Monthly Archives: July 2013

NO! To Q of L Tax Increase, Part 4

NO! to Q of L Tax Increase, Part 4 by Peter Burrows 7/27/13

The voters of Grant County will soon receive a ballot in the mail asking us to approve a .25% increase in the Gross Receipts Tax.  This will support a $10 million bond sale, the proceeds from which will be spent on five projects in Grant County, projects that some people think will improve our quality of life and economic welfare, thereby leading to happier families, lower crime rates, longer lives, and so on.

The most moronic of the proposals is to spend $3 million building a movie multiplex, which someone will then manage.  A recent editorial in the GC Beat by Lynda Aiman-Smith gives chapter and verse on a similar project in Deming.  Why such a disaster should be visited on the residents of Grant County is a mystery to me.

A more fundamental reason to vote against the proposal is that half the proceeds will be used to support Western New Mexico University projects, specifically a new swimming pool complex and a refurbished baseball field.  Aside from the widely held opinion that college athletic programs are a waste of money, especially at small colleges, the university is not Western Grant County University.

WNMU is a state supported institution, which means the entire state of New Mexico.  If the state refuses to pay for something University President Joe Shepard wants, it is not the obligation of Grant County taxpayers to fill the void.  A baseball field?  Say it ain’t so, Joe.

In fact, if the spending was to be for new libraries and laboratories at the university, we should still vote no.  If we’re going to spend our tax dollars on new libraries and laboratories — or new pools and baseball fields — it should be for Silver High School, or Cobre, or Cliff, or Aldo Leopold.

Dr. Shepard previously worked at a university in Florida, a relatively rich state. New Mexico is a relatively poor state, and Grant County is a relatively poor New Mexico county.  We would be even poorer if it weren’t for WNMU, one of Grant County’s most important assets.   However, to the extent WNMU starts to be a burden on Grant County taxpayers, to that extent it is less an asset and more a liability.

Let’s don’t go down that road. There is no end.

On a larger scale, the Rio Grande Foundation has done research showing that New Mexico, with 65 higher education campuses spread over 16 colleges, is over-schooled and spending way too much on higher education relative to richer states, e.g. Arizona.  How long is this going to go on?  Might this mean budget cuts, curricula elimination, and perhaps the elimination of all athletics are someday inevitable for WNMU?

Nationally, the Wall Street Journal had an article last Thursday about second tier colleges having a hard time filling their freshman classes.  This is due in part to the demographic fact that the number of high school graduates is in a long-term decline from its peak 3.4 million in 2010-2011.  Add to that the soaring costs of tuition, a trillion dollars of student debt, jobless college grads, and people are finally beginning to ask a fundamental question: Is a college education worth what it costs?

Note, the question is not if a college education is worthwhile, but is it worth as much as it costs?  If the primary purpose of college is to prepare for a career, the answer may be a resounding no, especially relative to a shorter, cheaper, technical education.  Maybe that’s where WNMU can find a niche.

The Internet promises to be an integral part of the future of higher education, a future that will provide a better education at a lower cost. WNMU already offers eight online degrees. Living on campus, going to college football games (or swim meets), is yesterday’s college, not tomorrow’s, especially not for WNMU, which I think faces a very uncertain future.

NO! to the tax incease.

NO! To Quality of Life Tax Increase, Part Three

NO! To Quality of Life Tax Increase, Part Three by Peter Burrows

There are tried and true arguments politicians always use to justify higher taxes.  There must be a  manual somewhere, Tax Increases for Dummies (that’s you and me), because we see the same list over and over. Very predictable, and being used right now, right here in Grant County to push a tax increase.

1) The tax isn’t very much. In our case, only .25% or only $1 extra sales tax for $400 of purchases.   This argument is used to take our eyes off the ball, to avoid the real question, which is: What will the extra tax money be used for? If it’s only $1 out of $1,000,000 but it’s being wasted, the tax is TOO MUCH.

2) Even after the tax increase, taxes will still be below what other dumm—oops! taxpayers elsewhere pay. In our case, what taxpayers in Ruidoso and Santa Fe pay. Well, frankly, most of us don‘t give a damn what they pay in Ruidoso or Santa Fe. Maybe their taxes are too high, and, more importantly, their taxes may be lower than ours on an ability to pay comparison, meaning they have higher incomes (which they do.)

3) We need to spend more money on our children because they have no place to play nothing to do are bored and getting into trouble and it’s all our fault for not providing them with something to do or some place to go like a new youth center or baseball league or swimming pool or bungee tower or blah blah blah blah.

When they pull out the “for the children” argument, you know they’re getting desperate. Lots of voters unquestioningly vote for anything if its “for the children”, even if it’s only a tiny portion of the overall spending plans, or only remotely connected to children. The Spaceport, for instance, was going to motivate New Mexico kids to take up math, engineering, physics, etc., and I wish I was making that up. People, God bless ‘em, by and large really do want to do something for children, and politicians shamelessly take advantage of that decent impulse.

Some of us curmudgeons, however, might suggest that if kids are getting into trouble during the summer, maybe we should add six weeks to the school year. Of course, we do such a great job of educating kids in New Mexico, other states would see that as really piling on, and besides, our underpaid teachers (aren’t they all?) would want more money, and the greenies might object because running school buses an extra six weeks will add more greenhouse gases to the atmosphere, bringing closer the day when Global Warming (always capitalize the name of a religion) will kill us all.

It was just a thought.  Geez.

Another thought: Why not eliminate the minimum wage law for kids under 18? So typical of politicians: 1) raise the minimum wage. 2) This means more kids can’t get summer jobs. 3) Raise taxes to provide something for kids to do in the summer.  Sigh.

On a more Cosmic plane, intellectuals and other superior people will quote Supreme Court justice Oliver Wendell Holmes who said, “I like to pay taxes. With them I buy civilization.”  This is one of those pithy little sayings that’s supposed to shut down all argument, when it really needs to be qualified.

It certainly does not justify taxes being spent on stupid or corrupt things. For instance, no one can defend the city manager in Bell, CA, paying himself a salary of over $700,000 a year, plus, his pension funding was $600,000 a year. Where was that money coming from, the Tooth Fairy? Gee, he must have been really civilized.

At the other end of the spectrum, libertarians have a cute little phrase of their own, almost as fatuous as the Justice Holmes quote, which is “Taxation is theft.”  That, too, needs to be qualified. Taxes have to be levied to pay for essential services, services which indeed buy civilization, such as police protection and courts of law. That’s hardly theft.

One of my favorite quotes cuts through the sophistry and verbiage and says it best: “Collecting more taxes than is absolutely necessary is legalized robbery.” — Calvin Coolidge

NO! To Q of L Bonds, Part Two

NO! To Q of L Bonds, Part Two Peter Burrows

Grant County voters will soon be voting via a special mail-in election on whether to authorize $10 million in new bonds, the proceeds to be used, supposedly, for five “quality of life” projects.  For legal reasons, what will formally be voted on is an “Imposition of a County Capital Outlay Gross Receipts Tax of 0.25%.”

The ballots will be mailed by the end of July and must be postmarked by August 19 to be counted.  My understanding is that the mailings will not include any details of the spending on the five projects publicly proposed by Grant County Chairman Brett Kasten, County Manager Jon Saari and WNMU President, Joe Sheppard.

Let’s take a look at these five projects that may or may not be funded by the blank check the County Commissioners want us to sign.  The one that has the most merit is to remodel the interior of the county owned Conference Center, the old WalMart building where Ace hardware is.

As you’ve probably noticed, the exterior of the Conference Center has just been extensively renovated.  It looks pretty good, but as Joe Sheppard said, doing just the exterior is like “putting lipstick on a pig.”  Sheppard would like to tie-in the Conference Center with university events, but the interior has to be redone in order to accommodate large gatherings and formal presentations.

I have no idea if it makes economic sense to do this, but at least it should generate some revenues. I would point out to Dr. Sheppard that the “lipstick” was given to us by the Economic Development Administration who, due to sequestration, couldn’t follow through with the $2 million budgeted to do the interior.  Now we are being asked to finish the job with our own, taxpayer purchased  “lipstick.”

What’s the rush?  Has the Economic Development Administration removed all possibility of ever completing the funding?

Also, has the County ever tried to sell the Center to a professional real estate management company, somebody with expertise who would put their own money in the game?  I would ask the bankers for advice on this, especially Wells Fargo. I’d also see if there are any regional REITs that might be interested, e.g. put in a call to Trans Continental Realty in Dallas. Can’t hurt.

(As an aside, if this had been privately funded, the inside would have been done FIRST.)

Another proposal, probably the most trivial, is to spend money improving the golf course, specifically to put in paved cart paths.  This isn’t what I’d call lipstick on a pig, more like lipstick on a platypus.  The course is just fine the way it is. It’s a good course, not a great course. If people must have a great golf course or a private country club, Silver City is not for them.

Besides, the golf course was a big beneficiary of the Silver City $5 million quality of life funding approved two years ago in which $450,000 was earmarked for a new clubhouse, yet to be built.  The first step was to clean up the parking area around the old clubhouse by removing all the little Quonset huts that are garages for privately owned golf carts.

These were all moved across Fairway Drive to the parking lot by the baseball fields and reinstalled on new cement pads.  This was absolutely the best thing that could be done to make the golf course more attractive. It also points out that any improvement to the course, especially cart paths, will primarily benefit the owners of these golf-cart Quonset huts.

The rent for these, and there are 54 of them, is $100 per year. In addition, to operate a cart on the course costs $556 per year. This totals $656 before any green fees are paid.  Since these folks own their carts, they incur the additional expenses of depreciation, maintenance and fuel.  Any course improvements, especially cart paths, will be much appreciated by this tiny, well-to-do minority.

Don’t be surprised if these people support the bond. I don’t blame them. If I had the money, I’d buy a storage unit and cart, and tool around the course in style.  If I really wanted voters to approve this tax increase though, I’d drop funding for anything associated with the golf course. Enough is enough.

Next week Part Three, More dumb ideas

NO! To Quality of Life Bond

The voters of Grant County will soon be voting on a $10 million “quality of life” bond our three County commissioners unanimously recommended.  It will be paid for by increasing the gross receipts tax, New Mexico’s convoluted sales tax, by one-quarter of one percent in the county.  Supporters will tell us that this is only $1 out of every $400 in retail purchases. No biggie, right?  Wrong.  Two reasons:

(1) If the money is used in a corrupt or stupid manner, any amount is too much. For example, if the “quality of life” being enhanced is that of ex-county commissioners, starting with the current three, in the form of life-time annual pensions of $100,000 each, this is clearly corrupt.  If the money will be used to build a monorail to the Cliff Dwellings, this is clearly stupid.

(2) By trivializing the tax increment, proponents would have us ignore that this is additive to the taxes we already pay.  For example, one-quarter of one percent used to justify one hundred proposals adds up to 25%.  It illustrates the old saw that you can’t throw a frog into boiling water, because he’ll reflexively jump out. However, put him in the pot and slowly raise the temperature, and he’s cooked.

“Cooked” is what Grant County taxpayers will be if we continue to approve “quality of life” spending. We have to ask,  just whose “quality of life” is being enhanced, the general publics’ or special interests’ ?

A couple of years ago, Silver City had its own $7 million quality of life bond issue.  Mayor James Marshall defended the spending by noting that there is a certain level of public infrastructure that most residents think municipalities should provide, in addition to essential services such as police and fire departments.

This includes things like public tennis courts, a municipal golf course,  a public swimming pool, attractive parks and maybe even public transportation, e.g. a city bus service.  None of these by themselves makes much difference, none can be individually defended as an essential service,  but together they constitute important quality of life factors that make Silver City a nice place to live, frosting on the cake, so to speak.

When the city council requested public input on what to spend the money on, a large group of citizens showed up wielding tennis rackets.  The refurbishing of six tennis courts made the list.  Numerous people also supported building a new clubhouse at the golf course, the primary reason being that a golf course is an absolute must to attract many retirees.  That, too, made the list.

There may be a couple hundred families living in Silver City that wouldn’t be here if these amenities didn’t exist. They pay thousands in property taxes and spend millions at local retail stores, and without them Silver City would be hurting. A case can be made that some, SOME, quality of life spending is a good investment for the city, especially for things the city has historically supported.

However, there are a couple of problems with this approach, the first being that it‘s difficult to quantify cost vs. benefit when it comes to quality of life spending.   Second, and far more important, the list of new proposals never ends.  Somebody will always have a good idea to spend public money on, something that will enhance somebody’s quality of life.

One lady recently said it would really be nice if there were facilities for year-around basket ball and year-around volley ball, to keep the kids busy.  Yes, it would be nice.  It would be nice if Grant County built a Curling rink, say two sheets of ice up in Pinos Altos, give the kids something to do in the winter, attract retirees from Wisconsin and Minnesota. And on and on and on.

The problem is we are a small, relatively poor community that just cannot afford to be all things to all people. WE CANNOT AFFORD TO BE ALL THINGS TO ALL PEOPLE. Somebody has to draw the line, and it doesn’t look like our elected officials will do it.

Next week: Part Two: How The Money Would Be Spent