After all, they had been presented with a seemingly reasonable and generous offer and since “obsolete platting” technically creates conditions of “blight” as defined in New Mexico law, this may have seemed like the simplest option.

Obviously, we’re not dealing with a situation as we saw in Connecticut where Susette Kelo and many of her neighbors had been living in their houses for upwards of 50 years. While Rio Rancho’s use of eminent domain to resolve its platting problem is unlikely to stir up that kind of backlash from the American people or even a majority of New Mexicans, it is not necessarily the best policy either. More importantly, it is vital that opponents of eminent domain reform not use what amounts to a historical anomaly to derail strong eminent domain protections for all New Mexicans.

The Problem of Platting and Blight

I want to stress to this panel that the Rio Grande Foundation is concerned about the likelihood for abuse contained in any “blight” exemption that might be contained in any new eminent domain restrictions. Prior to the Kelo decision, blight was used and abused regularly by state governments in their uses of eminent domain. In fact, in Lakewood, Ohio, the City attempted to condemn homes using eminent domain by calling the area blighted. Why was this community considered blighted? Well, some homes didn’t have an attached two-car garage or they had less than two full bathrooms. Other than that, the homes were well taken care of.[3] My point is that even the most innocent and well-intended blight definition will inevitably be twisted, expanded, and even redefined by special interests over time, so I urge you to keep that in mind when making your recommendations.

I’d like to discuss the specifics associated with the platting issue that was discussed last week and offer some ideas for ways in which legitimate economic development in a poorly-platted area like Rio Rancho might occur without resorting to abusing eminent domain. First and foremost, as was touched on yet not elaborated upon last week, if any property poses a specific physical danger to any nearby other property, there are existing police powers that can be used to address the problem. The fact is that whether the situation is a crack house down the street or the potential for massive flooding, governments can and do have the power to act to protect citizens.

Now, as I understand it from last week’s discussion, Rio Rancho has in the past struck deals with Pulte homes to allow Pulte to essentially “borrow” the city’s eminent domain power in order to develop specific parcels of land that were poorly platted. At the same time, Pulte has provided significant infrastructure to the city and to residents of the new development. This may sound like a win-win deal, but what about those people who wanted to build their retirement homes on that land? Also, did those property owners really get fair market value for their land or was Pulte able to use the eminent domain club to get the land at a reduced cost with enough left over to provide the added infrastructure and still make a tidy profit? I don’t have all of the answers to these questions, but I can tell you that allowing private entities to use government power – even if it appears to be for the good of the community – is likely to be abused.

It is the Foundation’s belief that ultimately a free or at least less coercive environment could have led to a similarly beneficial result. Here I will outline some ideas on how things might have been handled differently and how they might be handled in other similar situations in the future.

  • A private developer ie. Pulte works with individual landowners to assemble parcels of land large enough for development. This is the most logical and simplest of all choices. Why hadn’t it been done before? Possibly, Pulte and other developers, cognizant of the eminent domain threat at their disposal decided against the more difficult and possibly more costly method of assembling parcels of land and decided against this method because they felt they could get the land cheaper with the City’s help.
  • The City could contact landowners throughout the parcel of land and explain to them that if they agree to sell their land which, in its current ownership structure is worth far less than its real market value if assembled, they can cash in on the opportunity to sell for a decent price. As the city assembles those voluntarily willing to part with their parcels of land for a fair price, developers could then bid on the right to develop that particular area.
  • Additionally, Rio Rancho could look to the example the city of Anaheim, California provides, where the Mayor has chosen to solve platting problems as well as stagnant development without resort to eminent domain. In Anaheim, the city used a strategy of overlay zoning and also announced a sort of first-come first-served policy on applications for residential permits.  So, developers who sought approval for 200 condo units would get it, up to whatever the city determined was the maximum. Rio Rancho could do something like that, perhaps with utilities or other permits. That encourages developers to buy and people to sell while it’s still saleable.
  • Lastly, and only in areas that are considered threats to other areas, the city could indeed use its powers of condemnation in order to construct flood control ponds and other tools to ensure the livability of already-developed areas. It is unclear to me exactly how developing particular parcels of land protects adjacent land, but in the likelihood that this is the case, the legitimate use of eminent domain for flood protection is indeed a public use and would be legal under even the most restrictive eminent domain abuse protection legislation. If the City felt it necessary to recoup the costs of these outlays, it could easily do so by taxing existing and future residents to pay for these flood control services.

While it is possible that the City could indeed leverage the resources of private developers in order to improve flood protections and protect homeowners in existing developments (with or without abusing eminent domain), it is hard to see why existing homeowners should have the right to force development of a particular parcel of land in order to protect their homes. These people clearly purchased their houses without the adjacent land being developed. If their properties need additional protections from the ravages of Mother Nature, it is ultimately their responsibility to pay for it.

More “Typical” Eminent Domain Abuse

While it is worthwhile to spend a significant portion of my time discussing the platting issue which is admittedly somewhat tricky, I believe that the more “traditional” forms of eminent domain abuse will become increasingly common in New Mexico. In fact, current efforts to create a “city center” in Ranchos de Albuquerque may fall into this category. Although the village has, to my knowledge, not yet used eminent domain to condemn any property owned by existing landowners, the threat of eminent domain has been made in the pages of the Albuquerque Journal.

Should the village ultimately resort to using eminent domain to take land from one group of private property owners for the benefit of other private individuals or entities and, at least theoretically, the people of Ranchos de Albuquerque, this would qualify as eminent domain abuse. This is exactly the type of development that we believe must be prohibited under New Mexico law.

While Jennifer Perkins covered many of the policy prescriptions and legal changes that New Mexico can implement in order to prevent this type of abuse from occurring, I’d like to point out exactly why governments should refrain from becoming intimately involved in economic development issues in general and why eminent domain is especially ripe for abuse. These are not simply moral arguments; rather they are economic and moral. Time and again, the economic evidence has shown that the economies of nations, states, and cities are improved when governments protect property rights and create an even playing field without picking favorites.

I have already mentioned Michigan’s Poletown decision. In 1981, the Michigan Supreme Court allowed the City of Detroit to seize and bulldoze an entire neighborhood so that General Motors could build an auto plant. More than 4,200 people were displaced from their homes, 140 businesses were lost, as were 6 churches and a hospital. GM paid Detroit $8 million for the property, while the City paid more than $200 million to acquire and prepare the land.[4]

Although Detroit Mayor Coleman Young and GM had promised the project would create 6,000 jobs, when all was said and done, the plant employed only 2,500 people. It is estimated that the Poletown taking resulted in a net loss of jobs and it is clear to me that along with the substantial loss of property tax revenue, the city was ultimately worse off from a revenue standpoint than it was before.

There are dozens of similar examples all across the country.[5]


Simply put, eminent domain for the supposed benefit of economic development is the most significant rationale for abusive use of eminent domain and, if Governor Richardson and the Legislature fail to act, it will become a problem here. To that end, I urge you to use the model legislation and language provided by Ms. Perkins in your recommendations and to keep in mind that when we as a nation have been at our best it has been due to our respect for the rights of the individual. The times at which we have been at our worst have unfortunately been the times when we have forgotten the inalienable rights the Founders set forth in the Constitution in favor of some collectivist agenda.

There is no doubt that eminent domain has a role to play in our political and economic system. Without it, the Interstate Highways would never have been built and countless utility and other projects that are used by all of us on a daily basis would never have been created. Yet, I hope I have clearly illustrated the very real problems that arise when governments at any level abuse or even delegate their powers to private entities.

As Justice O’Connor noted at the end of her dissent in Kelo:

Any property may now be taken for the benefit of another private party, but 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.  As for the victims, the government now has license to transfer property from those with fewer resources to those with more.  The Founders cannot have intended this perverse result.  “[T]hat alone is just government,” wrote James Madison, “which impartially secures to every man, whatever is his own.”

In closing, I would like to remind you that the purpose of this task force is to consider, not whether eminent domain for private benefit can be useful, but whether or not eminent domain is a necessary tool for state and local economic development. While there are situations in which it might be simpler to use government power to quite literally steamroll the opposition, we must create a legal framework deferential to individual property rights, lest those rights be abused.

Thank you for your time and attention this afternoon. I look forward to answering your questions.

[1] Jeff Jacoby, “Abusing Eminent Domain,” The Boston Globe, September 30, 2004,

[2] Charlotte Allen, “A Wreck of a Plan: Look at How Renewal Ruined Southwest,” The Washington Post, July 17, 2005,

[3] 60 Minutes, “Eminent Domain Being Abused?” July 4, 2004,

[4] Castle Coalition, “Redevelopment Wrecks,” June 2006,

[5] Paul J. Gessing, “Eminent Domain Abuse: If they Can’t Tax It, They’ll Just Take It,” National Taxpayers Union, August 24, 2004,

Education Research

Providing School Choice to New Mexico Children in Foster Care: Fostering Stability and Achievement

Executive Summary

The estimated 523,000 children in foster care systems across the United States – 2,100 in New Mexico – are among the most at-risk in our society.2 For a variety of reasons, children in foster care have been removed from the homes of their birth families and placed under state care. Some children are ultimately returned to their birth family or placed for adoption. Others end up in long-term foster care. Nationally, roughly half of all foster children will spend at least one year in foster care, with 20 percent staying longer than three years.3

Research suggests that children in foster care are at far higher risk of poor life outcomes than the general society.4 Adults who were formerly in foster care are more likely to be homeless, incarcerated, and dependent on state services than the general population.5 They are also more susceptible to drug and alcohol abuse and poor physical or mental health. Young women in foster care are more likely to have early pregnancies and place their own children into the foster system.

A root cause of these problems is that foster children often have not been equipped with the necessary skills to make the difficult transition out of the foster care system and become self-sufficient adults at age 18 or 21. Attaining independence is a challenge for most adolescence, but foster children are at a far greater disadvantage, often lacking a family or social structure to rely on during difficult times.

All too often, foster children receive a substandard education. Compared to the general population, foster children have lower scores on standardized tests and higher absenteeism, tardiness, truancy, and dropout rates.6

Common problems for foster children in the classroom are instability and persistent low-expectations. Frequent out-of-home placements often lead to frequent school transfers for foster children, often leading to setbacks in classroom learning. Moreover, adults formerly in foster care surveyed about their experiences often report persistent low-expectations and a lack of quality educational opportunities in the classroom.

In 2006, Arizona lawmakers enacted a first-in-the-nation school voucher program for children in foster care.7 The program will provide $2.5 million for opportunity scholarships for children that have been placed in foster care. In all, an estimated 500 students are expected to use scholarships worth $5,000 to attend private school.

Following Arizona, New Mexico could implement a school voucher program for children in foster care. An opportunity scholarship could be made available to the estimated 2,100 foster children to attend a public, private, or charter school of choice. Opportunity Scholarships could ensure that a child could continue to attend a quality school even if he or she experiences frequent out-of-home placements. Moreover, it could provide better educational opportunities to children who otherwise could have little reason to excel in the classroom. For the many foster children who are eligible for special education services, an opportunity scholarship would help ensure that these needs are met.

Ensuring that each child in New Mexico’s foster care system receives a high-quality and stable education could have lasting benefits for both the children themselves and communities as a whole.


There are an estimated 523,000 foster care children in the United States. New Mexico has approximately 2,100 children in foster care. This paper is based on the understanding that these children require specially tailored assistance to help with the difficult transition from youth to adulthood.

Unlike their peers in traditional families, foster children often do not have an adequate safety net or social network. They are unable to rely on parents and other relatives for support during the school years and to facilitate a smooth transition out of the home and into adulthood.

Research suggests that children in foster care are among the most at-risk for poor life outcomes in our society.8 For example, research has found that adults who were formerly foster children are more likely to be homeless, unprepared for employment and limited to low-skill jobs, and dependent on welfare or Medicaid.9 Research has also found that foster care children are more likely than the general population to be convicted of crimes and incarcerated, susceptible to drug and alcohol abuse, and to have poor physical or mental health.10 Among young women formerly in foster care, there is a high rate of early pregnancy.11 Evidence suggests that being placed in foster care may be a generational cycle. Adults who were formerly foster care children are more likely to have their own children placed in foster care; nearly one in five foster care women who have children will have to place their children in foster care according to one survey.12

Early Warning Signs: Poor Performance in the Classroom

An early warning sign of these negative outcomes is found in the poor performance of foster care children in the education system. While there are no comprehensive data available on the performance of foster children, a review of the numerous research sources suggests that their performance is below that of the general population.

According to the National Conference of State Legislatures, foster children’s poor performance compared to the general population is reflected in “high rates of grade retention; lower scores on standardized tests; and higher absenteeism, tardiness, truancy and dropout rates.”13 A study published by the American School Board Journal found that “foster children often repeat a grade and are twice as likely as the rest of the population to drop out before graduation.”14 Among dropouts, “fewer foster children eventually earn their GED than non-foster dropouts.”15 According to a research synthesis published by the Child Welfare League, “Almost all of the reviewed studies of those who were in out-of-home care reveal that the subject’s average level of educational attainment is below that of other citizens of comparable age.”16

Background on Education and Foster Children

The reason for this poor performance may be found in general problems that researchers have identified in meeting the following unique educational needs and circumstances of foster care children.


Children placed in foster care often change schools as they change homes or settings. As a number of researchers have concluded, changing schools results in emotional instability as well as practical disruptions in the educational process. According to a synthesis of foster care research, “fewer placements while in care were associated with better adult functioning,” specifically – “living with fewer placements was found to be associated with better school achievement and more years of education.”17 It is not surprising, therefore, that a survey of adults who had formerly been in foster care found that, “these former foster children strongly believed that they had been shifted around too much while in foster care, and as a result, they suffered, especially in terms of education.”18

Practically, school transfers can impose gaps in the learning cycle, as children change from different classrooms and must adjust to new settings, teachers, students, and, in many cases, special services. Such changes might be dramatic compared with each prior situation. According to the Vera Institute, a non-profit group and advocacy organization in support of foster care children, “too many transfers can cause a child to disengage and give up on school.”19 The U.S. Department of Education estimates that students lose between four to six months each time they transfer to a new school.20

In addition to educational setbacks, school transfers cause emotional instability and disruption. According to Nebraska University researchers, “foster children’s social network often broke down as a result of placement disruption and the collapse of their peer relationships once they switched neighborhoods or schools.”21 Given that children in foster care already lack the stability and emotional support of a natural or adoptive family or permanent guardian, this loss of stability from their school community can be particularly damaging. Researchers and policymakers suggest that, for both practical and emotional reasons, instability and too many school transfers should be avoided.

Low Expectations and the Failure of Adult Advocacy

In 1983, a researcher surveyed 277 former foster children in New York City about their experience in foster care. The results of this survey, documented in the landmark No One Ever Asked Us report, shed light on former foster children’s opinions of their educational opportunities. The former foster care children reported that, in many cases, the foster care system failed to place a high standard on their education.22

The Vera Institute also reported that surveys of older youth in foster care revealed that these children often “have high educational aspirations, resent the fact that more is not expected of them, and would benefit from adult encouragement.”23 In many cases, the report suggested, it seems these children would have benefited from alternative educational environments that offered different and more challenging and/or individualized opportunities.

Unfortunately, some of the blame may fall on the adults who should be helping ensure that these children’s educational experience is a success. According to the Vera Institute, “too often teachers, guidance counselors, and other school staff do not expect foster children to excel in school.and few are encouraged to participate in the extra-curricular activities that are associated with higher academic achievement.”24 Likewise, the National Conference of State Legislatures found that the “lines of responsibility and accountability for the educational outcomes of children in foster care are unclear” and that often “no single person or agency ultimately is held accountable for results.”25

The Need for Life Skills Instruction

It is also important to recognize the unique needs of foster children, who, in many cases, lack the family and social network necessary to learn basic life skills. A 1990 survey of former foster care children in the San Francisco Bay Area found that the subjects in general agreed that it is “imperative that social workers put more emphasis on teaching youth life skills as well as providing more tools to secure adequate and affordable housing upon emancipation.”26 The New York City No One Ever Asked Us survey concluded that education services and preparation for independent living were two of the three factors stressed for improvement by former foster children.27

Special Education

Approximately 30 to 40 percent of all children in foster care are also in special education, a higher percentage than the general population.28 Many more foster care children may be eligible for or in need of special education services, since both the identification of and tracking of foster care children may be inadequate. It is also possible that, since foster care children often lack a consistent advocate, some children placed in foster care may be better served in mainstream classrooms.29 According to researchers of the Casey Family Program, “A review of the literature and anecdotal data from the field suggest that the stories of foster children in special education are, all too often, stories of un-served or underserved children, lost records, minimal interagency communication, and confusion over the roles of birth parents, foster parents, and social workers.”30

It stands to reason that children in foster care are at risk of being underserved by the special education system. Special education is an area in education that often requires greater parental advocacy to be effective. Children in multiple placements are at great risk of failing to have their special education needs identified in their IEP (individual education program) placed into action. Among the areas suggested for improvement in meeting the needs of foster care children are: providing more access to early intervention, greater tracking and coordination of special needs children, and empowering guardians with greater advocacy and decision-making authority.31

Cultural Sensitivities

Ethnic minority children are overrepresented in the foster care population. In 2001, 54 percent of the children in foster care were ethnic minorities.32 In many cases, ethnic minority children are placed in mixed-cultural settings. These children may possibly be at greater risk than non-minority children in the foster system. Researchers have identified providing “culturally sensitive and culturally competent” services for minority children as an important goal for our child welfare system, since they might “lessen the traumatic impact of being separated from both their families and from being in a majority culture public child welfare system.”33

Precedent for Targeted Education Aid for Foster Children:
The Federal Chafee Foster Care Independence Act

Foster care services are primarily administered at the state and local level.34 However, the federal government does provide significant funding for foster care children, approximately $7.8 billion in 2004.35 While the majority of these federal funds are dedicated to general child welfare costs, such as the cost of out-of-home placement, some of these resources are dedicated to specific education programs to encourage best practices.

In 1999, President Clinton signed into law the John Chafee Foster Care Independence Program (CFCIP) that focuses on helping children aging out of foster care acquire the necessary life skills to achieve independence in adulthood.36 This program increased funding for mandatory services for youth aging out of foster care to $140 million and, according to the Congressional Research Service, granted states “more flexibility to design programs intended to improve the transition of older foster children from state custody to independent living.”37 One eligible use under CFCIP is to allow states to award $5,000 vouchers to foster children aging out of the program who are 16 years old or older for education and job training programs at public and private institutions.

Why K-12 School Choice for Foster Children?

But the education aid offered by the Chafee Foster Care Independence Act-targeted to foster children 16 years old and older-may in many cases too late. As described in detail above, children in foster care in the K-12 education system have a number of unique needs that are different than the general school population. Providing education choice and flexibility to K-12 foster care children would help provide a more solid educational foundation that will help them better achieve academic success, social stability, and adult self-sufficiency. As described in detail below, there are a number of reasons why school choice may lead to better outcomes for foster care children.

Background on School Choice: History and Empirical Evidence

Simply defined, school choice policies allow students to use taxpayer funds that would have been spent on their education in public school to choose from among a number of schools, including public, private (sectarian or secular), or charter schools. For decades, economists and policy analysts have argued that student-centered reforms such as vouchers would benefit both participating children and the entire school system through market competition.

Today, the argument for school choice rests on more than economic theory. In all, 11 states and municipalities have enacted 14 publicly-funded school choice programs.38 Thanks to the generosity of philanthropists, tens of thousands of children have been able to experience school choice through privately-funded scholarship programs.39 The growing number of publicly and privately-funded school choice programs across America have afforded researches with ample opportunity to study the effects of school choice on outcomes such as parental satisfaction, student achievement, and public school performance. This research is surveyed below.

Across the board, research suggests that school choice reforms have a positive impact on student outcomes. For example, Columbia University scholars recently examined 35 empirical studies testing the effects of competition in the educational marketplace. Overall, they found that “a sizable majority of these studies report beneficial effects of competition across all outcomes.”40

Family Satisfaction

There is general agreement that the ability to choose a child’s school increases family’s satisfaction with that school. This common sense idea has been proven in numerous studies. For example, in 2003, the Goldwater Institute surveyed approximately 2,600 low-income families participating in Arizona School Choice Trust’s scholarship program and found that parents able to choose their child’s school were happier than those parents who were unable to choose their child’s school.41

Several other studies have reached the same conclusion.42 For example, the U.S. Department of Education’s National Household Education Survey Program also found that school choice increases parental satisfaction in a national survey of parents:

Parents whose children attended either public, chosen schools or private schools were more likely to say they were very satisfied with their children’s schools, teachers, academic standards, and order and discipline than were parents whose children attended public, assigned schools. Parents whose children attended private schools were more involved in activities at their children’s schools than were parents whose children attended public, assigned and public, chosen schools.43

Policymakers implementing a school voucher program should be confident that school choice will boost the participating family’s satisfaction.

Effect on Academic Achievement of Students Receiving Vouchers

A growing body of research also suggests that school choice programs have a positive impact on student achievement. For example, a study conducted by researchers from Harvard and Georgetown Universities and the University of Wisconsin released in 2001 found that African-American students receiving private scholarships in Ohio, New York, and Washington, D.C. scored significantly higher than their peers who remained in public schools.44 Overall, dozens of independent studies have found that school choice programs benefit the students who participate.45 For example, Dr. Jay Greene, the head of the newly endowed department of education reform at the University of Arkansas, recently examined the effects of school choice on high school graduation rates in Milwaukee and found that 64 percent of low-income students using vouchers to enroll at 10 private high schools in 1999 graduated, whereas only 36 percent of their public school peers received diplomas.46

How School Choice Could Address the Special Needs of Foster Children

As described above, research suggests that children participating in school choice programs benefit from higher academic achievement It is likely that providing foster children with vouchers to attend a chosen private or parochial school would lead to higher academic achievement or, at least, greater satisfaction.

In a sense, school choice provides children with a money-back-guarantee, since the student could always use his opportunity scholarship to transfer to a new school that affords better opportunities. In addition to academic achievement and higher satisfaction, a system of school choice could address foster children’s specific needs in a number of ways.

Fostering Stability and Building Friendships and Peer Groups

Instability caused by too many transfers from different out-of-home placements, as described earlier, is one of the biggest challenges facing foster children. As the Vera Institute recently recommended, “keeping school as a point of stability can help foster children succeed educationally and give them peers and caring adults to help them weather the changes at home.”47 An opportunity scholarship would empower a child, in many cases, to remain at the same school despite transferring to a new out-of-home placement. Assuming that the placement is in the same general geographical location, the child could in many cases continue to attend the same school. As a number of researchers have advised, providing permanency in school leads to better educational outcomes and greater emotional stability for foster children.48

Long-term Friendships

Creating a long-term relationship with a chosen school could help build a long-term sense of community for a child. A survey of alumni of the Boise Division of the Casey Family Program for children in foster care found that many of the alumni “expressed a desire to connect with other be involved in alumni activities. And a willingness to contribute to the division and to help ‘Casey kids’ currently in foster homes.”49 This suggests that a positive experience with an association or community can make a positive impact on a foster child. By helping a child remain in the same school community for a lengthy period, an opportunity scholarship could purchase an important sense of belonging and community for a foster child.

Ownership and Decision-making

A primary challenge facing foster care children in the education system is the lack of an advocate. Similarly, former foster care children have expressed frustration over a lack of control about their lives and education. By offering students vouchers and the power of being a customer shopping within the education system, an opportunity scholarship would provide foster care students a greater sense of ownership over their education and future. A system of school choice for foster care children would need to include adult guardianship and accountability (discussed in greater detail below). Nevertheless, providing foster care children with some autonomy in the process of seeking education services would likely improve the child’s experience in the system. Education providers would have an additional financial incentive to meet the students’ needs or risk losing the student’s funding, since the student and his family would have control over their education future.

Cultural Considerations

Meeting the cultural needs of ethnic minority children has been identified by researchers as an important goal in the child welfare system. Increasing flexibility in the delivery of education service may provide an opportunity to meet these cultural needs, either in choosing a child’s school or, perhaps, by allocating resources to educational, after-school or summer programs designed to help meet a child’s cultural needs. Greater flexibility through school choice will likely facilitate new opportunities to meet specific needs like cultural considerations.

Special Education and Special Needs

Since between 30 to 40 percent of the children in foster care are also in special education, it is important to consider how school choice programs have been designed to benefit children with special needs. In Florida, all of the states’ nearly 400,000 special education students are eligible to receive a school voucher to attend a private or public school of their parents’ choice.50 This year, 13,700 students are participating in the program.51 According to a survey of parents currently using McKay vouchers and parents who previously used a McKay voucher and who no longer do, Manhattan Institute researchers found that “parents are much more satisfied with their experiences in private McKay schools than they were with their experience in public schools.”52 Importantly, the survey also found that over 90 percent of the parents who left the program believe it should continue to be available to those who wish to use it.

The evidence from the McKay program suggests that offering vouchers to students in special education improves the students’ educational experience by providing the power to exercise choice and preference. Offering children in foster care similar school choice options may help solve some of the general problems identified by researchers and child advocates, such as children generally falling through the cracks of the special education system. In addition, ensuring that children remain in the same school even when they change out-of-home placement (when it is geographically possible) would also help ensure that that delivery of special education services and emotional therapy sessions are not interrupted.

Innovation: Meeting Special Needs Such as Life Skills Instruction

One of the likely benefits of providing students with school choice options is innovation within the education system. For example, in 1994, Arizona enacted what is considered the nation’s strongest charter school law. Charter schools are public schools that are operated privately instead of by a school district. Over the past decade, the number of charter schools in Arizona has grown to more than 500, and nearly 10 percent of public school children now attend a charter school because they offer unique education services, for example, schools that focus on character education, back-to-basics, or the Montessori teaching method.53

Providing an incentive or opportunity to meet the very specific needs of foster care children could possibly result in the creation of innovative instruction methods that would both benefit participating children and provide a model that other education providers could imitate. The Cato Institute reported in 2001 that the field of “edupreneurs” – or for-profit educators – has expanded to constitute approximately 10 percent of the nation’s $740 billion education industry.54 Rapid innovation occurs in nearly all aspects of human life that are open to the forces of market competition. Encouraging these edupreneurs to seek ways to provide superior education services to children in foster care could lead to a number of unforeseen innovations that may benefit children and society.

Numerous research reports and surveys of former foster children suggest that children in foster care need more life-skills preparation. Since an opportunity scholarship would empower the foster care children and their families to choose their education services, foster care children would be able to choose facilities that offer these services. Other school choice programs, including charter schools as well as vouchers, have led to the development of innovative education providers. Some schools specialize in at-risk youth; others use a Montessori method of teaching; still others specialize in international education and provide additional language training. By turning foster care students into education consumers, educational providers will have an incentive to address these important needs.

Creating an Incentive for Foster Families to Become or Remain Caregivers

Recruiting and retaining quality foster parents is one of the many challenges facing America’s foster care system. According to a research report published by the National Council of State Legislatures, “Turnover among foster parents is extremely high; some agencies lose from 30 to 50 percent of their caregivers every year.”55

One common reason cited for the drop in number of foster homes nationwide is insufficient financial incentive for parents to become foster parents. But there is evidence to suggest that other factors-such as the inability to help guide the child’s future-also contribute to foster family’s dissatisfaction. The U.S. Department of Health and Human Services surveyed foster parents who had planned to quit and found that the top reason for why they decided to quit fostering – cited by 46 percent – was “no say in the child’s future.”56 Providing students with better educational opportunities through an opportunity scholarship program could make the fostering experience more enjoyable for both adults and children, as foster families would be given the opportunity to have more say in the child’s future. It is also likely that some additional parents from the private or charter school communities may find a new incentive to become foster parents if they are confident that the foster child will receive access to a quality education.

A Proposal for New Mexico:
Opportunity Scholarships for Foster Care Children

In 2006, Arizona created a first-in-the-nation school voucher program for children in foster care. The $2.5 million will provide scholarship grants worth $5,000 a piece to an estimated 500 students who have been placed in foster care.

New Mexico could implement a similar school choice program for children in foster care. According to the National Center for Education Statistics, the average per-student expenditure in New Mexico public schools is $7,022.57 The state could offer Opportunity Scholarships worth this amount to children in foster care to attend a chosen public, private, or charter school of their choice. The funding could be used to pay for both enrollment costs as well as transportation to the chosen school. (Since high school typically costs more than elementary and middle school, the voucher amount could be tiered to pay appropriate costs at the various schooling levels.)

An Opportunity Scholarship worth approximately $7,000 would enable all children to have the opportunity to attend a high quality public or private school. This about the same amount that is provided in current school voucher programs in Cleveland, Milwaukee and Washington, D.C. The U.S. Department of Education reported in 2000 that the average private school tuition across the country was $4,689. The Cato Institute, in 2003, surveyed private schools in five metropolitan cities and found that, in each case, the median private school tuition was below $5,000. In Washington, D.C., the median private school tuition was $4,500.58 For Catholic schools in particular, tuition is typically below $4,000 for an elementary school child and less than $7,000 for a high school student.59 All of this suggests that a scholarship worth $8,000 would facilitate widespread school choice.

Moreover, if the cost of tuition and transportation is lower than the $7,000 scholarship amount, the savings could be used for other education services such as tutoring or after school development programs. Or it could also be invested in an education savings account for future use, such as higher education or job training programs. Given the unique needs of foster care children, a generous $11,000 voucher would afford the flexibility to create an education program tailored to the needs of the student.

For the foster children currently receiving special education services which typically cost more than the typical per pupil expenditure, the child’s total funding in public school could be made portable. This would ensure that children receiving costly mental and physical care are also eligible to participate in the program.


This program could be overseen by the Children Youth and Families Department of the New Mexico state government. It also could be overseen by the New Mexico State Public Education Department.

Partnering with Non-Profit Organizations

In addition-or as an alternative-the state could partner with non-government organizations such as charities to provide educational guidance for children in foster care. Non-profits and charities such as the Casey Family Programs organization nationwide have a long history of a commitment to caretaking and improving the lives of children in foster care.

Moreover, non-profit organizations across the nation have also played a key role in providing better educational opportunities for disadvantaged children. Charitable scholarships funds and private school organizations have a long-track record of providing support and guidance for at-risk children. There are many precedents of government partnering with charitable organizations to offer scholarships to disadvantaged children. For example, in 2004, Congress created the Washington D.C. Opportunity Scholarship program, awarding the non-profit Washington Scholarship Fund with the opportunity of awarding school vouchers to low-income children in the nation’s capital. A similar partnership could be created in a program for foster children in New Mexico.

Additional Considerations

Oversight, Advocacy, and Checks and Balances

One of the challenges of designing a school choice program for foster care children is this: who will have the power to choose the child’s school? Children in the foster care system are charges of the state. The state should carefully design a system of checks and balances to ensure that foster children and families make wise decisions with their education resources. A number of examples that demonstrate how such a system of check and balances can be drawn from the already existing accountability measures within the child welfare system.

One possible solution would be to create a panel of commissioners to review the foster child’s education plan for the year in the summer preceding the school year. Reviewing this plan could ensure that the Opportunity Scholarship resources would be put to good use. A proposed education plan could be developed through a cooperative process that includes the opinions of the child, the child’s designated guardian, and other mentors or caseworkers appointed to supervise the child’s well-being. Prior to the school year, the commission could hold a hearing to review the plan. (While the commission would have ultimate decision-making authority, in extreme cases these decisions could be appealed to another authority within the state’s child welfare system.) Once the plan is put into place, the state could require that the commission receive periodic updates about the child’s progress to ensure that the chosen plan is being executed.

Adoption and Placement Incentives

Policymakers should structure the opportunity scholarship program to ensure that it does not provide adverse incentives for placement and adoption. For example, it would be problematic if adoption – the goal of 22 percent of foster care children60 – was seen as a determent to a child’s schooling. In this proposal, one option would be to continue to provide the foster child a scholarship after she has been adopted, therefore enabling the child to continue with her previous schooling. Similarly, while it is unlikely that any family would seek to place their child in foster care due to the opportunity provided by a voucher program, policymakers could eliminate any incentive by offering similar school choice options to all parents or specific populations, such as students from low-income families.

Religious Considerations

Policymakers must determine whether to allow foster children in the opportunity scholarship program to attend private parochial schools. The decision presents interesting questions. Numerous programs have been designed to allow individuals to independently choose to use state funds at religious institutions, such as government subsidies for higher education or health care. However, in this case, since the state is providing a supervisory role, it may practically require the state to determine whether to choose religious instruction for the child.

On the other hand, a parochial education may be a valuable option for some children in foster care. Religious institutions have a long history in caring for orphans or parent-less children. In the case where a child in foster care has family guardians, states could consider allowing children to attend parochial schools. Policymakers should carefully weigh these considerations to determine the best program for the state’s foster care children.


New Mexico’s 2,100 children in foster care are among the most at-risk in our society. Adults who were formerly in foster care are more likely to be homeless, incarcerated, and dependent on the state than the general population. One of the primary reasons for these risks it that many foster care children do not receive a high-quality education.

Offering opportunity scholarships to the estimated 2,100 school age children in foster care to attend a chosen school could address some of the common problems plaguing the educational experience of foster care children, such as instability and persistent low expectations. Moreover, it would encourage schools to tailor education services to the unique needs of foster care children, such as the need for greater life skills and self-sufficiency training.

This program would give students scholarships worth $7,500 to attend a school of their choice – a choice that would factor in the opinions of the student, his guardians, and caseworkers. Foster children eligible for special education services would be able to utilize all of their eligible public school funding at a chosen school. By using existing education funding, this program could be created at no additional cost to the state. Over the long term, an opportunity scholarship program may actually save the state additional resources as at-risk children are given the necessary skills to become independent adults, rather than dependent on the state.

School choice policies like the opportunity scholarship program outlined in this report have been found to boost student outcomes on test scores and increase family satisfaction with their child’s education experience. It is likely that foster care children could also benefit from school choice.

Dan Lips is an Education Analyst at the Heritage Foundation,, in Washington, D.C., and a senior fellow at the Goldwater Institute, the Maryland Public Policy Institute, and the Rio Grande Foundation.

1. Much of the research and writing for this report was drawn from previous studies authored by Dan Lips on the idea of school choice for children in foster care for the Maryland Public Policy Institute (2005) and the Yankee Institute (2006).
2. “Foster Care FY1999-FY2003,” Administration for Children and Families, Department of Health and Human Services, accessed at Data as of April 2005.
3. “Foster Care National Statistics,” National Clearing House on Child Abuse and Neglect Information, U.S. Department of Health and Human Services, According to HHS, 542,000 children were in foster care as of September 30, 2001. 50 percent of these children will remain in foster care for longer than 1 year.
4. For a summary of the risk factors facing children in foster care, see: Thomas P. McDonald, et al., Assessing the Long-Term Effects of Foster Care: A Research Synthesis (Child Welfare League of America, Washington, D.C.: 1996).
5. Ibid.
6. Steve Christian, “Educating Children in Foster Care,” National Conference of State Legislatures, Children’s Policy Initiative, Washington, D.C., December 2003, available at (accessed August 29, 2005).
7. Goldwater Institute, “Four New School Choice Measures Make History,” press release, June 21, 2006, at:
8. McDonald, et al., Assessing the Long-Term Effects of Foster Care: A Research Synthesis. P41-69, 119-129.
9. Ibid. P41-69.
10. Ibid. P71-80.
11. Ibid. P125.
12. Ibid. P125.
13. Christian, “Educating Children in Foster Care,” December 2003. P.1.
14. “How You Can Create a Positive Educational Experience for the Foster Child,” Vera Institute of Justice, available online at: (accessed August 29, 2005). P.2.
15. Ibid.
16. McDonald, et al., Assessing the Long-Term Effects of Foster Care: A Research Synthesis, p. 41.
17. Ibid., p. 135.
18. Findings from Trudy Festinger, No One Ever Asked Us (Columbia University: 1984). Research cited in: Patrick A. Curtis, et al., eds, The Foster Care Crisis: Translating Research into Policy and Practice (University of Nebraska: 1999), p. 109.
19. “How You Can Create a Positive Educational Experience for the Foster Child,” Vera Institute of Justice. P.3.
20. “Foster children prone to drop out, statistics show,” Education Daily, July 27, 2005.
21. Ibid., p. 108.
22. Ibid.
23. “How You Can Create a Positive Educational Experience for the Foster Child,” Vera Institute.
24. Ibid. P.24.
25. Steve Christian, “Educating Children in Foster Care,” December 2003.
26. Curtis, et al., The Foster Care Crisis, p. 111.
27. Ibid., p. 110.
28. Claire van Windgerden, John Emerson, and Dennis Ichikawa, “Improving Special Education for Children with Disabilities in Foster Care,” Education Issue Brief, Casey Family Programs, 2002. Available at: August 29, 2005).
29. Researchers have identified systemic problems of specific populations of students being over-identified in special education. For example, see: Matthew Ladner, Christopher Hammons, “Special But Unequal: Race and Special Education,” in Rethinking Special Education for a New Century (Fordham Foundation: 2001), Chapter 5, available at: (accessed August 29, 2005).
30. Windergerden, “Improving Special Education for Children with Disabilities in Foster Care,” 2002.
31. Ibid.
32. “Foster Care National Statistics,” National Clearing House on Child Abuse and Neglect Information, U.S. Department of Health and Human Services,
33. See Anthony J. Urqquiza, et al., “The Foster Care Crisis,” Chapter 4: “Foster Care and the Special Needs of Minority Children,” p. 84-95.
34. Emilie Stoltzfus, “Child Welfare, Foster Care, and Adoption,” Congressional Research Service, April 12, 2004.
35. Ibid.
36. For an overview of the CFCIP, see Emilie Stoltzfus, “Child Welfare: the Chafee Foster Care Independence Program.”
37. Ibid.
38. Krista Kafer, “School Choice 2003: How States are Providing Greater Opportunity in Education,” Heritage Foundation, 2003. P.ix.
39. An example is the Children’s Scholarship Fund. Since 1998, the non-profit organization has awarded 67,000 private school scholarships to low-income children. For information on CSF, visit
40. Clive R. Belfield, Henry M. Levin, “Analyzing School Choice Reforms,” National Center for the Study of Privatization, Columbia University, March 2002.p.2.
41. Dan Lips, “The Impact of Tuition Scholarships on Low-Income Families: A Survey of Arizona School Choice Trust Parents,” Policy Report #187, Goldwater Institute, December 11, 2003, available at: (accessed August 29, 2005).
42. Phillip Vassalo, “More Than Grades: How School Choice Boosts Parental Satisfaction,” Cato Institute, October 27, 2000.
43. “Trends in the Use of School Choice: 1993 to 1999,” Statistical Analysis Report, National Center for Education Statistics, U.S. Department of Education, May 2003, available at (accessed August 29, 2005). P.vii.
44. William Howell, et al., “School Vouchers and Academic Performance: Results from Three Randomized Field Trials.” Journal of Policy Analysts and Management, Spring 2002.
45. Belfield and Levin, “Analyzing School Choice Reforms.”
46. Jay Greene, “Graduation Rates for Choice and Public School Students in Milwaukee,” Manhattan Institute for Policy Research, September 2004. P.2.
47. “How You Can Create a Positive Educational Experience for the Foster Child,” Vera Institute. P.3.
48. Ibid. P.10.
49. Curtis, The Foster Care Crisis, p. 113.
50. Jay Greene, Greg Forster, “Vouchers for Special Education Students: An Evaluation of Florida’s McKay Scholarship Program,” Civic Report No. 38, Manhattan Institute, June 2003. P.1.
51. Facts on school choice compiled by School Choice Wisconsin, available at: August 29, 2005).
52. Greene and Forster, “Vouchers for Special Education Students,” June 2003. P.1.
53. For background on Arizona’s experience with charter schools, visit the U.S. Department of Education’s website on charter schools:
54. Carrie Lips, “Edupreneuers: A Survey of For-Profit Education,” Policy Analysis No. 386, Cato Institute November 20, 2000.
55. Steve Christian, “Supporting and Retaining Foster Parents,” Legislative Report, Vol. No. 7, No. 11, National Conference of State Legislatures, April 2002. P.1.
56. Christian. P.2.
57. Digest of Education Statistics 2005, National Center for Education Statistics, U.S. Department of Education, Table 166.
58. David Salisbury, “Most Private Schools Aren’t Expensive,” August 29, 2003.
59. See Valerie Strauss, “Area Catholic Schools Grow, Bucking Trend,” Washington Post, August 29, 2004, p. C01.
60. Foster Care National Statistics, National Clearinghouse on Child Abuse and Neglect Information, available at: (accessed August 29, 2005). P.3.

Health Care

Provide Health Care to Poor, not Uninsured

Some 15 percent of all Americans are without any medical insurance, but the uninsured are not left in the streets to bleed from a car crash, nor are they denied a heart surgery if needed. Emergency rooms must treat anyone regardless of ability to pay. Taxpayers and people who are insured subsidize those medical services.

Some, including myself, believe that while the state should leave medical care to the free market, it should worry about the minority of the genuinely poor (and chronically ill, etc.). For others, forcing employers to insure the uninsured is the inauguration of a road toward a government-run health care system a la Canada.

Massachusetts recently made a big splash by enacting a law forcing all its residents to buy health coverage. Gov. Bill Richardson, who is campaigning in the national arena, wants “every New Mexican insured by 2008, 2009.”

Let’s compare New Mexico with Massachusetts and see if, instead of mimicking Gov. Mitt Romney’s plan, we can do better by modifying New Mexico’s new health initiatives. But first note: According to the Statistical Abstract of the United States, in 2003 average personal income per capita in New Mexico was fourth from the bottom with $24,995; Massachusetts was fourth from the top with $39,504.

According to the U.S. Census Bureau (average 2002-2004) New Mexico was the state with the second highest rate for uninsured residents, 21.8 percent. Massachusetts with 11.2 percent uninsured was the 13th from the bottom.

In April, Romney grabbed national headlines when he persuaded the Massachusetts legislature to pass a universal-health plan characterized as “market friendly.” It isn’t, nor is it fiscally wise. It penalizes employers to the tune of $295 per year per uninsured employee— a crude interference in the marketplace; it offers the needy state-subsidized health insurance policy with a zero deductible that insulates the insured from the true cost of medical care and, consequently, it costs taxpayers a fortune.

So, can poor New Mexico, with one of the highest rates of uninsured, do better than rich Massachusetts with a relatively low rate of uninsured?

Medicaid in New Mexico, with a budget of $2.59 billion (about 72 percent federal) in state fiscal year 2006, is very generous to poor children, including medically fragile children, the disabled, the aged who require institutional care and a variety of other needy persons, such as the blind.

New Mexico is currently in the process of implementing the State Coverage Insurance (SCI) plan, which involves businesses that employ 50 or fewer: The employer pays $75 per month per employee. The employee pays $0-$35 per month along a sliding scale. The state and federal government through Medicaid cover the remainder, estimated at $260 per month.

SCI is offered only to adults 19 through 64 years of age, who earn no more than 200 percent of the federal poverty guidelines. As an illustration, 200 percent of the poverty level for a single mother with two children is currently $33,204 per annum.

The SCI’s paramount advantage over the Massachusetts plan is that it is not mandatory: An employer can take it or leave it without paying any penalty. But it is flawed as follows:

  • It targets only a subgroup of needy employees who happened to work for small companies.
  • SCI fails to accept the premise that in a competitive labor markets, particularly where small employers are present, there is a dollar-for-dollar trade-off between wages and health benefits. A genuinely poor employee who pays no income taxes would hate to trade off $75 per month of reduced wages for health insurance knowing that he can gain admittance to hospitals through emergency rooms.
  • SCI offers the poor employee insurance with a $0, $5 or $7 co-payment, depending on income, for a physician/provider office visit. But the SCI has no deductibles. Even the needy should not be completely insulated from health-care costs in the real world. Moreover, the lack of deductibles results in a huge monthly premium of $355 ($20 75 260), or $4,260 per adult per annum.

Gov. Richardson wants to outdo Gov. Romney. But, to innovate and do better than Massachusetts, New Mexico should target all genuinely poor adults with income less than 200 percent of the poverty level, instead of focusing on small employers and raising the poverty threshold to a fiscally irresponsible level of 300 percent of the poverty level.

The requirement that employers pay $75 per month per employee should be rescinded. The no-deductible policy is bad. The health care policy for the poor should offer a deductible that increases with income along a sliding scale.

The state should leave small employers alone: They are neither poor nor little children and they can figure out for themselves how to band together to form insurance pools.

Finally, those who argue that the cost of expanding medical care to the uninsured non-poor balances out the cost of funding uncompensated care for providers are wrong: “Free care” is negligible for the uninsured with incomes greater than 200 percent of the poverty level.

The Land of Enchantment can do better than the Bay State by focusing on the genuinely poor, not the uninsured.

Micha Gisser is professor emeritus of economics and senior fellow at 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.

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 325-8941 Farmington R
2 Dick Cheney 320-0315 Farmington R
3 Sandra L. Townsend 334-2481 Farmington R
4 Ray Begaye 368-4192 Shiprock D
5 Irvin Harrison 863-1216 Gallup D
6 George J. Hanosh   287-4451 Grants D
7 Kandy Cordova 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 877-5416 Albuquerque D
13 Daniel P. Silva   280-9647 Albuquerque D
14 Miguel P. Garcia 450-2455 Albuquerque D
15 Teresa A. Zanetti 344-7248 Albuquerque R
16 Harriet I. Ruiz 771-3059 Albuquerque D
17 Edward C. Sandoval 344-8449 Albuquerque D
18 Gail Chasey 266-5191 Albuquerque D
19 Sheryl Williams Stapleton 265-6089 Albuquerque D
20 Richard Berry 293-1130 Albuquerque R
21 Mimi Stewart 880-8249 Albuquerque D
22 Kathy A. McCoy 281-9540 Cedar Crest R
23 Eric A. Youngberg 843-8181 Albuquerque R
24 Janice E. Arnold-Jones 938-3141 Albuquerque R
25 Danice Picraux 232-2977 Albuquerque D
26 Al Park   256-0818 Albuquerque D
27 Larry A. Larranaga   821-4948 Albuquerque R
28 Jimmie C. Hall 294-6178 Albuquerque R
29 Thomas A. Anderson 897-2593 Albuquerque R
30 Justine Fox-Young 883-3017 Albuquerque R
31 William “Bill” R. Rehm 259-3398 Albuquerque R
32 Dona G. Irwin   546-9376 Deming D
33 Joni Marie Gutierrez 647-5577 Mesilla D
34 Mary Helen Garcia   526-2726 Las Cruces D
35 Antonio Lujan 649-2218 Las Cruces D
36 Andy Nunez   267-3451 Hatch D
37 Ed Boykin   522-8174 Las Cruces R
38 Dianne Hamilton 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 665-0075 Ohkay Owingeh D
42 Bobby Gonzales   758-2674 Taos D
43 Jeannette O. Wallace 661-2575 Los Alamos R
44 Jane E. Powdrell-Culbert 721-9021 Corrales R
45 Jim R. Trujillo 470-0143 Santa Fe D
46 Ben Lujan   455-3354 Santa Fe D
47 Peter Wirth 988-1668 Santa Fe D
48 Luciano “Lucky” Varela   982-1292 Santa Fe D
49 Don L. Tripp 835-2465 Socorro R
50 Rhonda S. King   832-5050 Stanley D
51 Gloria C. Vaughn   434-2819 Alamogordo R
52 Joseph Cervantes 526-5600 Las Cruces D
53 Terry T. Marquardt 437-7783 Alamagordo R
54 Joe M Stell   785-2188 Carlsbad D
55 John A. Heaton 887-5983 Carlsbad D
56 W. C. “Dub” Williams   378-4181 Glencoe D
57 Daniel R. Foley 624-0608 Roswell R
58 Candy Spence Ezzell 625-0550 Roswell R
59 Avon W. Wilson   624-7442 Roswell R
60 Thomas E. Swisstack 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 472-5267 Santa Rosa D
64 Anna M. Crook 763-4108 Clovis R
65 James Roger Madalena 834-7359 Jemez Pueblo D
66 Keith J. Gardner 622-6500 Roswell R
67 Brian K. Moore 374-9681 Clayton R
68 Hector H. Balderas 730-1342 Wagon Mound D
69 Ken Martinez 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 325-5055 Farmington R
2 Steven P. Neville 327-5450 Aztec R
3 John Pinto   928-871-6952 Tohatchi D
4 Lidio G. Rainaldi   863-3643 Gallup D
5 Richard C. Martinez 753-8027 Espanola D
6 Carlos R. Cisneros 670-5610 Questa D
7 Clinton D. Harden 389-1248 Clovis R
8 Pete Campos 454-5700 Las Vegas D
9 Steve Komadina 893-2840 Corrales R
10 John C. Ryan 343-1400 Albuquerque R
11 Linda M. Lopez   831-4148 Albuquerque D
12 Gerald Ortiz y Pino 265-3717 Albuquerque D
13 Dede Feldman 242-1997 Albuquerque D
14 James G. Taylor 877-4986 Albuquerque D
15 Diane Snyder   830-1669 Albuquerque R
16 Cisco McSorley 266-0588 Albuquerque D
17 Shannon Robinson 998-6600 Albuquerque D
18 Mark Boitano 798-1092 Albuquerque R
19 Sue Wilson Beffort 292-7116 Albuquerque R
20 William H. Payne 884-6872 Albuquerque R
21 Kent L. Cravens 294-1368 Albuquerque R
22 Leonard Tsosie     Crownpoint D
23 Joseph J. Carraro 898-9369 Albuquerque R
24 Nancy Rodriguez   983-8913 Santa Fe D
25 John T.L. Grubesic 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 865-5583 Belen D
30 Joseph A. Fidel   287-4432 Grants D
31 Cynthia Nava 882-6200 Las Cruces D
32 Timothy Z. Jennings   623-8331 Roswell D
33 Rod Adair 627-8372 Roswell R
34 Vernon D. Asbill 302-8135 Carlsbad R
35 John Arthur Smith 546-4979 Deming D
36 Mary Jane M. Garcia 523-0440 Dona Ana D
37 Leonard Lee Rawson 528-1801 Las Cruces R
38 Mary Kay Papen   524-4462 Las Cruces D
39 Phil A. Griego 988-2233 San Jose D
40 Dianna J. Duran 585-9896 Tularosa R
41 Carroll H. Leavell 395-2535 Jal R
42 Gay G. Kernan 392-2327 Hobbs R

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.

Economy Oil & Gas Transportation

Hysteria Over High Gas Prices is Pumped Up

The hysteria surrounding the spike in gasoline prices has risen to the level of the late 1970s and early 1980s “oil-crisis” madness. Most of the media is actively participating in the doomsday chorus, and the House of Representatives recently voted 389-34 to make gasoline “price gouging” a federal felony. It is time for some serious economic analysis.

First, let us examine gasoline prices expressed in today’s dollars from 1971 to 2005. During the first three years of the 1970s the price has been about $1.50 a gallon, then, because of the OPEC disruption and the Iran-Iraq war, it soared to unprecedented high levels, hitting a peak of $2.70 a gallon in 1981, and then receded gradually, returning to its early 1970s price of $1.50 in the mid 1980s. Until 2003, gas prices fluctuated around $1.50 a gallon. In 2003 gasoline prices began a climbing trend, reaching an annual average of $2.31 in 2005.

Surprisingly, today our economy is robust despite the spike in oil prices. There are two reasons for this: First, at a price of $1.50 a gallon, due to personal income growth and increased automobile efficiency, the percentage of average household income spent on gasoline fell from 4.5 percent in 1971 to 3.1 percent in 2001.

Second, President Bush’s tax cut in May of 2003, supported by accommodating monetary policy, gave the economy a huge boost that easily swamped the impact of rising gasoline prices. Politicians who advocate restoring taxes to their pre-May 2003 level should think again.

The present spike in gasoline prices— surprise, surprise— occurred because supply and demand for a change have not been going hand-in-hand. Demand for oil has intensified since the economies of China and India have at long last taken off. But the growth in oil supply slowed down considerably in the wake of Katrina and Rita, the instability in the Middle East and in response to the new ethanol legislation fiasco. That policy forced oil companies to shoulder the distorting 54-cent a gallon tariff to protect ethanol producers.

In the short term Congress could alleviate the market pressures by rescinding the ethanol tariff, abolishing— or at least relaxing— the “boutique” regulations that hinder gasoline mobility across the United States, and doing something about the NIMBY (not in my backyard) activists who are responsible for the freeze in the number of oil refineries.

Politicians who incite against the oil companies are working for re-election, not for American consumers. In particular they have launched a witch hunt for price gougers.

Economic theory is very straightforward on this issue: Price gouging is possible only if producers collude. For example, a lonely wheat farmer in Minnesota cannot raise the price of wheat over the prevailing price in the marketplace. But, if all wheat farmers colluded they could conceivably become a cartel of gougers. Hypothetically, since the oil and gas industry is somewhat concentrated, oil and gas companies could conspire and raise the price to a monopolistic level.

However, this is very unlikely: First, charges of price fixing may send oil executives to jail. Second, if oil executives were willing to take the legal risk involved in price fixing, they would collude when the price is $1.50, not $3 -a-gallon, when everybody wants to stick it to them. It is safe to assume that oil executives’ brains do not shrink when gasoline prices rise.

Some oil industry bashers advocate slapping the oil companies with profit taxes. Economic theory is also straightforward on this issue: Initially such a tax will not affect the level of production because it will not modify the conditions for profit maximization. In the long run, however, oil companies will have less profit available to reinvest in new drilling and better technologies. The impact on future oil and oil-substitute production will be devastating. So, what to do in the long run?

The long run begins in Alaska. The first step to accelerate the supply growth of oil should be taken by drilling in the Arctic National Wildlife Refuge. The environmentalists continue to argue that drilling in ANWR and shipping oil via pipe across Alaska will devastate caribou and other wildlife. Fact is that the caribou herd in the Prudhoe Bay oil field has grown more than sevenfold since the Prudhoe Bay project started in the mid-1970s.

Last, but not least, there is a danger in the free world’s relying on the turbulent Middle East for its huge exports of crude oil. Advancing alternative energy resources through selective subsidies or regulations is a bad idea— it leads to economic inefficiencies and political pressure groups that invest time and money in lobbying for even higher subsidies for their specific product.

To reduce our reliance on oil from the Middle East we must eliminate the anxiety stemming from oil-price instability. For this end, Congress should initiate setting a floor for the price of oil at a relatively high level, maybe something in a range of $40-$55 per barrel. This could be implemented by imposing a flexible duty on imported crude oil. This is a bad idea whose time, unfortunately, has come.

Micha Gisser is professor emeritus of economics, University of New Mexico, and a senior fellow, Rio Grande Foundation.

Economy Education

Shift Burden of Financing Schools to Private Sector


The recent agreement between the Albuquerque Public Schools and the Home Builders Association of Central New Mexico was a real head-scratcher for several reasons.

After all, who gave the home builders and the school district the power to tax? Even if this action is found to be legal, a questionable proposition at best, $2,000 per new home seems rather arbitrary (the number will rise to $3,000 in the third year). What exactly are the home-buyers who will ultimately pay this new tax getting out of the deal?

Some would argue that forcing new homeowners to pay for new schools is similar to a “user fee” because new homeowners demand additional services. But, this is not the case because buyers of new homes pay the same taxes as everyone else. It is simply not fair to charge retirees (or anyone else without kids in public schools) yet another tax, simply for the “privilege” of purchasing a newly-constructed home.

Nearly as important as the fairness question is whether the schools really need the money they say they do. APS claims it needs an astounding $1.7 billion for two new high schools on the West Side and renovations to existing school buildings. Rather than simply raising taxes though, with a little creativity, APS could avoid this tax increase and transform schools into thriving community centers that can be used on weekends and during summers.

The key is to put an incentive structure in place that creates maximum benefits at a minimal cost. This can most effectively be done by shifting the burden of financing new schools to the private sector. It works like this:

# School districts ask private developers to bid on a contract to construct (or renovate) a school from start to finish.

# The district converts the cost of the project into a 20-year lease with annual rent payments equal to 85 percent of the cost of the project (based on the winning bid).

# The developer completes the school with furnishings (such as desks and chalkboards), computers, administrative offices, landscaping, and athletic facilities.

# The district effectively gains use of a school building for 15 percent less than it would cost to construct on the district’s own accord.

Private developers receive an additional bonus: They get control of the buildings and classrooms when they are not in use by the school. During evenings, weekends, and (possibly) summers, the developer may lease classrooms to for-profit trade schools and approved civic, political, or religious groups.

Projects like this have been undertaken in Florida, Nova Scotia, and Britain. APS should consider similar financing efforts both for constructing new schools and renovating existing schools.

An additional way to cut school construction costs is to exempt public school construction projects from New Mexico’s Davis-Bacon “prevailing wage” law. If the Legislature were to approve such a measure, taxpayers and school districts would likely save an additional 15 percent on school construction.

A 1995 study by the National School Boards Association demonstrated that over 60 percent of school boards found that federal or state Davis-Bacon laws had increased the cost of a recent construction project, and over half had increased as much as 20 percent.

Lastly, Albuquerque must work in concert with the governor and Legislature to better rationalize its school funding system. If East Side taxpayers refuse to pay for new schools on the West Side, perhaps the district should be split in two. And, rather than pouring taxpayer money into the construction of additional schools, perhaps money should be given to parents themselves so they can decide whether charter, private or traditional public schools are best for their child.

Throwing more money at Albuquerque’s troubled school system is not a recipe for success. Instead of abdicating their taxing authority to APS, our elected officials need to come up with innovative ways to save money.

The Rio Grande Foundation is 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.

Economy Energy and Environment Oil & Gas

Drilling for Votes: N.M.’s Representatives in Washington Have No Business Accusing Big Oil of Price Gouging


Price gouging can be defined as “pricing above the market when no alternative retailer is available.” Sure, gas prices are higher than most of us might like, but this recent talk about collusion among oil companies to gouge consumers is rubbish, and our elected officials know better.

Unfortunately, rather than admitting their own recent mistakes are at least partially to blame for high gas prices, Sens. Pete Domenici and Jeff Bingaman, along with Rep. Heather Wilson, are pointing their fingers at big oil.

First, the facts on so-called price gouging. Unlike the U.S. Postal Service, Amtrak and public schools, oil companies face real competition. Why else would gas stations display their prices so publicly? If these companies could really manipulate prices at will, why wouldn’t they have colluded to sell gas for $3 a gallon five years ago, when prices were low?

In a competitive environment, if you choose to purchase a product or service from someone, whatever the cost, price gouging is simply not taking place. If it were, then those of us who purchased homes when prices were low and are planning to sell for double and even triple the original price are gouging, too.

The real wild card is, of course, Congress. While talking up the gouging issue, our elected officials seem unwilling to face up to their own mistakes, so they have chosen to demonize the oil industry.

In an effort to promote policy solutions instead of useless name-calling, New Mexico’s congressional delegation, especially the ringleaders on price gouging – Domenici, Bingaman and Wilson – should consider the following ideas provided by the Competitive Enterprise Institute:

Open a small portion of the coastal plain of the Arctic National Wildlife Refuge to oil and gas production. If there is as much oil as the U.S. Geological Survey’s estimate shows, this would increase America’s proven domestic oil reserves by approximately 50 percent. There is majority support in both the House and Senate for opening the refuge, but an obstructionist minority blocked enactment last year. The Senate again voted 51 to 49 earlier this year to open the refuge.

Open the Pacific, Atlantic and eastern Gulf of Mexico offshore areas to oil and natural gas production. America’s deep-sea reserves are potentially enormous, but – except for the western Gulf of Mexico, which is the United States’ largest producing oil field today – they have been put off limits by the federal government. Environmental concerns about deep-sea production are unwarranted. The last significant offshore oil spill in the United States was in 1969. Hurricanes Katrina and Rita last summer destroyed many oil rigs and platforms in the gulf but did not cause any significant spills. Congress should enact legislation this year to open offshore areas currently under moratorium and share federal royalties 50-50 with the states involved.

Repeal the new ethanol mandate included in the energy bill passed last year. The new mandate requires refiners to double their 2005 use of ethanol to 7.5 billion gallons per year by 2012. Higher demand is causing ethanol prices to soar. The mandate will require 22 percent of the U.S. corn crop to provide 4 percent of gasoline supplies. Repeal the current 54-cents-a-gallon tariff on imported ethanol. Domestic ethanol producers already receive 51 cents per gallon in federal subsidies. They don’t need any more protection.

All-too-often, our elected officials look for short-term electoral gains at the expense of sound policy objectives. We are now reaping the consequences of an energy bill that has failed economically and politically. Rather than enacting unwise price-gouging legislation, New Mexico’s elected officials should use their influence to promote a healthier debate focusing on real solutions.

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.”


ACORN’s Agenda Falls Far From the Local Tree

Albuquerque’s City Council is now considering whether or not to pre-empt an expected ballot measure campaign by the Association of Community Organizations for Reform Now (ACORN) on behalf of a $7.50 minimum wage for the city.
Given the mountains of economic evidence that government wage mandates harm economic growth, some elected officials are uncomfortable voting for a higher wage. Perhaps that is why Mayor Martin Chávez and several city councilors have, when pressed on the issue, passed the buck off to Congress, indicating that minimum wage rates are a federal responsibility.
Unfortunately, since ACORN already came close to success at the ballot box last year, Albuquerque politicians and the city’s Chamber of Commerce are working to pre-empt ACORN by passing their own “reasonable” minimum wage hike.
But bowing to ACORN’s demands without so much as a fight is exactly what this radical outfit wants and, like an unruly child who throws a tantrum until his parents give in, ACORN will view this “compromise” as a sign of weakness. It will quickly move to impose the rest of its far-left agenda on Albuquerque residents and businesses.
First and foremost, ACORN and its activists are, by and large, not locally based, so most of them don’t really care what happens to Albuquerque’s economy once they have their “victory.” ACORN was founded in Little Rock, and has offices spread around the country and Latin America.
While portraying itself as a humble advocate for the poor, ACORN actually promotes an agenda of anti-capitalism, central planning, victimology and government handouts.
ACORN’s political agenda includes unionizing welfare recipients, micromanaging banks’ lending practices under a federal law known as the Community Reinvestment Act, and passing laws to prohibit foreclosure, according to its Web site. Not only does ACORN wish to make doing business in big cities more difficult than it already is, it would like to trap businesses should they wish to leave, according to the site, It proposes forcing them to obtain “an exit visa from the community board signifying that the company has adequately compensated all its employees and the community at large for losses due to relocation.”
ACORN is not even consistent when it comes to the group’s own radical notions of right and wrong. In fact, the group regularly takes actions that appear blatantly self-interested or hypocritical, as if its pure motives and laudable ends might justify less-than-elevated means. For example, even while pushing for living-wage legislation in California, ACORN was paying its workers less than the existing minimum wage — and arguing when the state sued it that the minimum-wage law infringed its First Amendment free-speech right, since paying workers more would hinder it in spreading its message.
The main factor in ACORN’s success is that local interest groups like the Albuquerque Chamber and local politicians lack the courage to stand up to the group. Instead, faced with the threat of Jesse Jackson-style direct-action, corporations often give generous donations to the group in order to buy peace.
In the same vein, rather than forcing ACORN to organize and run costly campaigns, local governments often cave to the group’s pressure by pre-emptively giving in to a majority of their demands.
If Albuquerque’s City Council caves to ACORN’s demands, they certainly won’t be the first to do so. But if they tell the group to take its recipes for urban decay elsewhere, they will be defending the interests not only of small businesses, consumers and taxpayers, but of those on the very bottom rungs of the economic ladder. For them the only alternative to working for unskilled wages is unemployment.
ACORN doesn’t really care what happens to Albuquerque, so we’d better start caring ourselves.
The Rio Grande Foundation is 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.

Human Events Panel Chooses ’10 Worst Government Programs’

Recently, I had the privilege of serving on a panel convened by Human Events Magazine that was assigned with the task of naming the 10 worst government programs. Other panelists included such luminaries as Larry Kudlow of Kudlow and Cramer fame, Walter Williams, one of the best-known economists in the country, and former House Majority Leader Dick Armey (among others) . The votes are now tallied and here is what we came up with. This was a weighted vote that included some 50 federal programs. I don’t necessarily agree with all of the panel’s choices, but it is a good listing and should provoke discussion.