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Columns

  • Seven percent tax stopping jobs

    In New Mexico, innovation is literally moving at the speed of light. Over the last several decades, laboratories, working with private industry, have led the way in developing new “directed energy” technologies. My own company, Fiore Industries, has built microwave systems that can disable the engine of a speeding car and neutralize Anthrax in packages. We’re turning science fiction into science fact.
    As directed energy technologies take off over the next two or three decades, New Mexico stands to create hundreds of new high-skill jobs and billions of dollars in new investment when the manufacturing starts.
    The only thing standing in the way of this enormous economic growth is New Mexico’s sales tax, which makes it too expensive for the government to award the contracts to local companies.  Known as a gross receipts tax, New Mexico’s sales tax adds a seven percent charge to all directed energy manufacturing.
    That’s unusual because states are technically forbidden from taxing the federal government directly. A gross receipts tax skates past this rule by taxing the contractor, not the government.
    I’ve seen the impact firsthand. Several years ago, my company won a contract to develop the early modeling for a new directed energy system.

  • County fiscal crisis is an opportunity

    “Never waste a good crisis” goes the saying. Sadly, it often takes a crisis to force overdue actions. The county budget shortfall is such an opportunity.

    The county government’s fiscal challenge is real. The revenue bubble it has enjoyed the six years since LANL started paying gross receipts taxes is deflating. Neither the lab’s mission nor its political support in Washington are as strong as they were for decades. The lab is not going away, but its size and strength are declining.

    Our failure to focus on diversifying our economic base means we are not replacing the meaningful jobs being lost at the lab or the income they produce — to the community and the county government.

    So far, the county government’s reaction to the “sudden” (actually, long-foreseeable and avoidable) crisis has been predictable. Council, trying to avoid hard decisions, hopes things will be better next year. Staff is understandably trying to avoid losing jobs and changes in business practices.

    Most “solutions” proposed are also predictable and generally more appropriate for a short term crunch than a long-term sea change, e.g., draw down reserves, reduce travel, postpone capital improvement and maintenance projects, and borrow more.

  • Eventually, it adds up

    Today’s column marks my 200th submission of “But I Digress” to The Los Alamos Monitor.  
    While this might seem an astonishing feat, it doesn’t take people who meet me long to recognize that my spouting off 200 opinions is anything but surprising.
     I was born with a speech defect and couldn’t talk until I was 11 years old.  After an operation on my throat corrected a windpipe abnormality - Presto!  I could talk!
    And I haven’t shut up since.
    Anyway, I asked my friends what I should write about to commemorate 200 rants.  I got some great suggestions, but ultimately my wife nailed it by saying I should just write about my one true passion.
    Yeah, of course.  Math.  What else?
    And what’s not to love?  The history of math reads like an epic saga of gladiatorial battles to conquer the universe of numbers.  It’s full of herculean efforts by early giants to understand the geometric symmetry and algebraic aesthetics of the world around us.
    Mathematics is harmony incarnate.  When early mathematicians saw amazing patterns in numbers (like the sum of cubes equaling the square of the sum of the numbers), they would say,
    “This can’t be a mere coincidence.  The gods are trying to tell us something!”

  • What the maple trade conveys

     Maple sugar season straddles six weeks in sugaring states when winter turns to spring. The business supplies ample food for thought.
     Harvest traditions evoke homey scenes: the crusty New Englander ... rock-ribbed, spare, silent ... tending his maple woods by one-horse sled. The sap is gathered by the pailful and hauled in vats to the sugar house, where steam rises from the maple sap boiling pans.
    Practiced eyes keep watch as the water boils off to turn some 40 gallons of sap into one gallon of the golden brown syrup. Fresh sap is up to 98% water.
    To sell to wider markets, the business has a few new twists.
    What has grown most is the extent of maple trade, not the annual production. The steps in producing and processing sap are the same as before. And the same as were learned from the Indians ages before that.
     Markets now are more diverse, which requires more knowledge and specification of the steps. Technology has evolved, but not the scale of technology.  
    Collection methods have progressed from catching drips in a pail to pulling sap with high-vacuum to tanks through networks of plastic tubing. More sap is collected with less tending.  
    Water removal designs have added reverse osmosis and heat recovery schemes. Water is removed using less fuel.

  • Maybe rainy day funds be used for education

    SANTA FE — The more things change, the more they stay the same. I was about to write that same introduction for my previous column about simplifying the state’s tax structure because it was a repeat of something I had tried to do 20 years earlier.
    This time the subject is a piece of the land grant permanent fund a group wants to use to improve New Mexico’s education system.
    Many of you remember that little ditty that took place soon after Gov. Bill Richardson took office.
    It was 10 years ago and Gov. Richardson had a huge amount of political capital. He had a big, bold legislative initiative and nearly all of it passed – much even on a bipartisan basis.
    Two of those items were constitutional amendments, which required a public vote at the next November’s election
    One of the bills was to take money out of the permanent to assist in improving public education. The other was to bring the state Department under the governor. It seemed logical since education is about half the state’s budget. And thus, the governor should have control of it.
    Gov. Richardson barnstormed the state campaigning for the two items. The transfer of the state Board of Education passed easily. Voters weren’t accustomed to spending their permanent fund monies. But with Richardson’s help. It passed too.

  • Licenses for illegal immigrants, plus shorter campaigns

    New Mexicans weary of the contretemps over illegal immigrants and drivers’ licenses, which has engulfed them since Susana Martinez hit the campaign trail back in 2010, were probably surprised to learn that a new law in Illinois permits immigrants without papers to apply for licenses in that state.
    So there are now four states that have such laws on their books: New Mexico, Utah, Washington and Illinois.
    Four states hardly a bandwagon makes, but with the almost decade-long blockade of anything smacking of immigration reform apparently coming to an end, a number of other states are also toying with the idea.
    California, with its huge illegal immigrant population, has long grappled with the problems of unlicensed drivers on its streets and roadways.
    Last month the Los Angeles Times reported on a recent study by the California Motor Vehicle Department that finds “Unlicensed drivers in California—the vast majority of whom are illegal immigrants—are nearly three times as likely to cause a fatal crash as licensed drivers.”
    Why?

  • Knowledge of state's economy is vague

    Mythology provides the thread throughout discussions of New Mexico’s economy.
    By recently telling an Albuquerque real estate group (and no doubt many others) that we must “commit to diversifying our economy,” Gov. Susana Martinez also says our economy is not diversified.
    Another common line is that the federal government share of our economy depends on the decisions of some bureaucrat, one bureaucrat, that is, in Washington.
    The fear mongering desired image is that this one bureaucrat, sufficiently annoyed, could at a stroke close everything federal in the state.
    Early in her most recent Senate campaign, Heather Wilson explained the real world to me. For better or worse, it is nearly impossible to eliminate a government activity.
    Every activity has a constituency, she said. If you try to eliminate something, that constituency and all of its friends and relations appear from the woodwork to protest and delay. Nearly always the constituency wins.
    Three sets of numbers provide a vague idea of the structure of our economy and of what is happening. Emphasis on “vague.”

  • The time for motor carrier deregulation has arrived

    The Rio Grande Foundation recently completed a report in which it analyzed dozens of state regulations that are holding back our economy and need to be eliminated or reformed. The need for deregulation has never been more apparent with our economy losing jobs and seeing an outflow of workers (according to a recent report from United Van Lines).
    Unlike many issues in Santa Fe, deregulation has not historically been a partisan issue. At the federal level, President Jimmy Carter deregulated trucking, freight rail, and airlines to positive effect in the 1970s. President Reagan continued those efforts in ways that led to significant economic growth throughout the 1980s.
    To further illustrate the point that deregulation can and should be bi-partisan, we are pleased to see that Think New Mexico has embraced the concept of deregulation, at least insofar as motor carriers here in New Mexico are concerned.
    Think New Mexico has been working to pass House Bill 194, legislation sponsored on a bi-partisan basis by Republican Rep. Tom Taylor and Democrat Rep. Carl Trujillo. The bill attempts to overcome many of the most absurd barriers to free competition in transportation services. These barriers harm both New Mexico’s economy and reduce options for consumers.

  • Voters to Santa Fe: Do something

    Standing in the back of the room, as Democratic lawmakers rolled out their jobs package, was a seasoned economic developer with many notches in his belt.
    I asked him what he thought of all the proposals we’ve heard so far. He said he doesn’t like to mix in politics, “but if we don’t do something quick, we’re screwed.”
    With those inspiring words, let’s look at the proposals.
    The governor and state Economic Development Department Secretary Jon Barela offer the New Century Jobs Agenda, which calls for a single sales factor (companies pay tax only on sales within the stat)e; reducing the corporate income tax from 7.6 percent to 4.9 percent; $10 million to help local governments pay for job-creating infrastructure; $4.75 million for the Job Training Incentive Program, which supports new employee training for qualified companies; a reformed capital outlay process; the Spaceport Informed Consent law; and more money for the MainStreet program.
    Democrats presented a three-point plan: public works, potential growth areas, and a Jobs Council.
    Most innovative is the Jobs Council, which would meet between sessions to develop a strategic plan. Everybody I’ve talked to likes this idea. When we bring up tax reform and other sticky issues, we need a forum to hammer out solutions.

  • GOP not dead yet

    SANTA FE – Is the GOP dead? Not on your life. Yes, demography and Barack Obama’s campaign machine are creeping up on Republicans. But before I get into the whys, I want to talk about the whats.
    Remember the aftermath of the 2008 elections? The Obama war machine, also called a ground game, swept many candidates into office. Democrat Harry Teague even won New Mexico’s 2nd Congressional district. Democrats had control of top state and national offices.
    There were so many Republican defeats just four years ago that many in my business were writing the party’s epilogue. There was no foreseeable way for Republicans to come back.
    Until six months later, that is. In the summer of 2009, Obama started talking about health care and everything turned around. And in the 2010 elections, Democrats lost heavily up and down the ballot.
    It was the perfect time for Republicans to win. They got to redesign state and national legislative and congressional districts. It has been said that had Republican legislators not have redesigned congressional districts; Democrats would have taken back control of the U.S. House in 2012.