Category: Issues

Mayor Martin Chávez is at it again. A few months ago he wanted to put taxpayers on the hook for a $300 million tourist trolley along Central. Now he wants a 16,000 seat arena and hotel complex with much of the expected $350 million price tag to be footed by taxpayers.

As much as we all desire Albuquerque’s Downtown to be a vibrant place to visit, spending megabucks on an arena is a costly and uncertain way to spur development. Like the streetcar, a taxpayer-subsidized arena and hotel complex will not generate new investment, but will suck money from other areas of the city and send it Downtown.

Economists have repeatedly found that there is no net increase in economic activity derived from stadium and arena projects. Dennis Coates and Brad R. Humphreys, for example, have explained that “As sport- and stadium-related activities increase, other spending declines because people substitute spending on sports for other spending.” In other words, fan money spent at a new arena would likely have gone to other entertainment absent the arena. Thus, net economic benefits are zero.

Of course, that is assuming that Albuquerque even finds a regular tenant for the arena that can draw a crowd. Given the track record of the area’s minor league hockey and basketball teams, even a permanent minor league tenant for the proposed arena may not mean success and would likely result in massive losses to taxpayers as the building sits empty much of the time. After all, the Scorpions are selling a disappointing average of just over 3,000 tickets per game in a brand new 6,200 seat arena in Rio Rancho and attendance at Thunderbirds games at Tingley averages in the hundreds.

These points are not meant to disparage the Albuquerque sports fan, but a team from any of the “major league” NBA, NHL, or Arena Football leagues is not on the horizon. More importantly, given the relative population and income levels found in the Albuquerque metropolitan area (our population ranks 65th in the country), there are a number of cities in line to get big-time professional franchises before us.

If a group of private investors were considering whether or not to invest their own money in a sports arena, they would undoubtedly look for signs that additional capacity was needed or that a market niche was being left unfulfilled. Clearly, that is not the case here in Albuquerque. With Rio Rancho struggling to fill an arena less than half the size of that being proposed for Albuquerque and Tingley Coliseum having experienced “an inconsistent event demand over the last few years,” according to the consulting firm that was paid by the city to evaluate the need for the new arena, it would appear that Albuquerque has a surplus of arena space, not a deficit.

So, why is Mayor Chávez pushing for a 16,000-seat arena despite the obvious lack of need? First and foremost, unlike a private investor attempting to turn a profit, Chávez can leave his legacy using our tax money. The wise use of resources is clearly not his first (or even second) concern. Secondly, although private arenas have been constructed in Columbus, Ohio, Detroit, Chicago, outside of Detroit, and in Washington, D.C., just to name a few, again, there would have to be some reason besides blind optimism for an investor to take interest.

Chávez, like most politicians, would rather spend taxpayer dollars on luxury items like trolleys and arenas than on maintaining streets and bridges and keeping the roads clear of snow. Ironically, despite what many would call Chávez’s “progressive” political bent, this arena project would do nothing more than take $350 million from middle and low-income Albuquerque taxpayers and give it to the wealthy developers and patrons of the proposed sports arena and high-end hotel, both of whom are likely to be wealthier than the average Duke City resident.

The case against a taxpayer-financed arena is rather damning, but in the mayor’s head it all boils down to the simple fact that he thinks he knows how to spend the taxpayers’ (our) money better than we possibly could. It happened before with the trolley; again it is up to the citizens of Albuquerque to tell their big-spending politicians “no!”

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

The REAL ID Act was passed by Congress in May of 2005 without a single hearing in the Senate. Although the law is theoretically supposed to increase the integrity of our nation’s identification cards, it really amounts to yet another power grab by arrogant politicians in Washington.

This new federal mandate – if implemented – will cost New Mexico taxpayers $43 million and place a heavy enforcement burden on small business. During the upcoming legislative session, New Mexico lawmakers will be faced with the decision to either go sheepishly along with outrageous Congressional demands or instead stand up for New Mexicans and New Mexico businesses by rejecting this costly mandate.

So, what would REAL ID actually do?

•  If New Mexico chooses to implement REAL ID, the state’s Motor Vehicle Division (MVD) will need to verify the “issuance, validity and completeness” of every document presented to them;
•  MVD would be expected to copy, and store both in paper and electronic form documents such as the birth certificates and Social Security cards and to keep those records for up to 10 years;
• New Mexico would automatically take part in a shared database making each person’s information available to all states, the federal government as well as the Canadian and Mexican governments;
• A “machine readable zone” that will allow for easy capture of personal data by anyone with the appropriate reading mechanism would be added to your drivers’ license.

It is hard to believe that New Mexicans would want to put nearly all of their personal information and the responsibility for protecting that it in the hands of a government agency that is not even set up for that purpose. That is exactly what would happen under REAL ID implementation.

The potential for mismanagement of personal information was made clear last year when, in the hunt for alleged cop-killer Michael Astorga, it was discovered that MVD employees were providing Astorga with driver’s licenses in other people’s names

While leaving identification efforts open to abuses, the law makes obtaining licenses more difficult for law-abiding citizens. Gone will be the days when you can apply for a license and receive it in the same day. Since the law requires those without an official government document verifying their address to attain alternative verification, businesses (most especially utility companies) will face increasing burdens under the new law.

In addition to implementation costs, New Mexicans could wind up paying close to $100 for their ID’s – six times more than the $16 they pay now – if the Legislature goes along with Congress’s wishes. It is unclear exactly how much the additional paperwork and bureaucratic hassle will cost businesses, but given the requirements of the new law, those costs may be quite high.

So what are taxpayers getting for their money? Even if REAL ID improves our ability to identify people, discerning their intentions is another problem entirely. Worse, once the system is fooled or identities are stolen, centralized databases will allow for even greater mischief than under the current system.

Time and again, for example, the ability of government officials to accurately separate friend from foe has been called into question. The so-called “No Fly List,” which has been used to stop potential terrorists, has led to confusion and problems for some travelers. The wife of Senator Ted Stevens – whose name “Catharine” is similar to that of blacklisted singer “Cat Stevens” – is just one of thousands of innocent people to face repeated problems. Will the bureaucrats at New Mexico’s MVD be any better than those working for the federal government?

If the outrageous cost and the vast potential for mischief associated with REAL ID implementation are not enough, principle alone should convince policy makers to reject REAL ID. For too long, New Mexico and other states have allowed the federal government to badger them into bad policy making with an array of big sticks and carrots. Telling states how to run their driver registration systems is not Congress’s job.

It is time for New Mexicans to stand up for the Constitution and our state’s autonomy when Congress oversteps its authority. Say “No” to REAL ID.”

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

Many New Mexicans may remember that, at this time last year, our neighbors to the north in Colorado were having a heated debate over government spending and taxes.

Voters in Colorado narrowly approved the measure known as Referendum C, which allowed the state government to spend all the revenue it takes in for the next five years – but the state’s taxpayer protections, known as the Taxpayers’ Bill of Rights, lives on. More importantly, Colorado’s experience with strictly limiting taxes and spending provides New Mexicans a clear example of how we could change our state’s economic fortunes for the better.

Government plays a major role in New Mexico’s economy. In fact, $2 is spent by the federal government within our borders for every $1 our citizens send to Washington. As if the large federal presence were not enough, according to data from the Census Bureau, New Mexico employs more state and local workers per capita than all but two other states.

This reliance on government is not the economic boon that some would like to believe.

While like New Mexico in many ways, Colorado is not as reliant on government spending. In fact, in 1992, Colorado adopted strict limits on taxes and spending in a conscious effort to shift resources from government and into the private sector.

Unlike New Mexico, where politicians can raise taxes and spend as much as they like with few limits, Colorado’s politicians must ask voters to approve any spending above the “natural” rate of government growth – the combined effects of inflation and population – and any tax hikes. Between 1997 and 2002, Colorado issued annual tax rebates totaling more than $3.2 billion.

So what does giving voters greater control over the taxing and spending habits of their politicians do for the economy?

Well, in terms of personal income levels, which are probably the most effective mechanism for measuring living standards, Colorado outstrips New Mexico by wide margins.

In 1992, Colorado ranked a respectable 17th in personal income levels. Thanks in large part to its Taxpayers’ Bill of Rights, it now ranks 8th in the nation. This was the greatest jump during the time period. New Mexico, on the other hand, ranked 46th in the nation in 1992 and ranks 46th today.

Even more impressive, especially given the opposition to fiscal restraint by most on the left, is the fact that spending restraint has resulted in significant poverty reductions in Colorado. That state’s poverty rate is lower than all but 11 other states. New Mexico, on the other hand, has one of the worst poverty rates in the nation, beating only two states – Mississippi and Louisiana.

The problem is that politicians, if left to their own devices, will spend taxpayer money far in excess of the real needs of government. Much of this money is either wasted or used in ways that are not as beneficial to the citizens of that particular state as if the money was left in the private sector. Over time, this means that government consumes more of the economy, while the private economy, from which economic growth and innovation result, is less robust.

Some will assume that if we only elected the “right” politicians, the problem would be solved, but history shows this to be wishful thinking.

The Rio Grande Foundation analyzed the spending records of each of the last four governors of New Mexico and found that while Gary Johnson was the most fiscally-conservative and Bill Richardson the most spendthrift, Garrey Carruthers, a Republican, was a bigger spender than Bruce King, a Democrat.

Spending in New Mexico – not to mention around the country and at the federal level – is a bipartisan problem.

There is no reason for New Mexicans or our political leaders to accept our current status of economic lagging. It is not culture, our reliance on resource extraction or even our poor educational system that hinder our state economy. In reality, it is our willingness to let government take more of our hard-earned money than is absolutely necessary that keeps us down.

Only by placing strict limits on our political leaders will New Mexico’s economic future brighten.

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